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About Rockwell Collins, Inc.

Rockwell Collins, now doing business as Collins Aerospace Systems, makes aviation electronics and communication equipment for business, commercial, and military aircraft. The company also provides flight simulation and training, MRO services, and navigation and surveillance systems. Its commercial systems include avionics and in-flight entertainment systems for commercial aircraft and offers flight planning and cabin connectivity for business aviation through its ARINCDirect flight support services. Collins also offers information management and network services such as command and control, cybersecurity, and disaster communications (UrgentLink) for commercial airlines, airports, the FAA, and railroad operators. The company operates as a subsidiary of United Technologies Corporation (UTC) since UTC acquired Rockwell Collins Inc. for $23 billion in 2018.

Change in Company Type

In the biggest aerospace deal in history, United Technologies Corporation (UTC) acquired Rockwell Collins for $23 billion in 2018. Rockwell Collins now operates as UTC division Collins Aerospace Systems. UTC projects the new division will generate more than $23 billion in revenue per year. Collins Aerospace will also work in tandem with UTC's Pratt & Whitney subsidiary, which makes commercial, military, and business jet engines.

 

Operations

Collins Aerospace operates in four segments: Interior systems, Government Systems, Commercial Systems, and Information Management Systems.

The Commercial Systems segment (around 30% of revenue) provides systems and products for manufacturing, retrofitting, and upgrading aircraft. Products include the Pro Line Fusion integrated avionics system, cabin management systems, head-up guidance systems, primary actuation systems, and simulators for crew training. The segment serves a range of customers from the biggest aircraft makers in the world to owners of individual aircraft. Aftermarket products are sold through distributors and to regional airline operators.

Collins' Government Systems segment (around 30% of sales) provides products for a variety of uses under rugged conditions and constrained by challenges regarding size, weight, and power. These products include satellite communications systems, handheld navigation devices, flight controls, helmet-mounted displays, and training systems.

The Interior Systems segment (more than 30% of revenue) was added when Rockwell Collins bought B/E Aerospace in 2017. This unit makes cabin interior products such as aircraft seats, aircraft food and beverage equipment, modular lavatory systems, oxygen storage, protective breathing equipment, and lighting products.

The Information Management Services segment (almost 10%) provides communications services, systems integration, and security services across the aviation, airport, rail, transit, and nuclear security markets to customers located around the world. Its customer base includes commercial airlines, business aircraft operators, the US Federal Aviation Administration (FAA), airport and critical infrastructure operators, and major passenger and freight railroads.

Geographic Reach

The company's headquarters is located in Cedar Rapids, IA. Collins Aerospace operates various manufacturing and engineering facilities, sales offices, warehouses, and service locations throughout the US and around the world. The company makes about 55% of its sales in the US.

Sales and Marketing

Collins Aerospace markets its systems, products, and services directly to government and commercial systems customers through an internal marketing department and sales force. The company also works through a worldwide dealer network and international sales reps for international sales and marketing.

The US government accounts for almost 25% of sales. Customers include the Department of Defense, US Coast Guard, civil agencies, defense contractors, foreign ministries, commercial air support manufacturers, and airlines.

Financial Performance

Before being acquired, Rockwell Collins' revenue had been skyrocketing with a 27% increase to $8.7 billion in FY2018 compared with the previous year. Sales in 2017 were also 30% higher than in 2016. The increases in both years were primarily due to sales from the company's B/E Aerospace acquisition in 2017. Excluding B/E sales, other contributing factors to its 2018 performance include higher revenue in commercial aftermarket activities and higher sales to the US government.

Despite higher cost of sales, net income spiked to more than $1 billion, a 46% increase compared with 2017, mostly from higher revenue in all its divisions and a lower income tax expense.

Cash at the end of fiscal 2018 was $738 million, an increase of $35 million from the prior year. Cash from operations was $310 million in the red due to higher cash receivables and product inventory, while investing activities used $256 million, mainly for property additions. Financing activities provided $610 million from short-term borrowings.

Strategy

Collins Aerospace has invested more than $5 billion in research and development over the past five years (since 2014) allowing the company to develop new systems, products and software to accelerate growth. The B/E Aerospace acquisition in 2017 has opened the aircraft interiors market to Collins and the company seeks to capitalize on that market from trends in seating, lighting systems, food preparation, and storage.

