Published on October 17, 2013
Arinc Incorporated Investor Overview August 12, 2013 © 2013 Rockwell Collins All rights reserved. Rockwell Collins Proprietary Information
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 economy, 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; unanticipated impacts of sequestration and other provisions of the Budget Control Act of 2011; the discontinuance of 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; timing of international contract awards; 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 fixedprice 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, including the integration of ARINC; 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. © 2013 Rockwell Collins All rights reserved. Rockwell Collins Proprietary Information 2
Executive Summary y Synergies / Financial Impact • Rockwell Collins has entered into a definitive agreement to purchase ARINC from The Carlyle Group for $1.39 billion in cash • Fully committed financing from Citigroup Global Markets, Inc • Transaction Summary Combination of 2 world-class information management businesses – Significant revenue synergy opportunities – Identified cost synergies © 2013 Rockwell Collins All rights reserved. Expected to be EPS accretive in fiscal year 2015 • Timing • Accretive to Rockwell Collins’ revenue growth • Contingent upon completion of regulatory and other customary conditions • Estimated close within 90 days Rockwell Collins Proprietary Information
Acquisition Highlights q g g 1 Substantially expands Rockwell Collins’ position in the growing aviation information management space 2 ARINC’s trusted network and connectivity services complement Rockwell Collins’ hardware and avionics platform and business jet flight information systems to provide a broader range of solutions 3 Positions company for accelerated future growth by leveraging high assurance network solutions for aviation 4 Increases Rockwell Collins pro forma commercial revenue split to 54% of total sales © 2013 Rockwell Collins All rights reserved. Rockwell Collins Proprietary Information 4
ARINC Overview Global Aviation Solu utions • A leading global provider of air-to-ground data and voice communication services for commercial and aviation industries • Highly scalable and mission-critical technology solutions between cockpit and airline operations centers (GLOBALink), business aviation flight support services (ARINC Direct) and secure data transmissions through terrestrial IP-based networks (AviNet) • A leading global provider of air-to-ground data and voice communication services • A leading global provider of business aviation flight support services Global Airp ports, Tran nsportation & Security • A leading domestic provider of virtual private messaging services to the aviation industry • Provides integrated communications and information systems for airports; command & control and information systems for rail customers; advanced security systems for nuclear power facilities, transit authorities and other critical infrastructure; and interoperable communication solutions for first responders • A leading provider of communications and information technology for airports in North America and a leading provider in Europe, the Middle East and Asia • A leading provider of passenger and transit rail control centers in North America ASE ES • A leading provider of advanced security systems for U.S. based commercial nuclear power plants • Provides aircraft modification and maintenance repair & overhaul services for military maintenance, customers worldwide © 2013 Rockwell Collins All rights reserved. Rockwell Collins Proprietary Information 5
Synergies Overview y g • Significant synergy opportunities given complementary end markets and customers • Key revenue synergy opportunity areas include: – Accelerated expansion of GlobaLink services p – ARINC Direct and RC Ascend Flight Services – Business aviation connectivity services – Global weather solutions – Airline trusted application hosting • Key cost synergy areas include: – Corporate function consolidations © 2013 Rockwell Collins All rights reserved. Rockwell Collins Proprietary Information 6
Acquisition Financing Overview q g • Financing entire purchase price with debt • Funding sources – 1/3 new commercial paper long term – 2/3 long-term debt – Locks in long-term financing at historically low rates • E Expect t pay down commercial paper over the next few years t to d i l th tf • Expect share repurchases to moderate in near-term © 2013 Rockwell Collins All rights reserved. Rockwell Collins Proprietary Information 7
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