Rockwell Collins, Inc. COL today reported second quarter fiscal year 2015 earnings per share from continuing operations increased 13% to $1.22 compared to $1.08 in the prior year. Total sales for the second quarter of fiscal year 2015 were $1.34 billion, a 7% increase from the same period in fiscal year 2014. Cash provided by operating activities for the first six months of fiscal 2015 totaled $132 million, an increase of $54 million compared to the $78 million reported for the first six months last year.
"Our performance in the first half of fiscal 2015 is underscored by another quarter of double digit EPS growth driven by organic sales and earnings growth across all of our businesses," said Rockwell Collins Chief Executive Officer and President, Kelly Ortberg. "Our plan for the year is playing out about as we expected, with air transport OEM sales and aviation connectivity sales continuing to pace our top-line revenue growth. We're also seeing stabilization in U.S. DoD programs and business jet production. As a result, I continue to believe we are well positioned to deliver double-digit earnings per share and cash flow growth for fiscal year 2015."
Following is a discussion of fiscal year 2015 second quarter sales and earnings for each business segment.
Commercial Systems
Commercial Systems, which provides aviation electronics systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide, achieved 2015 second quarter results as summarized below.
| (dollars in millions) | Q2 FY15 | Q2 FY14 | Inc/(Dec) | |||||||||||
| Commercial Systems sales | ||||||||||||||
| Original equipment | $ | 370 | $ | 317 | 17 | % | ||||||||
| Aftermarket | 234 | 221 | 6 | % | ||||||||||
| Wide-body in-flight entertainment | 15 | 18 | (17 | )% | ||||||||||
| Total Commercial Systems sales | $ | 619 | $ | 556 | 11 | % | ||||||||
| Operating earnings | $ | 142 | $ | 127 | 12 | % | ||||||||
| Operating margin rate | 22.9 | % | 22.8 | % | 10 bps | |||||||||
- Original equipment sales increased due to improved share of airline selectable equipment, higher customer funded development program sales, and higher OEM production rates.
- Aftermarket sales increased primarily due to higher service and support revenues, increased sales of used aircraft parts, and higher regulatory mandate-related sales.
- Operating earnings increased due to incremental earnings on higher sales volume.
Government Systems
Government Systems provides a broad range of electronic products, systems and services to customers including the U.S. Department of Defense, other government agencies, civil agencies, defense contractors and ministries of defense around the world. Results from the second quarter of 2015 are summarized below.
| (dollars in millions) | Q2 FY15 | Q2 FY14 | Inc/(Dec) | |||||||||||
| Government Systems sales | ||||||||||||||
| Avionics | $ | 361 | $ | 333 | 8 | % | ||||||||
| Communication products | 110 | 119 | (8 | )% | ||||||||||
| Surface solutions | 48 | 56 | (14 | )% | ||||||||||
| Navigation products | 48 | 46 | 4 | % | ||||||||||
| Total Government Systems sales | $ | 567 | $ | 554 | 2 | % | ||||||||
| Operating earnings | $ | 114 | $ | 111 | 3 | % | ||||||||
| Operating margin rate | 20.1 | % | 20.0 | % | 10 bps | |||||||||
- Avionics sales increased due to higher hardware deliveries for rotary wing aircraft, higher KC-10 retrofit sales, and higher Joint Strike Fighter simulation and training sales. These increases were partially offset by lower KC-46 development program sales and the foreign currency impact of a stronger U.S. dollar.
- Communication product sales decreased due to lower deliveries of Joint Tactical Radio System Manpack radios partially offset by higher data link development sales.
- Surface solutions sales decreased due to lower development sales for the Common Range Integrated Instrumentation System program.
- Operating earnings increased due to incremental earnings on higher sales volume, partially offset by higher investment in company-funded R&D expense.
Information Management Services
Information Management Services (IMS) enables mission-critical data and voice communications throughout the world to customers including the U.S. Federal Aviation Administration (FAA), commercial airlines, business aircraft operators, airport and critical infrastructure operators and major passenger and freight railroads. These communications are enabled by the Company's high-performance, high-quality and high-assurance proprietary radio and terrestrial networks, enhancing customer efficiency, safety and connectivity. Results from the second quarter of 2015 are summarized below.
| (dollars in millions) | Q2 FY15 | Q2 FY14 | Inc/(Dec) | |||||||||||
| Information Management Services sales | $ | 155 | $ | 149 | 4 | % | ||||||||
| Operating earnings | $ | 22 | $ | 18 | 22 | % | ||||||||
| Operating margin rate | 14.2 | % | 12.1 | % | 210 bps | |||||||||
- IMS sales increased primarily due to 10 percent growth in aviation related businesses including GLOBALinkSM and ARINCDirectSM, partially offset by lower sales due to the exit of certain government programs.
