Document_and_Entity_Informatio
Document and Entity Information Document | 9 Months Ended | |
Jun. 30, 2014 | Jul. 16, 2014 | |
Document and Entity Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'ROCKWELL COLLINS INC | ' |
Entity Central Index Key | '0001137411 | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 135,099,026 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statement of Financial Position (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $450 | $391 |
Receivables, net | 1,131 | 1,058 |
Inventories, net | 1,707 | 1,518 |
Current deferred income taxes | 8 | 19 |
Businesses held for sale | 69 | 17 |
Other current assets | 146 | 91 |
Total current assets | 3,511 | 3,094 |
Property | 888 | 773 |
Goodwill | 1,865 | 779 |
Intangible Assets | 688 | 288 |
Long-term Deferred Income Taxes | 64 | 245 |
Other Assets | 237 | 221 |
TOTAL ASSETS | 7,253 | 5,400 |
Current Liabilities: | ' | ' |
Short-term debt | 855 | 436 |
Accounts payable | 467 | 463 |
Compensation and benefits | 241 | 293 |
Advance payments from customers | 354 | 324 |
Accrued customer incentives | 184 | 184 |
Product warranty costs | 109 | 121 |
Liabilities associated with businesses held for sale | 31 | 4 |
Other current liabilities | 191 | 156 |
Total current liabilities | 2,432 | 1,981 |
Long-term Debt, Net | 1,663 | 563 |
Retirement Benefits | 986 | 1,078 |
Other Liabilities | 219 | 155 |
Equity: | ' | ' |
Common stock ($0.01 par value; shares authorized: 1,000; shares issued: 183.8) | 2 | 2 |
Additional paid-in capital | 1,480 | 1,469 |
Retained earnings | 4,479 | 4,163 |
Accumulated other comprehensive loss | -1,255 | -1,287 |
Common stock in treasury, at cost (shares held: June 30, 2014, 48.7; September 30, 2013, 48.7) | -2,759 | -2,729 |
Total shareowners' equity | 1,947 | 1,618 |
Noncontrolling interest | 6 | 5 |
Total equity | 1,953 | 1,623 |
TOTAL LIABILITIES AND EQUITY | $7,253 | $5,400 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Financial Position (Parenthetical) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
Common Stock, Par Value | $0.01 | $0.01 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, Shares, Issued | 183,800,000 | 183,800,000 |
Common Stock, Shares Held in Treasury | 48,700,000 | 48,700,000 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||
Sales: | ' | ' | ' | ' | ||
Product sales | $1,065 | $1,060 | $3,117 | $3,067 | ||
Service sales | 199 | 72 | 460 | 188 | ||
Total sales | 1,264 | 1,132 | 3,577 | 3,255 | ||
Costs, expenses and other: | ' | ' | ' | ' | ||
Product cost of sales | 743 | 725 | 2,176 | 2,129 | ||
Service cost of sales | 134 | 44 | 319 | 129 | ||
Selling, general and administrative expenses | 148 | 130 | 430 | 374 | ||
Interest expense | 15 | 7 | 43 | [1] | 21 | [1] |
Other income, net | -5 | -4 | -20 | -14 | ||
Total costs, expenses and other | 1,035 | 902 | 2,948 | 2,639 | ||
Income from continuing operations before income taxes | 229 | 230 | 629 | 616 | ||
Income tax expense | 66 | 69 | 184 | 161 | ||
Income from continuing operations | 163 | 161 | 445 | 455 | ||
Income (loss) from discontinued operations, net of taxes | -5 | 3 | -8 | 2 | ||
Net income | $158 | $164 | $437 | $457 | ||
Basic | ' | ' | ' | ' | ||
Continuing operations | $1.21 | $1.19 | $3.29 | $3.32 | ||
Discontinued operations | ($0.04) | $0.02 | ($0.06) | $0.01 | ||
Basic earnings per share | $1.17 | $1.21 | $3.23 | $3.33 | ||
Diluted | ' | ' | ' | ' | ||
Continuing operations | $1.19 | $1.18 | $3.25 | $3.29 | ||
Discontinued operations | ($0.04) | $0.02 | ($0.06) | $0.01 | ||
Diluted earnings per share | $1.15 | $1.20 | $3.19 | $3.30 | ||
Weighted average common shares: | ' | ' | ' | ' | ||
Basic | 135.2 | 135.5 | 135.3 | 137.1 | ||
Diluted | 136.9 | 137.2 | 136.9 | 138.5 | ||
Cash dividends per share | $0.30 | $0.30 | $0.90 | $0.90 | ||
[1] | During the nine months ended JuneB 30, 2014, the Company incurred $3 million of bridge facility fees related to the acquisition of ARINC. These costs are included in Interest expense; therefore total transaction costs related to the acquisition of ARINC during the period were $16 million. |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statement of Comprehensive Income Statement (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Net Income | $158 | $164 | $437 | $457 |
Unrealized foreign currency translation adjustments | 3 | 0 | 2 | -11 |
Pension and other retirement benefits adjustments (net of taxes for the three and nine months ended June 30, 2014 of $5 and $15, respectively; net of taxes for the three and nine months ended June 30, 2013 of $6 and $18, respectively) | 9 | 10 | 26 | 31 |
Cash flow hedge adjustments (net of taxes for the three and nine months ended June 30, 2014 of $1 and $0, respectively; net of taxes for the three and nine months ended June 30, 2013 of $(2) and $(2), respectively) | 2 | -3 | 4 | -5 |
Comprehensive Income | $172 | $171 | $469 | $472 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statement of Comprehensive Income (Parenthetical) (Parentheticals) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Amortization of defined benefit plan costs, tax amount | $5 | $6 | $15 | $18 |
Foreign currency cash flow hedge adjustment tax amount | $1 | ($2) | $0 | ($2) |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statement of Cash Flows (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating Activities: | ' | ' |
Net Income | $437 | $457 |
Adjustments to arrive at cash provided by operating activities: | ' | ' |
Gain on sale of business | -10 | 0 |
Loss on pending divestiture of business | 4 | 0 |
Depreciation | 102 | 91 |
Amortization of intangible assets and pre-production engineering costs | 61 | 41 |
Stock-based compensation expense | 17 | 19 |
Compensation and benefits paid in common stock | 37 | 42 |
Excess tax benefit from stock-based compensation | -5 | -7 |
Deferred income taxes | 80 | 75 |
Pension plan contributions | -66 | -120 |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ' | ' |
Receivables | 40 | 2 |
Production Inventory | -104 | -99 |
Pre-production engineering costs | -156 | -131 |
Accounts payable | -18 | -67 |
Compensation and benefits | -77 | 3 |
Advance payments from customers | -25 | 11 |
Accrued customer incentives | 0 | -7 |
Product warranty costs | -11 | -7 |
Income taxes | -65 | 14 |
Other assets and liabilities | -4 | -8 |
Cash Provided by Operating Activities | 237 | 309 |
Investing Activities: | ' | ' |
Acquisition of business, net of cash acquired | -1,405 | 0 |
Property additions | -115 | -85 |
Proceeds from the disposition of property | 0 | -1 |
Acquisition of intangible assets | 1 | 1 |
Proceed from business divestitures | 24 | 0 |
Cash (Used for) Investing Activities | -1,497 | -85 |
Financing Activities: | ' | ' |
Purchases of treasury stock | -111 | -524 |
Cash dividends | -122 | -124 |
Proceeds from short-term commercial paper borrowings, net | 620 | 400 |
Repayment of debt | -200 | 0 |
Net proceeds from long-term debt issuance | 1,089 | 0 |
Proceeds from the exercise of stock options | 35 | 38 |
Excess tax benefit from stock-based compensation | 5 | 7 |
Cash Provided by (Used for) Financing Activities | 1,316 | -203 |
Effect of exchange rate changes on cash and cash equivalents | 3 | -2 |
Net Change in Cash and Cash Equivalents | 59 | 19 |
Cash and Cash Equivalents at Beginning of Period | 391 | 335 |
Cash and Cash Equivalents at End of Period | $450 | $354 |
Business_Description_and_Basis
Business Description and Basis of Presentation | 9 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Business Description and Basis of Presentation | ' |
Business Description and Basis of Presentation | |
Rockwell Collins, Inc. (the Company or Rockwell Collins) designs, produces and supports communications and aviation systems for commercial and military customers and provides information management services through voice and data communication networks and solutions worldwide. | |
The Company operates on a 52/53 week fiscal year with quarters ending on the Friday closest to the last day of the calendar quarter. For ease of presentation, June 30 and September 30 are utilized consistently throughout these financial statements and notes to represent the period end date. | |
The Company has one consolidated subsidiary with income attributable to a noncontrolling interest. The net income and comprehensive income attributable to the noncontrolling interest is insignificant. | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended September 30, 2013. | |
In the opinion of management, the unaudited financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year. | |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates and assumptions. | |
During the first quarter of 2014, the Company acquired ARINC Incorporated (ARINC). As a result of the acquisition, the Company's service sales are now greater than ten percent of total sales. Accordingly, service and product sales and service and product cost of sales are now presented separately and prior periods were changed to conform to the current period presentation. This change did not impact previously reported total revenues, total cost of sales, or net income, nor did it have any effect on the Company's financial position or cash flows for any prior periods. | |
As discussed in Note 4, Discontinued Operations and Divestitures, the Company entered into an agreement during the quarter to divest its satellite communication systems business, formerly known as Datapath, Inc. (Datapath), with operations in Duluth, Georgia and Stockholm, Sweden. The Company also intends to divest the Aerospace Systems Engineering and Support (ASES) business, which was acquired as part of the ARINC transaction. As such, these businesses are classified as held for sale and have been accounted for as discontinued operations for all periods presented. Unless otherwise noted, disclosures pertain to the Company's continuing operations. |
Recently_Issued_Accounting_Sta
Recently Issued Accounting Standards | 9 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards | |
In February 2013 the Financial Accounting Standards Board (FASB) issued amended guidance which requires entities to provide details about the amounts reclassified out of accumulated other comprehensive income (AOCI) by component. In addition, entities must disclose the income statement line items affected for significant items reclassified out of AOCI to net income in their entirety. The amendment became effective for the Company in the first quarter of 2014 and is required to be applied prospectively. There was no impact to the Company's financial position, results of operations, or cash flows; the Company did, however, include additional disclosures as required by the new pronouncement, as shown in Note 13. | |
In April 2014 the FASB issued guidance that modifies the criteria used to qualify divestitures for classification as discontinued operations and expands disclosures related to disposals of significant components. The amendment will become effective for the Company in fiscal 2016 with early adoption permitted; the Company does not intend to early adopt the amended guidance. The amended guidance is expected to decrease the likelihood that future disposals will qualify for discontinued operations treatment, meaning that the results of operations of some future disposals may be reported in continuing operations. | |
In May 2014 the FASB issued comprehensive new revenue recognition guidance, effectively replacing all current guidance on the topic. Given the significance of this change, the Company is currently in the process of reviewing the new standard and its potential impact on the Company. The new guidance is effective for the Company in fiscal 2018, and may significantly impact the Company's financial position, results of operations or cash flows upon implementation. |
Acquisitions
Acquisitions | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Acquisitions | ' | ||||||||||||||||
Acquisitions | |||||||||||||||||
On December 23, 2013, the Company acquired 100 percent of the outstanding common stock and voting interests of Radio Holdings, Inc. (Radio Holdings), the holding company of ARINC, a leading global provider of air-to-ground data and voice communication services. ARINC enables mission critical data and voice communications throughout the world to customers including the U.S. Federal Aviation Administration (FAA), commercial airlines, business aircraft operators, airport and critical infrastructure operators and major passenger and freight railroads. Combining ARINC’s communication networks and services with the Company’s onboard aircraft information systems will strengthen the Company’s ability to deliver efficiency and enhanced connectivity to aircraft operators worldwide. | |||||||||||||||||
The ARINC purchase price was $1.405 billion, net of cash acquired and net of $10 million in cash received by the Company in June 2014 from the settlement of various post-closing matters, including adjustments for changes in working capital. As discussed in Note 10, the Company used proceeds from the issuance of long-term debt and commercial paper to finance the cash purchase price. The following table, which is preliminary and subject to change, summarizes the estimated fair value of assets acquired and liabilities assumed at the acquisition date. | |||||||||||||||||
(in millions) | 23-Dec-13 | ||||||||||||||||
Restricted Cash(1) | $ | 61 | |||||||||||||||
Receivables and Other current assets | 182 | ||||||||||||||||
Building held for sale(2) | 81 | ||||||||||||||||
Business held for sale(3) | 25 | ||||||||||||||||
Property | 56 | ||||||||||||||||
Intangible Assets | 430 | ||||||||||||||||
Other Assets | 7 | ||||||||||||||||
     Total Identifiable Assets Acquired | 842 | ||||||||||||||||
Payable to ARINC option holders(1) | (61 | ) | |||||||||||||||
Current Liabilities | (181 | ) | |||||||||||||||
Liability related to building held for sale(2) | (81 | ) | |||||||||||||||
Liabilities associated with business held for sale(3) | (9 | ) | |||||||||||||||
Long-term deferred income taxes | (152 | ) | |||||||||||||||
Retirement Benefits and Other Long-term Liabilities | (39 | ) | |||||||||||||||
     Total Liabilities Assumed | (523 | ) | |||||||||||||||
Net Identifiable Assets Acquired, excluding Goodwill | 319 | ||||||||||||||||
Goodwill | 1,086 | ||||||||||||||||
     Net Assets Acquired | $ | 1,405 | |||||||||||||||
(1) Option-holders of ARINC were due approximately $61 million at the transaction closing date. This payment did not clear until December 24, 2013. Therefore the opening balance sheet, which is prepared as of December 23, 2013, includes restricted cash of $61 million and a current liability payable to the ARINC option holders for an equal amount. | |||||||||||||||||
(2) On March 28, 2014, the Company sold the building which was classified as held for sale at the acquisition date. For more information related to the Building held for sale, see below. | |||||||||||||||||
(3) Assets and liabilities associated with the Business held-for-sale relate to ASES, which the Company intends to divest, as detailed in Note 4. | |||||||||||||||||
The final determination of the fair value of certain assets and liabilities will be completed within the one year measurement period as allowed by FASB Accounting Standards Codification Topic 805, Business Combinations (ASC 805). As of June 30, 2014, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary. The size and breadth of the ARINC acquisition necessitates use of the measurement period to adequately analyze all the factors used in establishing the asset and liability fair values as of the acquisition date, including intangible assets, certain reserves, purchase price adjustments and the related tax impacts of any changes made. Any potential adjustments will be made retroactively and could be material to the preliminary values presented above. | |||||||||||||||||
The preliminary purchase price allocation resulted in the recognition of $1.086 billion of goodwill, none of which is expected to be deductible for tax purposes. All of the goodwill is included in the Company’s new Information Management Services segment. The goodwill is primarily a result of revenue synergy opportunities generated by the combination of the Company’s aviation electronics and flight services business with ARINC’s network communication solutions and cost synergies resulting from the consolidation of certain corporate and administrative functions. Goodwill also results from the workforce acquired with the business. See Note 22 for additional information relating to the new Information Management Services segment. | |||||||||||||||||
ARINC’s results of operations have been included in the Company's operating results for the period subsequent to the completion of the acquisition on December 23, 2013. ARINC contributed sales of $134 million for the three months ended June 30, 2014 and $277 million from the date of acquisition through June 30, 2014, and net income of $12 million for the three months ended June 30, 2014 and $22 million from the date of acquisition through June 30, 2014. | |||||||||||||||||
Building Held For Sale and Liability Related to Building Held for Sale | |||||||||||||||||
In connection with the acquisition of ARINC, the Company classified $81 million of acquired real estate assets as Building held for sale at the acquisition date. The Company also recorded a $81 million liability related to the Building held for sale at the acquisition date. The assets and related liability were recorded at their estimated fair value. | |||||||||||||||||
In November of 2004, ARINC obtained approval from the Department of Labor to contribute these real estate assets to their defined benefit pension plan. In connection with this transaction, ARINC entered into a simultaneous agreement to leaseback the contributed facilities for a period of twenty years, through November 1, 2024. As a result of the related party elements of the transaction, no sale or gain was recognized when ARINC contributed the real estate to its pension plan. Instead, ARINC recognized a deferred gain liability equal to the fair value of the contributed real estate. The increase in deferred gain liability was offset by an equal reduction to pension plan liabilities to recognize the fair value of the contributed real estate in the funded status of the pension plan. | |||||||||||||||||
The Building held for sale was comprised of the land and buildings of the ARINC corporate headquarters, located in Annapolis, Maryland. The related liability represented future rental payment obligations under the leaseback agreement. As of the acquisition date, the real estate assets were being marketed for sale. In March 2014, the assets were sold to an unrelated third party. The net proceeds from the sale of $81 million were remitted directly to the ARINC pension plan, and have been included as a benefit to the funded status of that plan, as detailed in Note 11, Retirement Benefits. The sale had no impact on the Company's statement of operations or statement of cash flows. | |||||||||||||||||
Concurrent with the sale of the real estate assets, the Company entered into revised lease agreements with the new owner of the Annapolis, Maryland facilities. A portion of the leased assets have been classified as a capital lease resulting in the establishment of capital lease assets and offsetting capital lease obligation on the Company's Condensed Consolidated Statement of Financial Position, as described in Note 7, Property. | |||||||||||||||||
Transaction-related Expenses | |||||||||||||||||
The Company incurred transaction costs related to the acquisition of $0 and $16 million during the three and nine months ended June 30, 2014, respectively. Of the year to date amount, $13 million is recorded within Selling, general and administrative expenses on the Condensed Consolidated Statement of Operations. The remaining $3 million is recorded within Interest expense and relates to fees incurred in connection with the bridge credit agreement which was entered into in September 2013 to support the financing of the ARINC acquisition. | |||||||||||||||||
Supplemental Pro-Forma Data | |||||||||||||||||
The following unaudited supplemental pro-forma data presents consolidated pro-forma information as if the acquisition and related financing had been completed as of the beginning of the prior year, or on October 1, 2012. | |||||||||||||||||
The unaudited supplemental pro-forma financial information does not reflect the potential realization of revenue synergies or cost savings, nor does it reflect other costs relating to the integration of the two companies. This pro-forma data should not be considered indicative of the results that would have actually occurred if the acquisition and related financing been consummated on October 1, 2012, nor are they indicative of future results. | |||||||||||||||||
The unaudited supplemental pro-forma financial information was calculated by combining the Company's results with the stand-alone results of ARINC for the pre-acquisition periods, which were adjusted to account for certain transactions and other costs that would have been incurred during this pre-acquisition period. The pro-forma information included herein is preliminary and may be revised as additional information becomes available and as additional analysis is performed within the one year measurement period allowed by ASC 805. Any potential future adjustments could be material. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||
(in millions, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Pro-forma sales | $ | 1,264 | $ | 1,262 | $ | 3,683 | $ | 3,637 | |||||||||
