Goodrich 10-Q 22 Apr 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	3 Months Ended Mar. 31, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	GOODRICH CORP
Entity Central Index Key	0000042542
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		6.2
Entity Common Stock, Shares Outstanding	125,178,657

Condensed Consolidated Statemen

Condensed Consolidated Statement of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Statement of Income [Abstract]
Sales	1695.2	1695.9
Operating costs and expenses:
Cost of sales	1204.3	1180.1
Selling and administrative costs	269.9	248
Total operating costs and expenses	1474.2	1428.1
Operating Income	221	267.8
Interest expense	-33.5	-28.8
Interest income	0.1	0.6
Other income (expense) - net	-6.4	-4.4
Income from continuing operations before income taxes	181.2	235.2
Income tax expense	-68.6	-61.9
Income From Continuing Operations	112.6	173.3
Income from discontinued operations - net of income taxes	1.2	0.5
Consolidated Net Income	113.8	173.8
Net income attributable to noncontrolling interests	-2.6	(4)
Net Income Attributable to Goodrich	111.2	169.8
Amounts attributable to Goodrich:
Income from continuing operations	110	169.3
Income from discontinued operations - net of income taxes	1.2	0.5
Net Income Attributable to Goodrich	111.2	169.8
Basic Earnings Per Share
Continuing operations	0.87	1.35
Discontinued operations	0.01
Net Income Attributable to Goodrich	0.88	1.35
Diluted Earnings Per Share
Continuing operations	0.86	1.35
Discontinued operations	0.01
Net Income Attributable to Goodrich	0.87	1.35
Dividends Declared Per Common Share	0.27	0.25

Condensed Consolidated Balance

Condensed Consolidated Balance Sheet (Unaudited) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Current Assets
Cash and cash equivalents	778.4	$811
Accounts and notes receivable, less allowances for doubtful receivables($18.2 at March 31, 2010 and $18 at December 31,2009)	1159.9	1073.2
Inventories - net	2339.2	2290.4
Deferred income taxes	178.1	165.2
Prepaid expenses and other assets	52.5	59.6
Income taxes receivable	0	15
Total Current Assets	4508.1	4414.4
Property, plant and equipment - net	1418.9	1451.2
Prepaid pension	0.9	0.8
Goodwill	1571.6	1,587
Identifiable intangible assets - net	604.9	633.2
Deferred income taxes	16.8	16.7
Other assets	606.7	638.1
Total Assets	8727.9	8741.4
Current Liabilities
Short-term debt	4.3	3.1
Accounts payable	607.6	547.8
Accrued expenses	1,023	1037.4
Income taxes payable	14.7	0.5
Deferred income taxes	23.9	23.8
Current maturities of long-term debt and capital lease obligations	0.5	0.5
Total Current Liabilities	1,674	1613.1
Long-term debt and capital lease obligations	2007.3	2008.1
Pension obligations	811.9	908.7
Postretirement benefits other than pensions	298.2	301.1
Long-term income taxes payable	171.1	171.1
Deferred income taxes	269.8	257.2
Other non-current liabilities	496.9	514.5
Shareholders' Equity
Common stock $5 par value Authorized 200,000,000 shares; issued 146,703,530 shares at March 31, 2010 and 145,241,995 shares at December 31, 2009 (excluding 14,000,000 shares held by a wholly owned subsidiary)	733.5	726.2
Additional paid-in capital	1646.7	1,597
Income retained in the business	2165.1	2,088
Accumulated other comprehensive income (loss)	-735.4	-673.2
Common stock held in treasury, at cost (21,524,873 shares at March 31, 2010 and 20,854,137 shares at December 31, 2009)	-859.8	(817)
Total Shareholders' Equity	2950.1	2,921
Noncontrolling interests	48.6	46.6
Total Equity	2998.7	2967.6
Total Liabilities And Equity	8727.9	8741.4

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009
Current Assets
Allowances for doubtful receivables, accounts and notes receivables	$18	$18
Shareholders' Equity
Common stock, par value	5	5
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	146,703,530	145,241,995
Common stock, excluding shares held by a wholly owned subsidiary	14,000,000	14,000,000
Common stock held in treasury, shares	21,524,873	20,854,137