- IMS operating earnings and operating margin increased primarily due to the higher sales volume and the absence of certain licensing costs incurred in the prior year.
Corporate and Financial Highlights
Income Taxes
The company's effective income tax rate was
32.4% for the second quarter of 2015 compared to a rate of 31.5% for the
same period last year. The higher effective income tax rate in the
second quarter of 2015 was due primarily to a favorable adjustment
recorded in the second quarter of 2014 that related to the resolution of
the IRS audit for taxable years ended September 30, 2010 and 2011.
Cash Flow
Cash provided by operating activities was $132
million for the first six months of fiscal year 2015, compared to $78
million in the first six months of fiscal year 2014. The increase in
cash provided by operating activities was due primarily to higher
earnings and lower income tax payments, partially offset by other net
working capital changes.
During the second quarter of 2015, the company repurchased 0.7 million shares of common stock at a total cost of $63 million. The company also paid a dividend on its common stock of 30 cents per share, or $40 million, in the second quarter of 2015.
Fiscal Year 2015 Outlook
The following table is a summary of the company's financial guidance for continuing operations for fiscal year 2015, which is unchanged from the guidance previously provided on January 23, 2015:
|
-- |
Total sales | $5.2 billion to $5.3 billion | |||||
|
-- |
Total segment operating margins | 20.5% to 21.5% | |||||
|
-- |
Earnings per share | $5.10 to $5.30 | |||||
|
-- |
Cash flow from operations | $700 million to $800 million | |||||
|
-- |
Total research & development investment | About $1 billion (1) | |||||
|
-- |
Capital expenditures | About $200 million | |||||
|
-- |
Full year income tax rate | 28% to 29% | |||||
(1) - Total research and development investment consists of company and customer funded research & development expenditures as well as the net increase in pre-production engineering costs capitalized within inventory.
Conference Call and Webcast Details
Rockwell Collins CEO and
President, Kelly Ortberg, and Senior Vice President and CFO, Patrick
Allen, will conduct an earnings conference call at 10:00 a.m. Eastern
Time on April 23, 2015. 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 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.
Business Highlights
Rockwell Collins expands information management offerings with
acquisition of Pacific Avionics
Rockwell Collins acquired
Pacific Avionics Pty. Limited, a Singapore-based company specializing in
technologies used for wireless information distribution, including
inflight entertainment and connectivity.
Rockwell Collins and Bluesky sign final agreement to form ACCEL
(Tianjin) Flight Simulation Co. LTD.
Rockwell Collins and
Beijing Bluesky Aviation Technology, an AVIC subsidiary, signed a final
agreement to establish ACCEL (Tianjin) Flight Simulation Co. LTD. Joint
Venture (JV). The JV, with equal shares owned by the two entities, will
create a simulation and training center of excellence in China for
commercial flight simulation and training solutions.
Rockwell Collins teams with OneWeb to provide unprecedented
connectivity to aviation
Rockwell Collins signed a memorandum
of understanding with OneWeb Ltd. to be the exclusive developer and
provider of satellite communication terminals for OneWeb's global
aviation high-speed broadband service. Rockwell Collins will also be an
authorized value added reseller of OneWeb connectivity services.
Rockwell Collins unveils ground-breaking approach to military
communications with launch of TruNet™ networked communications solution
For
years, the U.S. armed forces and militaries around the world have sought
an interoperable, scalable, ad-hoc networked communications system that
allows warfighters to talk with each other, no matter if they are
located on the ground or in the air. Now Rockwell Collins has cracked
that code with its TruNet networked communications solution – offering a
one-stop, integrated ground-air network.
Rockwell Collins to produce SATCOM terminals for Iridium CertusSM
broadband
Rockwell Collins entered into an agreement with
Iridium Communications Inc. to be a value-added manufacturer for Iridium
Certus broadband terminals. As a VAM, Rockwell Collins will design and
manufacture the terminals, which will enable users to utilize Iridium
Certus, the voice and data service enabled by the Iridium NEXT satellite
constellation.
