Rockwell Collins' Third Quarter Fiscal Year 2006 EPS Increase 25% to 70 Cents on 8% Organic Revenue Growth.CEDAR RAPIDS Cedar Rapids, city (1990 pop. 108,751), seat of Linn co., E central Iowa, on the Cedar River; inc. as a city 1856. The second largest city in Iowa, it is named for the surging rapids in the river. , Iowa -- Rockwell Collins Rockwell Collins, Inc. (NYSE: COL) is a large United States-based international company headquartered in Cedar Rapids, Iowa, primarily providing aviation and information technology systems, solutions, and services to governmental agencies and aircraft manufacturers. , Inc. (NYSE NYSE See: New York Stock Exchange :COL col (kol) a depression in the interdental tissues just below the interproximal contact area, connecting the buccal and lingual papillae. col n. ) today reported net income of $121 million for the third quarter of fiscal year 2006 ended June 30, an increase of $20 million, or 20%, over fiscal year 2005 third quarter net income of $101 million. Earnings per share improved 25% to 70 cents compared to 56 cents for the same period last year. Earnings per share growth exceeded the growth rate in net income due to the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effect of the company's share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. Total segment operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the third quarter improved 250 basis points to 20.6% compared to 18.1% last year. Third quarter sales were $964 million, an increase of $74 million, or 8% from the $890 million reported last year. For the first nine months of fiscal year 2006 cash flow from operating activities totaled $313 million compared to $352 million for the same period a year ago. The lower year-to-date cash flow from operating activities was principally due to the net effect of higher income tax payments offset by lower voluntary pension plan contributions. "Our third quarter financial results reflect another demonstration of excellent execution by both our Government and Commercial Systems businesses," said Rockwell Collins Chairman, President and Chief Executive Officer, Clay Jones. "I'm particularly pleased by our ability to continue achieving productivity improvements that translate into profitability growth at rates considerably higher than our revenue growth," concluded Jones, noting that total segment operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before increased 24% and resulted in a total segment operating margin in excess of 20% for the first time. Current year third quarter earnings include $4 million ($3 million after tax, or 2 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) of stock-based compensation costs related to the company's adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, on October 1, 2005, and $3 million (or 2 cents per share) of higher income tax expense principally due to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the Federal Research and Development Tax Credit on December 31, 2005. Legislation extending the availability of tax credits beyond December 31, 2005 has yet to be enacted. Following is a discussion of sales and earnings for each business segment. Government Systems Government Systems, which provides aviation electronics, navigation and precision guidance, communications and simulation systems, products and services to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. government, foreign militaries and manufacturers of military platforms, achieved third quarter sales of $499 million, an increase of $37 million, or 8%, compared to the $462 million reported for the same period last year. Defense electronics systems and products sales increased $19 million, or 6%, to $335 million. Higher Defense Advanced GPS Receiver For the DAGR Direct Attack Guided Rocket, see . The Defense Advanced GPS Receiver (DAGR) is a handheld GPS receiver used by the United States Department of Defense and select foreign military services. (DAGR DAGR Defense Advanced GPS Receiver DAGR Direct Attack Guided Rocket ) and fixed and rotary wing electronics systems upgrade program revenues were partially offset by lower simulation and training revenues due to delayed customer procurements. Defense communications sales increased $18 million, or 12%, to $164 million. Higher ARC-210 radio and advanced communication program revenues more than offset lower Joint Tactical Radio System program revenues. Government Systems' third quarter operating earnings increased $17 million, or 21% to $99 million, or an operating margin of 19.8%, compared to operating earnings of $82 million, or an operating margin of 17.7%, for the same period last year. The higher operating earnings and operating margin were primarily attributable to the combination of the higher sales, productivity improvements and a more favorable proportion of higher margin production revenues, partially offset by higher discretionary