1 [BFGoodrich Logo] NEWS THE BFGOODRICH COMPANY C1138 3 Coliseum Centre Media Contact: Kevin Ramundo 2550 West Tyvola Rd. Phone: 704/423-7024 Charlotte, North Carolina 28217 Fax: 704/423-7127 www.bfgoodrich.com Investor Contact: Paul Gifford Phone: 704-423-5517 Fax: 704-423-5516 For immediate release BFGoodrich reports consolidated 1999 third-quarter results CHARLOTTE, NC, OCTOBER 28, 1999 -- The BFGoodrich Company (NYSE: GR) reported third-quarter net income, excluding special items, of $83.0 million, or $0.74 per share, compared to $85.1 million, or $0.76 per share, in the year-ago quarter. Sales for the quarter were approximately $1.3 billion, a slight decline from the third quarter in 1998. These results and those that follow include Coltec Industries and have been restated to conform accounting practices following the Coltec merger this past July. For the first nine months of 1999, BFGoodrich achieved an 18 percent increase in net income, excluding special items. Earnings equaled $276.0 million, or $2.47 per share compared to $233.3 million, or $2.07 per share for the same period a year ago. Sales for the first nine months of the year increased 4 percent to $4.2 billion. As previously disclosed, the company incurred net special charges of $202.3 million ($153.9 million after tax) in the third quarter, and $232.5 million ($172.7 million after tax) for the first nine months of 1999, largely related to costs associated with the Coltec merger and consolidation activities. Of these special charges, $204.7 million and $241.0 million has been reported within operating income for the third quarter and nine-month periods of 1999, respectively. Including these charges, BFGoodrich reported a net loss of $70.9 million, or $0.64 per share in the third quarter, and net income of $103.3 million, or $0.93 per share for the first nine months of 1999. Commenting on the company's operating performance, David L. Burner, BFGoodrich's chairman and chief executive officer, said, "While 1999 will be another year of significant overall earnings growth and record aerospace results, we are experiencing continued softness across our industrial markets, and pricing pressure and increasing raw material costs in performance materials. Nevertheless, we remain confident in the strength of our businesses and our strategies to achieve significant revenue and earnings growth on a consistent basis over time." Page 1 of 3 C1138-BFGoodrich reports consolidated 1999 third-quarter results 2 [BFGoodrich Logo] NEWS THIRD QUARTER SEGMENT REVIEW: 1999 VS. 1998 In the Aerospace segment, operating income increased 2 percent to $130.9 million on a 1 percent decrease in sales to $855 million. The higher operating income reflects overhead cost reductions and increased aftermarket demand for wheels and brakes, offset by declining original equipment delivery rates in aerostructures. In Performance Materials, operating income increased 5 percent to $39.4 million, as sales remained flat at $306 million. The increase in operating income reflects overhead cost reductions and improved results in polymer additives and specialty plastics, partially offset by lower volumes and prices in textiles and coatings. In the Engineered Industrial Products segment, operating income was $28.1 million, approximately 20 percent below last year. Sales equaled $171 million, approximately 5 percent below last year. Market softness in industries served by the compressors, spray technologies and sealing technologies businesses was the major contributor to the sales and operating income declines. 