Rockwell Collins avionics selected by the following airlines:
- India-based airline, IndiGo, selected Rockwell Collins' advanced avionics systems, including its MultiScan ThreatTrack™ weather radar and Multi-Mode Receiver, for 30 Airbus A320neo (new engine option) aircraft.
- China Eastern selected Rockwell Collins' advanced avionics systems, including its Head-up Guidance System and Multi-Mode Receiver, for 20 new Next-Generation Boeing 737 aircraft.
- Rockwell Collins' PAVES™ Broadcast in-flight entertainment and Airshow® 3D Moving Map systems will be featured on 45 Next-Generation Boeing 737 aircraft on order by China-based Xiamen Airlines and its subsidiary, Hebei Airlines.
- China-based Hainan Airlines selected Rockwell Collins' Head-up Guidance System for an undisclosed number of new and in-service Next-Generation Boeing 737 aircraft and flight simulators to improve safety and performance.
Star Air to upgrade Boeing 767 fleet with Rockwell Collins'
large-format flight displays
Rockwell Collins' large-format
flight displays, inspired by the same display system found on Boeing 787
Dreamliner airplanes, was selected by Denmark-based Star Air for its
fleet of 11 Boeing 767-200BDSF cargo airplanes.
Rockwell Collins brings innovative avionics to Bristow Helicopters
for U.K. search and rescue program
Rockwell Collins' newest
technologies for helicopters will be playing a key role in advancing
search and rescue services being provided by Bristow Helicopters Ltd on
behalf of the Maritime and Coastguard Agency for the UK's search and
rescue (SAR) program, commencing in April. Rockwell Collins' flight
decks are featured on the new fleet of specially commissioned SAR
aircraft, including 11 Sikorsky S-92s and 11 AW189 helicopters.
Zen Technologies and Rockwell Collins Launch into India's Military
Flight Simulation Market Segment
Zen Technologies and Rockwell
Collins announced their decision to join forces in military flight
simulation by unveiling a next generation rotary wing simulator at Aero
India 2015. The two industry leaders recently signed a memorandum of
understanding to combine their strengths in simulation and training to
offer advanced and high fidelity aviation training solutions.
Rockwell Collins to provide Joint Fires Observer/Joint Terminal
Attack Controller simulator to Australian Army
Rockwell Collins
will provide the Australian Army with the latest generation Joint Fires
Observer /Joint Terminal Attack Controller simulator that is designed to
meet all of the service's training requirements now and into the
foreseeable future.
Rockwell Collins collaborates with AMMROC for military avionics MRO
alliance
Rockwell Collins and Advanced Military Maintenance
Repair and Overhaul Center (AMMROC) LLC, an Abu Dhabi-based company,
have agreed in principle to form a strategic alliance that will provide
maintenance, repair and overhaul services for military avionics. Target
markets include the UAE and countries in the South Asia, Middle East and
North Africa region.
Rockwell Collins delivers RNP-RNAV capabilities for U.S. Army CH-47F
Chinooks
The U.S. Army continues to bring additional levels of
safety to CH-47F operators with a new Required Navigation
Performance-Area Navigation (RNP-RNAV) upgrade from Rockwell Collins.
Rockwell Collins to provide secure GPS receivers for Harris
Corporation tactical radios
Rockwell Collins signed a contract
to provide its MicroGRAM GPS receivers for Harris Corporation's tactical
radios, bringing secure, jam-resistant GPS capability to products such
as the Falcon III AN/PRC-158 and AN/PRC-117G.
Rockwell Collins completes sale of ARINC Aerospace Systems
Engineering and Support to Field Aviation Inc.
Rockwell Collins
completed the sale of ARINC Aerospace Systems Engineering and Support to
Field Aviation Inc., a privately held U.S. company.
Rockwell Collins introduces ARINC MultiLinkSM
flight tracking service
Rockwell Collins unveiled its ARINC
MultiLinkSM flight tracking service, offering a comprehensive
and cost-effective global flight tracking solution for the world's
airlines. ARINC MultiLink brings together multiple data sources to
reliably report the location of an aircraft anywhere in the world.
