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) | April 1, 2018 | April 2, 2017 | |||||
Revenue: | |||||||
Products | $ | 4,576 | $ | 4,467 | |||
Services | 2,959 | 2,974 | |||||
7,535 | 7,441 | ||||||
Operating costs and expenses: | |||||||
Products | 3,546 | 3,438 | |||||
Services | 2,444 | 2,485 | |||||
General and administrative (G&A) | 537 | 472 | |||||
6,527 | 6,395 | ||||||
Operating earnings | 1,008 | 1,046 | |||||
Interest, net | (27 | ) | (25 | ) | |||
Other, net | (21 | ) | (11 | ) | |||
Earnings before income tax | 960 | 1,010 | |||||
Provision for income tax, net | 161 | 247 | |||||
Net earnings | $ | 799 | $ | 763 | |||
Earnings per share | |||||||
Basic | $ | 2.70 | $ | 2.53 | |||
Diluted | $ | 2.65 | $ | 2.48 |
Three Months Ended | |||||||
(Dollars in millions) | April 1, 2018 | April 2, 2017 | |||||
Net earnings | $ | 799 | $ | 763 | |||
(Losses) gains on cash flow hedges | (3 | ) | 13 | ||||
Unrealized gains on marketable securities | — | 5 | |||||
Foreign currency translation adjustments | 1 | 82 | |||||
Change in retirement plans’ funded status | 84 | 69 | |||||
Other comprehensive income, pretax | 82 | 169 | |||||
Provision for income tax, net | 15 | 44 | |||||
Other comprehensive income, net of tax | 67 | 125 | |||||
Comprehensive income | $ | 866 | $ | 888 |
(Unaudited) | |||||||
(Dollars in millions) | April 1, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 4,332 | $ | 2,983 | |||
Accounts receivable | 3,769 | 3,617 | |||||
Unbilled receivables | 5,865 | 5,240 | |||||
Inventories | 5,543 | 5,303 | |||||
Other current assets | 955 | 1,185 | |||||
Total current assets | 20,464 | 18,328 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment, net | 3,533 | 3,517 | |||||
Intangible assets, net | 702 | 702 | |||||
Goodwill | 11,955 | 11,914 | |||||
Other assets | 565 | 585 | |||||
Total noncurrent assets | 16,755 | 16,718 | |||||
Total assets | $ | 37,219 | $ | 35,046 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | $ | 2,498 | $ | 2 | |||
Accounts payable | 2,851 | 3,207 | |||||
Customer advances and deposits | 7,095 | 6,992 | |||||
Other current liabilities | 2,798 | 2,898 | |||||
Total current liabilities | 15,242 | 13,099 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 3,981 | 3,980 | |||||
Other liabilities | 6,222 | 6,532 | |||||
Commitments and contingencies (see Note N) | |||||||
Total noncurrent liabilities | 10,203 | 10,512 | |||||
Shareholders’ equity: | |||||||
Common stock | 482 | 482 | |||||
Surplus | 2,820 | 2,872 | |||||
Retained earnings | 27,605 | 26,444 | |||||
Treasury stock | (15,742 | ) | (15,543 | ) | |||
Accumulated other comprehensive loss | (3,391 | ) | (2,820 | ) | |||
Total shareholders’ equity | 11,774 | 11,435 | |||||
Total liabilities and shareholders’ equity | $ | 37,219 | $ | 35,046 |
Three Months Ended | |||||||
(Dollars in millions) | April 1, 2018 | April 2, 2017 | |||||
Cash flows from operating activities - continuing operations: | |||||||
Net earnings | $ | 799 | $ | 763 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation of property, plant and equipment | 89 | 92 | |||||
Amortization of intangible assets | 20 | 19 | |||||
Equity-based compensation expense | 29 | 23 | |||||
Deferred income tax provision | 4 | 45 | |||||
(Increase) decrease in assets, net of effects of business acquisitions: | |||||||
Accounts receivable | (150 | ) | (84 | ) | |||
Unbilled receivables | (608 | ) | (338 | ) | |||
Inventories | (236 | ) | 2 | ||||
Increase (decrease) in liabilities, net of effects of business acquisitions: | |||||||
Accounts payable | (358 | ) | (72 | ) | |||
Customer advances and deposits | (149 | ) | (95 | ) | |||
Income taxes payable | 167 | 202 | |||||
Other current liabilities | (128 | ) | (76 | ) | |||
Other, net | 25 | 52 | |||||
Net cash (used) provided by operating activities | (496 | ) | 533 | ||||
Cash flows from investing activities: | |||||||
Capital expenditures | (104 | ) | (62 | ) | |||
Other, net | (1 | ) | (23 | ) | |||
Net cash used by investing activities | (105 | ) | (85 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from commercial paper, net | 2,494 | — | |||||
Purchases of common stock | (267 | ) | (354 | ) | |||
Dividends paid | (250 | ) | (230 | ) | |||
Other, net | (25 | ) | (22 | ) | |||
Net cash provided (used) by financing activities | 1,952 | (606 | ) | ||||
Net cash used by discontinued operations | (2 | ) | (8 | ) | |||
Net increase (decrease) in cash and equivalents | 1,349 | (166 | ) | ||||
Cash and equivalents at beginning of period | 2,983 | 2,334 | |||||
Cash and equivalents at end of period | $ | 4,332 | $ | 2,168 | |||
Supplemental cash flow information: | |||||||
Income tax refunds, net | $ | 4 | $ | 4 | |||
Interest payments | $ | 21 | $ | 20 |
Common Stock | Retained | Treasury | Accumulated Other Comprehensive | Total Shareholders’ | |||||||||||||||||||
(Dollars in millions) | Par | Surplus | Earnings | Stock | Loss | Equity | |||||||||||||||||
December 31, 2017 | $ | 482 | $ | 2,872 | $ | 26,444 | $ | (15,543 | ) | $ | (2,820 | ) | $ | 11,435 | |||||||||
Cumulative-effect adjustments (see Note A) | — | — | 638 | — | (638 | ) | — | ||||||||||||||||
Net earnings | — | — | 799 | — | — | 799 | |||||||||||||||||
Cash dividends declared | — | — | (276 | ) | — | — | (276 | ) | |||||||||||||||
Equity-based awards | — | (52 | ) | — | 58 | — | 6 | ||||||||||||||||
Shares purchased | — | — | — | (257 | ) | — | (257 | ) | |||||||||||||||
Other comprehensive income | — | — | — | — | 67 | 67 | |||||||||||||||||
April 1, 2018 | $ | 482 | $ | 2,820 | $ | 27,605 | $ | (15,742 | ) | $ | (3,391 | ) | $ | 11,774 | |||||||||
December 31, 2016 | $ | 482 | $ | 2,819 | $ | 24,543 | $ | (14,156 | ) | $ | (3,387 | ) | $ | 10,301 | |||||||||
Cumulative-effect adjustment* | — | — | (3 | ) | — | — | (3 | ) | |||||||||||||||
Net earnings | — | — | 763 | — | — | 763 | |||||||||||||||||
Cash dividends declared | — | — | (254 | ) | — | — | (254 | ) | |||||||||||||||
Equity-based awards | — | (57 | ) | — | 63 | — | 6 | ||||||||||||||||
Shares purchased | — | — | — | (355 | ) | — | (355 | ) | |||||||||||||||
Other comprehensive income | — | — | — | — | 125 | 125 | |||||||||||||||||
April 2, 2017 | $ | 482 | $ | 2,762 | $ | 25,049 | $ | (14,448 | ) | $ | (3,262 | ) | $ | 10,583 |
• | ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Specific to our business, ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income. The ASU eliminates the available-for-sale classification for equity investments that recognized changes in fair value as a component of other comprehensive income. We adopted the standard on a modified retrospective basis on January 1, 2018, and recognized the cumulative effect as a $24 increase to retained earnings on the date of adoption. |
• | 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. We adopted the standard retrospectively on January 1, 2018. |
• | ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires the service cost component of net benefit cost to be reported separately from the other components of net benefit cost in the income statement. We adopted the standard retrospectively on January 1, 2018. Our restated operating earnings increased $11 for the three-month period ended April 2, 2017, due to the reclassification of the non-service cost components of net benefit cost, and other income decreased by the same amount, with no impact to net earnings. |
• | ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows the reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the implementation of the Tax Cuts and Jobs Act (tax reform) enacted on December 22, 2017. We adopted the standard on January 1, 2018, and recognized a $614 increase to retained earnings on the date of adoption. |
Aerospace | Combat Systems | Information Systems and Technology | Marine Systems | Total Goodwill | |||||||||||||||
December 31, 2017 (a) | $ | 2,638 | $ | 2,677 | $ | 6,302 | $ | 297 | $ | 11,914 | |||||||||
Acquisitions/divestitures (b) | — | — | 16 | — | 16 | ||||||||||||||
Other (c) | 40 | (14 | ) | (1 | ) | — | 25 | ||||||||||||
April 1, 2018 (a) | $ | 2,678 | $ | 2,663 | $ | 6,317 | $ | 297 | $ | 11,955 |
Gross Carrying Amount (a) | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount (a) | Accumulated Amortization | Net Carrying Amount | ||||||||||||||
April 1, 2018 | December 31, 2017 | ||||||||||||||||||
Contract and program intangible assets (b) | $ | 1,665 | $ | (1,318 | ) | $ | 347 | $ | 1,684 | $ | (1,320 | ) | $ | 364 | |||||
Trade names and trademarks | 477 | (168 | ) | 309 | 465 | (160 | ) | 305 | |||||||||||
Technology and software | 154 | (109 | ) | 45 | 137 | (105 | ) | 32 | |||||||||||
Other intangible assets | 155 | (154 | ) | 1 | 155 | (154 | ) | 1 | |||||||||||
Total intangible assets | $ | 2,451 | $ | (1,749 | ) | $ | 702 | $ | 2,441 | $ | (1,739 | ) | $ | 702 |
(a) | Change in gross carrying amounts consists primarily of adjustments for acquired intangible assets and foreign currency translation. |
(b) | Consists of acquired backlog and probable follow-on work and associated customer relationships. |
Three Months Ended | April 1, 2018 | April 2, 2017 | |||||
Revenue | $ | 115 | $ | 72 | |||
Operating earnings | 97 | 50 | |||||
Diluted earnings per share | $ | 0.25 | $ | 0.11 |
Three Months Ended | April 1, 2018 | April 2, 2017 | |||||
Aircraft manufacturing, outfitting and completions | $ | 1,366 | $ | 1,629 | |||
Aircraft services | 451 | 435 | |||||
Pre-owned aircraft | 8 | 10 | |||||
Total Aerospace | 1,825 | 2,074 | |||||
Wheeled combat and tactical vehicles | 625 | 560 | |||||
Weapons systems, armament and munitions | 383 | 346 | |||||
Tanks and tracked vehicles | 331 | 247 | |||||
Engineering and other services | 101 | 134 | |||||
Total Combat Systems | 1,440 | 1,287 | |||||
C4ISR* solutions | 1,098 | 1,088 | |||||
Information technology (IT) services | 1,138 | 1,058 | |||||
Total Information Systems and Technology | 2,236 | 2,146 | |||||
Nuclear-powered submarines | 1,296 | 1,204 | |||||
Surface combatants | 265 | 247 | |||||
Auxiliary and commercial ships | 218 | 143 | |||||
Repair and other services | 255 | 340 | |||||
Total Marine Systems | 2,034 | 1,934 | |||||
Total revenue | $ | 7,535 | $ | 7,441 |
Three Months Ended April 1, 2018 | Aerospace | Combat Systems | Information Systems and Technology | Marine Systems | Total Revenue | ||||||||||||||
Fixed-price | $ | 1,668 | $ | 1,253 | $ | 1,007 | $ | 1,305 | $ | 5,233 | |||||||||
Cost-reimbursement | — | 179 | 1,017 | 728 | 1,924 | ||||||||||||||
Time-and-materials | 157 | 8 | 212 | 1 | 378 | ||||||||||||||
Total revenue | $ | 1,825 | $ | 1,440 | $ | 2,236 | $ | 2,034 | $ | 7,535 | |||||||||
Three Months Ended April 2, 2017 | |||||||||||||||||||
Fixed-price | $ | 1,902 | $ | 1,073 | $ | 930 | $ | 1,130 | $ | 5,035 | |||||||||
Cost-reimbursement | — | 207 | 1,010 | 801 | 2,018 | ||||||||||||||
Time-and-materials | 172 | 7 | 206 | 3 | 388 | ||||||||||||||
Total revenue | $ | 2,074 | $ | 1,287 | $ | 2,146 | $ | 1,934 | $ | 7,441 |
Three Months Ended April 1, 2018 | Aerospace | Combat Systems | Information Systems and Technology | Marine Systems | Total Revenue | ||||||||||||||
U.S. government: | |||||||||||||||||||
Department of Defense (DoD) | $ | 41 | $ | 607 | $ | 1,175 | $ | 1,950 | $ | 3,773 | |||||||||
Non-DoD | — | 1 | 755 | — | 756 | ||||||||||||||
Foreign Military Sales (FMS) | 16 | 69 | 15 | 29 | 129 | ||||||||||||||
Total U.S. government | 57 | 677 | 1,945 | 1,979 | 4,658 | ||||||||||||||
U.S. commercial | 842 | 58 | 67 | 53 | 1,020 | ||||||||||||||
Non-U.S. government | 10 | 697 | 173 | 2 | 882 | ||||||||||||||
Non-U.S. commercial | 916 | 8 | 51 | — | 975 | ||||||||||||||
Total revenue | $ | 1,825 | $ | 1,440 | $ | 2,236 | $ | 2,034 | $ | 7,535 | |||||||||
Three Months Ended April 2, 2017 | |||||||||||||||||||
U.S. government: | |||||||||||||||||||
DoD | $ | 40 | $ | 609 | $ | 1,142 | $ | 1,837 | $ | 3,628 | |||||||||
Non-DoD | — | 2 | 698 | — | 700 | ||||||||||||||
FMS | 9 | 108 | 12 | 58 | 187 | ||||||||||||||
Total U.S. government | 49 | 719 | 1,852 | 1,895 | 4,515 | ||||||||||||||
U.S. commercial | 936 | 61 | 89 | 33 | 1,119 | ||||||||||||||
Non-U.S. government | 5 | 502 | 176 | 4 | 687 | ||||||||||||||
Non-U.S. commercial | 1,084 | 5 | 29 | 2 | 1,120 | ||||||||||||||
Total revenue | $ | 2,074 | $ | 1,287 | $ | 2,146 | $ | 1,934 | $ | 7,441 |
Three Months Ended | April 1, 2018 | April 2, 2017 | |||
Basic weighted average shares outstanding | 296,399 | 301,771 | |||
Dilutive effect of stock options and restricted stock/RSUs* | 4,705 | 5,511 | |||
Diluted weighted average shares outstanding | 301,104 | 307,282 |
• | 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) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial Assets (Liabilities) | April 1, 2018 | ||||||||||||||||||
Measured at fair value: | |||||||||||||||||||
Marketable securities held in trust: | |||||||||||||||||||
Cash and equivalents | $ | 6 | $ | 6 | $ | 2 | $ | 4 | $ | — | |||||||||
Available-for-sale debt securities | 130 | 130 | — | 130 | — | ||||||||||||||
Equity securities | 54 | 54 | 54 | — | — | ||||||||||||||
Other investments | 4 | 4 | — | — | 4 | ||||||||||||||
Cash flow hedges | (107 | ) | (107 | ) | — | (107 | ) | — | |||||||||||
Measured at amortized cost: | |||||||||||||||||||
Short- and long-term debt principal | (6,532 | ) | (6,356 | ) | — | (6,356 | ) | — |
December 31, 2017 | |||||||||||||||||||
Measured at fair value: | |||||||||||||||||||
