Document and Entity Information
Document and Entity Information Document - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Oct. 31, 2016 | Apr. 01, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ROCKWELL COLLINS INC | ||
Entity Central Index Key | 1,137,411 | ||
Document and Entity Information | --09-30 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Registrant Name | 10-K | ||
Document Period End Date | Sep. 30, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 130,256,671 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 12,070 |
Consolidated Statement of Finan
Consolidated Statement of Financial Position - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 340 | $ 252 |
Receivables, net | 1,094 | 1,038 |
Inventories, net | 1,939 | 1,824 |
Other current assets | 117 | 110 |
Total current assets | 3,490 | 3,224 |
Property | 1,035 | 964 |
Goodwill | 1,919 | 1,904 |
Intangible Assets | 667 | 703 |
Deferred Income Taxes | 219 | 165 |
Other Assets | 377 | 344 |
TOTAL ASSETS | 7,707 | 7,304 |
Current Liabilities: | ||
Short-term debt | 740 | 448 |
Accounts payable | 527 | 487 |
Compensation and benefits | 269 | 273 |
Advance payments from customers | 283 | 365 |
Accrued customer incentives | 246 | 232 |
Product warranty costs | 87 | 89 |
Other current liabilities | 194 | 166 |
Total current liabilities | 2,346 | 2,060 |
Long-term Debt, Net | 1,382 | 1,680 |
Retirement Benefits | 1,660 | 1,466 |
Other Liabilities | 235 | 218 |
Equity: | ||
Common stock ($0.01 par value; shares authorized: 1,000; shares issued: September 30, 2016, 143.8; September 30, 2015, 183.8) | 1 | 2 |
Additional paid-in capital | 1,506 | 1,519 |
Retained earnings | 3,327 | 5,124 |
Accumulated other comprehensive loss | (1,898) | (1,699) |
Common stock in treasury, at cost (shares held: September 30, 2016, 13.6; September 30, 2015, 51.9) | (858) | (3,071) |
Total shareowners’ equity | 2,078 | 1,875 |
Noncontrolling interest | 6 | 5 |
Total equity | 2,084 | 1,880 |
TOTAL LIABILITIES AND EQUITY | $ 7,707 | $ 7,304 |
Consolidated Statement of Fina3
Consolidated Statement of Financial Position (Parenthetical) - $ / shares | Sep. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 143,800,000 | 183,800,000 |
Common stock, shares held in treasury | 13,600,000 | 51,900,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Sales: | ||||
Product sales | $ 4,411 | $ 4,438 | $ 4,309 | |
Service sales | 848 | 806 | 670 | |
Total sales | 5,259 | 5,244 | 4,979 | |
Costs, expenses and other: | ||||
Product cost of sales | 3,045 | 3,064 | 3,001 | |
Service cost of sales | 597 | 566 | 468 | |
Selling, general and administrative expenses | 638 | 606 | 594 | |
Interest expense | 64 | 61 | 59 | [1] |
Other income, net | (20) | (15) | (25) | |
Total costs, expenses and other | 4,324 | 4,282 | 4,097 | |
Income from continuing operations before income taxes | 935 | 962 | 882 | |
Income tax expense | 208 | 268 | 264 | |
Income from continuing operations | 727 | 694 | 618 | |
Income (loss) from discontinued operations, net of taxes | 1 | (8) | (14) | |
Net income | $ 728 | $ 686 | $ 604 | |
Basic | ||||
Continuing operations | $ 5.57 | $ 5.25 | $ 4.57 | |
Discontinued operations | 0.01 | (0.06) | (0.10) | |
Basic earnings per share | 5.58 | 5.19 | 4.47 | |
Diluted | ||||
Continuing operations | 5.50 | 5.19 | 4.52 | |
Discontinued operations | 0.01 | (0.06) | (0.10) | |
Diluted earnings per share | $ 5.51 | $ 5.13 | $ 4.42 | |
Weighted average common shares: | ||||
Basic | 130.5 | 132.3 | 135.1 | |
Diluted | 132.1 | 133.7 | 136.7 | |
Cash dividends per share | $ 1.32 | $ 1.26 | $ 1.20 | |
[1] | During the year ended September 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 this period was $16 million. |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 728 | $ 686 | $ 604 |
Unrealized foreign currency translation adjustments | (20) | (41) | (27) |
Pension and other retirement benefits adjustments (net of taxes: 2016, $102; 2015, $169; 2014, $29) | (181) | (289) | (55) |
Foreign currency cash flow hedge adjustments (net of taxes: 2016, $1; 2015, $(1); 2014, $1) | 2 | (3) | 3 |
Comprehensive income | $ 529 | $ 353 | $ 525 |
Consolidated Statement of Comp6
Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Pension and other retirement benefits adjustments tax amount | $ 102 | $ 169 | $ 29 |
Foreign currency cash flow hedge adjustments tax amount | $ 1 | $ (1) | $ 1 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Operating Activities: | ||||
Net income | $ 728 | $ 686 | $ 604 | |
Income (loss) from discontinued operations, net of taxes | 1 | (8) | (14) | |
Income from continuing operations | 727 | 694 | 618 | |
Adjustments to arrive at cash provided by operating activities: | ||||
Non-cash restructuring charges | 6 | 0 | 9 | |
Gain on sale of business | 0 | 0 | (10) | |
Depreciation | 144 | 152 | 141 | |
Amortization of intangible assets and pre-production engineering costs | 109 | 100 | 84 | |
Stock-based compensation expense | 27 | 24 | 24 | |
Compensation and benefits paid in common stock | 59 | 50 | 50 | |
Excess tax benefit from stock-based compensation (see Note 2) | 0 | (13) | (6) | |
Deferred income taxes | 48 | 50 | 113 | |
Pension plan contributions | (69) | (69) | (75) | |
Fair value of acquisition-related contingent consideration | 1 | 0 | 0 | |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||||
Receivables | (91) | (46) | 67 | |
Production inventory | (18) | (23) | (84) | |
Pre-production engineering costs | (177) | (183) | (198) | |
Accounts payable | 38 | (29) | 23 | |
Compensation and benefits | (4) | 24 | (60) | |
Advance payments from customers | (82) | 16 | (11) | |
Accrued customer incentives | 14 | 30 | 18 | |
Product warranty costs | (2) | (14) | (14) | |
Income taxes | 25 | 50 | (21) | |
Other assets and liabilities | (32) | (64) | (8) | |
Cash Provided by Operating Activities from Continuing Operations | 723 | 749 | 660 | |
Investing Activities: | ||||
Property additions | (193) | (210) | (163) | |
Acquisition of businesses, net of cash acquired | (17) | (74) | (1,405) | |
Acquisition of intangible assets | 0 | 0 | (1) | |
Proceeds from business divestitures | 0 | 0 | 24 | |
Other investing activities | 1 | (10) | 8 | |
Cash (Used for) Investing Activities from Continuing Operations | (209) | (294) | (1,537) | |
Financing Activities: | ||||
Purchases of treasury stock | (261) | (330) | (211) | |
Cash dividends | (172) | (167) | (162) | |
Repayment of short-term borrowings | 0 | 0 | (200) | |
