8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 5, 2004

GOODRICH CORPORATION
(Exact Name of Registrant as Specified in Charter)

New York
(State or Other
Jurisdiction of
Incorporation) 1-892
(Commission
File Number) 34-0252680
(IRS Employer
Identification No.)

Four Coliseum Centre
2730 West Tyvola Road
Charlotte, North Carolina 28217
(Address of Principal Executive Offices)(Zip Code)

Registrant’s telephone number, including area code: (704) 423-7000

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     On February 5, 2004, Goodrich Corporation (“Goodrich”) issued a press release announcing its financial results for the fourth quarter and full year 2003 and updating its outlook for full year 2004. A copy of the press release is furnished as Exhibit 99.1 hereto.

     Goodrich will host a conference call for investors and security analysts to discuss the financial results and outlook at 10:00 a.m. Eastern Time on February 5, 2004. By press release dated January 19, 2004, the public was invited to listen to the conference call by telephone or by live webcast accessed through the Investor Relations area of Goodrich’s website at www.goodrich.com. Additional written information regarding the financial results and 2004 outlook will be posted as a webcast presentation on the Investor Relations area of Goodrich’s website prior to the conference call. A copy of such presentation is furnished as Exhibit 99.2 hereto.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GOODRICH CORPORATION (Registrant)
Date: February 5, 2004	By:	/s/ Robert D. Koney, Jr.
		Robert D. Koney, Jr.
		Vice President and Controller

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EXHIBIT INDEX

Exhibit 99.1	Goodrich Corporation Press Release dated February 5, 2004 titled “Goodrich Announces Fourth Quarter and Full Year 2003 Results, Updates Outlook for Full Year 2004”
Exhibit 99.2	Goodrich Corporation written presentation dated February 5, 2004 titled “Goodrich Fourth Quarter and Full-year 2003 Performance Review”

4 EX-99.1 3 g87038exv99w1.htm EX-99.1 PRESS RELEASE

EXHIBIT 99.1

Media Contacts:		News Release
Phone:   Phone:	Lisa Bottle 704 423 7060 Gail Warner 704 423 7048	Goodrich Corporation Four Coliseum Centre 2730 West Tyvola Road Charlotte, NC 28217-4578 Tel: 704 423 7000 Fax: 704 423 7127 www.goodrich.com
Investor Contact:	Paul Gifford
Phone:	704 423 5517

Goodrich Announces Fourth Quarter and Full Year 2003 Results, Updates Outlook for Full Year 2004

• Fourth quarter net income per diluted share of $0.28 on sales of $1,130 million.

• Fourth quarter cash flow from operations of $204 million.

CHARLOTTE, NC, February 5, 2004 – Goodrich Corporation announced today its results for the fourth quarter and full year 2003, and updated its outlook for sales, earnings and cash flow from operations for 2004.

The company reported fourth quarter 2003 net income of $33 million, or $0.28 per diluted share, on sales of $1,130 million. During the fourth quarter 2002, net income was $12 million, or $0.11 per diluted share, on sales of $1,157 million. The $27 million, or 2 percent, sales decrease was due to reduced demand for commercial aircraft original equipment and aftermarket parts and service, partially offset by increased demand for military and space products and services.

During the fourth quarter 2003, the company’s reported results included $7 million in pre-tax ($5 million after-tax) charges for facility closure and headcount reduction actions. Similar charges for the fourth quarter 2002 were $11 million pre-tax ($7 million after-tax). Additionally, in the fourth quarter 2002, Goodrich incurred $71 million in pre-tax ($51 million after-tax) charges for inventory step-up and in-process R&D related to the acquisition of the Aeronautical Systems businesses from TRW. There were no similar charges during the fourth quarter 2003.

Commenting on the company’s performance, Marshall Larsen, Chairman, President and Chief Executive Officer said, “It appears we may have seen the bottom of the downturn in the commercial aerospace market during 2003. Our fourth quarter revenue increased 6 percent compared to third quarter 2003, including a 4 percent improvement in commercial aftermarket sales. We had a great year for cash flow from operations in 2003, and used a significant portion of that to pay down debt. Our team performed extremely well under very difficult circumstances. In 2004, we remain focused on improving our operational and financial performance and are

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aligned toward specific enterprise-wide goals, including margin improvement and strong cash flow. We continue to invest in new products and systems that will fuel the future growth of our company.”

For the full year 2003, the company reported net income of $111 million, or $0.93 per diluted share, on sales of $4,383 million. For the full year 2002, net income was $118 million, or $1.14 per diluted share, on sales of $3,809 million. The increased sales of $574 million are primarily attributable to the Aeronautical Systems businesses, which represented about $755 million in incremental sales in 2003, offset by reduced sales for products associated with commercial aircraft original equipment production and aftermarket parts and service. The results from continuing operations for both years include certain charges totaling $95 million for 2003 and $77 million for 2002, as shown in the table below. Also included in the results from continuing operations for the full year 2003 is pre-tax pension expense of $88 million, compared to $35 million for the full year 2002.