research and development costs. Commercial Systems Commercial Systems, which provides aviation electronics systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide, achieved third quarter sales of $465 million, an increase of $37 million, or 9%, compared to sales of $428 million reported for the same period last year. Increased demand for new business and air transport aircraft, spares and avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. retrofits drove the revenue growth. Sales to airlines and aircraft original equipment manufacturers (OEMs) increased $26 million, or 12%, to $249 million. Significantly higher business jet avionics and cabin electronics systems revenues and higher air transport avionics sales more than offset lower regional jet avionics and in-flight entertainment In-flight entertainment (IFE) refers to the entertainment available to aircraft passengers during a flight. After World War II commercial aviation flights became a daily event in which entertainment was requested by passengers to help the time pass. systems revenues. Commercial Systems' aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. revenues increased $11 million, or 5%, to $216 million. Higher revenues from retrofit ret·ro·fit v. ret·ro·fit·ted or ret·ro·fit, ret·ro·fit·ting, ret·ro·fits v.tr. 1. To provide (a jet, automobile, computer, or factory, for example) with parts, devices, or equipment not in and spares activities more than offset a $4 million decline in regulatory mandate program revenues. Commercial Systems' third quarter operating earnings increased $21 million, or 27%, to $100 million, or an operating margin of 21.5%, compared to operating earnings of $79 million, or an operating margin of 18.5%, for the same period a year ago. The higher operating earnings and operating margin primarily resulted from the combination of the higher sales, productivity improvements and a lower proportion of lower margin in-flight entertainment systems revenues, partially offset by higher research and development costs.
Financial Highlights
Based on the strength of its balance sheet and operating cash
flow, the company continued to execute on a capital deployment
strategy targeted at providing additional shareowner value.
-- The amount of the regular quarterly per share dividend was
increased by 33% to 16 cents from 12 cents effective with the
dividend paid on June 5, 2006.
-- The company repurchased 2.2 million shares of common stock at
a total cost of $125 million. Total authorized share
repurchases available beyond June 30, 2006 stand at $331
million.
Fiscal Year 2006 Outlook
The company has updated certain elements of its full fiscal year
2006 financial guidance as follows:
-- Government Systems' full year sales are now projected to
increase over fiscal year 2005 sales by about 14% (previously
in the range of 14% to 16%).
-- Commercial Systems' full year sales are now expected to
increase over fiscal year 2005 sales by about 10% (previously
in the range of 8% to 10%).
-- Due to the company's higher than anticipated segment operating
margin performance in the first nine months of the fiscal
year, expectations for Government and Commercial Systems full
year segment operating margins have been raised.
-- Government Systems' full year operating margins are
expected to be in the range of 19% to 19.5% (previously
about 19%).
-- Commercial Systems' full year operating margins are
projected to be about 20% (previously in the range of 19%
to 20%).
-- Earnings per share are projected to be in the range of $2.65
to $2.70 (previously in the range of $2.60 to $2.70). In
addition, management now expects that the new EPS guidance
range will accommodate a full year effective income tax rate
of 31% to 32% that could result if legislative action is not
enacted during the fourth quarter to retroactively extend the
availability of federal research and development tax credits
from December 31, 2005 to at least the end of the 2006 fiscal
year.
-- Cash flow from operating activities is now expected to be
about $550 million (previously about $600 million), as a
result of the company's $50 million voluntary contribution to
its U.S. qualified defined benefit pension plan.
-- Research and development costs are expected to total about
$725 million (previously about $690 million).
A summary of these and other elements of the company's current fiscal
year 2006 financial guidance are provided below.
-- Total sales $3.8 billion to $3.9 billion
-- Segment sales growth:(1)
-- Government Systems(2) about 14%
-- Commercial Systems(3) about 10%
-- Segment operating margins:(4)
-- Government Systems 19% to 19.5%
-- Commercial Systems about 20%
-- Earnings per share $2.65 to $2.70
-- Cash flow from operating activities about $550 million
-- Research & development costs about $725 million
-- Capital expenditures about $140 million
(1) Projected growth rate over prior fiscal year actual segment sales.
