Meccanica Holdings USA, Inc. FINMECCANICA Società per azioni

Transcription

1 Meccanica Holdings USA, Inc. (incorporated in the State of Delaware) as Issuer FINMECCANICA Società per azioni (incorporated in the Republic of Italy as a joint stock company) as Guarantor $500,000, % Guaranteed Notes due 2040 The notes due 2040 will bear interest at a rate of 6.25% per year (the Notes ). The Issuer will pay interest on the Notes on January 15 and July 15 of each year. The first such payment will be made on January 15, The Notes will be issued in fully registered form and only in denominations of $100,000 and in integral multiples of $1,000 in excess thereof. Meccanica Holdings USA, Inc. ( Meccanica Holdings or the Issuer ) may redeem the Notes in whole or in part on the terms set forth in this Listing Prospectus under Description of the Notes. The Issuer may also redeem all of the Notes at any time at 100% of the principal amount in the event of certain tax law changes requiring the payment of additional amounts as described in this Listing Prospectus. The Issuer will pay accrued and unpaid interest, if any, and any other amounts payable to the date of redemption. The Notes will not be subject to any sinking fund requirement. See Description of the Notes. The Notes are unsecured and unsubordinated obligations of Meccanica Holdings, and rank equally with each other and with all present and future unsecured and unsubordinated debt obligations of Meccanica Holdings. The Notes are unconditionally and irrevocably guaranteed by Finmeccanica Società per azioni (the Guarantor ). See Description of the Notes. Application has been made for the Notes to be admitted to trading on the regulated market of the Luxembourg Stock Exchange and to listing on the official list of the Luxembourg Stock Exchange. The regulated market of the Luxembourg Stock Exchange is a regulated market for the purposes of the Markets in Financial Instruments Directive 2004/39/EC. Investing in the Notes involves certain risks. See Risk Factors beginning on page 14 of this Listing Prospectus for a discussion of certain risks you should consider before buying the Notes. Offering Price of the Notes: %, plus accrued interest, if any, from October 27, 2009 The Notes and the Guarantees have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act ) and have been offered and sold in the United States only to qualified institutional buyers ( QIBs ) in reliance on Rule 144A ( Rule 144A ) under the Securities Act and to certain non-u.s. persons outside the United States in offshore transactions in reliance on Regulation S ( Regulation S ) under the Securities Act. Prospective purchasers in the United States are hereby notified that the seller of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The Notes are not transferable except in accordance with the restrictions described under Transfer Restrictions. The Notes were delivered to purchasers in book-entry form only through the facilities of the Depository Trust Company ( DTC ) and its direct and indirect participants (including Euroclear Bank S.A./ N.V. and Clearstream Banking, société anonyme) on or about October 27, Joint Bookrunners BofA Merrill Lynch Citi Goldman Sachs International J.P. Morgan Morgan Stanley Nomura Securities Santander UBS Investment Bank Listing Prospectus dated December 23, 2009.

2 This Listing Prospectus has been prepared by Finmeccanica solely for use in connection with the offering of the Notes described in this Listing Prospectus. This Listing Prospectus is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the Notes. You are authorized to use this Listing Prospectus solely for the purpose of considering the purchase of the Notes. Distribution of this Listing Prospectus to any person other than the prospective investor and any person retained to advise such prospective investor with respect to such purchase is unauthorized, and any disclosure of any of its contents, without the Issuer s prior written consent, is prohibited. Each prospective investor, by accepting delivery of this Listing Prospectus, agrees to the foregoing. In making an investment decision, prospective investors must rely on their own examination of Finmeccanica and the terms of the offering, including the merits and risks involved. Prospective investors should not construe anything in this Listing Prospectus as legal, business or tax advice. Each prospective investor should consult its own advisors as needed to make its investment decision. Finmeccanica has furnished the information in this Listing Prospectus. You acknowledge and agree that the initial purchasers make no representation or warranty, express or implied, as to the accuracy or completeness of such information, and nothing contained in this Listing Prospectus is, or shall be relied upon as, a promise or representation by the initial purchasers. Copies of documents referred to herein will be made available to prospective investors upon request to the Issuer. This Listing Prospectus constitutes a Prospectus for purposes of article 5(3) of the Prospectus Directive (Directive 2003/71/EC) (the Prospectus Directive ). Each of the Issuer and the Guarantor accepts responsibility for the information contained in this Listing Prospectus. Each of the Issuer and the Guarantor declare that, having taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and contains no omission likely to affect its import. Where information contained in this Listing Prospectus has been sourced from a third party, such information has been accurately reproduced and so far as each of the Issuer and the Guarantor is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. The distribution of this Listing Prospectus and the offering and sale of the Notes in certain jurisdictions may be restricted by law. The Issuer and the initial purchasers require persons into whose possession this Listing Prospectus comes to inform themselves about and to observe any such restrictions. This Listing Prospectus does not constitute an offer of, or an invitation to purchase, any of the Notes in any jurisdiction in which such offer or sale would be unlawful. NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES Neither the Securities and Exchange Commission ( SEC ) nor any state securities commission has approved or disapproved of these securities or determined if this Listing Prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The Notes are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and any applicable state securities laws or pursuant to registration or exemption therefrom. As a prospective purchaser, you should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time. Please refer to the sections in this Listing Prospectus entitled Transfer Restrictions and Plan of Distribution. i