Sales and Earnings - Additional Details	Full Year Comparisons
	2003						2002
	Sales & After-						Sales & After-
	tax earnings			Diluted			tax earnings			Diluted
	($ in Millions)			EPS			($ in Millions)			EPS
Sales	$	4,383					$	3,809
Income from Continuing Operations(*)	$	49		$	0.41		$	164		$	1.56
Income (Loss) from Discontinued Operations	$	62		$	0.52			($10	)		($0.08	)
Cumulative effect of change in accounting		—			—			($36	)		($0.34	)
Net income	$	111		$	0.93		$	118		$	1.14
*Included in Income from Continuing Operations (amounts after-tax):
Non-cash asset impairment charges:
Cordiem investment write-off		($8	)		($0.07	)		—			—
Super 727 inventory and receivables impairment		($54	)		($0.46	)		—			—
Inventory step-up (Aeronautical Systems related)		—			—			($39	)		($0.38	)
In-process R&D (Aeronautical Systems related)		—			—			($12	)		($0.12	)
Other facility and spare part valuation adjustments		($23	)		($0.20	)		($1	)		($0.01	)
Accounts receivable write-off due to customer bankruptcies		($2	)		($0.01	)		($1	)		($0.01	)
Sub-total — non-cash asset impairment charges		($87	)		($0.74	)		($53	)		($0.52	)
Facility closure and headcount reduction actions		($15	)		($0.12	)		($30	)		($0.28	)
Gain on sale of Noveon PIK notes	$	5		$	0.04			—			—
Fairchild Dornier asset valuation	$	2		$	0.02			($11	)		($0.11	)
Intangible asset sale, insurance and contract claim settlements		—			—		$	17		$	0.17
Total of items above		($95	)		($0.80	)		($77	)		($0.74	)
Average Shares Outstanding — Diluted (in millions)		118.2						105.5

Cash flow from operations continued to be strong in the fourth quarter 2003. The company generated cash flow from operations of $204 million, which included a tax refund of approximately $52 million and contributions to the company’s pension plans of $21 million. On a year-to-date basis, cash flow from operations was $553 million, about 6 percent higher than the full year 2002. The quarter-ending cash balance was $378 million, an increase of $228 million

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from the cash balance of $150 million at the end of 2002. Total debt, including the QUIPS in both periods, during 2003 was reduced by $428 million, from $2,643 million at the end of 2002 to $2,215 at the end of 2003.

Cash Flow Comparison	Fourth Quarter
(Dollars in Millions)	2003			2002
Cash Flow from Operations	$	204		$	180
Capital Expenditures		($50	)		($51	)
Included in cash flow from operations:
Cash outflow for facility closures and headcount reductions		($9	)		($10	)

Cash Flow Comparison	Full Year Comparisons
(Dollars in Millions)	2003			2002
Cash Flow from Operations	$	553		$	524
Capital Expenditures		($125	)		($106	)
Included in cash flow from operations:
Cash outflow for facility closures and headcount reductions		($47	)		($52	)

Business Highlights and Potential New Programs

• In October 2003, Goodrich completed the redemption of approximately one-half of the outstanding BFGoodrich Capital 8.30% Cumulative Quarterly Income Preferred Securities, Series A (QUIPS). In January 2004, the company, through BFGoodrich Capital, called for redemption of the remaining QUIPS for approximately $64 million. The redemption date will be March 2, 2004. Late in the fourth quarter 2003, the FASB finalized FIN 46, which resulted in the QUIPS being classified as debt. Fourth quarter 2003 results have been presented on this basis. Including these redemptions, Goodrich has reduced net debt (total debt minus cash and cash equivalents) over $1 billion since the acquisition of Aeronautical Systems in October 2002.

Commercial

• Goodrich was selected to supply the complete wheel and braking system for the new Sukhoi Russian Regional Jet and the new Cessna Citation Mustang business jet. These awards represent the first commercial applications of the company’s proprietary brake control system.

• Lufthansa selected Goodrich as the cargo systems integrator for the industry’s first powered cargo system used for passenger-to-freighter conversion of five MD-11 aircraft. In the past, powered cargo systems were only available for original equipment MD-11 freighters.

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• Goodrich continues to work with Boeing on the new 7E7 aircraft. Throughout 2004 Goodrich will provide proposals on several key systems, many of which will include the use of innovative new technologies to increase the reliability and decrease the weight of components and systems.

Military & Space

• Goodrich and Raytheon finalized a teaming agreement under which Goodrich will be the lead manufacturer of composite structures and components for the Raytheon-led “Team LCS”, one of three competing teams awarded a contract for the preliminary design of the U.S. Navy’s new Littoral Combat Ship.

• In November, Goodrich was selected by Boeing and the U.S. Air Force to provide the SmartProbe™ primary air data system for the C-130 Avionics Modernization Program. The system will provide all primary and secondary air data information required by the flight control and cockpit display systems.

Outlook

Goodrich’s 2004 outlook is based on the following market assumptions:

• Deliveries of Boeing and Airbus large commercial aircraft are expected to be flat to slightly declining when compared to the 586 deliveries in 2003.

• Capacity in the global airline system, as measured by available seat miles (ASMs), is expected to grow for the first time since 2000. Goodrich continues to expect modest ASM growth in the 3 – 5 percent range. Goodrich sales to airlines for large commercial and regional aircraft aftermarket parts and service are expected to grow approximately in-line with increases in capacity.

• Regional and business new aircraft production is expected to increase by about 8 — 10 percent.

• Military sales (OE and aftermarket) should increase roughly in line with global military budgets, in the 7 — 10 percent range.

Based on current expectations for these key market trends, Goodrich 2004 sales are expected to grow in the low single-digit percent range, compared to 2003.

The outlook for operating income and earnings per share (EPS) is based on many external and internal factors that may have a material impact on operating income and EPS. These factors include, but are not limited to:

• Certain expenses included in Corporate G&A, Other Income (Expense) and segment operating results are expected to increase by approximately $30 million, in the aggregate, in 2004. The increase, compared to the prior outlook of a $20 — $25 million increase in these expenses, is primarily due to an expected change in the company’s incentive compensation plan, which will replace a portion of the annual stock option grant with restricted stock.

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• Stock option expensing – Goodrich expects to begin expensing stock options during 2004. For the full year 2004, it is expected that stock option expense will be approximately $16 million pre-tax (about $0.09 per diluted share).