Marketable securities held in trust: | |||||||||||||||||||
Cash and equivalents | $ | 20 | $ | 20 | $ | 15 | $ | 5 | $ | — | |||||||||
Available-for-sale debt securities | 117 | 117 | — | 117 | — | ||||||||||||||
Equity securities | 54 | 54 | 54 | — | — | ||||||||||||||
Other investments | 4 | 4 | — | — | 4 | ||||||||||||||
Cash flow hedges | (105 | ) | (105 | ) | — | (105 | ) | — | |||||||||||
Measured at amortized cost: | |||||||||||||||||||
Short- and long-term debt principal | (4,032 | ) | (3,974 | ) | — | (3,974 | ) | — |
April 1, 2018 | December 31, 2017 | ||||||
Deferred tax asset | $ | 60 | $ | 75 | |||
Deferred tax liability | (249 | ) | (244 | ) | |||
Net deferred tax liability | $ | (189 | ) | $ | (169 | ) |
April 1, 2018 | December 31, 2017 | ||||||
Unbilled revenue | $ | 22,928 | $ | 21,845 | |||
Advances and progress billings | (17,063 | ) | (16,605 | ) | |||
Net unbilled receivables | $ | 5,865 | $ | 5,240 |
April 1, 2018 | December 31, 2017 | ||||||
Work in process | $ | 4,138 | $ | 3,872 | |||
Raw materials | 1,328 | 1,357 | |||||
Finished goods | 52 | 51 | |||||
Pre-owned aircraft | 25 | 23 | |||||
Total inventories | $ | 5,543 | $ | 5,303 |
April 1, 2018 | December 31, 2017 | |||||||
Fixed-rate notes due: | Interest rate: | |||||||
July 2021 | 3.875% | $ | 500 | $ | 500 | |||
November 2022 | 2.250% | 1,000 | 1,000 | |||||
August 2023 | 1.875% | 500 | 500 | |||||
November 2024 | 2.375% | 500 | 500 | |||||
August 2026 | 2.125% | 500 | 500 | |||||
November 2027 | 2.625% | 500 | 500 | |||||
November 2042 | 3.600% | 500 | 500 | |||||
Commercial paper | 2.097% | 2,500 | — | |||||
Other | Various | 32 | 32 | |||||
Total debt principal | 6,532 | 4,032 | ||||||
Less unamortized debt issuance costs and discounts | 53 | 50 | ||||||
Total debt | 6,479 | 3,982 | ||||||
Less current portion | 2,498 | 2 | ||||||
Long-term debt | $ | 3,981 | $ | 3,980 |
April 1, 2018 | December 31, 2017 | ||||||
Salaries and wages | $ | 665 | $ | 786 | |||
Workers’ compensation | 320 | 320 | |||||
Retirement benefits | 292 | 295 | |||||
Fair value of cash flow hedges | 201 | 180 | |||||
Other (a) | 1,320 | 1,317 | |||||
Total other current liabilities | $ | 2,798 | $ | 2,898 | |||
Retirement benefits | $ | 4,359 | $ | 4,408 | |||
Customer deposits on commercial contracts | 555 | 814 | |||||
Deferred income taxes | 249 | 244 | |||||
Other (b) | 1,059 | 1,066 | |||||
Total other liabilities | $ | 6,222 | $ | 6,532 |
Losses on Cash Flow Hedges | Unrealized Gains on Marketable Securities | Foreign Currency Translation Adjustments | Changes in Retirement Plans’ Funded Status | AOCL | |||||||||||
December 31, 2017 | $ | (94 | ) | $ | 19 | $ | 402 | $ | (3,147 | ) | $ | (2,820 | ) | ||
Cumulative effect adjustments (see Note A) | (4 | ) | (19 | ) | — | (615 | ) | (638 | ) | ||||||
Other comprehensive income, pretax | (3 | ) | — | 1 | 84 | 82 | |||||||||
Provision for income tax, net | (1 | ) | — | — | 16 | 15 | |||||||||
Other comprehensive income, net of tax | (2 | ) | — | 1 | 68 | 67 | |||||||||
April 1, 2018 | $ | (100 | ) | $ | — | $ | 403 | $ | (3,694 | ) | $ | (3,391 | ) |
December 31, 2016 | $ | (345 | ) | $ | 14 | $ | 69 | $ | (3,125 | ) | $ | (3,387 | ) | ||
Other comprehensive income, pretax | 13 | 5 | 82 | 69 | 169 | ||||||||||
Provision for income tax, net | 4 | 1 | 15 | 24 | 44 | ||||||||||
Other comprehensive income, net of tax | 9 | 4 | 67 | 45 | 125 | ||||||||||
April 2, 2017 | $ | (336 | ) | $ | 18 | $ | 136 | $ | (3,080 | ) | $ | (3,262 | ) |
Three Months Ended | April 1, 2018 | April 2, 2017 | |||||
Beginning balance | $ | 467 | $ | 474 | |||
Warranty expense | 29 | 38 | |||||
Payments | (25 | ) | (24 | ) | |||
Adjustments | (3 | ) | — | ||||
Ending balance | $ | 468 | $ | 488 |
Pension Benefits | Other Post-retirement Benefits | |||||||||||||
Three Months Ended | April 1, 2018 | April 2, 2017 | April 1, 2018 | April 2, 2017 | ||||||||||
Service cost | $ | 46 | $ | 42 | $ | 3 | $ | 3 | ||||||
Interest cost | 114 | 113 | 8 | 8 | ||||||||||
Expected return on plan assets | (179 | ) | (169 | ) | (9 | ) | (8 | ) | ||||||
Recognized net actuarial loss (gain) | 96 | 86 | (1 | ) | (1 | ) | ||||||||
Amortization of prior service credit | (11 | ) | (17 | ) | (1 | ) | (1 | ) | ||||||
Net periodic benefit cost | $ | 66 | $ | 55 | $ | — | $ | 1 |
Revenue | Operating Earnings | |||||||||||
Three Months Ended | April 1, 2018 | April 2, 2017 | April 1, 2018 | April 2, 2017 | ||||||||
Aerospace | $ | 1,825 | $ | 2,074 | $ | 346 | $ | 439 | ||||
Combat Systems | 1,440 | 1,287 | 224 | 205 | ||||||||
Information Systems and Technology | 2,236 | 2,146 | 247 | 236 | ||||||||
Marine Systems | 2,034 | 1,934 | 184 | 161 | ||||||||
Corporate | — | — | 7 | 5 | ||||||||
Total | $ | 7,535 | $ | 7,441 | $ | 1,008 | $ | 1,046 |
Three Months Ended April 1, 2018 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
Revenue | $ | — | $ | 6,484 | $ | 1,051 | $ | — | $ | 7,535 | |||||
Cost of sales | (19 | ) | 5,202 | 807 | — | 5,990 | |||||||||
G&A | 13 | 436 | 88 | — | 537 | ||||||||||
Operating earnings | 6 | 846 | 156 | — | 1,008 | ||||||||||
Interest, net | (26 | ) | — | (1 | ) | — | (27 | ) | |||||||
Other, net | (24 | ) | 1 | 2 | — | (21 | ) | ||||||||
Earnings before income tax | (44 | ) | 847 | 157 | — | 960 | |||||||||
Provision for income tax, net | (42 | ) | 165 | 38 | — | 161 | |||||||||
Equity in net earnings of subsidiaries | 801 | — | — | (801 | ) | — | |||||||||
Net earnings | $ | 799 | $ | 682 | $ | 119 | $ | (801 | ) | $ | 799 | ||||
Comprehensive income | $ | 866 | $ | 685 | $ | 137 | $ | (822 | ) | $ | 866 | ||||
Three Months Ended April 2, 2017 | |||||||||||||||
Revenue | $ | — | $ | 6,544 | $ | 897 | $ | — | $ | 7,441 | |||||
Cost of sales | (17 | ) | 5,252 | 688 | — | 5,923 | |||||||||
G&A | 10 | 386 | 76 | — | 472 | ||||||||||
Operating earnings | 7 | 906 | 133 | — | 1,046 | ||||||||||
Interest, net | (24 | ) | — | (1 | ) | — | (25 | ) | |||||||
Other, net | (15 | ) | 3 | 1 | — | (11 | ) | ||||||||
Earnings before income tax | (32 | ) | 909 | 133 | — | 1,010 | |||||||||
Provision for income tax, net | (67 | ) | 293 | 21 | — | 247 | |||||||||
Equity in net earnings of subsidiaries | 728 | — | — | (728 | ) | — | |||||||||
Net earnings | $ | 763 | $ | 616 | $ | 112 | $ | (728 | ) | $ | 763 | ||||
Comprehensive income | $ | 888 | $ | 617 | $ | 207 | $ | (824 | ) | $ | 888 |
April 1, 2018 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and equivalents | $ | 3,787 | $ | — | $ | 545 | $ | — | $ | 4,332 | |||||
Accounts receivable | — | 1,215 | 2,554 | — | 3,769 | ||||||||||
Unbilled receivables | — | 2,757 | 3,108 | — | 5,865 | ||||||||||
Inventories | — | 5,441 | 102 | — | 5,543 | ||||||||||
Other current assets | 113 | 453 | 389 | — | 955 | ||||||||||
Total current assets | 3,900 | 9,866 | 6,698 | — | 20,464 | ||||||||||
Noncurrent assets: | |||||||||||||||
Property, plant and equipment (PP&E) | 228 | 6,857 | 1,250 | — | 8,335 | ||||||||||
Accumulated depreciation of PP&E | (77 | ) | (3,940 | ) | (785 | ) | — | (4,802 | ) | ||||||
Intangible assets, net | — | 285 | 417 | — | 702 | ||||||||||
Goodwill | — | 8,336 | 3,619 | — | 11,955 | ||||||||||
Other assets | 188 | 229 | 148 | — | 565 | ||||||||||
Investment in subsidiaries | 45,799 | — | — | (45,799 | ) | — | |||||||||
Total noncurrent assets | 46,138 | 11,767 | 4,649 | (45,799 | ) | 16,755 | |||||||||
Total assets | $ | 50,038 | $ | 21,633 | $ | 11,347 | $ | (45,799 | ) | $ | 37,219 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Short-term debt and current portion of long-term debt | $ | 2,496 | $ | — | $ | 2 | $ | — | $ | 2,498 | |||||
Customer advances and deposits | — | 4,273 | 2,822 | — | 7,095 | ||||||||||
Other current liabilities | 559 | 3,417 | 1,673 | — | 5,649 | ||||||||||
Total current liabilities | 3,055 | 7,690 | 4,497 | — | 15,242 | ||||||||||
Noncurrent liabilities: | |||||||||||||||
Long-term debt | 3,952 | 20 | 9 | — | 3,981 | ||||||||||
Other liabilities | 2,399 | 3,234 | 589 | — | 6,222 | ||||||||||
Total noncurrent liabilities | 6,351 | 3,254 | 598 | — | 10,203 | ||||||||||
Intercompany | 28,858 | (28,093 | ) | (765 | ) | — | — | ||||||||
Shareholders’ equity: | |||||||||||||||
Common stock | 482 | 6 | 2,126 | (2,132 | ) | 482 | |||||||||
Other shareholders’ equity | 11,292 | 38,776 | 4,891 | (43,667 | ) | 11,292 | |||||||||
Total shareholders’ equity | 11,774 | 38,782 | 7,017 | (45,799 | ) | 11,774 | |||||||||
Total liabilities and shareholders’ equity | $ | 50,038 | $ | 21,633 | $ | 11,347 | $ | (45,799 | ) | $ | 37,219 |
December 31, 2017 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and equivalents | $ | 1,930 | $ | — | $ | 1,053 | $ | — | $ | 2,983 | |||||
Accounts receivable | — | 1,259 | 2,358 | — | 3,617 | ||||||||||
Unbilled receivables | — | 2,547 | 2,693 | — | 5,240 | ||||||||||
Inventories | — | 5,216 | 87 | — | 5,303 | ||||||||||
Other current assets | 351 | 461 | 373 | — | 1,185 | ||||||||||
Total current assets | 2,281 | 9,483 | 6,564 | — | 18,328 | ||||||||||
Noncurrent assets: | |||||||||||||||
PP&E | 221 | 6,779 | 1,237 | — | 8,237 | ||||||||||
Accumulated depreciation of PP&E | (75 | ) | (3,869 | ) | (776 | ) | — | (4,720 | ) | ||||||
Intangible assets, net | — | 287 | 415 | — | 702 | ||||||||||
Goodwill | — | 8,320 | 3,594 | — | 11,914 | ||||||||||
Other assets | 199 | 232 | 154 | — | 585 | ||||||||||
Investment in subsidiaries | 44,887 | — | — | (44,887 | ) | — | |||||||||
Total noncurrent assets | 45,232 | 11,749 | 4,624 | (44,887 | ) | 16,718 | |||||||||
Total assets | $ | 47,513 | $ | 21,232 | $ | 11,188 | $ | (44,887 | ) | $ | 35,046 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Short-term debt and current portion of long-term debt | $ | — | $ | 1 | $ | 1 | $ | — | $ | 2 | |||||
Customer advances and deposits | — | 4,180 | 2,812 | — | 6,992 | ||||||||||
Other current liabilities | 561 | 3,758 | 1,786 | — | 6,105 | ||||||||||
Total current liabilities | 561 | 7,939 | 4,599 | — | 13,099 | ||||||||||
Noncurrent liabilities: | |||||||||||||||
Long-term debt | 3,950 | 21 | 9 | — | 3,980 | ||||||||||
Other liabilities | 2,451 | 3,473 | 608 | — | 6,532 | ||||||||||
Total noncurrent liabilities | 6,401 | 3,494 | 617 | — | 10,512 | ||||||||||
Intercompany | 29,116 | (28,494 | ) | (622 | ) | — | — | ||||||||
Shareholders’ equity: | |||||||||||||||
Common stock | 482 | 6 | 2,126 | (2,132 | ) | 482 | |||||||||
Other shareholders’ equity | 10,953 | 38,287 | 4,468 | (42,755 | ) | 10,953 | |||||||||
Total shareholders’ equity | 11,435 | 38,293 | 6,594 | (44,887 | ) | 11,435 | |||||||||
Total liabilities and shareholders’ equity | $ | 47,513 | $ | 21,232 | $ | 11,188 | $ | (44,887 | ) | $ | 35,046 |
Three Months Ended April 1, 2018 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ||||||||||
Net cash (used) provided by operating activities* | $ | 80 | $ | 105 | $ | (681 | ) | $ | — | $ | (496 | ) | |||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (7 | ) | (86 | ) | (11 | ) | — | (104 | ) | ||||||
Other, net | 1 | (2 | ) | — | — | (1 | ) | ||||||||
Net cash used by investing activities | (6 | ) | (88 | ) | (11 | ) | — | (105 | ) | ||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from commercial paper, net | 2,494 | — | — | — | 2,494 | ||||||||||
Purchases of common stock | (267 | ) | — | — | — | (267 | ) | ||||||||
Dividends paid | (250 | ) | — | — | — | (250 | ) | ||||||||
Other, net | (25 | ) | — | — | — | (25 | ) | ||||||||
Net cash provided by financing activities | 1,952 | — | — | — | 1,952 | ||||||||||
Net cash used by discontinued operations | (2 | ) | — | — | — | (2 | ) | ||||||||
Cash sweep/funding by parent | (167 | ) | (17 | ) | 184 | — | — | ||||||||
Net increase in cash and equivalents | 1,857 | — | (508 | ) | — | 1,349 | |||||||||
Cash and equivalents at beginning of period | 1,930 | — | 1,053 | — | 2,983 | ||||||||||
Cash and equivalents at end of period | $ | 3,787 | $ | — | $ | 545 | $ | — | $ | 4,332 | |||||
Three Months Ended April 2, 2017 | |||||||||||||||
Net cash provided by operating activities* | $ | (10 | ) | $ | 443 | $ | 100 | $ | — | $ | 533 | ||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (3 | ) | (42 | ) | (17 | ) | — | (62 | ) | ||||||
Other, net | — | 28 | (51 | ) | — | (23 | ) | ||||||||
Net cash used by investing activities | (3 | ) | (14 | ) | (68 | ) | — | (85 | ) | ||||||
Cash flows from financing activities: | |||||||||||||||
Purchases of common stock | (354 | ) | — | — | — | (354 | ) | ||||||||
Dividends paid | (230 | ) | — | — | — | (230 | ) | ||||||||
Other, net | (21 | ) | (1 | ) | — | — | (22 | ) | |||||||
Net cash used by financing activities | (605 | ) | (1 | ) | — | — | (606 | ) | |||||||
Net cash used by discontinued operations | (8 | ) | — | — | — | (8 | ) | ||||||||
Cash sweep/funding by parent | 423 | (428 | ) | 5 | — | — | |||||||||
Net decrease in cash and equivalents | (203 | ) | — | 37 | — | (166 | ) | ||||||||
Cash and equivalents at beginning of period | 1,254 | — | 1,080 | — | 2,334 | ||||||||||
Cash and equivalents at end of period | $ | 1,051 | $ | — | $ | 1,117 | $ | — | $ | 2,168 |
• | CSRA is expected to add approximately $3.6 billion of revenue in 2018 to the Information Systems and Technology group’s revenue. |
• | After a one-time charge of approximately $80 in the second quarter of 2018 associated with the costs to complete the acquisition, we expect the acquisition to be break even to slightly accretive to our diluted earnings per share in the second half of 2018. |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 7,535 | $ | 7,441 | $ | 94 | 1.3 | % | ||||||
