8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

December 23, 2013

Rockwell Collins, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-16445	52-2314475
(State or other jurisdiction	(Commission File Number)	(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)

Registrant's telephone number, including area code: (319) 295-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

£	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

Explanatory Note

On December 24, 2013, Rockwell Collins, Inc. filed a Current Report on Form 8-K (the “Original Form 8-K”) to report the completion of its previously announced acquisition of Radio Holdings, Inc., the holding company of ARINC Incorporated (“ARINC”), which provides information management services for commercial and government customers worldwide (the “Merger”) on December 23, 2013. Because Radio Holdings, Inc. has no significant operations of its own, or operating subsidiaries other than ARINC, only the consolidated financial statements of ARINC and its subsidiaries are included in this Amendment No. 1 to the Original Form 8-K. This amendment supplements Items 9.01(a) and (b) of the Original Form 8-K and provides the required financial information that was not filed with the Original Form 8-K and that is permitted to be filed by this amendment. Except as set forth herein, all information in the Original Form 8-K remains unchanged.

Item 9.01.	Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements required by Item 9.01(a) of Form 8-K are included as Exhibit 99.1 and Exhibit 99.2 to this Amendment No. 1 to the Original Form 8-K and incorporated herein by reference.
(b) Pro forma Financial Information.
The pro forma financial information required by Item 9.01(b) of Form 8-K is included as Exhibit 99.3 to this Amendment No. 1 to the Original Form 8-K and incorporated herein by reference.
(d) Exhibits.
99.1 Audited financial statements of ARINC Incorporated and subsidiaries as of and for the year ended December 31, 2012, filed as Exhibit 99.1 to the Company's Form 8-K dated December 11, 2013 are incorporated herein by reference
99.2 ARINC Unaudited Comparative Consolidated Financial Statements for the Quarterly Period Ended September 30, 2013
99.3  Unaudited Pro Forma Condensed Combined Financial Information

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ROCKWELL COLLINS, INC.
		(Registrant)
Dated:	March 10, 2014	By	/s/ Robert J. Perna
			Robert J. Perna
			Senior Vice President,
			General Counsel and Secretary

Exhibit Index

99.2	ARINC Unaudited Comparative Consolidated Financial Statements for the Quarterly Period Ended September 30, 2013
99.3	Unaudited Pro Forma Condensed Combined Financial Information

EX-99.2

Exhibit 99.2

ARINC INCORPORATED AND SUBSIDIARIES

Condensed Consolidated Financial Statements

September 30, 2013 and December 31, 2012

(Unaudited)

ARINC INCORPORATED AND SUBSIDIARIES

INDEX

Section	Page Number
Condensed Consolidated Statement of Financial Position (Unaudited) - September 30, 2013 and December 31, 2012	1
Condensed Consolidated Statement of Operations (Unaudited) - Three and Nine Months Ended September 30, 2013 and 2012	2
Condensed Consolidated Statement of Comprehensive Income (Loss) (Unaudited) - Three and Nine Months Ended September 30, 2013 and 2012	3
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - Nine Months Ended September 30, 2013	4
Condensed Consolidated Statement of Cash Flows (Unaudited) - Nine Months Ended September 30, 2013 and 2012	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6

i

ARINC INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Unaudited; in thousands, except per share amounts)

	September 30, 2013			December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents	$	55,651		$	142,762
Billed accounts receivable, net	70,653			77,097
Unbilled accounts receivable, net	71,033			71,401
Inventories, net	1,060			962
Deferred income tax assets	4,102			15,325
Other current assets	4,781			7,336
Total Current Assets	207,280			314,883
Property and equipment:
Communications systems and equipment	238,625			224,646
Land, buildings and leasehold improvements	72,443			69,412
Furniture and fixtures	3,475			3,349
Less accumulated depreciation and amortization	(182,433		)	(168,409		)
Net property and equipment	132,110			128,998
Other long-term assets:
Goodwill	304,115			304,115
Intangible assets	60,931			63,262
Other	4,218			5,190
Total other-long term assets	369,264			372,567
TOTAL ASSETS	$	708,654		$	816,448
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	2,415		$	2,685
Accounts payable and income taxes payable	11,147			52,817
Capital lease obligations	648			433
Accrued costs	44,572			68,791
Billings in excess of revenues earned to date	26,735			33,748
Other current liabilities	26,370			25,112
Total current liabilities	111,887			183,586
Long-Term Liabilities:
Long-term debt	238,504			310,180
Deferred income tax liabilities	23,232			16,693
Capital lease obligations	2,224			109
Deferred gain on building contributed to pension plan	43,726			44,164
Other long-term liabilities	65,910			75,733
Total long term liabilities	373,596			446,879
Total liabilities	485,483			630,465
Stockholders' Equity:
Common stock, $.01 par value; 1,000 shares authorized, issued and outstanding at September 30, 2013 and December 31, 2012	—			—
Additional paid-in-capital	275,766			275,194
Accumulated loss	(25,750		)	(57,201		)
Accumulated other comprehensive loss	(26,845		)	(32,010		)
Total stockholders' equity	223,171			185,983
TOTAL LIABILITIES AND EQUITY	$	708,654		$	816,448

See Notes to Condensed Consolidated Financial Statements.

1

ARINC INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited; in thousands)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2013			2012			2013			2012
Revenue	$	145,635		$	143,494		$	445,072		$	438,167
Costs and expenses:
Cost of communications and engineering	94,515			91,622			290,837			284,014
Selling, general and administrative	23,329			27,766			72,141			78,709
Goodwill impairment loss	—			16,964			—			16,964
Depreciation and amortization	7,881			7,319			23,822			22,144
Total costs and expenses	125,725			143,671			386,800			401,831
Operating income (loss)	19,910			(177		)	58,272			36,336
Interest expense	3,759			5,895			12,042			17,964
Other (loss) income	(19		)	1,100			(19		)	1,006
Income (loss) before income taxes	16,132			(4,972		)	46,211			19,378
Income tax provision	4,024			4,078			14,760			13,715
Income (loss) from continuing operations	12,108			(9,050		)	31,451			5,663
Income from discontinued operations, net of tax	—			5,303			—			16,070
Net income (loss)	$	12,108		$	(3,747	)	$	31,451		$	21,733

See Notes to Condensed Consolidated Financial Statements.

2

ARINC INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; in thousands)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2013			2012			2013			2012
Net income (loss)	$	12,108		$	(3,747	)	$	31,451		$	21,733
Components of other comprehensive income (loss):
Currency translations	(24		)	(248		)	(64		)	(118		)
Cash flow hedges	425			350			319			222
Retirement plans	65			—			8,066			—
Tax effect	(153		)	(112		)	(3,156		)	(84		)
Other comprehensive income (loss)	313			(10		)	5,165			20
Comprehensive income (loss)	$	12,421		$	(3,757	)	$	36,616		$	21,753

See Notes to Condensed Consolidated Financial Statements.

3

ARINC INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited; in thousands, except share data)

	Common Stock Shares	Amount		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income			Total
Balance at December 31, 2012	1,000	$	—	$	275,194	$	(57,201	)	$	(32,010	)	$	185,983
Stock based compensation expense	—	—		572		—			—			572
Net income	—	—		—		31,451			—			31,451
Other comprehensive income (loss):
Change in fair value of foreign currency forwards	—	—		—		—			198			198
Change in funded status of retirement plans, net of tax of ($3,056)	—	—		—		—			5,010			5,010
Change in foreign currency translation adjustments	—	—		—		—			(43		)	(43		)
Balance at September 30, 2013	1,000	$	—	$	275,766	$	(25,750	)	$	(26,845	)	$	223,171

See Notes to Condensed Consolidated Financial Statements.