• Pension expense – the company expects pension costs to be approximately $7 million (pre-tax) lower than 2003, due to higher than previously anticipated pension plan asset levels driven by strong equity markets in the fourth quarter 2003.

• Foreign exchange – for 2004, Goodrich is currently hedged on about 75 percent of its estimated foreign exchange exposure. The recent weakening of the US dollar, especially against the Canadian dollar, the Euro and the Pound Sterling, is expected to negatively impact 2004 income by approximately $15 – $20 million pre-tax, compared to 2003, based on current exchange rates.

• 7E7 and A380 spending – combined spending on these two programs is expected to be relatively flat in 2004 compared to 2003 as the reductions in spending on the Airbus A380 program are expected to be largely offset by increased spending on the Boeing 7E7 program.

• Change in contract accounting – the company expects to change certain elements of the contract accounting methodology utilized at its Aerostructures business, effective January 1, 2004, to better align with industry practices. Goodrich expects a one-time increase to income, which will be recorded as a cumulative effect of change in accounting, of approximately $24 million pre-tax (about $0.13 per diluted share). As a result of the change, a decrease to 2004 operating income of about $8 million pre-tax (about $0.05 per diluted share) is expected. This change has no impact on cash flow from operations.

Taking these items into account, Goodrich expects 2004 fully diluted EPS to be in the range of $1.20 — $1.35. EPS from continuing operations, which excludes the one-time gain from the cumulative effect of accounting change but including the ongoing negative impact of this accounting change and stock option expensing, is expected to be between $1.07 — $1.22.

EPS Outlook	2004 Outlook
EPS from continuing operations (diluted)*	$	1.07 - $1.22
Cumulative effect of change in accounting — beginning of year		$0.13
Net Income (diluted EPS)	$	1.20 - $1.35
* Includes:
Change in accounting — operating income impact		($0.05)
Stock option expensing		($0.09)

Goodrich expects cash flow from operations, minus capital expenditures, to approximate net income in 2004. The company expects capital expenditures in 2004 to be substantially higher than the 2003 expenditures of $125 million.

The current earnings and cash flow outlook does not include any consideration for premiums associated with potential early retirement of debt, settlement of pending tax litigation related to

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previously disclosed Rohr and Coltec cases or potential contractual disputes with Northrop Grumman related to the purchase of Aeronautical Systems from TRW.

The supplemental segment discussion and tables that follow provide more detailed information about the fourth quarter 2003 results.

Goodrich will hold a conference call on February 5, 2004 at 10:00 AM U.S. Eastern time to discuss this announcement. Interested parties can listen to a live webcast of the conference call, and view a presentation, at www.goodrich.com, or listen via telephone by dialing 913-981-5571.

Goodrich Corporation, a Fortune 500 company, is a leading global supplier of systems and services to the aerospace and defense industry. Goodrich technology is involved in making aircraft fly... helping them land... and keeping them safe. Serving a global customer base with significant worldwide manufacturing and service facilities, Goodrich is one of the largest aerospace companies in the world. For more information visit http://www.goodrich.com

Forward-looking Statements

Certain statements made in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the company’s future plans, objectives, and expected performance. Specifically, statements that are not historical facts, including statements accompanied by words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” or “plan,” are intended to identify forward-looking statements and convey the uncertainty of future events or outcomes. The company cautions readers that any such forward-looking statements are based on assumptions that the company believes are reasonable, but are subject to a wide range of risks, and actual results may differ materially.

Important factors that could cause actual results to differ include, but are not limited to: the extent to which the company is successful in integrating Aeronautical Systems and achieving expected operating synergies; potential contractual disputes with Northrop Grumman related to the purchase of Aeronautical Systems; the nature, extent and timing of the company’s proposed restructuring and consolidation actions and the extent to which the company is able to achieve savings from these actions; the possibility of additional restructuring and consolidation actions beyond those previously announced by the company; global demand for aircraft spare parts and aftermarket services; threats associated with and efforts to combat terrorism, including the current situation in Iraq; the impact of Severe Acute Respiratory Syndrome (SARS) on global travel; the health of the commercial aerospace industry, including the impact of additional bankruptcies in the airline industry; demand for and market acceptance of new and existing products, such as the Airbus A380, the Joint Strike Fighter, the Boeing 7E7 and the Embraer 190;

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potential cancellation of orders by customers; successful development of products and advanced technologies; the effect of changes in accounting policies including the proposed change in contract accounting at the company’s Aerostructures business; competitive product and pricing pressures; possible assertion of claims against the company on the theory that it, as the former corporate parent of Coltec Industries Inc, bears some responsibility for the asbestos-related liabilities of Coltec and its subsidiaries, or that Coltec’s dividend of its aerospace business to the company prior to the EnPro spin-off was made at a time when Coltec was insolvent or caused Coltec to become insolvent; the company’s ability to recover from third parties under contractual rights of indemnification for environmental and other claims arising out of the divestiture of the company’s tire, vinyl and other businesses; domestic and foreign government spending, budgetary and trade policies; economic and political changes in international markets where the company competes, such as changes in currency exchange rates, inflation rates, recession and other external factors over which the company has no control; and the outcome of contingencies (including completion of acquisitions, divestitures, litigation and environmental remediation efforts). Further information regarding the factors that could cause actual results to differ materially from projected results can be found in the company’s filings with the Securities and Exchange Commission, including in the company’s Annual Report on Form 10-K for the year ended December 31, 2002.

The company cautions you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the date on which such statements were made. The company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date on which such statements were made or to reflect the occurrence of unanticipated events.

