Fitch Affirms Goodrich's IDR at 'BBB+'; Outlook Remains Stable

NEW YORK--(Business Wire)--
Fitch Ratings has affirmed the following Goodrich Corporation (GR) credit
ratings:

--Issuer Default Rating (IDR) at 'BBB+';

--Senior unsecured debt at 'BBB+';

--Bank credit facility at 'BBB+'.

The Rating Outlook is Stable. Approximately $1.7 billion of outstanding debt is
covered by the ratings.

The ratings reflect GR's competitive position in its markets, a diversified
customer base, a balanced mix between original equipment manufacturer (OEM) and
aftermarket sales, high defense spending levels with favorable positions on
large defense programs, strong operating margins and healthy free cash flow. The
commercial aerospace industry faces challenges in 2009 and 2010, but Fitch
believes that GR's credit metrics and liquidity provide the company with the
strength to meet these challenges at the current rating levels.

Key concerns relate to the potential for debt-funded acquisitions, share
repurchases, pension underfunding, and macro issues such as cyclicality, airline
bankruptcy, and event risks (such as terrorism, disease, etc). Weakness in some
parts of the commercial aerospace industry is also a concern, and as airline
traffic continues to decline and aircraft retirements accelerate, GR could
experience some additional declines in its aftermarket business in the next few
quarters. However, GR's content on older fleets is low, so the impact on GR
would likely be lessened relative to other aerospace suppliers. New aircraft
programs such as the Boeing 787 also present some risk, but GR's payment terms
mitigate some of this concern. Asbestos liabilities are a lesser concern, and
there is also modest concern about the health of the supply chain due to
commercial weakness and credit.

As of March 31, 2009, GR's liquidity consisted of $665 million in cash and $457
million in availability under a $500 million revolving credit facility for total
liquidity of $1.1 billion. Goodrich does not have any debt maturities until 2012
which is also when its bank facility expires. Fitch expects that GR's total debt
will remain relatively stable for the next few years due to low debt maturities
and little incentive to pre-pay debt after the company reached its target rating
objective in 2008.

As a result of rising profits, GR has delevered (debt to operating EBITDA) from
2.5 times (x) at the end of 2005. For the latest 12 months (LTM) ended March 31,
2009, leverage was 1.4x versus 1.2x at the end of 2008 and 1.6x at the end of
2007. Interest coverage as defined by operating EBITDA to interest expense was
11.6x for the 12 months ended March 31, 2009, versus 11.4x for 2008 and 8.4x for
2007.

Free cash flow (cash from operations less capital expenditures and dividends) in
2008 was $385 million and Fitch expects solid cash flow generation going
forward. Free cash flow has been strong since 2006 (a year with negative cash
flow largely due to discretionary events such as the retirement of an accounts
receivable securitization program, voluntary pension contributions, and a
substantial tax settlement payment). Working capital needs, capital expenditures
to fund new program investments and dividends have been a significant use of
cash. Fitch expects that GR will gradually build cash balances in the next two
years.

Going forward cash may be directed more towards shareholders, although much of
the share repurchases will be to offset stock option dilution. Additional
bolt-on acquisitions continue to be a consideration, and voluntary pension
contributions may also be uses of cash. Capital expenditures are expected to
fall in the range of $220 million to $240 million in 2009, which is
significantly below $285 million spent in 2008. Fitch estimates that GR has
adequate financial flexibility and cash flow to execute acquisitions of several
hundred million dollars. However, if larger debt-funded acquisitions were
accomplished, Fitch would review the Outlook or ratings for potential revision.

The underfunded global pension plans (71% funded, with a $985 million funding
deficit as of Dec. 31, 2008) remain a concern, but Fitch considers this to be
manageable due to GR's financial position. The company expects to make plan
contributions between $150 million and $200 million in 2009. Management planned
to contribute $137 million to the U.S. plan in April 2009.

GR has significant sales of commercial original equipment (OE) and commercial
aftermarket products and services; both will face challenges in 2009 and into
2010. Fitch expects aircraft deliveries at Boeing and Airbus could decline
15%-20% in this cycle, with large backlogs moderating the declines compared to
previous cycles. Somewhat offsetting this commercial OE risk is GR's exposure to
the defense segment which should have modest increases in revenues during the
next two years. Overall, a strong backlog at Boeing and Airbus, relatively low
exposure to the business jet market, and growing GR content on newer programs
should continue to generate better than industry growth rates for the company's
OE business in the next several years.

The more profitable commercial aftermarket business declined in the first
quarter and is likely to see some additional deterioration during 2009. However,
Fitch expects this segment to be the first commercial aerospace segment to
recover, and it could begin to rise modestly in 2010 if the global economy shows
moderate growth.

Furthermore, this segment should have a solid growth trend longer-term as GR has
increased its content on newer aircraft and as the Airbus and regional jet
fleets age.

Fitch believes GR has effectively executed its business strategy in the past
several years, positively affecting its financial performance. The company has
made significant progress on improving its product mix, operational efficiencies
and productivity, which have contributed to higher profitability. The
realignment of some manufacturing and engineering activities to lower cost
overseas locations has also helped to improve the cost structure. Since 2005,
operating EBITDA margins have increased 580 basis points to 19% at March 31,
2009.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Kathleen Connelly, +1-212-908-0980
Craig Fraser, +1-212-908-0310
Cindy Stoller, +1-212-908-0526 (Media Relations)
cindy.stoller@fitchratings.com

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