Pro-forma net income attributable to common shareowners from continuing operations | $ | 163 | $ | 168 | $ | 448 | $ | 453 | |||||||||
Pro-forma basic earnings per share from continuing operations | $ | 1.21 | $ | 1.24 | $ | 3.31 | $ | 3.3 | |||||||||
Pro-forma diluted earnings per share from continuing operations | $ | 1.19 | $ | 1.22 | $ | 3.27 | $ | 3.27 | |||||||||
The unaudited supplemental pro-forma data above exclude the results of ASES, which the Company intends to divest, as detailed in Note 4. The following significant adjustments were made to account for certain transactions and costs that would have occurred if the acquisition had been completed on October 1, 2012. These adjustments are net of any applicable tax impact and were included to arrive at the pro-forma results above. As the acquisition of ARINC was completed on December 23, 2013, the pro forma adjustments for the three and nine months ended June 30, 2014 in the table below include only the required adjustments through December 23, 2013. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Increases / (decreases) to pro-forma net income: | |||||||||||||||||
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments(1) | $ | — | $ | 2 | $ | 2 | $ | 7 | |||||||||
Advisory, legal and accounting service fees(2) | — | — | 21 | (22 | ) | ||||||||||||
Amortization of acquired ARINC intangible assets, net(3) | — | (3 | ) | (4 | ) | (12 | ) | ||||||||||
Interest expense incurred on acquisition financing, net(4) | — | (2 | ) | — | (5 | ) | |||||||||||
(1) This adjustment captures the net impact to depreciation expense resulting from various purchase accounting adjustments to fixed assets | |||||||||||||||||
(2) This adjustment reflects the elimination of transaction-related fees incurred by ARINC and Rockwell Collins in connection with the acquisition and assumes all of the fees were incurred during the first quarter of 2013 | |||||||||||||||||
(3) This adjustment eliminates amortization of the historical ARINC intangible assets and replaces it with the new amortization for the acquired intangible assets | |||||||||||||||||
(4) This adjustment reflects the addition of interest expense for the debt incurred by Rockwell Collins to finance the ARINC acquisition, net of interest expense that was eliminated on the historical ARINC debt that was repaid at the acquisition date. The adjustment also reflects the elimination of interest expense incurred by Rockwell Collins for bridge loan financing which was assumed to not be required for purposes of the pro-forma periods presented. |
Discontinued_Operations_and_Di
Discontinued Operations and Divestitures | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||||||||||
Discontinued Operations and Divestitures | ' | ||||||||||||||||
Discontinued Operations and Divestitures | |||||||||||||||||
On May 22, 2014, the Company entered into an agreement to sell its satellite communication systems business formerly known as Datapath, Inc. (Datapath). Datapath designs, manufactures, and services ground-based satellite communication systems, primarily for military applications, and includes operations in Duluth, Georgia and Stockholm, Sweden. The sale is subject to customary closing conditions and is expected to close in the fourth quarter. During the third quarter of 2014, the Company recognized a pre-tax loss of $14 million ($4 million after-tax) related to the pending divestiture of the Datapath business. The high effective tax rate is primarily attributable to differences in the treatment of goodwill for income tax and financial reporting purposes. There could be additional gains or losses recorded upon the final disposition of this business. The operating results of Datapath, including the loss expected to be realized on the disposition, have been included in discontinued operations in the Company's Condensed Consolidated Statement of Operations for all periods presented. The Datapath business was formerly included in the Government Systems segment. The anticipated divestiture of this business is part of our strategy to reshape the Government Systems segment to align with the changing dynamics of the defense environment and focus on opportunities in addressed markets for the Company's core products and solutions. | |||||||||||||||||
The Company also intends to divest ARINC's ASES business, which provides military aircraft integration and modifications, maintenance, and logistics and support, in order to align with the Company's long-term primary business strategies. The operating results of ASES are included in discontinued operations in the Company's Condensed Consolidated Statement of Operations for all periods presented. | |||||||||||||||||
At June 30, 2014, the Company has classified $69 million of assets related to Datapath and ASES as businesses held-for-sale within current assets and $31 million of liabilities related to Datapath and ASES as businesses held-for-sale within current liabilities on the Condensed Consolidated Statement of Financial Position. The major classes of assets and liabilities that make up the current assets and current liabilities are as follows: | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Receivables | $ | 29 | |||||||||||||||
Inventory, net | 17 | ||||||||||||||||
Current deferred income taxes | 2 | ||||||||||||||||
Other current assets | 7 | ||||||||||||||||
Property | 7 | ||||||||||||||||
Goodwill and intangible assets | 5 | ||||||||||||||||
Other Assets | 2 | ||||||||||||||||
Total assets classified as current | $ | 69 | |||||||||||||||
Accounts payable | $ | 10 | |||||||||||||||
Compensation and benefits | 6 | ||||||||||||||||
Advance payments from customers | 3 | ||||||||||||||||
Product warranty costs | 1 | ||||||||||||||||
Other current liabilities | 7 | ||||||||||||||||
Other Liabilities | 4 | ||||||||||||||||
Total liabilities classified as current | $ | 31 | |||||||||||||||
Results of discontinued operations are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Sales | $ | 31 | $ | 33 | $ | 74 | $ | 103 | |||||||||
Income (loss) from discontinued operations before income taxes | (13 | ) | 4 | (17 | ) | 3 | |||||||||||
On November 22, 2013, the Company sold its subsidiary, Kaiser Optical Systems, Inc. (KOSI), a supplier of spectrographic instrumentation and applied holographic technology, to Endress+Hauser. The sale price, after post-closing adjustments for changes in working capital, was $23 million. This resulted in a pretax gain of $10 million, which was included in Other income during the three months ended December 31, 2013. The divestiture of this business is part of our strategy to reshape the Government Systems segment to align with the changing dynamics of the defense environment and focus on opportunities in addressed markets for the Company's core products and solutions. As part of the divestiture agreement, the Company entered into a long-term supply agreement with the buyer that allows the Company to continue purchasing certain products from KOSI after completion of the sale. As a result of this continuing involvement, the KOSI divestiture did not qualify for classification as a discontinued operation. As of September 30, 2013, the KOSI business was classified within current assets and current liabilities as a business held-for-sale. |
Receivables_Net
Receivables, Net | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Receivables, Net | ' | |||||||
Receivables, Net | ||||||||
Receivables, net are summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Billed | $ | 792 | $ | 823 | ||||
Unbilled | 535 | 432 | ||||||
Less progress payments | (186 | ) | (188 | ) | ||||
Total | 1,141 | 1,067 | ||||||
Less allowance for doubtful accounts | (10 | ) | (9 | ) | ||||
Receivables, net | $ | 1,131 | $ | 1,058 | ||||
Receivables expected to be collected beyond the next twelve months are classified as long-term and are included within Other Assets. | ||||||||
Unbilled receivables principally represent sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms. |
Inventories_Net
Inventories, Net | 9 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ' | |||||||||||||||||||||||
Inventories, Net | ' | |||||||||||||||||||||||
Inventories, Net | ||||||||||||||||||||||||
Inventories, net are summarized as follows: | ||||||||||||||||||||||||
(in millions) | June 30, | September 30, | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Finished goods | $ | 207 | $ | 181 | ||||||||||||||||||||
Work in process | 287 | 273 | ||||||||||||||||||||||
Raw materials, parts and supplies | 377 | 358 | ||||||||||||||||||||||
Less progress payments | (10 | ) | (8 | ) | ||||||||||||||||||||
Total | 861 | 804 | ||||||||||||||||||||||
Pre-production engineering costs | 846 | 714 | ||||||||||||||||||||||
Inventories, net | $ | 1,707 | $ | 1,518 | ||||||||||||||||||||
The Company defers certain pre-production engineering costs during the development phase of a program in connection with long-term supply arrangements that contain contractual guarantees for reimbursement from customers. Such customer guarantees generally take the form of a minimum order quantity with quantified reimbursement amounts if the minimum order quantity is not taken by the customer. These costs are deferred to the extent of the contractual guarantees and are amortized over their estimated useful lives using a units-of-delivery method, up to 15 years. This amortization expense is included as a component of cost of sales. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis and begins when the Company starts recognizing revenue as the Company delivers equipment for the program. The estimated useful life is limited to the amount of time the Company is virtually assured to earn revenues through a contractually enforceable right included in long-term supply arrangements with the Company’s customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain contractual guarantees for reimbursement are expensed as incurred. | ||||||||||||||||||||||||
Anticipated annual amortization expense for pre-production engineering costs is as follows: | ||||||||||||||||||||||||
(in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Anticipated amortization expense for pre-production engineering costs | $ | 36 | $ | 53 | $ | 70 | $ | 75 | $ | 86 | $ | 550 | ||||||||||||
Amortization expense for pre-production engineering costs for the three and nine months ended June 30, 2014 was $10 million and $24 million, respectively, compared to $6 million and $18 million for the three and nine months ended June 30, 2013. As of June 30, 2014, the weighted average amortization period remaining for pre-production engineering costs included in inventory was approximately 11 years. |
Property
Property | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property, Plant and Equipment, Net [Abstract] | ' | |||||||
Property | ' | |||||||
Property | ||||||||
Property is summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Land | $ | 16 | $ | 10 | ||||
Buildings and improvements | 408 | 388 | ||||||
Machinery and equipment (including internal use software) | 1,131 | 1,066 | ||||||
Information systems software and hardware | 357 | 344 | ||||||
Furniture and fixtures | 65 | 65 | ||||||
Capital leases | 62 | — | ||||||
Construction in progress | 126 | 101 | ||||||
Total | 2,165 | 1,974 | ||||||
Less accumulated depreciation | (1,277 | ) | (1,201 | ) | ||||
Property | $ | 888 | $ | 773 | ||||
Property additions acquired by incurring capital leases, which are reflected as non-cash transactions in the Company's Condensed Consolidated Statement of Cash Flows were $56 million and $0 at June 30, 2014 and 2013, respectively. | ||||||||
A portion of the Company's operations are conducted in leased real estate facilities, including both operating and, to a lesser extent, capital leases. Accumulated depreciation relating to assets under capital lease totals $3 million and $0 as of June 30, 2014 and September 30, 2013, respectively. Amortization of assets under capital lease is recorded as depreciation expense. Remaining minimum lease payments under capital leases total $85 million, including $29 million of interest, as of June 30, 2014. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||||||
Changes in the carrying amount of goodwill are summarized as follows: | ||||||||||||||||||||||||
(in millions) | Government | Commercial | Information Management Services | Total | ||||||||||||||||||||
Systems | Systems | |||||||||||||||||||||||
Balance at September 30, 2013 | $ | 513 | $ | 266 | $ | — | $ | 779 | ||||||||||||||||
ARINC acquisition | — | — | 1,086 | 1,086 | ||||||||||||||||||||
Reclassification from Commercial Systems to Information Management Services | — | (4 | ) | 4 | — | |||||||||||||||||||
Reclassification of Datapath goodwill to business held-for-sale | (1 | ) | — | — | (1 | ) | ||||||||||||||||||
Foreign currency translation adjustments and other | 1 | — | — | 1 | ||||||||||||||||||||
Balance at June 30, 2014 | $ | 513 | $ | 262 | $ | 1,090 | $ | 1,865 | ||||||||||||||||
As a result of the ARINC acquisition, the Company recorded $1.086 billion of goodwill. The goodwill value is preliminary and subject to change. Beginning in the first quarter of 2014, the Company created a new Information Management Services segment. This segment combines the retained portion of the newly acquired ARINC business with the Company's existing flight services business, which had previously been included in the Commercial Systems segment. As a result of the reorganization of the Company's segments, a portion of the goodwill from the Commercial Systems segment was reassigned to the Information Management Services segment using a fair value allocation method. | ||||||||||||||||||||||||
The Company performs an annual impairment test of goodwill and indefinite-lived intangible assets during the second quarter of each fiscal year, or at any time there is an indication goodwill or indefinite-lived intangibles are more-likely-than-not impaired, commonly referred to as triggering events. There have been no such triggering events during any of the periods presented, and the Company's 2014 and 2013 impairment tests resulted in no impairment. | ||||||||||||||||||||||||
Intangible assets are summarized as follows: | ||||||||||||||||||||||||
June 30, 2014 | September 30, 2013 | |||||||||||||||||||||||
(in millions) | Gross | Accum | Net | Gross | Accum | Net | ||||||||||||||||||
Amort | Amort | |||||||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Developed technology and patents | $ | 323 | $ | (176 | ) | $ | 147 | $ | 222 | $ | (175 | ) | $ | 47 | ||||||||||
Backlog | 3 | — | 3 | — | — | — | ||||||||||||||||||
Customer relationships: | ||||||||||||||||||||||||
Acquired | 338 | (61 | ) | 277 | 89 | (60 | ) | 29 | ||||||||||||||||
Up-front sales incentives | 252 | (44 | ) | 208 | 241 | (35 | ) | 206 | ||||||||||||||||
License agreements | 13 | (8 | ) | 5 | 13 | (8 | ) | 5 | ||||||||||||||||
Trademarks and tradenames | 15 | (14 | ) | 1 | 15 | (14 | ) | 1 | ||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Trademarks and tradenames | 47 | — | 47 | — | — | — | ||||||||||||||||||
Intangible assets | $ | 991 | $ | (303 | ) | $ | 688 | $ | 580 | $ | (292 | ) | $ | 288 | ||||||||||
As a result of the ARINC acquisition, the Company has preliminarily allocated $383 million to finite-lived intangible assets with a weighted average life of approximately 15 years and $47 million to indefinite-lived intangible assets. | ||||||||||||||||||||||||
Rockwell Collins provides up-front sales incentives prior to delivering products or performing services to certain commercial customers in connection with sales contracts. Up-front sales incentives are recorded as a Customer relationship intangible asset and are amortized using a units-of-delivery method over the period the Company has received a contractually enforceable right related to the incentives, up to 15 years. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis. Amortization begins when the Company starts recognizing revenue as the Company delivers equipment for the program. Up-front sales incentives consisting of cash payments or customer account credits are amortized as a reduction of sales, whereas incentives consisting of free products are amortized as cost of sales. As of June 30, 2014, the weighted average amortization period remaining for up-front sales incentives was approximately 9 years. | ||||||||||||||||||||||||
Anticipated annual amortization expense for intangible assets is as follows: | ||||||||||||||||||||||||
(in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Anticipated amortization expense for up-front sales incentives | $ | 12 | $ | 14 | $ | 18 | $ | 20 | $ | 22 | $ | 131 | ||||||||||||
Anticipated amortization expense for intangibles acquired in ARINC acquisition | 19 | 26 | 26 | 26 | 26 | 260 | ||||||||||||||||||
Anticipated amortization expense for all other intangible assets | 19 | 15 | 12 | 8 | 6 | 18 | ||||||||||||||||||
Total | $ | 50 | $ | 55 | $ | 56 | $ | 54 | $ | 54 | $ | 409 | ||||||||||||
Amortization expense for intangible assets for the three and nine months ended June 30, 2014 was $14 million and $37 million, respectively, compared to $8 million and $23 million for the three and nine months ended June 30, 2013. | ||||||||||||||||||||||||
The Company reviews Intangible Assets for impairment at least annually, or whenever potential indicators of impairment exist. |
Other_Assets
Other Assets | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Other Assets [Abstract] | ' | |||||||
Other Assets | ' | |||||||
Other Assets | ||||||||
Other assets are summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Long-term receivables | $ | 29 | $ | 32 | ||||
Investments in equity affiliates | 12 | 22 | ||||||
Exchange and rental assets (net of accumulated depreciation of $94 at June 30, 2014 and $91 at September 30, 2013) | 58 | 55 | ||||||
Other | 138 | 112 | ||||||
Other assets | $ | 237 | $ | 221 | ||||
Investments in Equity Affiliates | ||||||||
Investments in equity affiliates consist of seven joint ventures, which are accounted for under the equity method. Under the equity method of accounting for investments, the Company’s proportionate share of the earnings or losses of its equity affiliates are included in Net income and classified as Other income, net in the Condensed Consolidated Statement of Operations. | ||||||||
During the second quarter of 2014, the Company established a new joint venture to develop and deliver products for the C919 Program. Rockwell Collins CETC Avionics Co., Ltd (RCCAC) is a 50 percent owned joint venture with CETC Avionics Co., Ltd (CETCA). The Company's share of earnings or losses of RCCAC is included in the operating results of the Commercial Systems segment. | ||||||||
As a result of the ARINC acquisition, the Company has a new joint venture. ADARI Aviation Technology Limited (ADARI) is a 50 percent owned joint venture with Aviation Data Communication Corporation Co, LTD. The Company's share of earnings or losses of ADARI is included in the operating results of the Information Management Services segment. | ||||||||
The Company's remaining joint ventures are also 50 percent owned. For segment performance reporting purposes, Rockwell Collins’ share of earnings or losses of Visual Systems International, LLC. (VSI), Data Link Solutions LLC (DLS), Integrated Guidance Systems LLC (IGS) and Quest Flight Training Limited are included in the operating results of the Government Systems segment, while the share of earnings or losses of AVIC Leihua Rockwell Collins Avionics Company (ALRAC) are included in the operating results of the Commercial Systems segment. | ||||||||
In the normal course of business or pursuant to the underlying joint venture agreements, the Company may sell products or services to equity affiliates. The Company defers a portion of the profit generated from these sales equal to its ownership interest in the equity affiliates until the underlying product is ultimately sold to an unrelated third party. Sales to equity affiliates were $42 million and $118 million for the three and nine months ended June 30, 2014, respectively, and $33 million and $102 million for the three and nine months ended June 30, 2013. The deferred portion of profit generated from sales to equity affiliates was $0 at June 30, 2014 and $1 million at September 30, 2013. | ||||||||
Exchange and Rental Assets | ||||||||
Exchange and rental assets consist primarily of Company products that are either exchanged or rented to customers on a short-term basis in connection with warranty and other service related activities. These assets are recorded at acquisition or production cost and depreciated using the straight-line method over their estimated lives, up to 15 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Depreciation expense for exchange and rental assets was $3 million and $8 million for the three and nine months ended June 30, 2014, respectively, and $2 million and $7 million for the three and nine months ended June 30, 2013, respectively. |
Debt
Debt | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt | ' | |||||||
Debt | ||||||||
Short-term Debt | ||||||||
Short-term debt and a reconciliation to the carrying amount is summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Short-term commercial paper borrowings | $ | 855 | $ | 235 | ||||
Current portion of long-term debt | — | 200 | ||||||
Current portion of fair value swap adjustment (Notes 16 and 17) | — | 1 | ||||||
Short-term debt | $ | 855 | $ | 436 | ||||
Commercial Paper Program | ||||||||