###

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Supplemental Segment Review

Total Segment Results
	4Q 2003						4Q 2002
	Sales and Pre-tax						Sales and Pre-tax
	earnings						earnings
	($ in Millions)			Margin %			($ in Millions)			Margin %
Sales	$	1,130					$	1,157
Segment Operating Income	$	114			10.1	%	$	81			7.0	%
Included in Segment Operating Income (pre-tax):
Inventory step-up (Aeronautical Systems related)		—			—			($59	)		(5.1	%)
In-process R&D (Aeronautical Systems related)		—			—			($13	)		(1.1	%)
Facility closures and headcount reductions		($7	)		(0.6	%)		($11	)		(1.0	%)
Segment pension expense		($20	)		(1.8	%)		($9	)		(0.8	%)
Total of items above		($27	)		(2.4	%)		($92	)		(8.0	%)

Included below is a summary discussion of sales and operating income changes by segment. Pension expense is an element of variance in all segments, and is not discussed specifically below.

Airframe Systems — Sales decreased $28 million, or 6 percent, from $479 million in the fourth quarter of 2002 to $451 million in the fourth quarter of 2003. The decrease was primarily due to lower sales for landing gear original equipment, wheel and brake and aeronautical systems’ product repair services, and heavy airframe maintenance during the fourth quarter of 2003.

Operating income increased $2.8 million, or 20.7%, from $13.5 million in the fourth quarter of 2002 to $16.3 million in the fourth quarter of 2003. Airframe Systems recorded $39.3 million of in-process R&D and inventory step-up accounting charges in 2002 associated with the acquisition of the Aeronautical Systems businesses, which did not recur in 2003. Excluding these charges, the operating income decline of $36.5 million over the same period a year ago was attributable in part to the decreased sales noted above for landing gear original equipment, wheel and brake repair services, and heavy airframe maintenance during the fourth quarter of 2003. In addition, the sales associated with the Aeronautical Systems businesses in this segment resulted in a loss for the fourth quarter of 2003.

Engine Systems — Sales increased 1 percent, from $402 million in the fourth quarter 2002 to $407 million in the fourth quarter 2003. Higher sales in Aerostructures were mostly offset by decreased sales of aerospace and industrial gas turbine components at Turbomachinery Products.

Operating income increased 120 percent, from $27.0 million in the fourth quarter 2002 to $59.6 million. The primary contributor to the increased operating income was the $24.1 million of inventory step-up accounting charges in 2002 associated with the acquisition of the Aeronautical Systems businesses, which did not recur in 2003. Turbomachinery Products also reported improved operating results even though sales declined, due to successful implementation of facility closure and headcount reduction actions.

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Electronic Systems – Sales for the fourth quarter 2003 decreased 2 percent to $272 million, from $277 million in the fourth quarter 2002. Increased sales for the Lighting Systems, Sensor Systems and Propulsion Systems businesses were largely offset by decreased sales in the Optical and Space Systems and Power Systems businesses.

Operating income decreased about 4 percent from the year-ago quarter, from $40.0 million to $38.3 million. Electronic Systems recorded $7.9 million of inventory step-up accounting charges in 2002 associated with the acquisition of the Aeronautical Systems businesses, which did not recur in 2003. After taking these into account, primary contributors to the reduced operating income were the reduced sales for the Optical and Space Systems business, unfavorable product mix in Aircraft Interior Products and increased spending on A380 product development.

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GOODRICH CORPORATION
(Dollars in millions except per share amounts)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2003			2002			2003			2002
Sales	$	1,130.3		$	1,157.0		$	4,382.9		$	3,808.5
Operating Income		89.3			61.5			260.1			358.6
Interest Expense1		(38.4	)		(36.3	)		(155.5	)		(106.2	)
Interest Income		0.6			6.7			6.0			32.6
Other Expense — net		(1.4	)		(4.5	)		(26.3	)		(18.1	)
Income before Income Taxes and Trust Distributions		50.1			27.4			84.3			266.9
Income Tax Expense		(17.4	)		(13.2	)		(27.8	)		(92.2	)
Distributions on Trust Preferred
Securities		—			(2.6	)		(7.9	)		(10.5	)
Income from Continuing Operations		32.7			11.6			48.6			164.2
Income (Loss) from Discontinued Operations		—			0.1			62.4			(10.2	)
Cumulative Effect of Change in Accounting		—			—			(0.5	)		(36.1	)
Net Income	$	32.7		$	11.7		$	110.5		$	117.9
Income Per Share:
Basic
Continuing Operations	$	0.28		$	0.11		$	0.41		$	1.58
Discontinued Operations		—			—			0.52			(0.09	)
Cumulative Effect of Change in Accounting		—			—			—			(0.35	)
Net Income	$	0.28		$	0.11		$	0.93		$	1.14
Diluted
Continuing Operations	$	0.28		$	0.11		$	0.41		$	1.56
Discontinued Operations		—			—			0.52			(0.08	)
Cumulative Effect of Change in Accounting		—			—			—			(0.34	)
Net Income	$	0.28		$	0.11		$	0.93		$	1.14
Weighted — Average Number of Shares Outstanding (in millions):
Basic		117.5			108.9			117.4			103.7
Diluted		118.9			109.1			118.2			105.5

¹ As a result of the Company’s adoption of FASB Interpretation No. 46 “Consolidation of Variable Interest Entities” (FIN 46), debt has increased primarily due to the Mandatorily Redeemable Preferred Securities of Trust (QUIPS). Accordingly, Distributions on Trust Preferred Securities has been reclassified to Interest Expense. Prior periods have not been restated.