2_Condensed Consolidated Statem

Condensed Consolidated Statement of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating Activities
Consolidated net income	113.8	173.8
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Income from discontinued operations	-1.2	-0.5
Restructuring and consolidation:
Expenses	0.3	4.9
Payments	-3.5	-2.6
Pension and postretirement benefits:
Expenses	47.6	51.6
Contributions and benefit payments	-112.7	-17.7
Depreciation and amortization	67.1	60
Excess tax benefits related to share-based payment arrangements	(8)	-0.6
Share-based compensation expense	18.2	13.4
Deferred income taxes	5.8	6.2
Change in assets and liabilities, net of effects of acquisitions and divestitures:
Receivables	-100.5	-100.1
Inventories, net of pre-production and excess-over-average	-7.4	-61.2
Pre-production and excess-over-average inventories	-50.3	-27.5
Other current assets	-2.3	-1.8
Accounts payable	68	41.5
Accrued expenses	-52.6	(102)
Income taxes payable/receivable	37.5	52.8
Other non-current assets and liabilities	9.7	-23.6
Net Cash Provided By Operating Activities	29.5	66.6
Investing Activities
Purchases of property, plant and equipment	-20.9	-34.2
Proceeds from sale of property, plant and equipment	0.1	0.8
Investments in and advances to equity investees	-0.5	-0.5
Net Cash Used In Investing Activities	-21.3	-33.9
Financing Activities
Increase (decrease) in short-term debt, net	1.1	-1.8
Proceeds (repayments) of long-term debt and capital lease obligations		297.6
Proceeds from issuance of common stock	35.2	11.5
Purchases of treasury stock	-42.8	-6.5
Dividends paid	-34.1	-31.2
Excess tax benefits related to share-based payment arrangements	8	0.6
Distributions to noncontrolling interests	-0.6	-6.5
Net Cash Provided By (Used In) Financing Activities	-33.2	263.7
Discontinued Operations
Net cash (used in) provided by operating activities	-0.2	0.5
Net cash (used in) provided by investing activities	0
Net cash (used in) provided by financing activities	0
Net cash (used in) provided by discontinued operations	-0.2	0.5
Effect of exchange rate changes on cash and cash equivalents	-7.4	-2.1
Net increase (decrease) in cash and cash equivalents	-32.6	294.8
Cash and cash equivalents at beginning of period	811	370.3
Cash and cash equivalents at end of period	778.4	665.1

Basis of Interim Financial Stat

Basis of Interim Financial Statement Preparation and Use of Estimates
	3 Months Ended Mar. 31, 2010
Basis of Interim Financial Statement Preparation and Use of Estimates [Abstract]
Basis of Interim Financial Statement Preparation and Use of Estimates	Note 1. Basis of Interim Financial Statement Preparation and Use of Estimates The accompanying unaudited condensed consolidated financial statements of Goodrich Corporation and its subsidiaries have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. Unless indicated otherwise or the context requires, the terms we, our, us, Goodrich or Company refer to Goodrich Corporation and its subsidiaries. The Company believes that all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain amounts in prior year financial statements have been reclassified to conform to the current year presentation. Operating results for the three months ended March31, 2010 are not necessarily indicative of the results that may be achieved for the twelve months ending December31, 2010. For further information, refer to the consolidated financial statements and notes included in the Companys Annual Report on Form 10-K for the year ended December31, 2009. Discontinued Operations. Unless otherwise noted, disclosures pertain to the Companys continuing operations. Net income from discontinued operations for the three months ended March31, 2010 and 2009 was $1.2million and $0.5million, respectively. Use of Estimates. The preparation of financial statements requires management to make estimates and assumptions that affect amounts recognized. Estimates and assumptions are reviewed and updated regularly as new information becomes available. During the three months ended March31, 2010 and 2009, the Company changed its estimates of revenues and costs on certain long-term contracts primarily in its aerostructures and aircraft wheels and brakes businesses. The changes in estimates increased income from continuing operations before income taxes during the three months ended March 31, 2010 and 2009 by $16million ($10million after tax or $0.08 per diluted share) and $4.5million ($2.8million after tax or $0.02 per diluted share), respectively. These revisions were primarily related to favorable cost and operational performance, changes in volume expectations and to some extent, sales pricing improvements on follow-on contracts.

New Accounting Standards Adopte

New Accounting Standards Adopted in 2010
	3 Months Ended Mar. 31, 2010
New Accounting Standards Adopted in 2010 [Abstract]
New Accounting Standards Adopted in 2010	Note 2. New Accounting Standards Adopted in 2010 Variable Interest Entities On January1, 2010, the Company adopted new accounting guidance that is included in Accounting Standards Codification (ASC)Topic 810, Consolidation. This guidance amends the consolidation guidance applicable to variable interest entities. This standard did not have a material impact on the Companys financial condition and results of operations. Fair Value Measurements On January1, 2010, the Company adopted new accounting guidance that is included in ASC Topic 820, Fair Value Measurements and Disclosures. This guidance requires the Company to disclose the amount of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for these transfers and the reasons for any transfers in or out of Level 3 of the fair value hierarchy. In addition, the guidance clarifies certain existing disclosure requirements. This standard did not have a material impact on the Companys disclosures in its condensed consolidated financial statements. See Note 7, Fair Value Measurements.

