U.K.-based global aerospace and defense company Rolls-Royce PLC continues to face pressure on profitability and cash flow generation. Recent company guidance indicates a weaker first half of 2016 than we expected, which increases the risk that these trends will persist for longer, and slow the pace and timing of recovery. We are therefore lowering to 'A-/A-2' from 'A/A-1' our ratings on Rolls-Royce. The negative outlook reflects that we may lower the long-term rating within the next 12 months if we anticipate that Rolls-Royce's profits, cash flow, or leverage metrics will be weaker than we expect for 2016. On May 20, 2016, S&P Global Ratings lowered to 'A-' from 'A' its long-term corporate credit and related debt ratings on U.K.-based global