4

ARINC INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited; in thousands)

	Nine Months Ended September 30
	2013			2012
Cash flows from operating activities:
Net income	$	31,451		$	21,733
Income from discontinued operations	—			(16,070		)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,822			22,144
Gain (loss) on disposal of capital assets	18			(99		)
Deferred income tax expense	14,398			(5,665		)
Stock-based compensation expense	572			2,246
Goodwill impairment loss	—			16,964
Amortization of loan origination costs	1,496			1,235
Change in assets and liabilities:
Accounts receivable	6,812			(7,936		)
Inventories	(98		)	112
Other current assets	2,555			12,975
Other long-term assets	(283		)	(149		)
Accounts payable	(12,584		)	(1,166		)
Taxes paid on business divestiture	(29,086		)	—
Accrued costs	(24,219		)	9,270
Billings in excess of revenues earned to date	(7,013		)	(14,811		)
Other current liabilities	4,821			3,046
Pension and retirement costs	735			(3,520		)
Other long-term liabilities	(2,643		)	301
Net cash provided by operating activities- continuing operations	10,754			40,610
Net cash provided by operating activities- discontinued operations	—			27,965
Net cash provided by operating activities	10,754			68,575
Cash flows from investing activities:
Capital expenditures	(21,839		)	(26,348		)
Sales price adjustment from business divestiture	(3,563		)	—
Net cash used by investing activities- continuing operations	(25,402		)	(26,348		)
Net cash used by investing activities- discontinued operations	—			(824		)
Net cash used by investing activities	(25,402		)	(27,172		)
Cash flows from financing activities:
Payments on capital leases	(452		)	(232		)
Principal payments on senior notes	(71,946		)	(2,320		)
Net cash used by financing activities- continuing operations	(72,398		)	(2,552		)
Net cash used by financing activities- discontinued operations	—			—
Net cash used by financing activities	(72,398		)	(2,552		)
Effect of exchange rate changes on cash and cash equivalents	(65		)	21
Net (decrease) increase in cash and cash equivalents	(87,111		)	38,872
Cash and cash equivalents, beginning of period	142,762			75,520
Cash and cash equivalents, end of period	$	55,651		$	114,392

See Notes to Condensed Consolidated Financial Statements.

5

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(1) Organization

ARINC Incorporated and subsidiaries (collectively, the Company or ARINC) is organized under the laws of Delaware. The Company, headquartered in Annapolis, Maryland, has regional offices in Singapore and the United Kingdom and operates in various locations throughout the world. The Company develops and operates communications and information processing systems and provides systems engineering and integration solutions to four key industries: commercial aviation, business aviation, airports, and rail and security.

On October 25, 2007 (Acquisition Date), Radio Acquisition Corp. (Buyer) and the Sellers (as defined below) consummated a transaction (Acquisition) with the Company’s prior stockholders, who were principally several prominent U.S. airline companies (Sellers), whereby the Buyer acquired in excess of 90% of the equity interests of the Company and then was merged with and into the Company, with the remaining equity interest of the Company converted into the right to receive cash. The Company survived such merger as a wholly owned subsidiary of Radio Holdings, Inc. (RHI). RHI is owned by The Carlyle Group.

On December 23, 2013, the Company was acquired by Rockwell Collins, Inc.

(a) Basis of Presentation

These Condensed Consolidated Financial Statements are unaudited and include the consolidated accounts of the Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) applicable to quarterly reporting. All amounts contained in these footnotes, except for share and per share information, are presented in thousands unless otherwise noted. These statements do not include all footnotes included in annual financial statements, and should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2012.

Operating results for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. In the opinion of management, the unaudited Condensed Consolidated Financial Statements contain all adjustments that are of a normal recurring nature, necessary for a fair presentation of results for the three and nine month periods ended September 30, 2013 and 2012, respectively.

During the third quarter of 2013, the Company determined that it had erroneously presented pass-through fuel and trip planning revenues on a gross basis. With the correction, pass-through fuel and trip planning revenues are now presented on a net basis for all periods presented. This change did not impact previously presented net income, nor did it have any effect on the Company's financial position or cash flows for any period periods.

(b) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of ARINC Incorporated and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

(2) Discontinued Operations

On November 30, 2012, the Company completed the sale of its Defense Systems and Engineering Services (DSES) business to Booz Allen Hamilton Holding Corporation (BAH) in a cash transaction of $155,051. During the nine months ended September 30, 2013, the Company paid a post-closing purchase price adjustment to BAH of $3,563 which has been reflected as an investing outflow on the statement of cash flows.

BAH is majority-owned by The Carlyle Group, which is also the majority-owner of RHI. Subsequent to this divestiture, the Company does not have any significant continuing involvement in the operations of the business and does not expect any significant continuing cash flows. Accordingly, the results of operations and cash flows of the DSES business are reported as discontinued operations for all periods presented.

6

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

The following table sets forth the components of income from discontinued operations:

	Three Months Ended		Nine Months Ended
(in thousands)	September 30, 2012		September 30, 2012
Revenue	$	91,871	$	256,859
Operating income	9,376		28,413
Income tax expense	4,073		12,343
Income from discontinued operations, net of tax	$	5,303	$	16,070

(3) Goodwill and Intangible Assets

The Company performs an impairment test of goodwill and indefinite-lived intangible assets at last annually, or at any time there is an indication of potential impairment. The Company's 2012 impairment test concluded that the carrying amount of goodwill assigned to the Aerospace Systems Engineering and Support (ASES) segment exceeded its implied fair value and the Company recorded an impairment charge of $16,964 during the three months ended September 30, 2012.

Identifiable intangible assets consisted of the following:

	September 30, 2013							December 31, 2012
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Determinable life intangibles:
Technology	$	22,700	$	(6,537	)	$	16,163	$	22,700	$	(5,751	)	$	16,949
Customer relationships	41,140		(33,152		)	7,988		41,140		(31,607		)	9,533
	63,840		(39,689		)	24,151		63,840		(37,358		)	26,482
Indefinite life intangibles:
Trademarks	36,780		—			36,780		36,780		—			36,780
Total	$	100,620	$	(39,689	)	$	60,931	$	100,620	$	(37,358	)	$	63,262

Amortization expense for intangible assets for the three and nine months ended September 30, 2013 was $777 and $2,331, respectively, compared to $934 and $2,808 for the three and nine months ended September 30, 2012.

The Company amortizes intangible technology assets on a straight-line basis over their expected useful lives which range between 5 and 30 years. Customer relationships are amortized in relation to the run-off of the expected benefit over their expected lives which range between 2 and 20 years. Trademarks and goodwill are considered to have indefinite useful lives and, therefore, are not amortized.

7

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(4) Accounts Receivable

Accounts receivable consist of the following:

(in thousands)	September 30, 2013			December 31, 2012
Billed:
Accounts receivable	$	72,116		$	79,979
Allowance for doubtful accounts	(1,463		)	(2,882		)
Billed receivables, net	$	70,653		$	77,097
Unbilled:
Accounts currently billable	$	28,466		$	46,530
Costs and profit retention	1,805			841
Not currently billable costs and profits	41,045			46,268
Reserve for potentially unrecoverable costs	(283		)	(22,238		)
Unbilled receivables, net	$	71,033		$	71,401

Contract receivables, net of established reserves, are stated at amounts expected to be realized in future periods. Unbilled receivables result from revenue that has been earned in advance of billing. The unbilled receivables can be invoiced at contractually defined intervals or milestones, as well as upon completion of the contract or U.S. government cost audits. The Company anticipates that the majority of unbilled receivables will be billed and collected within one year.

Total receivables due from the U.S. Government including the Department of Defense and other government agencies, both directly and indirectly through subcontracts, were $44,916 and $41,819 at September 30, 2013 and December 31, 2012, respectively.

The Company provides for reserves based upon management’s best estimate of potentially unrecoverable costs and receivables. In developing this estimate the Company considers the length of time the amounts are outstanding, the Company’s history with the customer, the customer’s current ability to pay, and the condition of the general economy and industry as a whole.

(5) Accrued Costs

Accrued costs consist of the following:

(in thousands)	September 30, 2013		December 31, 2012
Payroll and other related costs	$	6,740	$	8,312
Vacation	7,629		7,068
Accrued interest	117		94
Accrued expenses	24,489		35,510
Accrued vendor payment	5,597		17,807
	$	44,572	$	68,791

8

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(6) Other Current Liabilities

Other current liabilities consist of the following:

(in thousands)	September 30, 2013		December 31, 2012
Deferred revenue	$	21,942	$	18,370
Other	4,428		6,742
	$	26,370	$	25,112

(7) Other Long‑Term Liabilities

Other long‑term liabilities consist of the following:

(in thousands)	September 30, 2013		December 31, 2012
Other post-retirement benefits	$	8,655	$	8,844
Defined-benefit pension plan	26,345		33,210
Operating deposits	20,347		21,611
Other taxes	10,329		11,059
Other	234		1,009
	$	65,910	$	75,733

(8) Long‑Term Debt

In conjunction with the October 25, 2007 acquisition by The Carlyle Group, the Company entered into senior secured credit facilities with financial institutions. These facilities are comprised of a $395,000 first lien term loan facility, a $195,000 second lien term loan facility, a $120,000 working capital revolving credit facility, which was later amended to $70,000 in 2009, and a $60,000 pre‑funded synthetic letter of credit facility.

