© Confidential, All Rights Reserved. Aerospace and Defense Industries in Arizona Sector Profile Aerospace Innovation Forum 2011 December 5, 2011.

© Confidential, All Rights Reserved.

Aerospace and Defense Industries in Arizona

Sector Profile

Aerospace Innovation Forum

2011December 5, 2011

Arizona Aerospace and Defense Commission

Improve Arizona’s Business Environment

Create a Robust Pipeline of Business & Entrepreneurial Opportunities to Fuel Growth

Build Arizona’s Research Competitiveness

Attract, Educate, Retain & Retrain Arizona’s Skilled Workforce

Annual Report Sent to AZ Governor’s Office on 12/31/2011

AZ Aerospace Commission Key Focus

1. Completed A&D Economic Impact Study

2. Developed A&D Value Proposition– “Arizona has always attracted a certain type of person – the

pathfinder, the builder, the explorer. That is why industries that depend on innovation to survive, like Aerospace and Defense, have prospered in Arizona. World class universities, large prime contractors and low operating costs are only part of the story. Find out more about Arizona.”

3. Participated in the Arizona Commerce Authority A&D Growth Sector Public Hearing & Recommendation Development

2011 AZ Aerospace Commission Actions

1. Selected Host for 2012 Arizona Aerospace, Aviation & Defense Requirements Conference – AZ Technology Council

a) January 25 – 26, 2012

b) Focus to “Link Large Contractors with Supply Base”

For more information: Requirements Conference for Arizona’s Aerospace, Aviation & Defense Community (http://bit.ly/vucpHO)

2. Unmanned Aerial Systems (UAS) – Arizona Advisory Council Established• Promote enhanced UAS-related collaboration and communication between

industry, government agencies and officials, the military and academia;

• Drive economic development by establishing a statewide Center of Excellence in UAS flight testing, training, and research and development that establishes Arizona as a nationally recognized leader in safe UAS integration into the NAS; and

• Position Arizona for designation as a national UAS test range

Industry and Trade Associations in AZ

1. Aerospace Industries Association2. Air Transport Association3. Aircraft Electronic Association4. American Institute of Aeronautics and Astronautics5. Arizona’s Aerospace and Defense Commission6. Arizona Aerospace Institute Initiative7. Arizona Technology Council8. Aviation Distributors and Manufacturers Association9. Aviation Suppliers Association10. General Aviation Manufacturers Association11. Light Aircraft Manufacturers Association12. National Air Transportation Association13. National Business Aviation Association14. National Defense Industrial Association15. Satellite Industry Association16. Southern Arizona Industry & Aerospace Alliance17. Space Enterprise Council18. Space Foundation19. Space Transportation Association

Arizona Trends in A&D

Arizona Defense Spending

Total Department of Defense contracts in 2011 (through December) amounted to US$313.9 billion.

US$11.6 billion in contracts and grants from the Department of Defense went to AZ in 2011 (www.USASpending.gov).

Employment & Impact

Aerospace Employment in AZ Direct Employment: 39,400 (AIA, 2009) Payroll: US$4.3 billion (2009)

Department of Defense Employment: 30,934 (U.S. OPM, 2009) 69% of which are military workers (non-civilian)

Aerospace and Defense Industries Direct and Indirect Employment Accounted for 93,800 employees in 2009 Contributed US$8.8 billion to Gross State Product in 2009

10 Largest AZ A&D Employers (2010)

Arizona's Top Aerospace and Defense VLM's by # of Employees

Company# of

Empl.Location in

AZPrimary Products

Raytheon Missile Systems 11,835 Tucson Missile & Space Systems, Maintenance, Advanced R&D

Honeywell Aerospace 9,716 Phoenix Gas Turbines / Jet Engines, Fuel System Components

The Boeing Company 4,853 Mesa Aircraft Components

General Dynamics C-4 Systems

4,000 ScottsdaleDefense Electronics & Communications Equipment,

Maintenance, R&D

Orbital Systems Corp. 1,550 Chandler Space satellite systems

L-3 Electro-Optical Systems 753 Phoenix Aviation Communication & Surveillance Systems (ACSS) 

Bombardier 746 Tucson Gas Turbines / Jet Engines

Goodrich Interiors 630 Phoenix Specialty Products for Aircraft, Specialty Systems

BAE Systems 607 Tucson Unmanned Aircraft Programs

Hamilton Sundstrand Aerospace

520 Phoenix Specialty Products for Aircraft, Specialty Systems

Defense Contracting Activity

Arizona received more than $11.6 billion (3.7%) of total DoD contracts AZ was the 4th largest recipient state for DoD contracts in 2011

Top Arizona Defense Contractors

Arizona A&D Exports

Breakdown of Arizona Aircraft Exports, 2010: Q1 – Q4

Arizona A&D Exports to the World

Arizona Exports to Canada

Arizona Aerospace Exports to Canada

Arizona Imports from Canada

Arizona Imports from Canada

State-level A&D Business Incentives

Maintenance Repair and Overhaul

Avionics

Unmanned Aerial Systems

333 North Central Avenue, Suite 1900Phoenix, AZ 85004

602.845.1200www.azcommerce.com

More Information: [email protected]