Rockwell Collins States FY 2001 EPS Remains on Target and Announces Restructuring Charge for the Fourth Quarter of FY 2001

CEDAR RAPIDS, Iowa (September 25, 2001) - Rockwell Collins announced that the company is on target for achieving its FY 2001 earnings per share of $1.40 to $1.45, consistent with previously announced guidance, and is anticipating revenues for FY 2001 to be slightly above $2.8 billion.

Clay Jones, president and chief executive officer of Rockwell Collins said, “We remain confident that we will be able to meet our FY 2001 earnings per share objectives. However, due to the current economic situation, we are taking aggressive action to address the expected reduction in next year's revenues. To that end, we are planning a workforce reduction of approximately 2,600 employees or 15% of our workforce in FY 2002 and will be taking a restructuring charge in the fourth quarter of FY 2001.” Due to the effects of the current market environment, the company also is taking an impairment charge in the fourth quarter of FY 2001 related to intangibles on its in-flight entertainment business. These actions are intended to enable the company to be well positioned to effectively compete in the commercial and military marketplaces for both the long and short term.

Jones continued, “We expect to see significant challenges next year. Given the current volatility of the marketplace, we are continuing to assess the impact to our financial forecast for FY 2002. However, since approximately 40% of our revenues are in defense electronic products we believe our government systems business will offset some of the impact of the commercial markets downturn. We have extensive product offerings in GPS missile guidance systems, mobile HF and VHF secure communication systems, GPS hand held receivers and communication jammers. In addition, Rockwell Collins has a strong balance sheet with a very modest debt to capital ratio that will provide the financial support needed during this commercial market downturn.”

This news release contains statements relating to future results that are “forward-looking” 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, those detailed from time to time in the company’s Securities and Exchange Commission filings.

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