Q: Rockwell Collins is very focused on accelerating its return to growth. As you look ahead, what solutions and trends will best help your pursuit of that goal? Kent Statler: In our commercial business we see a robust, opportunity-rich marketplace that can drive expansion for Commercial Systems in the years to come. In addition to maintaining our historically high capture rate for airline-selectable equipment, today we're benefitting from manufacturers' standardization of systems across the newest aircraft fleets. So when we secure a win on a new platform, it creates predictable, positive revenue benefits for years to come. We see that in the Boeing 787 Dreamliner and the Airbus A350 XWB, along with this year’s displays win for the Boeing 737 MAX, which already has more than 900 orders. And, notably, Pro Line Fusion^®, our integrated avionics suite targeted toward the business and regional aviation market, has been selected for more than 15 platforms that have yet to enter service, which will more than offset the continued weakness in the light-jet market.

Phil Jasper: As for Government Systems, it’s no secret that in the last few years there has been a softening of domestic demand in the U.S. government sector. But what is exciting are the opportunities we see internationally; in fact, we see the bulk of the growth in Government Systems over the next five years coming from international customers. As geopolitical conditions continue to evolve, governments around the world are facing increased security challenges. And they have a greater appetite for technologies that address those challenges. So when we develop new solutions, we make sure that we are not working solely to satisfy a domestic military market; we are also designing them to be exportable, so they can be tailored to satisfy the needs of a growing global defense market. In terms of growth drivers, we see strong customer interest in our FireStorm^™ integrated targeting system; in networked communications, including airborne radios; and in avionics for helicopters and fixed-wing aircraft.

Q: Certainly, much of the company’s future growth will come from overseas markets. But many of your competitors must be thinking the same thing. How can Rockwell Collins position itself for success? Colin Mahoney: What’s especially important is to align the organization so we can create a higher level of customer affinity — and in so doing we gain what we call "privileged insight." It is an approach that helps us gain a deeper understanding of customer needs, requirements and expectations. To do this, we employ a methodology that brings together essential business development elements to create a diverse but unified team that can share and leverage information and expertise. We not only want to understand unique market and customer requirements, but we also strive to partner in establishing critical capability requirements as customers move toward a purchase decision.

Q: Where has that approach proved beneficial? Colin Mahoney: We have targeted several emerging markets as key focus areas of growth, and we are working to implement our business development strategies in these markets today. Brazil offers an excellent example of our methodology at work and how it can create greater customer affinity. Our long history of excellent commercial performance for Embraer was key to our Pro Line Fusion^® KC-390 win. We have further strengthened our relationship with Brazil’s military forces with a new contract for the Talon airborne radio, which will be on a variety of rotary-wing aircraft. Today, as the armed forces in Brazil look to revamp their entire communications network, we are very well-positioned to expand those relationships going forward.

Q: Rockwell Collins always talks about "building trust every day." How do you go about actually putting that into practice, and why is trust essential to strong, long-term customer relationships? Kent Statler: Earning trust means delivering reliable systems and services on time, every time, but it also goes much further. We have seen a rapid escalation in customers' need for connectivity, for information management, for big data and the ability to manage that seamlessly, within the aircraft and between the aircraft and ground operations. A good example is Airbus' choice of our Information Management Onboard solution for the A350, providing a platform and information gateway that enables real-time airline flight operational logistics, aircraft maintenance diagnostics and airline software applications hosting. The demand trajectory for those kinds of solutions is going to continue, and customers are seeking partners with the expertise to securely, reliably and efficiently manage that information flow. Our major investments in integrated software solutions and integrated and synchronized aircraft information management systems and services, like our pending ARINC acquisition, are designed to address that need. And, as these new technologies prove themselves through deployment, we will further build our legacy of trusted performance.

Phil Jasper: When you think about the technologies and systems we offer, many of them are mission critical — they make it possible for pilots to fly and land safely or for military personnel in the field to communicate effectively. In that context, reliability and safety are paramount. Customers want to know that our solutions are reliable and secure and that we will be there to stand by our products and continue to improve them over the long term. And they need to see us as a trusted partner that fully understands their needs and operational requirements.

Colin Mahoney: Building trust internationally, specifically in emerging markets, takes on a little different meaning. All the tenets that have made us successful in developed markets obviously still hold, but with the added dynamic of the emerging markets' more limited history with our company. In some emerging countries that experience is more episodic and in others, such as China, more sustained. Our focus is on ensuring that we execute flawlessly on all commitments, understand the right networks and relationships to be successful and implement our strategies at an appropriate pace.