Delaware | 13-1673581 | |
State or other jurisdiction of incorporation or organization | I.R.S. employer identification no. | |
2941 Fairview Park Drive, Suite 100 Falls Church, Virginia | 22042-4513 | |
Address of principal executive offices | Zip code |
PART I - | PAGE | |
Item 1 - | ||
Item 2 - | ||
Item 3 - | ||
Item 4 - | ||
PART II - | ||
Item 1 - | ||
Item 1A - | ||
Item 2 - | ||
Item 6 - | ||
Three Months Ended | |||||||
(Dollars in millions, except per-share amounts) | October 2, 2016 | October 4, 2015 | |||||
Revenue: | |||||||
Products | $ | 4,844 | $ | 5,119 | |||
Services | 2,887 | 2,875 | |||||
7,731 | 7,994 | ||||||
Operating costs and expenses: | |||||||
Products | 3,757 | 4,037 | |||||
Services | 2,434 | 2,447 | |||||
General and administrative (G&A) | 471 | 476 | |||||
6,662 | 6,960 | ||||||
Operating earnings | 1,069 | 1,034 | |||||
Interest, net | (23 | ) | (23 | ) | |||
Other, net | 2 | 2 | |||||
Earnings from continuing operations before income tax | 1,048 | 1,013 | |||||
Provision for income tax, net | 281 | 280 | |||||
Earnings from continuing operations | 767 | 733 | |||||
Discontinued operations, net of tax benefit of $46 in 2016 and $7 in 2015 | (84 | ) | — | ||||
Net earnings | $ | 683 | $ | 733 | |||
Earnings per share | |||||||
Basic: | |||||||
Continuing operations | $ | 2.52 | $ | 2.31 | |||
Discontinued operations | (0.27 | ) | — | ||||
Net earnings | $ | 2.25 | $ | 2.31 | |||
Diluted: | |||||||
Continuing operations | $ | 2.48 | $ | 2.28 | |||
Discontinued operations | (0.27 | ) | — | ||||
Net earnings | $ | 2.21 | $ | 2.28 |
Nine Months Ended | |||||||
(Dollars in millions, except per-share amounts) | October 2, 2016 | October 4, 2015 | |||||
Revenue: | |||||||
Products | $ | 14,556 | $ | 15,189 | |||
Services | 8,564 | 8,471 | |||||
23,120 | 23,660 | ||||||
Operating costs and expenses: | |||||||
Products | 11,287 | 11,887 | |||||
Services | 7,224 | 7,185 | |||||
G&A | 1,417 | 1,446 | |||||
19,928 | 20,518 | ||||||
Operating earnings | 3,192 | 3,142 | |||||
Interest, net | (68 | ) | (64 | ) | |||
Other, net | 13 | 5 | |||||
Earnings from continuing operations before income tax | 3,137 | 3,083 | |||||
Provision for income tax, net | 882 | 882 | |||||
Earnings from continuing operations | 2,255 | 2,201 | |||||
Discontinued operations, net of tax benefit of $46 in 2016 and $7 in 2015 | (97 | ) | — | ||||
Net earnings | $ | 2,158 | $ | 2,201 | |||
Earnings per share | |||||||
Basic: | |||||||
Continuing operations | $ | 7.38 | $ | 6.79 | |||
Discontinued operations | (0.31 | ) | — | ||||
Net earnings | $ | 7.07 | $ | 6.79 | |||
Diluted: | |||||||
Continuing operations | $ | 7.25 | $ | 6.68 | |||
Discontinued operations | (0.31 | ) | — | ||||
Net earnings | $ | 6.94 | $ | 6.68 |
Three Months Ended | Nine Months Ended | |||||||||||||
(Dollars in millions) | October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | ||||||||||
Net earnings | $ | 683 | $ | 733 | $ | 2,158 | $ | 2,201 | ||||||
Gains (losses) on cash flow hedges | 102 | 53 | 260 | (331 | ) | |||||||||
Unrealized losses on securities | (1 | ) | (4 | ) | (5 | ) | (4 | ) | ||||||
Foreign currency translation adjustments | (43 | ) | (195 | ) | 82 | (230 | ) | |||||||
Change in retirement plans' funded status | 65 | 99 | 191 | 287 | ||||||||||
Other comprehensive income (loss), pretax | 123 | (47 | ) | 528 | (278 | ) | ||||||||
Provision (benefit) for income tax, net | 49 | 46 | 133 | (25 | ) | |||||||||
Other comprehensive income (loss), net of tax | 74 | (93 | ) | 395 | (253 | ) | ||||||||
Comprehensive income | $ | 757 | $ | 640 | $ | 2,553 | $ | 1,948 |
(Unaudited) | |||||||
(Dollars in millions) | October 2, 2016 | December 31, 2015 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 2,303 | $ | 2,785 | |||
Accounts receivable | 3,502 | 3,446 | |||||
Contracts in process | 5,213 | 4,357 | |||||
Inventories | 3,657 | 3,366 | |||||
Other current assets | 622 | 617 | |||||
Total current assets | 15,297 | 14,571 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment, net | 3,445 | 3,466 | |||||
Intangible assets, net | 715 | 763 | |||||
Goodwill | 11,581 | 11,443 | |||||
Other assets | 1,630 | 1,754 | |||||
Total noncurrent assets | 17,371 | 17,426 | |||||
Total assets | $ | 32,668 | $ | 31,997 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | $ | 1 | $ | 501 | |||
Accounts payable | 2,276 | 1,964 | |||||
Customer advances and deposits | 5,249 | 5,674 | |||||
Other current liabilities | 4,367 | 4,306 | |||||
Total current liabilities | 11,893 | 12,445 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 3,885 | 2,898 | |||||
Other liabilities | 5,573 | 5,916 | |||||
Commitments and contingencies (See Note L) | |||||||
Total noncurrent liabilities | 9,458 | 8,814 | |||||
Shareholders' equity: | |||||||
Common stock | 482 | 482 | |||||
Surplus | 2,789 | 2,730 | |||||
Retained earnings | 24,661 | 23,204 | |||||
Treasury stock | (13,724 | ) | (12,392 | ) | |||
Accumulated other comprehensive loss | (2,891 | ) | (3,286 | ) | |||
Total shareholders' equity | 11,317 | 10,738 | |||||
Total liabilities and shareholders' equity | $ | 32,668 | $ | 31,997 |
Nine Months Ended | |||||||
(Dollars in millions) | October 2, 2016 | October 4, 2015 | |||||
Cash flows from operating activities - continuing operations: | |||||||
Net earnings | $ | 2,158 | $ | 2,201 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation of property, plant and equipment | 272 | 272 | |||||
Amortization of intangible assets | 70 | 88 | |||||
Equity-based compensation expense | 76 | 84 | |||||
Deferred income tax provision | 218 | 88 | |||||
Discontinued operations, net of tax | 97 | — | |||||
(Increase) decrease in assets, net of effects of business acquisitions: | |||||||
Accounts receivable | (52 | ) | 254 | ||||
Contracts in process | (957 | ) | 391 | ||||
Inventories | (288 | ) | (29 | ) | |||
Increase (decrease) in liabilities, net of effects of business acquisitions: | |||||||
Accounts payable | 305 | 334 | |||||
Customer advances and deposits | (574 | ) | (1,508 | ) | |||
Other, net | 47 | 95 | |||||
Net cash provided by operating activities | 1,372 | 2,270 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (244 | ) | (360 | ) | |||
Maturities of held-to-maturity securities | — | 500 | |||||
Proceeds from sales of assets | 4 | 290 | |||||
Other, net | (42 | ) | (12 | ) | |||
Net cash (used) provided by investing activities | (282 | ) | 418 | ||||
Cash flows from financing activities: | |||||||
Purchases of common stock | (1,514 | ) | (2,729 | ) | |||
Proceeds from fixed-rate notes | 992 | — | |||||
Dividends paid | (678 | ) | (655 | ) | |||
Repayment of fixed-rate notes | (500 | ) | (500 | ) | |||
Proceeds from stock option exercises | 211 | 240 | |||||
Other, net | (39 | ) | (29 | ) | |||
Net cash used by financing activities | (1,528 | ) | (3,673 | ) | |||
Net cash used by discontinued operations | (44 | ) | (31 | ) | |||
Net decrease in cash and equivalents | (482 | ) | (1,016 | ) | |||
Cash and equivalents at beginning of period | 2,785 | 4,388 | |||||
Cash and equivalents at end of period | $ | 2,303 | $ | 3,372 | |||
Supplemental cash flow information: | |||||||
Cash payments for: | |||||||
Income taxes | $ | 677 | $ | 776 | |||
Interest | $ | 58 | $ | 62 |
Common Stock | Retained | Treasury | Accumulated Other Comprehensive | Total Shareholders’ | |||||||||||||||||||
(Dollars in millions) | Par | Surplus | Earnings | Stock | Loss | Equity | |||||||||||||||||
December 31, 2015 | $ | 482 | $ | 2,730 | $ | 23,204 | $ | (12,392 | ) | $ | (3,286 | ) | $ | 10,738 | |||||||||
Net earnings | — | — | 2,158 | — | — | 2,158 | |||||||||||||||||
Cash dividends declared | — | — | (701 | ) | — | — | (701 | ) | |||||||||||||||
Equity-based awards | — | 59 | — | 206 | — | 265 | |||||||||||||||||
Shares purchased | — | — | — | (1,538 | ) | — | (1,538 | ) | |||||||||||||||
Other comprehensive income | — | — | — | — | 395 | 395 | |||||||||||||||||
October 2, 2016 | $ | 482 | $ | 2,789 | $ | 24,661 | $ | (13,724 | ) | $ | (2,891 | ) | $ | 11,317 | |||||||||
December 31, 2014 | $ | 482 | $ | 2,548 | $ | 21,127 | $ | (9,396 | ) | $ | (2,932 | ) | $ | 11,829 | |||||||||
Net earnings | — | — | 2,201 | — | — | 2,201 | |||||||||||||||||
Cash dividends declared | — | — | (673 | ) | — | — | (673 | ) | |||||||||||||||
Equity-based awards | — | 149 | — | 210 | — | 359 | |||||||||||||||||
Shares purchased | — | — | — | (2,729 | ) | — | (2,729 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (253 | ) | (253 | ) | |||||||||||||||
October 4, 2015 | $ | 482 | $ | 2,697 | $ | 22,655 | $ | (11,915 | ) | $ | (3,185 | ) | $ | 10,734 |
• | ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. We adopted ASU 2016-09 in the second quarter of 2016. ASU 2016-09 impacted several aspects of our accounting for share-based payment transactions. The ASU requires that excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the Consolidated Statement of Earnings. Previously, these amounts were recognized directly to |
• | ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires the recognition of lease rights and obligations as assets and liabilities on the balance sheet. Previously, lessees were not required to recognize on the balance sheet assets and liabilities arising from operating leases. The ASU also requires disclosure of key information about leasing arrangements. ASU 2016-02 is effective on January 1, 2019, using the modified retrospective method of adoption, with early adoption permitted. We are in the preliminary phases of assessing the effect of the ASU on our portfolio of leases. While this assessment continues, we have not yet selected a transition date nor have we yet determined the effect of the ASU on our Consolidated Financial Statements. |
• | ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues. ASU 2016-15 is effective retrospectively on January 1, 2018, with early adoption permitted. We have not yet determined the effect of the ASU on our Consolidated Financial Statements nor have we selected a transition date. |
Aerospace | Combat Systems | Information Systems and Technology | Marine Systems | Total Goodwill | |||||||||||||||
December 31, 2015 (a) | $ | 2,542 | $ | 2,591 | $ | 6,021 | $ | 289 | $ | 11,443 | |||||||||
Acquisitions (b) | 28 | — | 6 | — | 34 | ||||||||||||||
Other (c) | 61 | 43 | — | — | 104 | ||||||||||||||
October 2, 2016 | $ | 2,631 | $ | 2,634 | $ | 6,027 | $ | 289 | $ | 11,581 |
Gross Carrying Amount (a) | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount (a) | Accumulated Amortization | Net Carrying Amount | ||||||||||||||
October 2, 2016 | December 31, 2015 | ||||||||||||||||||
Contract and program intangible assets (b) | $ | 1,636 | $ | (1,270 | ) | $ | 366 | $ | 1,626 | $ | (1,214 | ) | $ | 412 | |||||
Trade names and trademarks | 470 | (141 | ) | 329 | 455 | (127 | ) | 328 | |||||||||||
Technology and software | 120 | (100 | ) | 20 | 119 | (96 | ) | 23 | |||||||||||
Other intangible assets | 154 | (154 | ) | — | 154 | (154 | ) | — | |||||||||||
Total intangible assets | $ | 2,380 | $ | (1,665 | ) | $ | 715 | $ | 2,354 | $ | (1,591 | ) | $ | 763 |
(a) | Change in gross carrying amounts consists primarily of adjustments for foreign currency translation and acquired intangible assets. |
(b) | Consists of acquired backlog and probable follow-on work and associated customer relationships. |
Three Months Ended | Nine Months Ended | |||||||
October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||
Basic weighted average shares outstanding | 303,938 | 316,680 | 305,445 | 323,996 | ||||
Dilutive effect of stock options and restricted stock/RSUs* | 5,790 | 5,258 | 5,679 | 5,418 | ||||
Diluted weighted average shares outstanding | 309,728 | 321,938 | 311,124 | 329,414 |
• | Level 1 – quoted prices in active markets for identical assets or liabilities; |
• | Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly; and |
• | Level 3 – unobservable inputs significant to the fair value measurement. |
Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) (b) | ||||||||||||
Financial Assets (Liabilities) (a) | October 2, 2016 | ||||||||||||||
Available-for-sale securities | $ | 179 | $ | 179 | $ | 93 | $ | 86 | |||||||
Derivatives | (403 | ) | (403 | ) | — | (403 | ) | ||||||||
Long-term debt, including current portion | (3,923 | ) | (4,002 | ) | — | (4,002 | ) | ||||||||
December 31, 2015 | |||||||||||||||
Available-for-sale securities | $ | 186 | $ | 186 | $ | 124 | $ | 62 | |||||||
Derivatives | (673 | ) | (673 | ) | — | (673 | ) | ||||||||
Long-term debt, including current portion | (3,425 | ) | (3,381 | ) | — | (3,381 | ) |
October 2, 2016 | December 31, 2015 | ||||||
Current deferred tax asset | $ | 8 | $ | 3 | |||
Current deferred tax liability | (1,048 | ) | (829 | ) | |||
Noncurrent deferred tax asset | 1,152 | 1,272 | |||||
Noncurrent deferred tax liability | (88 | ) | (75 | ) | |||
Net deferred tax asset | $ | 24 | $ | 371 |
October 2, 2016 | December 31, 2015 | ||||||
Contract costs and estimated profits | $ | 26,633 | $ | 20,742 | |||
Other contract costs | 811 | 965 | |||||
27,444 | 21,707 | ||||||
Advances and progress payments | (22,231 | ) | (17,350 | ) | |||
Total contracts in process | $ | 5,213 | $ | 4,357 |
October 2, 2016 | December 31, 2015 | ||||||
Work in process | $ | 2,204 | $ | 1,889 | |||
Raw materials | 1,380 | 1,376 | |||||
Finished goods | 33 | 28 | |||||
Pre-owned aircraft | 40 | 73 | |||||
Total inventories | $ | 3,657 | $ | 3,366 |
October 2, 2016 | December 31, 2015 | |||||||
Fixed-rate notes due: | Interest rate | |||||||
July 2016 | 2.250% | $ | — | $ | 500 | |||
November 2017 | 1.000% | 900 | 900 | |||||
July 2021 | 3.875% | 500 | 500 | |||||
November 2022 | 2.250% | 1,000 | 1,000 | |||||
August 2023 | 1.875% | 500 | — | |||||
August 2026 | 2.125% | 500 | — | |||||
November 2042 | 3.600% | 500 | 500 | |||||
Other | Various | 23 | 25 | |||||