Business Segment Information

Business Segment Information
	3 Months Ended Mar. 31, 2010
Business Segment Information [Abstract]
Business Segment Information	Note 3. Business Segment Information The Companys three business segments are as follows: The Actuation and Landing Systems segment provides systems, components and related services pertaining to aircraft taxi, take-off, flight control, landing and stopping, and engine components, including fuel delivery systems and rotating assemblies. The Nacelles and Interior Systems segment produces products and provides maintenance, repair and overhaul services associated with aircraft engines, including thrust reversers, cowlings, nozzles and their components, and aircraft interior products, including slides, seats, cargo and lighting systems. The Electronic Systems segment produces a wide array of systems and components that provide flight performance measurements, flight management, fuel controls, electrical systems, control and safety data, reconnaissance and surveillance systems and precision guidance systems. The Company measures each reporting segments profit based upon operating income. Accordingly, the Company does not allocate net interest expense, other income (expense) net and income taxes to its reporting segments. The company-wide Enterprise Resource Planning (ERP)implementation costs that are not directly associated with a specific business were not allocated to the segments. The accounting policies of the reportable segments are the same as those for the Companys condensed consolidated financial statements. Three Months Ended March 31, 2010 2009 (Dollars in millions) Sales: Actuation and Landing Systems $ 613.1 $ 612.7 Nacelles and Interior Systems 555.8 632.2 Electronic Systems 526.3 451.0 $ 1,695.2 $ 1,695.9 Intersegment sales: Actuation and Landing Systems $ 6.8 $ 6.9 Nacelles and Interior Systems 1.9 1.7 Electronic Systems 6.7 6.7 $ 15.4 $ 15.3 Operating income: Actuation and Landing Systems $ 69.4 $ 76.1 Nacelles and Interior Systems 118.8 148.7 Electronic Systems 70.8 67.1 259.0 291.9 Corporate general and administrative expenses (33.9 ) (20.0 ) ERP implementation costs (4.1 ) (4.1 ) Total operating income $ 221.0 $ 267.8

Other Income

Other Income (Expense) - Net
	3 Months Ended Mar. 31, 2010
Other Income (Expense) - Net [Abstract]
Other Income (Expense) - Net	Note 4. Other Income (Expense) Net Other Income (Expense) Net consisted of the following: Three Months Ended March 31, 2010 2009 (Dollars in millions) Retiree health care expenses related to previously owned businesses $ (2.7 ) $ (3.4 ) Expenses related to previously owned businesses (1.2 ) (0.9 ) Equity in affiliated companies (1.9 ) 0.3 Other net (0.6 ) (0.4 ) Other income (expense) net $ (6.4 ) $ (4.4 )

Share-Based Compensation

Share-Based Compensation
	3 Months Ended Mar. 31, 2010
Share-Based Compensation [Abstract]
Share-Based Compensation	Note 5. Share-Based Compensation During the three months ended March31, 2010 and 2009, the Company expensed share-based compensation awards under the Goodrich Equity Compensation Plan and the Goodrich Corporation 2008 Global Employee Stock Purchase Plan for employees and under the Outside Director Deferral and Outside Director Phantom Share plans for non-employee directors. A detailed description of the awards under these plans is included in the Companys Annual Report on Form 10-K for the year ended December31, 2009. The compensation cost recorded for share-based compensation plans during the three months ended March31, 2010 and 2009 was $18.2million and $13.4million, respectively. The increase of $4.8 million from 2009 to 2010 was primarily due to a higher grant date fair value for the Restricted Stock Units and Stock Options plans and changes in the Companys share price for the Outside Director Phantom Share plan. Grants A summary of the Companys grants during the three months ended March31, 2010 and the weighted-average fair value per share are as follows: Stock Options Restricted Stock Units Performance Units Weighted Average Weighted Average Weighted Average Shares Fair Value Per Share Shares Fair Value Per Share Shares Fair Value Per Share 722,600 $20.73 496,750 $65.31 142,700 $86.42 The grant date fair value for the stock options with the three-year service condition was estimated under the Black-Scholes-Merton formula using the following weighted-average assumptions: 2010 2009 Risk-free interest rate (%) 2.9 1.8 Expected dividend yield (%) 1.6 2.6 Historical volatility factor (%) 35.0 33.3 Weighted-average expected life of the options (years) 5.7 5.6 Employee Stock Purchase Plan Shares Issued There were 406,778 and 345,851 shares of common stock issued during the three months ended March 31, 2010 and 2009, respectively. Employee contributions of $12.3million and $10.4million during the years ended December31, 2009 and 2008, respectively, were used to purchase the Companys stock during the three months ended March31, 2010 and 2009, respectively.

