Delaware
|
52-2314475
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
Identification
No.)
|
400
Collins Road NE
|
52498
|
Cedar
Rapids, Iowa
|
(Zip
Code)
|
(Address
of principal executive offices)
|
Yes
|
x
|
No
|
o
|
Large
accelerated filer
|
x
|
Accelerated
filer
|
o |
Non-accelerated
filer
|
o
|
Yes
|
o
|
No
|
x
|
Page
No.
|
|||
PART
I.
|
FINANCIAL
INFORMATION:
|
||
Item
1.
|
Condensed
Consolidated Financial Statements:
|
||
Condensed
Consolidated Statement of Financial Position (Unaudited) —
|
|||
March
31, 2008 and September 30, 2007
|
2
|
||
Condensed
Consolidated Statement of Operations (Unaudited) —
|
|||
Three
and Six Months Ended March 31, 2008 and 2007
|
3
|
||
Condensed
Consolidated Statement of Cash Flows (Unaudited) —
|
|||
Six
Months Ended March 31, 2008 and 2007
|
4
|
||
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
5
|
||
Item
2.
|
Management's
Discussion and Analysis of
|
||
Financial
Condition and Results of Operations
|
18
|
||
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
27
|
|
Item
4.
|
Controls
and Procedures
|
27
|
|
PART
II.
|
OTHER
INFORMATION:
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
28
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
28
|
|
Item
6.
|
Exhibits
|
29
|
|
Signatures
|
30
|
March
31,
|
September
30,
|
||||||
2008
|
2007
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
198
|
$
|
231
|
|||
Receivables
|
923
|
883
|
|||||
Inventories
|
918
|
823
|
|||||
Current
deferred income taxes
|
167
|
176
|
|||||
Other
current assets
|
64
|
56
|
|||||
Total
current assets
|
2,270
|
2,169
|
|||||
Property
|
624
|
607
|
|||||
Intangible
Assets
|
157
|
147
|
|||||
Goodwill
|
550
|
544
|
|||||
Prepaid
Pension Asset
|
109
|
88
|
|||||
Other
Assets
|
233
|
195
|
|||||
TOTAL
ASSETS
|
$
|
3,943
|
$
|
3,750
|
|||
LIABILITIES
AND SHAREOWNERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Short-term
debt
|
$
|
361
|
$
|
-
|
|||
Accounts
payable
|
370
|
395
|
|||||
Compensation
and benefits
|
231
|
305
|
|||||
Advance
payments from customers
|
316
|
304
|
|||||
Product
warranty costs
|
220
|
213
|
|||||
Income
taxes payable
|
10
|
29
|
|||||
Other
current liabilities
|
186
|
213
|
|||||
Total
current liabilities
|
1,694
|
1,459
|
|||||
Long-Term
Debt
|
233
|
223
|
|||||
Retirement
Benefits
|
364
|
359
|
|||||
Other
Liabilities
|
159
|
136
|
|||||
Shareowners'
Equity:
|
|||||||
Common
stock ($0.01 par value; shares authorized: 1,000;
|
|||||||
shares
issued: 183.8)
|
2
|
2
|
|||||
Additional
paid-in capital
|
1,366
|
1,353
|
|||||
Retained
earnings
|
1,790
|
1,533
|
|||||
Accumulated
other comprehensive loss
|
(323
|
)
|
(336
|
)
|
|||
Common
stock in treasury, at cost (shares held: March 31, 2008,
23.1;
|
|||||||
September
30, 2007, 18.0)
|
(1,342
|
)
|
(979
|
)
|
|||
Total
shareowners' equity
|
1,493
|
1,573
|
|||||
TOTAL
LIABILITIES AND SHAREOWNERS’ EQUITY
|
$
|
3,943
|
$
|
3,750
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
March
31
|
March
31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Sales:
|
|||||||||||||
Product
sales
|
$
|
1,074
|
$
|
978
|
$
|
2,084
|
$
|
1,875
|
|||||
Service
sales
|
112
|
105
|
214
|
201
|
|||||||||
Total
sales
|
1,186
|
1,083
|
2,298
|
2,076
|
