Delaware
|
52-2314475
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
|
of
incorporation or organization)
|
|
Identification
No.)
|
400
Collins Road NE
|
||
Cedar
Rapids, Iowa
|
52498
|
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Large accelerated
filer þ
|
Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
(Do not check if a smaller
reporting company)
|
Smaller
reporting company ¨
|
Page
No.
|
||||||
PART
I.
|
FINANCIAL
INFORMATION:
|
|||||
Item
1.
|
Condensed
Consolidated Financial Statements:
|
|||||
Condensed
Consolidated Statement of Financial Position (Unaudited) —
December 31, 2009 and September 30, 2009 |
2
|
|||||
Condensed
Consolidated Statement of Operations (Unaudited) —
Three
Months Ended December 31, 2009 and 2008
|
3
|
|||||
Condensed
Consolidated Statement of Cash Flows (Unaudited) —
Three Months Ended December 31, 2009 and 2008 |
4
|
|||||
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
5
|
|||||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
22 |
|
|||
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
28 |
|
|||
Item
4.
|
Controls
and Procedures
|
29 |
|
|||
PART
II.
|
OTHER
INFORMATION:
|
|||||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
30 |
|
|||
Item
6.
|
Exhibits
|
31 |
|
|||
Signatures
|
32 |
|
December
31,
|
September
30,
|
|||||||
2009
|
2009
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 206 | $ | 235 | ||||
Receivables,
net
|
825 | 913 | ||||||
Inventories,
net
|
1,022 | 943 | ||||||
Current
deferred income taxes
|
155 | 154 | ||||||
Other
current assets
|
96 | 117 | ||||||
Total
current assets
|
2,304 | 2,362 | ||||||
Property
|
714 | 719 | ||||||
Goodwill
|
761 | 695 | ||||||
Intangible
Assets
|
307 | 269 | ||||||
Long-term
Deferred Income Taxes
|
350 | 371 | ||||||
Other
Assets
|
213 | 229 | ||||||
TOTAL
ASSETS
|
$ | 4,649 | $ | 4,645 | ||||
LIABILITIES
AND EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Short-term
debt
|
$ | 62 | $ | - | ||||
Accounts
payable
|
339 | 366 | ||||||
Compensation
and benefits
|
185 | 199 | ||||||
Advance
payments from customers
|
342 | 349 | ||||||
Product
warranty costs
|
210 | 217 | ||||||
Other
current liabilities
|
241 | 228 | ||||||
Total
current liabilities
|
1,379 | 1,359 | ||||||
Long-term
Debt, net
|
529 | 532 | ||||||
Retirement
Benefits
|
1,141 | 1,254 | ||||||
Other
Liabilities
|
216 | 205 | ||||||
Equity:
|
||||||||
Common
stock ($0.01 par value; shares authorized: 1,000; shares
issued: 183.8)
|
2 | 2 | ||||||
Additional
paid-in capital
|
1,389 | 1,395 | ||||||
Retained
earnings
|
2,524 | 2,444 | ||||||
Accumulated
other comprehensive loss
|
(1,075 | ) | (1,080 | ) | ||||
Common
stock in treasury, at cost (shares held: December 31, 2009, 26.5;
September
30, 2009, 26.7)
|
(1,459 | ) | (1,469 | ) | ||||
Total
shareowners’ equity
|
1,381 | 1,292 | ||||||
Noncontrolling
interest
|
3 | 3 | ||||||
Total
equity
|
1,384 | 1,295 | ||||||
TOTAL
LIABILITIES AND EQUITY
|
$ | 4,649 | $ | 4,645 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
2009
|
2008
|
|||||||
Sales:
|
||||||||
Product
sales
|
$ | 927 | $ | 958 | ||||
Service
sales
|
100 | 100 | ||||||
Total
sales
|
1,027 | 1,058 | ||||||
Costs,
expenses and other:
|
||||||||
Product
cost of sales
|
666 | 664 | ||||||
Service
cost of sales
|
68 | 68 | ||||||
Selling,
general and administrative expenses
|
109 | 105 | ||||||
Interest
expense
|