GOODRICH CORPORATION SEGMENT REPORTING
(Dollars in millions)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2003			2002			2003			2002
Sales:
Airframe Systems	$	451.1		$	478.6		$	1,784.4		$	1,451.6
Engine Systems		406.9			401.8			1,557.8			1,422.6
Electronic Systems		272.3			276.6			1,040.7			934.3
Total Sales	$	1,130.3		$	1,157.0		$	4,382.9		$	3,808.5
Operating Income:
Airframe Systems	$	16.3		$	13.5		$	78.7		$	100.6
Engine Systems		59.6			27.0			113.2			171.2
Electronic Systems		38.3			40.0			139.6			147.4
Total Segment Operating Income		114.2			80.5			331.5			419.2
Corporate General and Administrative Costs		(24.9	)		(19.0	)		(71.4	)		(60.6	)
Total Operating Income	$	89.3		$	61.5		$	260.1		$	358.6
Segment Operating Income as a Percent of Sales :
Airframe Systems		3.6	%		2.8	%		4.4	%		6.9	%
Engine Systems		14.6	%		6.7	%		7.3	%		12.0	%
Electronic Systems		14.1	%		14.5	%		13.4	%		15.8	%
Total Segment Operating Income as a Percent of Sales		10.1	%		7.0	%		7.6	%		11.0	%

GOODRICH CORPORATION
SUPPLEMENTARY FINANCIAL INFORMATION
(Dollars in millions)

	Twelve Months Ended
	December 31,
	2003			2002
Non-Segment Expenses:
Net Interest Expense	$	(149.5	)	$	(73.6	)
- Payment-in-Kind Interest Income	$	4.3		$	23.3
(included in Net Interest Expense above)
Other Income (Expense), Net:	$	(26.3	)	$	(18.1	)
- Discontinued Retiree Health Care	$	(20.7	)	$	(18.1	)
- Other Income (Expense)	$	(5.6	)	$	—
	Twelve Months Ended
	December 31,
	2003			2002
Preliminary Balance Sheet and Cash Flow Data:
Short-term Bank Debt	$	2.7		$	379.2
Current Maturities of Long-term Debt and Capital Lease Obligations1	$	75.6		$	3.9
Long-term Debt and Capital Lease Obligations	$	2,136.6		$	2,129.0
Total Debt	$	2,214.9		$	2,512.1
Cash and Cash Equivalents	$	378.4		$	149.9
Net Debt2	$	1,836.5		$	2,362.2
Dividends	$	94.0		$	96.9
Depreciation and Amortization	$	219.1		$	180.8
- Depreciation	$	157.8		$	133.0
- Amortization	$	61.3		$	47.8

1

As a result of the Company’s adoption of FASB Interpretation No. 46 “Consolidation of Variable Interest Entities” (FIN 46), debt has increased primarily due to the Mandatorily Redeemable Preferred Securities of Trust (QUIPS). Prior periods have not been restated to reflect the change. If prior periods had been restated, debt would have increased by $130.4 million for 2002.

2

Total Debt (defined as short-term debt plus current maturities of long-term debt and capital lease obligations plus long-term debt and capital lease obligations) and Net Debt (defined as Total Debt minus cash and cash equivalents) are non-GAAP financial measures that the Company believes are useful to rating agencies and investors in understanding the Company’s capital structure and leverage. Because all companies do not calculate these measures in the same manner, the Company’s presentation may not be comparable to other similarly titled measures reported by other companies.

PRELIMINARY CONSOLIDATED BALANCE SHEET (UNAUDITED)

(DOLLARS IN MILLIONS, EXCEPT SHARE AMOUNTS)
DECEMBER 31	2003			2002
CURRENT ASSETS
Cash and cash equivalents	$	378.4		$	149.9
Accounts and notes receivable		608.5			716.0
Inventories		979.3			962.6
Deferred income taxes		53.3			121.3
Prepaid expenses and other assets		82.7			38.0
Assets of discontinued operations		—			46.5
TOTAL CURRENT ASSETS		2,102.2			2,034.3
Property		1,175.9			1,222.4
Prepaid pension		219.5			250.5
Goodwill		1,259.5			1,194.2
Identifiable intangible assets		484.7			464.9
Payment-in-kind notes receivable, less discount ($11.0 at December 31, 2002)		—			141.7
Deferred income taxes		65.4			45.5
Other assets		643.7			644.8
TOTAL ASSETS	$	5,950.9		$	5,998.3
CURRENT LIABILITIES
Short-term bank debt	$	2.7		$	379.2
Accounts payable		414.5			435.8
Accrued expenses		648.2			576.9
Income taxes payable		259.9			150.8
Liabilities of discontinued operations		—			16.3
Current maturities of long-term debt and capital lease obligation		75.6			3.9
TOTAL CURRENT LIABILITIES		1,400.9			1,562.9
Long-term debt and capital lease obligations		2,136.6			2,129.0
Pension obligations		642.0			722.1
Postretirement benefits other than pensions		319.2			323.2
Deferred income taxes		50.9			—
Other non-current liabilities		197.7			202.8
Commitments and contingent liabilities		—			—
Mandatorily redeemable preferred securities of trust		—			125.4
SHAREHOLDERS’ EQUITY
Common stock— $5 par value
Authorized, 200,000,000 shares; issued, 131,265,173 shares at December 31, 2003, and 130,568,582 shares at December 31, 2002 (excluding 14,000,000 shares held by a wholly owned subsidiary)		656.3			652.9
Additional paid-in capital		1,035.8			1,027.4
Income retained in the business		52.5			36.1
Accumulated other comprehensive income (loss)		(126.1	)		(369.1	)
Unearned compensation		(1.4	)		(1.6	)
Common stock held in treasury, at cost (13,539,820 shares in 2003 and 13,506,977 shares in 2002)		(413.5	)		(412.8	)
TOTAL SHAREHOLDERS’ EQUITY		1,203.6			932.9
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,950.9		$	5,998.3