|||||||||
Costs,
expenses and other:
|
|||||||||||||
Product
cost of sales
|
763
|
687
|
1,464
|
1,312
|
|||||||||
Service
cost of sales
|
77
|
69
|
145
|
134
|
|||||||||
Selling,
general, and administrative expenses
|
120
|
119
|
231
|
228
|
|||||||||
Interest
expense
|
5
|
3
|
10
|
7
|
|||||||||
Other
income, net
|
(11
|
)
|
(5
|
)
|
(16
|
)
|
(10
|
)
|
|||||
Total
costs, expenses and other
|
954
|
873
|
1,834
|
1,671
|
|||||||||
Income
before income taxes
|
232
|
210
|
464
|
405
|
|||||||||
Income
tax provision
|
64
|
70
|
142
|
122
|
|||||||||
Net
income
|
$
|
168
|
$
|
140
|
$
|
322
|
$
|
283
|
|||||
Earnings
per share:
|
|||||||||||||
Basic
|
$
|
1.04
|
$
|
0.83
|
$
|
1.99
|
$
|
1.69
|
|||||
Diluted
|
$
|
1.03
|
$
|
0.82
|
$
|
1.96
|
$
|
1.66
|
|||||
Weighted
average common shares:
|
|||||||||||||
Basic
|
161.1
|
167.9
|
162.0
|
167.7
|
|||||||||
Diluted
|
163.2
|
170.6
|
164.3
|
170.3
|
|||||||||
Cash
dividends per share
|
$
|
0.16
|
$
|
0.16
|
$
|
0.32
|
$
|
0.32
|
Six
Months Ended
|
|||||||
March
31
|
|||||||
2008
|
2007
|
||||||
Operating
Activities:
|
|||||||
Net
income
|
$
|
322
|
$
|
283
|
|||
Adjustments
to arrive at cash provided by operating activities:
|
|||||||
Depreciation
|
50
|
47
|
|||||
Amortization
of intangible assets
|
12
|
10
|
|||||
Stock-based
compensation
|
10
|
9
|
|||||
Compensation
and benefits paid in common stock
|
31
|
28
|
|||||
Tax
benefit from the exercise of stock options
|
6
|
19
|
|||||
Excess
tax benefit from stock-based compensation
|
(6
|
)
|
(19
|
)
|
|||
Deferred
income taxes
|
29
|
3
|
|||||
Pension
plan contributions
|
(5
|
)
|
(5
|
)
|
|||
Changes
in assets and liabilities, excluding effects of
acquisitions
|
|||||||
and
foreign currency adjustments:
|
|||||||
Receivables
|
(57
|
)
|
(65
|
)
|
|||
Inventories
|
(116
|
)
|
(65
|
)
|
|||
Accounts
payable
|
(7
|
)
|
4
|
||||
Advance
payments from customers
|
12
|
31
|
|||||
Compensation
and benefits
|
(74
|
)
|
(33
|
)
|
|||
Income
taxes
|
(44
|
)
|
(32
|
)
|
|||
Other
assets and liabilities
|
(33
|
)
|
(29
|
)
|
|||
Cash
Provided by Operating Activities
|
130
|
186
|
|||||
Investing
Activities:
|
|||||||
Property
additions
|
(75
|
)
|
(57
|
)
|
|||
Acquisition
of intangible assets
|
(5
|
)
|
(3
|
)
|
|||
Proceeds
from settlement of discontinued license agreement
|
-
|
14
|
|||||
Proceeds
from purchase price settlement related to business
acquisition
|
-
|
5
|
|||||
Other
investing activities
|
(1
|
)
|
-
|
||||
Cash
Used for Investing Activities
|
(81
|
)
|
(41
|
)
|
|||
Financing
Activities:
|
|||||||
Purchases
of treasury stock
|
(415
|
)
|
(113
|
)
|
|||
Cash
dividends
|
(52
|
)
|
(54
|
)
|
|||
Decrease
in long-term borrowings
|
-
|
(22
|
)
|
||||
Increase
in short-term borrowings
|
361
|
3
|
|||||
Proceeds
from exercise of stock options
|
11
|
40
|
|||||
Excess
tax benefit from stock-based compensation
|
6
|
19
|
|||||
Cash
Used for Financing Activities
|
(89
|
)
|
(127
|
)
|
|||
Effect
of exchange rate changes on cash and cash equivalents
|
7
|
5
|
|||||
Net
Change in Cash and Cash Equivalents
|
(33
|
)
|
23
|
||||
231
|
144
|
||||||
Cash
and Cash Equivalents at End of Period
|
$
|
198
|
$
|
167
|
1.
|
Business
Description and Basis of
Presentation
|
2.
