Rockwell Collins Reports Earnings Per Share of 33 Cents; Company Continues to Generate Significant Free Cash Flow

CEDAR RAPIDS, Iowa (September 23, 2003) - Rockwell Collins, Inc. (NYSE: COL) today reported net income of $60 million or 33 cents per share for the third quarter ended June 30, 2002. The Company also generated free cash flow of $197 million for the nine months ended June 30, 2002.

Clay Jones, chairman, president and chief executive officer of Rockwell Collins said, "Our diverse and balanced business model continues to help us achieve strong profitability in the markets we serve. In addition, our continued focus on reducing both accounts receivable and inventory levels this year have led to the generation of significant free cash flow."

Net income for the third quarter ended June 30, 2002 was $60 million, or 33 cents per share, compared with pro forma net income of $71 million, or 38 cents per share, for the same period last year. Sales for the third quarter of fiscal 2002 were $623 million versus $727 million for the same period a year ago. Free cash flow for the nine months ended June 30, 2002 was $197 million, or 119% of net income, representing a $273 million improvement over the prior year.

Due to the strong free cash flow performance through June 30, 2002, the Company has increased its estimate of free cash flow for the year to a range of $250 to $275 million from its previous guidance of approximately $175 to $225 million. The Company also anticipates earnings per share to be in the range of $1.23 to $1.26 for fiscal 2002.

Following is a discussion of sales and operating margins for each business segment.

Commercial Systems

Commercial Systems, which provides aviation electronics and in-flight entertainment products to air transport, business and regional aircraft manufacturers and airlines worldwide, reported sales of $336 million in the third quarter of fiscal 2002, a decline of $92 million or 21% from last year. This decline resulted primarily from lower sales of commercial avionics to the air transport marketplace and lower business and regional jet avionics sales, due to the effects of the strike at Bombardier. Commercial Systems' operating margin for the third quarter of fiscal 2002 decreased to 13.1%, compared with 16.6% for the same period in 2001, as a result of lower commercial avionics sales, a less favorable sales mix and higher costs related to the development of the integrated information systems product.

Government Systems

Government Systems, which provides aviation electronics and communications products to the United States government, foreign militaries and manufacturers of military aircraft, reported sales of $287 million in the third quarter of fiscal 2002, a modest decline from the $299 million in the third quarter of last year. Higher sales in GPS products resulting from military surge activities, and the C-130 integrated applications product line, nearly offset a $26 million decline in sales related to a KC-135 aircraft retrofit program that was completed in the third quarter of fiscal 2001. Government Systems' operating margin for the third quarter of fiscal 2002 increased to 17.4% compared with 15.4% in 2001 as a result of an improved mix of products sold and higher engineering productivity.

Corporate

Due to a favorable resolution of a legal matter associated with the sale of a business several years ago, the Company reversed a reserve in the third quarter of fiscal 2002 which increased earnings per share by approximately $.01.

Business Highlights for the Third Quarter of Fiscal 2002:

• As a member of the Boeing Joint Tactical Radio System team, Rockwell Collins will provide software-defined radio communications technology and equipment to the program, which is anticipated to provide more than $2 billion in revenue to the Company over the life of the program. The initial contract award when fully funded will be worth $110 million.
• The Company was selected to provide avionics hardware for the U.S. Special Operations Forces Common Avionics Architecture System upgrade program. The initial contract award is potentially worth $40 million.
• Rockwell Collins successfully flew its first projection display system on a F/A-18E/F Super Hornet at the Naval Air Warfare Center in China Lake, California.
• United Airlines selected the Company to conduct a trial of its Video Intelligence System, which will provide cabin surveillance on one of its 747-400 aircraft.
• In June 2002, Rockwell Collins entered into a definitive agreement to acquire Airshow, Inc., to better serve the business jet cabin management and passenger information systems marketplace.
• Rockwell Collins was selected by American Eagle Airlines to provide service and support under a ten-year agreement on their Bombardier Regional Jet fleet.

Rockwell Collins Chairman, President and CEO Clay Jones and Senior Vice President and CFO Larry Erickson will conduct an earnings conference call at 9:00 a.m. Eastern time on July 16, 2002. Individuals may listen to the call on the Internet at www.rockwellcollins.com . Listeners are encouraged to go to the Investor Relations portion of the web site at least 15 minutes prior to the call to download and install any necessary software. The call will be available for replay on the Internet at www.rockwellcollins.com through August 16, 2002.

This press release contains statements (including certain projections and business trends) that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including, but not limited to the impact of terrorist attacks and their aftermath; the timing related to restoring consumer confidence in air travel; the health of the global economy as well as the commercial aerospace industry; domestic and foreign government spending, budgetary and trade policies; economic and political changes in international markets where the Company competes; demand for and market acceptance of new and existing products, including potential cancellation or delay of orders by commercial customers; successful development of advance technologies; our ability to successfully execute to our internal performance plans; favorable outcomes of certain customer procurements; changes to government policies and regulations; new aircraft build rates; product reliability and cost of repairs; the cyclical nature of some of the Company's businesses; factors that result in significant disruption to air travel or reduction to airline profitability; customers willingness to outsource avionics maintenance and service; successful execution of our acquisition plans; our ability to remain competitive in a highly competitive and rapidly changing marketplace; implementation of restructuring actions in accordance with management plans; our ability to handle production rate increases and decreases; and the uncertainties of litigation, as well as other risks and uncertainties, including but not limited to those detailed from time to time in the Company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof.

Rockwell Collins is a world leader in the design, production and support of communications and aviation electronics solutions for commercial and government customers worldwide. Additional information is available at www.rockwellcollins.com .

# # #

530-NR-52