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earning Per Share [Abstract]
Earnings Per Share	Note 6. Earnings Per Share The computation of basic and diluted earnings per share (EPS)for income from continuing operations is as follows: Three Months Ended March 31, 2010 2009 (In millions, except per share amounts) Numerator Numerator for basic and diluted EPS income from continuing operations attributable to Goodrich $ 110.0 $ 169.3 Percentage allocated to common shareholders (1) 98.6 % 98.6 % Numerator for basic and diluted EPS $ 108.4 $ 166.9 Denominator Denominator for basic EPS weighted-average shares 125.0 123.8 Effect of dilutive securities: Stock options, employee stock purchase plan and other deferred compensation shares 1.3 0.6 Denominator for diluted EPS adjusted weighted-average shares and assumed conversion 126.3 124.4 Per common share income from continuing operations Basic $ 0.87 $ 1.35 Diluted $ 0.86 $ 1.35 (1)Basic weighted-average common shares outstanding 125.0 123.8 Basic weighted-average common shares outstanding and unvested restricted share units expected to vest 126.7 125.6 Percentage allocated to common shareholders 98.6 % 98.6 % The Companys unvested restricted share units contain rights to receive nonforfeitable dividend equivalents, and thus, are participating securities requiring the two-class method of computing EPS. The calculation of EPS for common stock shown above excludes the income attributable to the unvested restricted share units from the numerator and excludes the dilutive impact of those units from the denominator. At March31, 2010 and 2009, the Company had 4.7million and 5.4million, respectively, of outstanding stock options. Stock options are included in the diluted earnings per share calculation using the treasury stock method, unless the effect of including the stock options would be anti-dilutive. For the three months ended March31, 2010 and 2009, 1.6million and 3million anti-dilutive stock options, respectively, were excluded from the diluted EPS calculation. During the three months ended March31, 2010 and 2009, the Company issued 1.5million and 0.8 million, respectively, of shares of common stock pursuant to stock option exercises and other share-based compensation plans. The Companys share repurchase program was initially approved by the Board of Directors on October 24, 2006 and increased by the Board of Directors on February19, 2008, for $600million in total. During the three months ended March31, 2010, the Company repurchased 0.5million shares. During the three months ended March31, 2009, there were no share repurchases. From inception of the program through March31, 2010, the Company has repurchased 7.2million shares for approximately $400million under its share repurchase program.

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 7. Fair Value Measurements The Company defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following three levels of inputs are used to measure fair value: Level 1 quoted prices in active markets for identical assets and liabilities. Level 2 observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. The Companys financial assets and (liabilities)measured at fair value on a recurring basis were, in millions, as follows: Fair Value Fair Value March 31, December 31, 2010 Level 1 Level 2 Level 3 2009 Level 1 Level 2 Level 3 Cash Equivalents (1) $ 490.2 $ 490.2 $ $ $ 470.1 $ 470.1 $ $ Derivative Financial Instruments (2) Cash Flow Hedges 4.6 4.6 54.2 54.2 Other Forward Contracts (1.8 ) (1.8 ) (2.5 ) (2.5 ) Rabbi Trust Assets (3) 49.3 49.3 45.0 45.0 Long-term debt (4) (2,197.0 ) (2,197.0 ) (2,144.0 ) (2,144.0 ) (1) Because of their short maturities, the carrying value of these assets approximates fair value. (2) See Note 17, Derivatives and Hedging Activities. Estimates of the fair value of the derivative financial instruments represent the Companys best estimates based on its valuation models, which incorporate industry data and trends and relevant market rates and transactions. (3) Rabbi trust assets include mutual funds and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees. The fair value of these assets was based on quoted market prices. (4) The carrying amount of the Companys long-term debt was $2,001.7million and $2,001.9million at March31, 2010 and December31, 2009, respectively. The fair value of long-term debt is based on quoted market prices or on rates available to the Company for debt with similar terms and maturities.