(2) Includes approximately 3 percentage points of growth from
incremental TELDIX revenues and Evans & Sutherland military
simulation business revenues.
(3) Includes less than 1 percentage point of growth from Evans &
Sutherland commercial simulation business revenues.
(4) Segment operating margins exclude the impact of stock-based
compensation expense.
Business Highlights: Rockwell Collins' Board of Directors elected Andrew J. Policano and Mark Donegan to the company's Board of Directors. Mr. Policano is currently the Dean of the Paul Merage School of Business UC Irvine's Paul Merage School of Business Formerly known as the Graduate School of Management, the school was renamed in Spring 2005 to the Paul Merage School of Business, after receiving a generous donation by philanthropist, entrepreneur, and Chef America founder, Paul at the University of California The University of California has a combined student body of more than 191,000 students, over 1,340,000 living alumni, and a combined systemwide and campus endowment of just over $7.3 billion (8th largest in the United States). , Irvine, a position he has held since August 2004. He had previously served as Dean of the University of Wisconsin-Madison “University of Wisconsin” redirects here. For other uses, see University of Wisconsin (disambiguation). A public, land-grant institution, UW-Madison offers a wide spectrum of liberal arts studies, professional programs, and student activities. School of Business. Mr. Donegan is currently the chairman and chief executive officer of Precision Castparts Corp., a company he joined in 1985. In his more than 25-year career, he has held positions of increasing responsibility first at General Electric, and then at Precision Castparts. Rockwell Collins completed the acquisition of Evans & Sutherland's military and commercial simulation business in a $71 million cash transaction. Rockwell Collins now offers complete simulation and training solutions for military and commercial applications throughout the world, including the hardware and software to create visual images for simulation, training, engineering, and other applications. The U.S. Air Force successfully demonstrated several applications of the Rockwell Collins Tactical Targeting Network Technology (TTNT TTNT Tactical Targeting Network Technology (USAF) TTNT Till The Next Time ) during the Joint Expeditionary Force An armed force organized to accomplish a specific objective in a foreign country. expeditionary force n → cuerpo expedicionario expeditionary force n → corps m experiment held recently at Nellis Air Force Base Nellis Air Force Base (IATA: LSV, ICAO: KLSV) is a United States Air Force base, in Clark County, Nevada, on the northeast side of Las Vegas. It is also treated as a census-designated place by the United States Census for statistical purposes, and so specific . TTNT provided the high bandwidth, reliable, ad-hoc network to connect fighter, bomber bomber Military aircraft designed to drop bombs on surface targets. Aerial bombardment can be traced to the Italo-Turkish War (1911), in which an Italian pilot dropped grenades on two Turkish targets. , and command and control aircraft, as well as mobile and fixed forward ground nodes to extend the reach of Internet Protocol-enabled applications and to integrate the TTNT sub-network with the fixed ground network. An advanced communications program Software that manages the transmission of data between computers, typically via modem and the serial port. Such programs were very popular for connecting to BBSs before the Internet took off. developed by the Defense Advanced Research Projects Agency Defense Advanced Research Projects Agency (DARPA), U.S. government agency administered by the Department of Defense (see Defense, United States Department of). , TTNT is the airborne networking waveform The shape of a signal. See wavelength, sine wave and square wave. for the Multi-functional Information Distribution System Joint Tactical Radio System (MIDS-JTRS) program. Rockwell Collins and Thales signed a strategic agreement for the joint development and pursuit of international programs for tactical ground communications through a new product line of radios called FlexNet. The new single- and multi-channel FlexNet radios will be capable of supporting the FlexNet waveform, which provides for high data rate ad-hoc networked communications and multimedia services. This enhanced capability increases the level of information which can be exchanged between users, introduces new possibilities of cooperative combat engagement between different units, and provides the mobility required by armed forces. Based on an open and secure architecture - compliant with Software Communication Architecture - the FlexNet radios will accommodate future technology insertions or requirement upgrades. Data Link Solutions (DLS DLS abbr. Doctor of Library Science ) and Thales agreed to cooperatively produce and