Increase (decrease) in short-term commercial paper borrowings, net(1) | [1] | (8) | (56) | 269 |
Increase in long-term borrowings | 0 | 0 | 1,089 | |
Proceeds from the exercise of stock options | 21 | 49 | 37 | |
Excess tax benefit from stock-based compensation (see Note 2) | 0 | 13 | 6 | |
Other financing activities | (2) | (1) | (1) | |
Cash Provided by (Used for) Financing Activities from Continuing Operations | (422) | (492) | 827 | |
Effect of exchange rate changes on cash and cash equivalents | (4) | (23) | (12) | |
Discontinued Operations: | ||||
Operating activities | 0 | (14) | (16) | |
Investing activities | 0 | 3 | 10 | |
Cash (Used For) Discontinued Operations | 0 | (11) | (6) | |
Net Change in Cash and Cash Equivalents | 88 | (71) | (68) | |
Cash and Cash Equivalents at Beginning of Period | 252 | 323 | 391 | |
Cash and Cash Equivalents at End of Period | 340 | 252 | 323 | |
Statement of Cash Flows Footnote [Abstract] | ||||
Gross borrowings of commercial paper with maturities greater than three months | 0 | 0 | 265 | |
Gross payments of commercial paper with maturities greater than three months | 0 | 0 | 265 | |
Net borrowings of commercial paper with maturities greater than three months | $ 0 | $ 0 | $ 0 | |
[1] | Includes gross borrowings and repayments of commercial paper with maturities greater than three months as follows: Year Ended September 30 2016 2015 2014Gross borrowings of commercial paper with maturities greater than three months$— $— $265Gross payments of commercial paper with maturities greater than three months— — 265Net borrowings of commercial paper with maturities greater than three months$— $— $— |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] |
Shares Outstanding at Sep. 30, 2013 | 135,100 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Sep. 30, 2013 | $ 1,623 | $ 2 | $ 1,469 | $ 4,163 | $ (1,287) | $ (2,729) | $ 5 |
Net income | 604 | 604 | |||||
Net current period other comprehensive income (loss) | (79) | (79) | |||||
Dividends, Cash | (162) | (162) | |||||
Exercise of stock options, shares | 800 | ||||||
Exercise of Stock Options | 37 | (9) | 46 | ||||
Vesting of performance shares and restricted stock, shares | 200 | ||||||
Vesting of performance shares and restricted stock | (5) | (11) | 6 | ||||
Excess tax pools | $ 3 | 3 | |||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 100 | 100 | |||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 10 | 2 | 8 | ||||
Stock Issued During Period, Shares, Employee Savings Plan | 500 | ||||||
Stock Issued During Period, Value, Employee Savings Plan | 40 | 11 | 29 | ||||
Stock-based compensation | 24 | 24 | |||||
Treasury share repurchases, shares | (2,700) | ||||||
Treasury share repurchases | (206) | (206) | |||||
Shares Outstanding at Sep. 30, 2014 | 134,000 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Sep. 30, 2014 | 1,889 | $ 2 | 1,489 | 4,605 | (1,366) | (2,846) | 5 |
Net income | 686 | 686 | |||||
Net current period other comprehensive income (loss) | (333) | (333) | |||||
Dividends, Cash | (167) | (167) | |||||
Exercise of stock options, shares | 1,100 | ||||||
Exercise of Stock Options | 49 | (13) | 62 | ||||
Vesting of performance shares and restricted stock, shares | 100 | ||||||
Vesting of performance shares and restricted stock | (5) | (10) | 5 | ||||
Excess tax pools | $ 12 | 12 | |||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 100 | 100 | |||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 11 | 4 | 7 | ||||
Stock Issued During Period, Shares, Employee Savings Plan | 400 | ||||||
Stock Issued During Period, Value, Employee Savings Plan | 39 | 13 | 26 | ||||
Stock-based compensation | 24 | 24 | |||||
Treasury share repurchases, shares | (3,800) | ||||||
Treasury share repurchases | (325) | (325) | |||||
Shares Outstanding at Sep. 30, 2015 | 131,900 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Sep. 30, 2015 | 1,880 | $ 2 | 1,519 | 5,124 | (1,699) | (3,071) | 5 |
Net income | 728 | 728 | |||||
Net current period other comprehensive income (loss) | (199) | (199) | |||||
Dividends, Cash | $ (172) | (172) | |||||
Exercise of stock options, shares | 387 | 400 | |||||
Exercise of Stock Options | $ 21 | (2) | 23 | ||||
Vesting of performance shares and restricted stock, shares | 100 | ||||||
Vesting of performance shares and restricted stock | (6) | (10) | 4 | ||||
Excess tax pools | $ 0 | 0 | |||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 100 | 100 | |||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 10 | 2 | 8 | ||||
Stock Issued During Period, Shares, Employee Savings Plan | 600 | ||||||
Stock Issued During Period, Value, Employee Savings Plan | 49 | 14 | 35 | ||||
Stock-based compensation | 27 | 27 | |||||
Treasury share repurchases, shares | (2,900) | ||||||
Treasury share repurchases | (255) | (255) | |||||
Treasury share retirements | 0 | $ (1) | (44) | (2,353) | 2,398 | ||
Stockholders' Equity, other | 1 | 1 | |||||
Shares Outstanding at Sep. 30, 2016 | 130,200 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Sep. 30, 2016 | $ 2,084 | $ 1 | $ 1,506 | $ 3,327 | $ (1,898) | $ (858) | $ 6 |
Treasury Stock, Shares, Retired | 40,000 | ||||||
Treasury Stock Retirement Weighted Average Price per Share | $ 59.95 |
Business Description and Basis
Business Description and Basis of Presentation | 12 Months Ended |
Sep. 30, 2016 | |
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 ending on the Friday closest to September 30. Fiscal year 2016 and 2015 were 52-week years while 2014 was a 53-week year. For ease of presentation, September 30 is utilized consistently throughout these financial statements and notes to represent the fiscal year end date. All date references contained herein relate to the Company's fiscal year unless otherwise stated. As discussed in Note 4, Discontinued Operations and Divestitures, on March 10, 2015, the Company divested its Aerospace Systems Engineering and Support (ASES) business, which was acquired as part of the ARINC Incorporated (ARINC) transaction. On July 25, 2014, the Company divested its satellite communication systems business, formerly known as Datapath, Inc. (Datapath). As a result of the divestitures, the operating results of ASES and Datapath have been accounted for as discontinued operations for all periods presented. Unless otherwise noted, disclosures pertain to the Company's continuing operations. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Consolidation The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. 