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Inventories [Abstract]
Inventories	Note 8. Inventories Inventories consist of the following: March 31, December 31, 2010 2009 (Dollars in millions) Average or actual cost (which approximates current costs): Finished products $ 226.4 $ 225.6 In-process 1,553.2 1,485.6 Raw materials and supplies 664.2 667.6 2,443.8 2,378.8 Less: Reserve to reduce certain inventories to LIFO basis (52.0 ) (51.5 ) Progress payments and advances (52.6 ) (36.9 ) Total $ 2,339.2 $ 2,290.4 In-process inventory included $877.1million and $827.7million at March31, 2010 and December 31, 2009, respectively, for the following: (1)pre-production and excess-over-average inventory accounted for under long-term contract accounting; and (2)engineering costs recoverable under long-term contractual arrangements. The March31, 2010 balance of $877.1million included $464.1 million related to the Boeing 787, $161million related to the Airbus A350 XWB and $69.1million related to the Pratt and Whitney PurePower PW 1000G engine contracts. The Company uses the last-in, first-out (LIFO)method of valuing inventory for certain of the Companys legacy aerospace manufacturing businesses, primarily the aircraft wheels and brakes business in the Actuation and Landing Systems segment. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time.

Goodwill

Goodwill
	3 Months Ended Mar. 31, 2010
Goodwill [Abstract]
Goodwill	Note 9. Goodwill The changes in the carrying amount of goodwill by segment were as follows: Foreign Balance Currency Balance December 31, Business Translation/ March 31, 2009 Combinations Other 2010 (Dollars in millions) Actuation and Landing Systems $ 302.6 $ $ (9.4 ) $ 293.2 Nacelles and Interior Systems 441.2 (3.7 ) 437.5 Electronic Systems 843.2 (2.3 ) 840.9 $ 1,587.0 $ $ (15.4 ) $ 1,571.6

Financing Arrangements

Financing Arrangements
	3 Months Ended Mar. 31, 2010
Financing Arrangements [Abstract]
Financing Arrangements	Note 10. Financing Arrangements The Company has a $500million committed global syndicated revolving credit facility, which expires in May2012. Interest rates under this facility vary depending upon: The amount borrowed; The Companys public debt rating by Standard Poors, Moodys and Fitch; and At the Companys option, rates tied to the agent banks prime rate or, for U.S. Dollar and Great Britain Pounds Sterling borrowings, the London Interbank Offered Rate and for Euro Dollar borrowings, the Euro Interbank Offered Rate. At March31, 2010, there were no borrowings and $61.6million in letters of credit outstanding under the facility. At December31, 2009, there were no borrowings and $68million in letters of credit outstanding under the facility. The level of unused borrowing capacity varies from time to time depending, in part, upon the Companys compliance with financial and other covenants set forth in the related agreement, including the consolidated net worth requirement and maximum leverage ratio. The Company is currently in compliance with all such covenants. Under the most restrictive of these covenants, $1,781.9million of income retained in the business and additional paid-in capital was free from such limitations at March31, 2010. At March31, 2010, the Company had borrowing capacity under this facility of $438.4million, after reductions for letters of credit outstanding under the facility. At March31, 2010, the Company had letters of credit and bank guarantees of $105.3million, inclusive of $61.6million in letters of credit outstanding under the Companys syndicated revolving credit facility, as discussed above. At March31, 2010, the Company also maintained $75million of uncommitted U.S. money market facilities and $155.5million of uncommitted and committed foreign working capital facilities with various banks to meet short-term borrowing requirements. At March31, 2010 and December31, 2009, there were $4.3million and $3.1million, respectively, in borrowings and $12.5 million and $0.3 million, respectively, in letters of credit and bank guarantees outstanding under these facilities. These credit facilities are provided by a small number of commercial banks that also provide the Company with committed credit through the syndicated revolving credit facility described above and with various cash management, trust and other services. Lease Commitments The Company leases certain of its office and manufacturing facilities, machinery and equipment and corporate aircraft under various committed lease arrangements provided by financial institutions. Future minimum lease payments under operating leases were $171.6million at March31, 2010. One of these arrangements allows the Company, rather than the lessor, to claim a deduction for tax depreciation on the asset and allows the Company to lease a corporate aircraft with a total commitment amount of $43.8million. For accounting purposes, the Company was deemed to be the owner of the aircraft during the construction period and recorded an asset with an offsetting lease obligation of approximately $32million. This lease will qualify for sales-leasebac