sell MIDS-JTRS terminals for the global market. DLS, a joint venture between Rockwell Collins and BAE Systems BAE Systems British manufacturer of aircraft, missiles, avionics, naval vessels, and other aerospace and defense products. BAE Systems was formed (1999) from the merger of British Aerospace (BAe) with Marconi Electronic Systems. , is currently developing MIDS MIDS Multifunctional Information Distribution System MIDS Matrix Information and Directory Services (USA) MIDS Multifunction Information Distribution System MIDS Municipal Infrastructure Data Standard JTRS JTRS Joint Tactical Radio System JtRS Just The Right Shoe JTRS Just the Right Size JTRS Johnson Technical Reports Server JTRS Joint Tenancy with Right of Survivorship JTRS Jefferson Township Rescue Squad under an $82 million contract and is also performing under an additional $9 million development contract to insert the Tactical Targeting Networking Technology waveform into the MIDS-JTRS terminal. The base MIDS-JTRS terminal, which will provide current MIDS Link 16 and tactical air navigation Tactical Air Navigation, or TACAN, is a navigation system used by military aircraft. It provides the user with a distance and bearing from a ground station. It is a more accurate version of the VHF omnidirectional range / Distance Measuring Equipment (VOR/DME) system that functions, as well as three additional programmable channels to run various communications, navigation and command-and-control waveforms, is scheduled to be complete in September 2007; with additional European- unique developments running through 2009. The U.S. Air Force selected Rockwell Collins to develop next-generation Global Positioning System Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. (GPS) technology as part of the Modernized mod·ern·ize v. mo·dern·ized, mo·dern·iz·ing, mo·dern·iz·es v.tr. To make modern in appearance, style, or character; update. v.intr. To accept or adopt modern ways, ideas, or style. User Equipment (MUE) Receiver Card Development program. To be executed through October 2007, the $28 million contract calls for the preliminary design of modernized receiver cards for ground and airborne applications, establishing first proof of design for the modernized GPS architecture. Completion of the receiver card development, test and security certification A certification issued by competent authority to indicate that a person has been investigated and is eligible for access to classified matter to the extent stated in the certification. will be accomplished under a government exercisable contract option for these tasks. This program represents the military user equipment portion of a next-generation GPS system that adds a new military signal and security architecture, enabling enhanced integrity, exclusivity and improved anti-jam capabilities. The U. S. Navy and Air Force each awarded a contract to Rockwell Collins for simulation and training system programs. The U.S. Navy award was for its MH-60 Weapons Load Trainer (WLT WLT Washtenaw Land Trust WLT Weakest Link Theory WLT Winning Lottery Ticket WLT Work Leader Training WLT Weapons Load Training WLT Windows Live Toolbar ) program. The contract, valued at $26 million, calls for Rockwell Collins to modify an existing H-60F trainer and build four new H-60 WLTs. The U.S. Air Force award is for the provision of concurrency Operations that are performed simultaneously within the computer. For example, dual-core CPUs provide complete overlapping of two independent processes. See dual core, hyperthreading, multiprocessing, multitasking, multithreading, SMP and MPP. concurrency - multitasking updates, training modifications and support for the U.S. Air Force's B-1B Training System. Under a 6-year contract worth $95 million, Rockwell Collins will support five Weapons System Trainers Weapons Systems Trainer (WST). A training device (simulator) designed particularly for weapons training. A term commonly used by the United States Department of Defense, particularly for aircraft simulators. , two Mission Trainers, five Cockpit Procedure Trainers and 18 Maintenance Trainers. Rockwell Collins Simulation and Training Solutions has been providing B-1B training services for the Air Force since 1999. Rockwell Collins made the first deliveries of its Core Network cabinet to support the Boeing 787 Dreamliner program. The Core Network cabinet plays a key role in Boeing's objective to 'e-enable' the entire aircraft. Utilizing commercial open standards Specifications for hardware and software that are developed by a standards organization or a consortium involved in supporting a standard. Available to the public for developing compliant products, open standards imply "open systems;" that an existing component in a system can be replaced , the Core Network hosts a wide variety of third party applications, and manages on board information flow to improve airline operations efficiency. The units delivered will