1999 AND 2000 OUTLOOK Last month, BFGoodrich revised its earnings per share outlook to be between $3.20 and $3.30 in 1999, compared to $2.91 in 1998, excluding special items. The revised earnings outlook reflected continued pricing pressure and higher raw material costs in Performance Materials, and continued softness across most markets served by the Engineered Industrial Products segment. Other factors included initial dilution from the Coltec merger and delays in closing the transaction, which postponed the realization of cost synergies. Looking ahead to 2000, the company expects the same market issues that have affected results in the second half of 1999 to continue. These pressures, together with a further decline in commercial aircraft production, will most likely result in relatively flat financial performance compared to 1999. This outlook includes $25 million in annual headquarter cost savings beginning in 2000 and significant operational savings through consolidation of businesses and facilities. Regarding next year, David Burner said, "While our initial outlook indicates that 2000 will be more challenging than first anticipated, we are taking every possible action to do better. In addition to the progress we have made in realizing the cost synergies of the Coltec merger, our management team is Page 2 of 3 C1138-BFGoodrich reports consolidated 1999 third-quarter results 3 [BFGoodrich Logo] NEWS now redoubling efforts in cost reduction, lean manufacturing and quality improvement, as well as new commercial initiatives." The BFGoodrich Company, headquartered in Charlotte, NC, has leading market positions in advanced aerospace systems, performance materials, and engineered industrial products. The company has annual revenues approaching $6 billion and 27,000 employees worldwide. The tables that follow provide more detailed information about BFGoodrich results for the third quarter and first nine months of 1999 and 1998, as well as results for 1996 - 1998, which have been restated to reflect the merger of BFGoodrich and Coltec Industries. [Part of this announcement contains forward-looking statements that involve risks and uncertainties, and actual results could differ materially from those projected in the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed with the Securities and Exchange Commission, including but not limited to the last section of the Management's Discussion and Analysis entitled "Forward-Looking Information is Subject to Risk and Uncertainty" contained in the company's Annual Report on Form 10-K and in other filings.] ### Page 3 of 3 C1138-BFGoodrich reports consolidated 1999 third-quarter results 4 THE BFGOODRICH COMPANY (Dollars in millions except per share amounts) Three Months Ended September 30 ----------------------------------------- 1999 1999 AS REPORTED AS ADJUSTED(A) 1998(B) Sales $ 1,332.1 $ 1,332.1 $ 1,346.6 ========= ========= ========= Income (Loss) before Income Taxes and Trust Distributions (63.2) 139.1 143.4 Income Tax Expense (3.1) (51.5) (53.7) Distributions on Trust Preferred Securities (4.6) (4.6) (4.6) --------- --------- --------- Net Income (Loss) $ (70.9) $ 83.0 $ 85.1 ========= ========= ========= Income (Loss) Per Share: Basic $ (0.64) $ 0.75 $ 0.77 ========= ========= ========= Diluted $ (0.64) $ 0.74 $ 0.76 ========= ========= ========= Weighted - Average Number of Shares Outstanding (in millions): Basic 110.1 110.1 110.7 ========= ========= ========= Diluted 110.1 113.9 114.4 ========= ========= ========= (A) Results exclude the effect of a $202.3 million charge ($153.9 million after-tax), or $1.35 diluted share, primarily related to merger-related and consolidation costs. (B) There were no special items reported during the third quarter of 1998. 