With ever-increasing demand for software-based applications in the aviation industry, Collins is enhancing its products with more robust data streams and applications for safety and on-time flight performance. In 2018, it introduced its GlobalConnect information management system for some Airbus and Boeing aircraft and plans to expand its communications and data management services for airlines in the future.

Outside the US, Collins aims to capture new programs at international OEMs in emerging markets as global commercial air travel is expected to increase in developing countries. It also plans to strategically position service centers worldwide and launch joint ventures.

Mergers and Acquisitions

Over the years, Collins Aerospace has achieved revenue milestones with the aid of key acquisitions. In its largest acquisition to date, the company (then Rockwell Collins) in 2017 acquired B/E Aerospace in a transaction valued at $8.6 billion. The major deal largely expanded the range of products that Collins supplies to major commercial and business aircraft and broadened its customer base internationally. It specifically added seating, food and beverage preparation, lighting, oxygen systems, and modular galley and lavatory systems to its product portfolio.

Company Background

Collins Radio Company, founded by Arthur Collins in Cedar Rapids, IA in 1933, initially designed and produced short wave radio equipment. When the company experienced financial difficulties in 1973, Rockwell International, a diversified high-tech company, acquired Collins Radio Company forming Rockwell Collins. The company was later acquired by aerospace conglomerate United Technologies Corporation (UTC) in 2018 becoming the UTC subsidiary, Collins Aerospace Systems.

Rockwell Collins, Inc.

400 COLLINS RD NE
Cedar Rapids, IA 52498-0505
Phone: 1 (319) 295-1000

Stats

Employer Type: Publicly Owned
SVP and CFO: Patrick E. Allen
SVP, Operations: Bruce M. King
Chairman, President, and CEO: Robert` K. Ortberg
Employees (This Location): 277
Employees (All Locations): 70,000

Major Office Locations

Cedar Rapids, IA

Other Locations

Foley, AL
Huntsville, AL
Chandler, AZ
Tucson, AZ
Anaheim, CA
Burlingame, CA
Calexico, CA
Carlsbad, CA
Corona, CA
Hawthorne, CA
Irvine, CA
Livermore, CA
Los Angeles, CA
Marina Del Rey, CA
Westminster, CA
Stratford, CT
Crestview, FL
Doral, FL
Hurlburt Field, FL
Longwood, FL
Melbourne, FL
Miami, FL
Miramar, FL
Niceville, FL
Orlando, FL
Atlanta, GA
Duluth, GA
Hampton, GA
Savannah, GA
Cedar Rapids, IA
Coralville, IA
Decorah, IA
Manchester, IA
Des Plaines, IL
Hanover Park, IL
O Fallon, IL
Independence, KS
Lenexa, KS
Shawnee Mission, KS
Wichita, KS
Barksdale Afb, LA
Lexington, MA
Rockport, MA
Annapolis, MD
Cockeysville, MD
Columbia, MD
Millersville, MD
Livonia, MI
Bay Saint Louis, MS
High Point, NC
Morrisville, NC
Winston Salem, NC
Minot, ND
Hampton, NH
Paramus, NJ
Albuquerque, NM
Bohemia, NY
Elmont, NY
Medford, NY
New York, NY
Oklahoma City, OK
Tulsa, OK
Wilsonville, OR
Kennett Square, PA
Middletown, PA
Mountainhome, PA
Washington Crossing, PA
Clarksville, TN
Memphis, TN
Abilene, TX
Addison, TX
Carrollton, TX
Dallas, TX
Euless, TX
Grand Prairie, TX
Houston, TX
Pleasanton, TX
Richardson, TX
Waco, TX
Salt Lake City, UT
Arlington, VA
Charlottesville, VA
Sterling, VA
Bothell, WA
Everett, WA
Federal Way, WA
Tumwater, WA
New Berlin, WI
Fenwick, WV
Beijing, China
Tokoname, Japan
Dorval, Canada
Richmond, Canada
Blagnac, France
Saint Maximin, France
Thiais, France
Tremblay En France, France
Moscow, Russia
Taipei City, Taiwan
Bruxelles, Belgium
Ciudad De Buenos Aires, Argentina
Lantau Island, Hong Kong
Singapore, Singapore