Total debt - principal | 3,923 | 3,425 | ||||||
Less unamortized debt issuance costs and discounts | 37 | 26 | ||||||
Total debt | 3,886 | 3,399 | ||||||
Less current portion | 1 | 501 | ||||||
Long-term debt | $ | 3,885 | $ | 2,898 |
October 2, 2016 | December 31, 2015 | ||||||
Deferred income taxes | $ | 1,048 | $ | 829 | |||
Salaries and wages | 741 | 648 | |||||
Fair value of cash flow hedges | 478 | 780 | |||||
Workers' compensation | 382 | 369 | |||||
Retirement benefits | 299 | 304 | |||||
Other (a) | 1,419 | 1,376 | |||||
Total other current liabilities | $ | 4,367 | $ | 4,306 | |||
Retirement benefits | $ | 4,011 | $ | 4,251 | |||
Customer deposits on commercial contracts | 359 | 506 | |||||
Deferred income taxes | 88 | 75 | |||||
Other (b) | 1,115 | 1,084 | |||||
Total other liabilities | $ | 5,573 | $ | 5,916 |
Losses on Cash Flow Hedges | Unrealized Gains on Securities | Foreign Currency Translation Adjustments | Changes in Retirement Plans’ Funded Status | AOCL | |||||||||||
December 31, 2015 | $ | (487 | ) | $ | 20 | $ | 178 | $ | (2,997 | ) | $ | (3,286 | ) | ||
Other comprehensive income, pretax | 260 | (5 | ) | 82 | 191 | 528 | |||||||||
Provision for income tax, net | 65 | (2 | ) | 1 | 69 | 133 | |||||||||
Other comprehensive income, net of tax | 195 | (3 | ) | 81 | 122 | 395 | |||||||||
October 2, 2016 | $ | (292 | ) | $ | 17 | $ | 259 | $ | (2,875 | ) | $ | (2,891 | ) |
December 31, 2014 | $ | (173 | ) | $ | 22 | $ | 541 | $ | (3,322 | ) | $ | (2,932 | ) | ||
Other comprehensive loss, pretax | (331 | ) | (4 | ) | (230 | ) | 287 | (278 | ) | ||||||
Benefit for income tax, net | (115 | ) | (1 | ) | (6 | ) | 97 | (25 | ) | ||||||
Other comprehensive loss, net of tax | (216 | ) | (3 | ) | (224 | ) | 190 | (253 | ) | ||||||
October 4, 2015 | $ | (389 | ) | $ | 19 | $ | 317 | $ | (3,132 | ) | $ | (3,185 | ) |
Nine Months Ended | October 2, 2016 | October 4, 2015 | |||||
Beginning balance | $ | 465 | $ | 428 | |||
Warranty expense | 85 | 128 | |||||
Payments | (72 | ) | (92 | ) | |||
Adjustments | (1 | ) | (1 | ) | |||
Ending balance | $ | 477 | $ | 463 |
Pension Benefits | Other Post-retirement Benefits | |||||||||||||
Three Months Ended | October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | ||||||||||
Service cost | $ | 44 | $ | 57 | $ | 3 | $ | 3 | ||||||
Interest cost | 114 | 133 | 8 | 11 | ||||||||||
Expected return on plan assets | (178 | ) | (174 | ) | (8 | ) | (8 | ) | ||||||
Recognized net actuarial loss (gain) | 84 | 110 | (1 | ) | 2 | |||||||||
Amortization of prior service credit | (17 | ) | (17 | ) | (2 | ) | (1 | ) | ||||||
Net periodic benefit cost | $ | 47 | $ | 109 | $ | — | $ | 7 |
Pension Benefits | Other Post-retirement Benefits | |||||||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | ||||||||||
Service cost | $ | 132 | $ | 171 | $ | 8 | $ | 9 | ||||||
Interest cost | 342 | 399 | 25 | 33 | ||||||||||
Expected return on plan assets | (534 | ) | (522 | ) | (24 | ) | (24 | ) | ||||||
Recognized net actuarial loss (gain) | 252 | 329 | (3 | ) | 5 | |||||||||
Amortization of prior service credit | (51 | ) | (51 | ) | (5 | ) | (3 | ) | ||||||
Net periodic benefit cost | $ | 141 | $ | 326 | $ | 1 | $ | 20 |
Revenue | Operating Earnings | |||||||||||
Three Months Ended | October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | ||||||||
Aerospace | $ | 2,017 | $ | 2,343 | $ | 437 | $ | 426 | ||||
Combat Systems | 1,330 | 1,345 | 219 | 218 | ||||||||
Information Systems and Technology | 2,341 | 2,219 | 256 | 219 | ||||||||
Marine Systems | 2,043 | 2,087 | 166 | 181 | ||||||||
Corporate* | — | — | (9 | ) | (10 | ) | ||||||
Total | $ | 7,731 | $ | 7,994 | $ | 1,069 | $ | 1,034 |
Revenue | Operating Earnings | |||||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | ||||||||
Aerospace | $ | 6,138 | $ | 6,709 | $ | 1,282 | $ | 1,296 | ||||
Combat Systems | 3,918 | 4,116 | 655 | 648 | ||||||||
Information Systems and Technology | 6,903 | 6,804 | 748 | 673 | ||||||||
Marine Systems | 6,161 | 6,031 | 539 | 556 | ||||||||
Corporate* | — | — | (32 | ) | (31 | ) | ||||||
Total | $ | 23,120 | $ | 23,660 | $ | 3,192 | $ | 3,142 |
Three Months Ended October 2, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
Revenue | $ | — | $ | 6,782 | $ | 949 | $ | — | $ | 7,731 | |||||
Cost of sales | (2 | ) | 5,479 | 714 | — | 6,191 | |||||||||
G&A | 10 | 381 | 80 | — | 471 | ||||||||||
Operating earnings | (8 | ) | 922 | 155 | — | 1,069 | |||||||||
Interest, net | (23 | ) | (1 | ) | 1 | — | (23 | ) | |||||||
Other, net | 1 | (4 | ) | 5 | — | 2 | |||||||||
Earnings before income tax | (30 | ) | 917 | 161 | — | 1,048 | |||||||||
Provision for income tax, net | (42 | ) | 306 | 17 | — | 281 | |||||||||
Discontinued operations, net of tax | (84 | ) | — | — | — | (84 | ) | ||||||||
Equity in net earnings of subsidiaries | 755 | — | — | (755 | ) | — | |||||||||
Net earnings | $ | 683 | $ | 611 | $ | 144 | $ | (755 | ) | $ | 683 | ||||
Comprehensive income | $ | 757 | $ | 608 | $ | 175 | $ | (783 | ) | $ | 757 | ||||
Three Months Ended October 4, 2015 | |||||||||||||||
Revenue | $ | — | $ | 7,037 | $ | 957 | $ | — | $ | 7,994 | |||||
Cost of sales | 1 | 5,729 | 754 | — | 6,484 | ||||||||||
G&A | 9 | 399 | 68 | — | 476 | ||||||||||
Operating earnings | (10 | ) | 909 | 135 | — | 1,034 | |||||||||
Interest, net | (23 | ) | (1 | ) | 1 | — | (23 | ) | |||||||
Other, net | 2 | — | — | — | 2 | ||||||||||
Earnings before income tax | (31 | ) | 908 | 136 | — | 1,013 | |||||||||
Provision for income tax, net | (47 | ) | 296 | 31 | — | 280 | |||||||||
Equity in net earnings of subsidiaries | 717 | — | — | (717 | ) | — | |||||||||
Net earnings | $ | 733 | $ | 612 | $ | 105 | $ | (717 | ) | $ | 733 | ||||
Comprehensive income | $ | 640 | $ | 613 | $ | (33 | ) | $ | (580 | ) | $ | 640 |
Nine Months Ended October 2, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
Revenue | $ | — | $ | 20,291 | $ | 2,829 | $ | — | $ | 23,120 | |||||
Cost of sales | 1 | 16,348 | 2,162 | — | 18,511 | ||||||||||
G&A | 30 | 1,162 | 225 | — | 1,417 | ||||||||||
Operating earnings | (31 | ) | 2,781 | 442 | — | 3,192 | |||||||||
Interest, net | (69 | ) | (1 | ) | 2 | — | (68 | ) | |||||||
Other, net | 11 | (3 | ) | 5 | — | 13 | |||||||||
Earnings before income tax | (89 | ) | 2,777 | 449 | — | 3,137 | |||||||||
Provision for income tax, net | (93 | ) | 903 | 72 | — | 882 | |||||||||
Discontinued operations, net of tax | (97 | ) | — | — | — | (97 | ) | ||||||||
Equity in net earnings of subsidiaries | 2,251 | — | — | (2,251 | ) | — | |||||||||
Net earnings | $ | 2,158 | $ | 1,874 | $ | 377 | $ | (2,251 | ) | $ | 2,158 | ||||
Comprehensive income | $ | 2,553 | $ | 1,866 | $ | 674 | $ | (2,540 | ) | $ | 2,553 | ||||
Nine Months Ended October 4, 2015 | |||||||||||||||
Revenue | $ | — | $ | 20,688 | $ | 2,972 | $ | — | $ | 23,660 | |||||
Cost of sales | (2 | ) | 16,765 | 2,309 | — | 19,072 | |||||||||
G&A | 33 | 1,196 | 217 | — | 1,446 | ||||||||||
Operating earnings | (31 | ) | 2,727 | 446 | — | 3,142 | |||||||||
Interest, net | (66 | ) | (2 | ) | 4 | — | (64 | ) | |||||||
Other, net | 3 | 2 | — | — | 5 | ||||||||||
Earnings before income tax | (94 | ) | 2,727 | 450 | — | 3,083 | |||||||||
Provision for income tax, net | (88 | ) | 884 | 86 | — | 882 | |||||||||
Equity in net earnings of subsidiaries | 2,207 | — | — | (2,207 | ) | — | |||||||||
Net earnings | $ | 2,201 | $ | 1,843 | $ | 364 | $ | (2,207 | ) | $ | 2,201 | ||||
Comprehensive income | $ | 1,948 | $ | 1,850 | $ | (59 | ) | $ | (1,791 | ) | $ | 1,948 |
October 2, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and equivalents | $ | 1,077 | $ | — | $ | 1,226 | $ | — | $ | 2,303 | |||||
Accounts receivable | — | 1,235 | 2,267 | — | 3,502 | ||||||||||
Contracts in process | 227 | 3,193 | 1,793 | — | 5,213 | ||||||||||
Inventories | |||||||||||||||
Work in process | — | 2,191 | 13 | — | 2,204 | ||||||||||
Raw materials | — | 1,347 | 33 | — | 1,380 | ||||||||||
Finished goods | — | 22 | 11 | — | 33 | ||||||||||
Pre-owned aircraft | — | 40 | — | — | 40 | ||||||||||
Other current assets | 210 | 198 | 214 | — | 622 | ||||||||||
Total current assets | 1,514 | 8,226 | 5,557 | — | 15,297 | ||||||||||
Noncurrent assets: | |||||||||||||||
Property, plant and equipment (PP&E) | 194 | 6,501 | 1,155 | — | 7,850 | ||||||||||
Accumulated depreciation of PP&E | (65 | ) | (3,609 | ) | (731 | ) | — | (4,405 | ) | ||||||
Intangible assets | — | 1,448 | 932 | — | 2,380 | ||||||||||
Accumulated amortization of intangible assets | — | (1,172 | ) | (493 | ) | — | (1,665 | ) | |||||||
Goodwill | — | 8,047 | 3,534 | — | 11,581 | ||||||||||
Other assets | 1,256 | 213 | 161 | — | 1,630 | ||||||||||
Investment in subsidiaries | 42,766 | — | — | (42,766 | ) | — | |||||||||
Total noncurrent assets | 44,151 | 11,428 | 4,558 | (42,766 | ) | 17,371 | |||||||||
Total assets | $ | 45,665 | $ | 19,654 | $ | 10,115 | $ | (42,766 | ) | $ | 32,668 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Short-term debt and current portion of long-term debt | $ | — | $ | 1 | $ | — | $ | — | $ | 1 | |||||
Customer advances and deposits | — | 2,665 | 2,584 | — | 5,249 | ||||||||||
Other current liabilities | 1,616 | 3,584 | 1,443 | — | 6,643 | ||||||||||
Total current liabilities | 1,616 | 6,250 | 4,027 | — | 11,893 | ||||||||||
Noncurrent liabilities: | |||||||||||||||
Long-term debt | 3,863 | 22 | — | — | 3,885 | ||||||||||
Other liabilities | 3,136 | 1,923 | 514 | — | 5,573 | ||||||||||
Total noncurrent liabilities | 6,999 | 1,945 | 514 | — | 9,458 | ||||||||||
Intercompany | 25,733 | (24,962 | ) | (771 | ) | — | — | ||||||||
Shareholders' equity: | |||||||||||||||
Common stock | 482 | 6 | 2,411 | (2,417 | ) | 482 | |||||||||
Other shareholders' equity | 10,835 | 36,415 | 3,934 | (40,349 | ) | 10,835 | |||||||||
Total shareholders' equity | 11,317 | 36,421 | 6,345 | (42,766 | ) | 11,317 | |||||||||
Total liabilities and shareholders' equity | $ | 45,665 | $ | 19,654 | $ | 10,115 | $ | (42,766 | ) | $ | 32,668 |
December 31, 2015 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and equivalents | $ | 1,732 | $ | — | $ | 1,053 | $ | — | $ | 2,785 | |||||
Accounts receivable | — | 1,181 | 2,265 | — | 3,446 | ||||||||||
Contracts in process | 514 | 2,795 | 1,048 | — | 4,357 | ||||||||||
Inventories | |||||||||||||||
Work in process | — | 1,882 | 7 | — | 1,889 | ||||||||||
Raw materials | — | 1,344 | 32 | — | 1,376 | ||||||||||
Finished goods | — | 23 | 5 | — | 28 | ||||||||||
Pre-owned aircraft | — | 73 | — | — | 73 | ||||||||||
Other current assets | 140 | 213 | 264 | — | 617 | ||||||||||
Total current assets | 2,386 | 7,511 | 4,674 | — | 14,571 | ||||||||||
Noncurrent assets: | |||||||||||||||
PP&E | 189 | 6,386 | 1,101 | — | 7,676 | ||||||||||
Accumulated depreciation of PP&E | (59 | ) | (3,462 | ) | (689 | ) | — | (4,210 | ) | ||||||
Intangible assets | — | 1,445 | 909 | — | 2,354 | ||||||||||
Accumulated amortization of intangible assets | — | (1,122 | ) | (469 | ) | — | (1,591 | ) | |||||||
Goodwill | — | 8,040 | 3,403 | — | 11,443 | ||||||||||
Other assets | 1,379 | 207 | 168 | — | 1,754 | ||||||||||
Investment in subsidiaries | 40,062 | — | — | (40,062 | ) | — | |||||||||
Total noncurrent assets | 41,571 | 11,494 | 4,423 | (40,062 | ) | 17,426 | |||||||||
Total assets | $ | 43,957 | $ | 19,005 | $ | 9,097 | $ | (40,062 | ) | $ | 31,997 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Short-term debt and current portion of long-term debt | $ | 500 | $ | 1 | $ | — | $ | — | $ | 501 | |||||
Customer advances and deposits | — | 3,038 | 2,636 | — | 5,674 | ||||||||||
Other current liabilities | 1,331 | 3,309 | 1,630 | — | 6,270 | ||||||||||
Total current liabilities | 1,831 | 6,348 | 4,266 | — | 12,445 | ||||||||||
Noncurrent liabilities: | |||||||||||||||
Long-term debt | 2,874 | 24 | — | — | 2,898 | ||||||||||
Other liabilities | 3,417 | 2,021 | 478 | — | 5,916 | ||||||||||
Total noncurrent liabilities | 6,291 | 2,045 | 478 | — | 8,814 | ||||||||||
Intercompany | 25,097 | (23,816 | ) | (1,281 | ) | — | — | ||||||||
Shareholders' equity: | |||||||||||||||
Common stock | 482 | 6 | 2,354 | (2,360 | ) | 482 | |||||||||
Other shareholders' equity | 10,256 | 34,422 | 3,280 | (37,702 | ) | 10,256 | |||||||||
Total shareholders' equity | 10,738 | 34,428 | 5,634 | (40,062 | ) | 10,738 | |||||||||
Total liabilities and shareholders' equity | $ | 43,957 | $ | 19,005 | $ | 9,097 | $ | (40,062 | ) | $ | 31,997 |
Nine Months Ended October 2, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
Net cash provided by operating activities* | $ | 98 | $ | 1,161 | $ | 113 | $ | — | $ | 1,372 | |||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (5 | ) | (208 | ) | (31 | ) | — | (244 | ) | ||||||
Other, net | 3 | (3 | ) | (38 | ) | — | (38 | ) | |||||||
Net cash used by investing activities | (2 | ) | (211 | ) | (69 | ) | — | (282 | ) | ||||||
Cash flows from financing activities: | |||||||||||||||
Purchases of common stock | (1,514 | ) | — | — | — | (1,514 | ) | ||||||||
Proceeds from fixed-rate notes | 992 | — | — | — | 992 | ||||||||||
Dividends paid | (678 | ) | — | — | — | (678 | ) | ||||||||
Repayment of fixed-rate notes | (500 | ) | — | — | — | (500 | ) | ||||||||
Proceeds from stock option exercises | 211 | — | — | — | 211 | ||||||||||
Other, net | (38 | ) | (1 | ) | — | — | (39 | ) | |||||||
Net cash used by financing activities | (1,527 | ) | (1 | ) | — | — | (1,528 | ) | |||||||
Net cash used by discontinued operations | (44 | ) | — | — | — | (44 | ) | ||||||||
Cash sweep/funding by parent | 820 | (949 | ) | 129 | — | — | |||||||||
Net decrease in cash and equivalents | (655 | ) | — | 173 | — | (482 | ) | ||||||||
Cash and equivalents at beginning of period | 1,732 | — | 1,053 | — | 2,785 | ||||||||||
Cash and equivalents at end of period | $ | 1,077 | $ | — | $ | 1,226 | $ | — | $ | 2,303 | |||||
Nine Months Ended October 4, 2015 | |||||||||||||||
