Industry Report Card: Global Commercial Aerospace Credit Outlook Sees Slight Lift, U.S. Defense Sector Steady But Slower Dec 06

Standard & Poors, December 2006

Abstract
Commercial aerospace firms saw a moderate overall improvement in credit quality over the past 12 months, supported in part by increasing demand for new jetliners, particularly from airlines in Asia and the Middle East, generally healthy global economic activity, growing air traffic, and upward trending financial results of many air carriers in those regions. Strong demand for commercial airplanes continued in 2006, following record orders for both manufacturersBoeing Co. (A+/Stable/A-1) and Airbus SAS (a unit of European Aeronautic Defence and Space Co. N.V. [EADS; A-/Watch Neg/A-2]) in 2005. This surge resulted in record backlogs, equivalent to about five years of production. However, this robust level of demand is probably not sustainable, and orders in 2007 are likely to be smaller,...

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

- Boeing Co.
- GenCorp Inc.
- General Dynamics Corp.
- Goodrich Corp.
- Kaman Corp.
- Boeing Capital Corp.
- Moog Inc.
- Raytheon Co.
- Textron Inc.
- United Technologies Corp.
- Honeywell International Inc.
- Hexcel Corp.
- BAE Systems PLC
- Finmeccanica SpA
- European Aeronautic Defence and Space Co. N.V.
- AAR Corp.
- Sequa Corp.
- Thales S.A.
- K&F Industries Inc.
- Bombardier Inc.
- Orbital Sciences Corp.
- BE Aerospace Inc.
- Alliant Techsystems Inc.
- Lockheed Martin Corp.
- Northrop Grumman Corp.
- Communications & Power Industries Inc.
- L-3 Communications Corp.
- Argo-Tech Corp.
- Precision Castparts Corp.
- DeCrane Aerospace Inc.
- TransDigm Inc.
- Rolls-Royce PLC
- Vought Aircraft Industries Inc.
- Rockwell Collins Inc.
- DRS Technologies Inc.
- Esterline Technologies Corp.
- Armor Holdings Inc.
- ARINC Inc.
- Wornick Co. (The)
- Heckler & Koch GmbH
- Standard Aero Ltd.
- Piedmont Hawthorne Holdings Inc.
- DynCorp International LLC
- AmeriQual Group LLC
- Spirit AeroSystems Inc.
- MTU Aero Engines Holding AG
- Embraer S.A.
- Mecachrome International Inc.
- Atlantic Marine Holding Co.
- Wesco Aircraft Hardware Corp.

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