|
New
Accounting Standards
|
3.
|
Acquisition
|
4.
|
Receivables
|
March 31,
|
September 30,
|
||||||
2008
|
2007
|
||||||
Billed
|
$
|
754
|
$
|
715
|
|||
Unbilled
|
197
|
207
|
|||||
Less
progress payments
|
(20
|
)
|
(30
|
)
|
|||
Total
|
931
|
892
|
|||||
Less
allowance for doubtful accounts
|
(8
|
)
|
(9
|
)
|
|||
Receivables
|
$
|
923
|
$
|
883
|
5.
|
Inventories
|
March 31,
|
September 30,
|
||||||
2008
|
2007
|
||||||
Finished
goods
|
$
|
183
|
$
|
187
|
|||
Work
in process
|
421
|
362
|
|||||
Raw
materials, parts, and supplies
|
406
|
371
|
|||||
Total
|
1,010
|
920
|
|||||
Less
progress payments
|
(92
|
)
|
(97
|
)
|
|||
Inventories
|
$
|
918
|
$
|
823
|
6.
|
Property
|
March 31,
|
September 30,
|
||||||
2008
|
2007
|
||||||
Land
|
$
|
31
|
$
|
31
|
|||
Buildings
and improvements
|
314
|
307
|
|||||
Machinery
and equipment
|
796
|
769
|
|||||
Information
systems software and hardware
|
230
|
224
|
|||||
Furniture
and fixtures
|
54
|
52
|
|||||
Construction
in progress
|
86
|
72
|
|||||
Total
|
1,511
|
1,455
|
|||||
Less
accumulated depreciation
|
(887
|
)
|
(848
|
)
|
|||
Property
|
$
|
624
|
$
|
607
|
7. |
Goodwill
and Intangible Assets
|
Government
|
Commercial
|
|||||||||
Systems
|
Systems
|
Total
|
||||||||
Balance
at September 30, 2007
|
$
|
353
|
$
|
191
|
$
|
544
|
||||
Foreign
currency translation adjustment
|
4
|
-
|
4
|
|||||||
Other
adjustments to goodwill
|
2
|
-
|
2
|
|||||||
Balance
at March 31, 2008
|
$
|
359
|
$
|
191
|
$
|
550
|
March 31, 2008
|
September 30, 2007
|
||||||||||||||||||
Accum
|
Accum
|
||||||||||||||||||
Gross
|
Amort
|
Net
|
Gross
|
Amort
|
Net
|
||||||||||||||
Intangible
assets with finite lives:
|
|||||||||||||||||||
Developed
technology and patents
|
$
|
151
|
$
|
(80
|
)
|
$
|
71
|
$
|
156
|
$
|
(72
|
)
|
$
|
84
|
|||||
License
agreements
|
18
|
(3
|
)
|
15
|
11
|
(3
|
)
|
8
|
|||||||||||
Customer
relationships
|
87
|
(22
|
)
|
65
|
67
|
(19
|
)
|
48
|
|||||||||||
Trademarks
and tradenames
|
12
|
(8
|
)
|
4
|
12
|
(7
|
)
|
5
|
|||||||||||
Intangible
assets with indefinite lives:
|
|||||||||||||||||||
Trademarks
and tradenames
|
2
|
-
|
2
|
2
|
-
|
2
|
|||||||||||||
Intangible
assets
|
$
|
270
|
$
|
(113
|
)
|
$
|
157
|
$
|
248
|
$
|
(101
|
)
|
$
|
147
|
8.
|
Other
Assets
|
March 31,
|
September 30,
|
||||||
2008
|
2007
|
||||||
Long-term
receivables
|
$
|
91
|
$
|
73
|
|||
Long-term
deferred income taxes
|
24
|
1
|
|||||
Investment
in equity affiliates
|
10
|
10
|
|||||
Exchange
and rental assets, net of accumulated depreciation of $96
at
|
|||||||
March
31, 2008 and $95 at September 30, 2007
|
41
|
37
|
|||||
Other
|
67
|
74
|
|||||
Other
assets
|
$
|
233
|
$
|
195
|
9.
|
Other
Current Liabilities
|
March 31,
|
September 30,
|
||||||
2008
|
2007
|
||||||
Customer
incentives
|
$
|
106
|
$
|
117
|
|||
Contract
reserves
|
14
|
18
|
|||||
Other
|
66
|
78
|
|||||
Other
current liabilities
|
$
|
186
|
$
|
213
|
10.