Operating costs and expenses | 6,527 | 6,395 | 132 | 2.1 | % | |||||||||
Operating earnings | 1,008 | 1,046 | (38 | ) | (3.6 | )% | ||||||||
Operating margin | 13.4 | % | 14.1 | % |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 1,825 | $ | 2,074 | $ | (249 | ) | (12.0 | )% | |||||
Operating earnings | 346 | 439 | (93 | ) | (21.2 | )% | ||||||||
Operating margin | 19.0 | % | 21.2 | % | ||||||||||
Gulfstream aircraft deliveries (in units) | 26 | 30 | (4 | ) | (13.3 | )% |
Aircraft manufacturing, outfitting and completions | $ | (263 | ) |
Aircraft services | 16 | ||
Pre-owned aircraft | (2 | ) | |
Total decrease | $ | (249 | ) |
Aircraft manufacturing, outfitting and completions | $ | (86 | ) |
Aircraft services | 11 | ||
G&A/other expenses | (18 | ) | |
Total decrease | $ | (93 | ) |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 1,440 | $ | 1,287 | $ | 153 | 11.9 | % | ||||||
Operating earnings | 224 | 205 | 19 | 9.3 | % | |||||||||
Operating margin | 15.6 | % | 15.9 | % |
International military vehicles | $ | 133 | |
Weapons systems and munitions | 11 | ||
U.S. military vehicles | 9 | ||
Total increase | $ | 153 |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 2,236 | $ | 2,146 | $ | 90 | 4.2 | % | ||||||
Operating earnings | 247 | 236 | 11 | 4.7 | % | |||||||||
Operating margin | 11.0 | % | 11.0 | % |
IT services | $ | 80 | |
C4ISR solutions | 10 | ||
Total increase | $ | 90 |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 2,034 | $ | 1,934 | $ | 100 | 5.2 | % | ||||||
Operating earnings | 184 | 161 | 23 | 14.3 | % | |||||||||
Operating margin | 9.0 | % | 8.3 | % |
U.S. Navy ship construction | $ | 146 | |
Commercial ship construction | 18 | ||
U.S. Navy ship engineering, repair and other services | (64 | ) | |
Total increase | $ | 100 |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 4,576 | $ | 4,467 | $ | 109 | 2.4 | % | ||||||
Operating costs | 3,546 | 3,438 | 108 | 3.1 | % |
Military vehicle production | $ | 176 | |
Ship construction | 167 | ||
Aircraft manufacturing, outfitting and completions | (263 | ) | |
Other, net | 29 | ||
Total increase | $ | 109 |
Three Months Ended | April 1, 2018 | April 2, 2017 | Variance | |||||||||||
Revenue | $ | 2,959 | $ | 2,974 | $ | (15 | ) | (0.5 | )% | |||||
Operating costs | 2,444 | 2,485 | (41 | ) | (1.6 | )% |
Ship engineering, repair and other services | $ | (68 | ) |
IT services | 70 | ||
Other, net | (17 | ) | |
Total decrease | $ | (15 | ) |
Funded | Unfunded | Total Backlog | Estimated Potential Contract Value | Total Potential Contract Value | |||||||||||||||
April 1, 2018 | |||||||||||||||||||
Aerospace | $ | 11,898 | $ | 158 | $ | 12,056 | $ | 1,868 | $ | 13,924 | |||||||||
Combat Systems | 17,126 | 378 | 17,504 | 3,549 | 21,053 | ||||||||||||||
Information Systems and Technology | 6,739 | 2,075 | 8,814 | 15,787 | 24,601 | ||||||||||||||
Marine Systems | 18,310 | 5,458 | 23,768 | 4,271 | 28,039 | ||||||||||||||
Total | $ | 54,073 | $ | 8,069 | $ | 62,142 | $ | 25,475 | $ | 87,617 | |||||||||
December 31, 2017 | |||||||||||||||||||
Aerospace | $ | 12,319 | $ | 147 | $ | 12,466 | $ | 1,955 | $ | 14,421 | |||||||||
Combat Systems | 17,158 | 458 | 17,616 | 3,154 | 20,770 | ||||||||||||||
Information Systems and Technology | 6,682 | 2,192 | 8,874 | 14,875 | 23,749 | ||||||||||||||
Marine Systems | 15,872 | 8,347 | 24,219 | 4,809 | 29,028 | ||||||||||||||
Total | $ | 52,031 | $ | 11,144 | $ | 63,175 | $ | 24,793 | $ | 87,968 |
• | $445 to produce Piranha 5 wheeled armored vehicles and provide associated support services to the Romanian Armed Forces, part of a larger contract with a total potential value exceeding $1 billion. |
• | $285 from the U.S. Army for inventory management and engineering and support services for the Stryker wheeled combat-vehicle fleet. |
• | $155 from the Army for various calibers of ammunition. |
• | $80 from the Army for technical support and engineering and logistics services for the Abrams main battle tank program. |
• | $70 from the Army for the production of Stryker double-V-hull vehicles in the A1 configuration. |
• | $65 to produce AGM-114R Hellfire munitions. |
• | $215 from the National Aeronautics and Space Administration (NASA) for the Space Network Ground Segment Sustainment (SGSS) program to modernize NASA’s ground infrastructure systems for its satellite network. |
• | $120 from the U.S. Army for computing and communications equipment under the Common Hardware Systems-4 (CHS-4) program. |
• | $95 from the U.S. Air Force for the Battlefield Information Collection and Exploitation System (BICES) program to provide information sharing support to coalition operations. |
• | $60 to provide IT network and technical support services for the U.S. Army Intelligence and Security Command. |
• | $55 from the U.S. Air Force Central Command for communications equipment and associated technical support services in Asia. |
• | $50 from the National Geospatial-Intelligence Agency (NGA) for IT lifecycle management and virtual desktop services. |
• | $45 to provide vehicle electronic systems and components for Prophet, the Army’s ground-based tactical signals intelligence and electronic warfare system. |
• | $45 from the Army for the lightweight mobile tactical network. |
• | $40 to continue managing the Army’s live training systems. |
• | $30 to provide engineering and integration support for the Canadian Army’s tactical communications network, the Land Command Support System (LCSS). |
• | $695 from the U.S. Navy to procure long-lead materials for four Virginia-class submarines under Block V of the program. |
• | $420 from the Navy for construction of the second ship in the John Lewis-class (TAO-205) fleet oiler program. |
• | $100 from the Navy for Advanced Nuclear Plant Studies in support of the Columbia-class submarine program. |
• | $85 from the Navy for maintenance and modernization work on the USS Montpelier, a Los Angeles-class attack submarine. |
• | $40 from the Navy to provide design and development and lead yard services for Virginia-class submarines. |
Three Months Ended | April 1, 2018 | April 2, 2017 | |||||
Net cash (used) provided by operating activities | $ | (496 | ) | $ | 533 | ||
Capital expenditures | (104 | ) | (62 | ) | |||
Free cash flow from operations | $ | (600 | ) | $ | 471 | ||
Cash flows as a percentage of earnings from continuing operations: | |||||||
Net cash (used) provided by operating activities | (62 | )% | 70 | % | |||
Free cash flow from operations | (75 | )% | 62 | % |
• | 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 | |||||||||||||
1/1/18-1/28/18 | 425,242 | $ | 207.83 | 425,242 | 7,160,168 | ||||||||
1/29/18-2/25/18 | — | — | — | 7,160,168 | |||||||||
2/26/18-4/1/18 | 750,000 | 224.23 | 750,000 | 6,410,168 | |||||||||
Shares Delivered or Withheld Pursuant to Restricted Stock Vesting* | |||||||||||||
1/1/18-1/28/18 | 321,249 | 201.99 | |||||||||||
1/29/18-2/25/18 | — | — | |||||||||||
2/26/18-4/1/18 | 110,501 | 223.93 | |||||||||||
1,606,992 | $ | 215.43 |
2.1 |
2.2 |
4.1 |
10.1 |
10.2 |
10.3 |
10.4 |
31.1 |
31.2 |
32.1 |
32.2 |
101 | Interactive Data File** |
* | General Dynamics Corporation has omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request by the SEC. |
** | Filed or furnished herewith. |
GENERAL DYNAMICS CORPORATION | ||
by | ||
William A. Moss | ||
Vice President and Controller | ||
(Authorized Officer and Chief Accounting Officer) | ||
Dated: April 25, 2018 |
BANK OF AMERICA, N.A., as a Lender | |
By: | /s/ Michael Contreras |
Name: Michael Contreras | |
Title: Vice President |
ROYAL BANK OF CANADA, as a Lender | |
By: | /s/ Philippe Pepin |
Name: Philippe Pepin | |
Title: Authorized Signatory |
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. NEW YORK BRANCH, as a Lender | |
By: | /s/ Cara Younger |
Name: Cara Younger | |
Title: Director | |
By: | /s/ Miriam Trautmann |
Name: Miriam Trautmann | |
Title: Senior Vice President | |
LLOYDS BANK PLC, as a Lender | |
By: | /s/ Allen McGuire |
Name: Allen McGuire | |
Title: Assistant Manager | |
Transaction Execution Category A M004 | |
By: | /s/ Jennifer Larrow |
Name: Jennifer Larrow | |
Title: Assistant Manager | |
Transaction Execution Category A L003 |
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 |
Document and Entity Information |
3 Months Ended |
---|---|
Apr. 01, 2018
shares
| |
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 | Apr. 01, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 297,033,427 |
Trading Symbol | GD |
Consolidated Statement of Earnings (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Revenue: | ||
Products | $ 4,576 | $ 4,467 |
Services | 2,959 | 2,974 |
Revenue, total | 7,535 | 7,441 |
Operating costs and expenses: | ||
Products | 3,546 | 3,438 |
Services | 2,444 | 2,485 |
General and administrative (G&A) | 537 | 472 |
Operating costs and expenses, total | 6,527 | 6,395 |
Operating earnings | 1,008 | 1,046 |
Interest, net | (27) | (25) |
Other, net | (21) | (11) |
Earnings before income tax | 960 | 1,010 |
Provision for income tax, net | 161 | 247 |
Net earnings | $ 799 | $ 763 |
Basic: | ||
Continuing operations | $ 2.70 | $ 2.53 |
Diluted: | ||
Continuing operations | $ 2.65 | $ 2.48 |
Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 799 | $ 763 |
(Losses) gains on cash flow hedges | (3) | 13 |
Unrealized gains on marketable securities | 0 | 5 |
Foreign currency translation adjustments | 1 | 82 |
Change in retirement plans’ funded status | 84 | 69 |
Other comprehensive income, pretax | 82 | 169 |
Provision for income tax, net | 15 | 44 |
Other comprehensive income, net of tax | 67 | 125 |
Comprehensive income | $ 866 | $ 888 |
Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |||
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Apr. 01, 2018 |
Apr. 02, 2017 |
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Cash flows from operating activities - continuing operations: | ||||
Net earnings | $ 799 | $ 763 | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||
Depreciation of property, plant and equipment | 89 | 92 | ||
Amortization of intangible assets | 20 | 19 | ||
Equity-based compensation expense | 29 | 23 | ||
Deferred income tax provision | 4 | 45 | ||
(Increase) decrease in assets, net of effects of business acquisitions: | ||||
Accounts receivable | (150) | (84) | ||
Unbilled receivables | (608) | (338) | ||
Inventories | (236) | 2 | ||
Increase (decrease) in liabilities, net of effects of business acquisitions: | ||||
Accounts payable | (358) | (72) | ||
Customer advances and deposits | (149) | (95) | ||
Income taxes payable | 167 | 202 | ||
Other current liabilities | (128) | (76) | ||
Other, net | 25 | 52 | ||
Net cash (used) provided by operating activities | [1] | (496) | 533 | |
Cash flows from investing activities: | ||||
Capital expenditures | (104) | (62) | ||
Other, net | (1) | (23) | ||
Net cash used by investing activities | (105) | (85) | ||
Cash flows from financing activities: | ||||
Proceeds from commercial paper, net | 2,494 | 0 | ||
Purchases of common stock | (267) | (354) | ||
Dividends paid | (250) | (230) | ||
Other, net | (25) | (22) | ||
Net cash provided (used) by financing activities | 1,952 | (606) | ||
Net cash used by discontinued operations | (2) | (8) | ||
Net increase (decrease) in cash and equivalents | 1,349 | (166) | ||
Cash and equivalents at beginning of period | 2,983 | 2,334 | ||
Cash and equivalents at end of period | 4,332 | 2,168 | ||
Supplemental cash flow information: | ||||
Income tax refunds, net | 4 | 4 | ||
Interest payments | $ 21 | $ 20 | ||
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Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Millions |
Total |
Common Stock, Par |
Common Stock, Surplus |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
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Cumulative-effect adjustments | [1] | $ (3) | $ (3) | |||||
Beginning balance at Dec. 31, 2016 | 10,301 | $ 482 | $ 2,819 | 24,543 | $ (14,156) | $ (3,387) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 763 | 763 | ||||||
Cash dividends declared | (254) | (254) | ||||||
Equity-based awards | 6 | (57) | 63 | |||||
Shares purchased | (355) | (355) | ||||||
Other comprehensive income | 125 | 125 | ||||||
Ending balance at Apr. 02, 2017 | 10,583 | 482 | 2,762 | 25,049 | (14,448) | (3,262) | ||
Cumulative-effect adjustments | 0 | 638 | (638) | |||||
Beginning balance at Dec. 31, 2017 | 11,435 | 482 | 2,872 | 26,444 | (15,543) | (2,820) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 799 | 799 | ||||||
Cash dividends declared | (276) | (276) | ||||||
Equity-based awards | 6 | (52) | 58 | |||||
Shares purchased | (257) | (257) | ||||||
Other comprehensive income | 67 | 67 | ||||||
Ending balance at Apr. 01, 2018 | $ 11,774 | $ 482 | $ 2,820 | $ 27,605 | $ (15,742) | $ (3,391) | ||
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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 or disclosures to conform to the current-year presentation. Consistent with 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. Further discussion of our significant accounting policies is contained in the other notes to these 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-month period ended April 1, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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-month periods ended April 1, 2018, and April 2, 2017. 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, 2017. Accounting Standards Updates. On January 1, 2018, we adopted the following accounting standards issued by the Financial Accounting Standards Board (FASB):