Under the Company’s commercial paper program, the Company may sell up to $1.2 billion face amount of unsecured short-term promissory notes in the commercial paper market. The commercial paper notes may bear interest or may be sold at a discount, and have a maturity of not more than 364 days from the time of issuance. The commercial paper program is supported by the Company's five-year $1.0 billion revolving credit facility and a 364-day $200 million revolving credit facility. At June 30, 2014, short-term commercial paper borrowings outstanding were $855 million with a weighted-average interest rate and maturity period of 0.34 percent and 41 days, respectively. At September 30, 2013, short-term commercial paper borrowings outstanding were $235 million with a weighted-average interest rate and maturity period of 0.18 percent and 15 days, respectively. | ||||||||
For the nine months ended June 30, 2014 and 2013, gross borrowings under the Company's commercial paper program with a maturity period greater than 90 days were $265 million and $0, respectively. For the nine months ended June 30, 2014 and 2013, gross payments under the Company's commercial paper program with a maturity period greater than 90 days were $90 million and $0, respectively. These borrowings and payments were included within short-term commercial paper borrowings, net on the Condensed Consolidated Statement of Cash Flows for the nine months ended June 30, 2014 and 2013, respectively. | ||||||||
Revolving Credit Facilities | ||||||||
On September 24, 2013, the Company entered into new credit agreements to ensure adequate commercial paper borrowing capacity in anticipation of the Company's pending ARINC acquisition and to meet other short-term cash requirements. The Company closed on these new revolving credit facilities on December 23, 2013, concurrent with the ARINC acquisition closing date. These new credit facilities consist of a five-year $1.0 billion credit facility that expires in December 2018 and a 364-day $200 million credit facility that expires in December 2014. These agreements replace the prior $850 million revolving credit facility that was terminated concurrently upon the closing of the new agreements. The credit facilities include one financial covenant requiring the Company to maintain a consolidated debt to total capitalization ratio of not greater than 60 percent. The ratio excludes the equity impact on accumulated other comprehensive loss related to defined benefit retirement plans. The ratio was 44 percent as of June 30, 2014. The credit facilities also contain covenants that require the Company to satisfy certain conditions in order to incur debt secured by liens, engage in sale/leaseback transactions or merge or consolidate with another entity. Borrowings under these credit facilities bear interest at the London Interbank Offered Rate (LIBOR) plus a variable margin based on the Company’s unsecured long-term debt rating or, at the Company’s option, rates determined by competitive bid. At June 30, 2014 and September 30, 2013, there were no outstanding borrowings under either revolving credit facility. | ||||||||
In addition, short-term credit facilities available to non-U.S. subsidiaries amounted to $58 million as of June 30, 2014, of which $16 million was utilized to support commitments in the form of commercial letters of credit. At | ||||||||
June 30, 2014 and September 30, 2013, there were no short-term borrowings outstanding under the Company’s non-U.S. subsidiaries’ credit facilities. | ||||||||
At June 30, 2014 and September 30, 2013, there were no significant commitment fees or compensating balance requirements under any of the Company’s credit facilities. | ||||||||
Bridge Credit Agreement | ||||||||
On December 16, 2013, the Company terminated the $900 million 364-day senior unsecured bridge term loan credit agreement it had previously entered into on September 24, 2013. There were no outstanding borrowings under this agreement. The termination coincided with the receipt of net proceeds from the Company's long-term debt issuance on December 16, 2013. As a result of that long-term debt issuance, the Company no longer required the bridge credit agreement as a potential financing source for the ARINC acquisition. | ||||||||
Current Portion of Long-term Debt | ||||||||
On November 20, 2003, the Company issued $200 million of 4.75 percent fixed rate unsecured debt due | ||||||||
December 1, 2013 (the 2013 Notes). At the time of the debt issuance, the Company entered into interest rate swap contracts which effectively converted $100 million of the 2013 Notes to floating rate debt based on six-month LIBOR less 0.075 percent. See Notes 16 and 17 for additional information relating to the interest rate swap contracts. The 2013 Notes matured on December 1, 2013. The Company initially repaid the 2013 Notes using commercial paper borrowing proceeds, and then subsequently refinanced the amounts borrowed using a portion of the proceeds from the new long-term debt issued on December 16, 2013, which is discussed in further detail below. | ||||||||
New Long-term Debt Issuances | ||||||||
On December 16, 2013, the Company issued $300 million of floating rate unsecured debt due December 15, 2016 (the 2016 Notes). The 2016 Notes bear annual interest at a rate equal to three-month LIBOR plus 0.35 percent. As of June 30, 2014 the quarterly interest rate was 0.58 percent. The rate resets quarterly. The net proceeds to the Company from the 2016 Notes, after deducting $1 million of debt issuance costs, were $299 million. | ||||||||
On December 16, 2013, the Company issued $400 million of 3.70 percent fixed rate unsecured debt due December 15, 2023 (the 2023 Notes). The net proceeds to the Company from the 2023 Notes, after deducting a $1 million discount and $3 million of debt issuance costs were $396 million. In March 2014, the Company entered into interest rate swap contracts which effectively converted $200 million of the 2023 Notes to floating rate debt based on one-month LIBOR plus 0.94 percent. See Notes 16 and 17 for additional information relating to the interest rate swap contracts. | ||||||||
On December 16, 2013, the Company issued $400 million of 4.80 percent fixed rate unsecured debt due December 15, 2043 (the 2043 Notes). The net proceeds to the Company from the 2043 Notes, after deducting a $2 million discount and $4 million of debt issuance costs were $394 million. | ||||||||
The net proceeds after discounts and debt issuance costs from the December 16, 2013 debt issuance totaled $1,089 million. Approximately $900 million was used to finance the ARINC acquisition and approximately $200 million was used to refinance the 2013 Notes that matured on December 1, 2013. The remaining ARINC purchase price was funded using commercial paper proceeds. | ||||||||
Other Long-term Debt | ||||||||
On November 16, 2011, the Company issued $250 million of 3.10 percent fixed rate unsecured debt due November 15, 2021 (the 2021 Notes). | ||||||||
On May 6, 2009, the Company issued $300 million of 5.25 percent fixed rate unsecured debt due July 15, 2019 (the 2019 Notes). In January 2010, the Company entered into interest rate swap contracts which effectively converted $150 million of the 2019 Notes to floating rate debt based on six-month LIBOR plus 1.235 percent. See Notes 16 and 17 for additional information relating to the interest rate swap contracts. | ||||||||
The 2043, 2023, 2021, 2019 and 2016 Notes are included in the Condensed Consolidated Statement of Financial Position net of any unamortized discount within the caption Long-term Debt, Net. The debt issuance costs are capitalized within Other Assets on the Condensed Consolidated Statement of Financial Position. The debt issuance costs and any discounts are amortized over the life of the debt and recorded in Interest expense. | ||||||||
The 2043, 2023, 2021, 2019 and 2016 Notes each contain covenants that require the Company to satisfy certain conditions in order to incur debt secured by liens, engage in sales/leaseback transactions, merge or consolidate with another entity or transfer substantially all of the Company’s assets. The Company was in compliance with all debt covenants at June 30, 2014 and September 30, 2013. | ||||||||
Long-term debt and a reconciliation to the carrying amount is summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Principal amount of 2043 Notes, net of discount | $ | 398 | $ | — | ||||
Principal amount of 2023 Notes, net of discount | 399 | — | ||||||
Principal amount of 2021 Notes, net of discount | 249 | 249 | ||||||
Principal amount of 2019 Notes, net of discount | 299 | 299 | ||||||
Principal amount of 2016 Notes | 300 | — | ||||||
Principal amount of 2013 Notes | — | 200 | ||||||
Fair value swap adjustment (Notes 16 and 17) | 18 | 16 | ||||||
Total | $ | 1,663 | $ | 764 | ||||
Less current portion | — | 201 | ||||||
Long-term debt, net | $ | 1,663 | $ | 563 | ||||
Interest paid on debt for the nine months ended June 30, 2014 and 2013 was $41 million and $20 million, respectively. |
Retirement_Benefits
Retirement Benefits | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||
Retirement Benefits | ' | ||||||||||||||||
Retirement Benefits | |||||||||||||||||
The Company sponsors defined benefit pension (Pension Benefits) and other postretirement (Other Retirement Benefits) plans which provide monthly pension and other benefits to eligible employees upon retirement. In connection with the acquisition of ARINC, the Company assumed pension and postretirement employment benefits obligations of $4 million and $8 million, respectively. | |||||||||||||||||
Pension Benefits | |||||||||||||||||
The components of expense for Pension Benefits for the three and nine months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 3 | $ | 3 | $ | 8 | $ | 8 | |||||||||
Interest cost | 43 | 35 | 126 | 104 | |||||||||||||
Expected return on plan assets | (59 | ) | (51 | ) | (171 | ) | (152 | ) | |||||||||
Amortization: | |||||||||||||||||
Prior service credit | (3 | ) | (5 | ) | (9 | ) | (14 | ) | |||||||||
Net actuarial loss | 17 | 20 | 51 | 60 | |||||||||||||
Net benefit expense | $ | 1 | $ | 2 | $ | 5 | $ | 6 | |||||||||
Other Retirement Benefits | |||||||||||||||||
The components of expense for Other Retirement Benefits for the three and nine months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | — | $ | 1 | $ | 2 | $ | 3 | |||||||||
Interest cost | 3 | 2 | 7 | 6 | |||||||||||||
Expected return on plan assets | (1 | ) | — | (1 | ) | (1 | ) | ||||||||||
Amortization: | |||||||||||||||||
Prior service credit | (2 | ) | (2 | ) | (7 | ) | (6 | ) | |||||||||
Net actuarial loss | 2 | 3 | 6 | 9 | |||||||||||||
Net benefit expense | $ | 2 | $ | 4 | $ | 7 | $ | 11 | |||||||||
ARINC Pension Plan | |||||||||||||||||
ARINC sponsors two primary pension sub-plans: one for union employees and one for non-union employees. | |||||||||||||||||
Effective April 1, 2006, ARINC froze the majority of its pension plans for employees not covered by bargaining unit agreements. As such, most of the non-union participants in the ARINC pension plans are no longer accruing contribution credits. The plans generally allow for employees who retire, or terminate, to elect to receive their pension benefits in a lump sum and certain existing participants in the plan continue to earn vesting rights and accrue interest on their account balance at rates established by the plan. | |||||||||||||||||
The ARINC pension plans were remeasured as of the acquisition date. ARINC's projected benefit obligation for pensions at December 23, 2013 was $274 million and was calculated using a discount rate of 4.89 percent. The fair value of ARINC's pension plan assets at December 23, 2013 were $270 million. Therefore, the funded status of the ARINC pension as of the December 23, 2013 acquisition date was a $4 million deficit. This net pension benefit obligation is included within Retirement benefits as a liability on the Company's Condensed Consolidated Statement of Financial Position at June 30, 2014. During the nine months ended June 30, 2014, the Company recorded $3 million of income related to the ARINC pension plans, which is reflected in the table above. | |||||||||||||||||
Included in ARINC's pension plan assets at December 23, 2013 was real estate that ARINC contributed to its pension plan in 2004 under a Department of Labor approved transaction. The details of this transaction are further discussed in Note 3, Acquisitions. Refer also to Note 3 for additional discussion regarding the subsequent sale of the contributed real estate to an independent third party in March 2014. The net proceeds from the sale of $81 million have been retained by the ARINC pension plan trust. | |||||||||||||||||
ARINC Other Retirement Benefits | |||||||||||||||||
ARINC also provides postretirement health coverage for many of their current and former employees and postretirement life insurance benefits for certain retirees. These benefits vary by employment status, age, service, and salary level at retirement. | |||||||||||||||||
The postretirement welfare plan was also remeasured as of the acquisition date. ARINC's postretirement plan obligation as of December 23, 2013 was $8 million and was calculated using a discount rate of 4.89 percent. There are no assets for this plan. The obligation is included within Retirement benefits as a liability on the Company's Condensed Consolidated Statement of Financial Position at June 30, 2014. | |||||||||||||||||
Pension Plan Funding | |||||||||||||||||
The Company’s objective with respect to the funding of its pension plans is to provide adequate assets for the payment of future benefits. Pursuant to this objective, the Company will fund its pension plans as required by governmental regulations and may consider discretionary contributions as conditions warrant. In October 2013, the Company voluntarily contributed $55 million to its U.S. qualified pension plan. There was no minimum statutory funding requirement for 2014 and the Company does not currently expect to make any additional discretionary contributions during fiscal year 2014. Furthermore, we are not required to make, and do not intend to make, any contributions to the ARINC pension plans during 2014. Any additional future contributions necessary to satisfy minimum statutory funding requirements are dependent upon actual plan asset returns and interest rates. Contributions to the non-U.S. plans and the U.S. non-qualified plan are expected to total $14 million in 2014. During the nine months ended June 30, 2014 the Company made contributions to the non-U.S. plans and the U.S. non-qualified pension plan of $11 million. |
StockBased_Compensation_and_Ea
Stock-Based Compensation and Earnings Per Share | 9 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Stock Based Compensation and Earnings Per Share Abstract | ' | |||||||||||||||||||||
Stock-Based Compensation and Earnings Per Share | ' | |||||||||||||||||||||
Stock-Based Compensation and Earnings Per Share | ||||||||||||||||||||||
Stock-based compensation expense and related income tax benefit included within the Condensed Consolidated Statement of Operations is as follows: | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Stock-based compensation expense included in: | ||||||||||||||||||||||
Product cost of sales | $ | 1 | $ | 2 | $ | 5 | $ | 6 | ||||||||||||||
Selling, general and administrative expenses | 4 | 4 | 12 | 13 | ||||||||||||||||||
Total | $ | 5 | $ | 6 | $ | 17 | $ | 19 | ||||||||||||||
Income tax benefit | $ | 2 | $ | 3 | $ | 6 | $ | 7 | ||||||||||||||
The Company issued awards of equity instruments under the Company's various incentive plans for the nine months ended June 30, 2014 and 2013 as follows: | ||||||||||||||||||||||
Options | Performance Shares | Restricted | ||||||||||||||||||||
Stock Units | ||||||||||||||||||||||
(shares in thousands) | Number Issued | Weighted | Number Issued | Weighted | Number Issued | Weighted | ||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Nine months ended June 30, 2014 | 581.8 | $ | 18.54 | 150.6 | $ | 71.44 | 78.9 | $ | 72.33 | |||||||||||||
Nine months ended June 30, 2013 | 923.3 | 12.56 | 211.2 | 54.79 | 85.3 | 55.77 | ||||||||||||||||
The maximum number of shares of common stock that can be issued in respect of performance shares granted in 2014 based on the achievement of performance targets for fiscal years 2014 through 2016 is approximately 341,000. | ||||||||||||||||||||||
The fair value of each option granted by the Company was estimated using a binomial lattice pricing model and the following weighted average assumptions: | ||||||||||||||||||||||
2014 Grants | 2013 Grants | |||||||||||||||||||||
Risk-free interest rate | 0.3% - 3.0% | 0.3% - 2.9% | ||||||||||||||||||||
Expected dividend yield | 1.9 | % | 2 | % | ||||||||||||||||||
Expected volatility | 28 | % | 27 | % | ||||||||||||||||||
Expected life | 7 years | 8 years | ||||||||||||||||||||
Employee benefits Paid in Company Stock | ||||||||||||||||||||||
During the nine months ended June 30, 2014 and 2013, 0.5 million and 0.7 million shares, respectively, of the Company common stock were issued to employees under the Company's employee stock purchase and defined contribution savings plans at a value of $37 million and $42 million for the respective periods. | ||||||||||||||||||||||
Earnings Per Share and Diluted Share Equivalents | ||||||||||||||||||||||
The computation of basic and diluted earnings per share is as follows: | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||
(in millions, except per share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Numerator for basic and diluted earnings per share: | ||||||||||||||||||||||
Income from continuing operations | $ | 163 | $ | 161 | $ | 445 | $ | 455 | ||||||||||||||
Income (loss) from discontinued operations, net of taxes | (5 | ) | 3 | (8 | ) | 2 | ||||||||||||||||
Net income | $ | 158 | $ | 164 | $ | 437 | $ | 457 | ||||||||||||||
Denominator: | ||||||||||||||||||||||
Denominator for basic earnings per share – weighted average common shares | 135.2 | 135.5 | 135.3 | 137.1 | ||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||
Stock options | 1.3 | 1.2 | 1.2 | 1 | ||||||||||||||||||
Performance shares, restricted stock and restricted stock units | 0.4 | 0.5 | 0.4 | 0.4 | ||||||||||||||||||
Dilutive potential common shares | 1.7 | 1.7 | 1.6 | 1.4 | ||||||||||||||||||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion | 136.9 | 137.2 | 136.9 | 138.5 | ||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Continuing operations | $ | 1.21 | $ | 1.19 | $ | 3.29 | $ | 3.32 | ||||||||||||||
Discontinued operations | (0.04 | ) | 0.02 | (0.06 | ) | 0.01 | ||||||||||||||||
Basic earnings per share | $ | 1.17 | $ | 1.21 | $ | 3.23 | $ | 3.33 | ||||||||||||||
Diluted | ||||||||||||||||||||||
Continuing operations | $ | 1.19 | $ | 1.18 | $ | 3.25 | $ | 3.29 | ||||||||||||||
Discontinued operations | (0.04 | ) | 0.02 | (0.06 | ) | 0.01 | ||||||||||||||||
Diluted earnings per share | $ | 1.15 | $ | 1.2 | $ | 3.19 | $ | 3.3 | ||||||||||||||
The average outstanding diluted shares calculation excludes anti-dilutive options. Stock options excluded from the average outstanding diluted shares calculation were 0 and 0.3 million for the three months ended June 30, 2014 and 2013, respectively, and 0 and 0.4 million for the nine months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||
Earnings per share amounts are computed independently each quarter. As a result, the sum of each quarter's per share amount may not equal the total per share amount for the full year. |
Other_Comprehensive_Loss
Other Comprehensive Loss | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Statement of Comprehensive Income [Abstract] | ' | ||||||||||||||||
Comprehensive Loss | ' | ||||||||||||||||
Other Comprehensive Loss | |||||||||||||||||
Changes in accumulated other comprehensive loss (AOCL), net of tax, by component for the nine months ended June 30, 2014 are as follows: | |||||||||||||||||
Foreign Exchange Translation Adjustment | Pension and Other Postretirement Adjustments (1) | Change in the Fair Value of Effective Cash Flow Hedges (2) | Total | ||||||||||||||
Balance at September 30, 2013 | $ | 12 | $ | (1,293 | ) | $ | (6 | ) | $ | (1,287 | ) | ||||||
Other comprehensive income before reclassifications | 4 | — | 4 | 8 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 24 | — | 24 | |||||||||||||
Net current period other comprehensive income | 4 | 24 | 4 | 32 | |||||||||||||
Balance at June 30, 2014 | $ | 16 | $ | (1,269 | ) | $ | (2 | ) | $ | (1,255 | ) | ||||||
(1) Reclassifications from AOCL to net income, related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans, were $41 million ($24 million net of tax), for the nine months ended June 30, 2014. The reclassifications are included in the computation of net benefit expense. See Note 11, Retirement Benefits for additional details. | |||||||||||||||||
(2) Reclassifications from AOCL to net income related to cash flow hedges were not significant for the nine months ended June 30, 2014. The reclassifications are included in cost of sales and interest expense. See Note 17, Derivative Financial Instruments for additional details. |
Other_Income_Net
Other Income, Net | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Nonoperating Income (Expense) [Abstract] | ' | ||||||||||||||||
Other Income, Net | ' | ||||||||||||||||
Other Income, Net | |||||||||||||||||
Other income, net consists of the following: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Earnings from equity affiliates | $ | 2 | $ | 1 | $ | 6 | $ | 10 | |||||||||
Gain from business divestiture | — | — | 10 | — | |||||||||||||
Other | 3 | 3 | 4 | 4 | |||||||||||||
Other income, net | $ | 5 | $ | 4 | $ | 20 | $ | 14 | |||||||||
Income_Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. | |