6 | 4 | ||||||
Other
income, net
|
(3 | ) | (5 | ) | ||||
Total
costs, expenses and other
|
846 | 836 | ||||||
Income
before income taxes
|
181 | 222 | ||||||
Income
tax provision
|
60 | 71 | ||||||
Net
income
|
$ | 121 | $ | 151 | ||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.77 | $ | 0.96 | ||||
Diluted
|
$ | 0.76 | $ | 0.95 | ||||
Weighted
average common shares:
|
||||||||
Basic
|
157.1 | 158.1 | ||||||
Diluted
|
159.2 | 159.2 | ||||||
Cash
dividends per share
|
$ | 0.24 | $ | 0.24 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
2009
|
2008
|
|||||||
Operating
Activities:
|
||||||||
Net
income
|
$ | 121 | $ | 151 | ||||
Adjustments
to arrive at cash provided by operating activities:
|
||||||||
Depreciation
|
27 | 26 | ||||||
Amortization
of intangible assets
|
9 | 6 | ||||||
Stock-based
compensation expense
|
5 | 5 | ||||||
Compensation
and benefits paid in common stock
|
17 | 17 | ||||||
Tax
benefit from stock-based compensation
|
2 | - | ||||||
Excess
tax benefit from stock-based compensation
|
(2 | ) | - | |||||
Deferred
income taxes
|
5 | - | ||||||
Pension
plan contributions
|
(101 | ) | (4 | ) | ||||
Changes
in assets and liabilities, excluding effects of acquisitions and
foreign
currency adjustments:
|
||||||||
Receivables
|
118 | 76 | ||||||
Inventories
|
(87 | ) | (63 | ) | ||||
Accounts
payable
|
(31 | ) | (92 | ) | ||||
Compensation
and benefits
|
(13 | ) | (121 | ) | ||||
Advance
payments from customers
|
(7 | ) | (22 | ) | ||||
Income
taxes
|
48 | 86 | ||||||
Other
assets and liabilities
|
(27 | ) | (44 | ) | ||||
Cash
Provided by Operating Activities
|
84 | 21 | ||||||
Investing
Activities:
|
||||||||
Property
additions
|
(26 | ) | (45 | ) | ||||
Acquisition
of businesses, net of cash acquired
|
(92 | ) | (28 | ) | ||||
Other
investing activities
|
(1 | ) | - | |||||
Cash
Used for Investing Activities
|
(119 | ) | (73 | ) | ||||
Financing
Activities:
|
||||||||
Purchases
of treasury stock
|
(28 | ) | (41 | ) | ||||
Cash
dividends
|
(38 | ) | (38 | ) | ||||
Increase
in short-term borrowings
|
62 | 154 | ||||||
Proceeds
from the exercise of stock options
|
7 | 1 | ||||||
Excess
tax benefit from stock-based compensation
|
2 | - | ||||||
Cash
Provided by Financing Activities
|
5 | 76 | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
1 | 1 | ||||||
Net
Change in Cash and Cash Equivalents
|
(29 | ) | 25 | |||||
Cash
and Cash Equivalents at Beginning of Period
|
235 | 175 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 206 | $ | 200 |
1.
|
Business
Description and Basis of
Presentation
|
2.
|
Recently
Issued Accounting Standards
|
3.
|
Acquisitions
|
4.
|
Receivables,
Net
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2009
|
2009
|
||||||
Billed
|
$ | 625 | $ | 734 | ||||
Unbilled
|
243 | 217 | ||||||
Less
progress payments
|
(31 | ) | (27 | ) | ||||
Total
|
837 | 924 | ||||||
Less
allowance for doubtful accounts
|
(12 | ) | (11 | ) | ||||
Receivables,
net
|
$ | 825 | $ | 913 |
5.
|
Inventories,
Net
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2009
|
2009
|
||||||
Finished
goods
|
$ | 176 | $ | 177 | ||||
Work
in process
|
294 | 262 | ||||||
Raw
materials, parts and supplies
|
355 | 341 | ||||||
Less
progress payments
|
(57 | ) | (77 | ) | ||||
Total
|
768 | 703 | ||||||
Pre-production
engineering costs
|
254 | 240 | ||||||
Inventories,
net
|
$ | 1,022 | $ | 943 |
6.