3 NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ( RSA ) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECU- RITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE IMPLIES THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT ANY EXEMP- TION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICA- TIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. ii

4 TABLE OF CONTENTS Forward-Looking Statements... 1 Certain Defined Terms... 2 Presentation of Financial Information and Incorporation by Reference... 3 Presentation of Market Information... 5 Exchange Rates... 6 Overview... 7 Overview of Financial Information Risk Factors Use of Proceeds Capitalization Selected Financial Data Supplemental Selected Financial Data as of and for the Period Ended September 30, Financial Information and Non-GAAP Measures Management s Discussion and Analysis of Financial Condition and Results of Operations Business Description DRS Technologies, Inc Management Principal Shareholders Related Party Transactions Description of the Notes Transfer Restrictions Service of Process and Enforcement of Civil Liabilities Tax Considerations Plan of Distribution Listing and General Information Independent Accountants Validity of Debt Securities and Guarantees Glossary of Terms and Definitions Definitions Unaudited Pro Forma Consolidated Financial Information... P-1 Index to the Financial Statements and Financial Information... F-1 Index to the Financial Statements and Financial Information of Meccanica Holdings USA, Inc.... M-1 iii

5 FORWARD-LOOKING STATEMENTS This Listing Prospectus contains forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical fact including, without limitation, those with respect to the financial condition, results of operations and businesses of Finmeccanica and certain of the plans, objectives, assumptions, projections, expectations, intentions, future developments in the markets in which it participates or is seeking to participate, or beliefs of Finmeccanica with respect to these items. These statements may generally, but not always, be identified by the use of words such as will, expects, is expected to, should, may, objective, is likely to, intends, believes, plans, we see, or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include but are not limited to: Finmeccanica s ability to integrate acquisitions successfully, including the acquisition of DRS Technologies, Inc. ( DRS ); Finmeccanica s ability to identify acquisition targets and evaluate potential benefits and potential liabilities; Finmeccanica s performance, and ability to estimate costs, under long-term contracts; Finmeccanica s ability to raise financings and the terms of those financings; the continuity and severity of the current global economic downturn; the level of governmental spending in the industries in which Finmeccanica operates; the availability of governmental funding for Finmeccanica s research and development activities; exchange rates and interest rates movements; the outcome of Finmeccanica s legal proceedings; write downs on intangible assets and liabilities arising from pension plans; contractual disputes and environmental liabilities; Finmeccanica s ability to produce and market successful new products; and changes in competition. Finmeccanica encourages prospective investors to read the sections of this Listing Prospectus entitled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations for a more complete discussion of the factors that could affect Finmeccanica s future performance and the markets in which it operates. In light of these risks, uncertainties and assumptions, the forward-looking events described in this Listing Prospectus may not occur. Finmeccanica undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information or future events or developments. 1

6 CERTAIN DEFINED TERMS In this Listing Prospectus: References to Finmeccanica, the Group, the Finmeccanica Group, we, our, ours and us are to Finmeccanica Società per azioni together with its subsidiaries, unless the context requires otherwise. References to the Company and the Guarantor are to Finmeccanica Società per azioni. References to the Issuer and Meccanica Holdings are to Meccanica Holdings USA, Inc. References to the Trustee are to The Bank of New York Mellon. References to Euro, A or euros are to the currency of the Member States of the European Union participating in the third stage of the Economic and Monetary Union. References to IFRS are to International Financial Reporting Standards as adopted by the European Union. References to Sterling or GBP are to the currency of the United Kingdom. References to U.S. GAAP are to U.S. Generally Accepted Accounting Principles. References to USD or U.S. dollars are to the currency of the United States. 2