For a discussion of other accounting standards that have been issued by the FASB but are not yet effective, refer to the Accounting Standards Updates section in our Annual Report on Form 10-K for the year ended December 31, 2017. |
Subsequent Events |
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Apr. 01, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On April 3, 2018, we completed our acquisition of CSRA Inc. (CSRA) for $41.25 per share in cash. The aggregate amount of consideration paid, including amounts to repay CSRA’s due and payable debt and cash out outstanding stock options and restricted stock units of CSRA, was approximately $9.7 billion. This amount was funded by a combination of available cash on hand, a borrowing of $7.5 billion under the 364-day credit facility further described in Note J and proceeds from commercial paper issuances. In addition, approximately $450 was paid to satisfy obligations under CSRA’s accounts receivable purchase agreement. CSRA is now part of General Dynamics Information Technology (GDIT) in our Information Systems and Technology group. The combination of GDIT and CSRA creates a premier provider of high-tech IT solutions to the government IT market. The disclosures required by Accounting Standards Codification (ASC) Topic 805 are not included in this Form 10-Q because the initial accounting for the business combination is incomplete. Additionally, on April 11, 2018, we announced that we had entered into a binding agreement to acquire Hawker Pacific, a leading provider of integrated aviation solutions across Asia Pacific and the Middle East, for $250. The transaction is subject to customary closing conditions, and is expected to be completed in the second quarter of 2018. |
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 the first quarter of 2018, we acquired a provider of specialized transmitters and receivers in our Information Systems and Technology group. In 2017, we acquired four businesses for an aggregate of $399: a fixed-base operation (FBO) in our Aerospace group; and a manufacturer of electronics and communications products, a provider of mission-critical support services, and a manufacturer of signal distribution products in our Information Systems and Technology group. As the purchase prices of these acquisitions were not material for the three-month periods ended April 1, 2018, and April 2, 2017, they are included in other investing activities, net, in the unaudited Consolidated Statement of Cash Flows. 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 the first quarter of 2018, we completed the sale of a commercial health products business in our Information Systems and Technology group. The proceeds from the sale are included in other investing activities, net, in the unaudited Consolidated Statement of Cash Flows. Goodwill. The changes in the carrying amount of goodwill by reporting unit were as follows:
(a)Goodwill 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 and an allocation of goodwill associated with the sale of the commercial health products business discussed above. (c)Consists primarily of adjustments for foreign currency translation. Intangible Assets. Intangible assets consisted of the following:
Amortization expense was $20 and $19 for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. |
Revenue |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | REVENUE The majority of our revenue is derived from long-term contracts and programs that can span several years. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 73% and 70% of our revenue for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. Substantially all of our revenue in the defense groups is recognized over time because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses. Revenue from goods and services transferred to customers at a point in time accounted for 27% and 30% of our revenue for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. The majority of our revenue recognized at a point in time is for the manufacture of business-jet aircraft in our Aerospace group. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft. On April 1, 2018, we had $62.1 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 60% of our remaining performance obligations as revenue by 2019, an additional 25% by 2021 and the balance thereafter. On December 31, 2017, we had $63.2 billion of remaining performance obligations, and on December 31, 2017, we expected to recognize approximately 40% of these remaining performance obligations as revenue in 2018, an additional 40% by 2020 and the balance thereafter. Contract Estimates. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, 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. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The nature of our contracts gives rise to several types of variable consideration, including claims and award and incentive fees. We include in our contract estimates additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time. Because of our certainty in estimating these amounts, they are included in the transaction price of our contracts and the associated remaining performance obligations. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates increased our revenue, operating earnings and diluted earnings per share as follows:
No adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three-month periods ended April 1, 2018, or April 2, 2017. Revenue by Category. Our portfolio of products and services consists of almost 10,000 active contracts. The following series of tables presents our revenue disaggregated by several categories. Revenue by major products and services was as follows:
* Command, control, communications, computers, intelligence, surveillance and reconnaissance. Revenue by contract type was as follows:
Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts can provide little or no fee for managing material costs, the content mix can impact profitability. Revenue by customer was as follows:
Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In our defense groups, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. In our Aerospace group, we generally receive deposits from customers upon contract execution and upon achievement of contractual milestones. These deposits are liquidated when revenue is recognized. Changes in the contract asset and liability balances during the three-month period ended April 1, 2018, were not materially impacted by any other factors. Revenue recognized in the three-month periods ended April 1, 2018, and April 2, 2017, that was included in the contract liability balance at the beginning of each year was $1.5 billion and $1.7 billion, respectively. This revenue represented primarily the sale of business-jet aircraft. |
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 in 2018 and 2017 due to share repurchases. See Note L for further discussion 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). Basic and diluted weighted average shares outstanding were as follows (in thousands):
* Excludes outstanding options to purchase shares of common stock that 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 517 and 681 for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. |
Fair Value |
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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 April 1, 2018, or December 31, 2017. Our financial instruments include cash and equivalents, accounts receivable and payable, marketable securities held in trust and other investments, short- and long-term debt, and derivative financial instruments. The carrying values of cash and equivalents and accounts receivable and payable on the unaudited Consolidated Balance Sheet approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on April 1, 2018, and December 31, 2017, and the basis for determining their fair values:
Our Level 1 assets include investments in publicly traded equity securities valued using quoted prices from the market exchanges. The fair value of our Level 2 assets and liabilities is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant. |
Income Taxes |
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Income Taxes | INCOME TAXES Income Tax Provision. We calculate our provision for federal, state and international income taxes based on current tax law. Tax reform was enacted on December 22, 2017, and has several key provisions impacting accounting for and reporting of income taxes. The most significant provision reduced the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018. We recorded the effect of the change in tax law in the fourth quarter of 2017. Net Deferred Tax Liability. Our deferred tax assets and liabilities are included in other noncurrent assets and liabilities on the Consolidated Balance Sheet. Our net deferred tax liability 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% 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 April 1, 2018, was not material to our results of operations, financial condition or cash flows. 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 2016. 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 April 1, 2018, was 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 vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows. |
Unbilled Receivables |
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Unbilled Receivables | UNBILLED RECEIVABLES Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms or upon achievement of contractual milestones. Unbilled receivables consisted of the following:
The increase in net unbilled receivables during the three-month period ended April 1, 2018, was due primarily to the timing of billings on large international vehicle contracts in our Combat Systems group. |
Inventories |
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Inventories | INVENTORIES The majority of our inventories are for business-jet aircraft. Our inventories 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 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 | DEBT Debt consisted of the following:
In the first quarter of 2018, we renewed and increased to $2 billion our $1 billion multi-year committed bank credit facility, which was scheduled to expire in July 2018. The new credit facility expires in March 2023. We have an additional $1 billion multi-year committed bank credit facility that expires in November 2020. We may renew or replace these credit facilities in whole or in part at or prior to their expiration dates. Also in the first quarter of 2018, we entered into a $7.5 billion, 364-day committed bank credit facility that expires in March 2019. We financed the acquisition of CSRA, in part, by borrowing $7.5 billion under this facility subsequent to the end of the quarter. We intend to issue debt securities in the future to repay in whole or in part the borrowings under this facility. The proceeds from these issuances will automatically reduce the bank’s commitments under this facility to an amount not less than $2 billion. Following this reduction, our three credit facilities will total $5 billion. Our credit facilities are used for general corporate purposes and working capital needs and support our commercial paper issuances. Our credit facilities are guaranteed by several of our 100%-owned subsidiaries. On April 1, 2018, $2.5 billion of commercial paper had been issued and remained outstanding with a dollar-weighted average interest rate of 2.097% and original maturities of less than 90 days. Our fixed-rate notes are fully and unconditionally guaranteed by several of our 100%-owned subsidiaries. See Note Q for condensed consolidating financial statements. We have the option to redeem the notes prior to their maturity in whole or in part for the principal plus any accrued but unpaid interest and applicable make-whole amounts. Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants and restrictions on April 1, 2018. |
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 outstanding shares of our common stock on the open market from time to time. On March 1, 2017, the board of directors authorized management to repurchase up to 10 million additional shares of the company’s outstanding stock. In the three-month period ended April 1, 2018, we repurchased 1.2 million of our outstanding shares for $257. On April 1, 2018, 6.4 million shares remained authorized by our board of directors for repurchase, approximately 2% of our total shares outstanding. We repurchased 1.9 million shares for $355 in the three-month period ended April 2, 2017. Dividends per Share. Dividends declared per share were $0.93 and $0.84 for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. Cash dividends paid were $250 and $230 for the three-month periods ended April 1, 2018, and April 2, 2017, 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:
Current-period amounts reclassified out of AOCL related primarily to changes in our retirement plans’ funded status and consisted of pretax recognized net actuarial losses of $95 and $85 for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. This was offset partially by pretax amortization of prior service credit of $12 and $18 for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. These AOCL components are included in our net periodic pension and other post-retirement benefit cost. See Note O 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 FINANCIAL 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 $4.3 billion in notional forward exchange contracts outstanding on April 1, 2018, and December 31, 2017. We do not use derivative financial instruments for trading or speculative purposes. We recognize derivative financial instruments on the Consolidated Balance Sheet at fair value. See Note F 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 dollar-weighted 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 derivative financial instruments 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-month periods ended April 1, 2018, and April 2, 2017. Net gains and losses reclassified to earnings from OCL were not material to our results of operations for the three-month periods ended April 1, 2018, and April 2, 2017, 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 April 1, 2018, or December 31, 2017. 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 derivative financial instruments 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 April 1, 2018, we held $4.3 billion in cash and equivalents, but held no marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified supplemental executive retirement plans. On April 1, 2018, and December 31, 2017, these marketable securities totaled $190 and $191, respectively, and were reflected at fair value on the unaudited Consolidated Balance Sheet in other current and noncurrent assets. 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 impact of translating our non-U.S. operations’ revenue into U.S. dollars was not material to our results of operations for the three-month periods ended April 1, 2018, and April 2, 2017. In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material for the three-month periods ended April 1, 2018, and April 2, 2017. |
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. Also in 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 U.S. government. 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 that 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 other 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 $1.4 billion on April 1, 2018. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts. Aircraft Trade-ins. In connection with orders for new aircraft in 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 generally 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 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 three-month periods ended April 1, 2018, and April 2, 2017, were as follows:
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Retirement Plans | RETIREMENT PLANS We provide defined-contribution benefits to eligible employees, as well as some remaining defined-benefit pension and other post-retirement benefits. Net periodic defined-benefit pension and other post-retirement benefit cost for the three-month periods ended April 1, 2018, and April 2, 2017, consisted of the following:
As discussed in Note A, the service cost component of net periodic benefit cost is reported separately from the other components of net periodic benefit cost in accordance with ASU 2017-07. 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 other 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 other contract costs in other current assets on the Consolidated Balance Sheet until the cost is allocable to contracts. For other plans, the amount allocated to contracts and included in revenue has exceeded the plans’ cumulative benefit cost. We have similarly deferred recognition of these excess earnings on the Consolidated Balance Sheet. It is our policy to fund our defined-benefit retirement plans in a manner that optimizes the tax deductibility and contract recovery of contributions considered within our capital deployment framework. Therefore, we may make discretionary contributions in addition to the required contributions determined in accordance with IRS regulations. In addition to our required contributions of approximately $315 in 2018, as we deploy additional cash resulting from the recent tax reform, we intend to make discretionary contributions, resulting in total pension plan contributions of approximately $550 in 2018. |
Business Group Information |
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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:
ASU 2017-07 requires the non-service cost components of pension and other post-retirement benefit cost (e.g., interest cost) to be reported in other income (expense) in the income statement. In our three defense groups, pension and other post-retirement benefit costs are allocable contract costs. For these groups, we report the offset for the non-service cost components in Corporate operating results. Stock option expense is also reported in Corporate operating results. |
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 J are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of our 100%-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 STATEMENT OF EARNINGS (UNAUDITED)
CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
CONDENSED CONSOLIDATING BALANCE SHEET
CONDENSED CONSOLIDATING STATEMENT 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 or disclosures to conform to the current-year presentation. Consistent with 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-month period ended April 1, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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-month periods ended April 1, 2018, and April 2, 2017. 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, 2017. |
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Accounting Standards Updates | Accounting Standards Updates. On January 1, 2018, we adopted the following accounting standards issued by the Financial Accounting Standards Board (FASB):
For a discussion of other accounting standards that have been issued by the FASB but are not yet effective, refer to the Accounting Standards Updates section in our Annual Report on Form 10-K for the year ended December 31, 2017. |
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Revenue Recognition | Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In our defense groups, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. In our Aerospace group, we generally receive deposits from customers upon contract execution and upon achievement of contractual milestones. These deposits are liquidated when revenue is recognized. The majority of our revenue is derived from long-term contracts and programs that can span several years. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 73% and 70% of our revenue for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. Substantially all of our revenue in the defense groups is recognized over time because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses. Revenue from goods and services transferred to customers at a point in time accounted for 27% and 30% of our revenue for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. The majority of our revenue recognized at a point in time is for the manufacture of business-jet aircraft in our Aerospace group. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft. On April 1, 2018, we had $62.1 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 60% of our remaining performance obligations as revenue by 2019, an additional 25% by 2021 and the balance thereafter. On December 31, 2017, we had $63.2 billion of remaining performance obligations, and on December 31, 2017, we expected to recognize approximately 40% of these remaining performance obligations as revenue in 2018, an additional 40% by 2020 and the balance thereafter. Contract Estimates. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, 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. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The nature of our contracts gives rise to several types of variable consideration, including claims and award and incentive fees. We include in our contract estimates additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time. Because of our certainty in estimating these amounts, they are included in the transaction price of our contracts and the associated remaining performance obligations. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. |
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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. |
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Fair Value of Financial Instruments | 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:
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Tax Uncertainties | 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% 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 April 1, 2018, was not material to our results of operations, financial condition or cash flows. 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 2016. 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 April 1, 2018, was 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 vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows. |
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Unbilled Receivables | Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms or upon achievement of contractual milestones. |
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Inventories | The majority of our inventories are for business-jet aircraft. Our inventories 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 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. |
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Derivative Instruments and Hedging Activities | 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 derivative financial instruments 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. 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 dollar-weighted 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 derivative financial instruments 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. 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. |
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Foreign Currency and Financial Statement Translation | 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 impact of translating our non-U.S. operations’ revenue into U.S. dollars was not material to our results of operations for the three-month periods ended April 1, 2018, and April 2, 2017. In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material for the three-month periods ended April 1, 2018, and April 2, 2017. |
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Commitments and Contingencies | 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 that 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. |
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Product Warranties | 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. |
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Retirement Plans | 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 other 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 other contract costs in other current assets on the Consolidated Balance Sheet until the cost is allocable to contracts. For other plans, the amount allocated to contracts and included in revenue has exceeded the plans’ cumulative benefit cost. We have similarly deferred recognition of these excess earnings on the Consolidated Balance Sheet. It is our policy to fund our defined-benefit retirement plans in a manner that optimizes the tax deductibility and contract recovery of contributions considered within our capital deployment framework. Therefore, we may make discretionary contributions in addition to the required contributions determined in accordance with IRS regulations. We provide defined-contribution benefits to eligible employees, as well as some remaining defined-benefit pension and other post-retirement benefits. |
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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. |
Acquisitions and Divestitures, Goodwill and Intangible Assets (Tables) |
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 were as follows:
(a)Goodwill 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 and an allocation of goodwill associated with the sale of the commercial health products business discussed above. (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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Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Adjustments in Contract Estimates | revenue, operating earnings and diluted earnings per share as follows:
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Revenue by Major Product Line | Revenue by major products and services was as follows:
* Command, control, communications, computers, intelligence, surveillance and reconnaissance. |
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Revenue by Contract Type | Revenue by contract type was as follows:
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Revenue by Customer | Revenue by customer was as follows:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||
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 that 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 517 and 681 for the three-month periods ended April 1, 2018, and April 2, 2017, respectively. |
Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 April 1, 2018, and December 31, 2017, and the basis for determining their fair values:
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Assets and Liabilities | Our net deferred tax liability consisted of the following:
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Unbilled Receivables (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unbilled Receivables | Unbilled receivables consisted of the following:
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventories | Inventories consisted of the following:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Debt | Debt consisted of the following:
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Other Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 three-month periods ended April 1, 2018, and April 2, 2017, were as follows:
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Retirement Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [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-month periods ended April 1, 2018, and April 2, 2017, consisted of the following:
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Business Group Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Financial Information For Each Of Our Business Groups | Summary financial information for each of our business groups follows:
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Condensed Consolidating Financial Statements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Earnings (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (UNAUDITED)
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Condensed Consolidating Balance Sheet (Unaudited) | CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
CONDENSED CONSOLIDATING BALANCE SHEET
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Condensed Consolidating Statement of Cash Flows (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)
* Continuing operations only. |
Summary Of Significant Accounting Policies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Jan. 01, 2018 |
|
New Accounting Pronouncements | ||
Length of fiscal quarters, weeks | 91 days | |
Operating Earnings | Accounting Standards Update 2017-07 | ||
New Accounting Pronouncements | ||
New accounting pronouncement, effect of change in operating results | $ 11 | |
Other Income | Accounting Standards Update 2017-07 | ||
New Accounting Pronouncements | ||
New accounting pronouncement, effect of change in operating results | $ (11) | |
Retained Earnings | Accounting Standards Update 2016-01 | ||
New Accounting Pronouncements | ||
Cumulative effect of new accounting pronouncement in period of adoption | $ 24 | |
Retained Earnings | Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements | ||
Cumulative effect of new accounting pronouncement in period of adoption | 614 | |
Accumulated Other Comprehensive Loss | Accounting Standards Update 2016-01 | ||
New Accounting Pronouncements | ||
Cumulative effect of new accounting pronouncement in period of adoption | (24) | |
Accumulated Other Comprehensive Loss | Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements | ||
Cumulative effect of new accounting pronouncement in period of adoption | $ (614) |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 11, 2018 |
Apr. 03, 2018 |
Apr. 01, 2018 |
|
Credit Facility | 364-day Committed Bank Credit Facility | |||
Subsequent Events [Line Items] | |||
Debt instrument term | 364 days | ||
Subsequent Event | CSRA | |||
Subsequent Events [Line Items] | |||
Aggregate amount of consideration paid | $ 9,700 | ||
Payment of obligations under accounts receivable purchase agreement | 450 | ||
Subsequent Event | CSRA | Credit Facility | 364-day Committed Bank Credit Facility | |||
Subsequent Events [Line Items] | |||
Amount drawn under credit facility | $ 7,500 | ||
Subsequent Event | CSRA | Common Stock | |||
Subsequent Events [Line Items] | |||
Cash acquisition price (in dollars per share) | $ 41.25 | ||
Subsequent Event | Scenario, Forecast | Hawker Pacific | |||
Subsequent Events [Line Items] | |||
Aggregate amount of consideration paid | $ 250 |
Acquisitions and Divestitures, Goodwill and Intangible Assets (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Apr. 01, 2018
USD ($)
|
Apr. 02, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
business
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Number of businesses acquired | business | 4 | ||
Payments to acquire businesses, gross | $ 399 | ||
Amortization expense | $ 20 | $ 19 |
Acquisitions and Divestitures, Divestitures, Goodwill and Intangible Assets Changes In Amount Of Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 01, 2018 |
Dec. 31, 2017 |
||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | $ 11,914 | |||||||
Acquisitions/divestitures | [2] | 16 | |||||||
Other | [3] | 25 | |||||||
Goodwill, end of period | [1] | 11,955 | |||||||
Aerospace | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 2,638 | |||||||
Acquisitions/divestitures | [2] | 0 | |||||||
Other | [3] | 40 | |||||||
Goodwill, end of period | [1] | 2,678 | |||||||
Combat Systems | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 2,677 | |||||||
Acquisitions/divestitures | [2] | 0 | |||||||
Other | [3] | (14) | |||||||
Goodwill, end of period | [1] | 2,663 | |||||||
Information Systems and Technology | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 6,302 | |||||||
Acquisitions/divestitures | [2] | 16 | |||||||
Other | [3] | (1) | |||||||
Goodwill, end of period | [1] | 6,317 | |||||||
Accumulated impairment loss | 2,000 | $ 2,000 | |||||||
Marine Systems | |||||||||
Goodwill [Roll Forward] | |||||||||
Goodwill, beginning of period | [1] | 297 | |||||||
Acquisitions/divestitures | [2] | 0 | |||||||
Other | [3] | 0 | |||||||
Goodwill, end of period | [1] | $ 297 | |||||||
|
Acquisitions and Divestitures, Divestitures, Goodwill and Intangible Assets Intangible Assets (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
|||||
---|---|---|---|---|---|---|---|
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | $ 2,451 | $ 2,441 | ||||
Accumulated Amortization | (1,749) | (1,739) | |||||
Net Carrying Amount | 702 | 702 | |||||
Contract and Program Intangible Assets | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1],[2] | 1,665 | 1,684 | ||||
Accumulated Amortization | [2] | (1,318) | (1,320) | ||||
Net Carrying Amount | [2] | 347 | 364 | ||||
Trade Names and Trademarks | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | 477 | 465 | ||||
Accumulated Amortization | (168) | (160) | |||||
Net Carrying Amount | 309 | 305 | |||||
Technology and Software | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | 154 | 137 | ||||
Accumulated Amortization | (109) | (105) | |||||
Net Carrying Amount | 45 | 32 | |||||
Other Intangible Assets | |||||||
Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | [1] | 155 | 155 | ||||
Accumulated Amortization | (154) | (154) | |||||
Net Carrying Amount | $ 1 | $ 1 | |||||
|
Revenue - Additional Information (Details) contract in Thousands, $ in Billions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018
USD ($)
contract
|
Apr. 02, 2017
USD ($)
|
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of active contracts | contract | 10 | |
Revenue recognized in contract liability balance | $ | $ 1.5 | $ 1.7 |
Transferred over Time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, percentage from products and services transferred to customers | 73.00% | 70.00% |
Transferred at Point in Time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, percentage from products and services transferred to customers | 27.00% | 30.00% |
Revenue - Remaining Performance Obligations to be Recognized as Revenue (Details) - USD ($) $ in Billions |
3 Months Ended | 12 Months Ended |
---|---|---|
Apr. 01, 2018 |
Dec. 31, 2017 |
|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-01-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligations | $ 62.1 | $ 63.2 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |
Revenue, remaining performance obligation, percentage recognized | 40.00% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | 2 years |
Revenue, remaining performance obligation, percentage recognized | 60.00% | 40.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years | |
Revenue, remaining performance obligation, percentage recognized | 25.00% |
Revenue - Impact of Adjustments in Contract Estimates (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Operating earnings | $ 1,008 | $ 1,046 |
Accounting Standards Update 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 115 | 72 |
Operating earnings | $ 97 | $ 50 |
Diluted earnings per share | $ 0.25 | $ 0.11 |
Revenue - Revenue by Products and Services (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Revenue [Line Items] | ||
Revenue | $ 7,535 | $ 7,441 |
Aerospace | ||
Revenue [Line Items] | ||
Revenue | 1,825 | 2,074 |
Aerospace | Aircraft manufacturing, outfitting and completions | ||
Revenue [Line Items] | ||
Revenue | 1,366 | 1,629 |
Aerospace | Aircraft services | ||
Revenue [Line Items] | ||
Revenue | 451 | 435 |
Aerospace | Pre-owned aircraft | ||
Revenue [Line Items] | ||
Revenue | 8 | 10 |
Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1,440 | 1,287 |
Combat Systems | Wheeled combat and tactical vehicles | ||
Revenue [Line Items] | ||
Revenue | 625 | 560 |
Combat Systems | Weapons systems, armament and munitions | ||
Revenue [Line Items] | ||
Revenue | 383 | 346 |
Combat Systems | Tanks and tracked vehicles | ||
Revenue [Line Items] | ||
Revenue | 331 | 247 |
Combat Systems | Engineering and other services | ||
Revenue [Line Items] | ||
Revenue | 101 | 134 |
Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 2,236 | 2,146 |
Information Systems and Technology | C4ISR solutions | ||
Revenue [Line Items] | ||
Revenue | 1,098 | 1,088 |
Information Systems and Technology | Information technology services | ||
Revenue [Line Items] | ||
Revenue | 1,138 | 1,058 |
Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2,034 | 1,934 |
Marine Systems | Nuclear - powered submarines | ||
Revenue [Line Items] | ||
Revenue | 1,296 | 1,204 |
Marine Systems | Surface combatants | ||
Revenue [Line Items] | ||
Revenue | 265 | 247 |
Marine Systems | Auxiliary and commercial ships | ||
Revenue [Line Items] | ||
Revenue | 218 | 143 |
Marine Systems | Repair and other services | ||
Revenue [Line Items] | ||
Revenue | $ 255 | $ 340 |
Revenue - Revenue by Contract Type (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Revenue [Line Items] | ||
Cost-reimbursement | $ 1,924 | $ 2,018 |
Revenue | 7,535 | 7,441 |
Aerospace | ||
Revenue [Line Items] | ||
Cost-reimbursement | 0 | 0 |
Revenue | 1,825 | 2,074 |
Combat Systems | ||
Revenue [Line Items] | ||
Cost-reimbursement | 179 | 207 |
Revenue | 1,440 | 1,287 |
Information Systems and Technology | ||
Revenue [Line Items] | ||
Cost-reimbursement | 1,017 | 1,010 |
Revenue | 2,236 | 2,146 |
Marine Systems | ||
Revenue [Line Items] | ||
Cost-reimbursement | 728 | 801 |
Revenue | 2,034 | 1,934 |
Fixed-price | ||
Revenue [Line Items] | ||
Revenue | 5,233 | 5,035 |
Fixed-price | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 1,668 | 1,902 |
Fixed-price | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1,253 | 1,073 |
Fixed-price | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 1,007 | 930 |
Fixed-price | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 1,305 | 1,130 |
Time-and-materials | ||
Revenue [Line Items] | ||
Revenue | 378 | 388 |
Time-and-materials | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 157 | 172 |
Time-and-materials | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 8 | 7 |
Time-and-materials | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 212 | 206 |
Time-and-materials | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | $ 1 | $ 3 |
Revenue - Revenue by Customer (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Revenue [Line Items] | ||
Revenue | $ 7,535 | $ 7,441 |
Aerospace | ||
Revenue [Line Items] | ||
Revenue | 1,825 | 2,074 |
Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1,440 | 1,287 |
Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 2,236 | 2,146 |
Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2,034 | 1,934 |
U.S. Government - Department of Defense | ||
Revenue [Line Items] | ||
Revenue | 3,773 | 3,628 |
U.S. Government - Department of Defense | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 41 | 40 |
U.S. Government - Department of Defense | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 607 | 609 |
U.S. Government - Department of Defense | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 1,175 | 1,142 |
U.S. Government - Department of Defense | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 1,950 | 1,837 |
U.S. Government - Non Department of Defense | ||
Revenue [Line Items] | ||
Revenue | 756 | 700 |
U.S. Government - Non Department of Defense | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 0 | 0 |
U.S. Government - Non Department of Defense | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1 | 2 |
U.S. Government - Non Department of Defense | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 755 | 698 |
U.S. Government - Non Department of Defense | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 0 | 0 |
U.S. Government - Foreign Military Sales | ||
Revenue [Line Items] | ||
Revenue | 129 | 187 |
U.S. Government - Foreign Military Sales | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 16 | 9 |