|
Property
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2009
|
2009
|
||||||
Land
|
$ | 30 | $ | 30 | ||||
Buildings
and improvements
|
350 | 349 | ||||||
Machinery
and equipment
|
899 | 891 | ||||||
Information
systems software and hardware
|
263 | 259 | ||||||
Furniture
and fixtures
|
62 | 62 | ||||||
Construction
in progress
|
92 | 88 | ||||||
Total
|
1,696 | 1,679 | ||||||
Less
accumulated depreciation
|
(982 | ) | (960 | ) | ||||
Property
|
$ | 714 | $ | 719 |
7.
|
Goodwill
and Intangible Assets
|
Government
|
Commercial
|
|||||||||||
(in
millions)
|
Systems
|
Systems
|
Total
|
|||||||||
Balance
at September 30, 2009
|
$ | 496 | $ | 199 | $ | 695 | ||||||
Air
Routing acquisition
|
- | 62 | 62 | |||||||||
DataPath
adjustment
|
6 | - | 6 | |||||||||
Foreign
currency translation adjustments
|
(2 | ) | - | (2 | ) | |||||||
Balance
at December 31, 2009
|
$ | 500 | $ | 261 | $ | 761 |
December
31, 2009
|
September
30, 2009
|
|||||||||||||||||||||||
Accum
|
Accum
|
|||||||||||||||||||||||
(in
millions)
|
Gross
|
Amort
|
Net
|
Gross
|
Amort
|
Net
|
||||||||||||||||||
Intangible
assets with finite lives:
|
||||||||||||||||||||||||
Developed
technology and patents
|
$ | 226 | $ | (109 | ) | $ | 117 | $ | 214 | $ | (104 | ) | $ | 110 | ||||||||||
Customer
relationships
|
206 | (39 | ) | 167 | 174 | (36 | ) | 138 | ||||||||||||||||
License
agreements
|
20 | (4 | ) | 16 | 17 | (4 | ) | 13 | ||||||||||||||||
Trademarks
and tradenames
|
15 | (10 | ) | 5 | 15 | (9 | ) | 6 | ||||||||||||||||
Intangible
assets with indefinite lives:
|
||||||||||||||||||||||||
Trademarks
and tradenames
|
2 | - | 2 | 2 | - | 2 | ||||||||||||||||||
Intangible
assets
|
$ | 469 | $ | (162 | ) | $ | 307 | $ | 422 | $ | (153 | ) | $ | 269 |
8.
|
Other
Assets
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2009
|
2009
|
||||||
Long-term
receivables
|
$ | 82 | $ | 97 | ||||
Investments
in equity affiliates
|
11 | 10 | ||||||
Exchange
and rental assets, net of accumulated depreciation of $105 at
December
31, 2009 and $103 at September 30, 2009
|
49 | 50 | ||||||
Other
|
71 | 72 | ||||||
Other
assets
|
$ | 213 | $ | 229 |
|
·
|
Vision
Systems International, LLC (VSI): VSI is a joint venture with
Elbit Systems, Ltd. for the joint pursuit of helmet mounted cueing systems
for the worldwide military fixed wing aircraft
market
|
|
·
|
Data
Link Solutions LLC (DLS): DLS is a joint venture with BAE
Systems, plc for the joint pursuit of the worldwide military data link
market
|
|
·
|
Integrated
Guidance Systems LLC (IGS): IGS is a joint venture with
Honeywell International Inc. for the joint pursuit of integrated precision
guidance solutions for worldwide guided weapons
systems
|
|
·
|
Quest
Flight Training Limited (Quest): Quest is a joint venture with
Quadrant Group plc (Quadrant) that provides aircrew training services
primarily for the United Kingdom Ministry of
Defence
|
9.
|
Other
Current Liabilities
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2009
|
2009
|
||||||
Customer
incentives
|
$ | 118 | $ | 122 | ||||
Contract
reserves
|
11 | 11 | ||||||
Income
taxes payable
|
27 | 4 | ||||||
Other
|
85 | 91 | ||||||
Other
current liabilities
|
$ | 241 | $ | 228 |
10.