7 PRESENTATION OF FINANCIAL INFORMATION AND INCORPORATION BY REFERENCE Disclosure of Financial Information The financial information as of and for the years ended December 31, 2008, 2007 and 2006 included in this Listing Prospectus has been derived from the Group s audited consolidated financial statements for the same periods (hereinafter the Annual Consolidated Financial Statements ) prepared in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Commission for use in the European Union ( IFRS ). The Annual Consolidated Financial Statements were prepared mainly for the purposes of the offering of notes to institutional investors. The Annual Consolidated Financial Statements have been prepared in order to present homogenous financial information for the years ended December 31, 2008, 2007 and As described in the accounting principles note to the Annual Consolidated Financial Statements, during 2007 the Group changed its accounting policy with regards to the actuarial gains and losses relating to defined benefit plans. Until the end of 2006, the Group adopted the corridor approach whereby changes in the underlying assumptions of the actuarial valuation are recognized in the income statement, amortized according to the average remaining working life of the employee. Starting from the financial statements as of and for the year ended December 31, 2007, the Group has adopted the equity approach set out in IAS 19. Under this approach, any actuarial gains or losses are fully recognized in a specific equity reserve ( reserve for actuarial gains and losses ). Interim financial information as of June 30, 2009 and for the six months ended June 30, 2009 and 2008 included in this Listing Prospectus has been derived from the Group s unaudited condensed consolidated financial information as of June 30, 2009 and for the six months ended June 30, 2009 and 2008 prepared in accordance with IAS 34 (the Unaudited Interim Condensed Consolidated Financial Information ). Interim results are not necessarily indicative of the results of operations that may be expected for any other period or for a full year. The financial information on a pro forma basis for the year ended December 31, 2008 has been derived from the Group s unaudited pro forma consolidated income statement for the year ended December 31, 2008 (the Unaudited Pro Forma Consolidated Financial Information ). The Unaudited Pro Forma Consolidated Financial Information has been prepared solely in connection with the Notes being offered hereby. In particular the Unaudited Pro Forma Consolidated Financial Information has been prepared to reflect the effect of the acquisition of DRS and the subsequent financing transactions. The Unaudited Pro Forma Consolidated Financial Information presented in this Listing Prospectus is based on available information and certain assumptions that the Group believes are reasonable. The Unaudited Pro Forma Consolidated Financial Information is presented for illustrative purposes only and does not purport to represent what the actual results of operations would have been if the events for which the pro forma adjustments were made had occurred on the dates assumed, nor does it purport to project the Group s results of operations for any future period or the Group s financial condition at any future date. The Group s future operating results may differ materially from the pro forma amounts set out in this Listing Prospectus due to various factors, including changes in operating results. The rules and regulations related to the preparation of pro forma financial information in the United States or other jurisdictions may vary significantly from the requirements applicable in Italy. The pro forma financial information included in this Listing Prospectus has not been prepared in accordance with the requirements of Regulation S-X of the U.S. Securities and Exchange Commission or generally accepted practice in the United States of America. The Annual Consolidated Financial Statements, the Unaudited Interim Condensed Consolidated Financial Information and the Unaudited Pro Forma Consolidated Financial Information are contained elsewhere in this Listing Prospectus and should be read in conjunction with the relevant notes thereto. Except where indicated, references to IFRS in this Listing Prospectus are solely to IFRS as adopted by the European Commission. In making an investment decision, investors must rely upon examination of the Group and the financial statements and information included elsewhere in this Listing Prospectus and should consult their own professional advisors for an understanding of: (i) the differences between U.S. GAAP and IFRS and how those differences might affect the financial information included in this Listing Prospectus; and (ii) the impact that future additions to, or amendments of, IFRS principles may have on the Group s results of operations and/or financial condition and on the comparability of prior periods. 3

8 Non-GAAP Measures This Listing Prospectus contains certain financial indicators and Non-GAAP measures, including adjusted EBITA, return on sales, free operating cash flow, return on investments, return on equity, net financial indebtedness, working capital, net invested capital and cash used in ordinary investing activities, which are not recognized as measures of financial performance or liquidity under IFRS. In addition, this Listing Prospectus includes adjusted EBITA and return on sales analyzed by business segment based on the segment reporting in the Group s financial statements. Investors should not place any undue reliance on these Non-GAAP measures and financial indicators and should not consider these measures as: (i) an alternative to operating income or net income as determined in accordance with generally accepted accounting principles, or as measures of operating performance; (ii) an alternative to cash flows from operating, investing or financing activities (as determined in accordance with generally accepted accounting principles), or as a measure of the Group s ability to meet cash needs; or (iii) an alternative to any other measures of performance under generally accepted accounting principles. These measures are not indicative of the Group s historical operating results, nor are they meant to be predictive of future results. These measures are used by Finmeccanica s management to monitor the underlying performance of the business and the operations. Since all companies do not calculate these measures in an identical manner, the Group s presentation may not be consistent with similar measures used by other companies. Therefore, investors should not place undue reliance on this data. A more detailed explanation of each of the financial indicators and Non-GAAP measures, together with relevant reconciliations, is provided in the section Financial Information and Non-GAAP Measures. Certain numerical figures set out in this Listing Prospectus, including financial data presented in millions or thousands and percentages describing market shares, have been subject to rounding adjustments and, as a result, the totals of the data in this Listing Prospectus may vary slightly from the actual arithmetic totals of such information. Incorporation by Reference Information included in the Interim Financial Report (the Nine-Month Interim Report ) at September 30, 2009 of Finmeccanica, which was published on November 5, 2009 is incorporated by reference into this Listing Prospectus. The following information appears on the pages of the Nine-Month Interim Report as set out below: Report on Operations at September 30, 2009 Pages 5-68 Analysis of the Financial Statements at September 30, 2009 Pages Any information not listed in the cross-reference list above but included in the document incorporated by reference is given for information purposes only. In addition, any document incorporated by reference will be published on the website of the Luxembourg Stock Exchange ( 4