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 Company's investments in entities it does not control but over which it has the ability to exercise significant influence are accounted for under the equity method and are included in Other Assets. All intercompany transactions are eliminated. Foreign Currency Translation and Transactions The functional currency for significant subsidiaries operating outside the United States is typically their respective local currency. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange rate at the balance sheet date. Sales, costs and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive loss within the Consolidated Statements of Comprehensive Income and Equity. Foreign exchange transaction gains and losses due to the remeasurement of account balances in foreign currencies are included within the Consolidated Statement of Operations and were not material to the Company's results of operations for 2016 , 2015 and 2014 . Revenue Recognition The Company enters into sales arrangements that may provide for multiple deliverables to a customer. The Company identifies all goods and/or services that are to be delivered separately under a sales arrangement and allocates revenue to each deliverable based on relative fair values. Fair values are generally established based on the prices charged when sold separately by the Company. In general, revenues are separated between hardware, engineering services, maintenance services and installation services. The allocated revenue for each deliverable is then recognized using appropriate revenue recognition methods. Sales related to long-term contracts requiring development and delivery of products over several years are generally accounted for under the percentage-of-completion method of accounting in accordance with the Construction-Type and Production-Type Contracts subtopic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. The percentage-of-completion method is predominately used in the Government Systems segment and sales and earnings under qualifying contracts are recorded either as products are shipped under the units-of-delivery method (for production effort), or based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method (for development effort). Purchase options and change orders are accounted for either as an integral part of the original contract or separately depending upon the nature and value of the item. Sales and costs related to profitable purchase options are included in estimates only when the options are exercised whereas sales and costs related to unprofitable purchase options are included in estimates when exercise is determined to be probable. Sales related to change orders are included in estimates only if they can be reliably estimated and collectability is reasonably assured. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. Changes in estimates of profit or loss on contracts are included in earnings on a cumulative basis in the period the estimate is changed. Sales related to long-term separately priced product maintenance or warranty contracts are accounted for based on the terms of the underlying agreements. Certain contracts are fixed-price contracts with sales recognized ratably over the contractual life, while other contracts have a fixed hourly rate with sales recognized based on actual labor or flight hours incurred. The cost of providing these services is expensed as incurred. The Company recognizes sales for most other products or services when all of the following criteria are met: an agreement of sale exists, product delivery and acceptance has occurred or services have been rendered, pricing is fixed or determinable and collection is reasonably assured. Cash and Cash Equivalents Cash and cash equivalents include time deposits, certificates of deposit with original maturity dates of three months or less and money market funds. Allowance for Doubtful Accounts Allowances are established in order to report receivables at net realizable value on the Company's Consolidated Statement of Financial Position. The determination of these allowances requires Company management to make estimates and judgments as to the collectability of customer account balances. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience and other currently available evidence. Inventories Inventories are stated at the lower of cost or market using costs which approximate the first-in, first-out method, less related progress payments received. Inventoried costs include direct costs of manufacturing, certain engineering costs and allocable overhead costs. The Company regularly compares inventory quantities on hand on a part level basis to estimated forecasts of product demand and production requirements as well as historical usage. Based on these comparisons, management establishes an excess and obsolete inventory reserve as needed. Inventory valuation reserves were $95 million and $87 million at September 30, 2016 and 2015 , respectively. 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 under long-term supply arrangements with the Company’s customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain customer guarantees for reimbursement are expensed as incurred. Progress Payments Progress payments relate to both receivables and inventories and represent cash collected from government-related contracts whereby the governments have a legal right of offset related to the receivable or legal title to the work-in-process inventory. Property Property is stated at acquisition cost, net of accumulated depreciation. Depreciation of property is generally provided using straight-line methods over the following estimated useful lives: buildings and improvements, 15 - 40 years; machinery and equipment (including internally developed software and other costs associated with the expansion and construction of ARINC's network-related assets), 5 - 15 years; information systems software and hardware, 5 - 10 years; and furniture and fixtures, 12 - 15 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Significant renewals and betterments are capitalized and replaced units are written off. Maintenance and repairs, as well as renewals of minor amounts, are charged to expense in the period incurred. The fair value of liabilities associated with the retirement of property is recorded when there is a legal or contractual requirement to incur such costs and the costs can be reasonably estimated. Upon the initial recognition of a contractual or legal liability for