Pensions and Postretirement Ben

Pensions and Postretirement Benefits Other Than Pensions
	3 Months Ended Mar. 31, 2010
Pensions and Postretirement Benefits Other Than Pensions [Abstract]
Pensions and Postretirement Benefits Other Than Pensions	Note 11. Pensions and Postretirement Benefits Other Than Pensions Pensions The following table sets forth the components of net periodic benefit cost and the weighted-average assumptions used to determine the net periodic benefit cost. The net periodic benefit cost for divested or discontinued operations retained by the Company is included in the amounts below: U.S. Plans U.K. Plans Other Plans Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2010 2009 2010 2009 2010 2009 (Dollars in millions) Service cost $ 11.7 $ 9.5 $ 4.1 $ 4.3 $ 1.2 $ 0.9 Interest cost 42.2 42.9 9.8 8.3 1.8 1.4 Expected return on plan assets (45.9 ) (41.8 ) (13.2 ) (9.7 ) (1.7 ) (1.1 ) Amortization of prior service cost 1.8 1.8 (0.1 ) (0.1 ) Amortization of actuarial loss 30.2 28.3 0.6 1.3 0.4 0.3 Gross periodic benefit cost 40.0 40.7 1.2 4.1 1.7 1.5 Settlement (gain)loss (0.4 ) Net periodic benefit cost $ 40.0 $ 40.7 $ 1.2 $ 4.1 $ 1.7 $ 1.1 The following table provides the assumptions used to determine the net periodic benefit cost. U.S. Plans U.K. Plans Other Plans 2010 2009 2010 2009 2010 2009 Discount rate 5.90 % 6.47 % 5.88 % 5.88 % 5.75 % 6.17 % Expected long-term rate of return on assets 8.75 % 8.75 % 8.50 % 8.50 % 8.32 % 8.12 % Rate of compensation increase 4.10 % 4.10 % 3.75 % 3.75 % 3.38 % 3.31 % Postretirement Benefits Other Than Pensions The following table sets forth the components of net periodic postretirement benefit cost other than pensions. Other postretirement benefits related to the divested and discontinued operations retained by the Company are included in the amounts below. Three Months Ended March 31, 2010 2009 (Dollars in millions) Service cost $ 0.4 $ 0.4 Interest cost 4.3 5.3 Amortization of prior service cost Amortization of actuarial (gain)loss Net periodic benefit cost $ 4.7 $ 5.7 The following table provides the assumptions used to determine the net periodic postretirement benefit cost. Three Months Ended March 31, 2010 2009 Discount rate 5.55 % 6.38 % Healthcare trend rate 7.3% in 2010 to 5% in 2015 7.8% in 2009 to 5% in 2015

Comprehensive Income

Comprehensive Income (Loss)
	3 Months Ended Mar. 31, 2010
Comprehensive Income (Loss) [Abstract]
Comprehensive Income (Loss)	Note 12. Comprehensive Income (Loss) Total comprehensive income (loss)consisted of the following: Three Months Ended March 31, 2010 2009 (Dollars in millions) Net income attributable to Goodrich $ 111.2 $ 169.8 Other comprehensive income (loss): Unrealized foreign currency translation gains (losses)during period (53.3 ) (49.3 ) Pension/OPEB liability adjustments during the period, net of tax for the three months ended March31, 2010 and 2009 of ($13.1) and ($30.9), respectively 21.7 51.3 Gain (loss)on cash flow hedges, net of tax for the three months ended March31, 2010 and 2009 of $18 and $6.5, respectively (30.6 ) (20.1 ) Less: Other comprehensive income (loss)attributable to noncontrolling interests Total comprehensive income (loss) $ 49.0 $ 151.7 Accumulated other comprehensive income (loss)consisted of the following: March 31, December 31, 2010 2009 (Dollars in millions) Cumulative unrealized foreign currency translation gains $ 117.5 $ 170.8 Pension/OPEB liability adjustments, net of deferred taxes of $511.1 and $524.2, respectively (846.6 ) (868.3 ) Accumulated gains (losses)on cash flow hedges, net of deferred taxes of $7.4 and ($10.6), respectively (6.3 ) 24.3 Total $ (735.4 ) $ (673.2 ) During 2009, $1.9million of deferred tax liabilities were established for earnings that are expected to be repatriated to the U.S. No other income taxes are provided on foreign currency translation gains (losses)for comprehensive income (loss)and accumulated other comprehensive income (loss)as foreign earnings are considered permanently invested.