9 PRESENTATION OF MARKET INFORMATION This Listing Prospectus contains statements of Finmeccanica s estimates related to, among other things, the following: the size of the sectors and markets in which Finmeccanica operates as a whole and by geographic area; growth and trends rates in the sectors and markets in which Finmeccanica operates as a whole and by geographic area; and Finmeccanica s relative competitive position in the sectors, markets and geographic areas in which it operates and the position of its competitors in those same sectors, markets and geographic areas. Whether or not this is stated where such information is presented, this information and these estimates are based on third party studies and surveys as well as Finmeccanica s experience, market knowledge, accumulated data and own investigation of market conditions. While Finmeccanica believes these estimates to be reasonable, Finmeccanica cannot assure you that this data or any of the assumptions underlying these estimates are accurate or correct, and none of the internal surveys or information on which Finmeccanica has relied has been verified by any independent sources. Accordingly, undue reliance should not be placed on such information. In addition, information regarding the sectors and markets in which Finmeccanica operates is normally not available for certain periods and, accordingly, such information may not be current as of the date of this Listing Prospectus. 5

10 EXCHANGE RATES The following table sets forth, for the periods indicated, high, low, average and period end noon buying rates in the City of New York for cable transfers between the Euro and U.S. dollar, as certified for customs purposes by the Federal Reserve Bank of New York, expressed in Euro per U.S. dollar The rates may differ from the actual rates used in the preparation of the consolidated financial statements and other financial information appearing in this Listing Prospectus. Finmeccanica makes no representation that the Euro or U.S. dollar amounts referred to in this Listing Prospectus have been, could have been or could, in the future, be converted to euros or U.S. dollars, as the case may be, at any particular rate, if at all. On December 11, 2009, the noon buying rate in the City of New York for cable transfers between euros and U.S. dollars as certified for customs purposes by the Federal Reserve Bank of New York was Euro to U.S. dollar Euros per USD 1.00 High Low Average Period End Year (1) (1) (1) (1) (1) Month January (2) February (2) March (2) April (2) May (2) June (2) July (2) August (2) September (2) October (2) November (2) December 2009 through December (2) (1) The average of the noon buying rates on the last business day of each month during the relevant period. (2) The average of the daily noon buying rates for each business day during the relevant period. 6

11 OVERVIEW This overview highlights certain aspects of the Issuer s and Guarantor s business and the Notes, but potential investors should read this entire Listing Prospectus, including the financial statements and accompanying notes, before making an investment decision. This overview should be read as an introduction to this Listing Prospectus. Any decision to invest in the Notes should be based on the Listing Prospectus as a whole by the investor. Potential investors should also carefully consider the information set forth in this Listing Prospectus under the heading Risk Factors. Unless the context otherwise requires, the terms Company and Finmeccanica refer to Finmeccanica Società per azioni and its subsidiaries. Under the relevant provisions of the Prospectus Directive, no civil liability will attach to the responsible persons in any such Member State solely on the basis of this overview, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Listing Prospectus. Where a claim relating to the information contained in this Listing Prospectus is brought before a court in a Member State of the EEA, the plaintiff may, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating this Listing Prospectus before the legal proceedings are initiated. Meccanica Holdings Meccanica Holdings is a wholly-owned subsidiary of Finmeccanica Società per azioni and holds the common stock of DRS. The registered office of Meccanica Holdings is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, U.S.A, and its telephone number is Meccanica Holdings purpose is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law. All of the common stock of Meccanica Holdings is owned by Finmeccanica Società per azioni. Following completion of the acquisition of DRS, Meccanica Holdings holds the common stock of DRS. In the future, Meccanica Holdings may provide guarantees for all or part of the Finmeccanica Group s indebtedness. Finmeccanica Overview Finmeccanica, together with its subsidiaries, is one of the leading European aerospace and defense companies in terms of revenues and a leading high technology company operating in the design and manufacture of helicopters, defense electronics and security, civil and military aircraft, aerostructures, satellites, space infrastructures, land and naval armaments, underwater defense systems and missiles. Finmeccanica participates in numerous international programs in the sector through well-established alliances with European and United States partners. The Finmeccanica Group also has significant assets and skills in the energy and transportation sectors. Finmeccanica is listed on the Italian Mercato Telematico Azionario and operates in Italy and abroad through subsidiaries and joint ventures. In particular, Finmeccanica has a large industrial base in Italy and in the United Kingdom, both considered the Group s domestic markets, as well as production facilities elsewhere in Europe and in the United States. As of December 31, 2008, Finmeccanica had a total workforce of approximately 73,400 people, of which 43,300 were in Italy and 30,100 were abroad. As of June 30, 2009, Finmeccanica had a total workforce of approximately 73,517 people, of which 43,370 were in Italy and 30,197 were abroad. The registered office of Finmeccanica is Piazza Monte Grappa, 4, Rome, Italy, and its telephone number is In the year ended December 31, 2008, Finmeccanica s consolidated revenues and net profit totaled Euro 15,037 million and Euro 621 million, respectively, while the Group s adjusted EBITA (see Financial Information and Non-GAAP Measures for an explanation of adjusted EBITA and a reconciliation to net profit) was equal to Euro 1,305 million. For the first six months of 2009, Finmeccanica s consolidated revenues and net profit totaled Euro 8,523 million and Euro 242 million, respectively, while the Group s adjusted EBITA (see Financial Information and Non-GAAP Measures for an explanation of adjusted EBITA and a reconciliation to net profit) was Euro 605 million. As of June 30, 2009 and December 31, 2008, Finmeccanica had an order backlog amounting to Euro 42,980 million and Euro 42,937 million respectively. 7