(a) Term Loan Principal Payments

Payments relating to the first lien term loan facility are made in equal quarterly installments in the amount of 0.25% of the initial loan balance adjusted for any prepayments. The first lien term loan facility also requires the Company to make annual payments that are based upon the outstanding amounts of “Excess Cash Flow”, as defined in the credit agreement, with the final installment payment on the balance of the loan payable at October 25, 2014.

On July 31, 2013, the Company purchased and extinguished $25,000 in aggregate principal amount of the first lien term loan at par value. The prepayment resulted in the write-off of approximately $77 of remaining unamortized deferred financing costs and the deferral of $212 of financing costs incurred to amend the first lien term loan agreement to provide for the prepayment. The quarterly first lien term loan principal payments are approximately $604.

On December 23, 2013, the first lien term loan was repaid concurrent with the acquisition of the Company by Rockwell Collins, Inc.

On July 10, 2013, the Company purchased and extinguished the remaining $45,000 in aggregate principal amount of the second lien term loan at par value. The prepayment resulted in the write-off of $391 of the remaining unamortized deferred financing costs.

9

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(b) Revolving Facilities

The Company's revolving credit facilities are in place principally to support the issuance of letters of credit. The working capital revolving credit facility is a $70,000 facility with a maturity date of October 25, 2014. At September 30, 2013 and December 31, 2012, the working capital revolving credit facility had outstanding commitments of $4,079 and $40,833, respectively, to secure outstanding letters of credit. The pre-funded synthetic letter of credit facility is a $60,000 facility with a maturity date of October 24, 2014. At September 30, 2013 and December 31, 2012, the Company had outstanding commitments of $59,951 and $36,070, respectively, to support letters of credit. At September 30, 2013 and December 31, 2012, there were no outstanding borrowings under either revolving facility.

Commitments related to the letters of credit are not reflected as liabilities on the Company’s consolidated statement of financial position because there have been no indications of nonperformance of the underlying contracts related to these letters of credit.

On December 23, 2013, these facilities were terminated concurrent with the acquisition of the Company by Rockwell Collins, Inc.

(c) Interest Rates

The first lien term loan, the second lien term loan and revolving credit facility are at variable interest rates. For the first lien and revolving credit facilities, the Company, at its discretion, has the option to select a Base rate plus 125 to 175 basis points or a Eurocurrency rate plus 225 to 275 basis points based upon the Company’s leverage ratio at the time of the rate adjustment. The Base rate is the greater of the prime lending rate of JP Morgan New York Branch or the Federal Funds effective rate plus 50 basis points.

The second lien term loan interest rate options include Base rate plus 500 basis points or the Eurocurrency rate plus 600 basis points. The Eurocurrency loan interest rate options are 30, 60, 90 or 180 day Eurocurrency Rate. The Eurocurrency rate may have a nine or twelve‑month interest period if agreed upon by the applicable lenders. The second lien term loan was extinguished during the three month period ended September 30, 2013.

(d) Origination Costs and Commitment fees

The Company has paid various loan origination fees which are deferred and amortized as interest expense over the term of the related debt using the effective interest rate method.

The Company pays commitment fees on any unused amounts of the commitments under the Revolving Credit Facility at an initial rate of 0.375% per annum. The Company also pays Letter of Credit Fees ranging from 2.25% to 2.75% per annum for performance, commercial and financial letters of credit. The fees are paid quarterly in arrears and determined by the Company’s leverage ratio at the end of each quarter.

(e) Restrictions and Covenant Compliance

The credit facilities are secured by substantially all of the Company’s assets other than real estate and require compliance with various representations, warranties and covenants. The facilities limit our ability to make certain payments. Additionally, the Company is required to maintain a first lien leverage ratio, as defined in the credit agreement, of no more than 6.00. The first lien leverage ratio at September 30, 2013 was 1.51. The Company was in compliance with all covenants at September 30, 2013.

Reflected in the table below is long‑term debt at the respective balance sheet dates:

(in thousands)	September 30, 2013			December 31, 2012
First lien term loan facility	$	240,919		$	267,865
Second lien term loan facility	—			45,000
Total debt	240,919			312,865
Less current portion of long-term debt	(2,415		)	(2,685		)
Long-term debt, net of current portion	$	238,504		$	310,180

10

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Interest paid during the nine‑month periods ended September 30, 2013 and 2012 was approximately $11,306 and $17,435, respectively. The interest payments for the nine-month periods ended September 30, 2013 and 2012 are inclusive of $3,482 and $3,514, respectively, of interest paid to the Company's pension plan in accordance with the terms of a non-cancelable facility leaseback. Refer to Note 14 for further details on real estate contributed to the Company's pension plan. Interest capitalized during the nine-month periods ended September 30, 2013 and 2012 was approximately $774 and $689, respectively. Non-cash amortization of deferred financing costs for each of the nine-month periods ended September 30, 2013 and 2012 was $1,496 and $1,235, respectively.

(9) Derivative Instruments and Hedging Activities

At September 30, 2013, the Company had approximately $238,504 in long-term variable rate debt with the potential for increased interest rates that could have an adverse effect on the Company’s earnings and cash flows. As of September 30, 2013 the Company is unhedged on its long-term variable rate debt.

Additionally the Company is exposed to the variability of the U.S. dollar amount of forecasted foreign currency expenditures caused by changes in currency rates. Foreign currency cash flow hedges were immaterial at September 30, 2013.

(10) Fair Value Measurements

(a) Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The assets and liabilities of the Company that are measured at fair value on a recurring basis are immaterial and primarily relate to the derivative instruments. In accordance with Accounting Standards Codification (ASC) 815, Derivatives and Hedging, the Company records its derivatives, which are foreign currency forward contracts, at fair value. To increase consistency and enhance disclosure of the fair value of financial instruments, U.S. GAAP has a fair value hierarchy to prioritize the inputs used to measure fair value into three categories. The Company’s derivative instruments have been classified as Level 2 instruments under the three tier fair value hierarchy in their entirety as the fair value measurements were based upon observable market data.

(b) Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. These measurements of fair value relate primarily to goodwill and intangible assets.

The Company assesses the fair value of goodwill on an annual basis or sooner if events or circumstances indicate that the carrying value may not be recoverable.

(c) Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, debt, and foreign currency forward contracts.

• The carrying amounts for cash and cash equivalents are representative of their respective fair value due to their short-term expected settlement.

• The fair value of the foreign currency forward contracts are not significant and are based on forward exchange rates and recorded in the financial statements at fair value as indicated in the preceding disclosure.

• The fair value of the first and second lien credit facility loans, considering fair value measurement under ASC 820 and the value a market participant would attribute to the debt based upon current market conditions, are based primarily on Level 2 inputs in the fair value hierarchy. The fair value of debt has been determined using a discounted cash flow analysis utilizing observable quoted rates for instruments with similar terms and maturities. In determining fair value, the Company considers the source of observable market data inputs, liquidity of the instrument, the credit risk and risk on nonperformance of itself or the counterparty to the contract.

11

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

The carrying amount and fair value of significant financial instruments at September 30, 2013 and December 31, 2012 are as follows:

	September 30, 2013				December 31, 2012
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Total Debt	$	240,919	$	236,101	$	312,865	$	306,777

(11) Income Taxes

At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.

During the nine month periods ended September 30, 2013 and 2012, the effective income tax rate on income from continuing operations was 31.9 percent and 70.8 percent, respectively. The lower effective income tax rate, as compared to the same period of the prior year, was primarily due to the favorable impacts of recording a research and development tax credit true-up tax returns for the years 2009 through 2012 in 2013, and the absence of the unfavorable impact from the goodwill impairment loss recorded in 2012.