|
Debt
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2009
|
2009
|
||||||
Principal
amount of 2019 Notes, net of discount
|
$ | 298 | $ | 298 | ||||
Principal
amount of 2013 Notes
|
200 | 200 | ||||||
Principal
amount of variable rate loan due June 2011
|
25 | 26 | ||||||
Fair
value swap adjustment (Notes 16 and 17)
|
6 | 8 | ||||||
Long-term
debt, net
|
$ | 529 | $ | 532 |
11.
|
Retirement
Benefits
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Service
cost
|
$ | 2 | $ | 2 | ||||
Interest
cost
|
40 | 42 | ||||||
Expected
return on plan assets
|
(53 | ) | (49 | ) | ||||
Amortization:
|
||||||||
Prior
service cost
|
(5 | ) | (5 | ) | ||||
Net
actuarial loss
|
23 | 7 | ||||||
Net
benefit expense (income)
|
$ | 7 | $ | (3 | ) |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Service
cost
|
$ | 1 | $ | 1 | ||||
Interest
cost
|
3 | 3 | ||||||
Expected
return on plan assets
|
- | - | ||||||
Amortization:
|
||||||||
Prior
service cost
|
(6 | ) | (6 | ) | ||||
Net
actuarial loss
|
3 | 3 | ||||||
Net
benefit expense
|
$ | 1 | $ | 1 |
12.
|
Stock-Based
Compensation
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Stock-based
compensation expense included in:
|
||||||||
Product
cost of sales
|
$ | 1 | $ | 1 | ||||
Service
cost of sales
|
- | 1 | ||||||
Selling,
general and administrative expenses
|
4 | 3 | ||||||
Total
|
$ | 5 | $ | 5 |
Performance
|
Restricted
|
Restricted
|
||||||||||||||||||||||||||||||
Options
|
Shares
|
Stock
|
Stock
Units
|
|||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||||||||||
(shares
in thousands)
|
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
||||||||||||||||||||||||
Issued
|
Fair
Value
|
Issued
|
Fair
Value
|
Issued
|
Fair
Value
|
Issued
|
Fair
Value
|
|||||||||||||||||||||||||
Three
months ended
December
31, 2009
|
790.9 | $ | 12.80 | 190.3 | $ | 53.08 | 56.6 | $ | 53.08 | 6.8 | $ | 51.90 | ||||||||||||||||||||
Three
months ended
December
31, 2008
|
1,290.7 | $ | 7.07 | 299.9 | $ | 30.39 | 98.7 | $ | 30.39 | 15.5 | $ | 33.83 |
2010
|
2009
|
|||||||
Grants
|
Grants
|
|||||||
Risk-free
interest rate (U.S. Treasury zero coupon issues)
|
2.69 | % | 2.37 | % | ||||
Expected
dividend yield
|
2.33 | % | 1.59 | % | ||||
Expected
volatility
|
27.00 | % | 24.00 | % | ||||
Expected
life
|
7
years
|
6
years
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions, except per share amounts)
|
2009
|
2008
|
||||||
Numerator:
|
||||||||
Numerator
for basic and diluted earnings per share –
Net
income
|
$ | 121 | $ | 151 | ||||
Denominator:
|
||||||||
Denominator
for basic earnings per share –
weighted
average common shares
|
157.1 | 158.1 | ||||||
Effect
of dilutive securities:
|
||||||||
Stock
options
|
1.7 | 0.9 | ||||||
Performance
shares, restricted shares and restricted stock units
|
0.4 | 0.2 | ||||||
Dilutive
potential common shares
|
2.1 | 1.1 | ||||||
Denominator
for diluted earnings per share –
adjusted
weighted average shares and assumed conversion
|
159.2 | 159.2 | ||||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.77 | $ | 0.96 | ||||
Diluted
|
$ | 0.76 | $ | 0.95 |
13.