12 As of the date of this Listing Prospectus, 30.2% of Finmeccanica s share capital is owned by the Italian Ministry of Economy and Finance ( MEF ) and the remaining approximately 69.8% is publicly held. Finmeccanica s operations are organized in the following segments: Helicopters, Defense Electronics and Security, Aeronautics, Space, Defense Systems, Energy, Transportation and Other Activities. Strategy Finmeccanica is pursuing a growth strategy aimed at continuously consolidating its competitive position and creating value for its shareholders. Finmeccanica intends to maintain a leading position internationally by exploiting its potential in those sectors where it holds a competitive edge in terms of technological excellence, innovation capabilities and product offering through the following strategic steps: growing in its domestic markets (United States, United Kingdom and Italy) and strengthening its global positioning in the Aerospace and Defense sector through the expansion of the Group s international presence; optimizing its product portfolio and offering integrated solutions to customers; enhancing industrial competitiveness and profitability; and maximizing the value of its subsidiaries operating in the Energy and Transportation segments. The Offering Please refer to Description of the Notes on page 167 of this Listing Prospectus for more information about the Notes. Issuer... Guarantor... Notes offered... Meccanica Holdings USA, Inc. Finmeccanica Società per azioni $500,000,000 in principal amount of 6.25% Notes due (the Notes ). Maturity Date... The Notes will mature on January 15, 2040 Issue price.... Ranking % of the face amount of the Notes, plus accrued interest from October 27, 2009 if any. The Notes and the Guarantees are unsecured and unsubordinated obligations of Meccanica Holdings and Finmeccanica, respectively, and will rank at least equally with all other unsecured and unsubordinated obligations of Meccanica Holdings and Finmeccanica, respectively. Interest... Interest on the Notes will accrue from October 27, Interest payment dates... January 15 and July 15, commencing January 15, Regular record dates for interest.... Payment of additional amounts... Optional redemption... January 1 and July 1 of each year. Subject to certain exceptions and limitations, the Issuer will pay such additional amounts under the Notes as are necessary in order that the net payment by the Issuer of the principal and interest on the Notes, after deduction for any present or future tax, assessment or governmental charge imposed by withholding with respect to payment, will not be less than the amount provided by the Notes to be then due and payable. See Description of the Notes Payment of Additional Amounts. TheIssuer has the right to redeem the Notes, in whole or in part, at any time at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes and (ii) the sum of the present 8

13 values of the remaining scheduled payments of principal and interest on the Notes (exclusive of interest to the date of redemption) discounted to the redemption date on a semi-annual basis at the treasury rate plus 35 basis points for the Notes, plus in each case accrued and unpaid interest to the date of redemption. See Description of the Notes Optional Redemption. Redemption for Tax Reasons... Negative Pledge and Events of Default.. Substitution of Issuer... Book-entry issuance, settlement and clearance... Further issuances... Under certain circumstances,the Notes may be redeemed at the option of the Issuer, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes, together with interest thereon to the date fixed for redemption, if the Issuer is required to pay certain additional amounts with respect to the Notes. See Description of the Notes Redemption for Tax Reasons. The terms and conditions of the Notes provide for certain restrictions, including a limited negative pledge and restrictions for certain events of default. There are no covenants restricting the Issuer s or the Guarantor s ability to make payments, incur indebtedness, dispose of assets, issue and sell capital stock, enter into transactions with affiliates or engage in business other than their present business. For further information, see Description of the Notes Negative Pledge and Description of the Notes Events of Default. The Issuer is permitted to transfer the obligations of the Issuer to the Guarantor or any subsidiary of the Guarantor so long as the obligations of any such subsidiary of the Guarantor are guaranteed by the Guarantor. It is possible that the U.S. Internal Revenue Service may deem a transfer of the Issuer s obligation under the debt securities to cause an exchange for U.S. federal income tax purposes of debt securities for new securities by the holders of the debt securities, which could result in the recognition of taxable gain or loss for U.S. federal income tax purposes and possible other adverse tax consequences. See Description of the Notes Mergers and Similar Events. The Notes are issued in fully registered form in denominations of $100,000 and in multiples of $1,000 in excess thereof. The Notes are represented by one or more global securities registered in the name of Cede & Co., as nominee of DTC. You will hold beneficial interests in the Notes through DTC and its direct and indirect participants (including Euroclear Bank S.A./N.V. and Clearstream Banking S.A.). For information on DTC s book-entry system, see Description of the Notes Book-Entry, Delivery and Form. The Issuer may, at its option, at any time and without the consent of the then existing Noteholders, issue additional Notes in one or more transactions subsequent to the date of this Listing Prospectus with terms (other than the issuance date, issue price and, possibly, the first interest payment date) identical to the Notes issued hereby. These additional Notes will be deemed to be part of the same series as the Notes offered hereby and will provide the holders of these additional Notes with the right to vote together with holders of the Notes issued hereby. 9