support the development of the Health Maintenance System for the Boeing 787. In addition to the core network cabinet, Rockwell Collins is the supplier for the 787 flight deck display system and crew alerting system, pilot controls, communication and surveillance systems and the aircraft's common data network. Rockwell Collins also serves as the systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. for each of these elements. Rockwell Collins announced its next generation of weather radar, the MultiScan Hazard Detection(TM) system, which will enable safer, smoother and more efficient flights. The system includes five ground-breaking technologies that go beyond today's most advanced radar systems by adding predictive weather analysis and hazard detection features. These technologies include: Directed Sequential Hazard Assessment, Flight Path Hazard Analysis A hazard analysis is a process used to characterize the elements of risk. The results of a hazard analysis is the identification of unacceptable risks and the selection of means of controlling or eliminating them. , Storm Top Information, Predictive Overflight o·ver·flight n. An aircraft flight over a particular area, especially over foreign territory. Noun 1. overflight - a flight by an aircraft over a particular area (especially over an area in foreign territory) Protection and Enhanced Turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as Detection. Xiamen Airlines Xiamen Airlines (simplified Chinese: 厦门航空; pinyin: Xiàmén Hángkōng) is the first airline company in People's Republic of China run by private individuals, established on July 25, 1984, and based in Xiamen Gaoqi International Airport. selected a full suite of Rockwell Collins' avionics for 15 new Boeing 737-800 aircraft. The agreement, which includes the selection of the Rockwell Collins WXR WXR Weather WXR Weather Radar WXR WordPress extended RSS (XML format used to export blog or website content) MultiScan Weather Radar, also calls for an option on five additional aircraft with deliveries scheduled to begin in July 2006. Rockwell Collins extended its current Preferred Supplier Agreement (PSA (Professional Services Automation) An information system designed to organize, track and manage all opportunities, work, resources, costs, revenues and invoices to improve the productivity and efficiency of the workforce. ) with Air France Air France in full Compagnie Internationale Air France French passenger and cargo airline with more than 200 destinations in some 80 countries. It introduced supersonic Concorde service in 1976, but financial loss led the company to cease its Concorde through 2010, and signed a new five year PSA with KLM KLM Kaiserliche Marine (Enigma: Rising Tide game) KLM Koninklijke Luchtvaart Maatschappij (Royal Dutch Airlines) KLM Klub Langer Menschen (German: Tall Person Club) Royal Dutch Airlines. Air France and KLM Royal Dutch Airlines are subsidiaries of Air France-KLM Air France-KLM (Euronext Paris: AF, NYSE: AKH) is an airline company incorporated under French law with its headquarters at Roissy-Charles de Gaulle Airport near Paris, France. . The PSAs provide for the purchase of Rockwell Collins' communication, navigation and surveillance avionics by the two airlines for their forward fit aircraft and retrofit activities, while enabling improved avionics performance and reliability through a continuous improvement program. The Air France agreement also covers data link avionics, while a separate KLM agreement covers MultiScan weather radar on KLM's Boeing 777 aircraft. Conference Call and Webcast Details Rockwell Collins Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Clay Jones and Senior Vice President and CFO See Chief Financial Officer. Patrick Allen For other persons named Patrick Allen, see Patrick Allen (disambiguation). John Keith Patrick Allen (March 17 1927 - July 28 2006) was a British actor and voice actor. Allen was born in Nyasaland (now Malawi), where his father was a tobacco farmer. will conduct an earnings conference call at 4:30 p.m. Eastern Time on July 26, 2006. Individuals may listen to the call and view management's supporting slide presentation on the Internet at www.rockwellcollins.com. Listeners are encouraged to go to the Investor Relations Investor relations The process by which the corporation communicates with its investors. portion of the web site at least 15 minutes prior to the call to download and install any necessary software. The call will be available for replay on the Internet at www.rockwellcollins.com through August 25, 2006. Rockwell Collins is a pioneer in the development and deployment of innovative communication and aviation electronics solutions for both commercial and government applications. Our expertise in flight deck avionics, cabin electronics, mission communications and information management is strengthened by 17,000 employees, and a global service and support network that crosses 27 