an asset retirement obligation, the Company capitalizes the asset retirement cost by increasing the carrying amount of the property by the same amount as the liability. This asset retirement cost is then depreciated over the estimated useful life of the underlying property. The Company did not have any significant asset retirement obligations at September 30, 2016 and 2015 . Goodwill and Intangible Assets Goodwill and intangible assets generally result from business acquisitions. The purchase price of the acquisition is assigned to tangible and intangible assets and liabilities assumed based on fair value. The excess of the purchase price over the amounts assigned is recorded as goodwill. Assets acquired and liabilities assumed are allocated to the Company's reporting units based on the Company's integration plans and internal reporting structure. As of September 30, 2016 the Company had six reporting units. Purchased intangible assets with finite lives are amortized over their estimated useful lives, ranging from 4 - 23 years. Goodwill and intangible assets with indefinite lives are not amortized, but are reviewed at least annually for impairment. Customer Relationship Up-Front Sales Incentives The Company 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 after entry into service. 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. Accrued Customer Incentives Incentives earned by customers based on purchases of Company products or services are recognized as a liability when the related sale is recorded. Incentives consisting of cash payments or customer account credits are recognized as a reduction of sales, while incentives consisting of free products and account credits where the customer's use is restricted to future purchases are recognized as cost of sales. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when management plans to dispose of assets or when events or circumstances indicate that the carrying amount of a long-lived asset is more-likely-than-not unrecoverable. Assets held for disposal are reported at the lower of the carrying amount or fair value less cost to sell. Management determines fair value using a discounted future cash flow analysis or other accepted valuation techniques. Long-lived assets held for use are reviewed for impairment by comparing the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset over its remaining useful life. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill and indefinite-lived intangible assets are tested annually for impairment with more frequent tests performed if indications of impairment exist. The Company's annual impairment testing date is in the second quarter of each fiscal year. Impairment for intangible assets with indefinite lives exists if the carrying value of the intangible asset exceeds its fair value. Goodwill is potentially impaired if the carrying value of a reporting unit exceeds its estimated fair value. Advance Payments from Customers Advance payments from customers represent cash collected from customers in advance of revenue recognition. Capital Leases Assets under capital lease and capital lease obligation are initially measured at the lower of estimated fair value or present value of the minimum lease payments. The present value of minimum lease payments is calculated for payments during the noncancelable lease term using the lower of the Company's estimated incremental borrowing rate or the rate implicit in the lease, if known. Capital lease obligation is recorded within Other Liabilities and the related assets are recorded in Property or Other Assets based upon their intended use. Payments are allocated between a reduction of the lease obligation and interest expense using the interest method. Assets under capital lease are depreciated over the noncancelable lease term, ranging from 5 - 15 years, consistent with the Company's depreciation policy. Research and Development The Company performs R&D activities relating to the development of new products and the improvement of existing products. Company-funded R&D programs are expensed as incurred and included in cost of sales. Company-funded R&D expenditures were $224 million , $272 million and $268 million for fiscal years ended September 30, 2016 , 2015 and 2014 , respectively. Environmental Liabilities for environmental matters are recorded in the period in which it is probable that an obligation has been incurred and the cost can be reasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the Company records a liability for its estimated allocable share of costs related to its involvement with the site as well as an estimated allocable share of costs related to the involvement of insolvent or unidentified parties. At environmental sites in which the Company is the only responsible party, the Company records a liability for the total estimated costs of remediation. Income Taxes Current tax liabilities and assets are based upon an estimate of taxes payable or refundable in the current year for each jurisdiction in which the Company is subject to tax. As part of the determination of its tax liability, management exercises considerable judgment in evaluating tax positions taken by the Company in determining the income tax provision and establishes reserves for uncertain tax positions in accordance with the Income Taxes topic of the FASB Accounting Standards Codification. Deferred tax assets and liabilities are recorded for the estimated future tax effects attributable to temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and their respective carrying amounts for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Derivative Financial Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and interest rate swap contracts for the purpose of minimizing exposure to changes in foreign currency exchange rates on business transactions and interest rates, respectively. The Company's policy is to execute such instruments with banks the Company believes to be creditworthy and not enter into derivative financial instruments for speculative purposes or to manage exposure for net investments in non-U.S. subsidiaries. These derivative financial instruments do not subject the Company to undue risk as gains and losses on these instruments generally offset gains and losses on the underlying assets, liabilities or anticipated transactions that are being hedged. All derivative financial instruments are recorded at fair value in the Consolidated Statement of Financial Position. For a derivative