14 Yield.... The yield on the Notes is the return you will receive by holding the notes for a period of time. For example, current yield for the Notes, which calculates the percentage return that annual interest payments might provide to you, is calculated as follows: Current Yield = Annual Dollar Interest Paid Market Price You may wish to calculate the adjusted current yield, yields to maturity, yield to call and other yields in making an investment decision with respect to the Notes. Risk Factors... Paying Agent; Transfer Agent and Registrar... Paying Agent (Luxembourg)... Transfer Restrictions... Use of proceeds.... Trustee... CUSIP/ISIN/COMMON CODE... You should carefully consider all of the information in this Listing Prospectus. In particular, you should evaluate the specific factors under Risk Factors beginning on page 14 of this Listing Prospectus for risks involved with an investment in the Notes. Risk Factors relating to Finmeccanica s business include risks related to Finmeccanica s ongoing and future contracts and financial indebtedness, risks posed by the accounting for long-term contracts, risks posed by a reduction in government funding and various regulatory changes, and risks related to Finmeccanica s mergers and acquisitions, divestitures, joint ventures and relationships with partners. Other Risk Factors including those relating to the industries in which Finmeccanica operates such as a reduction in government spending, the current global economic downturn, availability and price of components, competition and changes in the political and economic climate of the countries in which the Group operates may also affect the Group s business, results of operations and financial condition. The Bank of New York Mellon The Bank of New York Mellon The Bank of New York (Luxembourg) S.A. The Notes have not been and will not be registered under the Securities Act and are subject to certain restrictions on resale and transfer. See Transfer Restrictions. Meccanica Holdings estimates that the net proceeds from the offering were approximately $494,000,000 after payment of underwriting commissions and other fees and expenses related to the offering. Meccanica Holdings intends to use such proceeds to refinance parent company loans to DRS Technologies and the Group will apply the proceeds to meet 2010 third parties refinancing requirements, including the repayment of the Exchangeable Bonds, with an annual coupon of 0.375%, maturing in August See Management s Discussion and Analysis of Financial Condition and Results of Operations Bonds Issued. The Bank of New York Mellon For the Notes (Rule 144A): AC9/US583491AC98/ For the Notes (Regulation S): U58190AA4/USU58190AA41/

15 Governing Law... The Notes, Guarantees and the Indenture will be governed by the laws of the State of New York. 11

16 OVERVIEW OF FINANCIAL INFORMATION The following tables set forth an overview of the financial information of the Group as of and for the periods indicated. The overview of financial information as of and for the years ended December 31, 2008, 2007 and 2006 has been derived from the Annual Consolidated Financial Statements. Summary financial information as of June 30, 2009 and for the six months ended June 30, 2009 and 2008 has been derived from the Unaudited Interim Condensed Consolidated Financial Information. Interim results are not necessarily indicative of the results that may be expected for any other interim period nor are they indicative results for a full year. The overview of financial data in the tables below should be read together with the Annual Consolidated Financial Statements and the Unaudited Interim Condensed Consolidated Financial Information including the notes thereto, which are included elsewhere in this Listing Prospectus. See also Presentation of Financial Information and Incorporation by Reference, Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations and Capitalization. Six months ended June 30, Year ended December 31, (Unaudited) Revenue.... 8,523 6,433 15,037 13,429 12,472 Operating income ,210 1, Profit before taxes and discontinued operations ,273 Net profit ,021 Net profit attributable to equity holders of the Group Net profit attributable to minority interest Balance Sheet Data As of June 30, As of December 31, (Unaudited) Total non-current assets... 13,628 13,113 9,845 9,919 Total current assets... 16,371 16,809 14,203 13,374 Non-current assets held for sale Total assets... 29,999 29,922 24,048 23,403 Total shareholders equity... 6,319 6,130 5,432 5,320 Total non-current liabilities... 6,387 6,750 4,237 5,313 Total current liabilities... 17,293 17,042 14,379 12,687 Liabilities directly correlated with assets held for sale Total liabilities... 23,680 23,792 18,616 18,083 Total liabilities and shareholders equity ,999 29,922 24,048 23,403 12