|
Comprehensive
Income
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Net
income
|
$ | 121 | $ | 151 | ||||
Unrealized
foreign currency translation adjustment
|
(4 | ) | (7 | ) | ||||
Foreign
currency cash flow hedge adjustment
|
- | (5 | ) | |||||
Amortization
of defined benefit plan costs
|
9 | - | ||||||
Comprehensive
income
|
$ | 126 | $ | 139 |
14.
|
Other
Income, Net
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Royalty
income
|
$ | 2 | $ | 1 | ||||
Earnings
from equity affiliates
|
2 | 2 | ||||||
Interest
income
|
1 | 2 | ||||||
Other
|
(2 | ) | - | |||||
Other
income, net
|
$ | 3 | $ | 5 |
15.
|
Income
Taxes
|
16.
|
Fair
Value Measurements
|
|
Level
1 -
|
quoted
prices (unadjusted) in active markets for identical assets or
liabilities
|
|
Level
2 -
|
quoted
prices for similar assets and liabilities in active markets or inputs that
are observable for the asset or liability, either directly or indirectly
through market corroboration, for substantially the full term of the
financial instrument
|
|
Level
3 -
|
unobservable
inputs based on the Company’s own assumptions used to measure assets and
liabilities at fair value
|
December
31, 2009
|
September
30, 2009
|
||||||||||
Fair
Value
|
Fair
Value
|
Fair
Value
|
|||||||||
(in
millions)
|
Hierarchy
|
Asset
(Liability)
|
Asset
(Liability)
|
||||||||
Deferred
compensation plan investments
|
Level
1
|
$ | 37 | $ | 35 | ||||||
Interest
rate swaps
|
Level
2
|
6 | 8 | ||||||||
Foreign
currency forward exchange
contract
assets
|
Level
2
|
7 | 8 | ||||||||
Foreign
currency forward exchange
contract
liabilities
|
Level
2
|
(9 | ) | (11 | ) |
Asset
(Liability)
|
||||||||||||||||
December
31, 2009
|
September
30, 2009
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
(in
millions)
|
Amount
|
Value
|
Amount
|
Value
|
||||||||||||
Cash
and cash equivalents
|
$ | 206 | $ | 206 | $ | 235 | $ | 235 | ||||||||
Short-term
debt
|
(62 | ) | (62 | ) | - | - | ||||||||||
Long-term
debt
|
(529 | ) | (549 | ) | (532 | ) | (559 | ) |
17.
|
Derivative
Financial Instruments
|
Asset
Derivatives
|
|||||||||
December
31,
|
September
30,
|
||||||||
(in
millions)
|
Classification
|
2009
|
2009
|
||||||
Foreign
currency forward
exchange
contracts
|
Other
current assets
|
$
|
7
|
$
|
8
|
||||
Interest
rate swaps
|
Other
assets
|
6
|
8
|
||||||
Total
|
$
|
13
|
$
|
16
|
Liability
Derivatives
|
|||||||||
December
31,
|
September
30,
|
||||||||
(in
millions)
|
Classification
|
2009
|
2009
|
||||||
Foreign
currency forward
exchange
contracts
|
Other
current liabilities
|
$
|
9
|
$
|
11
|
Amount
of Gain (Loss)
|
||||||||||
Three
Months Ended
|
||||||||||
(in
millions)
|
Location
of
|
December
31
|
||||||||
Gain
(Loss)
|
2009
|
2008
|
||||||||
Fair
Value Hedges
|
||||||||||
Foreign
currency forward exchange contracts
|
Cost
of sales
|
$ | (2 | ) | $ | 1 | ||||
Interest
rate swaps
|
Interest
expense
|
1 | 1 | |||||||
Cash
Flow Hedges
|
||||||||||
Foreign
currency forward exchange contracts:
|
||||||||||
Amount
of loss recognized in AOCL (effective portion, before deferred tax
impact)
|
AOCL
|
$ | 3 | $ | (7 | ) | ||||
Amount
of loss reclassified from AOCL into income
|
Cost
of sales
|
3 | - |
18.
|
Guarantees
and Indemnifications
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Balance
at beginning of year
|
$ | 217 | $ | 226 | ||||
Warranty
costs incurred
|
(14 | ) | (13 | ) | ||||
Product
warranty accrual
|
7 | 11 | ||||||
Pre-existing
warranty adjustments
|
- | - | ||||||
Balance
at December 31
|
$ | 210 | $ | 224 |
19.