During the three months ended June 30, 2014 and 2013, the effective income tax rate from continuing operations was 28.8 percent and 30.0 percent, respectively. The lower current year effective income tax rate from continuing operations was primarily due to favorable adjustments related to the resolution of certain tax matters from prior years offset by the differences in availability of the Federal R&D Tax Credit. | |
During the nine months ended June 30, 2014 and 2013, the effective income tax rate from continuing operations was 29.3 percent and 26.1 percent, respectively. The higher current year effective income tax rate was primarily due to the differences in availability of the Federal R&D Tax Credit partially offset by favorable adjustments in the current period due to the resolution of certain tax matters from prior years. | |
The Company's U.S. Federal income tax returns for the tax year ended September 30, 2011 and prior years have been audited by the IRS and are closed to further adjustments by the IRS. ARINC is currently not under audit by the IRS for any open tax year and is closed to further adjustments for all tax years ended December 31, 2009 and prior, with the exception of the research and development credits claimed for 2009. The Company and ARINC are also currently under audit in various U.S. states and non-U.S. jurisdictions. The U.S. state and non-U.S. jurisdictions have statutes of limitations generally ranging from 3 to 5 years. The Company believes it has adequately provided for any tax adjustments that may result from the various audits. | |
The Company had net income tax payments of $166 million and $72 million during the nine months ended June 30 2014 and 2013, respectively. | |
The Company has gross unrecognized tax benefits recorded within Other Liabilities in the Condensed Consolidated Statement of Financial Position of $41 million and $56 million as of June 30, 2014 and September 30, 2013, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate were $20 million and $34 million as of June 30, 2014 and September 30, 2013, respectively. Although the timing and outcome of tax settlements are uncertain, it is not expected that a material reduction in the unrecognized tax benefits will occur during the next 12 months based on the outcome of tax examinations or as a result of the expiration of various statutes of limitations. | |
The Company includes interest and penalties related to unrecognized tax benefits in income tax expense. The total amount of interest and penalties recognized within Other Liabilities in the Condensed Consolidated Statement of Financial Position was $1 million and $2 million as of June 30, 2014 and September 30, 2013, respectively. The total amount of interest and penalties recorded as an expense or (income) within Income tax expense in the Condensed Consolidated Statement of Operations was $1 million and $0 for the nine months ended June 30, 2014 and 2013, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
The FASB defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The FASB’s guidance classifies the inputs used to measure fair value into the following hierarchy: | ||||||||||||||||
Level 1 - | quoted prices (unadjusted) in active markets for identical assets or liabilities | |||||||||||||||
Level 2 - | quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument | |||||||||||||||
Level 3 - | unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value | |||||||||||||||
A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | ||||||||||||||||
The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and September 30, 2013 are as follows: | ||||||||||||||||
June 30, 2014 | September 30, 2013 | |||||||||||||||
(in millions) | Fair Value | Fair Value | Fair Value | |||||||||||||
Hierarchy | Asset (Liability) | Asset (Liability) | ||||||||||||||
Deferred compensation plan investments | Level 1 | $ | 52 | $ | 49 | |||||||||||
Interest rate swap assets | Level 2 | 18 | 16 | |||||||||||||
Forward starting interest rate swap liabilities | Level 2 | — | (5 | ) | ||||||||||||
Foreign currency forward exchange contract assets | Level 2 | 6 | 6 | |||||||||||||
Foreign currency forward exchange contract liabilities | Level 2 | (5 | ) | (6 | ) | |||||||||||
There were no nonfinancial assets or nonfinancial liabilities recognized at fair value on a nonrecurring basis and there were no transfers between levels of the fair value hierarchy during the nine months ended June 30, 2014 or 2013. | ||||||||||||||||
The carrying amounts and fair values of the Company's financial instruments are as follows: | ||||||||||||||||
Asset (Liability) | ||||||||||||||||
June 30, 2014 | September 30, 2013 | |||||||||||||||
(in millions) | Carrying | Fair | Carrying | Fair | ||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Cash and cash equivalents | $ | 450 | $ | 450 | $ | 391 | $ | 391 | ||||||||
Short-term debt: | ||||||||||||||||
2013 Notes | — | — | (200 | ) | (201 | ) | ||||||||||
Commercial paper borrowings | (855 | ) | (855 | ) | (235 | ) | (235 | ) | ||||||||
Long-term debt | (1,645 | ) | (1,742 | ) | (548 | ) | (586 | ) | ||||||||
The fair value of cash and cash equivalents and the commercial paper portion of the short-term debt approximates their carrying value due to the short-term nature of the instruments. These items are within Level 1 of the fair value hierarchy. Fair value information for the 2013 Notes, which were classified as short-term debt at September 30, 2013, and fair value information for all long-term debt is within Level 2 of the fair value hierarchy. The fair value of these financial instruments were based on current market interest rates and estimates of current market conditions for instruments with similar terms, maturities and degree of risk. The carrying amount and fair value of short-term and long-term debt excludes the interest rate swaps fair value adjustment. These fair value estimates do not necessarily reflect the amounts the Company would realize in a current market exchange. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | |||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||
Derivative Financial Instruments | ' | |||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||||
Interest Rate Swaps | ||||||||||||||||||
The Company manages its exposure to interest rate risk by maintaining an appropriate mix of fixed and variable rate debt, which over time should moderate the costs of debt financing. When considered necessary, the Company may use financial instruments in the form of interest rate swaps to help meet this objective. In March 2014, the Company entered into three interest rate swap contracts (the 2023 Swaps) which expire on December 15, 2023 and effectively converted $200 million of the 2023 Notes to floating rate debt based on one-month LIBOR plus 0.94 percent. | ||||||||||||||||||
In January 2010, the Company entered into two interest rate swap contracts (the 2019 Swaps) which expire on July 15, 2019 and effectively converted $150 million of the 2019 Notes to floating rate debt based on nine-month LIBOR plus 1.235 percent. | ||||||||||||||||||
On November 20, 2003, the Company entered into two interest rate swap contracts (the 2013 Swaps) which expired on December 1, 2013 and effectively converted $100 million of the 2013 Notes to floating rate debt based on six-month LIBOR less 0.075 percent. | ||||||||||||||||||
The Company designated the 2013, 2019 and 2023 Swaps (the Swaps) as fair value hedges. The 2013 Swaps matured on December 1, 2013, and accordingly have no fair value at June 30, 2014. At September 30, 2013, the 2013 Swaps were recorded within Other current assets at a fair value of $1 million offset by a fair value adjustment to Short-term debt (Note 10) of $1 million. The 2019 and 2023 Swaps are recorded within Other Assets at a fair value of $18 million, offset by a fair value adjustment to Long-term Debt (Note 10) of $18 million at June 30, 2014. At September 30, 2013, the 2019 Swaps were recorded within Other Assets at a fair value of $15 million, offset by a fair value adjustment to Long-term Debt (Note 10) of $15 million. Cash payments or receipts between the Company and the counterparties to the Swaps are recorded as an adjustment to interest expense. | ||||||||||||||||||
Forward Starting Interest Rate Swaps | ||||||||||||||||||
In September 2013, the Company entered into forward starting interest rate swap agreements with combined notional values of $200 million to effectively lock in fixed interest rates on a portion of the long-term debt it incurred in December 2013 to refinance maturing debt and to fund the acquisition of ARINC. In October 2013, the Company entered into an additional $300 million notional value of forward starting interest rate swap agreements. These forward starting interest rate swaps were designated as cash flow hedges and were executed to hedge against the risk of potentially higher benchmark U.S. Treasury bond yields on long-term debt with maturities ranging from 2023 to 2043 and fixed interest rates ranging between 2.8150 percent and 3.8775 percent. The forward starting interest rate swaps were terminated in December 2013 concurrent with the Company's debt issuance. Upon termination, the forward starting swaps were valued at a net loss of $2 million. This net loss has been deferred within Accumulated other comprehensive losses on the Condensed Consolidated Statement of Financial Position and will be amortized into interest expense over the life of the corresponding debt. | ||||||||||||||||||
Foreign Currency Forward Exchange Contracts | ||||||||||||||||||
The Company transacts business in various foreign currencies which subjects the Company’s cash flows and earnings to exposure related to changes in foreign currency exchange rates. These exposures arise primarily from purchases or sales of products and services from third parties and intercompany transactions. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates and are used to offset changes in the fair value of certain assets or liabilities or forecasted cash flows resulting from transactions denominated in foreign currencies. As of June 30, 2014 and September 30, 2013, the Company had outstanding foreign currency forward exchange contracts with notional amounts of $327 million and $482 million, respectively. These notional values consist primarily of contracts for the European euro, British pound sterling and Japanese yen, and are stated in U.S. dollar equivalents at spot exchange rates at the respective dates. The acquisition of ARINC had no significant impact on the Company's foreign currency forward exchange contracts. | ||||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||||
Fair values of derivative instruments in the Condensed Consolidated Statement of Financial Position as of June 30, 2014 and September 30, 2013 are as follows: | ||||||||||||||||||
Asset Derivatives | ||||||||||||||||||
(in millions) | Classification | June 30, | September 30, | |||||||||||||||
2014 | 2013 | |||||||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 6 | $ | 6 | |||||||||||||
Interest rate swaps | Other assets | 18 | 15 | |||||||||||||||
Interest rate swaps | Other current assets | — | 1 | |||||||||||||||
Total | $ | 24 | $ | 22 | ||||||||||||||
Liability Derivatives | ||||||||||||||||||
(in millions) | Classification | June 30, | September 30, | |||||||||||||||
2014 | 2013 | |||||||||||||||||
Foreign currency forward exchange contracts | Other current liabilities | $ | 5 | $ | 6 | |||||||||||||
Forward starting interest rate swaps | Other current liabilities | — | 5 | |||||||||||||||
Total | $ | 5 | $ | 11 | ||||||||||||||
The fair values of derivative instruments are presented on a gross basis as the Company does not have any derivative contracts which are subject to master netting arrangements. As of June 30, 2014 and September 30, 2013, there were no undesignated foreign currency forward exchange contracts classified within other current assets or other current liabilities. | ||||||||||||||||||
The effect of derivative instruments on the Condensed Consolidated Statement of Operations for the three and nine months ended June 30 is as follows: | ||||||||||||||||||
Amount of Gain (Loss) | Amount of Gain (Loss) | |||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
June 30 | June 30 | |||||||||||||||||
(in millions) | Location of Gain (Loss) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Derivatives Designated as Hedging Instruments: | ||||||||||||||||||
Fair Value Hedges | ||||||||||||||||||
Interest rate swaps | Interest expense | $ | 2 | $ | 2 | $ | 6 | $ | 7 | |||||||||
Cash Flow Hedges | ||||||||||||||||||
Foreign currency forward exchange contracts: | ||||||||||||||||||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) | AOCL | $ | 2 | $ | (5 | ) | $ | 1 | $ | (7 | ) | |||||||
Forward starting interest rate swaps: | ||||||||||||||||||
Amount of gain recognized in AOCL (effective portion, before deferred tax impact) | AOCL | $ | — | $ | — | $ | 3 | $ | — | |||||||||
There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the nine months ended June 30, 2014. In addition, there was no significant impact to the Company’s earnings when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge during the three and nine months ended June 30, 2014. | ||||||||||||||||||
The Company did not have any hedges with credit-risk-related contingent features or that required the posting of collateral as of June 30, 2014. The cash flows from derivative contracts are recorded in operating activities in the Condensed Consolidated Statement of Cash Flows. | ||||||||||||||||||
Cash flow hedges are de-designated once the underlying transaction is recorded on the balance sheet, or approximately 60 days from the maturity date of the hedge. The Company expects to reclassify approximately $1 million of losses over the next 12 months. The maximum duration of a foreign currency cash flow hedge contract at June 30, 2014 was 73 months. |
Guarantees_and_Indemnification
Guarantees and Indemnifications | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Guarantees and Indemnifications Abstract | ' | |||||||
Guarantees and Indemnifications | ' | |||||||
Guarantees and Indemnifications | ||||||||
Product warranty costs | ||||||||
Accrued liabilities are recorded to reflect the Company’s contractual obligations relating to warranty commitments to customers. Warranty coverage of various lengths and terms is provided to customers depending on standard offerings and negotiated contractual agreements. An estimate for warranty expense is recorded at the time of sale based on the length of the warranty and historical warranty return rates and repair costs. | ||||||||
Changes in the carrying amount of accrued product warranty costs are summarized as follows: | ||||||||
Nine Months Ended | ||||||||
June 30 | ||||||||
(in millions) | 2014 | 2013 | ||||||
Balance at beginning of year | $ | 121 | $ | 126 | ||||
Warranty costs incurred | (35 | ) | (36 | ) | ||||
Product warranty accrual | 36 | 33 | ||||||
Changes in estimates for prior years | (12 | ) | (4 | ) | ||||
Foreign currency translation adjustments and other | (1 | ) | — | |||||
Balance at June 30, 2014 | $ | 109 | $ | 119 | ||||
Guarantees | ||||||||
The Company provides a parent company guarantee related to various obligations of its 50 percent owned joint venture, Quest Flight Training Limited (Quest). The Company has guaranteed, jointly and severally with Quadrant Group plc (Quadrant), the joint venture partner, the performance of Quest in relation to its contract with the United Kingdom Ministry of Defence (which expires in 2030) and the performance of certain Quest subcontractors (up to $2 million). In addition, the Company has also pledged equity shares in Quest to guarantee payment by Quest of a loan agreement executed by Quest. In the event of default on this loan agreement, the lending institution can request that the trustee holding such equity shares surrender them to the lending institution in order to satisfy all amounts then outstanding under the loan agreement. As of June 30, 2014, the outstanding loan balance was approximately $4 million. Quadrant has made an identical pledge to guarantee this obligation of Quest. | ||||||||
Should Quest fail to meet its obligations under these agreements, these guarantees may become a liability of the Company. As of June 30, 2014, the Quest guarantees are not reflected on the Company’s Condensed Consolidated Statement of Financial Position because the Company believes that Quest will meet all of its performance and financial obligations in relation to its contract with the United Kingdom Ministry of Defence and the loan agreement. | ||||||||
Letters of credit | ||||||||
The Company has contingent commitments in the form of letters of credit. Outstanding letters of credit are issued by banks on the Company’s behalf to support certain contractual obligations to its customers. If the Company fails to meet these contractual obligations, these letters of credit may become liabilities of the Company. Total outstanding letters of credit at June 30, 2014 were $288 million. These commitments are not reflected as liabilities on the Company’s Condensed Consolidated Statement of Financial Position. | ||||||||
Indemnifications | ||||||||
The Company enters into indemnifications with lenders, counterparties in transactions such as administration of employee benefit plans, for the benefit of customers for the work of subcontractors and other customary indemnifications with third parties in the normal course of business. The following are other than customary indemnifications based on the judgment of management. | ||||||||
In connection with agreements for the sale of portions of its business, the Company at times retains various liabilities of a business that relate to events occurring prior to its sale, such as tax, environmental, litigation and employment matters. The Company at times indemnifies the purchaser of a Rockwell Collins business in the event that a third party asserts a claim that relates to a liability retained by the Company. | ||||||||
The Company also provides indemnifications of varying scope and amounts to certain customers against claims of product liability or intellectual property infringement made by third parties arising from the use of Company or customer products or intellectual property. These indemnifications generally require the Company to compensate the other party for certain damages and costs incurred as a result of third party product liability or intellectual property claims arising from these transactions. | ||||||||
The amount the Company could be required to pay under its indemnification agreements is generally limited based on amounts specified in the underlying agreements, or in the case of some agreements, the maximum potential amount of future payments that could be required is not limited. When a potential claim is asserted under these agreements, the Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. A liability is recorded when a potential claim is both probable and estimable. The nature of these agreements prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay should counterparties to these agreements assert a claim; however, the Company currently has no material claims pending related to such agreements. |
Environmental_Matters
Environmental Matters | 9 Months Ended |
Jun. 30, 2014 | |
Environmental Remediation Obligations [Abstract] | ' |
Environmental Matters | ' |
Environmental Matters | |
The Company is subject to federal, state and local regulations relating to the discharge of substances into the environment, the disposal of hazardous wastes and other activities affecting the environment that have had and will continue to have an impact on the Company’s manufacturing operations. These environmental protection regulations may require the investigation and remediation of environmental impairments at current and previously owned or leased properties. In addition, lawsuits, claims and proceedings have been asserted on occasion against the Company alleging violations of environmental protection regulations, or seeking remediation of alleged environmental impairments, principally at previously owned or leased properties. As of June 30, 2014, the Company is involved in the investigation or remediation of nine sites under these regulations or pursuant to lawsuits asserted by third parties. Management estimates that the total reasonably possible future costs the Company could incur for eight of these sites is not significant. Management estimates that the total reasonably possible future costs the Company could incur from one of these sites to be approximately $12 million. Environmental reserves for this site were $6 million and $6 million as of June 30, 2014 and September 30, 2013, respectively, which represents management’s best estimate of the probable future cost for this site. | |
To date, compliance with environmental regulations and resolution of environmental claims has been accomplished without material effect on the Company’s liquidity and capital resources, competitive position or financial condition. Management believes that expenditures for environmental capital investment and remediation necessary to comply with present regulations governing environmental protection and other expenditures for the resolution of environmental claims will not have a material effect on the Company’s business or financial position. |
Legal_Matters
Legal Matters | 9 Months Ended |
Jun. 30, 2014 | |
Legal Matters Abstract | ' |
Legal Matters | ' |
Legal Matters | |