17 Statement of Cash Flow Data Six months ended June 30, Year ended December 31, (Unaudited) Net cash (used in)/generated from operating activities... (246) (790) 1,419 1,399 1,318 Net cash used in investing activities.... (634) (378) (3,179) (1,463) (262) Net cash (used in)/generated from financing activities... (701) (116) 2,463 (320) (112) Net (decrease)/increase in cash and cash equivalents... (1,581) (1,284) 703 (384) 944 Exchange rate gains/(losses)... 2 (9) (13) (12) (2) Cash and cash equivalents at the beginning of the period... 2,297 1,607 1,607 2,003 1,061 Cash and cash equivalents at the end of the period ,297 1,607 2,003 Other Financial Information and Indicators As of and for the Six months ended June 30, As of and for the year ended December 31, (Unaudited) Adjusted EBITA ,305 1, Net financial indebtedness... 4,615 n.a. 3,383 1, Working capital... 1,366 n.a Net invested capital... 10,934 n.a. 9,513 6,590 6,151 Adjusted EBITA, net financial indebtedness, working capital and net invested capital are not recognized as measures of financial performance or liquidity under IFRS. Investors should not place any undue reliance on these non-gaap measures as financial indicators and should not consider these measures as: (a) an alternative to operating income or net income as determined in accordance with generally accepted accounting principles, or as measures of operating performance; (b) an alternative to cash flows from operating, investing or financing activities (as determined in accordance with generally accepted accounting principles), or as a measure of the Group s ability to meet cash needs; or (c) an alternative to any other measures of performance under generally accepted accounting principles. These measures are not indicative of the Group s historical operating results, nor are they meant to be predictive of future results. These measures are used by Finmeccanica s management to monitor the underlying performance of the business and the operations. Since all companies do not calculate these measures in an identical manner, the Group s presentation may not be consistent with similar measures used by other companies. Therefore, investors should not place undue reliance on this data. An explanation and tabular reconciliation of adjusted EBITA, net financial indebtedness, working capital and net invested capital is provided under Financial Information and Non-GAAP Measures. 13

18 RISK FACTORS Risks relating to Finmeccanica s business Finmeccanica is the guarantor of the Notes, and therefore the risks relating to Finmeccanica s business are also relevant for the Issuer. Finmeccanica Group s operating results and financial performance may be adversely affected by lack of or delays in the award of new long-term contracts or cancellation of contracts. Although the Finmeccanica Group enjoys a significant order backlog, the long-term sustainability of Finmeccanica s economic and financial performance depends on its ability to service its existing contracts and to win new long-term contracts. Finmeccanica s contracts may be completed or expire, or they may be altered or terminated. Finmeccanica may be unable to replace these contracts with new contracts of comparable size and operating margins or in a timely manner. The award of new contracts is subject to competition and is affected by factors outside of Finmeccanica s control such as governmental spending decisions and administrative procedures. The recent economic downturn has not only led to a reduction in government contracts and government spending, but also a reduction in contracts in the civil sector, as demonstrated by the reduction in orders of civil aircraft, helicopters and products in the energy sector. Any failure to secure or any delay in securing a consistent number of long-term contracts or any interruption to or termination of existing contracts may cause an insufficient workload, lower operating profits and cash flow generation, and the inability to recover the carrying value of the related investments on Finmeccanica s balance sheet that would adversely affect Finmeccanica s business, results of operations and financial condition. Finmeccanica Group s operating and financial performance may suffer as a consequence of breaches of its contractual commitments. The timely and satisfactory execution of Finmeccanica s contractual commitments depends upon numerous factors, including the Group s ability to develop the technologies necessary to provide, directly or through third parties, the products and services required by its customers. The failure by Finmeccanica to deliver, in a timely manner or at all, the products and services it is obliged to deliver, or any fault in contract execution (including as a result of delays or breaches by the Group s suppliers), may lead to higher costs or penalties or the calling of performance bonds. This may negatively affect the Group s operating and financial performance. In addition, Finmeccanica s credit exposure includes indemnities by the Finmeccanica Group in connection with bank guarantees issued in favor of its customers. These bank guarantees, which are typical in long-term production contracts, include performance guarantees and guarantees for advanced payments. The amount of these bank guarantees as of December 31, 2008 was Euro 17,353 million. If these bank guarantees were to be called, the Finmeccanica Group would be required to indemnify the banks, which event could have a negative effect on Finmeccanica s financial position and results of operations. Finmeccanica Group s business segments derive significant revenue from medium- and long-term contracts and programs. Differences between estimated costs and actual costs may harm Finmeccanica s operating results, as may disputes over the performance of such contracts. The Group s business activities depend to a large extent upon medium-and long-term contracts and programs. In order to recognize revenue and margins resulting from such contracts and programs in the income statement of each period, the Group adopts the percentage-of-completion method, which requires: (i) an estimate of the costs necessary to perform the Group s obligations under the contract, including an estimate of the risks of delays and of the measures to be taken in order to mitigate the risks of non-performance and (ii) monitoring progress of the activities, including with respect to preoperative development costs. Finmeccanica conducts on a quarterly basis a review of its estimated costs to complete existing contracts and to the extent that such review suggests that cost overruns will be incurred, appropriate adjustments are recorded on Finmeccanica s financial statements in accordance with IFRS accounting principles. To the extent that cost overruns in the future exceed those estimates, Finmeccanica s results in future periods will be materially adversely affected. Differences between the estimated costs and actual costs can have a substantial negative effect on Finmeccanica s financial position and results of operations. These differences may arise from a number of factors including production delays, cost overruns and other items. The Group has experienced discrepancies 14