U.S. Government - Foreign Military Sales | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 69 | 108 |
U.S. Government - Foreign Military Sales | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 15 | 12 |
U.S. Government - Foreign Military Sales | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 29 | 58 |
U.S. Government | ||
Revenue [Line Items] | ||
Revenue | 4,658 | 4,515 |
U.S. Government | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 57 | 49 |
U.S. Government | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 677 | 719 |
U.S. Government | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 1,945 | 1,852 |
U.S. Government | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 1,979 | 1,895 |
U.S. Commercial | ||
Revenue [Line Items] | ||
Revenue | 1,020 | 1,119 |
U.S. Commercial | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 842 | 936 |
U.S. Commercial | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 58 | 61 |
U.S. Commercial | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 67 | 89 |
U.S. Commercial | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 53 | 33 |
Non U S Government | ||
Revenue [Line Items] | ||
Revenue | 882 | 687 |
Non U S Government | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 10 | 5 |
Non U S Government | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 697 | 502 |
Non U S Government | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 173 | 176 |
Non U S Government | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2 | 4 |
Non - U.S. Commercial | ||
Revenue [Line Items] | ||
Revenue | 975 | 1,120 |
Non - U.S. Commercial | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 916 | 1,084 |
Non - U.S. Commercial | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 8 | 5 |
Non - U.S. Commercial | Information Systems and Technology | ||
Revenue [Line Items] | ||
Revenue | 51 | 29 |
Non - U.S. Commercial | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | $ 0 | $ 2 |
Earnings Per Share (Detail) - shares shares in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|||
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding (shares) | 296,399 | 301,771 | ||
Dilutive effect of stock options and restricted stock/RSUs (shares) | [1] | 4,705 | 5,511 | |
Diluted weighted average shares outstanding (shares) | 301,104 | 307,282 | ||
|
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Stock Options and Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 517 | 681 |
Fair Value (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value | ||
Financial assets (liabilities) | ||
Cash and equivalents | $ 6 | $ 20 |
Available-for-sale debt securities | 130 | |
Available-for-sale debt securities | 117 | |
Equity securities | 54 | |
Equity securities | 54 | |
Other investments | 4 | |
Other investments | 4 | |
Cash flow hedges | (107) | (105) |
Short- and long-term debt principal | (6,356) | (3,974) |
Carrying Value | ||
Financial assets (liabilities) | ||
Cash and equivalents | 6 | 20 |
Available-for-sale debt securities | 130 | |
Available-for-sale debt securities | 117 | |
Equity securities | 54 | |
Equity securities | 54 | |
Other investments | 4 | |
Other investments | 4 | |
Cash flow hedges | (107) | (105) |
Short- and long-term debt principal | (6,532) | (4,032) |
Fair Value, Inputs, Level 1 | ||
Financial assets (liabilities) | ||
Cash and equivalents | 2 | 15 |
Available-for-sale debt securities | 0 | |
Available-for-sale debt securities | 0 | |
Equity securities | 54 | |
Equity securities | 54 | |
Other investments | 0 | |
Other investments | 0 | |
Cash flow hedges | 0 | 0 |
Short- and long-term debt principal | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Financial assets (liabilities) | ||
Cash and equivalents | 4 | 5 |
Available-for-sale debt securities | 130 | |
Available-for-sale debt securities | 117 | |
Equity securities | 0 | |
Equity securities | 0 | |
Other investments | 0 | |
Other investments | 0 | |
Cash flow hedges | (107) | (105) |
Short- and long-term debt principal | (6,356) | (3,974) |
Fair Value, Inputs, Level 3 | ||
Financial assets (liabilities) | ||
Cash and equivalents | 0 | 0 |
Available-for-sale debt securities | 0 | |
Available-for-sale debt securities | 0 | |
Equity securities | 0 | |
Equity securities | 0 | |
Other investments | 4 | |
Other investments | 4 | |
Cash flow hedges | 0 | 0 |
Short- and long-term debt principal | $ 0 | $ 0 |
Income Taxes Deferred Tax (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 60 | $ 75 |
Deferred tax liability | (249) | (244) |
Net deferred tax liability | $ (189) | $ (169) |
Income Taxes - Additional Information (Details) |
Apr. 01, 2018
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Possible chance of tax position sustained, percentage | 50.00% |
Amount of unrecorded benefit | $ 0 |
Unbilled Receivables (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Contractors [Abstract] | ||
Unbilled revenue | $ 22,928 | $ 21,845 |
Advances and progress billings | (17,063) | (16,605) |
Net unbilled receivables | $ 5,865 | $ 5,240 |
Inventory (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Work in process | $ 4,138 | $ 3,872 |
Raw materials | 1,328 | 1,357 |
Finished goods | 52 | 51 |
Pre-owned aircraft | 25 | 23 |
Total inventories | $ 5,543 | $ 5,303 |
Debt (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | ||
Total debt principal | $ 6,532 | $ 4,032 |
Less unamortized debt issuance costs and discounts | 53 | 50 |
Total debt | 6,479 | 3,982 |
Less current portion | 2,498 | 2 |
Long-term debt | 3,981 | 3,980 |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Short term debt | $ 2,500 | 0 |
Weighted average interest rate | 2.097% | |
Fixed-Rate Notes Due July 2021 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 3.875% | |
Fixed Rate Notes Due November 2022 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 1,000 | 1,000 |
Interest rate | 2.25% | |
Fixed Rate Notes Due August 2023 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 1.875% | |
Fixed Rate Notes Due November 2024 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 2.375% | |
Fixed Rate Notes Due August 2026 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 2.125% | |
Fixed Rate Notes Due November 2027 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 2.625% | |
Fixed Rate Notes Due November 2042 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 3.60% | |
Other Debt Securities | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 32 | $ 32 |
Other Interest rate | Various |
Debt - Additional Information (Details) $ in Billions |
3 Months Ended | ||
---|---|---|---|
Apr. 03, 2018
USD ($)
|
Apr. 01, 2018
USD ($)
credit_facility
|
Dec. 31, 2017
USD ($)
|
|
Debt Instrument [Line Items] | |||
Number of credit facilities | credit_facility | 3 | ||
Percentage of owned subsidiaries guaranteed fixed rate notes (the guarantors) | 100.00% | ||
Scenario, Forecast | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 5.0 | ||
Credit Facility | Multi-year Facility Expiring July 2018 | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 1.0 | ||
Credit Facility | 364-day Committed Bank Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 7.5 | ||
Debt instrument term | 364 days | ||
Credit Facility | 364-day Committed Bank Credit Facility | Scenario, Forecast | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | 2.0 | ||
Credit Facility | 364-day Committed Bank Credit Facility | Subsequent Event | CSRA | |||
Debt Instrument [Line Items] | |||
Amount drawn under credit facility | $ 7.5 | ||
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Commercial paper issued | $ 2.5 | ||
Weighted average interest rate | 2.097% | ||
Debt instrument term | 90 days | ||
Credit Facility | Multi-year Facility Expiring March 2023 | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 2.0 | ||
Credit Facility | Multi-year Facility Expiring November 2020 | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 1.0 |
Other Liabilities (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
|||||
---|---|---|---|---|---|---|---|
Other Liabilities Disclosure [Abstract] | |||||||
Salaries and wages | $ 665 | $ 786 | |||||
Fair value of cash flow hedges | 201 | 180 | |||||
Workers' compensation | 320 | 320 | |||||
Retirement benefits | 292 | 295 | |||||
Other | [1] | 1,320 | 1,317 | ||||
Total other current liabilities | 2,798 | 2,898 | |||||
Retirement benefits | 4,359 | 4,408 | |||||
Customer deposits on commercial contracts | 555 | 814 | |||||
Deferred income taxes | 249 | 244 | |||||
Other | [2] | 1,059 | 1,066 | ||||
Total other liabilities | $ 6,222 | $ 6,532 | |||||
|
Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
Mar. 01, 2017 |
|
Class of Stock [Line Items] | |||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 10.0 | ||
Stock repurchased during the period, shares | 1.2 | 1.9 | |
Stock repurchased during the period, value | $ 257 | $ 355 | |
Remaining number of shares authorized to be repurchased, shares | 6.4 | ||
Shares remaining to be repurchased as a percent of total shares outstanding | 2.00% | ||
Recognized net actuarial losses (before tax) | $ 95 | 85 | |
Amortization of prior service credit (before tax) | 12 | 18 | |
Purchases of common stock | $ 267 | $ 354 | |
Dividends declared per share | $ 0.93 | $ 0.84 | |
Dividends paid in cash | $ 250 | $ 230 |
Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | $ (2,820) | $ (3,387) |
Cumulative effect adjustments | (638) | |
Other comprehensive income (loss) pretax | 82 | 169 |
Provision (benefit) for income tax, net | 15 | 44 |
Other comprehensive income (loss) net of tax | 67 | 125 |
Ending Balance | (3,391) | (3,262) |
Losses on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (94) | (345) |
Cumulative effect adjustments | (4) | |
Other comprehensive income (loss) pretax | (3) | 13 |
Provision (benefit) for income tax, net | (1) | 4 |
Other comprehensive income (loss) net of tax | (2) | 9 |
Ending Balance | (100) | (336) |
Unrealized Gains on Securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 19 | 14 |
Cumulative effect adjustments | (19) | |
Other comprehensive income (loss) pretax | 0 | 5 |
Provision (benefit) for income tax, net | 0 | 1 |
Other comprehensive income (loss) net of tax | 0 | 4 |
Ending Balance | 0 | 18 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 402 | 69 |
Cumulative effect adjustments | 0 | |
Other comprehensive income (loss) pretax | 1 | 82 |
Provision (benefit) for income tax, net | 0 | 15 |
Other comprehensive income (loss) net of tax | 1 | 67 |
Ending Balance | 403 | 136 |
Changes in Retirement Plans’ Funded Status | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (3,147) | (3,125) |
Cumulative effect adjustments | (615) | |
Other comprehensive income (loss) pretax | 84 | 69 |
Provision (benefit) for income tax, net | 16 | 24 |
Other comprehensive income (loss) net of tax | 68 | 45 |
Ending Balance | $ (3,694) | $ (3,080) |
Derivative Instruments And Hedging Activities - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Apr. 01, 2018 |
Dec. 31, 2017 |
Apr. 02, 2017 |
Dec. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional forward foreign exchange contracts outstanding | $ 4,300 | $ 4,300 | ||
Average maturity of foreign currency forward contracts, in years | 3 years | |||
Fair value hedges | $ 0 | 0 | ||
Net investment hedges | 0 | 0 | ||
Cash and equivalents | 4,332 | 2,983 | $ 2,168 | $ 2,334 |
Marketable securities held in trust | $ 190 | $ 191 | ||
Maximum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Maturity of fixed-income securities, in years | 5 years |
Commitments And Contingencies - Additional Information (Details) $ in Billions |
3 Months Ended |
---|---|
Apr. 01, 2018
USD ($)
| |
Other Commitments [Line Items] | |
Letters of credit and guarantees | $ 1.4 |
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 (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning balance | $ 467 | $ 474 |
Warranty expense | 29 | 38 |
Payments | (25) | (24) |
Adjustments | (3) | 0 |
Ending balance | $ 468 | $ 488 |
Retirement Plans - Benefits Plans (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Required employer contributions to defined-benefit retirement plans during the fiscal year | $ 315 | |
Expected future employer contributions to defined-benefit retirement plans during the fiscal year | 550 | |
Pension Plans, Defined Benefit | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 46 | $ 42 |
Interest cost | 114 | 113 |
Expected return on plan assets | (179) | (169) |
Recognized net actuarial loss (gain) | 96 | 86 |
Amortization of prior service credit | (11) | (17) |
Net periodic benefit cost | 66 | 55 |
Other Postretirement Benefit Plans, Defined Benefit | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 3 | 3 |
Interest cost | 8 | 8 |
Expected return on plan assets | (9) | (8) |
Recognized net actuarial loss (gain) | (1) | (1) |
Amortization of prior service credit | (1) | (1) |
Net periodic benefit cost | $ 0 | $ 1 |
Business Group Information - Additional Information (Details) |
3 Months Ended |
---|---|
Apr. 01, 2018
group
Segment
| |
Segment Reporting [Abstract] | |
Number of operating business groups (segment) | Segment | 4 |
Number of defense groups | group | 3 |
Segment Reporting Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 7,535 | $ 7,441 |
Operating earnings | 1,008 | 1,046 |
Aerospace | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,825 | 2,074 |
Operating earnings | 346 | 439 |