|
Debt
|
March 31,
|
September 30,
|
||||||
2008
|
2007
|
||||||
Principal
amount of notes due December 1, 2013
|
$
|
200
|
$
|
200
|
|||
Principal
amount of variable rate loan facility due June 2011
|
27
|
24
|
|||||
Fair
value swap adjustment (Note 16)
|
6
|
(1
|
)
|
||||
Long-term
debt
|
$
|
233
|
$
|
223
|
11.
|
Retirement
Benefits
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
|
2007
|
|
2008
|
|
2007
|
|
||||||
Service
cost
|
$
|
2
|
$
|
2
|
$
|
4
|
$
|
4
|
|||||
Interest
cost
|
41
|
38
|
81
|
75
|
|||||||||
Expected
return on plan assets
|
(51
|
)
|
(47
|
)
|
(101
|
)
|
(93
|
)
|
|||||
Amortization:
|
|||||||||||||
Prior
service cost
|
(4
|
)
|
(5
|
)
|
(9
|
)
|
(9
|
)
|
|||||
Net
actuarial loss
|
11
|
15
|
23
|
29
|
|||||||||
Net
benefit expense / (income)
|
$
|
(1
|
)
|
$
|
3
|
$
|
(2
|
)
|
$
|
6
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Service
cost
|
$
|
1
|
$
|
1
|
$
|
2
|
$
|
2
|
|||||
Interest
cost
|
4
|
4
|
8
|
8
|
|||||||||
Expected
return on plan assets
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|||||
Amortization:
|
|||||||||||||
Prior
service cost
|
(8
|
)
|
(9
|
)
|
(17
|
)
|
(19
|
)
|
|||||
Net
actuarial loss
|
4
|
4
|
7
|
8
|
|||||||||
Net
benefit expense / (income)
|
$
|
-
|
$
|
(1
|
)
|
$
|
(1
|
)
|
$
|
(2
|
)
|
12.
|
Stock-Based
Compensation
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Stock-based
compensation expense included in:
|
|||||||||||||
Product
cost of sales
|
$
|
1
|
$
|
1
|
$
|
2
|
$
|
2
|
|||||
Service
cost of sales
|
-
|
1
|
1
|
1
|
|||||||||
Selling,
general and administrative expenses
|
4
|
3
|
7
|
6
|
|||||||||
Income
before income taxes
|
$
|
5
|
$
|
5
|
$
|
10
|
$
|
9
|
|||||
Net
income
|
$
|
4
|
$
|
3
|
$
|
7
|
$
|
6
|
|||||
Basic
and diluted earnings per share
|
$
|
0.02
|
$
|
0.02
|
$
|
0.04
|
$
|
0.04
|
Performance
|
Restricted
|
Restricted
|
|||||||||||||||||||||||
Options
|
Shares
|
Stock
|
Stock Units
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
||||||||||||||||||
Issued
|
Fair Value
|
Issued
|
Fair Value
|
Issued
|
Fair Value
|
Issued
|
Fair Value
|
||||||||||||||||||
Six
months ended
|
|||||||||||||||||||||||||
March
31, 2008
|
350,000
|
$
|
23.46
|
110,794
|
(a)
|
$
|
73.67
|
38,900
|
$
|
74.05
|
18,049
|
$
|
67.03
|
||||||||||||
Six
months ended
|
|||||||||||||||||||||||||
March
31, 2007
|
441,570
|
$
|
16.59
|
61,763
|
(b)
|
$
|
57.99
|
39,520
|
$
|
57.97
|
16,287
|
$
|
63.96
|
(a)
|
The
maximum number of performance shares that can be issued based on
the
achievement of performance targets for fiscal years 2008 through
2010 is
265,906.
|
(b)
|
The
maximum number of performance shares that can be issued based on
the
achievement of performance targets for fiscal years 2007 through
2009 is
148,231.
|
Six Months Ended
|
|||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Grants
|
Grants
|
||||||
Risk-free
interest rate (U.S. Treasury zero coupon issues)
|
3.90
|
%
|
4.55
|
%
|
|||
Expected
dividend yield
|
0.98
|
%
|
1.09
|
%
|
|||
Expected
volatility
|
0.30
|
0.28
|
|||||
Expected
life
|
6
years
|
5
years
|
During
the six months ended March 31, 2008 and 2007, 0.5 million and 0.4
million
shares, respectively, of Company common stock were issued to employees
under the Company’s employee stock purchase and defined contribution
savings plans at a value of $31 million and $28 million,
respectively.