Net cash provided by operating activities* | $ | (230 | ) | $ | 1,916 | $ | 584 | $ | — | $ | 2,270 | ||||
Cash flows from investing activities: | |||||||||||||||
Maturities of held-to-maturity securities | 500 | — | — | — | 500 | ||||||||||
Capital expenditures | (29 | ) | (314 | ) | (17 | ) | — | (360 | ) | ||||||
Proceeds from sales of assets | 162 | 128 | — | — | 290 | ||||||||||
Other, net | 2 | (14 | ) | — | — | (12 | ) | ||||||||
Net cash provided by investing activities | 635 | (200 | ) | (17 | ) | — | 418 | ||||||||
Cash flows from financing activities: | |||||||||||||||
Purchases of common stock | (2,729 | ) | — | — | — | (2,729 | ) | ||||||||
Dividends paid | (655 | ) | — | — | — | (655 | ) | ||||||||
Repayment of fixed-rate notes | (500 | ) | — | — | — | (500 | ) | ||||||||
Proceeds from stock option exercises | 240 | — | — | — | 240 | ||||||||||
Other, net | (31 | ) | 2 | — | — | (29 | ) | ||||||||
Net cash used by financing activities | (3,675 | ) | 2 | — | — | (3,673 | ) | ||||||||
Net cash used by discontinued operations | (31 | ) | — | — | — | (31 | ) | ||||||||
Cash sweep/funding by parent | 2,049 | (1,718 | ) | (331 | ) | — | — | ||||||||
Net decrease in cash and equivalents | (1,252 | ) | — | 236 | — | (1,016 | ) | ||||||||
Cash and equivalents at beginning of period | 2,536 | — | 1,852 | — | 4,388 | ||||||||||
Cash and equivalents at end of period | $ | 1,284 | $ | — | $ | 2,088 | $ | — | $ | 3,372 |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 7,731 | $ | 7,994 | $ | (263 | ) | (3.3 | )% | |||||
Operating costs and expenses | 6,662 | 6,960 | (298 | ) | (4.3 | )% | ||||||||
Operating earnings | 1,069 | 1,034 | 35 | 3.4 | % | |||||||||
Operating margin | 13.8 | % | 12.9 | % | ||||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 23,120 | $ | 23,660 | $ | (540 | ) | (2.3 | )% | |||||
Operating costs and expenses | 19,928 | 20,518 | (590 | ) | (2.9 | )% | ||||||||
Operating earnings | 3,192 | 3,142 | 50 | 1.6 | % | |||||||||
Operating margin | 13.8 | % | 13.3 | % |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 2,017 | $ | 2,343 | $ | (326 | ) | (13.9 | )% | |||||
Operating earnings | 437 | 426 | 11 | 2.6 | % | |||||||||
Operating margin | 21.7 | % | 18.2 | % | ||||||||||
Gulfstream aircraft deliveries (in units): | ||||||||||||||
Green | 30 | 40 | (10 | ) | (25.0 | )% | ||||||||
Outfitted | 27 | 43 | (16 | ) | (37.2 | )% | ||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 6,138 | $ | 6,709 | $ | (571 | ) | (8.5 | )% | |||||
Operating earnings | 1,282 | 1,296 | (14 | ) | (1.1 | )% | ||||||||
Operating margin | 20.9 | % | 19.3 | % | ||||||||||
Gulfstream aircraft deliveries (in units): | ||||||||||||||
Green | 92 | 110 | (18 | ) | (16.4 | )% | ||||||||
Outfitted | 88 | 116 | (28 | ) | (24.1 | )% |
Third Quarter | Nine Months | ||||||
Aircraft manufacturing, outfitting and completions | $ | (341 | ) | $ | (596 | ) | |
Aircraft services | (22 | ) | 19 | ||||
Pre-owned aircraft | 37 | 6 | |||||
Total decrease | $ | (326 | ) | $ | (571 | ) |
Third Quarter | Nine Months | ||||||
Aircraft manufacturing, outfitting and completions | $ | (4 | ) | $ | (64 | ) | |
Aircraft services | 6 | 44 | |||||
Pre-owned aircraft | (2 | ) | (8 | ) | |||
G&A/other expenses | 11 | 14 | |||||
Total increase (decrease) | $ | 11 | $ | (14 | ) |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 1,330 | $ | 1,345 | $ | (15 | ) | (1.1 | )% | |||||
Operating earnings | 219 | 218 | 1 | 0.5 | % | |||||||||
Operating margin | 16.5 | % | 16.2 | % | ||||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 3,918 | $ | 4,116 | $ | (198 | ) | (4.8 | )% | |||||
Operating earnings | 655 | 648 | 7 | 1.1 | % | |||||||||
Operating margin | 16.7 | % | 15.7 | % |
Third Quarter | Nine Months | ||||||
International military vehicles | $ | (31 | ) | $ | (157 | ) | |
Weapon systems and munitions | — | (50 | ) | ||||
U.S. military vehicles | 16 | 9 | |||||
Total decrease | $ | (15 | ) | $ | (198 | ) |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 2,341 | $ | 2,219 | $ | 122 | 5.5 | % | ||||||
Operating earnings | 256 | 219 | 37 | 16.9 | % | |||||||||
Operating margin | 10.9 | % | 9.9 | % | ||||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 6,903 | $ | 6,804 | $ | 99 | 1.5 | % | ||||||
Operating earnings | 748 | 673 | 75 | 11.1 | % | |||||||||
Operating margin | 10.8 | % | 9.9 | % |
Third Quarter | Nine Months | ||||||
C4ISR solutions | $ | 132 | $ | 173 | |||
IT services | (10 | ) | (74 | ) | |||
Total increase | $ | 122 | $ | 99 |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 2,043 | $ | 2,087 | $ | (44 | ) | (2.1 | )% | |||||
Operating earnings | 166 | 181 | (15 | ) | (8.3 | )% | ||||||||
Operating margin | 8.1 | % | 8.7 | % | ||||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 6,161 | $ | 6,031 | $ | 130 | 2.2 | % | ||||||
Operating earnings | 539 | 556 | (17 | ) | (3.1 | )% | ||||||||
Operating margin | 8.7 | % | 9.2 | % |
Third Quarter | Nine Months | ||||||
U.S. Navy ship construction | $ | (53 | ) | $ | 117 | ||
U.S. Navy ship engineering, repair and other services | 33 | 99 | |||||
Commercial ship construction | (24 | ) | (86 | ) | |||
Total (decrease) increase | $ | (44 | ) | $ | 130 |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 4,844 | $ | 5,119 | $ | (275 | ) | (5.4 | )% | |||||
Operating costs | 3,757 | 4,037 | (280 | ) | (6.9 | )% | ||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 14,556 | $ | 15,189 | $ | (633 | ) | (4.2 | )% | |||||
Operating costs | 11,287 | 11,887 | (600 | ) | (5.0 | )% |
Third Quarter | Nine Months | ||||||
Aircraft manufacturing, outfitting and completions | $ | (344 | ) | $ | (598 | ) | |
Military vehicle products | 22 | (194 | ) | ||||
Ship construction | (81 | ) | 14 | ||||
C4ISR products | 84 | 95 | |||||
Other, net | 44 | 50 | |||||
Total decrease | $ | (275 | ) | $ | (633 | ) |
Three Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 2,887 | $ | 2,875 | $ | 12 | 0.4 | % | ||||||
Operating costs | 2,434 | 2,447 | (13 | ) | (0.5 | )% | ||||||||
Nine Months Ended | October 2, 2016 | October 4, 2015 | Variance | |||||||||||
Revenue | $ | 8,564 | $ | 8,471 | $ | 93 | 1.1 | % | ||||||
Operating costs | 7,224 | 7,185 | 39 | 0.5 | % |
Third Quarter | Nine Months | ||||||
IT services | $ | (6 | ) | $ | (146 | ) | |
Ship engineering, repair and other services | 37 | 116 | |||||
C4ISR services | 48 | 78 | |||||
Military vehicle services | (37 | ) | 45 | ||||
Other, net | (30 | ) | — | ||||
Total increase | $ | 12 | $ | 93 |
Funded | Unfunded | Total Backlog | Estimated Potential Contract Value | Total Estimated Contract Value | |||||||||||||||
October 2, 2016 | |||||||||||||||||||
Aerospace | $ | 11,415 | $ | 108 | $ | 11,523 | $ | 2,158 | $ | 13,681 | |||||||||
Combat Systems | 17,659 | 436 | 18,095 | 4,469 | 22,564 | ||||||||||||||
Information Systems and Technology | 7,143 | 2,057 | 9,200 | 14,444 | 23,644 | ||||||||||||||
Marine Systems | 15,152 | 8,001 | 23,153 | 4,172 | 27,325 | ||||||||||||||
Total | $ | 51,369 | $ | 10,602 | $ | 61,971 | $ | 25,243 | $ | 87,214 | |||||||||
July 3, 2016 | |||||||||||||||||||
Aerospace | $ | 11,629 | $ | 126 | $ | 11,755 | $ | 2,221 | $ | 13,976 | |||||||||
Combat Systems | 18,032 | 478 | 18,510 | 4,812 | 23,322 | ||||||||||||||
Information Systems and Technology | 7,508 | 2,292 | 9,800 | 14,560 | 24,360 | ||||||||||||||
Marine Systems | 15,908 | 7,260 | 23,168 | 4,237 | 27,405 | ||||||||||||||
Total | $ | 53,077 | $ | 10,156 | $ | 63,233 | $ | 25,830 | $ | 89,063 |
• | $170 from the U.S. Army for the production of Hydra-70 rockets. |
• | $165 from the Army to produce various calibers of ammunition and ordnance. |
• | $145 from the Swiss government to produce Piranha armored vehicles equipped with mortar systems. |
• | $100 from the Army for Abrams M1A2 System Enhancement Program (SEP) components and associated program management. |
• | $75 to provide munitions to the government of Israel. |
• | $55 from the Army for Abrams technical support and engineering services. |
• | $105 from the U.S. Air Force for the Battlefield Information Collection and Exploitation System (BICES) program to provide intelligence information sharing and support to coalition operations. |
• | $90 from the Army for ruggedized computing equipment under the Common Hardware Systems-4 (CHS-4) program. |
• | $75 from the U.S. Navy for missile guidance systems. |
• | $65 from the Army for system engineering and program management for the Warfighter Information Network-Tactical (WIN-T) program. |
• | A contract from the U.S. Census Bureau to provide contact-center systems and operations support for the 2020 Census Questionnaire Assistance program, a key component of the 2020 Decennial Census. The contract has a value of $430 over five years. |
• | $300 from the Navy for lead-yard services, development studies and design efforts for Virginia-class submarines. |
• | $235 from the Navy to provide design, engineering, material and logistics support and research and development activities for active U.S submarines. |
• | $215 from the Navy to provide in-service support of systems and components on the USS Jimmy Carter (SSN23). |
• | $205 from the Navy to perform non-nuclear planning and maintenance work on five aircraft carriers. |
• | The design and construction of two liquefied natural gas (LNG)-capable containerships for Matson Navigation Company, Inc. Construction of the first containership will begin in early 2018, with deliveries in 2019 and 2020, respectively. |
Nine Months Ended | October 2, 2016 | October 4, 2015 | |||||
Net cash provided by operating activities | $ | 1,372 | $ | 2,270 | |||
Capital expenditures | (244 | ) | (360 | ) | |||
Free cash flow from operations | $ | 1,128 | $ | 1,910 | |||
Cash flows as a percentage of earnings from continuing operations: | |||||||
Net cash provided by operating activities | 61 | % | 103 | % | |||
Free cash flow from operations | 50 | % | 87 | % |
• | general U.S. and international political and economic conditions; |
• | decreases in U.S. government defense spending or changing priorities within the defense budget; |
• | termination or restructuring of government contracts due to unilateral government action; |
• | differences in anticipated and actual program performance, including the ability to perform under long-term fixed-price contracts within estimated costs, and performance issues with key suppliers and subcontractors; |
• | expected recovery on contract claims and requests for equitable adjustment; |
• | changing customer demand or preferences for business aircraft, including the effects of economic conditions on the business-aircraft market; |
• | potential for changing prices for energy and raw materials; and |
• | the status or outcome of legal and/or regulatory proceedings. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program* | Maximum Number of Shares That May Yet Be Purchased Under the Program* | |||||||||
Pursuant to Share Buyback Program | |||||||||||||
7/4/16-7/31/16 | 90,277 | $ | 138.87 | 90,277 | 10,600,054 | ||||||||
8/1/16-8/28/16 | 1,010,000 | 150.67 | 1,010,000 | 9,590,054 | |||||||||
8/29/16-10/2/16 | 1,200,000 | 152.93 | 1,200,000 | 8,390,054 | |||||||||
Total | 2,300,277 | $ | 151.38 |
4.1 | First Supplemental Indenture, dated as of August 12, 2016, among General Dynamics Corporation, the Guarantors named therein and The Bank of New York Mellon, as Trustee (incorporated by reference from the company's current report on Form 8-K, filed with the Commission August 12, 2016) |
31.1 | Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* |
31.2 | Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* |
32.1 | Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
32.2 | Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
101 | Interactive Data File* |
GENERAL DYNAMICS CORPORATION | ||
by | ||
Kimberly A. Kuryea | ||
Vice President and Controller | ||
(Authorized Officer and Chief Accounting Officer) | ||
Dated: October 26, 2016 |
1) | I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Phebe N. Novakovic | |
Phebe N. Novakovic | |
Chairman and Chief Executive Officer |
1) | I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jason W. Aiken | |
Jason W. Aiken | |
Senior Vice President and Chief Financial Officer |
1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Phebe N. Novakovic | |
Phebe N. Novakovic | |
Chairman and Chief Executive Officer |
1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jason W. Aiken | |
Jason W. Aiken | |
Senior Vice President and Chief Financial Officer |
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Document and Entity Information |
9 Months Ended |
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Oct. 02, 2016
shares
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Document and Entity Information [Abstract] | |
Entity Registrant Name | GENERAL DYNAMICS CORPORATION |
Entity Central Index Key | 0000040533 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Oct. 02, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 304,519,550 |
Trading Symbol | GD |
Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Revenue: | ||||
Products | $ 4,844 | $ 5,119 | $ 14,556 | $ 15,189 |
Services | 2,887 | 2,875 | 8,564 | 8,471 |
Revenue, total | 7,731 | 7,994 | 23,120 | 23,660 |
Operating costs and expenses: | ||||
Products | 3,757 | 4,037 | 11,287 | 11,887 |
Services | 2,434 | 2,447 | 7,224 | 7,185 |
General and administrative (G&A) | 471 | 476 | 1,417 | 1,446 |
Operating costs and expenses, total | 6,662 | 6,960 | 19,928 | 20,518 |
Operating earnings | 1,069 | 1,034 | 3,192 | 3,142 |
Interest, net | (23) | (23) | (68) | (64) |
Other, net | 2 | 2 | 13 | 5 |
Earnings from continuing operations before income tax | 1,048 | 1,013 | 3,137 | 3,083 |
Provision for income tax, net | 281 | 280 | 882 | 882 |
Earnings from continuing operations | 767 | 733 | 2,255 | 2,201 |