Rockwell Collins launches live credit card authorization service on
Hong Kong Airlines
Hong Kong Airlines (HKA) is the launch
airline for a new service from Rockwell Collins that enables the airline
to conduct live credit card authorizations using Wi-Fi® over its
existing ARINC ACARS infrastructure. The service, which is the first of
its kind in the industry, is offered through a strategic agreement with
the DFASS Group. With this service, HKA will be able to process credit
card authorizations in real time, eliminating loss due to credit card
fraud.
Federal Aviation Administration awards oceanic data link services
contract to Rockwell Collins
Rockwell Collins has been awarded
a seven year contract with the Federal Aviation Administration to
provide the company's oceanic data link service to enable real-time,
data communications between pilots and air traffic controllers, allowing
aircraft to fly more efficient routes to save fuel and enhance safety.
About Rockwell Collins
Rockwell Collins is a pioneer in the
development and deployment of innovative communication and aviation
electronic solutions for both commercial and government applications.
Our expertise in flight deck avionics, cabin electronics, mission
communications, simulation and training and information management
services is delivered by a global workforce, and a service and support
network that crosses more than 150 countries. To find out more, please
visit www.rockwellcollins.com.
Forward-Looking Statement
This press release contains
statements, including certain projections and business trends, that are
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those projected as a result of certain risks and uncertainties,
including but not limited to the financial condition of our customers,
including bankruptcies; the health of the global economy, including
potential deterioration in economic and financial market conditions;
adjustments to the commercial OEM production rates and the aftermarket;
the impacts of natural disasters and pandemics, including operational
disruption, potential supply shortages and other economic impacts;
cybersecurity threats, including the potential misappropriation of
assets or sensitive information, corruption of data or operational
disruption; delays related to the award of domestic and international
contracts; delays in customer programs; unanticipated impacts of
sequestration and other provisions of the Budget Control Act of 2011 as
modified by the Bipartisan Budget Act of 2013; the continued support for
military transformation and modernization programs; potential impact of
volatility in oil prices, currency exchange rates or interest rates on
the commercial aerospace industry or our business; the impact of
terrorist events on the commercial aerospace industry; declining defense
budgets resulting from budget deficits in the U.S. and abroad; changes
in domestic and foreign government spending, budgetary, procurement and
trade policies adverse to our businesses; market acceptance of our new
and existing technologies, products and services; reliability of and
customer satisfaction with our products and services; potential
unavailability of our mission-critical data and voice communication
networks; favorable outcomes on or potential cancellation or
restructuring of contracts, orders or program priorities by our
customers; recruitment and retention of qualified personnel; regulatory
restrictions on air travel due to environmental concerns; effective
negotiation of collective bargaining agreements by us, our customers,
and our suppliers; performance of our customers and subcontractors;
risks inherent in development and fixed-price contracts, particularly
the risk of cost overruns; risk of significant reduction to air travel
or aircraft capacity beyond our forecasts; our ability to execute to
internal performance plans such as productivity and quality improvements
and cost reduction initiatives; achievement of ARINC integration and
synergy plans as well as our other acquisition and related integration
plans; continuing to maintain our planned effective tax rates; our
ability to develop contract compliant systems and products on schedule
and within anticipated cost estimates; risk of fines and penalties
related to noncompliance with laws and regulations including export
control and environmental regulations; risk of asset impairments; our
ability to win new business and convert those orders to sales within the