The Company is currently not under audit by the IRS for any open tax year and is closed to further adjustments for all tax years ended December 31, 2009 and prior, with the exception of research and development credits for 2009. The Company is currently under audit in various U.S. states and non-U.S. jurisdictions. The U.S. state and non-U.S. jurisdictions have statutes of limitations generally ranging from 3 to 5 years. The Company believes it has adequately provided for any tax adjustments that may result from the various audits.The Company has gross unrecognized tax benefits recorded within Other long-term liabilities in the Condensed Consolidated Balance Sheets of $7,007 and $7,566 as of September 30, 2013 and December 31, 2012, respectively. The total amount of unrecognized tax benefits that, if recognized would affect the effective income tax rate were $2,131 and $1,505 as of September 30, 2013 and December 31, 2012.

The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

The Company includes interest and penalties related to unrecognized tax benefits in income tax expense. The total amount of interest and penalties recognized within Other long-term liabilities in the Condensed Consolidated Balance Sheet was $3,322 and $3,493 as of September 30, 2013 and December 31, 2012, respectively. The total amount of interest and penalties recorded as an expense or (income) within income tax expense in the Condensed Consolidated Statements of Operations was ($171) and $241 for the nine months ended September 30, 2013 and 2012, respectively.

Income taxes paid were $39,156 and $23,440 for the nine month periods ended September 30, 2013 and 2012, respectively. Cash payments for the nine months ended September 30, 2013 included $29,086 related to the gain from the sale of DSES.

(12) Defined Benefit and Other Postretirement Benefits

(a) Retirement Plan Summary Information

The company sponsors the ARINC Incorporated Retirement Income Plan (the Plan). The Plan has two sub‑plans; one for union employees and another for nonunion employees.

Union Sub-Plan

The union sub‑plan provides for the following benefits, based on employment date. The majority of the participants represent those who were employed on or after January 1, 2003. These participants will receive an annual retirement benefit calculated based on a flat amount and years of service. In addition, certain electing participants employed prior to January 1, 2003, will receive an annual retirement benefit calculated based on final average compensation and years of service.

12

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Approximately 9 percent of the Company’s employees are represented by collective bargaining agreements which are generally set to expire in 2017.

Non-Union Sub-Plan

The nonunion sub‑plan provides for benefits under a cash balance portion of the plan as well as a former benefits program. The cash balance portion of the plan represents a majority of the plan participants and allows for employees who retire or terminate to elect to receive their pension benefits in a lump sum, which is the present value of their future annuity that would have been earned under a traditional annuity-based pension plan. The former benefits program, for electing participants who were employed prior to December 31, 1998 will receive an annual retirement benefit calculated on the final average compensation and years of service.

Effective April 1, 2006, the Company froze participation in the cash balance portion of the plan and participants in the cash balance plan no longer accrue contribution credits. The cash balance account balances will continue to earn interest at the rate established by the plan and existing participants will continue to accrue vesting rights. The interest is determined on a simple interest basis with the interest rate for each year equal to the greater of 4% or the average of the yield on 5-year Treasury Constant Maturities (5-year Treasury Rate) for the month of November of the preceding year. Participants continue to receive their cash benefit under the current payment options of the Plan.

(b) Other Postretirement Benefits Summary Information

The Company maintains a plan that provides postretirement health coverage for many current and former employees and postretirement life insurance benefits for certain retirees. These benefits vary by employment status, age, service, and salary level at retirement. The coverage provided and the extent to which the retirees share in the cost of the program vary throughout the Company. In addition to an employee’s cash balance account, certain employees may also be eligible to receive benefits in the form of a Retiree Medical Supplement. This increased retirement income, based on years of service with the Company, can help participants pay for medical coverage in retirement.

The Company provides health care benefits on a contributory basis and life insurance benefits on a noncontributory basis to certain retired employees. Employees of the Company may become eligible for certain of these benefits after meeting minimum age and service requirements. The cost of providing retiree life insurance benefits is actuarially determined and accrued over the service period of an employee.

13

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Components of the net periodic benefit cost (benefit) of the plans, were as follows:

	Defined-Benefit Pension Plan						Other Post-Retirement Benefits
	Three Months Ended September 30						Three Months Ended September 30
(in thousands)	2013			2012			2013			2012
Service cost	$	375		$	473		$	38		$	71
Interest cost	3,128			3,712			87			114
Expected return on plan assets	(5,045		)	(5,517		)	—			—
Amortization of prior service cost	9			10			(48		)	(62		)
Amortization of net loss	372			288			—			—
Settlements	958			—			—			—
Net periodic (benefit) cost	$	(203	)	$	(1,034	)	$	77		$	123

	Defined-Benefit Pension Plan						Other Post-Retirement Benefits
	Nine Months Ended September 30						Nine Months Ended September 30
(in thousands)	2013			2012			2013			2012
Service cost	$	1,238		$	1,419		$	114		$	213
Interest cost	9,505			11,136			261			342
Expected return on plan assets	(16,186		)	(16,551		)	—			—
Amortization of prior service cost	28			30			(144		)	(186		)
Amortization of net loss	1,270			864			—			—
Settlements	5,551			—			—			—
Net periodic (benefit) cost	$	1,406		$	(3,102	)	$	231		$	369

As a result of the Company’s sale of DSES, the terminated employees who became employees of BAH may elect to receive their pension benefit in a lump sum. Because the cumulative lump-sum payments during the year are expected to exceed the sum of the service cost and interest cost components of the net periodic pension cost for the year, a significant plan event (settlement) is deemed to have occurred and therefore a settlement loss has been recognized in 2013 earnings.

(13) Stock‑Based Compensation

U.S. GAAP requires the measurement and recognition of compensation expense based on estimated fair value for all share‑based payment awards including stock options, employee stock purchases under employee stock purchase plans, nonvested share awards (restricted stock) and stock appreciation rights. The Company uses the Black‑Scholes pricing model as the most appropriate method for determining the estimated fair value of all applicable awards. For all awards, the Company has recognized compensation expense using a straight‑line amortization method over the vesting period of the award. Share‑based compensation expense is based on awards that ultimately vest; therefore, estimated share‑based compensation has been reduced for estimated forfeitures.

The Company recognizes compensation expense for its stock‑based compensation awards issued to employees that are expected to vest. Compensation cost is based on the fair value of awards as of the grant date.

Restricted Stock

In addition to stock options, the Company issues restricted stock units to members of the Board of Directors who elect to receive all or fifty percent of their annual retainer for their service to the Company. The restricted stock units vest over the service period, which is one year.

14

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

The following table summarizes the pre‑tax stock‑based compensation expense included in reported net income:

	Three Months Ended September 30
(in thousands)	2013		2012
Non-qualified stock options	$	125	$	767
Restricted stock units	79		79
Total stock-based compensation expense	$	204	$	846

	Nine Months Ended September 30
(in thousands)	2013		2012
Non-qualified stock options	$	336	$	2,276
Restricted stock units	236		236
Total stock-based compensation expense	$	572	$	2,512

(14) Related-Party Transactions and Transactions with Stockholders

In October 2007, the Company was acquired by The Carlyle Group (TCG) through a holding company, RHI. See Note 1 for a discussion of the transaction and organization. Entities controlled by TCG held $16,293 of the Company's second lien debt at December 31, 2012. As of September 30, 2013 the second lien term loan was extinguished and no position is held by related parties in the first lien term loan.

The Company entered into a management agreement with affiliates of the Carlyle Group to provide certain financial, strategic, advisory, consulting, and other services. Under the management agreement, the Company is obligated to pay affiliates of the Carlyle Group an annual management fee of $500 plus reasonable out-of-pocket expenses.

As discussed in Note 2, the Company sold its DSES business to Booz Allen Hamilton Holding Corporation (BAH) in November 2012. BAH is majority-owned by TCG, which is also the majority-owner of RHI. During the nine months ended September 30, 2013, the Company paid $3,563 back to BAH as a final purchase price adjustment on the DSES divestiture. This amount is reflected on the Condensed Consolidated Statement of Cash Flows as an investing cash outflow. The Company also received $2,883 during the nine months ended September 30, 2013 from BAH for transition services provided to BAH subsequent to the divestiture of DSES.