countries. To find out more, please visit www.rockwellcollins.com. This press release contains statements, including certain projections and business trends, that are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the health of the global economy, the continued recovery of the commercial aerospace industry and the continued support for military transformation and modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, programs; the potential adverse impact of oil prices on the commercial aerospace industry; changes in domestic and foreign government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. , budgetary and trade policies adverse to our businesses; market acceptance of new and existing products and services; reliability of and customer satisfaction with our products and services; potential cancellation or termination of contracts, delay of orders or changes in procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. practices or program priorities by our customers; customer bankruptcies and profitability; recruitment and retention of qualified personnel; performance of our suppliers and subcontractors; risks inherent in fixed price contracts, particularly the risk of cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor ; risk of significant and prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. disruption to air travel; our ability to execute to our internal performance plans such as our productivity improvement and cost reduction initiatives; achievement of our acquisition and related integration plans; continuing to maintain our planned effective tax rates; favorable outcomes of certain program restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , customer procurements, and congressional approvals; risk of contract price reductions and payment withholds related to noncompliance noncompliance failure of the owner to follow instructions, particularly in administering medication as prescribed; a cause of a less than expected response to treatment. noncompliance with U. S. Defense Department specialty metal requirements; our ability to develop contract compliant systems and products and satisfy our contractual commitments; risk of fines and penalties related to noncompliance with export control regulations; risk of asset impairments and government claims related to our pension plan freeze; and the uncertainties of the outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , as well as other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and the company assumes no obligation to update any forward-looking statement.
ROCKWELL COLLINS, INC.
SEGMENT SALES AND EARNINGS INFORMATION
(Unaudited)
(in millions, except per share amounts)
Three Months Ended Nine Months Ended
June 30 June 30
------------------ -----------------
2006 2005 2006 2005
--------- -------- -------- --------
Sales
Government Systems............... $499 $462 $1,485 $1,278
Commercial Systems............... 465 428 1,317 1,204
--------- -------- -------- --------
Total sales................. $964 $890 $2,802 $2,482
========= ======== ======== ========
Segment operating earnings
Government Systems............... $99 $82 $292 $228
Commercial Systems............... 100 79 264 224
--------- -------- -------- --------
Total segment operating
earnings................... 199 161 556 452
Interest expense................. (3) (3) (9) (8)
Earnings from corporate-level
equity affiliate................ 1 2 2 2
Stock-based compensation......... (4) - (13) -
General corporate, net........... (16) (16) (44) (40)
--------- -------- -------- --------
Income before income taxes....... 177 144 492 406
Income tax provision............. (56) (43) (153) (120)
--------- -------- -------- --------
Net income....................... $121 $101 $339 $286
========= ======== ======== ========
Diluted earnings per share....... $0.70 $0.56 $1.93 $1.58
Weighted average diluted shares
outstanding..................... 173.8 180.7 175.7 181.1
The following tables summarize total sales by product category and
Commercial Systems' sales by type of product or service for the three
and nine months ended June 30, 2006 and 2005 (unaudited, in millions):
Three Months Ended Nine Months Ended
June 30 June 30
------------------ -----------------
2006 2005 2006 2005
--------- -------- -------- --------
Defense electronics.............. $335 $316 $1,035 $869
Defense communications........... 164 146 450 409
Air transport aviation
electronics..................... 251 241 716 665
Business and regional aviation
electronics..................... 214 187 601 539
--------- -------- -------- --------
Total............................ $964 $890 $2,802 $2,482
========= ======== ======== ========
Original equipment............... $249 $223 $676 $563
Aftermarket...................... 216 205 641 641
--------- -------- -------- --------
Total Commercial Systems sales... $465 $428 $1,317 $1,204
========= ======== ======== ========
ROCKWELL COLLINS, INC.