Noncontrolling Interests

Noncontrolling Interests
	3 Months Ended Mar. 31, 2010
Noncontrolling Interests [Abstract]
Noncontrolling Interests	Note 13. Noncontrolling Interests The changes in the Companys noncontrolling interests were as follows: Three months ended March 31, 2010 2009 (Dollars in millions) Balance at January 1 $ 46.6 $ 60.9 Distributions to noncontrolling interests (0.6 ) (6.5 ) Comprehensive income: Net income attributable to noncontrolling interests 2.6 4.0 Other comprehensive income, net of tax Comprehensive income 2.6 4.0 Balance at March 31 $ 48.6 $ 58.4

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes [Abstract]
Income Taxes	Note 14. Income Taxes The Companys effective tax rate for the three months ended March31, 2010 was 37.9%. A significant item impacting the Companys effective tax rate as compared to the U.S. federal statutory rate of 35% was a charge of approximately $10million in the first quarter due to the recently-passed health care reform legislation, which increased the effective tax rate by approximately 6 percentage points. Other items that impacted the effective tax rate included foreign and domestic tax credits and benefits related to domestic manufacturing which reduced the effective tax rate by approximately 4percentage points, earnings in foreign jurisdictions taxed at rates different from the statutory U.S. federal rate which reduced the effective tax rate by approximately 3percentage points, deemed repatriation of non-U.S. earnings which increased the effective tax rate by approximately 2percentage points, adjustments to reserves for tax contingencies, including interest thereon (net of related tax benefit), which increased the effective tax rate by approximately 1percentage point and state income taxes (net of related tax benefit) which increased the effective tax rate by approximately 2percentage points. The Companys effective tax rate during the three months ended March31, 2010 was not reduced for the benefit of the U.S. Research and Development Credit (RD Credit) because the federal statute authorizing the RD Credit had not been extended beyond December31, 2009. The Company estimates that the effective tax rate at March31, 2010 would have been approximately 1percentage point lower had the Company been able to consider the tax benefits associated with the RD Credit. The Companys effective tax rate for the three months ended March31, 2009 was 26.3%. Significant items that impacted the Companys effective tax rate as compared to the U.S. federal statutory rate of 35% included a benefit from an adjustment to state tax reserves which reduced the effective tax rate by approximately 6percentage points, foreign and domestic tax credits and benefits related to domestic manufacturing which reduced the effective tax rate by approximately 4percentage points, earnings in foreign jurisdictions taxed at rates different from the statutory U.S. federal rate which reduced the effective tax rate by approximately 3percentage points, deemed repatriation of non-U.S. earnings which increased the effective tax rate by approximately 2percentage points, adjustments to reserves for tax contingencies, including interest thereon (net of related tax benefit), which increased the effective tax rate by approximately 2percentage points and state income taxes (net of related tax benefit) which increased the effective tax rate by approximately 2 percentage points. At March31, 2010, the Company had a $300.1million liability recorded for unrecognized tax benefits, which included interest and penalties of $149.4million. The total amount of unrecognized benefits that, if recognized, would have affected the effective tax rate was $225.5million. At December31, 2009, the Company had a $286.6million liability recorded for unrecognized tax benefits, which include

Contingencies

Contingencies
	3 Months Ended Mar. 31, 2010
Contingencies [Abstract]
Contingencies	Note 15. Contingencies General There are various pending or threatened claims, lawsuits and administrative proceedings against the Company or its subsidiaries, arising from the ordinary course of business which seek remedies or damages. Although no assurance can be given with respect to the ultimate outcome of these matters, the Company believes that any liability that may finally be determined with respect to commercial and non-asbestos product liability claims should not have a material effect on its consolidated financial position, results of operations or cash flows. Legal costs are expensed as incurred. Environmental The Company is subject to environmental laws and regulations which may require that the Company investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. At certain sites, the Company has been identified as a potentially responsible party under the federal Superfund laws and comparable state laws. The Company is currently involved in the investigation and remediation of a number of sites under applicable laws. Estimates of the Companys environmental liabilities are based on current facts, laws, regulations and technology. These estimates take into consideration the Companys prior experience and professional judgment of the Companys environmental specialists. Estimates of the Companys environmental liabilities are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and cost estimates, the extent of corrective actions that may be required and the number and financial condition of other potentially responsible parties, as well as the extent of their responsibility for the remediation. Accordingly, as investigation and remediation proceed, it is likely that adjustments in the Companys accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on the Companys results of operations or cash flows in a given period. Based on currently available information, however, the Company does not believe that future environmental costs in excess of those accrued with respect to sites for which the Company has been identified as a potentially responsible party are likely to have a material adverse effect on the Companys financial condition. Environmental liabilities are recorded when the liability is probable and the costs are reasonably estimable, which generally is not later than at completion of a feasibility study or when the Company has recommended a remedy or has committed to an appropriate plan of action. The liabilities are reviewed periodically and, as investigation and remediation proceed, adjustments are made as necessary. Liabilities for losses from environmental remediation obligations do not consider the effects of inflation and anticipated expenditures are not discounted to their present value. The liabilities are not reduced by possible recoveries from insurance carriers or other third parties, but do reflect