Related Party Lease

In November of 2004, the Company obtained approval from the Department of Labor to contribute real estate assets to its defined benefit pension plan. In connection with this transaction, the Company entered into a simultaneous agreement

to leaseback the contributed facilities for a period of twenty years, through November 1, 2024. As a result of the related party elements of the transaction, no sale or gain was recognized when the real estate was contributed to the pension plan. Instead, the Company recognized a deferred gain liability equal to the fair value of the contributed real estate.

The contributed real estate is comprised of the land and buildings of the Company's corporate headquarters, located in Annapolis, Maryland. The related liability will be amortized through 2024 as facility rents are paid, or until the building is sold, in accordance with the terms of the non-cancelable facility leaseback.

Subsequent to the September 30, 2013 balance sheet date, the Company’s pension plan began to actively market the contributed real estate for sale to a third party. If the property is sold, the proceeds from the sale will be retained for investment by the Company’s pension plan and the deferred gain liability will be removed from the Company’s balance sheet as the related party elements of the transaction would no longer exist. After the real estate is sold, the Company intends to continue leasing a portion of the Annapolis, Maryland facilities from the new owner.

15

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(15) Commitments and Contingencies

(a) Legal Proceedings and Claims

The Company is involved from time to time in various claims, proceedings and litigation generally incidental to the normal course of business. Various items which are pending or have been asserted against the Company include the following:

WMATA

On June 22, 2009 a Washington Metropolitan Area Transit Authority (WMATA) train collided with another WMATA train, which resulted in litigation proceedings against various defendants.

In May 2010, additional plaintiffs filed complaints that were added to the consolidated action, naming the Company as an additional defendant. The plaintiffs filed an amended Master Complaint in June 2010 naming the Company along with ADCO Circuits Inc. (ADCO) as captioned defendants.

Shortly before the statute of limitations expired on June 22, 2012, eight additional plaintiffs filed claims. No additional cases can be filed at this point. All but two of these cases have settled. The various defendants reached an agreement in principle for a coordinated defense approach, for contribution or indemnification claims and for claims related to damaged equipment and business interruption.

The Company maintains insurance policies for general liability and errors and omissions coverage. The primary layers of general liability and errors and omissions insurance limits have been exhausted by settlement payments. The excess general liability and errors and omissions carriers are providing coverage for any remaining exposure on a shared basis.

Based on the relevant facts, the Company believes that any remaining potential liability is expected to be covered by insurance and has not reflected any material accrued amounts in the condensed consolidated financial statements as of September 30, 2013.

Other Matters

Subsequent to the September 30, 2013 balance sheet date, a lawsuit was filed against the Company in the U.S. District Court of California, alleging a breach of contract with one of our customers. While the Company intends to vigorously defend against this claim, Management estimates the total amount of reasonably possible future loss the Company could incur on this matter ranges from $0 to $10 million. At the present time, the Company cannot conclude that any amount within this range is a better estimate than any other. The Company has not recorded a reserve for this claim as of September 30, 2013.

(b) Letters‑of‑Credit

The Company had letters‑of‑credit outstanding at September 30, 2013 totaling $64,030. The letters of credit are primarily issued in connection with certain foreign and domestic contracts in order to guarantee performance of certain requirements under the individual contracts. The letters‑of‑credit expire on dates ranging from 2013 to 2014. There have not been any events that have resulted in nonperformance of a contract related to these letters of credit.

(c) Self Insured Health Insurance Plan

The Company provides its employees with health benefits under a self‑insurance plan. Monthly payments for health claims are paid into a trust in the Company’s name and are withdrawn as claims are filed.

The Company also expenses estimated amounts to cover claims incurred but not reported under the self‑insurance plan. The Company has recorded an accrual for such incurred but not reported claims of $1,372 at September 30, 2013 and December 31, 2012, respectively. This amount is presented in accrued costs in the accompanying balance sheets.

16

ARINC Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(16) Subsequent Events

On December 23, 2013, the Company was acquired by Rockwell Collins, Inc. (Rockwell Collins) for $1.42 billion, net of cash acquired. The purchase price is subject to post-closing adjustments for potential changes in working capital and other items.

Rockwell Collins intends to divest the Company's ASES business, which provides military aircraft integration and modifications, maintenance, and logistics and support. The operating results of ASES are presented as continuing operations in these ARINC financial statements, but are presented as discontinued operations in the financial statements of Rockwell Collins prepared subsequent to the December 23, 2013 acquisition date.

As described in Note 14, the Company’s pension plan is in the process of actively marketing for sale to third parties certain real estate that the Company previously contributed to its pension plan.

As disclosed in Note 15, the Company is involved in a lawsuit that was filed subsequent to the September 30, 2013 balance sheet date.

17

EX-99.3

Exhibit 99.3

ROCKWELL COLLINS, INC.

UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On December 23, 2013 (the Acquisition Date), Rockwell Collins, Inc. (the Company or Rockwell Collins) acquired 100 percent of the outstanding common stock and voting interest of Radio Holdings, Inc. (Radio Holdings), the holding company of ARINC Incorporated (ARINC). Because Radio Holdings has no significant activity or operating subsidiaries other than ARINC, only the consolidated financial statements of ARINC and its subsidiaries have been utilized for purposes of preparing the unaudited condensed combined pro-forma financial information that is presented herein.

The ARINC purchase price was $1.42 billion, net of cash acquired. This amount is subject to post-closing adjustments for potential changes in working capital and other customary items. The Company funded the acquisition through a combination of long-term debt issued on December 16, 2013 and commercial paper borrowings.

The attached unaudited pro-forma condensed combined balance sheet has been prepared as of September 30, 2013 and gives effect to the acquisition and related financing transactions as if they had occurred on that date. The unaudited pro-forma condensed combined statement of income for the twelve months ended September 30, 2013 assumes the acquisition and related financing transactions were completed on October 1, 2012.

The unaudited pro-forma condensed combined financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) and should not be considered indicative of the financial position or results of operations that would have occurred if the acquisition had been completed on the dates indicated, nor are they indicative of the future financial position or results of operations of the Company following completion of the acquisition. In accordance with the rules and regulations of the SEC, the pro-forma condensed combined statements of income do not reflect potential revenue synergies or cost savings, nor do they reflect other costs relating to the integration of ARINC.

It should be noted that Rockwell Collins and ARINC have different fiscal year ends. Rockwell Collins operates on a 52/53 week fiscal year ending on the Friday closest to September 30. ARINC operates on a calendar year basis. Accordingly, the unaudited pro-forma income statement data for the twelve months ended September 30, 2013 has been derived from the Company’s historical consolidated statement of operations data for its fiscal year then ended. ARINC’s historical consolidated statement of operations data for the twelve months ended September 30, 2013 has been derived from ARINC’s historical condensed consolidated statement of operations for the three months ended December 31, 2012 and from ARINC’s historical condensed consolidated statement of operations for the nine months ended September 30, 2013. The unaudited pro-forma balance sheet data has been derived from the Company’s historical consolidated statement of financial position data as of September 30, 2013 and ARINC’s historical condensed consolidated statement of financial position data as of September 30, 2013.

The unaudited pro-forma condensed combined financial information should be read in conjunction with the accompanying notes thereto. In addition, the unaudited pro-forma condensed combined financial information was based upon and should be read in conjunction with the:

• Separate historical financial statements of Rockwell Collins as of and for the year ended September 30, 2013 and the related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013

• Separate historical financial statements of ARINC as of and for the year ended December 31, 2012 and the related notes, filed as Exhibit 99.1 to the Company's Form 8-K dated December 11, 2013 and incorporated herein by reference

• Separate historical financial statements of ARINC for the nine months ended September 30, 2013 and the related notes, included in Exhibit 99.2 hereto

The following unaudited pro-forma condensed combined financial information is based upon the historical consolidated financial information of Rockwell Collins and ARINC and has been prepared to reflect the acquisition using the acquisition method of accounting under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 805, Business Combinations (ASC 805). Under the acquisition method of accounting, the total consideration paid is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based upon their fair value, with any excess purchase price allocated to goodwill. The pro-forma purchase price allocation was based upon preliminary estimates of the fair value of

1

ROCKWELL COLLINS, INC.

UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL INFORMATION

ARINC’s tangible and intangible assets and liabilities as described in Note 4 of the accompanying Notes to the Unaudited Pro-Forma Condensed Combined Financial Statements.