|
Environmental
Matters
|
20.
|
Legal
Matters
|
21.
|
2009
Restructuring and Asset Impairment
Charges
|
Employee
|
||||
(in
millions)
|
Separation
Costs
|
|||
Balance
at September 30, 2009
|
$ | 10 | ||
Cash
payments
|
(3 | ) | ||
Reserve
adjustment
|
(1 | ) | ||
Balance
at December 31, 2009
|
$ | 6 |
22.
|
Business
Segment Information
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Sales:
|
||||||||
Government
Systems
|
$ | 616 | $ | 574 | ||||
Commercial
Systems
|
411 | 484 | ||||||
Total
sales
|
$ | 1,027 | $ | 1,058 | ||||
Segment
operating earnings:
|
||||||||
Government
Systems
|
$ | 134 | $ | 140 | ||||
Commercial
Systems
|
68 | 97 | ||||||
Total
segment operating earnings
|
202 | 237 | ||||||
Interest
expense
|
(6 | ) | (4 | ) | ||||
Stock-based
compensation
|
(5 | ) | (5 | ) | ||||
General
corporate, net
|
(11 | ) | (6 | ) | ||||
Restructuring
adjustment
|
1 | - | ||||||
Income
before income taxes
|
181 | 222 | ||||||
Income
tax provision
|
(60 | ) | (71 | ) | ||||
Net
income
|
$ | 121 | $ | 151 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Government
Systems product categories:
|
||||||||
Airborne
solutions
|
$ | 410 | $ | 403 | ||||
Surface
solutions
|
206 | 171 | ||||||
Government
Systems sales
|
$ | 616 | $ | 574 | ||||
Commercial
Systems product categories:
|
||||||||
Air
transport aviation electronics
|
$ | 241 | $ | 220 | ||||
Business
and regional aviation electronics
|
170 | 264 | ||||||
Commercial
Systems sales
|
$ | 411 | $ | 484 |
23.
|
Subsequent
Event
|
RESULTS OF OPERATIONS
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(dollars
in millions)
|
2009
|
2008
|
||||||
Total
sales
|
$ | 1,027 | $ | 1,058 | ||||
Percent
(decrease)
|
(3 | )% |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(dollars
in millions)
|
2009
|
2008
|
||||||
Net
income
|
$ | 121 | $ | 151 | ||||
Net
income as a percent of sales
|
11.8 | % | 14.3 | % | ||||
Diluted
earnings per share
|
$ | 0.76 | $ | 0.95 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(dollars
in millions)
|
2009
|
2008
|
||||||
Airborne
solutions
|
$ | 410 | $ | 403 | ||||
Surface
solutions
|
206 | 171 | ||||||
Total
|
$ | 616 | $ | 574 | ||||
Percent
increase
|
7 | % |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(dollars
in millions)
|
2009
|
2008
|
||||||
Segment
operating earnings
|
$ | 134 | $ | 140 | ||||
Percent
of sales
|
21.8 | % | 24.4 | % |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(dollars
in millions)
|
2009
|
2008
|
||||||
Wide-body
in-flight entertainment products
|
$ | 18 | $ | 21 | ||||
All
other air transport aviation electronics
|
223 | 199 | ||||||
Total
air transport aviation electronics
|
241 | 220 | ||||||
Business
and regional aviation electronics
|
170 | 264 | ||||||
Total
|
$ | 411 | $ | 484 | ||||
Percent
(decrease)
|
(15 | )% |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Original
equipment
|
$ | 201 | $ | 244 | ||||
Aftermarket
|
192 | 219 | ||||||
Wide-body
in-flight entertainment products
|
18 | 21 | ||||||
Total
|
$ | 411 | $ | 484 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(dollars
in millions)
|
2009
|
2008
|
||||||
Segment
operating earnings
|
$ | 68 | $ | 97 | ||||
Percent
of sales
|
16.5 | % | 20.0 | % |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Pension
benefits
|
$ | 7 | $ | (3 | ) | |||
Other
retirement benefits
|
1 | 1 | ||||||
Net
benefit expense (income)
|
$ | 8 | $ | (2 | ) |
|
·
|
total
sales in the range of $4.6 billion to $4.8
billion
|
|
·
|
diluted
earnings per share in the range of $3.35 to
$3.55
|
|
·
|
cash
provided by operating activities in the range of $600 million to $700
million
|
|
·
|
capital
expenditures of approximately $135
million
|
|
·
|
total
company and customer-funded R&D expenditures in the range of $870
million to $900 million, or about 19 percent of
sales
|
FINANCIAL
CONDITION AND LIQUIDITY
|
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Cash
provided by operating activities
|
$ | 84 | $ | 21 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Cash
used for investing activities
|
$ | (119 | ) | $ | (73 | ) |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2009
|
2008
|
||||||
Cash
provided by financing activities
|
$ | 5 | $ | 76 |
|
·
|
$92
million of the decrease is attributable to lower net borrowings of
short-term debt. Net short-term borrowings were $62 million during the
three months ended December 31, 2009 compared to $154 million during the
same period last year.