5 THE BFGOODRICH COMPANY (Dollars in millions except per share amounts) Nine Months Ended September 30 -------------------------------------------------------------- 1999 1999 1998 1998 AS REPORTED AS ADJUSTED(A) AS REPORTED AS ADJUSTED(B) Sales $ 4,207.3 $ 4,207.3 $ 4,064.5 $ 4,064.5 ========= ========= ========= ========= Income from Continuing Operations before Income Taxes and Trust Distributions 222.8 455.3 451.2 393.0 Income Tax Expense (105.7) (165.5) (168.0) (148.2) Distributions on Trust Preferred Securities (13.8) (13.8) (11.5) (11.5) --------- --------- --------- --------- Income from Continuing Operations 103.3 276.0 271.7 233.3 Income (Loss) from Discontinued Operations -- -- (1.6) -- Extraordinary Item -- -- (4.3) -- --------- --------- --------- --------- Net Income $ 103.3 $ 276.0 $ 265.8 $ 233.3 ========= ========= ========= ========= Income (Loss) Per Share: Basic Continuing Operations $ 0.94 $ 2.51 $ 2.46 $ 2.12 Discontinued Operations -- -- (0.01) -- Extraordinary Item -- -- (0.04) -- --------- --------- --------- --------- Net Income $ 0.94 $ 2.51 $ 2.41 $ 2.12 ========= ========= ========= ========= Diluted Continuing Operations $ 0.93 $ 2.47 $ 2.41 $ 2.07 Discontinued Operations -- -- (0.01) -- Extraordinary Item -- -- (0.04) -- --------- --------- --------- --------- Net Income $ 0.93 $ 2.47 $ 2.36 $ 2.07 ========= ========= ========= ========= Weighted - Average Number of Shares Outstanding (in millions): Basic 109.9 109.9 110.3 110.3 ========= ========= ========= ========= Diluted 110.8 113.7 114.1 114.1 ========= ========= ========= ========= (A) Results exclude the effect of a $232.5 million charge ($172.7 million after-tax), or $1.52 a diluted share, primarily related to merger-related and consolidation costs. (B) Results exclude the effect of a $58.2 million gain ($38.4 million after-tax), or $0.34 a diluted share, related to the sale of the Holley Performance Products subsidiary. 6 BFGOODRICH SEGMENT REPORTING (DOLLARS IN MILLIONS) Three Months Ended Nine Months Ended September 30 September 30 ----------------------- ----------------------- 1999 1998 1999 1998 Sales: Aerospace: Aerostructures $ 248.5 $ 276.3 $ 881.9 $ 861.3 Landing Systems 251.8 239.4 782.4 695.9 Sensors & Integrated Systems 230.5 229.8 696.6 676.5 Maintenance, Repair & Overhaul 124.4 116.9 386.4 332.1 -------- -------- -------- -------- 855.2 862.4 2,747.3 2,565.8 -------- -------- -------- -------- Engineered Industrial Products 170.6 179.4 542.7 600.6 -------- -------- -------- -------- Performance Materials: Textile and Coatings Solutions 154.4 158.5 467.7 459.0 Polymer Additives and Specialty Plastics 107.1 103.7 318.7 322.7 Consumer Specialties 44.8 42.6 130.9 116.4 -------- -------- -------- -------- 306.3 304.8 917.3 898.1 -------- -------- -------- -------- Total Sales $1,332.1 $1,346.6 $4,207.3 $4,064.5 ======== ======== ======== ======== Operating Income: Aerospace: Aerostructures $ 39.1 $ 44.5 $ 136.5 $ 127.3 Landing Systems 40.2 33.7 121.4 80.7 Sensors & Integrated Systems 44.8 42.9 130.4 123.2 Maintenance, Repair & Overhaul 6.8 7.4 30.0 19.8 -------- -------- -------- -------- 130.9 128.5 418.3 351.0 -------- -------- -------- -------- Engineered Industrial Products 28.1 35.2 99.3 96.8 -------- -------- -------- -------- Performance Materials: Textile and Coatings Solutions 12.9 16.3 34.8 52.8 Polymer Additives and Specialty Plastics 20.3 14.1 57.1 41.5 Consumer Specialties 6.2 7.0 23.7 19.9 -------- -------- -------- -------- 39.4 37.4 115.6 114.2 -------- -------- -------- -------- Total Segment Operating Income $ 198.4 $ 201.1 $ 633.2 $ 562.0 Corporate General and Administrative Costs (19.9) (20.4) (64.0) (62.1) Merger-related and Consolidation Costs (204.7) -- (241.0) -- -------- -------- -------- -------- Total Operating Income $ (26.2) $ 180.7 $ 328.2 $ 499.9 ======== ======== ======== ======== 7 BFGOODRICH CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED 1998, 1997, AND 1996 (In millions of dollars, except per share amounts) 1998 1997 1996 --------- --------- --------- Sales $ 5,454.9 $ 4,687.9 $ 4,005.5 Operating costs and expenses: Cost of sales 3,919.3 3,366.8 2,832.8 Charge for MD-90 contract -- 35.2 -- Selling and administrative costs 841.9 778.0 679.5 Merger related and consolidation costs 10.5 77.0 11.2 --------- --------- --------- 4,771.7 4,257.0 3,523.5 --------- --------- --------- Operating income 683.2 430.9 482.0 Interest expense (134.1) (127.9) (164.7) Interest income 6.1 12.0 4.2 Gain on issuance of subsidiary stock 13.7 Other