As of the date of this Current Report, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary. The final determination of fair value and related allocations of the purchase price will be completed within the one year measurement period allowed by ASC 805. The size and breadth of the ARINC acquisition necessitates use of the measurement period to adequately analyze all the factors used in establishing the asset and liability fair values, including intangible assets, certain reserves, purchase price adjustments and the related tax impacts of any changes made. Any potential adjustments could be material to the preliminary values presented herein.

The unaudited pro-forma condensed combined financial information presents the combination of the historical financial statements of Rockwell Collins and ARINC, adjusted to give effect to (i) the issuance of long-term debt to finance the acquisition, (ii) the incurrence of commercial paper indebtedness supported by the Company’s new revolving credit facilities to finance the acquisition, (iii) the offering for sale of certain ARINC businesses acquired, and (iv) other modifications resulting from the acquisition, in each case based upon the assumptions and adjustments described in the notes accompanying the unaudited pro-forma condensed combined financial information. The historical consolidated financial information of Rockwell Collins and ARINC has also been adjusted in the unaudited pro-forma condensed combined financial statements to give effect to pro-forma events that are directly attributable to the acquisition, factually supportable, and with respect to the statement of income, expected to have a continuing impact on the combined results.

2

ROCKWELL COLLINS, INC.

UNAUDITED PRO-FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2013

(Unaudited; in millions)

	Rockwell
	Collins			ARINC							Pro-Forma				Pro-Forma
	(As Reported)			(As Reported)			Reclassifications				Adjustments				Combined
ASSETS
Current Assets:
Cash and cash equivalents	$	391		$	56		$	—			$	(39	)	5c	$	408
Receivables, net	1,058			143			(5		)	5a	(11		)	5d, 5e	1,185
Inventories, net	1,518			1			—				(1		)	5e	1,518
Current deferred income taxes	19			4			—				2			5p	25
Business held for sale	—			—			—				69			5e	69
Other current assets	108			4			—				—				112
Total current assets	3,094			208			(5		)		20				3,317
Property	773			132			—				3			5e, 5f	908
Goodwill	779			304			—				789			5g	1,872
Intangible Assets	288			61			—				329			5e, 5h	678
Long-term Deferred Income Taxes	245			—			(23		)	5b	(131		)	5p	91
Other Assets	221			4			5			5a	5			5i	235
TOTAL ASSETS	$	5,400		$	709		$	(23	)		$	1,015			$	7,101
LIABILITIES AND EQUITY
Current Liabilities:
Short-term debt	$	436		$	2		$	—			$	543		5j	$	981
Accounts payable	463			45			—				28			5e, 5k	536
Compensation and benefits	293			15			—				5			5e, 5l	313
Advance payments from customers	324			49			—				(2		)	5e	371
Accrued customer incentives	184			—			—				—				184
Product warranty costs	121			—			—				—				121
Liabilities associated with business held for sale	—			—			—				9			5e	9
Other current liabilities	160			1			—				(7		)	5e, 5p	154
Total current liabilities	1,981			112			—				576				2,669
Long-term Debt, Net	563			239			—				659			5j	1,461
Retirement Benefits	1,078			35			—				(18		)	5m	1,095
Other Liabilities	155			100			(23		)	5b	34			5n	266
Equity:
Common stock	2			—			—				—				2
Additional paid-in capital	1,469			276			—				(276		)	5o	1,469
Retained earnings/(Accumulated loss)	4,163			(26		)	—				13			5o	4,150
Accumulated other comprehensive loss	(1,287		)	(27		)	—				27			5o	(1,287		)
Common stock in treasury, at cost	(2,729		)	—			—				—				(2,729		)
Total shareowners' equity	1,618			223			—				(236		)		1,605
Noncontrolling interest	5			—							—				5
Total equity	1,623			223			—				(236		)		1,610
TOTAL LIABILITIES AND EQUITY	$	5,400		$	709		$	(23	)		$	1,015			$	7,101

See Notes to Unaudited Pro-Forma Condensed Combined Financial Statements.

3

ROCKWELL COLLINS, INC.

UNAUDITED PRO-FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2013

(Unaudited; in millions, except per share amounts)

	Rockwell
	Collins			ARINC							Pro-Forma				Pro-Forma
	(As Reported)			(As Reported)			Reclassifications				Adjustments				Combined
Sales	$	4,610		$	610		$	(5,220	)	6a	$	—			$	—
Product sales	—			—			4,279			6a	—				4,279
Service sales	—			—			941			6a	(104		)	6c	837
Total Sales	4,610			610			—				(104		)		5,116
Costs, expenses and other:
Cost of sales	3,224			438			(3,662		)	6a	—				—
Product cost of sales	—			—			2,987			6a	—				2,987
Service cost of sales	—			—			681			6a, 6b	(73		)	6d	608
Selling, general and administrative expenses	506			97			(6		)	6b	(15		)	6e	582
Interest expense	28			18			—				12			6f	58
Other income, net	(16		)	(1		)	—				—				(17		)
Total costs, expenses and other	3,742			552			—				(76		)		4,218
Income from continuing operations before income taxes	868			58			—				(28		)		898
Income tax expense	236			14			—				(10		)	6g	240
Income from continuing operations	$	632		$	44		$	—			$	(18	)		$	658
Earnings per share:
Basic	$	4.63													$	4.82
Diluted	4.58														4.76
Weighted average common shares:
Basic	136.5														136.5
Diluted	138.1														138.1

See Notes to Unaudited Pro-Forma Condensed Combined Financial Statements.

4

ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

On December 23, 2013 (the Acquisition Date), Rockwell Collins, Inc. (the Company or Rockwell Collins) acquired 100 percent of the outstanding common stock and voting interest of Radio Holdings, Inc., the holding company of ARINC Incorporated (ARINC).

The ARINC purchase price was $1.42 billion, net of cash acquired. This amount is subject to post-closing adjustments for potential changes in working capital and other customary items. The Company funded the acquisition through a combination of long-term debt issued on December 16, 2013 and commercial paper borrowings.

The unaudited pro-forma condensed combined financial information is based upon the historical consolidated financial information of Rockwell Collins and ARINC and has been prepared to reflect the acquisition based upon the acquisition method of accounting. The unaudited pro-forma condensed combined balance sheet has been prepared as of September 30, 2013 and gives effect to the acquisition and related financing transactions as if they had occurred on that date. The unaudited pro-forma condensed combined statement of income for the twelve months ended September 30, 2013 assumes the acquisition and related financing transactions were completed on October 1, 2012.

Under the acquisition method, the total consideration paid is allocated to the underlying tangible and intangible assets acquired and liabilities assumed, with any excess purchase price allocated to goodwill. The pro-forma purchase price allocation is based upon preliminary estimates of the fair value of ARINC’s tangible and intangible assets and liabilities and is subject to change, as described in Note 4.

The process for measuring the fair value of identifiable intangible assets, liabilities and certain tangible assets requires the use of significant assumptions, including estimates of future cash flows and appropriate discount rates. The ARINC asset and liability fair values are based upon the information that is currently available and various assumptions that the Company’s management believes are reasonable. The pro-forma adjustments included herein are preliminary and may be revised as additional information becomes available and as additional analysis is performed. Any potential future adjustments could be material. The final allocation of the purchase price will be completed within the one year measurement period allowed by the applicable accounting rules.

2. Accounting Policies

The unaudited pro-forma condensed combined financial statements reflect preliminary adjustments to conform ARINC’s results to the Company’s accounting policies. Significant differences between the respective accounting policies that have been adjusted include the following:

• ARINC recorded long-term accounts receivable expected to be collected beyond the next twelve months as current Billed accounts receivable, net. Rockwell Collins records long-term accounts receivable as Other Assets

• As a result of the ARINC acquisition, the Company’s and ARINC's combined service sales will be greater than ten percent of the total sales for the combined entities. Accordingly, service and product sales and service and product cost of sales are now presented separately

• ARINC historically classified certain material handling costs in selling, general, and administrative expense (SG&A). Rockwell Collins presents such items in cost of sales

The financial impact of these items on the unaudited pro-forma condensed combined financial statements is detailed in Notes 5 and 6.