|
13.
|
Comprehensive
Income
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Net
income
|
$
|
168
|
$
|
140
|
$
|
322
|
$
|
283
|
|||||
Unrealized
foreign currency translation adjustment
|
8
|
1
|
11
|
7
|
|||||||||
Foreign
currency cash flow hedge adjustment
|
(1
|
)
|
-
|
-
|
(1
|
)
|
|||||||
Amortization
of defined benefit plan costs
|
1
|
-
|
2
|
-
|
|||||||||
Minimum
pension liability adjustment
|
-
|
-
|
-
|
(47
|
)
|
||||||||
Comprehensive
income
|
$
|
176
|
$
|
141
|
$
|
335
|
$
|
242
|
14.
|
Other
Income, Net
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Earnings
from equity affiliates
|
$
|
1
|
$
|
2
|
$
|
4
|
$
|
5
|
|||||
Interest
income
|
2
|
-
|
4
|
2
|
|||||||||
Royalty
income
|
7
|
3
|
9
|
5
|
|||||||||
Other
|
1
|
-
|
(1
|
)
|
(2
|
)
|
|||||||
Other
income, net
|
$
|
11
|
$
|
5
|
$
|
16
|
$
|
10
|
15.
|
Income
Taxes
|
16.
|
Financial
Instruments
|
Asset (Liability)
|
|||||||||||||
March 31, 2008
|
September 30, 2007
|
||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||
Amount
|
Value
|
Amount
|
Value
|
||||||||||
Cash
and cash equivalents
|
$
|
198
|
$
|
198
|
$
|
231
|
$
|
231
|
|||||
Deferred
compensation plan investments
|
36
|
36
|
39
|
39
|
|||||||||
Short-term
debt
|
(361
|
)
|
(361
|
)
|
-
|
-
|
|||||||
Long-term
debt
|
(233
|
)
|
(225
|
)
|
(223
|
)
|
(216
|
)
|
|||||
Interest
rate swaps
|
6
|
6
|
(1
|
)
|
(1
|
)
|
|||||||
Foreign
currency forward exchange contracts
|
(7
|
)
|
(7
|
)
|
(5
|
)
|
(5
|
)
|
17.
|
Guarantees
and Indemnifications
|
Six Months Ended
|
|||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Balance
at beginning of year
|
$
|
213
|
$
|
189
|
|||
Warranty
costs incurred
|
(25
|
)
|
(26
|
)
|
|||
Product
warranty accrual
|
33
|
39
|
|||||
Reclassifications
|
-
|
7
|
|||||
Pre-existing
warranty adjustments
|
(1
|
)
|
1
|
||||
Balance
at March 31
|
$
|
220
|
$
|
210
|
18.
|
Environmental
Matters
|
19.
|
Legal
Matters
|
20.
|
Business
Segment Information
|
The
sales and results of operations of the Company’s operating segments are
summarized as follows (in
millions):
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Sales:
|
|||||||||||||
Commercial
Systems
|
$
|
610
|
$
|
542
|
$
|
1,175
|
$
|
1,034
|
|||||
Government
Systems
|
576
|
541
|
1,123
|
1,042
|
|||||||||
Total
sales
|
$
|
1,186
|
$
|
1,083
|
$
|
2,298
|
$
|
2,076
|
|||||
Segment
operating earnings:
|
|||||||||||||
Commercial
Systems
|
$
|
140
|
$
|
122
|
$
|
277
|
$
|
236
|
|||||
Government
Systems
|
115
|
107
|
230
|
209
|
|||||||||
Total
segment operating earnings
|
255
|
229
|
507
|
445
|
|||||||||
Interest
expense
|
(5
|
)
|
(3
|
)
|
(10
|
)
|
(7
|
)
|
|||||
Stock-based
compensation
|
(5
|
)
|
(5
|
)
|
(10
|
)
|
(9
|
)
|
|||||
Restructuring
adjustment
|
-
|
3
|
-
|
3
|
|||||||||
General
corporate, net
|
(13
|
)
|
(14
|
)
|
(23
|
)
|
(27
|
)
|
|||||
Income
before income taxes
|
232
|
210
|
464
|
405
|
|||||||||
Income
tax provision
|
(64
|
)
|
(70
|
)
|
(142
|
)
|
(122
|
)
|
|||||
Net
income
|
$
|
168
|
$
|
140
|
$
|
322
|
$
|
283
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Commercial
Systems product categories:
|
|||||||||||||
Air
transport aviation electronics
|
$
|
320
|
$
|
288
|
$
|
621
|
$
|
538
|
|||||
Business
and regional aviation electronics
|
290
|
254
|
554
|
496
|
|||||||||
Total
Commercial Systems sales
|
$
|
610
|
$
|
542
|
$
|
1,175
|
$
|
1,034
|
|||||
Government
Systems product categories:
|
|||||||||||||
$
|
399
|
$
|
387
|
$
|
774
|
$
|
744
|
||||||
Surface
Solutions
|
177
|
154
|
349
|
298
|
|||||||||
Total
Government Systems sales
|
$
|
576
|
$
|
541
|
$
|
1,123
|
$
|
1,042
|
21.