19 between actual and estimated costs over the last three financial years including as a result of contractual penalties and disputes with counterparties, mainly with respect to the activities of AnsaldoBreda S.p.A. in the transportation segment because of difficulties encountered in meeting customer specifications in the execution of certain contracts and delays in the delivery of products. Cost overruns as well as contractual disputes may continue to occur in the future. The Finmeccanica Group has a substantial amount of indebtedness that will need to be repaid or refinanced; certain covenants in the Group s facilities restrict Finmeccanica s financial and operational flexibility. As of June 30, 2009, Finmeccanica s net financial indebtedness totaled Euro 4,615 million, equal to 73.0% of total shareholders equity as of that date. As of December 31, 2008, Finmeccanica s net financial indebtedness totaled Euro 3,383 million, equal to 55.2% of total shareholders equity as of that date. As of December 31, 2007, Finmeccanica s net financial indebtedness was Euro 1,158 million, equal to 21.3% of total shareholders equity as of that date. The increase from December 31, 2007 to December 31, 2008 mainly relates to the payment of the amount due for the acquisition of DRS and DRS s debt consolidation, less proceeds from the share capital increase completed in November On June 19, 2008, Finmeccanica entered into a facility agreement for the financing of the DRS acquisition (the Facility Agreement ). As of October 20, 2009, the outstanding principal amount for the Facility Agreement is Euro 992 million of which Euro 295 million with a final maturity of June 2010 is outstanding from Tranche B and Euro 697 million with a final maturity of June 2011 is outstanding from Tranche C. Following the issuance of a Euro bond of Euro 600 million with a maturity in 2022 under the EMTN Program on October 21, 2009, Finmeccanica will immediately prepay entirely the B Tranche and reduce the C Tranche to below Euro 640 million. Under the terms of the Facility Agreement, at that point, the financial covenants and mandatory prepayment obligations included in such facility, other than mandatory prepayment in relation to asset disposals, will cease to apply. See Management s Discussion and Analysis of Financial Condition and Results of Operations Facility Agreement for more details. As a result, the main refinancing requirement of Finmeccanica in 2010 is the repayment of the Euro 501 million bond due August As of June 30, 2009, 67% of the Group s net financial indebtedness was variable rate. This included short term debt which is normally not hedged for interest rate fluctuations and fixed rate long term debt which is swapped into variable rate debt under interest rate swap transactions with different counterparties. Following the recent July 2019 USD 500 million and July 2039 USD 300 million bond issuances and the recent October 2022 Euro 600 million bond issuance under the EMTN program, the variable rate proportion of the financial indebtedness of the Group is reduced significantly. However, Finmeccanica will continue to actively manage the fixed-floating rate portion of its financial debt. Should interest rates increase, the Group s financial expense relating to the variable rate portion of financial debt would increase and the Group s results would be adversely affected. Based on (i) the expected level of cash flows from operations, (ii) bank credit lines that have already been confirmed or that are expected to be confirmed in the near future, (iii) the success in placing bonds in the recent past and (iv) the present market conditions, Finmeccanica believes it can meet the above repayment obligations; however a further worsening of liquidity in the capital and bank markets and other circumstances may affect Finmeccanica s ability to generate the financial resources necessary to repay these obligations at the relevant maturity dates. If, in light of market conditions or other factors, the Group will not be able to generate or raise sufficient financial resources to meet its financial obligations when due, it would be required to renegotiate the terms of its existing debt or find alternative sources of financing. Those refinancings, if available at all, may be more costly than the current arrangements. This may adversely affect the Group s results and financial condition. Finmeccanica s largest customers (including the Italian government) typically pay towards the financial year end, therefore increasing Finmeccanica s reliance on debt-financing for short-term working capital requirements. The level of the Group s indebtedness during the year reflects seasonal working capital requirements. This seasonality arises largely because, while expenditures are incurred regularly during the course of the year, several of Finmeccanica s largest customers (including public sector customers) typically pay towards the financial year end (fourth quarter), therefore increasing Finmeccanica s reliance on debt-financing for shortterm working capital requirements. 15