PRELIMINARY CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

(DOLLARS IN MILLIONS)
YEAR ENDED DECEMBER 31	2003			2002			2001
OPERATING ACTIVITIES
Income from continuing operations	$	48.6		$	164.2		$	172.9
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Restructuring and consolidation:
Expenses		51.1			37.4			103.9
Payments		(46.6	)		(51.5	)		(29.9	)
In-process research and development		—			12.5			—
Aeronautical Systems inventory step-up		—			58.8			—
Asset Impairments		86.1			—			93.5
Depreciation and amortization		219.1			180.8			169.5
Deferred income taxes		77.4			(2.3	)		27.5
Net gains on sale of businesses		—			(2.5	)		(7.8	)
Payment-in-kind interest income		(4.3	)		(23.3	)		(17.6	)
Change in assets and liabilities, net of effects of acquisitions and dispositions of businesses:
Receivables		96.8			109.1			22.9
Change in receivables sold, net		—			—			46.3
Inventories		(33.5	)		55.1			(90.1	)
Other current assets		(5.9	)		(18.6	)		(9.6	)
Accounts payable		(52.2	)		(97.1	)		4.7
Accrued expenses		28.7			(27.8	)		23.9
Income taxes payable		77.4			129.8			(60.0	)
Tax benefit on non-qualified options		0.4			0.5			7.7
Other non-current assets and liabilities		10.0			(0.9	)		(83.0	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		553.1			524.2			374.8
INVESTING ACTIVITIES
Purchases of property		(125.1	)		(106.1	)		(187.4	)
Proceeds from sale of property		6.9			15.1			2.0
Proceeds from sale of businesses		—			6.0			18.9
Proceeds from payment-in-kind note		151.9			49.8			—
Payments received (made) in connection with acquisitions, net of cash acquired		23.6			(1,472.6	)		(111.6	)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES		57.3			(1,507.8	)		(278.1	)
FINANCING ACTIVITIES
Increase (decrease) in short-term debt, net		(377.4	)		264.0			(626.4	)
Proceeds from issuance of long-term debt and capital lease obligations		20.0			793.1			1.0
Repayment of long-term debt and capital lease obligations		(74.9	)		(1.4	)		(179.7	)
Proceeds from issuance of common stock		9.1			220.2			51.4
Purchases of treasury stock		(0.3	)		(4.9	)		(47.1	)
Dividends		(94.0	)		(96.9	)		(113.7	)
Distributions on Trust preferred securities		(7.9	)		(10.5	)		(10.5	)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES		(525.4	)		1,163.6			(925.0	)
DISCONTINUED OPERATIONS
Net cash (used) provided by discontinued operations		138.1			(118.7	)		836.6
Effect of Exchange Rate Changes on Cash and Cash Equivalents		5.4			2.8			—
Net Increase in Cash and Cash Equivalents		228.5			64.1			8.3
Cash and Cash Equivalents at Beginning of Year		149.9			85.8			77.5
Cash and Cash Equivalents at End of Year	$	378.4		$	149.9		$	85.8

  EX-99.2 4 g87038exv99w2.htm EX-99.2 WRITTEN PRESENTATION

Exhibit 99.2

Fourth Quarter and Full Year 2003 Performance Review February 5, 2004

Certain statements made in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company's future plans, objectives, and expected performance. The Company cautions readers that any such forward- looking statements are based on assumptions that the Company believes are reasonable, but are subject to a wide range of risks, and actual results may differ materially. Important factors that could cause actual results to differ include, but are not limited to, the extent to which the Company is successful in integrating the Aeronautical Systems businesses and achieving operating synergies; the nature, and extent and timing of the Company's proposed restructuring and consolidation actions and the extent to which the Company is able to achieve savings from these actions, as well as other factors discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. The Company cautions you not to place undue reliance on the forward-looking statements contained in this presentation, which speak only as of the date on which such statements were made. The Company undertakes no obligation to release publicly any revisions to these forward- looking statements to reflect events or circumstances after the date on which such statements were made or to reflect the occurrence of unanticipated events. Forward Looking Statements

Financial and Operational Overview

Recent Significant Developments Full year 2003 cash flow from operations of $553 million - 6% greater than 2002 2003 full year sales of $4.4 billion, EPS of $0.93 per diluted share Announced plans to redeem the remaining $63.5 million of QUIPS - to be completed on March 2, 2004 Several new commercial and military contracts announced Expect low single-digit sales growth in 2004, EPS expected to be between $1.20 - $1.35 per diluted share Includes impact of contract accounting change and expensing of stock options Strong finish to 2003

(Dollars in Millions, excluding EPS) 4th Qtr 2003 4th Qtr 2002 Change Sales $1,130 $1,157 ($27) Segment operating income $114 $81 $33 - % of Sales 10.1% 7.0% 3.1% Income - Continuing operations - Net income $33 $33 $12 $12 $21 $21 Diluted EPS - Continuing operations - Net income $0.28 $0.28 $0.11 $0.11 $0.17 $0.17 Fourth Quarter 2003 - Financial Summary

(Dollars in Millions, excluding EPS) 2003 2002 Change Sales $4,383 $3,809 $574 Segment operating income $332 $419 ($87) - % of Sales 7.6% 11.0% (3.4%) Income - Continuing operations - Net income $ 49 $111 $164 $118 ($115) ($7) Diluted EPS - Continuing operations - Net income $0.41 $0.93 $1.56 $1.14 ($1.15) ($0.21) Full Year 2003 - Financial Summary