3. Business Held for Sale

The Company intends to divest ARINC's Aerospace Systems Engineering and Support (ASES) business, which provides military aircraft integration and modifications, maintenance, logistics and support. The Company has

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ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

classified $69 million of assets related to ASES as a business held-for sale within current assets and $9 million of liabilities related to ASES as a business held-for-sale within current liabilities on the unaudited pro-forma condensed combined balance sheet. The ASES operating results have been eliminated from the unaudited pro-forma condensed combined statement of income.

4. Preliminary Pro-Forma Allocation of Purchase Price

The following table summarizes the ARINC assets acquired and liabilities assumed by Rockwell Collins, assuming the acquisition had been completed on September 30, 2013, reconciled to the actual consideration transferred, net of cash acquired.

(in millions)	September 30, 2013
Receivables and Other current assets	$	137
Business held-for-sale	69
Property	135
Intangible Assets	390
Other Assets	8
Total Identifiable Assets Acquired	739
Current Liabilities	(121		)
Liabilities held-for-sale	(9		)
Long-term deferred income taxes	(154		)
Retirement Benefits and Other Long-term Liabilities	(128		)
Total Liabilities Assumed	(412		)
Net Identifiable Assets Acquired, excluding Goodwill	327
Goodwill	1,093
Net Assets Acquired	$	1,420

5. Adjustments and Reclassifications to Unaudited Pro-Forma Condensed Combined Balance Sheet

The following pro-forma adjustments and reclassifications have been reflected in the unaudited pro-forma condensed combined balance sheet. All adjustments are based on current valuations, estimates, and assumptions and are subject to change within the one year measurement period allowed by ASC 805.

a. Receivables, net and Other Assets: As discussed in Note 2, ARINC recorded long-term accounts receivable as current. The reclassification reflects $5 million of ARINC long-term accounts receivable as Other Assets.

b. Long-term Deferred Income Taxes and Other Liabilities: Due to the fact that Rockwell Collins' net deferred tax position is a non-current asset, ARINC's $23 million non-current deferred tax liability has been reclassified to Long-term Deferred Income Taxes.

c. Cash and cash equivalents: Adjustments reflect the $1.437 billion of net debt proceeds described in Note 5j, offset by the $1.476 billion gross cash consideration paid to acquire ARINC as of the assumed September 30, 2013 acquisition date. The assumed gross cash consideration included $56 million paid for cash acquired. Therefore, the ARINC purchase price, net of cash acquired, was $1.420 billion. The excess of cash from the net debt proceeds over the ARINC net purchase price was primarily utilized to pay for various transaction related costs.

d. Receivables, net: The adjustment reflects $20 million of ARINC transaction-related expenses, as described in Note 5k, to be reimbursed by ARINC's previous owner offset by the classification of $31 million of ASES receivables as held for sale.

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ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

e. Business held for sale and Liabilities associated with business held for sale: As described in Note 3, the Company intends to divest the ASES business. As such, the assets and liabilities of ARINC’s ASES business were reclassified as held for sale. The $69 million of ASES assets and $9 million of ASES liabilities that are now classified as held for sale include the following:

Accounts receivable related to ASES	$	31
Inventories related to ASES	1
Property related to ASES	5
Intangible assets related to ASES	32
Business held for sale - assets	$	69

Accounts payable related to ASES	$	5
Compensation and benefits related to ASES	1
Advance payments from customers related to ASES	2
Other current liabilities related to ASES	1
Business held for sale - liabilities	$	9

f. Property: The adjustments detailed below reflect the net step-up of ARINC fixed assets to a preliminary estimate of fair value, partially offset by the classification of ASES property to a business held for sale.

Net increase in ARINC fixed assets from purchase accounting adjustments	$	8
Classification of ASES property as business held for sale	(5		)
	$	3

The estimated useful life of ARINC property acquired is approximately 16 years.

g. Goodwill: The adjustment reflects the elimination of $304 million of previously existing ARINC goodwill, offset by the addition of new goodwill resulting from the acquisition. The $1.093 billion of new goodwill is a pro-forma amount and is based upon the preliminary estimates and information summarized in Note 4.

h. Intangible Assets: The adjustments detailed below reflect the elimination of previously existing ARINC intangible assets, offset by a preliminary fair value estimate of the acquired identifiable intangible assets. A preliminary estimate of $32 million of the acquired intangible assets relate to the ASES business, which the Company intends to divest. Therefore, the intangible assets related to ASES have been reclassified to held for sale.

Write-off previously existing ARINC intangible assets	$	(61	)
Intangible assets recognized upon acquisition of ARINC, including ASES	422
Classification of ASES intangible assets as business held for sale	(32		)
	$	329

The preliminary estimates of fair value for the non-ASES identifiable intangible assets acquired and their average useful lives are as follows:

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ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

	Fair Value		Useful Life
Developed technology and patents	$	115	9 years
Backlog	29		3 years
Customer relationships	215		15 years
Trademarks and tradenames	31		Indefinite lived
	$	390

i. Other Assets: The adjustment assumes an increase of $6 million from debt issuance costs associated with the $900 million of long-term debt issued by the Company to finance the ARINC acquisition as discussed in Note 5j. The debt issuance costs are amortized over the life of the debt and are recorded in Interest expense. In addition, ARINC debt issuance costs of $1 million were written off concurrent with the repayment of ARINC debt as discussed in Note 5j.

j. Short-term debt and Long-term Debt, Net: The adjustment assumes the issuance of $1.437 billion of debt by the Company to finance the ARINC acquisition:

• $545 million of short-term commercial paper borrowings. A portion of the commercial paper proceeds were used to fund transaction related expenses

• $300 million of 3-year floating rate unsecured debt with an interest rate equal to three-month LIBOR plus 0.350 percent, reset quarterly

• $300 million of 10-year 3.70 percent fixed rate unsecured debt. The assumed net proceeds, after deducting $1 million of assumed discount and $2 million of assumed debt issuance costs were $297 million

• $300 million of 30-year 4.80 percent fixed rate unsecured debt. The assumed net proceeds, after deducting $1 million of assumed discount and $4 million of assumed debt issuance costs were $295 million

The assumed long-term debt issuances are recorded net of any unamortized discount in the unaudited pro-forma condensed combined balance sheet within Long-term Debt, Net. The assumed debt issuance costs are capitalized within Other Assets in the unaudited pro-forma condensed combined balance sheet as described in Note 5i.

ARINC debt, including $2 million of short-term debt and $239 million of long-term debt, was repaid on the Acquisition Date.

The table below summarizes the adjustments to Short-term debt.

Issuance of commercial paper	$	545
Elimination of ARINC debt	(2		)
	$	543

The table below summarizes the adjustments to Long-term Debt, Net.

Issuance of 3-year floating rate debt	$	300
Issuance of 10-year 3.70 percent fixed rate debt, net of discount	299
Issuance of 30-year 4.80 percent fixed rate debt, net of discount	299
Elimination of ARINC debt	(239		)
	$	659

The Company also entered into new credit agreements to ensure adequate commercial paper borrowing capacity

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ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

to fund the ARINC acquisition and to meet other short-term cash requirements. These new credit facilities consist of a five-year $1.0 billion credit facility and a 364-day $200 million credit facility. Borrowings under these credit facilities bear interest at LIBOR plus a variable margin based on the Company's unsecured long-term debt rating or, at the Company's option, rates determined by competitive bid. There were no outstanding borrowings under either revolving credit facility as of the Acquisition Date.

k. Accounts payable: The adjustment reflects the accrual of $20 million of ARINC transaction-related expenses and $13 million of Rockwell Collins transaction-related expenses that were incurred subsequent to September 30, 2013 offset by the classification of $5 million of ASES liabilities as held for sale.

l. Compensation and benefits: The adjustments reflect the accrual of $6 million for change in control severance payments made to ARINC executive leaders after the Acquisition Date offset by the classification of $1 million of ASES liabilities as held for sale.

m. Retirement benefits: The adjustment reflects an $18 million step-up in the fair value of ARINC pension plan assets. The September 30, 2013 ARINC balance includes a projected benefit obligation for pensions of $278 million which was calculated using a discount rate of 4.85 percent. The pro-forma fair value of ARINC's pension plan assets were $270 million at September 30, 2013 and have been adjusted to reflect the estimated fair value of $78 million of real estate that ARINC contributed to its pension plan in 2004, as discussed in Note 7. The ARINC September 30, 2013 balance sheet also includes a net liability for other post-retirement benefits of $9 million.