The Company is subject to various lawsuits, claims and proceedings that have been or may be instituted or asserted against the Company relating to the conduct of the Company's business, including those pertaining to product liability, antitrust, intellectual property, safety and health, exporting and importing, contract, employment and regulatory matters. Although the outcome of these matters cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, management believes there are no material pending legal proceedings. |
Restructuring_and_Asset_Impair
Restructuring and Asset Impairment Charges, Net | 9 Months Ended |
Jun. 30, 2014 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | ' |
Restructuring and Asset Impairment Charges | ' |
Restructuring and Asset Impairment Charges, Net | |
During the year ended September 30, 2012, the Company recorded restructuring and asset impairment charges, net totaling $58 million. Included in this charge was $35 million related to employee severance costs, primarily resulting from decisions to realign the Company's European organizational structure to better position the business for long-term growth and to adjust the size of the workforce in anticipation of the sequestration impacts on the U.S. defense budgets. Through June 30, 2014, the Company has made cash severance payments of approximately $27 million. As of June 30, 2014, $8 million of employee separation costs related to the 2012 action remains to be paid in future periods. |
Business_Segment_Information
Business Segment Information | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Business Segment Information | ' | ||||||||||||||||
Business Segment Information | |||||||||||||||||
The sales and results of continuing operations of the Company's operating segments are summarized as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Sales: | |||||||||||||||||
Government Systems | $ | 535 | $ | 569 | $ | 1,604 | $ | 1,623 | |||||||||
Commercial Systems | 583 | 551 | 1,660 | 1,599 | |||||||||||||
Information Management Services | 146 | 12 | 313 | 33 | |||||||||||||
Total sales | $ | 1,264 | $ | 1,132 | $ | 3,577 | $ | 3,255 | |||||||||
Segment operating earnings: | |||||||||||||||||
Government Systems | $ | 112 | $ | 125 | $ | 328 | $ | 345 | |||||||||
Commercial Systems | 130 | 131 | 368 | 352 | |||||||||||||
Information Management Services | 21 | 1 | 41 | 3 | |||||||||||||
Total segment operating earnings | 263 | 257 | 737 | 700 | |||||||||||||
Interest expense(1) | (15 | ) | (7 | ) | (43 | ) | (21 | ) | |||||||||
Stock-based compensation | (5 | ) | (6 | ) | (17 | ) | (19 | ) | |||||||||
General corporate, net | (14 | ) | (14 | ) | (45 | ) | (44 | ) | |||||||||
Gain on divestiture of business | — | — | 10 | — | |||||||||||||
ARINC transaction costs(1) | — | — | (13 | ) | — | ||||||||||||
Income from continuing operations before income taxes | 229 | 230 | 629 | 616 | |||||||||||||
Income tax expense | (66 | ) | (69 | ) | (184 | ) | (161 | ) | |||||||||
Income from continuing operations | $ | 163 | $ | 161 | $ | 445 | $ | 455 | |||||||||
(1) During the nine months ended June 30, 2014, the Company incurred $3 million of bridge facility fees related to the acquisition of ARINC. These costs are included in Interest expense; therefore total transaction costs related to the acquisition of ARINC during the period were $16 million. | |||||||||||||||||
Beginning in the first quarter of 2014, the Company created a new Information Management Services segment. This segment combines the retained portion of the newly acquired ARINC business with the Company's existing flight services business, which had previously been included in the Commercial Systems segment. Prior period results of the Commercial Systems and Information Management Services segments have been revised to conform to the current year presentation. | |||||||||||||||||
The Company evaluates performance and allocates resources based upon, among other considerations, segment operating earnings. The Company's definition of segment operating earnings excludes income taxes, stock-based compensation, unallocated general corporate expenses, interest expense, gains and losses from the disposition of businesses, restructuring and asset impairment charges, and other special items as identified by management from time to time. Intersegment sales are not material and have been eliminated. | |||||||||||||||||
The following table summarizes sales by product category for the three and nine months ended June 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Government Systems product categories: | |||||||||||||||||
Avionics | $ | 317 | $ | 341 | $ | 967 | $ | 980 | |||||||||
Communication products | 107 | 120 | 327 | 335 | |||||||||||||
Surface solutions | 68 | 62 | 182 | 169 | |||||||||||||
Navigation products | 43 | 46 | 128 | 139 | |||||||||||||
Government Systems sales | 535 | 569 | 1,604 | 1,623 | |||||||||||||
Commercial Systems product categories: | |||||||||||||||||
Air transport aviation electronics | 325 | 297 | 942 | 864 | |||||||||||||
Business and regional aviation electronics | 258 | 254 | 718 | 735 | |||||||||||||
Commercial Systems sales | 583 | 551 | 1,660 | 1,599 | |||||||||||||
Information Management Services sales | 146 | 12 | 313 | 33 | |||||||||||||
Total sales | $ | 1,264 | $ | 1,132 | $ | 3,577 | $ | 3,255 | |||||||||
Product category sales for Government Systems are delineated based upon differences in the underlying product technologies and markets served. Prior period results of the Communication products category in Government Systems have been revised to exclude Datapath, which is now reported as a discontinued operation, as discussed in Note 4, Discontinued Operations and Divestitures. | |||||||||||||||||
The air transport and business and regional aviation electronics product categories in Commercial Systems are delineated based on the difference in underlying customer base, size of aircraft and markets served. For the three and nine months ended June 30, 2014, product category sales for air transport aviation electronics include revenue from wide-body in-flight entertainment products and services of $17 million and $54 million, respectively, compared to $19 million and $64 million for the three and nine months ended June 30, 2013. | |||||||||||||||||
Inventories_Net_Inventories_Ne
Inventories, Net Inventories, Net (Policies) | 9 Months Ended |
Jun. 30, 2014 | |
Inventory Disclosure [Abstract] | ' |
Preproduction Engineering Costs Policy | ' |
The Company defers certain pre-production engineering costs during the development phase of a program in connection with long-term supply arrangements that contain contractual guarantees for reimbursement from customers. Such customer guarantees generally take the form of a minimum order quantity with quantified reimbursement amounts if the minimum order quantity is not taken by the customer. These costs are deferred to the extent of the contractual guarantees and are amortized over their estimated useful lives using a units-of-delivery method, up to 15 years. This amortization expense is included as a component of cost of sales. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis and begins when the Company starts recognizing revenue as the Company delivers equipment for the program. The estimated useful life is limited to the amount of time the Company is virtually assured to earn revenues through a contractually enforceable right included in long-term supply arrangements with the Company’s customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain contractual guarantees for reimbursement are expensed as incurred. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets Goodwill and Intangible Assets (Policies) | 9 Months Ended |
Jun. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Customer Incentives, Policy [Policy Text Block] | ' |
Rockwell Collins provides up-front sales incentives prior to delivering products or performing services to certain commercial customers in connection with sales contracts. Up-front sales incentives are recorded as a Customer relationship intangible asset and are amortized using a units-of-delivery method over the period the Company has received a contractually enforceable right related to the incentives, up to 15 years. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis. Amortization begins when the Company starts recognizing revenue as the Company delivers equipment for the program. Up-front sales incentives consisting of cash payments or customer account credits are amortized as a reduction of sales, whereas incentives consisting of free products are amortized as cost of sales. |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | ' | ||||||||||||||||
The following table, which is preliminary and subject to change, summarizes the estimated fair value of assets acquired and liabilities assumed at the acquisition date. | |||||||||||||||||
(in millions) | 23-Dec-13 | ||||||||||||||||
Restricted Cash(1) | $ | 61 | |||||||||||||||
Receivables and Other current assets | 182 | ||||||||||||||||
Building held for sale(2) | 81 | ||||||||||||||||
Business held for sale(3) | 25 | ||||||||||||||||
Property | 56 | ||||||||||||||||
Intangible Assets | 430 | ||||||||||||||||
Other Assets | 7 | ||||||||||||||||
     Total Identifiable Assets Acquired | 842 | ||||||||||||||||
Payable to ARINC option holders(1) | (61 | ) | |||||||||||||||
Current Liabilities | (181 | ) | |||||||||||||||
Liability related to building held for sale(2) | (81 | ) | |||||||||||||||
Liabilities associated with business held for sale(3) | (9 | ) | |||||||||||||||
Long-term deferred income taxes | (152 | ) | |||||||||||||||
Retirement Benefits and Other Long-term Liabilities | (39 | ) | |||||||||||||||
     Total Liabilities Assumed | (523 | ) | |||||||||||||||
Net Identifiable Assets Acquired, excluding Goodwill | 319 | ||||||||||||||||
Goodwill | 1,086 | ||||||||||||||||
     Net Assets Acquired | $ | 1,405 | |||||||||||||||
(1) Option-holders of ARINC were due approximately $61 million at the transaction closing date. This payment did not clear until December 24, 2013. Therefore the opening balance sheet, which is prepared as of December 23, 2013, includes restricted cash of $61 million and a current liability payable to the ARINC option holders for an equal amount. | |||||||||||||||||
(2) On March 28, 2014, the Company sold the building which was classified as held for sale at the acquisition date. For more information related to the Building held for sale, see below. | |||||||||||||||||
(3) Assets and liabilities associated with the Business held-for-sale relate to ASES, which the Company intends to divest, as detailed in Note 4. | |||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||
(in millions, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Pro-forma sales | $ | 1,264 | $ | 1,262 | $ | 3,683 | $ | 3,637 | |||||||||
Pro-forma net income attributable to common shareowners from continuing operations | $ | 163 | $ | 168 | $ | 448 | $ | 453 | |||||||||
Pro-forma basic earnings per share from continuing operations | $ | 1.21 | $ | 1.24 | $ | 3.31 | $ | 3.3 | |||||||||
Pro-forma diluted earnings per share from continuing operations | $ | 1.19 | $ | 1.22 | $ | 3.27 | $ | 3.27 | |||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Increases / (decreases) to pro-forma net income: | |||||||||||||||||
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments(1) | $ | — | $ | 2 | $ | 2 | $ | 7 | |||||||||
Advisory, legal and accounting service fees(2) | — | — | 21 | (22 | ) | ||||||||||||
Amortization of acquired ARINC intangible assets, net(3) | — | (3 | ) | (4 | ) | (12 | ) | ||||||||||
Interest expense incurred on acquisition financing, net(4) | — | (2 | ) | — | (5 | ) | |||||||||||
(1) This adjustment captures the net impact to depreciation expense resulting from various purchase accounting adjustments to fixed assets | |||||||||||||||||
(2) This adjustment reflects the elimination of transaction-related fees incurred by ARINC and Rockwell Collins in connection with the acquisition and assumes all of the fees were incurred during the first quarter of 2013 | |||||||||||||||||
(3) This adjustment eliminates amortization of the historical ARINC intangible assets and replaces it with the new amortization for the acquired intangible assets | |||||||||||||||||
(4) This adjustment reflects the addition of interest expense for the debt incurred by Rockwell Collins to finance the ARINC acquisition, net of interest expense that was eliminated on the historical ARINC debt that was repaid at the acquisition date. The adjustment also reflects the elimination of interest expense incurred by Rockwell Collins for bridge loan financing which was assumed to not be required for purposes of the pro-forma periods presented. |
Divestitures_Operations_and_Di
Divestitures Operations and Divestitures (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||||||||||
Schedule of Results of Discontinued Operations | ' | ||||||||||||||||
The major classes of assets and liabilities that make up the current assets and current liabilities are as follows: | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Receivables | $ | 29 | |||||||||||||||
Inventory, net | 17 | ||||||||||||||||
Current deferred income taxes | 2 | ||||||||||||||||
Other current assets | 7 | ||||||||||||||||
Property | 7 | ||||||||||||||||
Goodwill and intangible assets | 5 | ||||||||||||||||
Other Assets | 2 | ||||||||||||||||
Total assets classified as current | $ | 69 | |||||||||||||||
Accounts payable | $ | 10 | |||||||||||||||
Compensation and benefits | 6 | ||||||||||||||||
Advance payments from customers | 3 | ||||||||||||||||
Product warranty costs | 1 | ||||||||||||||||
Other current liabilities | 7 | ||||||||||||||||
Other Liabilities | 4 | ||||||||||||||||
Total liabilities classified as current | $ | 31 | |||||||||||||||
Results of discontinued operations are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Sales | $ | 31 | $ | 33 | $ | 74 | $ | 103 | |||||||||
Income (loss) from discontinued operations before income taxes | (13 | ) | 4 | (17 | ) | 3 | |||||||||||
Receivables_Net_Tables
Receivables, Net (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Schedule of Accounts Receivable | ' | |||||||
Receivables, net are summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Billed | $ | 792 | $ | 823 | ||||
Unbilled | 535 | 432 | ||||||
Less progress payments | (186 | ) | (188 | ) | ||||
Total | 1,141 | 1,067 | ||||||
Less allowance for doubtful accounts | (10 | ) | (9 | ) | ||||
Receivables, net | $ | 1,131 | $ | 1,058 | ||||
Inventories_Net_Tables
Inventories, Net (Tables) | 9 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ' | |||||||||||||||||||||||
Schedule of Inventories | ' | |||||||||||||||||||||||
Inventories, net are summarized as follows: | ||||||||||||||||||||||||
(in millions) | June 30, | September 30, | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Finished goods | $ | 207 | $ | 181 | ||||||||||||||||||||
Work in process | 287 | 273 | ||||||||||||||||||||||
Raw materials, parts and supplies | 377 | 358 | ||||||||||||||||||||||
Less progress payments | (10 | ) | (8 | ) | ||||||||||||||||||||
Total | 861 | 804 | ||||||||||||||||||||||
Pre-production engineering costs | 846 | 714 | ||||||||||||||||||||||
Inventories, net | $ | 1,707 | $ | 1,518 | ||||||||||||||||||||
Schedule of Pre-Production Engineering Expected Amortization | ' | |||||||||||||||||||||||
Anticipated annual amortization expense for pre-production engineering costs is as follows: | ||||||||||||||||||||||||
(in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Anticipated amortization expense for pre-production engineering costs | $ | 36 | $ | 53 | $ | 70 | $ | 75 | $ | 86 | $ | 550 | ||||||||||||
Property_Tables
Property (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property, Plant and Equipment, Net [Abstract] | ' | |||||||
Property | ' | |||||||
Property is summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Land | $ | 16 | $ | 10 | ||||
Buildings and improvements | 408 | 388 | ||||||
Machinery and equipment (including internal use software) | 1,131 | 1,066 | ||||||
Information systems software and hardware | 357 | 344 | ||||||
Furniture and fixtures | 65 | 65 | ||||||
Capital leases | 62 | — | ||||||
Construction in progress | 126 | 101 | ||||||
Total | 2,165 | 1,974 | ||||||
Less accumulated depreciation | (1,277 | ) | (1,201 | ) | ||||
Property | $ | 888 | $ | 773 | ||||
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Schedule of Goodwill | ' | |||||||||||||||||||||||
Changes in the carrying amount of goodwill are summarized as follows: | ||||||||||||||||||||||||
(in millions) | Government | Commercial | Information Management Services | Total | ||||||||||||||||||||
Systems | Systems | |||||||||||||||||||||||
Balance at September 30, 2013 | $ | 513 | $ | 266 | $ | — | $ | 779 | ||||||||||||||||
ARINC acquisition | — | — | 1,086 | 1,086 | ||||||||||||||||||||
Reclassification from Commercial Systems to Information Management Services | — | (4 | ) | 4 | — | |||||||||||||||||||
Reclassification of Datapath goodwill to business held-for-sale | (1 | ) | — | — | (1 | ) | ||||||||||||||||||
Foreign currency translation adjustments and other | 1 | — | — | 1 | ||||||||||||||||||||
Balance at June 30, 2014 | $ | 513 | $ | 262 | $ | 1,090 | $ | 1,865 | ||||||||||||||||
Summary of Intangible Assets | ' | |||||||||||||||||||||||
Intangible assets are summarized as follows: | ||||||||||||||||||||||||
June 30, 2014 | September 30, 2013 | |||||||||||||||||||||||
(in millions) | Gross | Accum | Net | Gross | Accum | Net | ||||||||||||||||||
Amort | Amort | |||||||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Developed technology and patents | $ | 323 | $ | (176 | ) | $ | 147 | $ | 222 | $ | (175 | ) | $ | 47 | ||||||||||
Backlog | 3 | — | 3 | — | — | — | ||||||||||||||||||
Customer relationships: | ||||||||||||||||||||||||
Acquired | 338 | (61 | ) | 277 | 89 | (60 | ) | 29 | ||||||||||||||||
Up-front sales incentives | 252 | (44 | ) | 208 | 241 | (35 | ) | 206 | ||||||||||||||||
License agreements | 13 | (8 | ) | 5 | 13 | (8 | ) | 5 | ||||||||||||||||
Trademarks and tradenames | 15 | (14 | ) | 1 | 15 | (14 | ) | 1 | ||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Trademarks and tradenames | 47 | — | 47 | — | — | — | ||||||||||||||||||
Intangible assets | $ | 991 | $ | (303 | ) | $ | 688 | $ | 580 | $ | (292 | ) | $ | 288 | ||||||||||
Schedule of Intangible Asset Expected Amortization Expense | ' | |||||||||||||||||||||||
Anticipated annual amortization expense for intangible assets is as follows: | ||||||||||||||||||||||||
(in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Anticipated amortization expense for up-front sales incentives | $ | 12 | $ | 14 | $ | 18 | $ | 20 | $ | 22 | $ | 131 | ||||||||||||
Anticipated amortization expense for intangibles acquired in ARINC acquisition | 19 | 26 | 26 | 26 | 26 | 260 | ||||||||||||||||||
Anticipated amortization expense for all other intangible assets | 19 | 15 | 12 | 8 | 6 | 18 | ||||||||||||||||||
Total | $ | 50 | $ | 55 | $ | 56 | $ | 54 | $ | 54 | $ | 409 | ||||||||||||
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Other Assets [Abstract] | ' | |||||||
Other Assets | ' | |||||||
Other assets are summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Long-term receivables | $ | 29 | $ | 32 | ||||
Investments in equity affiliates | 12 | 22 | ||||||
Exchange and rental assets (net of accumulated depreciation of $94 at June 30, 2014 and $91 at September 30, 2013) | 58 | 55 | ||||||
Other | 138 | 112 | ||||||
Other assets | $ | 237 | $ | 221 | ||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Short-term Debt | ' | |||||||
Short-term debt and a reconciliation to the carrying amount is summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Short-term commercial paper borrowings | $ | 855 | $ | 235 | ||||
Current portion of long-term debt | — | 200 | ||||||
Current portion of fair value swap adjustment (Notes 16 and 17) | — | 1 | ||||||
Short-term debt | $ | 855 | $ | 436 | ||||
Long-Term Debt Reconciliation to Carrying Amount | ' | |||||||
Long-term debt and a reconciliation to the carrying amount is summarized as follows: | ||||||||
(in millions) | June 30, | September 30, | ||||||
2014 | 2013 | |||||||
Principal amount of 2043 Notes, net of discount | $ | 398 | $ | — | ||||
Principal amount of 2023 Notes, net of discount | 399 | — | ||||||
Principal amount of 2021 Notes, net of discount | 249 | 249 | ||||||
Principal amount of 2019 Notes, net of discount | 299 | 299 | ||||||
Principal amount of 2016 Notes | 300 | — | ||||||
Principal amount of 2013 Notes | — | 200 | ||||||
Fair value swap adjustment (Notes 16 and 17) | 18 | 16 | ||||||
Total | $ | 1,663 | $ | 764 | ||||
Less current portion | — | 201 | ||||||
Long-term debt, net | $ | 1,663 | $ | 563 | ||||
Retirement_Benefits_Tables
Retirement Benefits (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Pension Plans, Defined Benefit [Member] | ' | ||||||||||||||||
Defined Benefit Plan Disclosure | ' | ||||||||||||||||
Schedule of Net Benefit Costs | ' | ||||||||||||||||
The components of expense for Pension Benefits for the three and nine months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 3 | $ | 3 | $ | 8 | $ | 8 | |||||||||
Interest cost | 43 | 35 | 126 | 104 | |||||||||||||
Expected return on plan assets | (59 | ) | (51 | ) | (171 | ) | (152 | ) | |||||||||
Amortization: | |||||||||||||||||
Prior service credit | (3 | ) | (5 | ) | (9 | ) | (14 | ) | |||||||||
Net actuarial loss | 17 | 20 | 51 | 60 | |||||||||||||
Net benefit expense | $ | 1 | $ | 2 | $ | 5 | $ | 6 | |||||||||
Other Postretirement Benefit Plans, Defined Benefit [Member] | ' | ||||||||||||||||
Defined Benefit Plan Disclosure | ' | ||||||||||||||||
