Your SlideShare is downloading. ×
0
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Final q3 fy14 quarterly earnings presentation
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Final q3 fy14 quarterly earnings presentation

81

Published on

Published in: Investor Relations
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
81
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. © 2014 Rockwell Collins All rights reserved. Insert pictures into these angled boxes. Height should be 3.44 inches. 3rd Quarter FY 2014 Conference Call July 22, 2014
  • 2. © 2014 Rockwell Collins All rights reserved. 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; adjustments to 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 as modified by the Bipartisan Budget Act of 2013; 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; 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 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 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.
  • 3. © 2014 Rockwell Collins All rights reserved. 3 (in millions except EPS amounts) 3rd Quarter FY 2014 Results $1,132 $1,264 3Q FY13 3Q FY14 Sales 12% increase $161 $163 3Q FY13 3Q FY14 Income from Continuing Operations, net of taxes 1% increase 137.2 136.9 3Q FY13 3Q FY14 Diluted Average Shares Outstanding $1.18 $1.19 3Q FY13 3Q FY14 EPS from Continuing Operations 1% increase (1) (1) (1) (1) Prior year amounts have been revised to exclude discontinued operations.
  • 4. © 2014 Rockwell Collins All rights reserved. (1) 4 ($ in millions) Sales $29 million OEM growth: 9% • Higher delivery rates for Boeing 787 • Increased customer funded development • Lower sales in light business jets $5 million Aftermarket increase: 2% • Increased service and support • Higher Boeing 747-8 and 787 spares sales • Lower retrofit sales Operating Earnings $1 million decrease in operating earnings • Higher employee related costs and unfavorable mix • Lower company-funded R&D expenses Commercial Systems 22.3%23.8% Operating Margins (1) Certain prior year amounts have been reclassified to the Information Management Services segment. See the supplemental schedule included in the press release filed on Form 8-K dated January 21, 2014 for a reconciliation of amounts reclassified. (1) $551 $583 3Q FY13 3Q FY14 CS Sales 6% increase $131 $130 3Q FY13 3Q FY14 CS Operating Earnings 1% decrease
  • 5. © 2014 Rockwell Collins All rights reserved. 5 22.0% 20.9% ($ in millions) Government Systems Sales Sales decline $34 million: (6%) • Lower sales for the E-6, KC-46 and KC-10 programs • Lower deliveries of JTRS Manpack radios Sales by product category: • Avionics decrease (7)% • Communication Products decrease (11)% • Surface Solutions increase 10% • Navigation Products decrease (7)% Operating Earnings Decrease in operating earnings and operating margin primarily due to: • Lower sales • Higher employee benefit related costs • The absence of certain favorable program adjustments that benefited the prior year • Partially offset by a better mix of higher margin hardware sales and cost savings initiatives Operating Margins $569 $535 3Q FY13 3Q FY14 GS Sales 6% decrease $125 $112 3Q FY13 3Q FY14 GS Operating Earnings 10% decrease (1) Prior year amounts have been revised to exclude the military satellite communications systems business (formerly known as Datapath), which is now reported as a discontinued operation. (1) (1)
  • 6. © 2014 Rockwell Collins All rights reserved. 6 ($ in millions) Sales • $134 million sales from ARINC Operating Earnings Increase in operating earnings and operating margin primarily due to the acquisition of ARINC Information Management Services 14.4%8.3% Operating Margins $12 $146 3Q FY13 3Q FY14 IMS Sales $1 $21 3Q FY13 3Q FY14 IMS Operating Earnings
  • 7. © 2014 Rockwell Collins All rights reserved. 7 ($ in millions except EPS amounts) Nine Month FY 2014 Results $3,255 $3,577 3Q FY13 YTD 3Q FY14 YTD Sales 10% increase $309 $237 3Q FY13 YTD 3Q FY14 YTD Operating Cash Flow 23% decrease $3.29 $3.25 3Q FY13 YTD 3Q FY14 YTD EPS from Continuing Operations 1% decrease $455 $445 3Q FY13 YTD 3Q FY14 YTD Income from Continuing Operations, net of taxes 2% decrease (1) (1) (1) (1) Prior year amounts have been revised to exclude discontinued operations.
