Thursday 3 October 2013 Government Shutdown update Linda Hudson   On this third day of the federal government’s partial shutdown, I wanted to update you on how the situation is affecting BAE Systems, Inc., and what you can expect next.   Our Government Relations team is following this closely and is not optimistic for a near-term solution. Until the Democrats and Republicans agree on legislation to fund the government — known as a continuing resolution — Washington will remain hobbled by dysfunction that has become all too common.Just as this is disruptive to our customers — 400,000 Defense Department workers are now on furlough — it is disruptive to everyone in our company. It dissipates our energy, threatening to distract us from the very important missions entrusted to us, and it’s hard on employees concerned for their jobs. The impact on our Intelligence & Security sector has been significant; with about 1,000 employees already excused from work at their customer sites. Elsewhere across Inc., the impact has been less acute due to contractual and funding differences. But with each passing day, the potential impact grows for all our employees as progress on Capitol Hill remains elusive. We are working to mitigate these impacts, paying all employees through this work week and continuing certain benefits coverage for non-union employees and their families for up to 90 days. (Continued benefits for union-represented employees are governed by collective-bargaining agreements.) Your sector and business leadership will continue to advise you of these details and to prepare for the possibility of widespread furloughs if the shutdown persists.While our Government Relations staff continues to voice its concern to our elected leaders, we cannot control the legislative process. What we can control, however, is our response to these circumstances. It’s more vital than ever that we take every opportunity to protect BAE Systems’ excellent reputation with its customers, and we will do that by maintaining our trademark focus on the critical work we do, the men and women we protect, and the nations we help defend.Linda HudsonPresident and CEOBAE Systems, Inc.