|
Subsequent
Event
|
(dollars in millions)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Total
sales
|
$
|
1,186
|
$
|
1,083
|
|||
Percent
increase
|
10
|
%
|
(dollars
in millions, except per share amounts)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Net
income
|
$
|
168
|
$
|
140
|
|||
Net
income as a percent of sales
|
14.2
|
%
|
12.9
|
%
|
|||
Diluted
earnings per share
|
$
|
1.03
|
$
|
0.82
|
(dollars
in millions)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Air
transport aviation electronics
|
$
|
320
|
$
|
288
|
|||
Business
and regional aviation electronics
|
290
|
254
|
|||||
Total
|
$
|
610
|
$
|
542
|
|||
Percent
increase
|
13
|
%
|
(in
millions)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Original
equipment
|
$
|
351
|
$
|
272
|
|||
Aftermarket
|
259
|
270
|
|||||
Total
|
$
|
610
|
$
|
542
|
|||
Percent
increase
|
13
|
%
|
(dollars
in millions)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Segment
operating earnings
|
$
|
140
|
$
|
122
|
|||
Percent
of sales
|
23.0
|
%
|
22.5
|
%
|
(dollars
in millions)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Airborne
solutions
|
$
|
399
|
$
|
387
|
|||
Surface
solutions
|
177
|
154
|
|||||
Total
|
$
|
576
|
$
|
541
|
|||
Percent
increase
|
6
|
%
|
(dollars
in millions)
|
Three Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Segment
operating earnings
|
$
|
115
|
$
|
107
|
|||
Percent
of sales
|
20.0
|
%
|
19.8
|
%
|
(dollars
in millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Total
sales
|
$
|
2,298
|
$
|
2,076
|
|||
Percent
increase
|
11
|
%
|
(dollars
in millions, except per share amounts)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Net
income
|
$
|
322
|
$
|
283
|
|||
Net
income as a percent of sales
|
14.0
|
%
|
13.6
|
%
|
|||
Diluted
earnings per share
|
$
|
1.96
|
$
|
1.66
|
(dollars
in millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Air
transport aviation electronics
|
$
|
621
|
$
|
538
|
|||
Business
and regional aviation electronics
|
554
|
496
|
|||||
Total
|
$
|
1,175
|
$
|
1,034
|
|||
Percent
increase
|
14
|
%
|
(in
millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Original
equipment
|
$
|
643
|
$
|
509
|
|||
Aftermarket
|
532
|
525
|
|||||
Total
|
$
|
1,175
|
$
|
1,034
|
|||
Percent
increase
|
14
|
%
|
(dollars
in millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Segment
operating earnings
|
$
|
277
|
$
|
236
|
|||
Percent
of sales
|
23.6
|
%
|
22.8
|
%
|
(dollars
in millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Airborne
solutions
|
$
|
774
|
$
|
744
|
|||
Surface
solutions
|
349
|
298
|
|||||
Total
|
$
|
1,123
|
$
|
1,042
|
|||
Percent
increase
|
8
|
%
|
(dollars
in millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Segment
operating earnings
|
$
|
230
|
$
|
209
|
|||
Percent
of sales
|
20.5
|
%
|
20.1
|
%
|
(in
millions)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
March 31
|
March 31
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Pension
benefits
|
$
|
(1
|
)
|
$
|
3
|
$
|
(2
|
)
|
$
|
6
|
|||
Other
retirement benefits
|
-
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
||||||
Net
benefit expense / (income)
|
$
|
(1
|
)
|
$
|
2
|
$
|
(3
|
)
|
$
|
4
|
·
|
Total
sales of about $4.75 billion.