Combat Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,440 | 1,287 |
Operating earnings | 224 | 205 |
Information Systems and Technology | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,236 | 2,146 |
Operating earnings | 247 | 236 |
Marine Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,034 | 1,934 |
Operating earnings | 184 | 161 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Operating earnings | $ 7 | $ 5 |
Condensed Consolidating Financial Statements - Narrative (Details) |
3 Months Ended |
---|---|
Apr. 01, 2018 | |
Consolidating Financial Statements [Abstract] | |
Percentage of owned subsidiaries (the guarantors) | 100.00% |
Condensed Consolidating Statements of Earnings (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
|
Revenue: | ||
Revenue | $ 7,535 | $ 7,441 |
Operating costs and expenses: | ||
Cost of sales | 5,990 | 5,923 |
General and administrative (G&A) | 537 | 472 |
Operating earnings | 1,008 | 1,046 |
Interest, net | (27) | (25) |
Other, net | (21) | (11) |
Earnings before income tax | 960 | 1,010 |
Provision for income tax, net | 161 | 247 |
Equity in net earnings of subsidiaries | 0 | 0 |
Net earnings | 799 | 763 |
Comprehensive income | 866 | 888 |
Consolidating Adjustments | ||
Revenue: | ||
Revenue | 0 | 0 |
Operating costs and expenses: | ||
Cost of sales | 0 | 0 |
General and administrative (G&A) | 0 | 0 |
Operating earnings | 0 | 0 |
Interest, net | 0 | 0 |
Other, net | 0 | 0 |
Earnings before income tax | 0 | 0 |
Provision for income tax, net | 0 | 0 |
Equity in net earnings of subsidiaries | (801) | (728) |
Net earnings | (801) | (728) |
Comprehensive income | (822) | (824) |
Parent Company | ||
Revenue: | ||
Revenue | 0 | 0 |
Operating costs and expenses: | ||
Cost of sales | (19) | (17) |
General and administrative (G&A) | 13 | 10 |
Operating earnings | 6 | 7 |
Interest, net | (26) | (24) |
Other, net | (24) | (15) |
Earnings before income tax | (44) | (32) |
Provision for income tax, net | (42) | (67) |
Equity in net earnings of subsidiaries | 801 | 728 |
Net earnings | 799 | 763 |
Comprehensive income | 866 | 888 |
Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 6,484 | 6,544 |
Operating costs and expenses: | ||
Cost of sales | 5,202 | 5,252 |
General and administrative (G&A) | 436 | 386 |
Operating earnings | 846 | 906 |
Interest, net | 0 | 0 |
Other, net | 1 | 3 |
Earnings before income tax | 847 | 909 |
Provision for income tax, net | 165 | 293 |
Equity in net earnings of subsidiaries | 0 | 0 |
Net earnings | 682 | 616 |
Comprehensive income | 685 | 617 |
Non-Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 1,051 | 897 |
Operating costs and expenses: | ||
Cost of sales | 807 | 688 |
General and administrative (G&A) | 88 | 76 |
Operating earnings | 156 | 133 |
Interest, net | (1) | (1) |
Other, net | 2 | 1 |
Earnings before income tax | 157 | 133 |
Provision for income tax, net | 38 | 21 |
Equity in net earnings of subsidiaries | 0 | 0 |
Net earnings | 119 | 112 |
Comprehensive income | $ 137 | $ 207 |
Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions |
Apr. 01, 2018 |
Dec. 31, 2017 |
Apr. 02, 2017 |
Dec. 31, 2016 |
||
---|---|---|---|---|---|---|
Current assets: | ||||||
Cash and equivalents | $ 4,332 | $ 2,983 | $ 2,168 | $ 2,334 | ||
Accounts receivable | 3,769 | 3,617 | ||||
Unbilled receivables | 5,865 | 5,240 | ||||
Inventories | 5,543 | 5,303 | ||||
Other current assets | 955 | 1,185 | ||||
Total current assets | 20,464 | 18,328 | ||||
Noncurrent assets: | ||||||
Property, plant and equipment (PP&E) | 8,335 | 8,237 | ||||
Accumulated depreciation of PP&E | (4,802) | (4,720) | ||||
Intangible assets, net | 702 | 702 | ||||
Goodwill | [1] | 11,955 | 11,914 | |||
Other assets | 565 | 585 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Total noncurrent assets | 16,755 | 16,718 | ||||
Total assets | 37,219 | 35,046 | ||||
Current liabilities: | ||||||
Short-term debt and current portion of long-term debt | 2,498 | 2 | ||||
Customer advances and deposits | 7,095 | 6,992 | ||||
Other current liabilities | 5,649 | 6,105 | ||||
Total current liabilities | 15,242 | 13,099 | ||||
Noncurrent liabilities: | ||||||
Long-term debt | 3,981 | 3,980 | ||||
Other liabilities | 6,222 | 6,532 | ||||
Total noncurrent liabilities | 10,203 | 10,512 | ||||
Intercompany | 0 | 0 | ||||
Shareholders’ equity: | ||||||
Common stock | 482 | 482 | ||||
Other shareholders’ equity | 11,292 | 10,953 | ||||
Total shareholders’ equity | 11,774 | 11,435 | 10,583 | 10,301 | ||
Total liabilities and shareholders’ equity | 37,219 | 35,046 | ||||
Consolidating Adjustments | ||||||
Current assets: | ||||||
Cash and equivalents | 0 | 0 | 0 | 0 | ||
Accounts receivable | 0 | 0 | ||||
Unbilled receivables | 0 | 0 | ||||
Inventories | 0 | 0 | ||||
Other current assets | 0 | 0 | ||||
Total current assets | 0 | 0 | ||||
Noncurrent assets: | ||||||
Property, plant and equipment (PP&E) | 0 | 0 | ||||
Accumulated depreciation of PP&E | 0 | 0 | ||||
Intangible assets, net | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Investment in subsidiaries | (45,799) | (44,887) | ||||
Total noncurrent assets | (45,799) | (44,887) | ||||
Total assets | (45,799) | (44,887) | ||||
Current liabilities: | ||||||
Short-term debt and current portion of long-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 | (2,132) | (2,132) | ||||
Other shareholders’ equity | (43,667) | (42,755) | ||||
Total shareholders’ equity | (45,799) | (44,887) | ||||
Total liabilities and shareholders’ equity | (45,799) | (44,887) | ||||
Parent Company | ||||||
Current assets: | ||||||
Cash and equivalents | 3,787 | 1,930 | 1,051 | 1,254 | ||
Accounts receivable | 0 | 0 | ||||
Unbilled receivables | 0 | 0 | ||||
Inventories | 0 | 0 | ||||
Other current assets | 113 | 351 | ||||
Total current assets | 3,900 | 2,281 | ||||
Noncurrent assets: | ||||||
Property, plant and equipment (PP&E) | 228 | 221 | ||||
Accumulated depreciation of PP&E | (77) | (75) | ||||
Intangible assets, net | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Other assets | 188 | 199 | ||||
Investment in subsidiaries | 45,799 | 44,887 | ||||
Total noncurrent assets | 46,138 | 45,232 | ||||
Total assets | 50,038 | 47,513 | ||||
Current liabilities: | ||||||
Short-term debt and current portion of long-term debt | 2,496 | 0 | ||||
Customer advances and deposits | 0 | 0 | ||||
Other current liabilities | 559 | 561 | ||||
Total current liabilities | 3,055 | 561 | ||||
Noncurrent liabilities: | ||||||
Long-term debt | 3,952 | 3,950 | ||||
Other liabilities | 2,399 | 2,451 | ||||
Total noncurrent liabilities | 6,351 | 6,401 | ||||
Intercompany | 28,858 | 29,116 | ||||
Shareholders’ equity: | ||||||
Common stock | 482 | 482 | ||||
Other shareholders’ equity | 11,292 | 10,953 | ||||
Total shareholders’ equity | 11,774 | 11,435 | ||||
Total liabilities and shareholders’ equity | 50,038 | 47,513 | ||||
Guarantor Subsidiaries | ||||||
Current assets: | ||||||
Cash and equivalents | 0 | 0 | 0 | 0 | ||
Accounts receivable | 1,215 | 1,259 | ||||
Unbilled receivables | 2,757 | 2,547 | ||||
Inventories | 5,441 | 5,216 | ||||
Other current assets | 453 | 461 | ||||
Total current assets | 9,866 | 9,483 | ||||
Noncurrent assets: | ||||||
Property, plant and equipment (PP&E) | 6,857 | 6,779 | ||||
Accumulated depreciation of PP&E | (3,940) | (3,869) | ||||
Intangible assets, net | 285 | 287 | ||||
Goodwill | 8,336 | 8,320 | ||||
Other assets | 229 | 232 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Total noncurrent assets | 11,767 | 11,749 | ||||
Total assets | 21,633 | 21,232 | ||||
Current liabilities: | ||||||
Short-term debt and current portion of long-term debt | 0 | 1 | ||||
Customer advances and deposits | 4,273 | 4,180 | ||||
Other current liabilities | 3,417 | 3,758 | ||||
Total current liabilities | 7,690 | 7,939 | ||||
Noncurrent liabilities: | ||||||
Long-term debt | 20 | 21 | ||||
Other liabilities | 3,234 | 3,473 | ||||
Total noncurrent liabilities | 3,254 | 3,494 | ||||
Intercompany | (28,093) | (28,494) | ||||
Shareholders’ equity: | ||||||
Common stock | 6 | 6 | ||||
Other shareholders’ equity | 38,776 | 38,287 | ||||
Total shareholders’ equity | 38,782 | 38,293 | ||||
Total liabilities and shareholders’ equity | 21,633 | 21,232 | ||||
Non-Guarantor Subsidiaries | ||||||
Current assets: | ||||||
Cash and equivalents | 545 | 1,053 | $ 1,117 | $ 1,080 | ||
Accounts receivable | 2,554 | 2,358 | ||||
Unbilled receivables | 3,108 | 2,693 | ||||
Inventories | 102 | 87 | ||||
Other current assets | 389 | 373 | ||||
Total current assets | 6,698 | 6,564 | ||||
Noncurrent assets: | ||||||
Property, plant and equipment (PP&E) | 1,250 | 1,237 | ||||
Accumulated depreciation of PP&E | (785) | (776) | ||||
Intangible assets, net | 417 | 415 | ||||
Goodwill | 3,619 | 3,594 | ||||
Other assets | 148 | 154 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Total noncurrent assets | 4,649 | 4,624 | ||||
Total assets | 11,347 | 11,188 | ||||
Current liabilities: | ||||||
Short-term debt and current portion of long-term debt | 2 | 1 | ||||
Customer advances and deposits | 2,822 | 2,812 | ||||
Other current liabilities | 1,673 | 1,786 | ||||
Total current liabilities | 4,497 | 4,599 | ||||
Noncurrent liabilities: | ||||||
Long-term debt | 9 | 9 | ||||
Other liabilities | 589 | 608 | ||||
Total noncurrent liabilities | 598 | 617 | ||||
Intercompany | (765) | (622) | ||||
Shareholders’ equity: | ||||||
Common stock | 2,126 | 2,126 | ||||
Other shareholders’ equity | 4,891 | 4,468 | ||||
Total shareholders’ equity | 7,017 | 6,594 | ||||
Total liabilities and shareholders’ equity | $ 11,347 | $ 11,188 | ||||
|
Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Apr. 01, 2018 |
Apr. 02, 2017 |
||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | $ (496) | $ 533 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (104) | (62) | |||
Other, net | (1) | (23) | |||
Net cash used by investing activities | (105) | (85) | |||
Cash flows from financing activities: | |||||
Proceeds from commercial paper, net | 2,494 | 0 | |||
Purchases of common stock | (267) | (354) | |||
Dividends paid | (250) | (230) | |||
Other, net | (25) | (22) | |||
Net cash provided (used) by financing activities | 1,952 | (606) | |||
Net cash used by discontinued operations | (2) | (8) | |||
Cash sweep/funding by parent | 0 | 0 | |||
Net decrease in cash and equivalents | 1,349 | (166) | |||
Cash and equivalents at beginning of period | 2,983 | 2,334 | |||
Cash and equivalents at end of period | 4,332 | 2,168 | |||
Consolidating Adjustments | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | 0 | 0 | ||
Cash flows from investing activities: | |||||
Capital expenditures | 0 | 0 | |||
Other, net | 0 | 0 | |||
Net cash used by investing activities | 0 | 0 | |||
Cash flows from financing activities: | |||||
Proceeds from commercial paper, net | 0 | ||||
Purchases of common stock | 0 | 0 | |||
Dividends paid | 0 | 0 | |||
Other, net | 0 | 0 | |||
Net cash provided (used) by financing activities | 0 | 0 | |||
Net cash used by discontinued operations | 0 | 0 | |||
Cash sweep/funding by parent | 0 | 0 | |||
Net 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 | |||
Parent Company | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | 80 | (10) | ||
Cash flows from investing activities: | |||||
Capital expenditures | (7) | (3) | |||
Other, net | 1 | 0 | |||
Net cash used by investing activities | (6) | (3) | |||
Cash flows from financing activities: | |||||
Proceeds from commercial paper, net | 2,494 | ||||
Purchases of common stock | (267) | (354) | |||
Dividends paid | (250) | (230) | |||
Other, net | (25) | (21) | |||
Net cash provided (used) by financing activities | 1,952 | (605) | |||
Net cash used by discontinued operations | (2) | (8) | |||
Cash sweep/funding by parent | (167) | 423 | |||
Net decrease in cash and equivalents | 1,857 | (203) | |||
Cash and equivalents at beginning of period | 1,930 | 1,254 | |||
Cash and equivalents at end of period | 3,787 | 1,051 | |||
Guarantor Subsidiaries | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | 105 | 443 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (86) | (42) | |||
Other, net | (2) | 28 | |||
Net cash used by investing activities | (88) | (14) | |||
Cash flows from financing activities: | |||||
Proceeds from commercial paper, net | 0 | ||||
Purchases of common stock | 0 | 0 | |||
Dividends paid | 0 | 0 | |||
Other, net | 0 | (1) | |||
Net cash provided (used) by financing activities | 0 | (1) | |||
Net cash used by discontinued operations | 0 | 0 | |||
Cash sweep/funding by parent | (17) | (428) | |||
Net 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 | |||
Non-Guarantor Subsidiaries | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | (681) | 100 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (11) | (17) | |||
Other, net | 0 | (51) | |||
Net cash used by investing activities | (11) | (68) | |||
Cash flows from financing activities: | |||||
Proceeds from commercial paper, net | 0 | ||||
Purchases of common stock | 0 | 0 | |||
Dividends paid | 0 | 0 | |||
Other, net | 0 | 0 | |||
Net cash provided (used) by financing activities | 0 | 0 | |||
Net cash used by discontinued operations | 0 | 0 | |||
Cash sweep/funding by parent | 184 | 5 | |||
Net decrease in cash and equivalents | (508) | 37 | |||
Cash and equivalents at beginning of period | 1,053 | 1,080 | |||
Cash and equivalents at end of period | $ 545 | $ 1,117 | |||
|
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