  • 8. © 2014 Rockwell Collins All rights reserved. 113 132 368 357 206 194 3Q FY13 YTD 3Q FY14 YTD R & D Investment Company Funded R&D Customer Funded R&D Pre-production Engineering, Net 8 $687 $683 ($ in millions) Research and Development • Company-funded R&D efforts declined on various next generation business jets • Customer funded R&D declined due to development programs winding down in Government Systems, partially offset by an increase in Commercial Systems customer funded development programs • Increased investment in pre-production engineering programs driven by: • Boeing 737MAX • Airbus CSeries • Bombardier CSeries and Global 7000/8000 21.1% 19.1% % of Sales
  • 9. © 2014 Rockwell Collins All rights reserved. 9 9/30/13 6/30/14 Cash and cash equivalents 391$ 450$ Short-term Debt (436) (855) Long-term Debt (563) (1,663) Net Debt (608)$ (2,068)$ Equity 1,623$ 1,953$ Debt To Total Capital 38% 56% Debt To EBITDA (1) 0.9x 2.2x ($ in millions) Capital Structure Status (1) See slide 12 for non-GAAP disclosures
  • 10. © 2014 Rockwell Collins All rights reserved. 10 (shares in millions) Status of Share Repurchases 650,000 shares repurchased in fiscal year 2014 third quarter • Cost of Purchases - $50.7 Million • Average Cost per Share - $77.99 87.6 million shares repurchased since January 2002 • Cost of Purchases - $4.4 Billion $305 million authorization remaining at the end of Q3 135.3 135.1 3Q FY13 3Q FY14 Common Shares Outstanding
  • 11. © 2014 Rockwell Collins All rights reserved. 11 Total Sales $4.90 Bil. to $4.95 Bil. (From $4.95 Bil. to $5.05 Bil.) Total Segment Operating Margins About 21% (From 20% to 21%) Earnings Per Share $4.45 to $4.55 (From $4.40 to $4.55) Cash Provided by Operating Activities About $650 Mil. (From $600 Mil. to $700 Mil.) Research & Development Investment About $950 Mil. Capital Expenditures About $160 Mil. FY 2014 Guidance (1) (1) - This slide represents a summary of the company's fiscal year 2014 financial guidance for continuing operations. The fiscal year 2014 outlook has been updated due to the pending sale of Datapath and to narrow the ranges from the previous financial guidance.
  • 12. © 2014 Rockwell Collins All rights reserved. 12 The Non-GAAP ratio of debt to EBITDA information included on slide nine 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, 2012 through September 30, 2013 and the twelve-month period from July 1, 2013 through June 30, 2014 (unaudited, in millions). All businesses reported as discontinued operations have been excluded from the debt to EBITDA calculation. Non-GAAP Financial Information 12 months ended 9/30/13 6/30/14 Income from continuing operations before income taxes $ 865 $ 878 Interest expense 28 50 Depreciation 123 134 Amortization of intangible assets and pre-production engineering costs 53 73 Earnings before interest, taxes, depreciation and amortization (EBITDA) $ 1,069 $ 1,135 9/30/13 6/30/14 Total debt $ 999 $ 2,518 Debt to EBITDA 0.9x 2.2x
  • 13. © 2014 Rockwell Collins All rights reserved. 13 ($ in millions) Third Quarter 2014 ARINC Results Three months ended June 30, 2014 ARINC Corporate Costs(a) Total Sales 134$ -$ 134$ Income before income taxes 20$ (9)$ 11$ Depreciation and amortization expense 10 - 10 Interest expense - 8 8 EBITDA 30 (1) 29 Transaction and integration costs - - - EBITDA, adjusted 30$ (1)$ 29$ Total EBITDA, adjusted as a percentage of sales 21.6% The Non-GAAP financial information included in the table below for earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EBITDA are believed to be useful to an investor's understanding and assessment of the recently completed ARINC acquisition. The Company does not intend for the Non-GAAP information to be considered in isolation or as a substitute for the related GAAP measures. The table below explains the impact that certain non-cash depreciation and amortization charges, and certain transaction and integration expenses, had on the financial results for ARINC during the three months ended June 30, 2014. The ASES business is treated as discontinued operations and is therefore excluded from the table (unaudited, in millions). (a) The Company’s definition of segment operating earnings excludes certain items, including interest and other general corporate expenses not allocated to business segments. Corporate costs for the three months ended June 30, 2014 include $8 million of interest expense from the incremental interest on the debt issued in December 2013 to finance the acquisition. The remaining corporate costs of $1 million represent selling, general and administrative expenses related to ARINC that were incurred at the corporate level.
  • 14. © 2014 Rockwell Collins All rights reserved. 14

×