Schedule of Net Benefit Costs | ' | ||||||||||||||||
The components of expense for Other Retirement Benefits for the three and nine months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | — | $ | 1 | $ | 2 | $ | 3 | |||||||||
Interest cost | 3 | 2 | 7 | 6 | |||||||||||||
Expected return on plan assets | (1 | ) | — | (1 | ) | (1 | ) | ||||||||||
Amortization: | |||||||||||||||||
Prior service credit | (2 | ) | (2 | ) | (7 | ) | (6 | ) | |||||||||
Net actuarial loss | 2 | 3 | 6 | 9 | |||||||||||||
Net benefit expense | $ | 2 | $ | 4 | $ | 7 | $ | 11 | |||||||||
StockBased_Compensation_and_Ea1
Stock-Based Compensation and Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Stock Based Compensation and Earnings Per Share Abstract | ' | |||||||||||||||||||||
Schedule of Stock-Based Compensation Expense | ' | |||||||||||||||||||||
Stock-based compensation expense and related income tax benefit included within the Condensed Consolidated Statement of Operations is as follows: | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Stock-based compensation expense included in: | ||||||||||||||||||||||
Product cost of sales | $ | 1 | $ | 2 | $ | 5 | $ | 6 | ||||||||||||||
Selling, general and administrative expenses | 4 | 4 | 12 | 13 | ||||||||||||||||||
Total | $ | 5 | $ | 6 | $ | 17 | $ | 19 | ||||||||||||||
Income tax benefit | $ | 2 | $ | 3 | $ | 6 | $ | 7 | ||||||||||||||
Schedule of Equity Instrument Awards | ' | |||||||||||||||||||||
The Company issued awards of equity instruments under the Company's various incentive plans for the nine months ended June 30, 2014 and 2013 as follows: | ||||||||||||||||||||||
Options | Performance Shares | Restricted | ||||||||||||||||||||
Stock Units | ||||||||||||||||||||||
(shares in thousands) | Number Issued | Weighted | Number Issued | Weighted | Number Issued | Weighted | ||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Nine months ended June 30, 2014 | 581.8 | $ | 18.54 | 150.6 | $ | 71.44 | 78.9 | $ | 72.33 | |||||||||||||
Nine months ended June 30, 2013 | 923.3 | 12.56 | 211.2 | 54.79 | 85.3 | 55.77 | ||||||||||||||||
Schedule of Assumptions Used to Value Option Grants | ' | |||||||||||||||||||||
The fair value of each option granted by the Company was estimated using a binomial lattice pricing model and the following weighted average assumptions: | ||||||||||||||||||||||
2014 Grants | 2013 Grants | |||||||||||||||||||||
Risk-free interest rate | 0.3% - 3.0% | 0.3% - 2.9% | ||||||||||||||||||||
Expected dividend yield | 1.9 | % | 2 | % | ||||||||||||||||||
Expected volatility | 28 | % | 27 | % | ||||||||||||||||||
Expected life | 7 years | 8 years | ||||||||||||||||||||
Earnings Per Share and Diluted Share Equivalents | ' | |||||||||||||||||||||
The computation of basic and diluted earnings per share is as follows: | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||
(in millions, except per share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Numerator for basic and diluted earnings per share: | ||||||||||||||||||||||
Income from continuing operations | $ | 163 | $ | 161 | $ | 445 | $ | 455 | ||||||||||||||
Income (loss) from discontinued operations, net of taxes | (5 | ) | 3 | (8 | ) | 2 | ||||||||||||||||
Net income | $ | 158 | $ | 164 | $ | 437 | $ | 457 | ||||||||||||||
Denominator: | ||||||||||||||||||||||
Denominator for basic earnings per share – weighted average common shares | 135.2 | 135.5 | 135.3 | 137.1 | ||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||
Stock options | 1.3 | 1.2 | 1.2 | 1 | ||||||||||||||||||
Performance shares, restricted stock and restricted stock units | 0.4 | 0.5 | 0.4 | 0.4 | ||||||||||||||||||
Dilutive potential common shares | 1.7 | 1.7 | 1.6 | 1.4 | ||||||||||||||||||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion | 136.9 | 137.2 | 136.9 | 138.5 | ||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Continuing operations | $ | 1.21 | $ | 1.19 | $ | 3.29 | $ | 3.32 | ||||||||||||||
Discontinued operations | (0.04 | ) | 0.02 | (0.06 | ) | 0.01 | ||||||||||||||||
Basic earnings per share | $ | 1.17 | $ | 1.21 | $ | 3.23 | $ | 3.33 | ||||||||||||||
Diluted | ||||||||||||||||||||||
Continuing operations | $ | 1.19 | $ | 1.18 | $ | 3.25 | $ | 3.29 | ||||||||||||||
Discontinued operations | (0.04 | ) | 0.02 | (0.06 | ) | 0.01 | ||||||||||||||||
Diluted earnings per share | $ | 1.15 | $ | 1.2 | $ | 3.19 | $ | 3.3 | ||||||||||||||
Other_Comprehensive_Loss_Table
Other Comprehensive Loss (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Statement of Comprehensive Income [Abstract] | ' | ||||||||||||||||
Schedule Of Accumulated Other Comprehensive Income Loss | ' | ||||||||||||||||
Changes in accumulated other comprehensive loss (AOCL), net of tax, by component for the nine months ended June 30, 2014 are as follows: | |||||||||||||||||
Foreign Exchange Translation Adjustment | Pension and Other Postretirement Adjustments (1) | Change in the Fair Value of Effective Cash Flow Hedges (2) | Total | ||||||||||||||
Balance at September 30, 2013 | $ | 12 | $ | (1,293 | ) | $ | (6 | ) | $ | (1,287 | ) | ||||||
Other comprehensive income before reclassifications | 4 | — | 4 | 8 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 24 | — | 24 | |||||||||||||
Net current period other comprehensive income | 4 | 24 | 4 | 32 | |||||||||||||
Balance at June 30, 2014 | $ | 16 | $ | (1,269 | ) | $ | (2 | ) | $ | (1,255 | ) | ||||||
(1) Reclassifications from AOCL to net income, related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans, were $41 million ($24 million net of tax), for the nine months ended June 30, 2014. The reclassifications are included in the computation of net benefit expense. See Note 11, Retirement Benefits for additional details. | |||||||||||||||||
(2) Reclassifications from AOCL to net income related to cash flow hedges were not significant for the nine months ended June 30, 2014. The reclassifications are included in cost of sales and interest expense. See Note 17, Derivative Financial Instruments for additional details. |
Other_Income_Net_Tables
Other Income, Net (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Nonoperating Income (Expense) [Abstract] | ' | ||||||||||||||||
Summary of Other Income, Net | ' | ||||||||||||||||
Other income, net consists of the following: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Earnings from equity affiliates | $ | 2 | $ | 1 | $ | 6 | $ | 10 | |||||||||
Gain from business divestiture | — | — | 10 | — | |||||||||||||
Other | 3 | 3 | 4 | 4 | |||||||||||||
Other income, net | $ | 5 | $ | 4 | $ | 20 | $ | 14 | |||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Financial Assets and Liabilities at Fair Value on Recurring Basis | ' | |||||||||||||||
The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and September 30, 2013 are as follows: | ||||||||||||||||
June 30, 2014 | September 30, 2013 | |||||||||||||||
(in millions) | Fair Value | Fair Value | Fair Value | |||||||||||||
Hierarchy | Asset (Liability) | Asset (Liability) | ||||||||||||||
Deferred compensation plan investments | Level 1 | $ | 52 | $ | 49 | |||||||||||
Interest rate swap assets | Level 2 | 18 | 16 | |||||||||||||
Forward starting interest rate swap liabilities | Level 2 | — | (5 | ) | ||||||||||||
Foreign currency forward exchange contract assets | Level 2 | 6 | 6 | |||||||||||||
Foreign currency forward exchange contract liabilities | Level 2 | (5 | ) | (6 | ) | |||||||||||
Financial Instruments at Fair Value and Carrying Value | ' | |||||||||||||||
The carrying amounts and fair values of the Company's financial instruments are as follows: | ||||||||||||||||
Asset (Liability) | ||||||||||||||||
June 30, 2014 | September 30, 2013 | |||||||||||||||
(in millions) | Carrying | Fair | Carrying | Fair | ||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Cash and cash equivalents | $ | 450 | $ | 450 | $ | 391 | $ | 391 | ||||||||
Short-term debt: | ||||||||||||||||
2013 Notes | — | — | (200 | ) | (201 | ) | ||||||||||
Commercial paper borrowings | (855 | ) | (855 | ) | (235 | ) | (235 | ) | ||||||||
Long-term debt | (1,645 | ) | (1,742 | ) | (548 | ) | (586 | ) |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | |||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||
Fair Value of Derivative Instruments in Condensed Consolidated Statement of Financial Position | ' | |||||||||||||||||
Fair values of derivative instruments in the Condensed Consolidated Statement of Financial Position as of June 30, 2014 and September 30, 2013 are as follows: | ||||||||||||||||||
Asset Derivatives | ||||||||||||||||||
(in millions) | Classification | June 30, | September 30, | |||||||||||||||
2014 | 2013 | |||||||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 6 | $ | 6 | |||||||||||||
Interest rate swaps | Other assets | 18 | 15 | |||||||||||||||
Interest rate swaps | Other current assets | — | 1 | |||||||||||||||
Total | $ | 24 | $ | 22 | ||||||||||||||
Liability Derivatives | ||||||||||||||||||
(in millions) | Classification | June 30, | September 30, | |||||||||||||||
2014 | 2013 | |||||||||||||||||
Foreign currency forward exchange contracts | Other current liabilities | $ | 5 | $ | 6 | |||||||||||||
Forward starting interest rate swaps | Other current liabilities | — | 5 | |||||||||||||||
Total | $ | 5 | $ | 11 | ||||||||||||||
Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations | ' | |||||||||||||||||
The effect of derivative instruments on the Condensed Consolidated Statement of Operations for the three and nine months ended June 30 is as follows: | ||||||||||||||||||
Amount of Gain (Loss) | Amount of Gain (Loss) | |||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
June 30 | June 30 | |||||||||||||||||
(in millions) | Location of Gain (Loss) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Derivatives Designated as Hedging Instruments: | ||||||||||||||||||
Fair Value Hedges | ||||||||||||||||||
Interest rate swaps | Interest expense | $ | 2 | $ | 2 | $ | 6 | $ | 7 | |||||||||
Cash Flow Hedges | ||||||||||||||||||
Foreign currency forward exchange contracts: | ||||||||||||||||||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) | AOCL | $ | 2 | $ | (5 | ) | $ | 1 | $ | (7 | ) | |||||||
Forward starting interest rate swaps: | ||||||||||||||||||
Amount of gain recognized in AOCL (effective portion, before deferred tax impact) | AOCL | $ | — | $ | — | $ | 3 | $ | — | |||||||||
Guarantees_and_Indemnification1
Guarantees and Indemnifications (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Guarantees and Indemnifications Abstract | ' | |||||||
Changes in Accrued Product Warranty Costs | ' | |||||||
Changes in the carrying amount of accrued product warranty costs are summarized as follows: | ||||||||
Nine Months Ended | ||||||||
June 30 | ||||||||
(in millions) | 2014 | 2013 | ||||||
Balance at beginning of year | $ | 121 | $ | 126 | ||||
Warranty costs incurred | (35 | ) | (36 | ) | ||||
Product warranty accrual | 36 | 33 | ||||||
Changes in estimates for prior years | (12 | ) | (4 | ) | ||||
Foreign currency translation adjustments and other | (1 | ) | — | |||||
Balance at June 30, 2014 | $ | 109 | $ | 119 | ||||
Business_Segment_Information_T
Business Segment Information (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Sales and Results of Continuing Operations of Operating Segments | ' | ||||||||||||||||
The sales and results of continuing operations of the Company's operating segments are summarized as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Sales: | |||||||||||||||||
Government Systems | $ | 535 | $ | 569 | $ | 1,604 | $ | 1,623 | |||||||||
Commercial Systems | 583 | 551 | 1,660 | 1,599 | |||||||||||||
Information Management Services | 146 | 12 | 313 | 33 | |||||||||||||
Total sales | $ | 1,264 | $ | 1,132 | $ | 3,577 | $ | 3,255 | |||||||||
Segment operating earnings: | |||||||||||||||||
Government Systems | $ | 112 | $ | 125 | $ | 328 | $ | 345 | |||||||||
Commercial Systems | 130 | 131 | 368 | 352 | |||||||||||||
Information Management Services | 21 | 1 | 41 | 3 | |||||||||||||
Total segment operating earnings | 263 | 257 | 737 | 700 | |||||||||||||
Interest expense(1) | (15 | ) | (7 | ) | (43 | ) | (21 | ) | |||||||||
Stock-based compensation | (5 | ) | (6 | ) | (17 | ) | (19 | ) | |||||||||
General corporate, net | (14 | ) | (14 | ) | (45 | ) | (44 | ) | |||||||||
Gain on divestiture of business | — | — | 10 | — | |||||||||||||
ARINC transaction costs(1) | — | — | (13 | ) | — | ||||||||||||
Income from continuing operations before income taxes | 229 | 230 | 629 | 616 | |||||||||||||
Income tax expense | (66 | ) | (69 | ) | (184 | ) | (161 | ) | |||||||||
Income from continuing operations | $ | 163 | $ | 161 | $ | 445 | $ | 455 | |||||||||
(1) During the nine months ended June 30, 2014, the Company incurred $3 million of bridge facility fees related to the acquisition of ARINC. These costs are included in Interest expense; therefore total transaction costs related to the acquisition of ARINC during the period were $16 million. | |||||||||||||||||
Summary of Sales by Product Category | ' | ||||||||||||||||
The following table summarizes sales by product category for the three and nine months ended June 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Government Systems product categories: | |||||||||||||||||
Avionics | $ | 317 | $ | 341 | $ | 967 | $ | 980 | |||||||||
Communication products | 107 | 120 | 327 | 335 | |||||||||||||
Surface solutions | 68 | 62 | 182 | 169 | |||||||||||||
Navigation products | 43 | 46 | 128 | 139 | |||||||||||||
Government Systems sales | 535 | 569 | 1,604 | 1,623 | |||||||||||||
Commercial Systems product categories: | |||||||||||||||||
Air transport aviation electronics | 325 | 297 | 942 | 864 | |||||||||||||
Business and regional aviation electronics | 258 | 254 | 718 | 735 | |||||||||||||
Commercial Systems sales | 583 | 551 | 1,660 | 1,599 | |||||||||||||
Information Management Services sales | 146 | 12 | 313 | 33 | |||||||||||||
Total sales | $ | 1,264 | $ | 1,132 | $ | 3,577 | $ | 3,255 | |||||||||
Business_Description_and_Basis1
Business Description and Basis of Presentation (Details) | 9 Months Ended |
Jun. 30, 2014 | |
Subsidiary | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Operating Cycle | '52/53 weeks |
Number of Consolidated Subsidiaries with Income Attributable to Noncontrolling Interest | 1 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 23, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | ||||
ARINC [Member] | ARINC [Member] | ARINC [Member] | ARINC [Member] | ARINC [Member] | ARINC [Member] | ARINC [Member] | ARINC [Member] | ARINC [Member] | |||||||||
Selling, General and Administrative Expenses [Member] | Interest Expense [Member] | Interest Expense [Member] | |||||||||||||||
Bridge Credit Agreement [Member] | Bridge Credit Agreement [Member] | ||||||||||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Percentage of Common Stock and Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | |||
Payments to Acquire Business | ' | ' | ' | ' | ' | ' | ' | ' | $1,405,000,000 | ' | ' | ' | ' | ' | |||
Goodwill | 1,865,000,000 | ' | 1,865,000,000 | ' | 779,000,000 | ' | 1,086,000,000 | ' | ' | 1,086,000,000 | 1,086,000,000 | ' | ' | ' | |||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | ' | ' | ' | ' | ' | ' | 0 | ' | ' | 0 | ' | ' | ' | ' | |||
Total sales | 1,264,000,000 | 1,132,000,000 | 3,577,000,000 | 3,255,000,000 | ' | ' | 134,000,000 | ' | ' | 277,000,000 | ' | ' | ' | ' | |||
Net Income (Loss) Attributable to Parent | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | 22,000,000 | ' | ' | ' | ' | |||
Building held for sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 81,000,000 | [1] | ' | ' | ' | ||
Liability related to building held for sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 81,000,000 | [1] | ' | ' | ' | ||
Payments for (Proceeds from) Real Estate Held-for-investment | ' | ' | ' | ' | ' | 81,000,000 | ' | 81,000,000 | ' | ' | ' | ' | ' | ' | |||
Acquisition Related Costs | 0 | 0 | 13,000,000 | [2] | 0 | [2] | ' | ' | 0 | ' | ' | 16,000,000 | ' | 13,000,000 | ' | ' | |
Debt Instrument, Fee Amount | 0 | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | 3,000,000 | |||
Goodwill, Purchase Accounting Adjustments | ' | ' | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | ' | |||
[1] | On March 28, 2014, the Company sold the building which was classified as held for sale at the acquisition date. For more information related to the Building held for sale, see below. | ||||||||||||||||
[2] | During the nine months ended JuneB 30, 2014, the Company incurred $3 million of bridge facility fees related to the acquisition of ARINC. These costs are included in Interest expense; therefore total transaction costs related to the acquisition of ARINC during the period were $16 million. |
Acquisitions_Assets_Acquired_a
Acquisitions Assets Acquired and Liabilities Assumed (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 23, 2013 | |
In Millions, unless otherwise specified | ARINC [Member] | ARINC [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | |
Restricted Cash | ' | ' | ' | $61 | [1] |
Receivables and Other current assets | ' | ' | ' | 182 | |
Building held for sale | ' | ' | ' | 81 | [2] |
Business held for sale(3) | ' | ' | ' | 25 | [3] |
Property | ' | ' | ' | 56 | |
Intangible Assets | ' | ' | ' | 430 | |
Other Assets | ' | ' | ' | 7 | |
Total Identifiable Assets Acquired | ' | ' | ' | 842 | |
Payable to ARINC option holders | ' | ' | ' | -61 | [1] |
Current Liabilities | ' | ' | ' | -181 | |
Liability related to building held for sale | ' | ' | ' | 81 | [2] |
Liabilities associated with business held for sale(3) | ' | ' | ' | -9 | [3] |
Long-term deferred income taxes | ' | ' | ' | -152 | |
Retirement Benefits and Other Long-term Liabilities | ' | ' | ' | -39 | |
Total Liabilities Assumed | ' | ' | ' | -523 | |
Net Identifiable Assets Acquired, excluding Goodwill | ' | ' | ' | 319 | |
Goodwill | 1,865 | 779 | 1,086 | 1,086 | |
Net Assets Acquired | ' | ' | ' | $1,405 | |
[1] | Option-holders of ARINC were due approximately $61 million at the transaction closing date. This payment did not clear until December 24, 2013. Therefore the opening balance sheet, which is prepared as of December 23, 2013, includes restricted cash of $61 million and a current liability payable to the ARINC option holders for an equal amount. | ||||
[2] | On March 28, 2014, the Company sold the building which was classified as held for sale at the acquisition date. For more information related to the Building held for sale, see below. | ||||
[3] | Assets and liabilities associated with the Business held-for-sale relate to ASES, which the Company intends to divest, as detailed in Note 4. |
Acquisitions_Proforma_Results_
Acquisitions Proforma Results (Details) (ARINC [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
ARINC [Member] | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Pro-forma sales | $1,264 | $1,262 | $3,683 | $3,637 |
Pro-forma net income attributable to common shareowners from continuing operations | $163 | $168 | $448 | $453 |
Pro-forma basic earnings per share from continuing operations | $1.21 | $1.24 | $3.31 | $3.30 |
Pro-forma diluted earnings per share from continuing operations | $1.19 | $1.22 | $3.27 | $3.27 |
Acquisitions_Proforma_Nonrecur
Acquisitions Proforma Nonrecurring Adjustments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ||||
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments(1) | ' | ' | $102 | $91 | ||||
Amortization of acquired ARINC intangible assets, net(3) | -14 | -8 | -37 | -23 | ||||
ARINC [Member] | Transaction-related adjustment [Member] | ' | ' | ' | ' | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ||||
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments(1) | 0 | [1] | 2 | [1] | 2 | [1] | 7 | [1] |
Advisory, legal and accounting service fees(2) | 0 | [2] | 0 | [2] | 21 | [2] | -22 | [2] |
Amortization of acquired ARINC intangible assets, net(3) | 0 | [3] | -3 | [3] | -4 | [3] | -12 | [3] |
Interest expense incurred on acquisition financing, net(4) | $0 | [4] | ($2) | [4] | $0 | [4] | ($5) | [4] |
[1] | This adjustment captures the net impact to depreciation expense resulting from various purchase accounting adjustments to fixed assets | |||||||
[2] | This adjustment reflects the elimination of transaction-related fees incurred by ARINC and Rockwell Collins in connection with the acquisition and assumes all of the fees were incurred during the first quarter of 2013 | |||||||
[3] | This adjustment eliminates amortization of the historical ARINC intangible assets and replaces it with the new amortization for the acquired intangible assets | |||||||
[4] | This adjustment reflects the addition of interest expense for the debt incurred by Rockwell Collins to finance the ARINC acquisition, net of interest expense that was eliminated on the historical ARINC debt that was repaid at the acquisition date. The adjustment also reflects the elimination of interest expense incurred by Rockwell Collins for bridge loan financing which was assumed to not be required for purposes of the pro-forma periods presented. |
Discontinued_Operations_and_Di1
Discontinued Operations and Divestitures (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2014 | Nov. 30, 2013 | |
Datapath and ASES [Member] | KOSI [Member] | ||||||
Discontinued Operations | ' | ' | ' | ' | ' | ' | ' |
Loss on Pending Sale of Business Pre-Tax | ' | ' | ($14,000,000) | ' | ' | ' | ' |
Loss On Pending Sale Of Business Net of Taxes | ' | ' | -4,000,000 | 0 | ' | ' | ' |
Results of Discontinued Operations | ' | ' | ' | ' | ' | ' | ' |
Receivables | ' | ' | ' | ' | ' | 29,000,000 | ' |
Inventory, net | ' | ' | ' | ' | ' | 17,000,000 | ' |