SUMMARY BALANCE SHEET
(Unaudited)
(in millions)
June 30, September 30,
2006 2005
------------- -------------
Assets
Cash and cash equivalents................. $121 $145
Receivables............................... 789 736
Inventories............................... 742 678
Current deferred income taxes............. 195 178
Other current assets...................... 69 43
------------- -------------
Total current assets................. 1,916 1,780
Property.................................. 527 473
Goodwill and intangible assets............ 614 571
Other assets.............................. 313 324
------------- -------------
Total assets......................... $3,370 $3,148
============= =============
Liabilities and shareowners' equity
Accounts payable.......................... $252 $283
Compensation and benefits................. 243 272
Advance payments from customers........... 236 194
Product warranty costs.................... 186 172
Income taxes payable...................... 52 48
Other current liabilities................. 228 215
------------- -------------
Total current liabilities............ 1,197 1,184
Long-term debt............................ 241 200
Retirement benefits....................... 726 758
Other liabilities......................... 80 67
Shareowners' equity....................... 1,126 939
------------- -------------
Total liabilities and shareowners'
equity.............................. $3,370 $3,148
============= =============
Certain prior year amounts have been reclassified to conform to the
current year presentation.
ROCKWELL COLLINS, INC.
CONDENSED CASH FLOW INFORMATION
(Unaudited)
(in millions)
Nine Months Ended
June 30
-----------------
2006 2005
-------- --------
Operating Activities:
Net income.......................................... $339 $286
Adjustments to arrive at cash provided by operating
activities:
Depreciation...................................... 62 64
Amortization of intangible assets................. 14 14
Stock-based compensation.......................... 13 -
Compensation and benefits paid in common stock.... 37 58
Tax benefit from the exercise of stock options.... 26 31
Excess tax benefit from stock-based compensation.. (26) -
Deferred income taxes............................. 3 51
Pension plan contributions........................ (60) (105)
Changes in assets and liabilities, excluding
effects of acquisitions..........................
and foreign currency adjustments:
Receivables.................................. (44) (45)
Inventories.................................. (66) (23)
Accounts payable............................. (27) 22
Advance payments from customers.............. 31 (7)
Income taxes................................. (7) (20)
Compensation and benefits.................... (30) 18
Other assets and liabilities................. 48 8
-------- --------
Cash Provided by Operating Activities...... 313 352
-------- --------
Investing Activities:
Property additions.................................. (104) (74)
Acquisition of businesses, net of cash acquired..... (71) (18)
Acquisition of intangible assets.................... - (7)
Proceeds from disposition of property............... - 2
-------- --------
Cash Used for Investing Activities......... (175) (97)
-------- --------
Financing Activities:
Proceeds from issuance of long-term debt............ 46 -
Purchases of treasury stock......................... (236) (250)
Cash dividends...................................... (69) (64)
Proceeds from exercise of stock options............. 69 86
Excess tax benefit from stock-based compensation.... 26 -
-------- --------
Cash Used for Financing Activities......... (164) (228)
-------- --------
Effect of exchange rate changes on cash and cash
equivalents........................................ 2 (3)
-------- --------
Net Change in Cash and Cash Equivalents............. (24) 24
Cash and Cash Equivalents at Beginning of Period.... 145 196
-------- --------
Cash and Cash Equivalents at End of Period.......... $121 $220
======== ========
Certain prior year amounts have been reclassified to conform to the
current year presentation.
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