income (expense) - net 39.0 15.0 (30.8) --------- --------- --------- Income from continuing operations before income taxes and trust distributions 594.2 343.7 290.7 Income tax expense (218.5) (138.2) (103.2) Distributions on trust preferred securities (16.1) (10.5) (10.5) --------- --------- --------- Income from continuing operations 359.6 195.0 177.0 Income from discontinued operations - net of taxes (1.6) 84.3 115.5 --------- --------- --------- Income before extraordinary items 358.0 279.3 292.5 Extraordinary item - net of tax (4.3) (19.3) (30.6) --------- --------- --------- Net income $ 353.7 $ 260.0 $ 261.9 ========= ========= ========= Basic earnings per share: Continuing operations $ 3.26 $ 1.81 $ 1.68 Discontinued operations (0.01) 0.78 1.10 Extraordinary item (0.04) (0.18) (0.29) --------- --------- --------- Net income $ 3.21 $ 2.41 $ 2.49 ========= ========= ========= Diluted earnings per share: Continuing operations $ 3.19 $ 1.75 $ 1.63 Discontinued operations (0.01) 0.75 1.05 Extraordinary item (0.04) (0.17) (0.28) --------- --------- --------- Net income $ 3.14 $ 2.33 $ 2.40 ========= ========= ========= Net income excluding special items $ 2.91 $ 2.34 $ 1.74 ========= ========= ========= Weighted average number of common and common equivalent shares outstanding - in millions Basic 110.2 107.9 105.3 Diluted 113.9 112.1 109.8 8 The BFGoodrich Company Group Results QUARTER: 1999 --------------------------------- ------- Q1 Q2 Q3 Total --------------------------------- ------- REVENUE Landing Systems 261.3 269.3 251.8 782.4 Sensors & Integrated Systems 237.7 228.4 230.5 696.6 MRO 117.0 145.0 124.4 386.4 Aerostructures 310.2 323.2 248.5 881.9 --------------------------------- ------- Aerospace 926.2 965.9 855.2 2,747.3 Engineered Industrial Products 185.6 186.5 170.6 542.7 --------------------------------- ------- Polymer Additives & Specialty Plastics 105.5 106.1 107.1 318.7 Textiles and Coatings Solutions 153.7 159.6 154.4 467.7 Consumer Specialties 40.8 45.3 44.8 130.9 --------------------------------- ------- Performance Materials 300.0 311.0 306.3 917.3 --------------------------------- ------- Segment Revenue 1,411.8 1,463.4 1,332.1 4,207.3 ================================= ======= OPERATING INCOME Landing Systems 38.6 42.6 40.2 121.4 Sensors & Integrated Systems 43.3 42.3 44.8 130.4 MRO 9.9 13.3 6.8 30.0 Aerostructures 50.7 46.7 39.1 136.5 --------------------------------- ------- Aerospace 142.5 144.9 130.9 418.3 Engineered Industrial Products 34.2 37.0 28.1 99.3 --------------------------------- ------- Polymer Additives & Specialty Plastics 19.2 17.6 20.3 57.1 Textiles and Coatings Solutions 8.3 13.6 12.9 34.8 Consumer Specialties 5.7 11.8 6.2 23.7 --------------------------------- ------- Performance Materials 33.2 43.0 39.4 115.6 --------------------------------- ------- Segment Operating Income 209.9 224.9 198.4 633.2 ================================= ======= YEAR TO DATE: 1999 -------------------------------------- 1Q YTD 2Q YTD 3Q YTD -------------------------------------- REVENUE Landing Systems 261.3 530.6 782.4 Sensors & Integrated Systems 237.7 466.1 696.6 MRO 117.0 262.0 386.4 Aerostructures 310.2 633.4 881.9 -------------------------------------- Aerospace 926.2 1,892.1 2,747.3 Engineered Industrial Products 185.6 372.1 542.7 -------------------------------------- Polymer Additives & Specialty Plastics 105.5 211.6 318.7 Textile and Coatings Solutions 153.7 313.3 467.7 Consumer Specialties 40.8 86.1 130.9 -------------------------------------- Performance Materials 300.0 611.0 917.3 -------------------------------------- Segment Revenue 1,411.8 2,875.2 4,207.3 ====================================== OPERATING INCOME Landing Systems 38.6 81.2 121.4 Sensors & Integrated Systems 43.3 85.6 130.4 MRO 9.9 23.2 30.0 Aerostructures 50.7 97.4 136.5 -------------------------------------- Aerospace 142.5 287.4 418.3 Engineered Industrial Products 34.2 71.2 99.3 -------------------------------------- Polymer Additives & Specialty Plastics 19.2 36.8 57.1 Textile and Coatings Solutions 8.3 21.9 34.8 Consumer Specialties 5.7 17.5 23.7 -------------------------------------- Performance Materials 33.2 76.2 115.6 -------------------------------------- Segment Operating Income 209.9 434.8 633.2 ====================================== 9 QUARTER: 1998 ---------------------------------------------------- --------- Q1 Q2 Q3 Q4 Total ---------------------------------------------------- --------- REVENUE Landing Systems 222.3 234.2 239.4 267.3 963.2 Sensors & Integrated Systems 221.6 225.1 229.8 234.8 911.3 MRO 104.8 110.4 116.9 128.5 460.6 Aerostructures 302.6 282.4 276.3 282.9 1,144.2 ---------------------------------------------------- --------- Aerospace 851.3 852.1 862.4 913.5 3,479.3 Engineered Industrial Products 208.4 212.8 179.4 179.3 779.9 ---------------------------------------------------- --------- Polymer Additives & Specialty Plastics 110.3 108.7 103.7 108.6 431.3 Textile and Coatings Solutions 121.2 179.3 158.5 147.2 606.2 Consumer Specialties 20.9 52.9 42.6 41.7 158.1 ---------------------------------------------------- --------- Performance Materials 252.4 340.9 304.8 297.5 1,195.6 ---------------------------------------------------- --------- Segment Revenue 1,312.1 1,405.8 1,346.6 1,390.3 5,454.8 ==================================================== ========= OPERATING INCOME Landing Systems 26.6 20.4 33.7 37.2 117.9 Sensors & Integrated Systems 41.2 39.1 42.9 47.1 170.3 MRO 5.3 7.1 7.4 2.9 22.7 Aerostructures 39.5 43.3 44.5 51.3 178.6 ---------------------------------------------------- --------- Aerospace 112.6 109.9 128.5 138.5 489.5 Engineered Industrial Products 36.0 25.6 35.2 34.8 131.6 ---------------------------------------------------- --------- Polymer Additives & Specialty Plastics 15.3 12.1 14.1 17.3 58.8 Textile and Coatings Solutions 15.7 20.6 16.3 10.4 63.0 Consumer Specialties 5.6 7.5 7.0 3.9 24.0 ---------------------------------------------------- --------- Performance Materials 36.6 40.2 37.4 31.6 145.8 ---------------------------------------------------- --------- Segment Operating Income 185.2 175.7 201.1 204.9 766.9 ==================================================== ========= YEAR TO DATE: 1998 ---------------------------------------------------- Q1 YTD Q2 YTD Q3 YTD Q4 YTD ---------------------------------------------------- REVENUE Landing Systems 222.3 456.5 695.9 963.2 Sensors & Integrated Systems 221.6 446.7 676.5 911.3 MRO 104.8 215.2 332.1 460.6 Aerostructures 302.6 585.0 861.3 1,144.2 ---------------------------------------------------- Aerospace 851.3 1,703.4 2,565.8 3,479.3 Engineered Industrial Products 208.4 421.2 600.6 779.9 ---------------------------------------------------- Polymer Additives & Specialty Plastics 110.3 219.0 322.7 431.3 Textile and Coatings Solutions 121.2 300.5 459.0 606.2 Consumer Specialties 20.9 73.8 116.4 158.1 ---------------------------------------------------- Performance Materials 252.4 593.3 898.1 1,195.6 ---------------------------------------------------- Segment Revenue 1,312.1 2,717.9 4,064.5 5,454.8 ==================================================== OPERATING INCOME Landing Systems 26.6 47.0 80.7 117.9 Sensors & Integrated Systems 41.2 80.3 123.2 170.3 MRO 5.3 12.4 19.8 22.7 Aerostructures 39.5 82.8 127.3 178.6 ---------------------------------------------------- Aerospace 112.6 222.5 351.0 489.5 Engineered Industrial Products 36.0 61.6 96.8 131.6 ---------------------------------------------------- Polymer Additives & Specialty Plastics 15.3 27.4 41.5 58.8 Textile and Coatings Solutions 15.7 36.3 52.8 63.2 Consumer Specialties 5.6 13.1 19.9 23.8 ---------------------------------------------------- Performance Materials 36.6 76.8 114.2 145.8 ---------------------------------------------------- Segment Operating Income 185.2 360.9 562.0 766.9 ====================================================