Discontinued operations, net of tax | (84) | 0 | (97) | 0 |
Net earnings | $ 683 | $ 733 | $ 2,158 | $ 2,201 |
Basic: | ||||
Continuing operations (usd per share) | $ 2.52 | $ 2.31 | $ 7.38 | $ 6.79 |
Discontinued operations (usd per share) | (0.27) | 0.00 | (0.31) | 0.00 |
Basic (usd per share) | 2.25 | 2.31 | 7.07 | 6.79 |
Diluted: | ||||
Continuing operations (usd per share) | 2.48 | 2.28 | 7.25 | 6.68 |
Discontinued operations (usd per share) | (0.27) | 0.00 | (0.31) | 0.00 |
Diluted (usd per share) | $ 2.21 | $ 2.28 | $ 6.94 | $ 6.68 |
Consolidated Statements of Earnings (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Income Statement [Abstract] | ||||
Tax benefit | $ 46 | $ 7 | $ 46 | $ 7 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 683 | $ 733 | $ 2,158 | $ 2,201 |
Gains (losses) on cash flow hedges | 102 | 53 | 260 | (331) |
Unrealized losses on securities | (1) | (4) | (5) | (4) |
Foreign currency translation adjustments | (43) | (195) | 82 | (230) |
Change in retirement plans' funded status | 65 | 99 | 191 | 287 |
Other comprehensive income (loss), pretax | 123 | (47) | 528 | (278) |
Provision (benefit) for income tax, net | 49 | 46 | 133 | (25) |
Other comprehensive income (loss), net of tax | 74 | (93) | 395 | (253) |
Comprehensive income | $ 757 | $ 640 | $ 2,553 | $ 1,948 |
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions |
9 Months Ended | |||
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Oct. 02, 2016 |
Oct. 04, 2015 |
|||
Cash flows from operating activities - continuing operations: | ||||
Net earnings | $ 2,158 | $ 2,201 | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||
Depreciation of property, plant and equipment | 272 | 272 | ||
Amortization of intangible assets | 70 | 88 | ||
Equity-based compensation expense | 76 | 84 | ||
Deferred income tax provision | 218 | 88 | ||
Discontinued operations, net of tax | 97 | 0 | ||
(Increase) decrease in assets, net of effects of business acquisitions: | ||||
Accounts receivable | (52) | 254 | ||
Contracts in process | (957) | 391 | ||
Inventories | (288) | (29) | ||
Increase (decrease) in liabilities, net of effects of business acquisitions: | ||||
Accounts payable | 305 | 334 | ||
Customer advances and deposits | (574) | (1,508) | ||
Other, net | 47 | 95 | ||
Net cash provided by operating activities | [1] | 1,372 | 2,270 | |
Cash flows from investing activities: | ||||
Capital expenditures | (244) | (360) | ||
Maturities of held-to-maturity securities | 0 | 500 | ||
Proceeds from sales of assets | 4 | 290 | ||
Other, net | (42) | (12) | ||
Net cash (used) provided by investing activities | (282) | 418 | ||
Cash flows from financing activities: | ||||
Purchases of common stock | (1,514) | (2,729) | ||
Proceeds from fixed-rate notes | 992 | 0 | ||
Dividends paid | (678) | (655) | ||
Repayment of fixed-rate notes | (500) | (500) | ||
Proceeds from stock option exercises | 211 | 240 | ||
Other, net | (39) | (29) | ||
Net cash used by financing activities | (1,528) | (3,673) | ||
Net cash used by discontinued operations | (44) | (31) | ||
Net decrease in cash and equivalents | (482) | (1,016) | ||
Cash and equivalents at beginning of period | 2,785 | 4,388 | ||
Cash and equivalents at end of period | 2,303 | 3,372 | ||
Cash payments for: | ||||
Income taxes | 677 | 776 | ||
Interest | $ 58 | $ 62 | ||
|
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Millions |
Total |
Common Stock, Par |
Common Stock, Surplus |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2014 | $ 11,829 | $ 482 | $ 2,548 | $ 21,127 | $ (9,396) | $ (2,932) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 2,201 | 0 | 0 | 2,201 | 0 | 0 |
Cash dividends declared | (673) | 0 | 0 | (673) | 0 | 0 |
Equity-based awards | 359 | 0 | 149 | 0 | 210 | 0 |
Shares purchased | (2,729) | 0 | 0 | 0 | (2,729) | 0 |
Other comprehensive income | (253) | 0 | 0 | 0 | 0 | (253) |
Ending balance at Oct. 04, 2015 | 10,734 | 482 | 2,697 | 22,655 | (11,915) | (3,185) |
Beginning balance at Dec. 31, 2015 | 10,738 | 482 | 2,730 | 23,204 | (12,392) | (3,286) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 2,158 | 0 | 0 | 2,158 | 0 | 0 |
Cash dividends declared | (701) | 0 | 0 | (701) | 0 | 0 |
Equity-based awards | 265 | 0 | 59 | 0 | 206 | 0 |
Shares purchased | (1,538) | 0 | 0 | 0 | (1,538) | 0 |
Other comprehensive income | 395 | 0 | 0 | 0 | 0 | 395 |
Ending balance at Oct. 02, 2016 | $ 11,317 | $ 482 | $ 2,789 | $ 24,661 | $ (13,724) | $ (2,891) |
Summary Of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||
Summary Of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements. Some prior-year amounts have been reclassified among financial statement accounts to conform to the current-year presentation. Consistent with defense industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year. Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted. Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and nine-month periods ended October 2, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and nine-month periods ended October 2, 2016, and October 4, 2015. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. Revenue Recognition. We account for revenue and earnings using the percentage-of-completion method. Under this method, we recognize contract costs and revenue as the work progresses, either as the products are produced or as services are rendered. We estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the loss in the quarter it is identified. We review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the reallocation method. Under the reallocation method, the impact of an adjustment in estimate is recognized prospectively over the remaining contract term. The net impact of adjustments in contract estimates on our operating earnings (and on a diluted per-share basis) totaled favorable adjustments of $44 ($0.09) and $231 ($0.48) for the three- and nine-month periods ended October 2, 2016, and $44 ($0.09) and $152 ($0.30) for the three- and nine-month periods ended October 4, 2015, respectively. No adjustment on any one contract was material to our unaudited Consolidated Financial Statements in the three- and nine-month periods ended October 2, 2016, and October 4, 2015. In the second quarter of 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in GAAP. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition. Several ASUs have been issued since the issuance of ASU 2014-09. These ASUs, which modify certain sections of ASU 2014-09, are intended to promote a more consistent interpretation and application of the principles outlined in the standard. The FASB has also issued two exposure drafts with technical corrections and updates intended to clarify ASU 2014-09. The exposure drafts are not expected to have a significant impact on the application of ASU 2014-09 and are anticipated to be issued as final ASUs prior to December 31, 2016. ASU 2014-09 is effective in the first quarter of 2018 for public companies. However, companies can elect to adopt one year earlier in the first quarter of 2017. The standard permits the use of either the retrospective or cumulative-effect transition method. Because the new standard will impact our business processes, systems and controls, we commenced our assessment of the standard during the second half of 2014 and developed a comprehensive change management project plan to guide the implementation. This project plan includes analyzing the standard’s impact on our contract portfolio, comparing our historical accounting policies and practices to the requirements of the new standard, and identifying potential differences from applying the requirements of the new standard to our contracts. With the assessment nearing completion, we plan to adopt the standard in the first quarter of 2017 using the retrospective transition method. We anticipate that the adoption of ASU 2014-09 will have primarily two impacts on our portfolio of contracts and our Consolidated Financial Statements. The majority of our long-term contracts will continue to recognize revenue and earnings over time as the work progresses because of the continuous transfer of control to the customer, generally using an input measure (e.g., costs incurred) to reflect progress. However, we will be precluded from using the reallocation method of recognizing adjustments in estimated profit on contracts discussed previously. The total impact of an adjustment in estimated profit recorded to date on a contract will be recognized in the period it is identified (cumulative catch-up method), rather than recognizing the impact of an adjustment prospectively over the remaining contract term. As a result, adjustments in contract estimates may be larger and likely more variable from period to period, particularly on our contracts of greater value and longer performance period (for example, in our Marine Systems group), and may introduce an element of variability to our operating results that we have not experienced using the reallocation method. Despite this variability, a contract’s cash flows and overall profitability at completion are the same under the cumulative catch-up method versus our current method of prospectively recognizing adjustments in estimate. Anticipated losses on contracts will continue to be recognized in the quarter they are identified. For our contracts for the manufacture of business-jet aircraft in the Aerospace group, we currently record revenue at two contractual milestones, green and outfitted aircraft delivery. Under ASU 2014-09, we will record revenue when control is transferred to the customer, generally when the customer accepts the fully outfitted aircraft. ASU 2014-09 will not change the total revenue or operating earnings recognized on our new aircraft contracts, only the timing of when those amounts are recognized. Numerous other contracts in our portfolio will be impacted by ASU 2014-09, due primarily to the identification of multiple performance obligations within a single contract. However, we do not anticipate that these impacts will be material to our Consolidated Financial Statements. We have assessed our 2015 operating results under ASU 2014-09. In our three defense groups, the assessment under ASU 2014-09 did not have a material impact on our results of operations. Our defense groups’ revenue and operating margin for 2015 were essentially unchanged. In our Aerospace group, the assessment under ASU 2014-09 increased revenue and operating margin by 4 percent and 40 basis points, respectively, as compared to 2015 operating results under existing GAAP. The increase in revenue and operating margin compared to as-reported 2015 operating results is due to the relationship between green and outfitted aircraft deliveries and the timing and mix of those aircraft deliveries. Because we delivered more outfitted aircraft than green aircraft in 2015, revenue and operating earnings were higher in 2015 under ASU 2014-09 versus under existing GAAP. The impact of ASU 2014-09 on our 2015 operating results may or may not be representative of the impact on subsequent years' results. As noted above, aircraft manufacturing revenue in our Aerospace group will be recognized when control is transferred to the customer, generally when the customer accepts the fully outfitted aircraft, which will depend on annual delivery rates. Moreover, as described above in our defense groups, use of the cumulative catch-up method of recognizing adjustments in estimated profits on our long-term contracts will require us to recognize the total impact of an adjustment in the period it is identified rather than prospectively over the remaining contract term as we have in the past. On our Consolidated Balance Sheet, long-term contracts will continue to be reported in a net asset (contracts in process) or liability (customer advances and deposits) position on a contract-by-contract basis at the end of each reporting period. Business-jet components in our Aerospace group will be reported in inventory until control of the aircraft transfers to the customer. The assessment of our December 31, 2015, Consolidated Balance Sheet under ASU 2014-09 resulted in some reclassifications among financial statement accounts, but these reclassifications did not materially change the total amount of net assets as of December 31, 2015. Once we adopt ASU 2014-09, we do not anticipate that our internal control framework will materially change, but rather that existing internal controls will be modified and augmented, as necessary, to consider our new revenue recognition policy effective January 1, 2017. As we implement the new standard, we have developed internal controls to ensure that we adequately evaluate our portfolio of contracts under the five-step model and accurately restate our prior-period operating results under ASU 2014-09. Discontinued Operations. In 2013, we settled litigation with the U.S. Navy related to the terminated A-12 aircraft contract in the company's former tactical military aircraft business. In connection with the settlement, we released some rights to reimbursement of costs on ships under contract at the time at our Bath, Maine shipyard. As we have progressed through the shipbuilding process, we have determined that the cost associated with this settlement is greater than anticipated. Therefore, in the third quarter of 2016, we recognized an $84 loss, net of taxes, to adjust the previously-recognized settlement value. In addition, in the first quarter of 2016, we recognized a final adjustment to the loss on the sale of a business further discussed in Note B. Accounting Standards Updates. The standards described below were issued by the FASB in 2016 and should be read in conjunction with the discussion of New Accounting Standards in our Annual Report on Form 10-K for the year ended December 31, 2015.