|
|
·
|
Partially
offset by a $13 million reduction in repurchases of common stock. During
the three months ended December 31, 2009, we had $28 million of cash
repurchases of common stock compared to $41 million during the same period
last year.
|
December 31,
|
September 30,
|
|||||||
(dollars
in millions)
|
2009
|
2009
|
||||||
Cash
and cash equivalents
|
$ | 206 | $ | 235 | ||||
Short-term
debt
|
(62 | ) | - | |||||
Long-term
debt, net
|
(529 | ) | (532 | ) | ||||
Net
debt (1)
|
$ | (385 | ) | $ | (297 | ) | ||
Total
equity
|
$ | 1,384 | $ | 1,295 | ||||
Debt
to total capitalization (2)
|
30 | % | 29 | % |
Credit
Rating Agency
|
Short-Term
Rating
|
Long-Term
Rating
|
Outlook
|
|||
Fitch
Ratings
|
F1
|
A
|
Stable
|
|||
Moody’s
Investors Service
|
P-1
|
A1
|
Stable
|
|||
Standard
& Poor’s
|
A-1
|
A
|
Stable
|
ENVIRONMENTAL
|
CRITICAL
ACCOUNTING POLICIES
|
CAUTIONARY
STATEMENT
|
Period
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced
Plans or Programs
|
Maximum Number
(or Approximate Dollar
Value) of Shares that May
Yet Be
Purchased Under
the Plans or Programs(1)
|
||||||||||
October
1, 2009 through October 31, 2009
|
- | $ | - | - | $ |
209
million
|
||||||||
November
1, 2009 through November 30, 2009
|
164,800 | 53.41 | 164,800 |
200
million
|
||||||||||
December
1, 2009 through December 31, 2009
|
340,000 | 55.99 | 340,000 |
181 million
|
||||||||||
Total
|
504,800 | $ | 55.15 | 504,800 | $ |
181
million
|
(1)
|
On
September 16, 2009, our Board authorized the repurchase of an additional
$200 million of our common stock. This authorization has no stated
expiration date.
|
(a)
|
Exhibits
|
12
|
Computation
of Ratio of Earnings to Fixed Charges for the three months
ended December 31, 2009.
|
|
31.1
|
Certification
by Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.
|
|
31.2
|
Certification
by Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.
|
|
32.1
|
Certification
by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
101.INS
|
XBRL
Instance Document
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema
|
|
101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase
|
|
101.PRE
|
|
XBRL
Taxonomy Extension Presentation
Linkbase
|
ROCKWELL COLLINS, INC.
|
||
(Registrant)
|
||
Date: January 28, 2010 |
By
|
/s/ M. A. Schulte
|
M.
A. Schulte
|
||
Vice
President, Finance and Controller
|
||
(Principal
Accounting Officer)
|
||
Date: January 28, 2010 |
By
|
/s/ G. R. Chadick
|
G.
R. Chadick
|
||
Senior
Vice President,
|
||
General
Counsel and
Secretary
|