Current deferred income taxes | ' | ' | ' | ' | ' | 2,000,000 | ' |
Other current assets | ' | ' | ' | ' | ' | 7,000,000 | ' |
Property | ' | ' | ' | ' | ' | 7,000,000 | ' |
Goodwill and intangible assets | ' | ' | ' | ' | ' | 5,000,000 | ' |
Other Assets | ' | ' | ' | ' | ' | 2,000,000 | ' |
Assets held-for-sale | 69,000,000 | ' | 69,000,000 | ' | 17,000,000 | 69,000,000 | ' |
Accounts payable | ' | ' | ' | ' | ' | 10,000,000 | ' |
Compensation and benefits | ' | ' | ' | ' | ' | 6,000,000 | ' |
Advance payments from customers | ' | ' | ' | ' | ' | 3,000,000 | ' |
Product warranty costs | ' | ' | ' | ' | ' | 1,000,000 | ' |
Other current liabilities | ' | ' | ' | ' | ' | 7,000,000 | ' |
Other Liabilities | ' | ' | ' | ' | ' | 4,000,000 | ' |
Liabilities of assets held-for-sale | 31,000,000 | ' | 31,000,000 | ' | 4,000,000 | 31,000,000 | ' |
Sales | 31,000,000 | 33,000,000 | 74,000,000 | 103,000,000 | ' | ' | ' |
Income (loss) from discontinued operations before income taxes | -13,000,000 | 4,000,000 | -17,000,000 | 3,000,000 | ' | ' | ' |
Sale price, after post-closing adjustments | ' | ' | 24,000,000 | 0 | ' | ' | 23,000,000 |
Pre-Tax gain on sale of business | $0 | $0 | $10,000,000 | $0 | ' | ' | $10,000,000 |
Receivables_Net_Details
Receivables, Net (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Receivables, Net | ' | ' |
Billed | $792 | $823 |
Unbilled | 535 | 432 |
Less progress payments | -186 | -188 |
Total | 1,141 | 1,067 |
Less allowance for doubtful accounts | -10 | -9 |
Receivables, net | $1,131 | $1,058 |
Inventories_Net_Details
Inventories, Net (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 |
Inventories, Net | ' | ' | ' | ' | ' |
Finished goods | $207 | ' | $207 | ' | $181 |
Work in process | 287 | ' | 287 | ' | 273 |
Raw materials, parts and supplies | 377 | ' | 377 | ' | 358 |
Less progress payments | -10 | ' | -10 | ' | -8 |
Total | 861 | ' | 861 | ' | 804 |
Pre-production engineering costs | 846 | ' | 846 | ' | 714 |
Inventories, net | 1,707 | ' | 1,707 | ' | 1,518 |
Preproduction Engineering Costs Useful Life Maximum | ' | ' | '15 years | ' | ' |
Anticipated amortization expense for pre-production engineering costs, 2014 | ' | ' | 36 | ' | ' |
Anticipated amortization expense for pre-production engineering costs, 2015 | ' | ' | 53 | ' | ' |
Anticipated amortization expense for pre-production engineering costs, 2016 | ' | ' | 70 | ' | ' |
Anticipated amortization expense for pre-production engineering costs, 2017 | ' | ' | 75 | ' | ' |
Anticipated amortization expense for pre-production engineering costs, 2018 | ' | ' | 86 | ' | ' |
Anticipated amortization expense for pre-production engineering costs, Thereafter | ' | ' | 550 | ' | ' |
Pre-production Engineering Amortization Expense | $10 | $6 | $24 | $18 | ' |
Capitalized Pre-Production Engineering Weighted Average Amortization Period Remaining, In Years | ' | ' | '11 years | ' | ' |
Property_Details
Property (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 |
Property | ' | ' | ' |
Property, Total | $2,165 | ' | $1,974 |
Less accumulated depreciation | -1,277 | ' | -1,201 |
Property | 888 | ' | 773 |
Property additions acquired by incurring capital leases | 56 | 0 | ' |
Remaining minimum lease payments under capital lease | 85 | ' | ' |
Remaining minimum interest payments under capital lease | 29 | ' | ' |
Land [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | 16 | ' | 10 |
Buildings and Improvements [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | 408 | ' | 388 |
Machinery and Equipment (including internal use software) [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | 1,131 | ' | 1,066 |
Information Systems Software and Hardware [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | 357 | ' | 344 |
Furniture and Fixtures [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | 65 | ' | 65 |
Capital Leases [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | 62 | ' | 0 |
Less accumulated depreciation | -3 | ' | 0 |
Construction in Progress [Member] | ' | ' | ' |
Property | ' | ' | ' |
Property, Total | $126 | ' | $101 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 23, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
ARINC [Member] | ARINC [Member] | Finite-Lived Intangible Assets [Member] | Indefinite-lived Intangible Assets [Member] | |||||
ARINC [Member] | ARINC [Member] | |||||||
Goodwill and Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | ' | ' | ' | ' | $1,086,000,000 | ' | ' | ' |
Goodwill, Impairment Loss | ' | ' | 0 | 0 | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' | 430,000,000 | 383,000,000 | 47,000,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | ' | ' | ' | ' | '15 years | ' | ' | ' |
Up Front Sales Incentives Amortization Period Maximum | ' | ' | '15 years | ' | ' | ' | ' | ' |
Up-front sales incentives weighted average amortization period remaining, in years | ' | ' | '9 years | ' | ' | ' | ' | ' |
Amortization expense for intangible assets | $14,000,000 | $8,000,000 | $37,000,000 | $23,000,000 | ' | ' | ' | ' |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Changes in the carrying amount of goodwill) (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 23, 2013 |
Goodwill | ' | ' |
Goodwill beginning balance | $779 | ' |
Reclassification from Commercial Systems to Information Management Services | 0 | ' |
Foreign currency translation adjustments and other | 1 | ' |
Goodwill ending balance | 1,865 | ' |
Government Systems [Member] | ' | ' |
Goodwill | ' | ' |
Goodwill beginning balance | 513 | ' |
Reclassification from Commercial Systems to Information Management Services | 0 | ' |
Foreign currency translation adjustments and other | 1 | ' |
Goodwill ending balance | 513 | ' |
Commercial Systems [Member] | ' | ' |
Goodwill | ' | ' |
Goodwill beginning balance | 266 | ' |
Reclassification from Commercial Systems to Information Management Services | -4 | ' |
Foreign currency translation adjustments and other | 0 | ' |
Goodwill ending balance | 262 | ' |
Information Management Services [Member] | ' | ' |
Goodwill | ' | ' |
Goodwill beginning balance | 0 | ' |
Reclassification from Commercial Systems to Information Management Services | 4 | ' |
Foreign currency translation adjustments and other | 0 | ' |
Goodwill ending balance | 1,090 | ' |
ARINC [Member] | ' | ' |
Goodwill | ' | ' |
Goodwill beginning balance | ' | 1,086 |
ARINC acquisition | 1,086 | ' |
Goodwill ending balance | 1,086 | 1,086 |
ARINC [Member] | Government Systems [Member] | ' | ' |
Goodwill | ' | ' |
ARINC acquisition | 0 | ' |
ARINC [Member] | Commercial Systems [Member] | ' | ' |
Goodwill | ' | ' |
ARINC acquisition | 0 | ' |
ARINC [Member] | Information Management Services [Member] | ' | ' |
Goodwill | ' | ' |
ARINC acquisition | 1,086 | ' |
Datapath [Member] | ' | ' |
Goodwill | ' | ' |
Reclassification of Datapath goodwill to business held-for-sale | -1 | ' |
Datapath [Member] | Government Systems [Member] | ' | ' |
Goodwill | ' | ' |
Reclassification of Datapath goodwill to business held-for-sale | -1 | ' |
Datapath [Member] | Commercial Systems [Member] | ' | ' |
Goodwill | ' | ' |
Reclassification of Datapath goodwill to business held-for-sale | 0 | ' |
Datapath [Member] | Information Management Services [Member] | ' | ' |
Goodwill | ' | ' |
Reclassification of Datapath goodwill to business held-for-sale | $0 | ' |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Summary of intangible assets) (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Intangible Assets | ' | ' |
Accumulated Amortization | ($303) | ($292) |
Finite-lived and Indefinite-lived Intangible Assets, Gross | 991 | 580 |
Net | 688 | 288 |
Developed technology and patents [Member] | ' | ' |
Intangible Assets | ' | ' |
Gross | 323 | 222 |
Accumulated Amortization | -176 | -175 |
Finite-Lived Intangible Assets, Net | 147 | 47 |
Backlog [Member] | ' | ' |
Intangible Assets | ' | ' |
Gross | 3 | 0 |
Accumulated Amortization | 0 | 0 |
Finite-Lived Intangible Assets, Net | 3 | 0 |
Customer relationships: Acquired [Member] | ' | ' |
Intangible Assets | ' | ' |
Gross | 338 | 89 |
Accumulated Amortization | -61 | -60 |
Finite-Lived Intangible Assets, Net | 277 | 29 |
Customer relationships: Up-front sales incentives [Member] | ' | ' |
Intangible Assets | ' | ' |
Gross | 252 | 241 |
Accumulated Amortization | -44 | -35 |
Finite-Lived Intangible Assets, Net | 208 | 206 |
License Agreements [Member] | ' | ' |
Intangible Assets | ' | ' |
Gross | 13 | 13 |
Accumulated Amortization | -8 | -8 |
Finite-Lived Intangible Assets, Net | 5 | 5 |
Trademarks and tradenames [Member] | ' | ' |
Intangible Assets | ' | ' |
Gross | 15 | 15 |
Accumulated Amortization | -14 | -14 |
Finite-Lived Intangible Assets, Net | 1 | 1 |
Trademarks and tradenames [Member] | ' | ' |
Intangible Assets | ' | ' |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $47 | $0 |
Goodwill_and_Intangible_Assets6
Goodwill and Intangible Assets (Expected annual amortization expense for intangible assets) (Details) (USD $) | Jun. 30, 2014 |
In Millions, unless otherwise specified | |
Anticipated Future Amortization Expense [Abstract] | ' |
Anticipated Amortization Expense, 2014 | $50 |
Anticipated Amortization Expense, 2015 | 55 |
Anticipated Amortization Expense, 2016 | 56 |
Anticipated Amortization Expense, 2017 | 54 |
Anticipated Amortization Expense, 2018 | 54 |
Anticipated Amortization Expense, Thereafter | 409 |
Up-front sales incentives [Member] | ' |
Anticipated Future Amortization Expense [Abstract] | ' |
Anticipated Amortization Expense, 2014 | 12 |
Anticipated Amortization Expense, 2015 | 14 |
Anticipated Amortization Expense, 2016 | 18 |
Anticipated Amortization Expense, 2017 | 20 |
Anticipated Amortization Expense, 2018 | 22 |
Anticipated Amortization Expense, Thereafter | 131 |
Intangible Assets Excluding Up Front Sales Incentives [Member] | ' |
Anticipated Future Amortization Expense [Abstract] | ' |
Anticipated Amortization Expense, 2014 | 19 |
Anticipated Amortization Expense, 2015 | 15 |
Anticipated Amortization Expense, 2016 | 12 |
Anticipated Amortization Expense, 2017 | 8 |
Anticipated Amortization Expense, 2018 | 6 |
Anticipated Amortization Expense, Thereafter | 18 |
ARINC [Member] | Intangible Assets Excluding Up Front Sales Incentives [Member] | ' |
Anticipated Future Amortization Expense [Abstract] | ' |
Anticipated Amortization Expense, 2014 | 19 |
Anticipated Amortization Expense, 2015 | 26 |
Anticipated Amortization Expense, 2016 | 26 |
Anticipated Amortization Expense, 2017 | 26 |
Anticipated Amortization Expense, 2018 | 26 |
Anticipated Amortization Expense, Thereafter | $260 |
Other_Assets_Narrative_Details
Other Assets (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 |
Joint_Venture | Joint_Venture | ||||
Other Assets | ' | ' | ' | ' | ' |
Number of Equity Affiliates | 7 | ' | 7 | ' | ' |
Equity Method Investments, Ownership Percentage | 50.00% | ' | 50.00% | ' | ' |
Sales to equity affiliates | $42 | $33 | $118 | $102 | ' |
Deferred profit generated from sales to equity affiliates | ' | ' | 0 | ' | 1 |
Exchange And Rental Assets Estimated Useful Life, in Years | ' | ' | '15 years | ' | ' |
Depreciation Expense, Exchange and Rental Assets | $3 | $2 | $8 | $7 | ' |
ARINC [Member] | Affiliated Entity [Member] | ' | ' | ' | ' | ' |
Other Assets | ' | ' | ' | ' | ' |
Equity Method Investments, Ownership Percentage | 50.00% | ' | 50.00% | ' | ' |
RCCAC [Member] | ' | ' | ' | ' | ' |
Other Assets | ' | ' | ' | ' | ' |
Equity Method Investments, Ownership Percentage | 50.00% | ' | 50.00% | ' | ' |
Other_Assets_Summary_of_other_
Other Assets (Summary of other assets) (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Other Assets | ' | ' |
Long-term receivables | $29 | $32 |
Investments in equity affiliates | 12 | 22 |
Exchange and rental assets (net of accumulated depreciation of $94 at June 30, 2014 and $91 at September 30, 2013) | 58 | 55 |
Other | 138 | 112 |
Other Assets | 237 | 221 |
Accumulated depreciation, exchange and rental assets | $94 | $91 |
Debt_Shortterm_Debt_Details
Debt (Short-term Debt) (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Short-term Debt [Line Items] | ' | ' |
Short-term Debt | $855 | $436 |
Short-term commercial paper borrowings [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short-term Debt | 855 | 235 |
Current portion of long-term debt [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short-term Debt | 0 | 200 |
Current portion of fair value swap adjustment [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short-term Debt | $0 | $1 |
Debt_Commercial_Paper_Program_
Debt (Commercial Paper Program) (Details) (USD $) | Dec. 23, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 23, 2013 |
Revolving Credit Facility [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper 90 Days [Member] | Commercial Paper 90 Days [Member] | Short term Credit Facility [Member] | |
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | $1,000,000,000 | $1,200,000,000 | ' | ' | ' | $200,000,000 |
Maximum Days of Commercial Paper Maturity | ' | '364 days | ' | ' | ' | ' |
Commercial Paper | ' | 855,000,000 | 235,000,000 | 265,000,000 | 0 | ' |
Gross Payments of Commercial Paper | ' | ' | ' | $90,000,000 | $0 | ' |
Short-term Debt, Weighted Average Interest Rate | ' | 0.34% | 0.18% | ' | ' | ' |
Short Term Borrowings Weighted Average Maturity Period | ' | '41 days | '15 days | ' | ' | ' |
Debt_Revolving_Credit_Faciliti
Debt (Revolving Credit Facilities) (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 23, 2013 | Sep. 30, 2013 | Mar. 31, 2014 | Jan. 31, 2010 | Jun. 30, 2014 | Dec. 23, 2013 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Dec. 16, 2013 | Mar. 31, 2014 |
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Short term Credit Facility [Member] | Short term Credit Facility [Member] | Short term Credit Facility [Member] | Short term Credit Facility Non US Subs [Member] | Short term Credit Facility Non US Subs [Member] | 2023 Notes [Member] | One Month LIBOR [Member] | |||
Unsecured Notes [Member] | 2023 Notes [Member] | ||||||||||||||
Unsecured Notes [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Issuance Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16-Dec-13 | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | $1,000,000,000 | ' | ' | ' | ' | $200,000,000 | ' | $58,000,000 | ' | ' | ' |
Revolving Credit Facility Expired | ' | ' | ' | 850,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum debt to total capitalization ratio per the debt covenants | ' | ' | 60.00% | ' | ' | ' | ' | ' | 60.00% | ' | ' | ' | ' | ' | ' |
Debt to total capitalization ratio | ' | ' | 44.00% | ' | ' | ' | ' | ' | 46.00% | ' | ' | ' | ' | ' | ' |
Amount utilized to support commitments in the form of letters of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,000,000 | ' | ' | ' |
Line of Credit Facility, Amount Outstanding | ' | ' | 0 | ' | ' | 0 | ' | ' | 0 | ' | 0 | 0 | 0 | ' | ' |
Derivative, Description of Variable Rate Basis | ' | ' | ' | ' | ' | ' | 'one-month LIBOR | 'six-month LIBOR | ' | ' | ' | ' | ' | ' | 'one-month LIBOR |
Debt Instrument, Fee Amount | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Bridge_Credit_Agreement_D
Debt (Bridge Credit Agreement) (Details) (Bridge Credit Agreement [Member], USD $) | Dec. 16, 2013 |
Bridge Credit Agreement [Member] | ' |
Short-term Debt [Line Items] | ' |
Line of Credit Facility, Amount Outstanding | $0 |
Revolving Credit Facility Expired | $900,000,000 |
Debt_Current_Portion_of_Long_T
Debt (Current Portion of Long Term Debt) (Details) (Unsecured Notes [Member], USD $) | 1 Months Ended | 2 Months Ended | ||
Mar. 31, 2014 | Jan. 31, 2010 | Nov. 20, 2003 | Nov. 20, 2003 | |
2013 Notes [Member] | 2013 Notes [Member] | |||
Six Month LIBOR [Member] | ||||
Short-term Debt [Line Items] | ' | ' | ' | ' |
Face amount | ' | ' | $200,000,000 | ' |
Interest rate | ' | ' | 4.75% | ' |
Derivative amount of hedged item | ' | ' | $100,000,000 | ' |
Derivative basis spread on LIBOR rate | ' | ' | ' | 0.08% |
Debt Instrument, Issuance Date | ' | ' | 20-Nov-03 | ' |
Debt Instrument, Maturity Date, Description | ' | ' | 'December 1, 2013 | ' |
Derivative, Inception Date | ' | ' | 20-Nov-03 | ' |
Derivative, Description of Variable Rate Basis | 'one-month LIBOR | 'six-month LIBOR | ' | 'six-month LIBOR |
Debt_New_LongTerm_Debt_Issuanc
Debt (New Long-Term Debt Issuances) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | ||||
Dec. 16, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 16, 2013 | Mar. 31, 2014 | Jan. 31, 2010 | Dec. 16, 2013 | Dec. 16, 2013 | Jun. 30, 2014 | Dec. 16, 2013 | Dec. 16, 2013 | Dec. 16, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 16, 2013 | Dec. 16, 2013 | |
ARINC [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | ||||
2016 Notes [Member] | 2016 Notes [Member] | 2016 Notes [Member] | 2016 Notes [Member] | 2023 Notes [Member] | 2023 Notes [Member] | 2023 Notes [Member] | 2023 Notes [Member] | 2043 Notes [Member] | 2043 Notes [Member] | |||||||
Three Month LIBOR [Member] | One Month LIBOR [Member] | |||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Issuance Date | ' | ' | ' | ' | ' | ' | ' | 16-Dec-13 | ' | ' | ' | 16-Dec-13 | ' | ' | ' | 16-Dec-13 |
Derivative, Description of Variable Rate Basis | ' | ' | ' | ' | 'one-month LIBOR | 'six-month LIBOR | ' | ' | ' | 'three-month LIBOR | ' | ' | ' | 'one-month LIBOR | ' | ' |
Face amount | ' | ' | ' | ' | ' | ' | $300,000,000 | $300,000,000 | ' | ' | $400,000,000 | $400,000,000 | ' | ' | $400,000,000 | $400,000,000 |
Derivative basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35% | ' | ' | 0.94% | 0.94% | ' | ' |
Variable Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | 0.58% | ' | ' | ' | ' | ' | ' | ' |
Debt Issuance Cost | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | 3,000,000 | ' | ' | ' | 4,000,000 | ' |
Proceeds from Issuance of Long-term Debt | 1,089,000,000 | 1,089,000,000 | 0 | ' | ' | ' | 299,000,000 | ' | ' | ' | 396,000,000 | ' | ' | ' | 394,000,000 | ' |
Derivative amount of hedged item | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | ' | ' | ' |
Debt Proceeds Used to Finance Acquisition | ' | ' | ' | 900,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Proceeds Used to Refinance Existing Debt | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.70% | 3.70% | ' | ' | 4.80% | 4.80% |
Unamortized Discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | $1,000,000 | ' | ' | $2,000,000 | $2,000,000 |
Debt_Other_LongTerm_Debt_Detai
Debt (Other Long-Term Debt) (Details) (Unsecured Notes [Member], USD $) | 1 Months Ended | 2 Months Ended | 7 Months Ended | 1 Months Ended | ||
Mar. 31, 2014 | Jan. 31, 2010 | Nov. 16, 2011 | 6-May-09 | Jan. 31, 2010 | Jan. 31, 2010 | |
2021 Notes [Member] | 2019 Notes [Member] | 2019 Notes [Member] | 2019 Notes [Member] | |||
Six Month LIBOR [Member] | ||||||
Long-term Debt | ' | ' | ' | ' | ' | ' |
Face amount | ' | ' | $250,000,000 | $300,000,000 | ' | ' |
Interest rate | ' | ' | 3.10% | 5.25% | ' | ' |
Derivative amount of hedged item | ' | ' | ' | ' | $150,000,000 | ' |
Derivative basis spread on variable rate | ' | ' | ' | ' | 1.24% | 1.24% |
Debt Instrument, Issuance Date | ' | ' | 16-Nov-11 | 6-May-09 | ' | ' |
Debt Instrument, Maturity Date, Description | ' | ' | 'November 15, 2021 | '7/15/2019 | ' | ' |
Derivative, Description of Variable Rate Basis | 'one-month LIBOR | 'six-month LIBOR | ' | ' | ' | 'six-month LIBOR |
Debt_Summary_of_longterm_debt_
Debt (Summary of long-term debt and a reconciliation to the carrying amount) (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 |
Long-term Debt | ' | ' | ' |
Fair value swap adjustment | $18 | ' | $16 |
Total | 1,663 | ' | 764 |
Less current portion | 0 | ' | 201 |
Long-term debt, net | 1,663 | ' | 563 |
Interest Paid | 41 | 20 | ' |
2043 Notes [Member] | Unsecured Notes [Member] | ' | ' | ' |
Long-term Debt | ' | ' | ' |
Principal amount of notes | 398 | ' | 0 |
2023 Notes [Member] | Unsecured Notes [Member] | ' | ' | ' |
Long-term Debt | ' | ' | ' |
Principal amount of notes | 399 | ' | 0 |
2021 Notes [Member] | Unsecured Notes [Member] | ' | ' | ' |
Long-term Debt | ' | ' | ' |
Principal amount of notes | 249 | ' | 249 |
2019 Notes [Member] | Unsecured Notes [Member] | ' | ' | ' |
Long-term Debt | ' | ' | ' |
Principal amount of notes | 299 | ' | 299 |
2016 Notes [Member] | Unsecured Notes [Member] | ' | ' | ' |
Long-term Debt | ' | ' | ' |
Principal amount of notes | 300 | ' | 0 |
2013 Notes [Member] | Unsecured Notes [Member] | ' | ' | ' |
Long-term Debt | ' | ' | ' |
Principal amount of notes | $0 | ' | $200 |
Retirement_Benefits_Components
Retirement Benefits (Components of Expense (Income)) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Pension Plans, Defined Benefit [Member] | ' | ' | ' | ' |
Components of Expense (Income) | ' | ' | ' | ' |
Service cost | $3 | $3 | $8 | $8 |
Interest cost | 43 | 35 | 126 | 104 |
Expected return on plan assets | -59 | -51 | -171 | -152 |
Amortization of prior service credit | -3 | -5 | -9 | -14 |
Amortization of net actuarial loss | 17 | 20 | 51 | 60 |
Net benefit expense | 1 | 2 | 5 | 6 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ' | ' | ' | ' |
Components of Expense (Income) | ' | ' | ' | ' |
Service cost | 0 | 1 | 2 | 3 |
Interest cost | 3 | 2 | 7 | 6 |
Expected return on plan assets | -1 | 0 | -1 | -1 |
Amortization of prior service credit | -2 | -2 | -7 | -6 |
Amortization of net actuarial loss | 2 | 3 | 6 | 9 |
Net benefit expense | $2 | $4 | $7 | $11 |
Retirement_Benefits_Narrative_
Retirement Benefits (Narrative) (Details) (USD $) | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Oct. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 23, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 23, 2013 |