that has not been designated as an accounting hedge, the change in fair value is recognized immediately through earnings. For a derivative that has been designated as an accounting hedge of an existing asset or liability (a fair value hedge), the change in the fair value of both the derivative and underlying asset or liability is recognized immediately through earnings. For a derivative designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the Consolidated Statement of Financial Position in Accumulated other comprehensive loss to the extent the derivative is effective in mitigating the exposure related to the anticipated transaction. The change in the fair value related to the ineffective portion of the hedge, if any, is immediately recognized in earnings. The amount recorded within Accumulated other comprehensive loss is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings. The Company does not exclude any amounts from the measure of effectiveness for both fair value and cash flow hedges. Use of Estimates The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, long-term contracts, allowances for doubtful accounts, inventory obsolescence, product warranty cost liabilities, customer incentives, retirement benefits, income taxes, environmental matters, pre-production engineering costs, recoverability of long-lived assets and contingencies. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the Consolidated Statement of Operations in the period they are determined. Concentration of Risks The Company's products and services are concentrated within the aerospace and defense industries with customers consisting primarily of military and commercial aircraft manufacturers, commercial airlines, the U.S. Government and non-U.S. governments. As a result of this industry focus, the Company's current and future financial performance is largely dependent upon the overall economic conditions within these industries. In particular, the commercial aerospace market has been historically cyclical and subject to downturns during periods of weak economic conditions, which could be prompted or exacerbated by political or other U.S. or international events. The defense market may be affected by changes in budget appropriations, procurement policies, political developments both in the U.S. and abroad and other factors. The Company depends to a large degree on U.S. Government spending, as a significant portion of the Company's sales are derived from U.S. Government contracts, both directly and indirectly through subcontracts. The U.S. Government has implemented various initiatives to address its fiscal challenges. In August 2011, Congress enacted the Budget Control Act of 2011 which imposed spending caps and certain reductions in security spending over a ten-year period through 2021. These spending caps and reductions, referred to as sequestration, went into effect in March 2013. In December 2013, Congress enacted the Murray-Ryan Bipartisan Budget Act of 2013, raising government discretionary spending limits temporarily for 2014 and 2015. More recently, the Bipartisan Budget Act of 2015 again raised the government discretionary spending limits temporarily for 2016 and 2017, after which the BCA will again be in force. The continued uncertainty surrounding the defense budget could have a material adverse effect on the Company and the defense industry in general. In years when the U.S. Government does not complete its annual budget and appropriations process prior to the beginning of its fiscal year (October 1), government operations are typically funded through a continuing resolution that authorizes agencies of the U.S. Government to continue to operate in the new year, but generally does not authorize new spending initiatives. During periods covered by continuing resolutions (or until the regular appropriation bills are passed), the Company may experience delays by the government in procurement of new or existing products and services which can adversely impact our results of operations and cause variability in the timing of revenue between periods. The government began operations in fiscal year 2017 under a continuing resolution that is set to expire in December 2016. The Company remains confident that its product offerings are well positioned to meet the needs of government customers in this uncertain environment and the Company continues to enhance international strategies and make proactive adjustments to the Company's cost structure as necessary. In addition to the overall business risks associated with the Company's concentration within the aerospace and defense industries, the Company is also exposed to a concentration of collection risk on credit extended to certain business jet aircraft manufacturers. At September 30, 2016 , receivables due from these business jet aircraft manufacturers were approximately $162 million . The Company performs ongoing credit evaluations on the financial condition of all of its customers and maintains allowances for uncollectible accounts receivable based on expected collectability. Although management believes its allowances are adequate, the Company is not able to predict with certainty the changes in the financial stability of its customers. Any material change in the financial status of any one customer or group of customers could have a material adverse effect on the Company's results of operations, financial position or cash flows. As of September 30, 2016 , approximately 12 percent of the Company's employees in the U.S. were represented by U.S. collective bargaining agreements, most of which were renewed without disruption in May 2013 and are set to expire in 2018. Recently Adopted Accounting Standards In March 2016, the FASB issued a new standard simplifying certain aspects of accounting for share-based payments (see Note 12). The new standard requires that excess tax benefits and shortfalls be recorded as income tax benefit or expense in the income statement, rather than in equity, and requires excess tax benefits from stock-based compensation to be classified within operating cash flow. Additionally, the new standard allows a policy election to either estimate the number of awards expected to be forfeited at the time of award issuance or record stock-based compensation for forfeitures as they occur. In order to simplify accounting for share-based payments, the Company adopted the new guidance during the second quarter of 2016, which resulted in a $4 million benefit to tax expense and a