2003 Airframe Systems Segment Actual 2003 Actual 2002 Change Change Dollars in Millions Actual 2003 Actual 2002 $ % Sales $1,784 $1,451 $333 23% Segment OI $79 $101 ($22) (22%) % Sales 4.4% 7.0% Included above: Facility Closure and Headcount Reductions/Asset Impairment ($18) ($4) ($14) N/A In-process R&D/Inventory step-up -- ($39) $39 N/A Major Variances: Aeronautical Systems (AS) added $470 million in incremental sales Excluding AS, sales decreased $137 million due primarily to lower sales in the landing gear OE, wheel and brake services and heavy maintenance businesses OI decline related primarily to reduced volume and unfavorable pension and FX impacts

2003 Engine Systems Segment Major Variances: Aeronautical Systems added $176 million in incremental sales Excluding AS, sales decreased $41 million, due primarily to lower sales of aerospace and industrial gas turbine components OI decline due primarily to higher asset impairment charges related to Super 27 program and other facility closure and headcount reduction action in 2003 Actual 2003 Actual 2002 Change Change Dollars in Millions Actual 2003 Actual 2002 $ % Sales $1,558 $1,423 $135 9% Segment OI $113 $171 ($58) (34%) % Sales 7.3% 12.0% Included Above: Facility Closure and Headcount Reductions/Asset Impairment ($111) ($26) ($85) N/A In-process R&D/Inventory step-up -- ($24) $24 N/A

2003 Electronic Systems Segment Major Variances: Aeronautical Systems added $109 million in incremental sales Remaining sales were relatively flat OI decline related primarily to pension and unfavorable mix Actual 2003 Actual 2002 Change Change Dollars in Millions Actual 2003 Actual 2002 $ % Sales $1,041 $934 $107 11% Segment OI $140 $147 ($7) (5%) % Sales 13.4% 15.7% Included Above: Facility Closure and Headcount Reductions/Asset Impairment ($9) ($7) ($2) N/A In-process R&D/Inventory step-up -- ($8) $8 N/A

Fourth Quarter 2003 - Financial Change Analysis (Dollars in Millions) (Dollars in Millions) Item Sales After-tax Income from Continuing Operations Diluted EPS Fourth Quarter 2002 $1,157 $12 $0.11 Lower operating margins, volume and product mix/other/share dilution ($27) ($18) ($0.19) Higher pension expense ($7) ($0.06) Lower facility closure and headcount reduction actions $3 $0.03 Fourth Quarter 2002 in-process R&D and inventory step-up $51 $0.47 Lower payment-in-kind (PIK) income ($4) ($0.04) Corporate G&A ($4) ($0.04) Fourth Quarter 2003 $1,130 $33 $0.28

Sales Trends Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 GR 896 900 856 893 844 831 823 866 264 250 264 241 264 Aeronautical Systems Sales ($ in Millions) Note: All sales restated to reflect discontinued operations

Debt Retirement Progress Since Acquisition of Aeronautical Systems 10/1/02 Proforma 12/31/2002 3/31/2003 6/30/2003 9/30/2003 12/31/2003 Net Debt 2893 2487 2075 1994 1949 1836 Cash 146 150 186 268 326 378 $ in Millions Total Debt + QUIPS $3,039 Total Debt + QUIPS $2,638 Total Debt + QUIPS $2,261 Net Debt + QUIPS $2,893 Net Debt + QUIPS $2,488 Net Debt + QUIPS $2,075 Cash $146 Cash $150 Cash $186 Total debt + QUIPS reduced $824M or 27%; Net debt + QUIPS reduced $1,056M or 37% Total Debt + QUIPS $2,262 Net Debt + QUIPS $1,994 Cash $268 Total Debt + QUIPS $2,275 Net Debt + QUIPS $1,949 Cash $326 Total Debt + QUIPS $2,215 Net Debt + QUIPS $1,837 Cash $378 Note: See page 27 for definitions of Total Debt and Net Debt and a detailed calculation of these measures as of the dates indicated.

Cash Flow and Capital Expenditures ($M) Cash Flow from Ops Cap Ex 2000 168 134 2001 375 187 2002 524 107 2003 553 125 Cash Flow from Operations 2003 Cash Flow Cash flow from operations of $553M Included $107M in federal income tax refunds Included $47M cash payments for facility closures and headcount reductions Capital Expenditures of $125M Incentive systems aligned with goal Utilize primarily for debt reduction Ongoing new program investments continued Stable dividend since EnPro spin- off Three years of significant cash generation

Sales by Market Channel

Boeing Airbus Regional, Business, GA OE Commercial A/C Aftermarket Regional, Business & GA Aftmkt Heavy Maintenance Military Other East 396 645 230 1114 291 143 1309 257 2003 Sales by Market Channel - Total Sales $4,383M Large Commercial Aircraft Aftermarket 25% Regional, Business & General Aviation Aftermarket 7% Boeing Commercial OE 9% Airbus Commercial OE 15% Military & Space, OE & Aftermarket 30% Other 6% Heavy A/C Maint. 3% OE AM Balanced business mix - three major market areas each represent approximately one-third of sales Regional, Business & Gen. Av. OE 5% Total Commercial Aftermarket 35% Total Commercial OE 29% Total Military and Space 30%

Outlook

Expectations for Goodrich 2004 Sales Sales by Market Channel 2003 Sales Mix Average Expected Growth Average Expected Growth Sales by Market Channel 2003 Sales Mix 2003 Actual Change* 2004 Expected Change Military and Space - OE and Aftermarket 30% 10% 7% - 10% Boeing and Airbus - OE Production 24% (10%) Flat to Down Slightly Regional, Business & General Aviation - OE 5% (18%) 8% - 10% Aftermarket - Large Commercial and Regional, Business and GA 32% (3%) 3% - 5% Heavy Airframe Maintenance 3% (27%) Approx. Flat Other 6% (13%) Approx. Flat Goodrich Total Sales $4.4B (4%) Low single-digit percent growth * Compared to 2002 pro-forma sales, including full year contribution of Aeronautical Systems, excluding discontinued operations. $3,809M as reported, plus $756M for Aeronautical Systems during first 9 months of 2002.