ARINC [Member] | ARINC [Member] | U.S. Qualified Pension Plan [Member] | Pension Plan, Defined Benefit [Member] | Pension Plan, Defined Benefit [Member] | Pension Plan, Defined Benefit [Member] | Pension Plan, Defined Benefit [Member] | Pension Plan, Defined Benefit [Member] | Pension Plan, Defined Benefit [Member] | Non U.S. Plans and U.S. Non Qualified Plan [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | |||
ARINC [Member] | ARINC [Member] | ARINC [Member] | |||||||||||||||
Defined Benefit Plan Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined Benefit Plan, Benefit Obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $274 | ' | ' | ' | ' | ' | ' |
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.89% | ' | ' | ' | ' | ' | 4.89% |
Defined Benefit Plan, Fair Value of Plan Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 270 | ' | ' | ' | ' | ' | ' |
Defined Benefit Plan, Funded Status of Plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | 8 |
Defined Benefit Plan, Actual Return on Plan Assets | ' | ' | ' | ' | ' | 1 | 2 | 5 | 6 | 3 | ' | ' | 2 | 4 | 7 | 11 | ' |
Payments for (Proceeds from) Real Estate Held-for-investment | ' | ' | 81 | 81 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | ' | ' | ' | ' | 55 | ' | ' | ' | ' | ' | ' | 14 | ' | ' | ' | ' | ' |
Pension Contributions | $66 | $120 | ' | ' | $55 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11 | ' | ' |
StockBased_Compensation_and_Ea2
Stock-Based Compensation and Earnings Per Share (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Stock-Based Compensation | ' | ' | ' | ' |
Max Shares Issued in Respect of Performance Shares Granted in Current Year | ' | ' | 341,000 | ' |
Company Common Stock Shares Issued To Employees Under Employee Stock Purchase And Defined Contribution Savings Plans | ' | ' | 500,000 | 700,000 |
Compensation and benefits paid in common stock | ' | ' | 37 | 42 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 300,000 | 0 | 400,000 |
StockBased_Compensation_and_Ea3
Stock-Based Compensation and Earnings Per Share (Stock-Based Compensation Expense) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Stock-Based Compensation | ' | ' | ' | ' |
Stock-based compensation expense | $5 | $6 | $17 | $19 |
Income tax benefit | 2 | 3 | 6 | 7 |
Employee Share Based Compensation Allocation Of Recognized Expense Cost Of Sales [Member] | ' | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' | ' |
Stock-based compensation expense | 1 | 2 | 5 | 6 |
Employee Service Share Based Compensation Allocation Of Recognized Expense Selling General and Administrative [Member] | ' | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' | ' |
Stock-based compensation expense | $4 | $4 | $12 | $13 |
StockBased_Compensation_and_Ea4
Stock-Based Compensation and Earnings Per Share (Equity Instruments Awards) (Details) (USD $) | 9 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Options [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Number Issued, Options | 581,800 | 923,300 |
Weighted Average Fair Value, Options | $18.54 | $12.56 |
Performance Shares [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Number Issued | 150,600 | 211,200 |
Weighted Average Fair Value | $71.44 | $54.79 |
Restricted Stock Units [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Number Issued | 78,900 | 85,300 |
Weighted Average Fair Value | $72.33 | $55.77 |
StockBased_Compensation_and_Ea5
Stock-Based Compensation and Earnings Per Share (Stock Option Fair Value Information) (Details) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Sep. 30, 2013 | |
Options Assumptions | ' | ' |
Risk Free Interest Rate, Minimum | 0.30% | 0.30% |
Risk Free Interest Rate, Maximum | 3.00% | 2.90% |
Expected dividend yield | 1.90% | 2.00% |
Expected volatility | 28.00% | 27.00% |
Expected life | '7 years | '8 years |
StockBased_Compensation_and_Ea6
Stock-Based Compensation and Earnings Per Share (Earnings Per Share and Diluted Share Equivalents) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Computation of Basic and Diluted Earnings Per Share | ' | ' | ' | ' |
Income from continuing operations | $163 | $161 | $445 | $455 |
Income (loss) from discontinued operations, net of taxes | -5 | 3 | -8 | 2 |
Net income | $158 | $164 | $437 | $457 |
Denominator: | ' | ' | ' | ' |
Denominator for basic earnings per share - weighted average common shares | 135.2 | 135.5 | 135.3 | 137.1 |
Stock options | 1.3 | 1.2 | 1.2 | 1 |
Performance shares, restricted shares and restricted stock units | 0.4 | 0.5 | 0.4 | 0.4 |
Dilutive potential common shares | 1.7 | 1.7 | 1.6 | 1.4 |
Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversion | 136.9 | 137.2 | 136.9 | 138.5 |
Basic | ' | ' | ' | ' |
Continuing operations | $1.21 | $1.19 | $3.29 | $3.32 |
Discontinued operations | ($0.04) | $0.02 | ($0.06) | $0.01 |
Basic earnings per share | $1.17 | $1.21 | $3.23 | $3.33 |
Diluted | ' | ' | ' | ' |
Continuing operations | $1.19 | $1.18 | $3.25 | $3.29 |
Discontinued operations | ($0.04) | $0.02 | ($0.06) | $0.01 |
Diluted earnings per share | $1.15 | $1.20 | $3.19 | $3.30 |
Other_Comprehensive_Loss_Detai
Other Comprehensive Loss (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | |
Balance at Beginning of Period | ($1,287) | |
Other comprehensive income before reclassifications | 8 | |
Amounts reclassified from accumulated other comprehensive income | 24 | |
Net current period other comprehensive income | 32 | |
Balance at End of Period | -1,255 | |
Amortization of defined benefit plan costs, before tax | 41 | |
Amortization of defined benefit plan costs, net of tax | 24 | |
Foreign Exchange Translation Adjustment [Member] | ' | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | |
Balance at Beginning of Period | 12 | |
Other comprehensive income before reclassifications | 4 | |
Amounts reclassified from accumulated other comprehensive income | 0 | |
Net current period other comprehensive income | 4 | |
Balance at End of Period | 16 | |
Pension and Other Postretirement Adjustments [Member] | ' | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | |
Balance at Beginning of Period | -1,293 | [1] |
Other comprehensive income before reclassifications | 0 | [1] |
Amounts reclassified from accumulated other comprehensive income | 24 | [1] |
Net current period other comprehensive income | 24 | [1] |
Balance at End of Period | -1,269 | [1] |
Change in Fair Value of Effective Cash Flow Hedges [Member] | ' | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | |
Balance at Beginning of Period | -6 | [2] |
Other comprehensive income before reclassifications | 4 | [2] |
Amounts reclassified from accumulated other comprehensive income | 0 | [2] |
Net current period other comprehensive income | 4 | [2] |
Balance at End of Period | ($2) | [2] |
[1] | Reclassifications from AOCL to net income, related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans, were $41 million ($24 million net of tax), for the nine months ended June 30, 2014. The reclassifications are included in the computation of net benefit expense. See Note 11, Retirement Benefits for additional details. | |
[2] | Reclassifications from AOCL to net income related to cash flow hedges were not significant for the nine months ended June 30, 2014. The reclassifications are included in cost of sales and interest expense. See Note 17, Derivative Financial Instruments for additional details. |
Other_Income_Net_Details
Other Income, Net (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Nonoperating Income (Expense) [Abstract] | ' | ' | ' | ' |
Earnings from equity affiliates | $2 | $1 | $6 | $10 |
Gain from business divestiture | 0 | 0 | 10 | 0 |
Other | 3 | 3 | 4 | 4 |
Other income, net | $5 | $4 | $20 | $14 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 |
Income Taxes | ' | ' | ' | ' | ' |
Effective Income Tax Rate, Continuing Operations | 28.80% | 30.00% | 29.30% | 26.10% | ' |
Statute of Limitations, Range, Minimum (in years) | ' | ' | '3 years | ' | ' |
Statute of Limitations, Range, Maximum (in years) | ' | ' | '5 years | ' | ' |
Income tax payments, net | ' | ' | $166 | $72 | ' |
Unrecognized Tax Benefits Recorded Within Other Current Liabilities | 41 | ' | 41 | ' | 56 |
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 20 | ' | 20 | ' | 34 |
Accrued Income tax penalties and interest | 1 | ' | 1 | ' | 2 |
Interest and penalties expense | ' | ' | $1 | $0 | ' |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis) (Details) (USD $) | 9 Months Ended | |||||||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 |
Level 1 [Member] | Level 1 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | |||
Deferred Compensation Plan Investments [Member] | Deferred Compensation Plan Investments [Member] | Forward Starting Interest Rate Swap Liabilities [Member] | Forward Starting Interest Rate Swap Liabilities [Member] | Foreign Exchange Forward Exchange Contract [Member] | Foreign Exchange Forward Exchange Contract [Member] | Interest Rate Swap Assets [Member] | Interest Rate Swap Assets [Member] | Foreign Exchange Forward Exchange Contract [Member] | Foreign Exchange Forward Exchange Contract [Member] | |||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets at fair value | ' | ' | $52 | $49 | ' | ' | ' | ' | $18 | $16 | $6 | $6 |
Liabilities at fair value | ' | ' | ' | ' | 0 | -5 | -5 | -6 | ' | ' | ' | ' |
Fair Value Nonfinancial Assets Measured on Nonrecurring Basis | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Nonfinancial Liabilities Measured on Nonrecurring Basis | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfers Between Measurement Levels | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Carryi
Fair Value Measurements (Carrying Amounts and Fair Values of Financial Instruments) (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2012 |
Carrying Amounts and Fair Value of Financial Instruments | ' | ' | ' | ' |
Cash and cash equivalents | $450,000,000 | $391,000,000 | $354,000,000 | $335,000,000 |
Short-term debt | -855,000,000 | -436,000,000 | ' | ' |
Long-term debt | -1,663,000,000 | -563,000,000 | ' | ' |
Carrying Amount [Member] | ' | ' | ' | ' |
Carrying Amounts and Fair Value of Financial Instruments | ' | ' | ' | ' |
Cash and cash equivalents | 450,000,000 | 391,000,000 | ' | ' |
Short-term debt | 0 | -200,000,000 | ' | ' |
Commercial Paper | -855,000,000 | -235,000,000 | ' | ' |
Long-term debt | -1,645,000,000 | -548,000,000 | ' | ' |
Fair Value [Member] | ' | ' | ' | ' |
Carrying Amounts and Fair Value of Financial Instruments | ' | ' | ' | ' |
Cash and cash equivalents | 450,000,000 | 391,000,000 | ' | ' |
Short-term debt | 0 | -201,000,000 | ' | ' |
Commercial Paper | -855,000,000 | -235,000,000 | ' | ' |
Long-term debt | ($1,742,000,000) | ($586,000,000) | ' | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Narrative) (Details) (USD $) | 9 Months Ended | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Jan. 31, 2010 | Sep. 30, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jan. 31, 2010 | Nov. 20, 2003 | Nov. 20, 2003 | Sep. 30, 2013 | Nov. 20, 2003 | Jun. 30, 2014 | Oct. 31, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 16, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Other Current Assets [Member] | Other Current Assets [Member] | Other Assets [Member] | Other Assets [Member] | Other Current Liabilities [Member] | Other Current Liabilities [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Unsecured Notes [Member] | Forward Starting Interest Rate Swap [Member] | Forward Starting Interest Rate Swap [Member] | Foreign Exchange Contract [Member] | Foreign Exchange Contract [Member] | Foreign Exchange Contract [Member] | Foreign Exchange Contract [Member] | Foreign Exchange Contract [Member] | Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | |||||
Other Assets [Member] | 2023 Notes [Member] | 2019 Notes [Member] | 2013 Notes [Member] | 2013 Notes [Member] | Other Current Assets [Member] | Other Current Assets [Member] | Other Assets [Member] | Other Assets [Member] | AOCL [Member] | AOCL [Member] | AOCL [Member] | AOCL [Member] | AOCL [Member] | ||||||||||||||||||||
Derivative Financial Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative, Inception Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20-Nov-03 | 20-Nov-03 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Swap expiration date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15-Dec-23 | 15-Jul-19 | ' | ' | ' | ' | ' | 1-Dec-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative amount of hedged item | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,000,000 | $150,000,000 | $100,000,000 | ' | ' | $100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one-month LIBOR | 'six-month LIBOR | ' | ' | ' | ' | ' | 'six-month LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -0.94% | -1.24% | ' | ' | ' | 0.08% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate swap assets | ' | ' | ' | ' | 0 | 1,000,000 | 18,000,000 | 15,000,000 | ' | ' | ' | ' | 15,000,000 | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value swap adjustment | 18,000,000 | ' | ' | 16,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000,000 | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative, Lower Fixed Interest Rate Range | ' | ' | 2.82% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative, Higher Fixed Interest Rate Range | ' | ' | 3.88% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 2,000,000 | 0 | 3,000,000 | 0 |
Derivative Liability, Fair Value, Gross Liability | 5,000,000 | ' | ' | 11,000,000 | ' | ' | ' | ' | 0 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount of foreign currency derivatives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | 300,000,000 | 327,000,000 | 482,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency forward exchange contract assets | ' | ' | ' | ' | 6,000,000 | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (Loss) on Cash Flow Hedge Ineffectiveness, Net | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (Loss) recognized when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of cash flow hedge loss to be reclassified into earnings over next 12 months | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum duration of a foreign currency cash flow hedge contract in months | '73 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | $0 | $0 | ' | ' | ' | ' | ' |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Fair Values of Derivative Instruments) (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Derivative Financial Instruments | ' | ' |
Total | $24 | $22 |
Derivative Liability, Fair Value, Gross Liability | 5 | 11 |
Other Current Assets [Member] | ' | ' |
Derivative Financial Instruments | ' | ' |
Foreign currency forward exchange contracts | 6 | 6 |
Interest rate swaps | 0 | 1 |
Other Assets [Member] | ' | ' |
Derivative Financial Instruments | ' | ' |
Interest rate swaps | 18 | 15 |
Other Current Liabilities [Member] | ' | ' |
Derivative Financial Instruments | ' | ' |
Foreign currency forward exchange contracts | 5 | 6 |
Derivative Liability, Fair Value, Gross Liability | $0 | $5 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Effect of Derivative Instruments) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 16, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Fair Value Hedging [Member] | Interest Expense [Member] | ' | ' | ' | ' | ' |
Derivative Financial Instruments | ' | ' | ' | ' | ' |
Gain (loss) recognized from interest rate swaps | $2 | ' | $2 | $6 | $7 |
Cash Flow Hedging [Member] | AOCL [Member] | ' | ' | ' | ' | ' |
Derivative Financial Instruments | ' | ' | ' | ' | ' |
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) | 2 | ' | -5 | 1 | -7 |
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $0 | $2 | $0 | $3 | $0 |
Guarantees_and_Indemnification2
Guarantees and Indemnifications (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Guarantees and Indemnifications | ' | ' |
Balance at beginning of year | $121 | $126 |
Warranty costs incurred | -35 | -36 |
Product warranty accrual | 36 | 33 |
Changes in estimates for prior years | -12 | -4 |
Foreign currency translation adjustments and other | -1 | 0 |
Balance at June 30 | 109 | 119 |
Equity Method Investments, Ownership Percentage | 50.00% | ' |
Outstanding letters of credit | 288 | ' |
Quest Guarantee [Member] | ' | ' |
Guarantees and Indemnifications | ' | ' |
Equity Method Investments, Ownership Percentage | 50.00% | ' |
Quest performance guarantee | 2 | ' |
Outstanding Quest loan balance | $4 | ' |
Environmental_Matters_Details
Environmental Matters (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Site | |
Environmental Matters | ' | ' |
Number of Sites Involved in Investigation | 9 | ' |
Environmental Loss Contingency Number of Sites Where Reasonably Possible Future Costs is Insignificant | 8 | ' |
Site contingency reasonably possible future costs | $12 | ' |
Accrual for environmental loss contingencies | $6 | $6 |
Restructuring_and_Asset_Impair1
Restructuring and Asset Impairment Charges (Details) (USD $) | 12 Months Ended | 25 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2012 | Jun. 30, 2014 |
Restructuring and Asset Impairment Charges [Line Items] | ' | ' |
Restructuring and Asset Impairment Charges, Net | $58 | ' |
Employee Severance [Member] | ' | ' |
Restructuring and Asset Impairment Charges [Line Items] | ' | ' |
Restructuring and Asset Impairment Charges, Net | 35 | ' |
Payments for Restructuring | ' | 27 |
Restructuring Reserve | ' | $8 |
Business_Segment_Information_S
Business Segment Information (Sales and Results of Operations of Reportable Segments) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | |||
Business Segment Information | ' | ' | ' | ' | ' | ||
Total sales | $1,264,000,000 | $1,132,000,000 | $3,577,000,000 | $3,255,000,000 | ' | ||
Total segment operating earnings | 263,000,000 | 257,000,000 | 737,000,000 | 700,000,000 | ' | ||
Interest expense | -15,000,000 | -7,000,000 | -43,000,000 | [1] | -21,000,000 | [1] | ' |
Stock-based compensation | -5,000,000 | -6,000,000 | -17,000,000 | -19,000,000 | ' | ||
General corporate, net | -14,000,000 | -14,000,000 | -45,000,000 | -44,000,000 | ' | ||
Gain on divestiture of business | 0 | 0 | 10,000,000 | 0 | ' | ||
ARINC transaction costs | 0 | 0 | -13,000,000 | [1] | 0 | [1] | ' |
Income from continuing operations before income taxes | 229,000,000 | 230,000,000 | 629,000,000 | 616,000,000 | ' | ||
Income tax expense | -66,000,000 | -69,000,000 | -184,000,000 | -161,000,000 | ' | ||
Income from continuing operations | 163,000,000 | 161,000,000 | 445,000,000 | 455,000,000 | ' | ||
Debt Instrument, Fee Amount | 0 | ' | 0 | ' | 0 | ||
ARINC [Member] | ' | ' | ' | ' | ' | ||
Business Segment Information | ' | ' | ' | ' | ' | ||
Total sales | 134,000,000 | ' | 277,000,000 | ' | ' | ||
ARINC transaction costs | 0 | ' | -16,000,000 | ' | ' | ||
Bridge Loan [Member] | ARINC [Member] | Interest Expense [Member] | ' | ' | ' | ' | ' | ||
Business Segment Information | ' | ' | ' | ' | ' | ||
Debt Instrument, Fee Amount | 3,000,000 | ' | 3,000,000 | ' | 3,000,000 | ||
Government Systems [Member] | ' | ' | ' | ' | ' | ||
Business Segment Information | ' | ' | ' | ' | ' | ||
Total sales | 535,000,000 | 569,000,000 | 1,604,000,000 | 1,623,000,000 | ' | ||
Total segment operating earnings | 112,000,000 | 125,000,000 | 328,000,000 | 345,000,000 | ' | ||
Commercial Systems [Member] | ' | ' | ' | ' | ' | ||
Business Segment Information | ' | ' | ' | ' | ' | ||
Total sales | 583,000,000 | 551,000,000 | 1,660,000,000 | 1,599,000,000 | ' | ||
Total segment operating earnings | 130,000,000 | 131,000,000 | 368,000,000 | 352,000,000 | ' | ||
Information Management Services [Member] | ' | ' | ' | ' | ' | ||
Business Segment Information | ' | ' | ' | ' | ' | ||
Total sales | 146,000,000 | 12,000,000 | 313,000,000 | 33,000,000 | ' | ||
Total segment operating earnings | $21,000,000 | $1,000,000 | $41,000,000 | $3,000,000 | ' | ||
[1] | During the nine months ended JuneB 30, 2014, the Company incurred $3 million of bridge facility fees related to the acquisition of ARINC. These costs are included in Interest expense; therefore total transaction costs related to the acquisition of ARINC during the period were $16 million. |
Business_Segment_Information_S1
Business Segment Information (Summary of Sales by Product Category) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Business Segment Information | ' | ' | ' | ' |
Total sales | $1,264 | $1,132 | $3,577 | $3,255 |
Government Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 535 | 569 | 1,604 | 1,623 |
Commercial Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 583 | 551 | 1,660 | 1,599 |
Information Management Services [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 146 | 12 | 313 | 33 |
Avionics [Member] | Government Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 317 | 341 | 967 | 980 |
Communication products [Member] | Government Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 107 | 120 | 327 | 335 |
Surface Solutions [Member] | Government Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 68 | 62 | 182 | 169 |
Navigation Products [Member] | Government Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 43 | 46 | 128 | 139 |
Air Transport Aviation Electronics [Member] | Commercial Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 325 | 297 | 942 | 864 |
Business And Regional Aviation Electronics [Member] | Commercial Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | 258 | 254 | 718 | 735 |
Wide-Body In-Flight Entertainment Products and Services [Member] | Commercial Systems [Member] | ' | ' | ' | ' |
Business Segment Information | ' | ' | ' | ' |
Total sales | $17 | $19 | $54 | $64 |