The impact of the adoption in the nine-month period ended October 2, 2016, was a tax benefit of approximately $60. As this area of the ASU permits only prospective adoption, there was no impact on our 2015 Consolidated Financial Statements. In the Consolidated Statement of Cash Flows, the impact of the adoption in the nine-month period ended October 2, 2016, was a $91 increase in net cash provided by operating activities and a corresponding $91 increase in net cash used by financing activities. The areas of the ASU that relate to the Consolidated Statement of Cash Flows were adopted retrospectively. We have restated our prior-period Consolidated Statement of Cash Flows accordingly, resulting in a $100 increase in net cash provided by operating activities and a corresponding $100 increase in net cash used by financing activities for the nine-month period ended October 4, 2015. The other aspects of the ASU did not have a material impact on our results of operations, financial condition or cash flows. Several other ASUs issued by the FASB in 2016 are not yet effective, including the following:
We do not expect other ASUs issued by the FASB in 2016 to have a material effect on our Consolidated Financial Statements. |
Acquisitions and Divestitures, Goodwill, and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures, Goodwill, and Intangible Assets | ACQUISITIONS AND DIVESTITURES, GOODWILL, AND INTANGIBLE ASSETS Acquisitions and Divestitures In 2016, we acquired an aircraft management and charter services provider in our Aerospace group and a manufacturer of unmanned underwater vehicles (UUVs) in our Information Systems and Technology group. As the purchase prices of these acquisitions are immaterial, they are included in other investing activities in the unaudited Consolidated Statement of Cash Flows. We did not acquire any businesses in 2015. The operating results of these acquisitions have been included with our reported results since the respective closing dates. The purchase prices of the acquisitions have been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. In 2015, we completed the sale of our axle business in our Combat Systems group and a commercial cyber security business in our Information Systems and Technology group. In the first quarter of 2016, we recognized a final adjustment to the loss on the sale of the axle business of $13 in discontinued operations. Goodwill The changes in the carrying amount of goodwill by reporting unit for the nine-month period ended October 2, 2016, were as follows:
(a)Goodwill on December 31, 2015, in the Information Systems and Technology reporting unit is net of $2 billion of accumulated impairment losses. (b)Includes adjustments during the purchase price allocation period. (c)Consists primarily of adjustments for foreign currency translation. Intangible Assets Intangible assets consisted of the following:
Amortization expense was $20 and $70 for the three- and nine-month periods ended October 2, 2016, and $29 and $88 for the three- and nine-month periods ended October 4, 2015. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased throughout 2016 and 2015 due to share repurchases. See Note J for additional details of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted stock and restricted stock units (RSUs). The dilutive effect of stock options and restricted stock/RSUs increased because of the adoption of ASU 2016-09 in 2016. See Note A for additional detail of our adoption of this accounting standard. Basic and diluted weighted average shares outstanding were as follows (in thousands):
* Excludes outstanding options to purchase shares of common stock because these options had exercise prices in excess of the average market price of our common stock during the period and therefore the effect of including these options would be antidilutive. These options totaled 4,622 and 4,080 for the three- and nine-month periods ended October 2, 2016, and 2,034 and 1,605 for the three- and nine-month periods ended October 4, 2015, respectively. |
Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | FAIR VALUE Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:
We did not have any significant non-financial assets or liabilities measured at fair value on October 2, 2016, or December 31, 2015. Our financial instruments include cash and equivalents, marketable securities and other investments; accounts receivable and payable; short- and long-term debt; and derivative financial instruments. The carrying values of cash and equivalents, accounts receivable and payable and short-term debt on the Consolidated Balance Sheet approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on October 2, 2016, and December 31, 2015, and the basis for determining their fair values:
(a)We had no Level 3 financial instruments on October 2, 2016, or December 31, 2015. (b)Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities. |
Income Taxes |
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Income Taxes | INCOME TAXES Net Deferred Tax Asset. Our net deferred tax asset consisted of the following:
Tax Uncertainties. For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50 percent chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense. The total amount of these tax liabilities on October 2, 2016, is not material to our results of operations, financial condition or cash flow. We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2015. We do not expect the resolution of tax matters for open years to have a material impact on our results of operations, financial condition, cash flows or effective tax rate. Based on all known facts and circumstances and current tax law, we believe the total amount of any unrecognized tax benefits on October 2, 2016, is not material to our results of operations, financial condition or cash flows, and if recognized, would not have a material impact on our effective tax rate. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will significantly vary over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows. |
Contracts In Process |
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Contracts In Process | CONTRACTS IN PROCESS Contracts in process represent recoverable costs and, where applicable, accrued profit related to long-term contracts less associated advances and progress payments. These amounts have been inventoried until the customer is billed, generally in accordance with the agreed-upon billing terms or upon shipment of products or rendering of services. Contracts in process consisted of the following:
Contract costs include primarily labor, material, overhead and, when appropriate, G&A expenses. Contract costs also may include estimated contract recoveries for matters such as contract changes and claims for unanticipated contract costs. We record revenue associated with these matters only when the amount of recovery can be estimated reliably and realization is probable. Other contract costs represent amounts that are not currently allocable to government contracts, such as a portion of our estimated workers’ compensation obligations, other insurance-related assessments, pension and other post-retirement benefits, and environmental expenses. These costs will become allocable to contracts generally after they are paid. We expect to recover these costs through ongoing business, including existing backlog and probable follow-on contracts. If the backlog in the future does not support the continued deferral of these costs, the profitability of our remaining contracts could be adversely affected. |
Inventories |
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Inventories | INVENTORIES Our inventories represent primarily business-jet components and are stated at the lower of cost or net realizable value. Work in process represents largely labor, material and overhead costs associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost of the units in a production lot. Raw materials are valued primarily on the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value. Inventories consisted of the following:
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Debt consisted of the following:
Our fixed-rate notes are fully and unconditionally guaranteed by several of our 100-percent-owned subsidiaries. See Note O for condensed consolidating financial statements. We have the option to redeem the notes prior to their maturity in whole or part for the principal plus any accrued but unpaid interest and applicable make-whole amounts. On October 2, 2016, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. We have $2 billion in committed bank credit facilities for general corporate purposes and working capital needs. These credit facilities include a $1 billion multi-year facility expiring in July 2018 and a $1 billion multi-year facility expiring in November 2020. These facilities are required by credit rating agencies to support our commercial paper issuances. We may renew or replace, in whole or part, these credit facilities at or prior to their expiration dates. Our bank credit facilities are guaranteed by several of our 100-percent-owned subsidiaries. We also have an effective shelf registration on file with the SEC that allows us to access the debt markets. In the third quarter of 2016, we repaid $500 of fixed-rate notes on their maturity date with cash on hand. We also issued $1 billion of fixed-rate notes for general corporate purposes. Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants on October 2, 2016. |
Other Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | OTHER LIABILITIES A summary of significant other liabilities by balance sheet caption follows:
(a)Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, deferred revenue and supplier contributions in the Aerospace group, liabilities of discontinued operations, and insurance-related costs. (b)Consists primarily of warranty reserves, workers' compensation liabilities and liabilities of discontinued operations. |
Shareholders' Equity |
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Shareholders' Equity | SHAREHOLDERS' EQUITY Share Repurchases. Our board of directors authorizes management’s repurchase of shares of common stock on the open market from time to time. In the nine-month period ended October 2, 2016, we repurchased 11.2 million of our outstanding shares for $1.5 billion. As some of these shares had not settled on October 2, 2016, the associated $23 cash outflow will be reported in the fourth quarter. On October 2, 2016, 8.4 million shares remained authorized by our board of directors for repurchase, approximately 3 percent of our total shares outstanding. We repurchased 19.3 million shares for $2.7 billion in the nine-month period ended October 4, 2015. Dividends per Share. Dividends declared per share were $0.76 and $2.28 for the three- and nine-month periods ended October 2, 2016, and $0.69 and $2.07 for the three- and nine-month periods ended October 4, 2015, respectively. Cash dividends paid were $231 and $678 for the three- and nine-month periods ended October 2, 2016, and $223 and $655 for the three- and nine-month periods ended October 4, 2015, respectively. Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following:
Amounts reclassified out of AOCL related primarily to changes in retirement plans' funded status and consisted of pretax recognized net actuarial losses of $249 and $334 for the nine-month periods ended October 2, 2016, and October 4, 2015, respectively. This was offset partially by pretax amortization of prior service credit of $56 and $54 for the nine-month periods ended October 2, 2016, and October 4, 2015, respectively. These AOCL components are included in our net periodic pension and other post-retirement benefit cost. See Note M for additional details. |
Derivative Instruments And Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments And Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to market risk, primarily from foreign currency exchange rates, interest rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We had $6.5 billion in notional forward exchange contracts outstanding on October 2, 2016, and $7.2 billion on December 31, 2015. We do not use derivatives for trading or speculative purposes. We recognize derivative financial instruments on the Consolidated Balance Sheet at fair value. See Note D for additional details. Foreign Currency Risk and Hedging Activities. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and inter-company transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The three-year average maturity of these instruments generally matches the duration of the activities that are at risk. We record changes in the fair value of derivative financial instruments in operating costs and expenses in the Consolidated Statement of Earnings or in other comprehensive loss (OCL) within the Consolidated Statement of Comprehensive Income depending on whether the derivative is designated and qualifies for hedge accounting. Gains and losses related to derivatives that qualify as cash flow hedges are deferred in OCL until the underlying transaction is reflected in earnings. We adjust derivative financial instruments not designated as cash flow hedges to market value each period and record the gain or loss in the Consolidated Statement of Earnings. The gains and losses on these instruments generally offset losses and gains on the assets, liabilities and other transactions being hedged. Gains and losses resulting from hedge ineffectiveness are recognized in the Consolidated Statement of Earnings for all derivative financial instruments, regardless of designation. Net gains and losses on derivative financial instruments recognized in earnings, including gains and losses related to hedge ineffectiveness, were not material to our results of operations for the three- and nine-month periods ended October 2, 2016, and October 4, 2015. Net gains and losses reclassified to earnings from OCL were not material to our results of operations for the three- and nine-month periods ended October 2, 2016, and October 4, 2015, and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material. We had no material derivative financial instruments designated as fair value or net investment hedges on October 2, 2016, or December 31, 2015. Interest Rate Risk. Our financial instruments subject to interest rate risk include fixed-rate long-term debt obligations and variable-rate commercial paper. However, the risk associated with these instruments is not material. Commodity Price Risk. We are subject to rising labor and commodity price risk, primarily on long-term fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivatives but are not accounted for separately because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in labor or commodity prices will have a material impact on our results of operations or cash flows. Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years. On October 2, 2016, we held $2.3 billion in cash and equivalents, but held no marketable securities. Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses' functional currency (generally the respective local currency) to U.S. dollars at end-of-period exchange rates, and statements of earnings at average exchange rates for each period. The resulting foreign currency translation adjustments are a component of OCL. We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations' results into U.S. dollars. The negative impact of translating our non-U.S. operations’ revenue into U.S. dollars was not material to our results of operations for the three- and nine-month periods ended October 2, 2016, or October 4, 2015. In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material in the nine-month periods ended October 2, 2016, and October 4, 2015. |
Commitments And Contingencies |
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Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation In 2015, Electric Boat Corporation, a subsidiary of General Dynamics Corporation, received a Civil Investigative Demand from the U.S. Department of Justice regarding an investigation of potential False Claims Act violations relating to alleged failures of Electric Boat’s quality system with respect to allegedly non-conforming parts purchased from a supplier. In 2016, Electric Boat was made aware that it is a defendant in a lawsuit related to this matter filed under seal in U.S. district court. In May 2016, the Suspending and Debarring Official for the U.S. Department of the Navy issued a Show Cause Letter to Electric Boat requesting that Electric Boat respond to the official’s concerns regarding Electric Boat’s oversight and management with respect to its quality assurance systems for subcontractors and suppliers. Electric Boat responded to the Show Cause Letter and has been engaged in discussions with the official. Given the current status of these matters, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss. Depending on the outcome of these matters, there could be a material impact on our results of operations, financial condition and cash flows. Additionally, various other claims and legal proceedings incidental to the normal course of business are pending or threatened against us. These other matters relate to such issues as government investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these other matters. However, based on information currently available, we believe any potential liabilities in these other proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows. Environmental We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a Potentially Responsible Party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts. As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions, will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows. Other Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows. In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and claims will be resolved without material impact to our results of operations, financial condition or cash flows. Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $1 billion on October 2, 2016. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance obligations of our subsidiaries arising under certain contracts. Aircraft Trade-ins. In connection with orders for new aircraft in funded contract backlog, our Aerospace group has outstanding options with some customers to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Any excess of the pre-established trade-in price above the fair market value at the time the new outfitted aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction. Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business-jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet. The changes in the carrying amount of warranty liabilities for the nine-month periods ended October 2, 2016, and October 4, 2015, were as follows:
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Retirement Plans | RETIREMENT PLANS We provide defined-contribution benefits to eligible employees, as well as some defined-benefit pension and other post-retirement benefits. Net periodic defined-benefit pension and other post-retirement benefit cost for the three- and nine-month periods ended October 2, 2016, and October 4, 2015, consisted of the following:
Beginning in 2016, we refined the method used to determine the service and interest cost components of our net periodic benefit cost. Previously, the cost was determined using a single weighted-average discount rate derived from a yield curve developed from a portfolio of high-quality fixed-income investments with maturities consistent with the projected benefit payout period. Under the refined method, known as the spot rate approach, we use individual spot rates along the yield curve that correspond with the timing of each benefit payment. We believe this change provides a more precise measurement of service and interest costs by improving the correlation between projected cash outflows and corresponding spot rates on the yield curve. Compared to the previous method the spot rate approach decreased the service and interest components of our benefit costs slightly in 2016. We accounted for this change prospectively as a change in accounting estimate. Our contractual arrangements with the U.S. government provide for the recovery of contributions to our pension and other post-retirement benefit plans covering employees working in our defense business groups. For non-funded plans, our government contracts allow us to recover claims paid. Following payment, these recoverable amounts are allocated to contracts and billed to the customer in accordance with the Cost Accounting Standards (CAS) and specific contractual terms. For some of these plans, the cumulative pension and post-retirement benefit cost exceeds the amount currently allocable to contracts. To the extent recovery of the cost is considered probable based on our backlog and probable follow-on contracts, we defer the excess in contracts in process on the Consolidated Balance Sheet until the cost is allocable to contracts. See Note F for discussion of our deferred contract costs. For other plans, the amount allocated to contracts and included in revenue has exceeded the plans’ cumulative benefit cost. We have deferred recognition of these excess earnings to provide a better matching of revenue and expenses. These deferrals have been classified against the plan assets on the Consolidated Balance Sheet. |
Business Group Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Group Information | BUSINESS GROUP INFORMATION We operate in four business groups: Aerospace, Combat Systems, Information Systems and Technology, and Marine Systems. We organize our business groups in accordance with the nature of products and services offered. We measure each group’s profitability based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our business groups. Summary financial information for each of our business groups follows:
* Corporate operating results consist primarily of stock option expense. |
Condensed Consolidating Financial Statements |
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Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The fixed-rate notes described in Note H are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of our 100-percent-owned subsidiaries (the guarantors). The following condensed consolidating financial statements illustrate the composition of the parent, the guarantors on a combined basis (each guarantor together with its majority-owned subsidiaries) and all other subsidiaries on a combined basis. CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED)
CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
CONDENSED CONSOLIDATING BALANCE SHEET
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
* Continuing operations only. |
Summary Of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||
Basis of Consolidation and Classification | Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements. Some prior-year amounts have been reclassified among financial statement accounts to conform to the current-year presentation. Consistent with defense industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year. |
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Interim Financial Statements | Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted. Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and nine-month periods ended October 2, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and nine-month periods ended October 2, 2016, and October 4, 2015. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. |
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Revenue Recognition | Revenue Recognition. We account for revenue and earnings using the percentage-of-completion method. Under this method, we recognize contract costs and revenue as the work progresses, either as the products are produced or as services are rendered. We estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the loss in the quarter it is identified. We review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the reallocation method. Under the reallocation method, the impact of an adjustment in estimate is recognized prospectively over the remaining contract term. The net impact of adjustments in contract estimates on our operating earnings (and on a diluted per-share basis) totaled favorable adjustments of $44 ($0.09) and $231 ($0.48) for the three- and nine-month periods ended October 2, 2016, and $44 ($0.09) and $152 ($0.30) for the three- and nine-month periods ended October 4, 2015, respectively. No adjustment on any one contract was material to our unaudited Consolidated Financial Statements in the three- and nine-month periods ended October 2, 2016, and October 4, 2015. In the second quarter of 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in GAAP. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition. Several ASUs have been issued since the issuance of ASU 2014-09. These ASUs, which modify certain sections of ASU 2014-09, are intended to promote a more consistent interpretation and application of the principles outlined in the standard. The FASB has also issued two exposure drafts with technical corrections and updates intended to clarify ASU 2014-09. The exposure drafts are not expected to have a significant impact on the application of ASU 2014-09 and are anticipated to be issued as final ASUs prior to December 31, 2016. ASU 2014-09 is effective in the first quarter of 2018 for public companies. However, companies can elect to adopt one year earlier in the first quarter of 2017. The standard permits the use of either the retrospective or cumulative-effect transition method. Because the new standard will impact our business processes, systems and controls, we commenced our assessment of the standard during the second half of 2014 and developed a comprehensive change management project plan to guide the implementation. This project plan includes analyzing the standard’s impact on our contract portfolio, comparing our historical accounting policies and practices to the requirements of the new standard, and identifying potential differences from applying the requirements of the new standard to our contracts. With the assessment nearing completion, we plan to adopt the standard in the first quarter of 2017 using the retrospective transition method. We anticipate that the adoption of ASU 2014-09 will have primarily two impacts on our portfolio of contracts and our Consolidated Financial Statements. The majority of our long-term contracts will continue to recognize revenue and earnings over time as the work progresses because of the continuous transfer of control to the customer, generally using an input measure (e.g., costs incurred) to reflect progress. However, we will be precluded from using the reallocation method of recognizing adjustments in estimated profit on contracts discussed previously. The total impact of an adjustment in estimated profit recorded to date on a contract will be recognized in the period it is identified (cumulative catch-up method), rather than recognizing the impact of an adjustment prospectively over the remaining contract term. As a result, adjustments in contract estimates may be larger and likely more variable from period to period, particularly on our contracts of greater value and longer performance period (for example, in our Marine Systems group), and may introduce an element of variability to our operating results that we have not experienced using the reallocation method. Despite this variability, a contract’s cash flows and overall profitability at completion are the same under the cumulative catch-up method versus our current method of prospectively recognizing adjustments in estimate. Anticipated losses on contracts will continue to be recognized in the quarter they are identified. For our contracts for the manufacture of business-jet aircraft in the Aerospace group, we currently record revenue at two contractual milestones, green and outfitted aircraft delivery. Under ASU 2014-09, we will record revenue when control is transferred to the customer, generally when the customer accepts the fully outfitted aircraft. ASU 2014-09 will not change the total revenue or operating earnings recognized on our new aircraft contracts, only the timing of when those amounts are recognized. Numerous other contracts in our portfolio will be impacted by ASU 2014-09, due primarily to the identification of multiple performance obligations within a single contract. However, we do not anticipate that these impacts will be material to our Consolidated Financial Statements. We have assessed our 2015 operating results under ASU 2014-09. In our three defense groups, the assessment under ASU 2014-09 did not have a material impact on our results of operations. Our defense groups’ revenue and operating margin for 2015 were essentially unchanged. In our Aerospace group, the assessment under ASU 2014-09 increased revenue and operating margin by 4 percent and 40 basis points, respectively, as compared to 2015 operating results under existing GAAP. The increase in revenue and operating margin compared to as-reported 2015 operating results is due to the relationship between green and outfitted aircraft deliveries and the timing and mix of those aircraft deliveries. Because we delivered more outfitted aircraft than green aircraft in 2015, revenue and operating earnings were higher in 2015 under ASU 2014-09 versus under existing GAAP. The impact of ASU 2014-09 on our 2015 operating results may or may not be representative of the impact on subsequent years' results. As noted above, aircraft manufacturing revenue in our Aerospace group will be recognized when control is transferred to the customer, generally when the customer accepts the fully outfitted aircraft, which will depend on annual delivery rates. Moreover, as described above in our defense groups, use of the cumulative catch-up method of recognizing adjustments in estimated profits on our long-term contracts will require us to recognize the total impact of an adjustment in the period it is identified rather than prospectively over the remaining contract term as we have in the past. On our Consolidated Balance Sheet, long-term contracts will continue to be reported in a net asset (contracts in process) or liability (customer advances and deposits) position on a contract-by-contract basis at the end of each reporting period. Business-jet components in our Aerospace group will be reported in inventory until control of the aircraft transfers to the customer. The assessment of our December 31, 2015, Consolidated Balance Sheet under ASU 2014-09 resulted in some reclassifications among financial statement accounts, but these reclassifications did not materially change the total amount of net assets as of December 31, 2015. Once we adopt ASU 2014-09, we do not anticipate that our internal control framework will materially change, but rather that existing internal controls will be modified and augmented, as necessary, to consider our new revenue recognition policy effective January 1, 2017. As we implement the new standard, we have developed internal controls to ensure that we adequately evaluate our portfolio of contracts under the five-step model and accurately restate our prior-period operating results under ASU 2014-09. |
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Discontinued Operations | Discontinued Operations. In 2013, we settled litigation with the U.S. Navy related to the terminated A-12 aircraft contract in the company's former tactical military aircraft business. In connection with the settlement, we released some rights to reimbursement of costs on ships under contract at the time at our Bath, Maine shipyard. As we have progressed through the shipbuilding process, we have determined that the cost associated with this settlement is greater than anticipated. Therefore, in the third quarter of 2016, we recognized an $84 loss, net of taxes, to adjust the previously-recognized settlement value. In addition, in the first quarter of 2016, we recognized a final adjustment to the loss on the sale of a business further discussed in Note B. |
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Accounting Standards Updates | Accounting Standards Updates. The standards described below were issued by the FASB in 2016 and should be read in conjunction with the discussion of New Accounting Standards in our Annual Report on Form 10-K for the year ended December 31, 2015.
The impact of the adoption in the nine-month period ended October 2, 2016, was a tax benefit of approximately $60. As this area of the ASU permits only prospective adoption, there was no impact on our 2015 Consolidated Financial Statements. In the Consolidated Statement of Cash Flows, the impact of the adoption in the nine-month period ended October 2, 2016, was a $91 increase in net cash provided by operating activities and a corresponding $91 increase in net cash used by financing activities. The areas of the ASU that relate to the Consolidated Statement of Cash Flows were adopted retrospectively. We have restated our prior-period Consolidated Statement of Cash Flows accordingly, resulting in a $100 increase in net cash provided by operating activities and a corresponding $100 increase in net cash used by financing activities for the nine-month period ended October 4, 2015. The other aspects of the ASU did not have a material impact on our results of operations, financial condition or cash flows. Several other ASUs issued by the FASB in 2016 are not yet effective, including the following:
We do not expect other ASUs issued by the FASB in 2016 to have a material effect on our Consolidated Financial Statements. |
Acquisitions and Divestitures, Goodwill, and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In The Carrying Amount Of Goodwill By Reporting Unit | The changes in the carrying amount of goodwill by reporting unit for the nine-month period ended October 2, 2016, were as follows:
(a)Goodwill on December 31, 2015, in the Information Systems and Technology reporting unit is net of $2 billion of accumulated impairment losses. (b)Includes adjustments during the purchase price allocation period. (c)Consists primarily of adjustments for foreign currency translation. |
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Intangible Assets | Intangible assets consisted of the following:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | Basic and diluted weighted average shares outstanding were as follows (in thousands):
* Excludes outstanding options to purchase shares of common stock because these options had exercise prices in excess of the average market price of our common stock during the period and therefore the effect of including these options would be antidilutive. These options totaled 4,622 and 4,080 for the three- and nine-month periods ended October 2, 2016, and 2,034 and 1,605 for the three- and nine-month periods ended October 4, 2015, respectively. |
Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying And Fair Values Of Other Financial Assets And Liabilities | The following tables present the fair values of our other financial assets and liabilities on October 2, 2016, and December 31, 2015, and the basis for determining their fair values:
(a)We had no Level 3 financial instruments on October 2, 2016, or December 31, 2015. (b)Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities. |
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Assets and Liabilities | Our net deferred tax asset consisted of the following:
|
Contracts In Process (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Contracts In Process | Contracts in process consisted of the following:
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Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventories | Inventories consisted of the following:
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Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Debt | Debt consisted of the following:
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Other Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Other Liabilities By Balance Sheet Caption | A summary of significant other liabilities by balance sheet caption follows:
(a)Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, deferred revenue and supplier contributions in the Aerospace group, liabilities of discontinued operations, and insurance-related costs. (b)Consists primarily of warranty reserves, workers' compensation liabilities and liabilities of discontinued operations. |
Shareholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following:
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Commitments And Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Changes In Carrying Amount Of Warranty Liabilities | The changes in the carrying amount of warranty liabilities for the nine-month periods ended October 2, 2016, and October 4, 2015, were as follows:
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Retirement Plans (Tables) |
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Defined-Benefit Pension And Other Post-Retirement Benefit Cost | Net periodic defined-benefit pension and other post-retirement benefit cost for the three- and nine-month periods ended October 2, 2016, and October 4, 2015, consisted of the following:
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Business Group Information (Tables) |
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Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Financial Information For Each Of Our Business Groups | Summary financial information for each of our business groups follows:
* Corporate operating results consist primarily of stock option expense. |
Condensed Consolidating Financial Statements (Tables) |
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Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statements of Earnings (Unaudited) | CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED)
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Condensed Consolidating Balance Sheet (Unaudited) |
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Condensed Consolidating Statements of Cash Flows (Unaudited) |
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Summary Of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
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New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Tax benefit | $ (281) | $ (280) | $ (882) | $ (882) |
Percentage increase in revenue | 4.00% | |||
Percentage increase in operating margin | 0.40% | |||
Discontinued operations, net of tax | (84) | |||
Length of fiscal quarters, weeks | 91 days | |||
Net increase in operating earnings from the quarterly impact of revisions in contract | $ 44 | $ 44 | $ 231 | $ 152 |
Net increase in operating earnings per share from the quarterly impact of revisions in contract | $ 0.09 | $ 0.09 | $ 0.48 | $ 0.30 |
New Accounting Pronouncement, Early Adoption, Effect | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Tax benefit | $ 60 | |||
Increase (decrease) in net cash provided by operating activities | 91 | $ 100 | ||
Increase (decrease) in net cash used by financing activities | $ (91) | $ (100) |
Acquisitions and Divestitures, Goodwill, and Intangible Assets (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 02, 2016 |
Apr. 03, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Goodwill and Intangible Assets Disclosure | |||||
Amortization expense | $ 20 | $ 29 | $ 70 | $ 88 | |
Sale of Axle Business | Discontinued Operations, Disposed of by Sale | |||||
Goodwill and Intangible Assets Disclosure | |||||
Final adjustment to loss in discontinued operations | $ (13) |
Acquisitions and Divestitures, Goodwill, and Intangible Assets Changes In Amount Of Goodwill (Detail) - USD ($) $ in Millions |
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 |
Dec. 31, 2015 |
||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | $ 11,443 | |||||||
Acquisitions | [2] | 34 | |||||||
Other | [3] | 104 | |||||||
Goodwill, end of period | 11,581 | ||||||||
Aerospace | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 2,542 | |||||||
Acquisitions | [2] | 28 | |||||||
Other | [3] | 61 | |||||||
Goodwill, end of period | 2,631 | ||||||||
Combat Systems | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 2,591 | |||||||
Acquisitions | [2] | 0 | |||||||
Other | [3] | 43 | |||||||
Goodwill, end of period | 2,634 | ||||||||
Information Systems and Technology | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 6,021 | |||||||
Acquisitions | [2] | 6 | |||||||
Other | [3] | 0 | |||||||
Goodwill, end of period | 6,027 | ||||||||
Accumulated impairment loss | $ 2,000 | ||||||||
Marine Systems | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 289 | |||||||
Acquisitions | [2] | 0 | |||||||
Other | [3] | 0 | |||||||
Goodwill, end of period | $ 289 | ||||||||
|
Acquisitions and Divestitures, Goodwill, and Intangible Assets Intangible Assets (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | $ 2,380 | $ 2,354 | ||||
Accumulated Amortization | (1,665) | (1,591) | |||||
Net Carrying Amount | 715 | 763 | |||||
Contract and Program Intangible Assets | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1],[2] | 1,636 | 1,626 | ||||
Accumulated Amortization | [2] | (1,270) | (1,214) | ||||
Net Carrying Amount | [2] | 366 | 412 | ||||
Trade Names and Trademarks | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | 470 | 455 | ||||
Accumulated Amortization | (141) | (127) | |||||
Net Carrying Amount | 329 | 328 | |||||
Technology and Software | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | 120 | 119 | ||||
Accumulated Amortization | (100) | (96) | |||||
Net Carrying Amount | 20 | 23 | |||||
Other Intangible Assets | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | 154 | 154 | ||||
Accumulated Amortization | (154) | (154) | |||||
Net Carrying Amount | $ 0 | $ 0 | |||||
|
Earnings Per Share (Detail) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|||
Earnings Per Share [Abstract] | ||||||
Basic weighted average shares outstanding (shares) | 303,938 | 316,680 | 305,445 | 323,996 | ||
Dilutive effect of stock options and restricted stock/RSUs (shares) | [1] | 5,790 | 5,258 | 5,679 | 5,418 | |
Diluted weighted average shares outstanding (shares) | 309,728 | 321,938 | 311,124 | 329,414 | ||
|
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Stock Options and Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (shares) | 4,622 | 2,034 | 4,080 | 1,605 |
Fair Value (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Financial assets (liabilities) | |||||||
Long-term debt, including current portion | $ (3,923) | $ (3,425) | |||||
Carrying Value | |||||||
Financial assets (liabilities) | |||||||
Available-for-sale securities | [1] | 179 | 186 | ||||
Derivatives | [1] | (403) | (673) | ||||
Long-term debt, including current portion | [1] | (3,923) | (3,425) | ||||
Fair Value | |||||||
Financial assets (liabilities) | |||||||
Available-for-sale securities | [1] | 179 | 186 | ||||
Derivatives | [1] | (403) | (673) | ||||
Long-term debt, including current portion | [1] | (4,002) | (3,381) | ||||
Fair Value, Inputs, Level 1 | |||||||
Financial assets (liabilities) | |||||||
Available-for-sale securities | [1] | 93 | 124 | ||||
Derivatives | [1] | 0 | 0 | ||||
Long-term debt, including current portion | [1] | 0 | 0 | ||||
Fair Value, Inputs, Level 2 | |||||||
Financial assets (liabilities) | |||||||
Available-for-sale securities | [1],[2] | 86 | 62 | ||||
Derivatives | [1],[2] | (403) | (673) | ||||
Long-term debt, including current portion | [1],[2] | (4,002) | (3,381) | ||||
Fair Value, Inputs, Level 3 | |||||||
Financial assets (liabilities) | |||||||
Available-for-sale securities | 0 | 0 | |||||
Derivatives | 0 | 0 | |||||
Long-term debt, including current portion | $ 0 | $ 0 | |||||
|
Income Taxes Deferred Tax (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Current deferred tax asset | $ 8 | $ 3 |
Current deferred tax liability | (1,048) | (829) |
Noncurrent deferred tax asset | 1,152 | 1,272 |
Noncurrent deferred tax liability | (88) | (75) |
Net deferred tax asset | $ 24 | $ 371 |
Income Taxes - Additional Information (Detail) |
Oct. 02, 2016
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Possible chance of tax position sustained, percentage | 50.00% |
Amount of unrecorded benefit | $ 0 |
Cost Of Contracts (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Contractors [Abstract] | ||
Contract costs and estimated profits | $ 26,633 | $ 20,742 |
Other contract costs | 811 | 965 |
Costs in excess of billings on uncompleted contracts or programs, total | 27,444 | 21,707 |
Advances and progress payments | (22,231) | (17,350) |
Total contracts in process | $ 5,213 | $ 4,357 |
Inventory (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Work in process | $ 2,204 | $ 1,889 |
Raw materials | 1,380 | 1,376 |
Finished goods | 33 | 28 |
Pre-owned aircraft | 40 | 73 |
Total inventories | $ 3,657 | $ 3,366 |
Debt (Detail) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Oct. 02, 2016 |
Dec. 31, 2015 |
|
Debt Instrument [Line Items] | ||
Total debt - principal | $ 3,923 | $ 3,425 |
Less unamortized debt issuance costs and discounts | 37 | 26 |
Total debt | 3,886 | 3,399 |
Less current portion | 1 | 501 |
Long-term debt | 3,885 | 2,898 |
Fixed-Rate Notes Due July 2016 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 0 | 500 |
Interest Rate | 2.25% | |
Fixed Rate Notes Due November 2017 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 900 | 900 |
Interest Rate | 1.00% | |
Fixed-Rate Notes Due July 2021 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 500 | 500 |
Interest Rate | 3.875% | |
Fixed Rate Notes Due November 2022 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 1,000 | 1,000 |
Interest Rate | 2.25% | |
Fixed Rate Notes Due August 2023 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 500 | 0 |
Interest Rate | 1.875% | |
Fixed Rate Notes Due August 2026 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 500 | 0 |
Interest Rate | 2.125% | |
Fixed Rate Notes Due November 2042 | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 500 | 500 |
Interest Rate | 3.60% | |
Other Debt Securities | ||
Debt Instrument [Line Items] | ||
Total debt - principal | $ 23 | $ 25 |
Other Interest rate | Various |
Debt - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Oct. 02, 2016 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Debt Instrument [Line Items] | |||
Percentage of owned subsidiaries guaranteed | 100.00% | ||
Commercial paper | $ 0.0 | $ 0.0 | |
Repayments of fixed-rate notes | 500.0 | 500.0 | $ 500.0 |
Fixed Rate Notes | Fixed Rate Notes | |||
Debt Instrument [Line Items] | |||
Debt issued | 1,000.0 | $ 1,000.0 | |
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Percentage of owned subsidiaries guaranteed | 100.00% | ||
Borrowing capacity | 2,000.0 | $ 2,000.0 | |
Commercial Paper | Multi-Year Facility Expiring July 2018 | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | 1,000.0 | 1,000.0 | |
Commercial Paper | Multi-year Facility Expiring November 2020 | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 1,000.0 | $ 1,000.0 |
Liabilities Balance (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Other Liabilities Disclosure [Abstract] | |||||||
Deferred income taxes | $ 1,048 | $ 829 | |||||
Salaries and wages | 741 | 648 | |||||
Fair value of cash flow hedges | 478 | 780 | |||||
Workers' compensation | 382 | 369 | |||||
Retirement benefits | 299 | 304 | |||||
Other | [1] | 1,419 | 1,376 | ||||
Total other current liabilities | 4,367 | 4,306 | |||||
Retirement benefits | 4,011 | 4,251 | |||||
Customer deposits on commercial contracts | 359 | 506 | |||||
Deferred income taxes | 88 | 75 | |||||
Other | [2] | 1,115 | 1,084 | ||||
Total other liabilities | $ 5,573 | $ 5,916 | |||||
|
Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2016 |
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Class of Stock [Line Items] | |||||
Stock repurchased during the period, shares | 11.2 | 19.3 | |||
Stock repurchased during the period, value | $ 1,500 | $ 2,700 | |||
Remaining number of shares authorized to be repurchased, shares | 8.4 | 8.4 | |||
Shares remaining to be repurchased as a percent of total shares outstanding | 3.00% | 3.00% | |||
Recognized net actuarial loss (before tax) | $ 249 | 334 | |||
Amortization of prior service credit (before tax) | 56 | 54 | |||
Payments to repurchase common stock | $ 1,514 | $ 2,729 | |||
Dividends declared per share | $ 0.76 | $ 0.69 | $ 2.28 | $ 2.07 | |
Dividends paid in cash | $ 231 | $ 223 | $ 678 | $ 655 | |
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Payments to repurchase common stock | $ 23 |
Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, Period Start | $ (3,286) | $ (2,932) |
Other comprehensive income (loss) pretax | 528 | (278) |
Provision (benefit) for income tax, net | 133 | (25) |
Other comprehensive income (loss) net of tax | 395 | (253) |
Balance, Period End | (2,891) | (3,185) |
Losses on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, Period Start | (487) | (173) |
Other comprehensive income (loss) pretax | 260 | (331) |
Provision (benefit) for income tax, net | 65 | (115) |
Other comprehensive income (loss) net of tax | 195 | (216) |
Balance, Period End | (292) | (389) |
Unrealized Gains on Securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, Period Start | 20 | 22 |
Other comprehensive income (loss) pretax | (5) | (4) |
Provision (benefit) for income tax, net | (2) | (1) |
Other comprehensive income (loss) net of tax | (3) | (3) |
Balance, Period End | 17 | 19 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, Period Start | 178 | 541 |
Other comprehensive income (loss) pretax | 82 | (230) |
Provision (benefit) for income tax, net | 1 | (6) |
Other comprehensive income (loss) net of tax | 81 | (224) |
Balance, Period End | 259 | 317 |
Changes in Retirement Plans’ Funded Status | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, Period Start | (2,997) | (3,322) |
Other comprehensive income (loss) pretax | 191 | 287 |
Provision (benefit) for income tax, net | 69 | 97 |
Other comprehensive income (loss) net of tax | 122 | 190 |
Balance, Period End | $ (2,875) | $ (3,132) |
Derivative Instruments And Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Oct. 02, 2016 |
Dec. 31, 2015 |
Oct. 04, 2015 |
Dec. 31, 2014 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional forward foreign exchange contracts outstanding | $ 6,500 | $ 7,200 | ||
Average maturity of foreign currency forward contracts, in years | 3 years | |||
Fair value hedges | $ 0 | 0 | ||
Net investment hedges | 0 | 0 | ||
Cash and equivalents | $ 2,303 | $ 2,785 | $ 3,372 | $ 4,388 |
Maximum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Maturity of fixed-income securities, in years | 5 years |
Commitments And Contingencies - Additional Information (Detail) $ in Billions |
9 Months Ended |
---|---|
Oct. 02, 2016
USD ($)
| |
Other Commitments [Line Items] | |
Letters of credit and guarantees | $ 1 |
Maximum | |
Other Commitments [Line Items] | |
Period preceding delivery of aircraft to customer fair market value of trade-in aircraft is established, days, maximum | 45 days |
Commitments And Contingencies Product Guarantee (Detail) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning balance | $ 465 | $ 428 |
Warranty expense | 85 | 128 |
Payments | (72) | (92) |
Adjustments | (1) | (1) |
Ending balance | $ 477 | $ 463 |
Retirement Plans Benefits Plans (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 44 | $ 57 | $ 132 | $ 171 |
Interest cost | 114 | 133 | 342 | 399 |
Expected return on plan assets | (178) | (174) | (534) | (522) |
Recognized net actuarial loss (gain) | 84 | 110 | 252 | 329 |
Amortization of prior service credit | (17) | (17) | (51) | (51) |
Net periodic benefit cost | 47 | 109 | 141 | 326 |
Other Postretirement Benefit Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 3 | 3 | 8 | 9 |
Interest cost | 8 | 11 | 25 | 33 |
Expected return on plan assets | (8) | (8) | (24) | (24) |
Recognized net actuarial loss (gain) | (1) | 2 | (3) | 5 |
Amortization of prior service credit | (2) | (1) | (5) | (3) |
Net periodic benefit cost | $ 0 | $ 7 | $ 1 | $ 20 |
Business Group Information - Additional Information (Detail) |
9 Months Ended |
---|---|
Oct. 02, 2016
Segment
| |
Disclosure Business Group Information Additional Information [Abstract] | |
Number of operating business groups (segment) | 4 |
Segment Reporting Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
||||
Segment Reporting Information [Line Items] | |||||||
Revenue | $ 7,731 | $ 7,994 | $ 23,120 | $ 23,660 | |||
Operating earnings | 1,069 | 1,034 | 3,192 | 3,142 | |||
Aerospace | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 2,017 | 2,343 | 6,138 | 6,709 | |||
Operating earnings | 437 | 426 | 1,282 | 1,296 | |||