fiscal year in accordance with our annual operating plan; and the
uncertainties of the outcome of lawsuits, claims and legal proceedings,
as well as other risks and uncertainties, including but not limited to
those detailed herein and from time to time in our Securities and
Exchange Commission filings. These forward-looking statements are made
only as of the date hereof 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 | Six Months Ended | |||||||||||||||||||
| March 31 | March 31 | |||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
| Sales | ||||||||||||||||||||
| Commercial Systems | $ | 619 | $ | 556 | $ | 1,187 | $ | 1,077 | ||||||||||||
| Government Systems | 567 | 554 | 1,076 | 1,069 | ||||||||||||||||
| Information Management Services | 155 | 149 | 304 | 167 | ||||||||||||||||
| Total sales | $ | 1,341 | $ | 1,259 | $ | 2,567 | $ | 2,313 | ||||||||||||
| Segment operating earnings | ||||||||||||||||||||
| Commercial Systems | $ | 142 | $ | 127 | $ | 267 | $ | 238 | ||||||||||||
| Government Systems | 114 | 111 | 220 | 216 | ||||||||||||||||
| Information Management Services | 22 | 18 | 43 | 20 | ||||||||||||||||
| Total segment operating earnings | 278 | 256 | 530 | 474 | ||||||||||||||||
| Interest expense | (15 | ) | (16 | ) | (30 | ) | (28 | ) | ||||||||||||
| Stock-based compensation | (7 | ) | (7 | ) | (12 | ) | (12 | ) | ||||||||||||
| General corporate, net | (15 | ) | (16 | ) | (29 | ) | (31 | ) | ||||||||||||
| Gain on divestiture of business | — | — | — | 10 | ||||||||||||||||
| ARINC transaction costs | — | (1 | ) | — | (13 | ) | ||||||||||||||
| Income from continuing operations before income taxes | 241 | 216 | 459 | 400 | ||||||||||||||||
| Income tax expense | (78 | ) | (68 | ) | (127 | ) | (118 | ) | ||||||||||||
| Income from continuing operations | 163 | 148 | 332 | 282 | ||||||||||||||||
| (Loss) from discontinued operations, net of taxes (1) | (6 | ) | — | (8 | ) | (3 | ) | |||||||||||||
| Net income | $ | 157 | $ | 148 | $ | 324 | $ | 279 | ||||||||||||
| Diluted earnings per share: | ||||||||||||||||||||
| Continuing operations | $ | 1.22 | $ | 1.08 | $ | 2.48 | $ | 2.06 | ||||||||||||
| Discontinued operations | (0.05 | ) | — | (0.06 | ) | (0.02 | ) | |||||||||||||
| Diluted earnings per share | $ | 1.17 | $ | 1.08 | $ | 2.42 | $ | 2.04 | ||||||||||||
| Weighted average diluted shares outstanding | 133.7 | 137.2 | 134.1 | 136.9 | ||||||||||||||||
(1) On July 25, 2014, the Company sold its satellite communications systems business formerly known as DataPath, Inc. (DataPath), which designs, manufactures and services ground-based satellite communication systems primarily for military customers. In addition, on March 10, 2015, the Company sold ARINC's Aerospace Systems Engineering and Support business (ASES), which provides military aircraft integration and modification services. The results of Datapath and ASES have been classified as discontinued operations.
The following tables summarize sales by category for the three and six months ended March 31, 2015 and 2014 (unaudited, in millions):
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| March 31 | March 31 | ||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| Commercial Systems sales: | |||||||||||||||||||
| Air transport aviation electronics: | |||||||||||||||||||
| Original equipment | $ | 204 | $ | 171 | $ | 395 | $ | 328 | |||||||||||
| Aftermarket | 136 | 124 | 267 | 252 | |||||||||||||||
| Wide-body in-flight entertainment | 15 | 18 | 31 | 37 | |||||||||||||||
| Total air transport aviation electronics | 355 | 313 | 693 | 617 | |||||||||||||||
| Business and regional aviation electronics: | |||||||||||||||||||
| Original equipment | 166 | 146 | 306 | 275 | |||||||||||||||
| Aftermarket | 98 | 97 | 188 | 185 | |||||||||||||||
| Total business and regional aviation electronics | 264 | 243 | 494 | 460 | |||||||||||||||
| Total Commercial Systems sales | $ | 619 | $ | 556 | $ | 1,187 | $ | 1,077 | |||||||||||
| Commercial Systems sales: | |||||||||||||||||||
| Total original equipment | $ | 370 | $ | 317 | $ | 701 | $ | 603 | |||||||||||
| Total aftermarket | 234 | 221 | 455 | 437 | |||||||||||||||
| Wide-body in-flight entertainment | 15 | 18 | 31 | 37 | |||||||||||||||
| Total Commercial Systems sales | $ | 619 | $ | 556 | $ | 1,187 | $ | 1,077 | |||||||||||
| Government Systems Sales: | |||||||||||||||||||
| Avionics | $ | 361 | $ | 333 | $ | 681 | $ | 650 | |||||||||||
