Corporates www.fitchratings.com April 22, 2010 Summary This report provides financial and industry information for the U.S. Industrials sector, including aerospace and defense, automotive, capital goods, and diversified industrials. The report has three sections. The first section (pages 2−5) contains liquidity summaries and credit comparison tables. The second section (pages 6−22) provides company summaries for operating performance and credit metrics over the past several years, as well as summaries of the companies’ key credit strengths and concerns as of the end of the 2009 fourth quarter; the companies are listed alphabetically within each sector. The final section, beginning on page 23, consists of charts and tables covering macro indicators, input prices, and end-market demand in key sectors. There are signs of stabilization in many industrial markets, but industrial economic activity generally remains below pre-recession levels. Many sectors have begun to see sequential improvement off of trough volumes, and some markets are experiencing year-over-year growth, although off of weak comparisons. Some positive factors that are helping industrial company performance include some strong Asian markets, inventory rebuilding, improving capital markets, and last year’s restructuring actions. Sector-wide concerns include excess capacity, rising input prices, forecasts weighted to the second half, and higher pension expense. Some costs are also returning this year, including incentive compensation. Cash deployment could be an emerging concern, with merger and acquisition activity picking up and several industrial companies increasing share repurchase authorizations or dividends. A macro concern is whether the recovery is being driven by temporary factors such as stimulus efforts and low interest rates. Fitch’s year-to-date Industrials rating actions reflect the sector’s stabilization tempered by the concerns listed above: Fitch has taken 10 favorable ratings actions, mostly outlook revisions, and no negative ratings actions. Credit quality in the U.S. commercial aerospace industry will remain under pressure in 2010, while the U.S. defense sector will experience more stability. Fitch expects deliveries in all commercial aerospace original equipment (OE) segments to decline in 2010, but aftermarket sales should begin to improve modestly. The commercial outlook for 2011 appears to be improving. In the auto sector Fitch forecasts that weak macroeconomic conditions will lead to a slow recovery in industry sales in 2010, with U.S. light vehicle sales forecast to reach 11.4 million units, up 9.6%. Although the auto sector is still weak, it has moved away from the stress levels of 2009, as illustrated by Fitch’s four auto and auto parts upgrades so far in 2010. Corporates U.S. and Canada Special Report U.S. Industrials Stats Quarterly — Fourth Quarter 2009 Analysts Craig Fraser +1 212 908-0310 craig.fraser@fitchratings.com Mark Oline +1 312 368-2073 mark.oline@fitchratings.com Bryant Bedwell +1 312 368-3179 bryant.bedwell@fitchratings.com Eric Ause +1 312 606-2302 eric.ause@fitchratings.com Cheryl Peterson +1 312 606-2309 cheryl.peterson@fitchratings.com Kathleen Connelly +1 212 908-0290 kathleen.connelly@fitchratings.com Nathan Spunt +1 212 908-0202 nathan.spunt@fitchratings.com Violet Mulladzhanova +1 212 908-0543 violet.mulladzhanova@fitchratings.com Corporates 2 U.S. Industrials Stats Quarterly — Fourth Quarter 2009 April 22, 2010 North American Aerospace and Defense Credit Comparisons LTM Ended Revenue ($ Mil.) Cash and Equiv. ($ Mil.) Total Debt ($ Mil.) EBITDA Margin (%) Interest Coverage (x) Debt/ EBITDA (x) Adj. Debt/ EBITDAR (x) Free Cash Flow/ Total Adj. Debt (%) Investment Grade Boeing Company 12/31/09 67,621.0 10,127.0 8,489.0 10.80 18.20 1.20 1.40 26.00 General Dynamics Corporation 12/31/09 31,981.0 2,263.0 3,864.0 13.20 24.80 0.90 1.30 31.70 Goodrich Corporation 12/31/09 6,685.6 811.0 2,011.7 17.30 9.40 1.70 2.00 16.60 Honeywell International Inc. 12/31/09 30,908.0 2,801.0 7,607.0 15.01 9.79 1.64 2.11 22.87 ITT Corporation 12/31/09 10,904.5 1,215.6 1,505.8 13.93 15.26 0.99 1.59 32.18 L-3 Communications Corporation 12/31/09 15,615.0 1,016.0 4,112.0 13.40 7.50 2.00 2.40 19.30 Lockheed Martin Corporation 12/31/09 45,189.0 2,391.0 5,403.0 11.50 17.00 1.00 1.50 16.70 Northrop Grumman Corporation 12/31/09 33,755.0 3,275.0 4,294.0 9.54 11.46 1.33 2.31 10.82 Raytheon Company 12/31/09 24,881.0 2,642.0 2,329.0 13.80 27.30 0.70 1.30 40.40 Rockwell Collins, Inc. 12/31/09 4,439.0 206.0 591.0 22.32 49.55 0.60 1.02 38.00 United Technologies Corporation 12/31/09 52,920.0 4,449.0 9,744.0 14.59 10.68 1.26 1.64 23.58 Non-Investment Grade Alliant Techsystems Inc. 1/03/10 4,815.4 385.8 1,393.0 13.50 9.00 2.10 2.70