Guarantees

Guarantees
	3 Months Ended Mar. 31, 2010
Guarantees [Abstract]
Guarantees	Note 16. Guarantees The Company extends financial and product performance guarantees to third parties. At March31, 2010, the following environmental remediation and indemnification and financial guarantees were outstanding: Maximum Carrying Potential Amount of Payment Liability (Dollars in millions) Environmental remediation and other indemnifications (Note 15, Contingencies) No Limit $ 20.0 Guarantees of residual value on leases $ 27.3 $ 5.8 Guarantees of JV debt and other financial instruments $ 33.4 $ The Company has guarantees of residual values on certain lease obligations in which the Company is obligated to either purchase or remarket the assets at the end of the lease term. The Company is guarantor on a revolving credit agreement totaling 30million between Rolls-Royce Goodrich Engine Control Systems Limited (JV)and a financial institution. In addition, the Company guarantees the JVs foreign exchange credit line and is indemnified by Rolls-Royce for 50% of the amount. Service and Product Warranties The Company provides service and warranty policies on certain of its products. The Company accrues liabilities under service and warranty policies based upon specific claims and a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience change. In addition, the Company incurs discretionary costs to service its products in connection with product performance issues. The changes in the carrying amount of service and product warranties for the three months ended March31, 2010, in millions, are as follows: Balance at December31, 2009 $ 147.6 Net provisions for warranties issued during the period 11.3 Net provisions (return to earnings) for warranties existing at the beginning of the year (2.3 ) Payments (14.0 ) Foreign currency translation (2.5 ) Balance at March31, 2010 $ 140.1 The current and long-term portions of service and product warranties were as follows: March 31, December 31, 2010 2009 (Dollars in millions) Accrued expenses $ 83.2 $ 88.2 Other non-current liabilities 56.9 59.4 Total $ 140.1 $ 147.6

Derivatives and Hedging Activit

Derivatives and Hedging Activities
	3 Months Ended Mar. 31, 2010
Derivatives and Hedging Activities [Abstract]
Derivatives and Hedging Activities	Note 17. Derivatives and Hedging Activities Cash Flow Hedges The Company has subsidiaries that conduct a substantial portion of their business in Euros, Great Britain Pounds Sterling, Canadian Dollars and Polish Zlotys but have significant sales contracts that are denominated primarily in U.S. Dollars. Periodically, the Company enters into forward contracts to exchange U.S. Dollars for Euros, Great Britain Pounds Sterling, Canadian Dollars and Polish Zlotys to hedge a portion of the Companys exposure from U.S. Dollar sales. The forward contracts described above are used to mitigate the potential volatility to earnings and cash flow arising from changes in currency exchange rates that impact the Companys U.S. Dollar sales for certain foreign operations. The forward contracts are accounted for as cash flow hedges and are recorded in the Companys condensed consolidated balance sheet at fair value, with the offset reflected in accumulated other comprehensive income (loss) (AOCI), net of deferred taxes. The gain or loss on the forward contracts is reported as a component of other comprehensive income (loss) (OCI)and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The notional value of the forward contracts at March31, 2010 and December31, 2009 was $1,912.9million and $1,827.4million, respectively. As of March31, 2010 and December31, 2009, the total fair value before taxes of the Companys forward contracts and the accounts in the condensed consolidated balance sheet in which the fair value amounts are included are shown below: March 31, December 31, 2010 2009 (Dollars in millions) Prepaid expenses and other assets $ 15.6 $ 24.5 Other assets 43.3 69.3 Accrued expenses 30.1 22.6 Other non-current liabilities 24.2 17.0 The amounts recognized in OCI and reclassified from AOCI into earnings are shown below: Three months ended March 31, 2010 2009 (Dollars in millions) Amount of gain/(loss) recognized in OCI, net of tax of $18 and $6.5, respectively $ (30.6 ) $ (20.1 ) Amount of gain/(loss) reclassified from AOCI into sales $ (4.2 ) $ (24.3 ) The total fair value of the Companys forward contracts of a $4.6million asset (before deferred taxes of $2.7million) at March31, 2010, combined with $16.6million of losses on previously matured hedges of intercompany sales and gains from forward contracts terminated prior to the original maturity dates, is recorded in AOCI and will be reflected in income as earnings are affected by the hedged items. As of March31, 2010, the portion of the net $4.6million asset that would be reclassified into earnings as an increase in sales to offset the effect of the hedged item in the next 12months is a loss of $14.5million. These forward contracts mature on a monthly basis with maturity dates that range from April2010 to December2014. There was a de minimis amount of both ineffectiveness and hedge components excluded from the assessment of effectiveness during the three months ended