Combat Systems | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 1,330 | 1,345 | 3,918 | 4,116 | |||
Operating earnings | 219 | 218 | 655 | 648 | |||
Information Systems and Technology | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 2,341 | 2,219 | 6,903 | 6,804 | |||
Operating earnings | 256 | 219 | 748 | 673 | |||
Marine Systems | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 2,043 | 2,087 | 6,161 | 6,031 | |||
Operating earnings | 166 | 181 | 539 | 556 | |||
Corporate | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | [1] | 0 | 0 | 0 | 0 | ||
Operating earnings | [1] | $ (9) | $ (10) | $ (32) | $ (31) | ||
|
Condensed Consolidating Financial Statements Narrative (Details) |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Consolidating Financial Statements [Abstract] | |
Percentage of owned subsidiaries (the guarantors) | 100.00% |
Condensed Consolidating Financial Statements Condensed Consolidating Statements Of Earnings (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Revenue: | ||||
Revenue | $ 7,731 | $ 7,994 | $ 23,120 | $ 23,660 |
Operating costs and expenses: | ||||
Cost of sales | 6,191 | 6,484 | 18,511 | 19,072 |
General and administrative (G&A) | 471 | 476 | 1,417 | 1,446 |
Operating earnings | 1,069 | 1,034 | 3,192 | 3,142 |
Interest, net | (23) | (23) | (68) | (64) |
Other, net | 2 | 2 | 13 | 5 |
Earnings before income tax | 1,048 | 1,013 | 3,137 | 3,083 |
Provision for income tax, net | 281 | 280 | 882 | 882 |
Discontinued operations, net of tax | (84) | 0 | (97) | 0 |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net earnings | 683 | 733 | 2,158 | 2,201 |
Comprehensive income | 757 | 640 | 2,553 | 1,948 |
Consolidating Adjustments | ||||
Revenue: | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating costs and expenses: | ||||
Cost of sales | 0 | 0 | 0 | 0 |
General and administrative (G&A) | 0 | 0 | 0 | 0 |
Operating earnings | 0 | 0 | 0 | 0 |
Interest, net | 0 | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 | 0 |
Earnings before income tax | 0 | 0 | 0 | 0 |
Provision for income tax, net | 0 | 0 | 0 | 0 |
Discontinued operations, net of tax | 0 | 0 | ||
Equity in net earnings of subsidiaries | (755) | (717) | (2,251) | (2,207) |
Net earnings | (755) | (717) | (2,251) | (2,207) |
Comprehensive income | (783) | (580) | (2,540) | (1,791) |
Parent Company | ||||
Revenue: | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating costs and expenses: | ||||
Cost of sales | (2) | 1 | 1 | (2) |
General and administrative (G&A) | 10 | 9 | 30 | 33 |
Operating earnings | (8) | (10) | (31) | (31) |
Interest, net | (23) | (23) | (69) | (66) |
Other, net | 1 | 2 | 11 | 3 |
Earnings before income tax | (30) | (31) | (89) | (94) |
Provision for income tax, net | (42) | (47) | (93) | (88) |
Discontinued operations, net of tax | (84) | (97) | ||
Equity in net earnings of subsidiaries | 755 | 717 | 2,251 | 2,207 |
Net earnings | 683 | 733 | 2,158 | 2,201 |
Comprehensive income | 757 | 640 | 2,553 | 1,948 |
Guarantor Subsidiaries | ||||
Revenue: | ||||
Revenue | 6,782 | 7,037 | 20,291 | 20,688 |
Operating costs and expenses: | ||||
Cost of sales | 5,479 | 5,729 | 16,348 | 16,765 |
General and administrative (G&A) | 381 | 399 | 1,162 | 1,196 |
Operating earnings | 922 | 909 | 2,781 | 2,727 |
Interest, net | (1) | (1) | (1) | (2) |
Other, net | (4) | 0 | (3) | 2 |
Earnings before income tax | 917 | 908 | 2,777 | 2,727 |
Provision for income tax, net | 306 | 296 | 903 | 884 |
Discontinued operations, net of tax | 0 | 0 | ||
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net earnings | 611 | 612 | 1,874 | 1,843 |
Comprehensive income | 608 | 613 | 1,866 | 1,850 |
Non-Guarantor Subsidiaries | ||||
Revenue: | ||||
Revenue | 949 | 957 | 2,829 | 2,972 |
Operating costs and expenses: | ||||
Cost of sales | 714 | 754 | 2,162 | 2,309 |
General and administrative (G&A) | 80 | 68 | 225 | 217 |
Operating earnings | 155 | 135 | 442 | 446 |
Interest, net | 1 | 1 | 2 | 4 |
Other, net | 5 | 0 | 5 | 0 |
Earnings before income tax | 161 | 136 | 449 | 450 |
Provision for income tax, net | 17 | 31 | 72 | 86 |
Discontinued operations, net of tax | 0 | 0 | ||
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net earnings | 144 | 105 | 377 | 364 |
Comprehensive income | $ 175 | $ (33) | $ 674 | $ (59) |
Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Millions |
Oct. 02, 2016 |
Dec. 31, 2015 |
Oct. 04, 2015 |
Dec. 31, 2014 |
|||
---|---|---|---|---|---|---|---|
Current assets: | |||||||
Cash and equivalents | $ 2,303 | $ 2,785 | $ 3,372 | $ 4,388 | |||
Accounts receivable | 3,502 | 3,446 | |||||
Contracts in process | 5,213 | 4,357 | |||||
Inventories | |||||||
Work in process | 2,204 | 1,889 | |||||
Raw materials | 1,380 | 1,376 | |||||
Finished goods | 33 | 28 | |||||
Pre-owned aircraft | 40 | 73 | |||||
Other current assets | 622 | 617 | |||||
Total current assets | 15,297 | 14,571 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment | 7,850 | 7,676 | |||||
Accumulated depreciation of PP&E | (4,405) | (4,210) | |||||
Intangible assets | 2,380 | 2,354 | |||||
Accumulated amortization of intangible assets | (1,665) | (1,591) | |||||
Goodwill | 11,581 | 11,443 | [1] | ||||
Other assets | 1,630 | 1,754 | |||||
Investment in subsidiaries | 0 | 0 | |||||
Total noncurrent assets | 17,371 | 17,426 | |||||
Total assets | 32,668 | 31,997 | |||||
Current liabilities: | |||||||
Short-term debt | 1 | 501 | |||||
Customer advances and deposits | 5,249 | 5,674 | |||||
Other current liabilities | 6,643 | 6,270 | |||||
Total current liabilities | 11,893 | 12,445 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 3,885 | 2,898 | |||||
Other liabilities | 5,573 | 5,916 | |||||
Total noncurrent liabilities | 9,458 | 8,814 | |||||
Intercompany | 0 | 0 | |||||
Shareholders' equity: | |||||||
Common stock | 482 | 482 | |||||
Other shareholders' equity | 10,835 | 10,256 | |||||
Total shareholders' equity | 11,317 | 10,738 | 10,734 | 11,829 | |||
Total liabilities and shareholders' equity | 32,668 | 31,997 | |||||
Consolidating Adjustments | |||||||
Current assets: | |||||||
Cash and equivalents | 0 | 0 | 0 | 0 | |||
Accounts receivable | 0 | 0 | |||||
Contracts in process | 0 | 0 | |||||
Inventories | |||||||
Work in process | 0 | 0 | |||||
Raw materials | 0 | 0 | |||||
Finished goods | 0 | 0 | |||||
Pre-owned aircraft | 0 | 0 | |||||
Other current assets | 0 | 0 | |||||
Total current assets | 0 | 0 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment | 0 | 0 | |||||
Accumulated depreciation of PP&E | 0 | 0 | |||||
Intangible assets | 0 | 0 | |||||
Accumulated amortization of intangible assets | 0 | 0 | |||||
Goodwill | 0 | 0 | |||||
Other assets | 0 | 0 | |||||
Investment in subsidiaries | (42,766) | (40,062) | |||||
Total noncurrent assets | (42,766) | (40,062) | |||||
Total assets | (42,766) | (40,062) | |||||
Current liabilities: | |||||||
Short-term debt | 0 | 0 | |||||
Customer advances and deposits | 0 | 0 | |||||
Other current liabilities | 0 | 0 | |||||
Total current liabilities | 0 | 0 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 0 | 0 | |||||
Other liabilities | 0 | 0 | |||||
Total noncurrent liabilities | 0 | 0 | |||||
Intercompany | 0 | 0 | |||||
Shareholders' equity: | |||||||
Common stock | (2,417) | (2,360) | |||||
Other shareholders' equity | (40,349) | (37,702) | |||||
Total shareholders' equity | (42,766) | (40,062) | |||||
Total liabilities and shareholders' equity | (42,766) | (40,062) | |||||
Parent Company | |||||||
Current assets: | |||||||
Cash and equivalents | 1,077 | 1,732 | 1,284 | 2,536 | |||
Accounts receivable | 0 | 0 | |||||
Contracts in process | 227 | 514 | |||||
Inventories | |||||||
Work in process | 0 | 0 | |||||
Raw materials | 0 | 0 | |||||
Finished goods | 0 | 0 | |||||
Pre-owned aircraft | 0 | 0 | |||||
Other current assets | 210 | 140 | |||||
Total current assets | 1,514 | 2,386 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment | 194 | 189 | |||||
Accumulated depreciation of PP&E | (65) | (59) | |||||
Intangible assets | 0 | 0 | |||||
Accumulated amortization of intangible assets | 0 | 0 | |||||
Goodwill | 0 | 0 | |||||
Other assets | 1,256 | 1,379 | |||||
Investment in subsidiaries | 42,766 | 40,062 | |||||
Total noncurrent assets | 44,151 | 41,571 | |||||
Total assets | 45,665 | 43,957 | |||||
Current liabilities: | |||||||
Short-term debt | 0 | 500 | |||||
Customer advances and deposits | 0 | 0 | |||||
Other current liabilities | 1,616 | 1,331 | |||||
Total current liabilities | 1,616 | 1,831 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 3,863 | 2,874 | |||||
Other liabilities | 3,136 | 3,417 | |||||
Total noncurrent liabilities | 6,999 | 6,291 | |||||
Intercompany | 25,733 | 25,097 | |||||
Shareholders' equity: | |||||||
Common stock | 482 | 482 | |||||
Other shareholders' equity | 10,835 | 10,256 | |||||
Total shareholders' equity | 11,317 | 10,738 | |||||
Total liabilities and shareholders' equity | 45,665 | 43,957 | |||||
Guarantor Subsidiaries | |||||||
Current assets: | |||||||
Cash and equivalents | 0 | 0 | 0 | 0 | |||
Accounts receivable | 1,235 | 1,181 | |||||
Contracts in process | 3,193 | 2,795 | |||||
Inventories | |||||||
Work in process | 2,191 | 1,882 | |||||
Raw materials | 1,347 | 1,344 | |||||
Finished goods | 22 | 23 | |||||
Pre-owned aircraft | 40 | 73 | |||||
Other current assets | 198 | 213 | |||||
Total current assets | 8,226 | 7,511 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment | 6,501 | 6,386 | |||||
Accumulated depreciation of PP&E | (3,609) | (3,462) | |||||
Intangible assets | 1,448 | 1,445 | |||||
Accumulated amortization of intangible assets | (1,172) | (1,122) | |||||
Goodwill | 8,047 | 8,040 | |||||
Other assets | 213 | 207 | |||||
Investment in subsidiaries | 0 | 0 | |||||
Total noncurrent assets | 11,428 | 11,494 | |||||
Total assets | 19,654 | 19,005 | |||||
Current liabilities: | |||||||
Short-term debt | 1 | 1 | |||||
Customer advances and deposits | 2,665 | 3,038 | |||||
Other current liabilities | 3,584 | 3,309 | |||||
Total current liabilities | 6,250 | 6,348 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 22 | 24 | |||||
Other liabilities | 1,923 | 2,021 | |||||
Total noncurrent liabilities | 1,945 | 2,045 | |||||
Intercompany | (24,962) | (23,816) | |||||
Shareholders' equity: | |||||||
Common stock | 6 | 6 | |||||
Other shareholders' equity | 36,415 | 34,422 | |||||
Total shareholders' equity | 36,421 | 34,428 | |||||
Total liabilities and shareholders' equity | 19,654 | 19,005 | |||||
Non-Guarantor Subsidiaries | |||||||
Current assets: | |||||||
Cash and equivalents | 1,226 | 1,053 | $ 2,088 | $ 1,852 | |||
Accounts receivable | 2,267 | 2,265 | |||||
Contracts in process | 1,793 | 1,048 | |||||
Inventories | |||||||
Work in process | 13 | 7 | |||||
Raw materials | 33 | 32 | |||||
Finished goods | 11 | 5 | |||||
Pre-owned aircraft | 0 | 0 | |||||
Other current assets | 214 | 264 | |||||
Total current assets | 5,557 | 4,674 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment | 1,155 | 1,101 | |||||
Accumulated depreciation of PP&E | (731) | (689) | |||||
Intangible assets | 932 | 909 | |||||
Accumulated amortization of intangible assets | (493) | (469) | |||||
Goodwill | 3,534 | 3,403 | |||||
Other assets | 161 | 168 | |||||
Investment in subsidiaries | 0 | 0 | |||||
Total noncurrent assets | 4,558 | 4,423 | |||||
Total assets | 10,115 | 9,097 | |||||
Current liabilities: | |||||||
Short-term debt | 0 | 0 | |||||
Customer advances and deposits | 2,584 | 2,636 | |||||
Other current liabilities | 1,443 | 1,630 | |||||
Total current liabilities | 4,027 | 4,266 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 0 | 0 | |||||
Other liabilities | 514 | 478 | |||||
Total noncurrent liabilities | 514 | 478 | |||||
Intercompany | (771) | (1,281) | |||||
Shareholders' equity: | |||||||
Common stock | 2,411 | 2,354 | |||||
Other shareholders' equity | 3,934 | 3,280 | |||||
Total shareholders' equity | 6,345 | 5,634 | |||||
Total liabilities and shareholders' equity | $ 10,115 | $ 9,097 | |||||
|
Condensed Consolidating Statements Of Cash Flows (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
||||
Condensed Financial Statements [Line Items] | |||||||
Net cash provided by operating activities | [1] | $ 1,372 | $ 2,270 | ||||
Cash flows from investing activities: | |||||||
Maturities of held-to-maturity securities | 0 | 500 | |||||
Capital expenditures | (244) | (360) | |||||
Proceeds from sales of assets | 4 | 290 | |||||
Other, net | (38) | (12) | |||||
Net cash (used) provided by investing activities | (282) | 418 | |||||
Cash flows from financing activities: | |||||||
Purchases of common stock | (1,514) | (2,729) | |||||
Proceeds from fixed-rate notes | 992 | 0 | |||||
Dividends paid | $ (231) | $ (223) | (678) | (655) | |||
Repayment of fixed-rate notes | (500) | (500) | (500) | ||||
Proceeds from option exercises | 211 | 240 | |||||
Other, net | (39) | (29) | |||||
Net cash used by financing activities | (1,528) | (3,673) | |||||
Net cash used by discontinued operations | (44) | (31) | |||||
Cash sweep/funding by parent | 0 | 0 | |||||
Net increase (decrease) in cash and equivalents | (482) | (1,016) | |||||
Cash and equivalents at beginning of period | 2,785 | 4,388 | |||||
Cash and equivalents at end of period | 2,303 | 3,372 | 2,303 | 3,372 | |||
Consolidating Adjustments | |||||||
Condensed Financial Statements [Line Items] | |||||||
Net cash provided by operating activities | [1] | 0 | 0 | ||||
Cash flows from investing activities: | |||||||
Maturities of held-to-maturity securities | 0 | ||||||
Capital expenditures | 0 | 0 | |||||
Proceeds from sales of assets | 0 | ||||||
Other, net | 0 | 0 | |||||
Net cash (used) provided by investing activities | 0 | 0 | |||||
Cash flows from financing activities: | |||||||
Purchases of common stock | 0 | 0 | |||||
Proceeds from fixed-rate notes | 0 | ||||||
Dividends paid | 0 | 0 | |||||
Repayment of fixed-rate notes | 0 | 0 | |||||
Proceeds from option exercises | 0 | 0 | |||||
Other, net | 0 | 0 | |||||
Net cash used by financing activities | 0 | 0 | |||||
Net cash used by discontinued operations | 0 | 0 | |||||
Cash sweep/funding by parent | 0 | 0 | |||||
Net increase (decrease) in cash and equivalents | 0 | 0 | |||||
Cash and equivalents at beginning of period | 0 | 0 | |||||
Cash and equivalents at end of period | 0 | 0 | 0 | 0 | |||
Parent Company | |||||||
Condensed Financial Statements [Line Items] | |||||||
Net cash provided by operating activities | [1] | 98 | (230) | ||||
Cash flows from investing activities: | |||||||
Maturities of held-to-maturity securities | 500 | ||||||
Capital expenditures | (5) | (29) | |||||
Proceeds from sales of assets | 162 | ||||||
Other, net | 3 | 2 | |||||
Net cash (used) provided by investing activities | (2) | 635 | |||||
Cash flows from financing activities: | |||||||
Purchases of common stock | (1,514) | (2,729) | |||||
Proceeds from fixed-rate notes | 992 | ||||||
Dividends paid | (678) | (655) | |||||
Repayment of fixed-rate notes | (500) | (500) | |||||
Proceeds from option exercises | 211 | 240 | |||||
Other, net | (38) | (31) | |||||
Net cash used by financing activities | (1,527) | (3,675) | |||||
Net cash used by discontinued operations | (44) | (31) | |||||
Cash sweep/funding by parent | 820 | 2,049 | |||||
Net increase (decrease) in cash and equivalents | (655) | (1,252) | |||||
Cash and equivalents at beginning of period | 1,732 | 2,536 | |||||
Cash and equivalents at end of period | 1,077 | 1,284 | 1,077 | 1,284 | |||
Guarantor Subsidiaries | |||||||
Condensed Financial Statements [Line Items] | |||||||
Net cash provided by operating activities | [1] | 1,161 | 1,916 | ||||
Cash flows from investing activities: | |||||||
Maturities of held-to-maturity securities | 0 | ||||||
Capital expenditures | (208) | (314) | |||||
Proceeds from sales of assets | 128 | ||||||
Other, net | (3) | (14) | |||||
Net cash (used) provided by investing activities | (211) | (200) | |||||
Cash flows from financing activities: | |||||||
Purchases of common stock | 0 | 0 | |||||
Proceeds from fixed-rate notes | 0 | ||||||
Dividends paid | 0 | 0 | |||||
Repayment of fixed-rate notes | 0 | 0 | |||||
Proceeds from option exercises | 0 | 0 | |||||
Other, net | (1) | 2 | |||||
Net cash used by financing activities | (1) | 2 | |||||
Net cash used by discontinued operations | 0 | 0 | |||||
Cash sweep/funding by parent | (949) | (1,718) | |||||
Net increase (decrease) in cash and equivalents | 0 | 0 | |||||
Cash and equivalents at beginning of period | 0 | 0 | |||||
Cash and equivalents at end of period | 0 | 0 | 0 | 0 | |||
Non-Guarantor Subsidiaries | |||||||
Condensed Financial Statements [Line Items] | |||||||
Net cash provided by operating activities | [1] | 113 | 584 | ||||
Cash flows from investing activities: | |||||||
Maturities of held-to-maturity securities | 0 | ||||||
Capital expenditures | (31) | (17) | |||||
Proceeds from sales of assets | 0 | ||||||
Other, net | (38) | 0 | |||||
Net cash (used) provided by investing activities | (69) | (17) | |||||
Cash flows from financing activities: | |||||||
Purchases of common stock | 0 | 0 | |||||
Proceeds from fixed-rate notes | 0 | ||||||
Dividends paid | 0 | 0 | |||||
Repayment of fixed-rate notes | 0 | 0 | |||||
Proceeds from option exercises | 0 | 0 | |||||
Other, net | 0 | 0 | |||||
Net cash used by financing activities | 0 | 0 | |||||
Net cash used by discontinued operations | 0 | 0 | |||||
Cash sweep/funding by parent | 129 | (331) | |||||
Net increase (decrease) in cash and equivalents | 173 | 236 | |||||
Cash and equivalents at beginning of period | 1,053 | 1,852 | |||||
Cash and equivalents at end of period | $ 1,226 | $ 2,088 | $ 1,226 | $ 2,088 | |||
|
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