favorable impact to operating cash flows of $4 million in 2016. With respect to forfeitures, the Company will continue to estimate the number of awards expected to be forfeited upon award issuance. In November 2015, the FASB issued new guidance requiring all deferred tax assets and liabilities to be classified as noncurrent on the balance sheet instead of separating those balances into current and noncurrent amounts. In order to simplify the accounting for income taxes, the Company adopted the new guidance in the first quarter of 2016 on a retrospective basis, which resulted in the reclassification of $9 million of current deferred tax assets and $84 million of current deferred tax liabilities to noncurrent as of September 30, 2015. In April 2015, the FASB issued a new standard that provides a practical expedient permitting entities with a fiscal year end that does not coincide with a month end to measure defined benefit plan assets and obligations using the month end date closest to the fiscal year end. The new standard was early adopted by the Company for each of its defined benefit plans effective for the 2015 fiscal year end with no significant impact to the Company's financial statements. Recently Issued Accounting Standards In June 2016, the FASB issued a new standard on the measurement of credit losses, which will impact the Company's measurement of trade receivables. The new standard replaces the current incurred loss model with a forward-looking expected loss model that is likely to result in earlier recognition of losses. The new standard also increases disclosure requirements and is effective for the Company in 2021, with early adoption permitted, but not earlier than 2020. The Company has completed an evaluation of the new standard and does not expect that adoption will have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued a comprehensive new lease accounting standard, which provides revised guidance on accounting for lease arrangements by both lessors and lessees. The central requirement of the new standard is that lessees must recognize lease-related assets and liabilities for all leases with a term longer than 12 months. The Company is evaluating the effect the standard will have on the Company's consolidated financial statements and related disclosures, but expects a material change to the balance sheet due to the recognition of right-of-use assets and lease liabilities related to the Company's portfolio of real estate leases. The new guidance is not expected to materially impact accounting for those leases the Company enters with customers. The new standard is effective for the Company in 2020, with early adoption permitted. In May 2014, the FASB issued a comprehensive new revenue recognition standard that effectively replaces all current guidance on the topic and expands disclosures regarding revenue. Several amendments to the new standard have been issued or proposed, which are intended to resolve potential implementation challenges and drive consistent interpretation and application of the new standard. The guidance permits use of either a retrospective or cumulative effect transition method. Based upon the FASB's decision to approve a one year delay in implementation, the new standard is now effective for the Company in 2019, with early adoption permitted, but not earlier than 2018. The Company continues to evaluate the transition methods allowed under the new standard and the effect the standard will have on the Company's consolidated financial statements and related disclosures. Anticipated changes under the new standard include increased use of the percentage-of-completion method of accounting for government contracts, elimination of the units-of-delivery method, and the elimination of Customer relationship intangible assets related to free products provided to customers as up-front sales incentives. The Company continues to monitor the work of standard setters and the interpretive efforts of other non-authoritative groups with respect to other areas of potential material change. Other new accounting standards issued but not effective until after September 30, 2016 are not expected to have a material impact on the Company's financial statements. |
Acquisitions, Goodwill and Inta
Acquisitions, Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisitions, Goodwill and Intangible Assets [Text Block] | Acquisitions, Goodwill and Intangible Assets Acquisitions On February 25, 2016, the Company acquired the Matrix series projector product line from Christie Digital Systems, a global visual, audio and collaboration solutions company. The product line acquisition was accounted for as a business combination, and the purchase price, net of cash acquired, was $17 million . In the third quarter of 2016, the purchase price allocation was finalized, with $6 million allocated to goodwill and $11 million to intangible assets. The intangible assets have a weighted average life of approximately 10 years. All goodwill resulting from the acquisition is tax deductible. The excess purchase price over net assets acquired, including intangible assets, reflects the Company's view that this acquisition will enhance the Company's industry-leading offerings for military and aviation simulation and training solutions. On August 6, 2015, the Company acquired 100 percent of the outstanding shares of Newport News, Virginia-based International Communications Group, Inc. (ICG), a leading provider of satellite-based global voice and data communication products and services for the aviation industry. The purchase price, net of cash acquired, was $50 million . Additional post-closing consideration of up to $14 million may be paid, contingent upon the achievement of certain milestones. The Company recorded a $12 million liability on the acquisition date for the fair value of the contingent consideration, which is reflected as a non-cash transaction on the Company's Consolidated Statement of Cash Flows in 2015. In the fourth quarter of 2016, the purchase price allocation was finalized, with $51 million allocated to goodwill and $23 million to intangible assets. The intangible assets have a weighted average life of approximately 8 years. All goodwill resulting from the acquisition is tax deductible. The excess purchase price over net assets acquired, including intangible assets, reflects the Company's view that this acquisition will broaden the Company's flight deck and connectivity portfolio. On March 20, 2015, the Company