| Communication products | 110 | 119 | 202 | 220 | |||||||||||||||
| Surface Solutions | 48 | 56 | 104 | 114 | |||||||||||||||
| Navigation products | 48 | 46 | 89 | 85 | |||||||||||||||
| Total Government Systems Sales | $ | 567 | $ | 554 | $ | 1,076 | $ | 1,069 | |||||||||||
| Information Management Services sales | $ | 155 | $ | 149 | $ | 304 | $ | 167 | |||||||||||
| Total sales | $ | 1,341 | $ | 1,259 | $ | 2,567 | $ | 2,313 | |||||||||||
The following table summarizes total Research & Development Investment by segment and funding type for the three and six months ended March 31, 2015 and 2014 (unaudited, dollars in millions):
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| March 31 | March 31 | |||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
| Research and Development Investment | ||||||||||||||||||||
| Customer-funded: | ||||||||||||||||||||
| Commercial Systems | $ | 44 | $ | 27 | $ | 84 | $ | 49 | ||||||||||||
| Government Systems | 106 | 92 | 195 | 181 | ||||||||||||||||
| Information Management Services | 2 | 2 | 4 | 2 | ||||||||||||||||
| Total Customer-funded | 152 | 121 | 283 | 232 | ||||||||||||||||
| Company-funded: | ||||||||||||||||||||
| Commercial Systems | 48 | 48 | 98 | 97 | ||||||||||||||||
| Government Systems | 24 | 19 | 42 | 35 | ||||||||||||||||
| Information Management Services (1) | — | — | 1 | — | ||||||||||||||||
| Total Company-funded | 72 | 67 | 141 | 132 | ||||||||||||||||
| Total Research and Development Expense | 224 | 188 | 424 | 364 | ||||||||||||||||
| Increase in Pre-production Engineering Costs, Net | 34 | 46 | 65 | 89 | ||||||||||||||||
| Total Research and Development Investment | $ | 258 | $ | 234 | $ | 489 | $ | 453 | ||||||||||||
| Percent of Total Sales | 19.2 | % | 18.6 | % | 19.0 | % | 19.6 | % | ||||||||||||
(1) Research and development expenses for the Information Management Services segment, including the ARINC acquisition, do not include costs of internally developed software and other costs associated with the expansion and construction of network-related assets. These costs are capitalized as Property on the Summary balance sheet.
| ROCKWELL COLLINS, INC. | |||||||||
| SUMMARY BALANCE SHEET | |||||||||
| (Unaudited) | |||||||||
| (in millions) | |||||||||
| March 31, | September 30, | ||||||||
| 2015 | 2014 | ||||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 284 | $ | 323 | |||||
| Receivables, net | 1,083 | 1,033 | |||||||
| Inventories, net (1) | 1,800 | 1,709 | |||||||
| Current deferred income taxes | 7 | 9 | |||||||
| Business held for sale | — | 15 | |||||||
| Other current assets | 131 | 115 | |||||||
| Total current assets | 3,305 | 3,204 | |||||||
| Property | 924 | 919 | |||||||
| Goodwill | 1,865 | 1,863 | |||||||
| Intangible assets | 683 | 688 | |||||||
| Long-term deferred income taxes | 67 | 101 | |||||||
| Other assets | 328 | 288 | |||||||
| Total assets | $ | 7,172 | $ | 7,063 | |||||
| Liabilities and equity | |||||||||
| Short-term debt | $ | 785 | $ | 504 | |||||
| Accounts payable | 472 | 535 | |||||||
| Compensation and benefits | 214 | 256 | |||||||
| Advance payments from customers | 364 | 359 | |||||||
| Accrued customer incentives | 204 | 202 | |||||||
| Product warranty costs | 97 | 104 | |||||||
| Liabilities associated with business held for sale | — | 16 | |||||||
| Other current liabilities | 207 | 222 | |||||||
| Total current liabilities | 2,343 | 2,198 | |||||||
| Long-term debt, net | 1,678 | 1,663 | |||||||
| Retirement benefits | 977 | 1,096 | |||||||
| Other liabilities | 221 | 217 | |||||||
| Equity | 1,953 | 1,889 | |||||||
| Total liabilities and equity | $ | 7,172 | $ | 7,063 | |||||
| (1) Inventories, net is comprised of the following: | |||||||||
| March 31, | September 30, | ||||||||
| 2015 | 2014 | ||||||||
| Inventories, net: | |||||||||
| Production inventory | $ | 859 | $ | 833 | |||||
| Pre-production engineering costs | 941 | 876 | |||||||
| Total Inventories, net | $ | 1,800 | $ | 1,709 | |||||
Pre-production engineering costs include costs incurred during the development phase of a program in connection with long-term supply arrangements that contain contractual guarantees for reimbursement from customers. These costs are deferred in Inventories, net to the extent of the contractual guarantees and are amortized to customer-funded research and development expense within cost of sales over their estimated useful lives using a units-of-delivery method, up to 15 years.