2004 P&L Headwind Directors & Officers Insurance Current multi-year program ends in mid 2004 Substantial premium increase expected on renewal Management Incentive Compensation Poor industry conditions drive below target payouts in 2002-2003 Normal payouts expected in 2004 Replace portion of stock options with restricted stock Tax Litigation (Defense costs) Two major cases projected for trial in 2004 (Rohr and Coltec) Detailed in recent SEC filings Retiree Medical Expenses Double digit increase expected Industry wide phenomena Included in other income/expense Excludes prescription drug subsidy Approximately $30M Aggregate Increase Expected In 2004.

2004 Pension Outlook The asset mix for the US plans at YE 2003 is approximately 61% equity / 6% real estate / 33% debt (10 to 15 year duration) No smoothing of asset returns for 80% of plans Future expense based on prior year end plan assets at FMV No required contributions for qualified U.S. plans in 2004 Actual 12/31/02 Actual 12/31/03 Projected 2004 L-T Rate of Return Assumption (US Plans) 9.25% 9.0% 9.0% Discount Rate (US Plans) 6.875% 6.25% 6.25% Actual Plan Return (US Plans) -4.1% 22.8% N/A P&L Expense (Worldwide) $35M $88M $81M Plan Assets (Worldwide) $1.99B $2.31B N/A Contributions (Worldwide) $47M $63M $60-70M $7M improvement expected for 2004 P&L Assumptions and Methodology

Foreign Exchange Considerations Goodrich Foreign Currency Exposure Approximately 90 percent of sales in US dollars Approximately 75 percent of pre-tax costs in US dollars Three currencies (Euro, Pound Sterling and Canadian dollar) represent >95 percent of exposure Exposure increased with Aeronautical Systems acquisition due to significant European manufacturing presence Goodrich hedges a major portion of projected forward exposure Currently hedged on about 75 percent of expected 2004 exposure Unhedged portion subject to FX rate fluctuations until hedged or realized Weakness in US dollar (weighted average decline of about 8 percent since 9/30/03 ) creates P&L headwind if US dollar remains at current levels or weakens further Estimated $15 - $20 million pre-tax impact versus 2003 at current FX rates

Contract Accounting Change - Overview Two methods allowed under GAAP for recognizing changes in contract profit estimates Cumulative catch-up adjusts profit recognized since beginning of contract (preferred) Reallocation method adjusts profit recognized prospectively for remaining life of contract Goodrich transitioning from reallocation to cumulative catch-up in Aerostructures business - requires recognition of prior period changes in current period Change is entirely related to timing of profit recognition No change to overall profitability of contracts or expected cash flow

Contract Accounting Change - Overview Impact reflected in Goodrich financials in two stages Cumulative effect on existing contracts from profit recorded in prior periods booked as "Cumulative effect of accounting change" on January 1, 2004 as part of first quarter 2004 results Projected income of $24 million pre-tax, or $0.13 per diluted share $24 million pre-tax income reverses over remaining duration of current contracts Lower projected operating income of $8 million pre-tax, or $0.05 per diluted share, over the four quarters of 2004 Lower projected operating income of $16 million pre-tax over remaining duration of current contracts (primarily 2005 and 2006)

2004 Outlook Considerations Major Factors Low End High End 2004 EPS Outlook Range $1.20 $1.35 Commercial OE Production 5% below 2003 Flat with 2003 Global ASM Growth +- 3% + 5% Foreign Exchange Rates Dollar weakness continues Dollar strengthens 7E7 Program Investments Contract awards on current schedule. GR wins disproportionate share Moderate award slippage and normal GR win rate Effective Tax Rate Current rate - 33% 100 to 200 basis point lower rate P&L Headwind As expected ($30M) Lower than expected Other factors outside of outlook consideration Resolution of Rohr or Coltec tax litigation in 2004 Potential contractual disputes with Northrop Grumman related to the purchase of Aeronautical Systems Premiums for early retirement of debt

Summary - Goodrich Attributes and Actions Top tier aerospace supplier Diversified, balanced business mix Proprietary, flight critical products Strong cash flow Enterprise-wide initiatives Experience managing operations in challenging markets Focused on Aeronautical Systems integration and turnaround Committed to maintaining a conservative financial profile and investment grade ratings Focused on what we can control

What Investors Should Expect from Goodrich Continued commitment to integrity No significant acquisitions Focused on the business "Blocking and Tackling" Cash flow Margin improvement Aeronautical Systems integration Working capital management New product development Continue investing in new products and systems Reduce leverage to target levels Transparency of financial results and disclosure Accountable to all stakeholders

Questions and Answers

Supplemental Information * In late September 2002, the company utilized short-term debt of $200 million to preposition certain funds necessary for the acquisition of TRW Aeronautical Systems. This short-term debt was repaid on October 1, 2002 with a portion of the proceeds from the $1.5 billion bridge loan secured to finance the entire purchase. Accordingly, on October 1, 2002, cash was reduced by $200 million. **Total Debt (defined as short-term debt plus current maturities of long-term debt and capital lease obligations plus long-term debt and capital lease obligations) and Net Debt (defined as Total Debt minus cash and cash equivalents) are non-GAAP financial measures that the Company believes is useful to rating agencies and investors in understanding the Company's capital structure and leverage. Because all companies do not calculate these measures in the same manner, the Company's presentation may not be comparable to other similarly titled measures reported by other companies.

EX-99.1

Ex-99.1 Press Release

EX-99.2

Ex-99.2 Written Presentation