acquired 100 percent of the outstanding shares of Pacific Avionics Pty. Limited (Pacific Avionics), a Singapore-based company specializing in technologies used for wireless information distribution, including in-flight entertainment and connectivity. The purchase price, net of cash acquired, was $24 million . In the fourth quarter of 2015, the purchase price allocation was finalized with $10 million allocated to intangible assets and $15 million to goodwill, none of which is deductible for tax purposes. The intangible assets have a weighted average life of approximately 7 years. The excess purchase price over net assets acquired, including intangible assets, reflects the Company's view that this acquisition will further enhance the Company's cabin products and information management services portfolios. The ICG and Pacific Avionics acquisitions are included within the Commercial Systems segment and the Matrix product line acquisition is included in the Government Systems segment. The results of operations for all three acquisitions have been included in the Company's operating results for the periods subsequent to their respective acquisition dates. Pro-forma results of operations have not been presented for these acquisitions as the effect of the acquisitions are not material to the Company's consolidated results of operations. On December 23, 2013, the Company acquired 100 percent of the outstanding common stock and voting interests of Radio Holdings, Inc., the holding company of ARINC, a leading global provider of air-to-ground data and voice communication services. ARINC develops and operates communications and information processing systems and provides systems engineering and integration solutions to five key industries: commercial aviation, business aviation, airports, rail and nuclear security. Combining ARINC's communication networks and services with the Company's onboard aircraft information systems strengthens the Company's ability to deliver 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 9, the Company used proceeds from the issuance of long-term debt and commercial paper to finance the cash purchase price. The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date: (in millions) December 23, 2013 Restricted Cash (1) $ 61 Receivables and Other current assets 216 Building held for sale (2) 81 Business held for sale (3) 15 Property 49 Intangible Assets 431 Other Assets 11 Total Identifiable Assets Acquired 864 Payable to ARINC option holders (1) (61 ) Current Liabilities (171 ) Liability related to building held for sale (2) (81 ) Liabilities associated with business held for sale (3) (12 ) Long-term deferred income taxes (182 ) Retirement Benefits and Other Long-term Liabilities (39 ) Total Liabilities Assumed (546 ) Net Identifiable Assets Acquired, excluding Goodwill 318 Goodwill 1,087 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 was 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 a building which was classified as held for sale at the acquisition date. (3) Assets and liabilities associated with the Business held for sale relate to ASES, which the Company divested, as detailed in Note 4. The purchase price allocation resulted in the recognition of $1.087 billion of goodwill and $431 million of intangible assets with a weighted average useful life of approximately 15 years. None of the goodwill is deductible for tax purposes. All of the goodwill is included in the Company’s 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 21 for additional information relating to the Information Management Services segment. Transaction-related Expenses The Company incurred transaction costs related to the acquisition of $16 million during the year ended September 30, 2014, of which $13 million is recorded within Selling, general and administrative expenses on the Company's 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 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 had 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. (in millions, except per share amounts) 2016 (as Reported) 2015 (as Reported) 2014 (Pro-forma) Sales $ 5,259 $ 5,244 $ 5,085 Net income attributable to common shareowners from continuing operations $ 727 $ 694 $ 624 Basic earnings per share from continuing operations $ 5.57 $ 5.25 $ 4.62 Diluted earnings per share from continuing operations $ 5.50 $ 5.19 $ 4.56 The unaudited supplemental pro-forma data above excludes the results of ASES, which the Company divested, 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 year ended September 30, 2014 in the table below include only the required adjustments through December 23, 2013. (in millions) 2016 2015 2014 Increases / (decreases) to pro-forma net income: Net reduction to depreciation resulting from fixed asset purchase accounting adjustments (1) $ — $ — $ 2 Advisory, legal and accounting service fees (2) — — 21 Amortization of acquired ARINC intangible assets, net (3) — — (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 Goodwill Changes in the carrying amount of goodwill are summarized as follows: (in millions) Commercial Systems Government Systems Information Management Services Total Balance at September 30, 2014 $ 262 $ 508 $ 1,093 $ 1,863 ICG acquisition 38 — — 38 Pacific Avionics acquisition 15 — — 15 ARINC acquisition adjustment — — (3 ) (3 ) Foreign currency translation adjustments and other (1 ) (8 ) — (9 ) Balance at September 30, 2015 314 500 1,090 1,904 ICG acquisition adjustment 13 — — 13 Matrix product line acquisition — 6 — 6 Foreign currency translation adjustments (1 ) (3 ) — (4 ) Balance at September 30, 2016 $ 326 $ 503 $ 1,090 $ 1,919 ICG goodwill increased by $13 million during 2016 primarily as a result of purchase accounting adjustments to establish liabilities for product development costs pursuant to certain contractual obligations. Beginning in the first quarter of fiscal 2014, the Company created the Information Management Services segment. This segment combines the retained portion of the 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 reclassified 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. The Company's 2016 , 2015 and 2014 impairment tests resulted in no impairment. Intangible Assets Intangible assets are summarized as follows: September 30, 2016 September 30, 2015 (in millions) Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology and patents $ 354 $ (216 ) $ 138 $ 346 $ (195 ) $ 151 Backlog 6 (3 ) 3 5 (2 ) 3 Customer relationships: Acquired 340 (106 ) 234 338 (87 ) 251 Up-front sales incentives 313 (80 ) 233 301 (62 ) 239 License agreements 14 (10 ) 4 13 (9 ) 4 Trademarks and tradenames 15 (14 ) 1 15 (14 ) 1 Intangible assets with indefinite lives: Trademarks and tradenames 47 — 47 47 — 47 In process research and development 7 — 7 7 — 7 Intangible assets $ 1,096 $ (429 ) $ 667 $ 1,072 $ (369 ) $ 703 Amortization expense for intangible assets for 2016 , 2015 and 2014 was $60 million , $53 million and $48 million , respectively. As of September 30, 2016 , the weighted average amortization period remaining for up-front sales incentives was approximately 10 years. Anticipated annual amortization expense for intangible assets is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Anticipated amortization expense for up-front sales incentives $ 16 $ 19 $ 24 $ 26 $ 26 $ 122 Anticipated amortization expense for all other intangible assets 40 38 37 33 32 200 Total $ 56 $ 57 $ 61 $ 59 $ 58 $ 322 |