n. Other Liabilities: Adjustment reflects the $34 million step-up of the ARINC deferred gain liability to reflect the estimated fair value of the real estate contributed to the ARINC pension plan, as described in Note 7.

o. Additional paid-in capital, Retained earnings/(Accumulated loss) and Accumulated other comprehensive loss: Adjustments reflect the elimination of ARINC's $223 million shareowners' equity balance. The balances eliminated include:

• Additional paid-in capital of $276 million

• Accumulated loss of $26 million

• Accumulated other comprehensive loss of $27 million

In addition, the adjustment to Retained earnings/(Accumulated loss) reflects the accrual of $13 million for Rockwell Collins transaction related costs as described in Note 5k.

p. Tax assets and liabilities: The adjustments reflect the impact of pro-forma adjustments on the deferred tax accounts as follows:

• The $2 million increase in Current deferred income taxes reflects deferred tax assets established as a result of the change in control severance accrual described in Note 5l

• The $131 million decrease in Long-term Deferred Income Taxes is driven by an adjustment of $156 million relating to the preliminary estimate of acquired intangible assets that are not deductible for income tax purposes, offset by the elimination of $23 million in deferred tax liabilities associated with the legacy ARINC intangible assets and offset by $2 million for the net impact of other pro-forma adjustments

• The decrease in Other current liabilities reflects a $6 million tax benefit to income taxes payable for deductible transaction costs incurred by ARINC and Rockwell Collins as discussed in Note 5k

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ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

6. Adjustments and Reclassifications to Unaudited Pro-Forma Condensed Combined Statement of Income

The following pro-forma adjustments and reclassifications have been reflected in the unaudited pro-forma condensed combined statement of income. All purchase accounting related adjustments are based upon preliminary valuations, estimates, and assumptions and are subject to change within the one year measurement period allowed by ASC 805.

a. Sales and Cost of sales: The reclassifications reflect the segmentation of total sales into product and service sales, and total cost of sales into product and service cost of sales. This adjustment was necessitated by the additional service sales resulting from the ARINC acquisition. The following details the reclassifications made to service sales:

Reclassification of Rockwell Collins sales to service sales	$	331
Reclassification of ARINC sales to service sales	610
	$	941

Total cost of sales for the combined companies were segmented into product cost of sales and service cost of sales. In addition, the reclassifications reflect the presentation of $6 million of ARINC material and handling costs as service cost of sales in order to conform to Rockwell Collins' accounting policy. The following details the reclassifications made to service cost of sales:

Reclassification of Rockwell Collins cost of sales to service cost of sales	$	237
Reclassification of ARINC cost of sales to service cost of sales	438
Reclassification of ARINC material and handling cost from SG&A to service cost of sales	6
	$	681

b. Selling, general and administrative expenses: The reclassification represents the presentation of $6 million of ARINC material and handling costs as service cost of sales in order to conform to Rockwell Collins' accounting policy.

c. Service sales: The pro-forma adjustment reflects the elimination of $101 million of service sales related to ARINC’s ASES business, which is held for sale as described in Note 3 and the elimination of $3 million of service sales related to ARINC's Industry Standards business which was sold in December 2013.

d. Service cost of sales: The following pro-forma adjustments were made to service cost of sales:

Elimination of cost of sales of ASES business to be sold	$	(85	)	[i]
Elimination of cost of sales of Industry Standards business sold	(2		)	[i]
Amortization expense eliminated	(3		)	[ii]
Amortization of the intangible assets acquired	36			[ii]
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments	(13		)	[iii]
Elimination of certain pension related costs	(7		)	[iv]
Other	1
	$	(73	)

[i] These two adjustments reflect the elimination of cost of sales related to ARINC's ASES business, which is held for sale as described in Note 3 and the elimination of cost of sales related to ARINC's Industry Standards business which was sold in December 2013

[ii] These two adjustments eliminate amortization of ARINC historical intangible assets and replace it with new amortization for the acquired intangible assets described in Note 5h

[iii] This adjustment captures the net impact to depreciation expense resulting from various purchase accounting adjustments to fixed assets, as discussed in Note 5f

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ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

[iv] This adjustment eliminates certain pension related amortizations and settlement charges. Because ARINC's accumulated other comprehensive loss balance was eliminated upon the Acquisition Date, any amortization or settlement charges out of equity for pension and retirement benefit related items have also been eliminated

e. Selling, general and administrative (SG&A) expense: The adjustments detailed below reflect the elimination of SG&A expense related to ARINC's ASES business, which is held for sale as described in Note 3. In addition, the adjustments reflect the elimination of Rockwell Collins' fees for advisory, legal and accounting services incurred in anticipation of the acquisition. The adjustments also include the elimination of management fees paid to the prior owners of ARINC.

Elimination of SG&A expenses of ASES business to be sold	$	(12	)
Elimination of Rockwell Collins transaction-related fees	(2		)
Elimination of ARINC management fees	(1		)
	$	(15	)

f. Interest expense: The following pro-forma adjustments were made to interest expense:

Elimination of ARINC interest expense, including amortization of debt issuance costs	$	(14	)
Elimination of interest expense incurred on bridge loan financing	(1		)
Interest expense on new long-term debt issuance, including amortization of debt issuance costs	25
Interest expense on incremental commercial paper borrowings	2
	$	12

As discussed in Note 5j, the debt issued by the Company to finance the acquisition of ARINC consists of both fixed and variable rate debt instruments. The adjustments to interest expense utilized fixed rates where applicable and the current interest rate on the variable instruments. The following assumptions were used when calculating pro-forma interest expense:

• $300 million of 3-year floating rate unsecured debt with an interest rate equal to three-month LIBOR plus 0.350 percent, reset quarterly. The weighted-average interest rate for the twelve-month period ended September 30, 2013 was assumed to be 0.64 percent

• $300 million of 10-year 3.70 percent fixed rate unsecured debt

• $300 million of 30-year 4.80 percent fixed rate unsecured debt

• $545 million of commercial paper borrowings with an average assumed interest rate of 0.32 percent

A 12.5 basis point change in the interest rate on the floating rate debt would result in a change to the interest expense described in the table above of less than $1 million for the twelve months ended September 30, 2013.

The Company eliminated $1 million of interest expense incurred in 2013 related to a bridge facility which was assumed not to be required in the pro-forma condensed combined financial statements. The debt-related interest expense of ARINC was also eliminated as ARINC's debt was repaid on the Acquisition Date. The interest expense related to the payment of facility rents for ARINC's real estate contributed to its pension plan was not eliminated. Refer to Note 7 for further details on ARINC's facility leaseback and real estate assets held for sale.

g. Income tax expense: Adjustment reflects the applicable tax provision on the pro-forma adjustments presented in the unaudited pro-forma condensed combined statements of income. The pro-forma adjustments pertain primarily to the U.S. tax jurisdiction, and are subject to a 35% federal tax rate, plus applicable state taxes.

7. Real Estate Contributed to ARINC Pension Plan

In November of 2004, ARINC obtained approval from the Department of Labor to contribute real estate assets to their defined benefit pension plan. In connection with this transaction, ARINC entered into a simultaneous agreement to

11

ROCKWELL COLLINS, INC.

NOTES TO THE UNAUDITED PRO-FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

leaseback the contributed facilities for a period of twenty years, through November 1, 2024. The contributed real estate is comprised of the land and buildings of the ARINC corporate headquarters, located in Annapolis, Maryland.

As a result of the related party elements of the transaction, no sale or gain was recognized when the real estate was contributed to ARINC's pension plan. Instead, ARINC recognized a deferred gain liability equal to the fair value of the contributed real estate. The related liability will be amortized through 2024 as facility rents are paid, or until the building is sold, in accordance with the terms of the non-cancelable facility leaseback.

Subsequent to the September 30, 2013 balance sheet date, the ARINC pension plan began to actively market the contributed real estate for sale to a third party. If the property is sold, the proceeds from the sale will be retained for investment by ARINC's pension plan and the deferred gain liability will be removed from the Company's balance sheet as the related party elements of the transaction would no longer exist. After the real estate is sold, the Company intends to continue leasing a portion of the Annapolis, Maryland facilities from the new owner.

12