Quarterly Earnings Presentation Q4

© 2013 Rockwell Collins All rights reserved.

Proprietary Information

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4th Quarter FY 2013 Conference Call October 25, 2013


Proprietary Information 2

Safe Harbor Statement

This presentation 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; the rate of recovery of the commercial OEM production rates and the aftermarket; the impacts of natural disasters, 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; the continued support for military transformation and modernization programs; potential adverse impact of oil prices on the commercial aerospace industry; 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; 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 and our customers; 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 our internal performance plans such as our productivity and quality improvements and cost reduction initiatives; achievement of our 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.



$152 $175

4Q FY12 4Q FY13

Net Income

$1.06 $1.28

4Q FY12 4Q FY13

EPS

$1,266 $1,252

4Q FY12 4Q FY13

Sales

3

($ in millions except EPS amounts) 4th Quarter FY 2013 Results

1% decrease

21% increase

15% increase

143.8 136.7

4Q FY12 4Q FY13

Diluted Average Shares Outstanding

5% decrease



$122 $122

4Q FY12 4Q FY13

CS Operating Earnings

$565 $583

4Q FY12 4Q FY13

CS Sales

4

($ in millions)

$15 million Aftermarket increase: 6%

• Increased retrofits for regulatory mandate upgrades

$3 million OEM growth: 1%

• Increased deliveries for Bombardier Global and Challenger aircrafts

• Partially offset by fewer deliveries for Cessna business jets

Decrease in operating margin of 70 basis points

• Higher R&D expense and employee incentive compensation costs

• Partially offset by higher sales

Commercial Systems

20.9% 21.6%

3% increase

Operating Margins



$175 $151

4Q FY12 4Q FY13

GS Operating Earnings

$701 $669

4Q FY12 4Q FY13

GS Sales

5

25.0% 22.6%

($ in millions) Government Systems Sales decline $32 million (5%) • Lower deliveries of airborne and ground

navigation products • Lower satellite communication and secure

communication product sales • Reduction in simulator sales • Partially offset by increased sales:

• JTRS Manpack radios • Firestorm targeting systems • Tanker/transport hardware sales

Sales by product category: • Avionics increase 3% • Communication Products decrease 16% • Surface Solutions increase 9% • Navigation Products decrease 26% $24 million decrease in operating earnings

• Lower sales • Higher employee incentive compensation

costs

5% decline

14% decline

Operating Margins



$4.15 $4.58

FY12 FY13

EPS

$4,726 $4,610

FY12 FY13

Sales

6

($ in millions except EPS amounts) Full FY 2013 Results

2% decrease

10% increase

$609 $632

FY12 FY13

Net Income

4% increase

$534

$617

FY12 FY13

Operating Cash Flow

16% increase



123 145

503 481

320 295

FY12 FY13

R & D Investment

Company Funded R&D

Customer Funded R&D

Increase in Pre-production Engineering, Net

7

$946 $921

($ in millions) Research and Development

• Maintained R&D investment as a percent

of sales

• Company-funded R&D declined as development programs were completed

• Customer funded R&D declined due to

programs winding down in Government Systems such as E-6 and E-2D

• Increased investment in pre-production engineering programs driven by:

• Boeing 737MAX • Bombardier C-Series • Airbus A350

20.0% 20.0% % of Sales



09/30/12 09/30/13

Cash 335$ 391$

Short-term Debt - (436)

Long-term Debt (779) (563)

Net (Debt) / Cash (444)$ (608)$

Equity 1,264$ 1,623$

Debt To Total Capital 38% 38%

Debt To EBITDA (1) 0.7x 0.9x

($ in millions) Capital Structure Status

(1) See slide 11 for non-GAAP disclosures



142.2 135.1

4Q FY12 4Q FY13

Common Shares Outstanding

9

($ in millions) Status of Share Repurchases

5% decrease

9.8 million shares repurchased in fiscal year 2013

• Cost of Purchases - $569 Million • Average Cost per Share - $58.38

86 million shares repurchased since January 2002

• Cost of Purchases - $4.3 Billion

$411 million authorization remaining at the end of Q4



Total Sales $4.5B to $4.6B

Total Segment Operating Margins 21% to 22%

Earnings Per Share $4.30 to $4.50

Cash Provided by Operating Activities $550M to $650M

Research & Development Investment About $950M

Capital Expenditures About $140M

FY 2014 Guidance

This guidance range excludes the planned acquisition of ARINC, which is expected to close shortly after receiving regulatory approval. Guidance ranges will be updated after the transaction has closed.



The non-GAAP ratio of debt to EBITDA information included on slide eight is believed to be useful to investors’ understanding and assessment of the Company’s total capital structure and liquidity. The Company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. The table below explains the debt to EBITDA calculation in more detail for the twelve-month period from October 1, 2011 through September 30, 2012 and the twelve-month period from October 1, 2012 through September 30, 2013 (unaudited, in millions):

Non-GAAP Financial Information

12 months ended 9/30/12 9/30/13 Income before income taxes $ 857 $ 868 Interest expense 27 28 Depreciation 117 124 Amortization of intangible assets and pre-production engineering costs 57 56 Earnings before interest, taxes, depreciation and amortization (EBITDA) $ 1,058 $ 1,076 9/30/12 9/30/13 Total debt $ 779 $ 999 Debt to EBITDA 0.7x 0.9x



Quarterly Earnings Presentation Q4

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