|
·
|
Earnings
per share in the range of $3.95 to
$4.05.
|
·
|
Cash
flow from operating activities in the range of $675 million to $725
million.
|
·
|
Research
and development expenditures in the range of $925 million to $950
million.
|
(in
millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Cash
provided by operating activities
|
$
|
130
|
$
|
186
|
(in
millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Cash
used for investing activities
|
$
|
(81
|
)
|
$
|
(41
|
)
|
· |
$18
million of additional capital expenditures during the six months
ended
March 31, 2008.
|
· |
The
six months ended March 31, 2007 benefited from a $14 million recovery
of a
license fee paid to The Boeing Company in prior years as a result
of The
Boeing Company exiting the high-speed broadband communication connectivity
markets.
|
· |
During
the six months ended March 31, 2007, we received $5 million as a
result of
a purchase price adjustment related to the E&S Simulation
Business.
|
(in
millions)
|
Six Months Ended
|
||||||
March 31
|
|||||||
2008
|
2007
|
||||||
Cash
used for financing activities
|
$
|
(89
|
)
|
$
|
(127
|
)
|
·
|
We
had proceeds from short-term borrowings of $361 million for the six
months
ended March 31, 2008 compared to net payments on borrowings in the
same
period last year of $19 million.
|
·
|
Share
repurchases increased during the six months ended March 31, 2008
to $415
million compared to $113 million paid for share repurchases during
the
same period last year.
|
·
|
We
received $11 million from the exercise of stock options for the six
months
ended March 31, 2008 compared to $40 million for the same period
last
year.
|
·
|
We
received a $6 million excess tax benefit from the exercise of stock
options for the six months ended March 31, 2008 compared to $19 million
for the same period last year.
|
·
|
We
paid cash dividends of $52 million during the six months ended March
31,
2008 compared to $54 million for the same period last year.
|
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 Appropriate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans or
Programs
|
|||||||||
January
1, 2008 through
January
31, 2008
|
2,177,100
|
$
|
64.79
|
2,177,100
|
$
|
375
million
|
|||||||
February
1, 2008 through
February
29, 2008
|
800,000
|
$
|
61.72
|
800,000
|
$
|
326
million
|
|||||||
March
1, 2008 through
March
31, 2008
|
-
|
-
|
-
|
$
|
326
million
|
||||||||
Total
|
2,977,100
|
$
|
63.97
|
2,977,100
|
$
|
326
million
|
(a)
|
The
annual meeting of shareowners of the Company was held on February
12, 2008
and the number of voting shares outstanding as of the record date
was
163,140,766.
|
(b) |
At
the meeting, the shareowners:
|
i.
|
voted
to elect two directors of the Company. Each nominee for director
was
elected to a term expiring in 2011 by a vote of the shareowners as
follows:
|
Affirmative
|
Votes
|
||||||
Votes
|
Withheld
|
||||||
Chris
A. Davis
|
143,590,300
|
5,716,444
|
|||||
Ralph
E. Eberhart
|
144,506,465
|
4,800,279
|
ii.
|
voted
on a proposal to approve the selection by the Audit Committee of
the Board
of Directors of the firm Deloitte & Touche LLP as auditors of the
Company. The proposal was approved by a vote of the shareowners as
follows:
|
Affirmative
votes
|
146,840,428
|
|||
Negative
votes
|
746,501
|
|||
Abstentions
|
1,719,815
|
(a)
|
Exhibits
|
10-S-2 |
Letter
agreement between the Company and Donald R. Beall dated March 19,
2008
|
12
|
Computation
of Ratio of Earnings to Fixed Charges for the six months ended March
31, 2008.
|
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.
|
ROCKWELL
COLLINS, INC.
|
|||
(Registrant)
|
|||
Date: April
24, 2008
|
By
|
/s/
M. A. Schulte
|
|
M.
A. Schulte
|
|||
Vice
President, Finance and Controller
|
|||
(Principal
Accounting Officer)
|
|||
Date: April
24, 2008
|
By
|
/s/
G. R. Chadick
|
|
G.
R. Chadick
|
|||
Senior
Vice President,
|
|||
General
Counsel and Secretary
|