| ROCKWELL COLLINS, INC. | ||||||||||
| CONDENSED CASH FLOW INFORMATION | ||||||||||
| (Unaudited, in millions) | ||||||||||
| Six Months Ended | ||||||||||
| March 31 | ||||||||||
| 2015 | 2014 (1) | |||||||||
| Operating Activities: | ||||||||||
| Net income | $ | 324 | $ | 279 | ||||||
| Loss from discontinued operations, net of tax | (8 | ) | (3 | ) | ||||||
| Income from continuing operations | 332 | 282 | ||||||||
| Adjustments to arrive at cash provided by operating activities: | ||||||||||
| Gain on sale of business | — | (10 | ) | |||||||
| Depreciation | 76 | 67 | ||||||||
| Amortization of intangible assets and pre-production engineering costs | 46 | 35 | ||||||||
| Stock-based compensation expense | 12 | 12 | ||||||||
| Compensation and benefits paid in common stock | 23 | 24 | ||||||||
| Excess tax benefit from stock-based compensation | (9 | ) | (5 | ) | ||||||
| Deferred income taxes | 33 | 41 | ||||||||
| Pension plan contributions | (63 | ) | (63 | ) | ||||||
| Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||||||||||
| Receivables | (79 | ) | 52 | |||||||
| Production inventory | (56 | ) | (73 | ) | ||||||
| Pre-production engineering costs | (86 | ) | (103 | ) | ||||||
| Accounts payable | (40 | ) | (32 | ) | ||||||
| Compensation and benefits | (36 | ) | (75 | ) | ||||||
| Advance payments from customers | 16 | (18 | ) | |||||||
| Accrued customer incentives | 2 | 13 | ||||||||
| Product warranty costs | (5 | ) | (7 | ) | ||||||
| Income taxes | 24 | (47 | ) | |||||||
| Other assets and liabilities | (58 | ) | (15 | ) | ||||||
| Cash Provided by Operating Activities from Continuing Operations | 132 | 78 | ||||||||
| Investing Activities: | ||||||||||
| Property additions | (104 | ) | (70 | ) | ||||||
| Acquisition of businesses, net of cash acquired | (22 | ) | (1,415 | ) | ||||||
| Acquisition of intangible assets | — | (1 | ) | |||||||
| Proceeds from business divestitures | — | 24 | ||||||||
| Other investing activities | (10 | ) | — | |||||||
| Cash (Used for) Investing Activities from Continuing Operations | (136 | ) | (1,462 | ) | ||||||
| Financing Activities: | ||||||||||
| Purchases of treasury stock | (242 | ) | (61 | ) | ||||||
| Cash dividends | (80 | ) | (81 | ) | ||||||
| Repayment of debt | — | (200 | ) | |||||||
| Increase in short-term commercial paper borrowings, net | 281 | 631 | ||||||||
| Increase in long-term borrowings | — | 1,089 | ||||||||
| Proceeds from the exercise of stock options | 30 | 31 | ||||||||
| Excess tax benefit from stock-based compensation | 9 | 5 | ||||||||
| Cash (Used for) Provided by Financing Activities from Continuing Operations | (2 | ) | 1,414 | |||||||
| Six Months Ended | ||||||||||
| March 31 | ||||||||||
| 2015 | 2014 (1) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (22 | ) | 4 | |||||||
| Discontinued Operations: | ||||||||||
| Operating activities | (14 | ) | (15 | ) | ||||||
| Investing activities | 3 | — | ||||||||
|
Cash (used for) discontinued operations |
(11 | ) | (15 | ) | ||||||
| Net Change in Cash and Cash Equivalents | (39 | ) | 19 | |||||||
| Cash and Cash Equivalents at Beginning of Period | 323 | 391 | ||||||||
| Cash and Cash Equivalents at End of Period | $ | 284 | $ | 410 | ||||||
(1) On July 25, 2014, the Company sold its satellite communications systems business formerly known as DataPath, Inc. (DataPath). The results for the six months ended March 31, 2014 have been reclassified to reflect the cash flows of DataPath as discontinued operations.
Rockwell Collins, Inc.
Media Contact:
Pam Tvrdy, 319-295-0591
pam.tvrdy@rockwellcollins.com
or
Investor
Contact:
Ryan Miller, 319-295-7575
investorrelations@rockwellcollins.com
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