Goodrich Settles with Northrop Grumman on TRW Aeronautical Systems Acquisition

CHARLOTTE, N.C., Dec. 27/Satnews Daily/ ¾ Defense contractor Goodrich Corp. (NYSE: GR) said it has entered into a $99 million partial settlement with Northrop Grumman related to its acquisition of TRW's Aeronautical Systems businesses in October 2002.

Goodrich said it received a deposit of $10 million from Northrop Grumman during the second quarter 2004 that will be applied to the settlement, and expects to receive the remaining $89 million before the end of 2004. Goodrich says it will use the settlement proceeds to repay debt and fund its pension plan.

The partial settlement agreement relates to customer warranty and other contract claims for products that were designed, manufactured or sold by TRW prior to the purchase of TRW Aeronautical Systems by Goodrich. The settlement, Goodrich said, excludes amounts associated with any claims that Goodrich may have against Northrop Grumman relating to the Airbus A380 actuation systems development program and certain other liabilities retained by TRW under the acquisition agreement.

Goodrich said it will record a liability for the estimated undiscounted future liabilities that have been assumed by Goodrich pursuant to the settlement agreement. To the extent that these estimated liabilities plus the company's existing receivables from Northrop Grumman for these matters exceed the settlement amount, Goodrich will record a charge to earnings.

Goodrich added it expects to record a pre tax charge of approximately $20 - $30 million (at current exchange rates), or $0.11 - $0.17 per fully diluted share, in the fourth quarter of 2004. Goodrich said the exact amount of the charge is currently under review by management and will be finalized prior to reporting fourth quarter and full year 2004 results in early 2005.

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