Discontinued Operations and Div
Discontinued Operations and Divestitures | 12 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Divestitures | Discontinued Operations and Divestitures On March 10, 2015, the Company sold its ASES business, which provides military aircraft integration and modifications, maintenance and logistics and support, to align with the Company's long-term primary business strategies. The sale price was $3 million , and additional post-closing consideration of up to $2 million may be received. The Company recognized a pre-tax loss of $5 million ( $3 million after-tax) related to the ASES divestiture. The operating results of ASES have been included in discontinued operations in the Company's Consolidated Statement of Operations for all periods presented. During 2016 , the Company recorded $2 million of income from discontinued operations ( $1 million after-tax), primarily due to the favorable settlement of a contractual matter with a customer of the ASES business. On July 25, 2014, the Company sold its satellite communication systems business formerly known as Datapath. The sales price, which was subject to post-closing adjustments for working capital and other adjustments, was $10 million . The Company recognized a pre-tax loss of $12 million ( $2 million after-tax) related to the 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. The operating results of Datapath, including the loss realized on the disposition, have been included in discontinued operations in the Company's Consolidated Statement of Operations for all periods presented. The Datapath business was formerly included in the Government Systems segment. The divestiture of this business is part of the Company's 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. Results of discontinued operations are as follows: Year Ended September 30 (in millions) 2016 2015 2014 Sales $ — $ 18 $ 94 Income (loss) from discontinued operations before income taxes 2 (13 ) (29 ) Income tax benefit (expense) from discontinued operations (1 ) 5 15 During the first quarter of 2014, 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, net. The divestiture of this business is part of the Company's 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. In April 2014, the FASB issued guidance that modifies the definition of a discontinued operation and provides new disclosure requirements for divestitures. This guidance is effective for the Company in 2016, and any divestiture in 2016 or after will be subject to the new guidance. The ASES, Datapath and KOSI divestitures occurred in 2015, 2014 and 2014, respectively, and are reported based upon the previous guidance for discontinued operations. |
Receivables, Net
Receivables, Net | 12 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Receivables, Net | Receivables, Net Receivables, net are summarized as follows: (in millions) September 30, September 30, 2015 Billed $ 748 $ 752 Unbilled 439 403 Less progress payments (87 ) (110 ) Total 1,100 1,045 Less allowance for doubtful accounts (6 ) (7 ) Receivables, net $ 1,094 $ 1,038 Receivables expected to be collected beyond the next twelve months are classified as long-term and are included in Other Assets. Total receivables due from the U.S. Government including the Department of Defense and other government agencies, both directly and indirectly through subcontracts, were $306 million and $286 million at September 30, 2016 and 2015 , respectively. U.S. Government unbilled receivables, net of progress payments, were $99 million and $91 million at September 30, 2016 and 2015 , respectively. Receivables, net due from equity affiliates were $68 million at September 30, 2016 . 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. The Company sells certain accounts receivable on a non-recourse basis to unrelated financial institutions under factoring agreements arranged by certain customers. Under the terms of the agreements, the Company retains no rights or interest and has no obligations with respect to the sold receivables. The Company accounts for these transactions as sales of receivables and records cash proceeds when received as cash provided by operating activities in the Consolidated Statement of Cash Flows. The beneficial impact on cash provided by operating activities from participating in these programs was $60 million and $12 million in 2016 and 2015, respectively. The cost of participating in these programs was immaterial to our results. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories, net are summarized as follows: (in millions) September 30, September 30, 2015 Finished goods $ 210 $ 216 Work in process 236 250 Raw materials, parts and supplies 354 353 Less progress payments (1 ) (7 ) Total 799 812 Pre-production engineering costs 1,140 1,012 Inventories, net $ 1,939 $ 1,824 As of September 30, 2016 , pre-production engineering costs related to programs with Bombardier, Boeing and Airbus were $414 million , $253 million , and $249 million , respectively. Amortization expense for pre-production engineering costs for 2016 , 2015 and 2014 was $49 million , $47 million and $36 million , respectively. As of September 30, 2016 , the weighted average amortization period remaining for pre-production engineering costs included in Inventories, net was approximately 10 years. Anticipated annual amortization expense for pre-production engineering costs is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Anticipated amortization expense for pre-production engineering costs (1) $ 60 $ 102 $ 137 $ 154 $ 139 $ 521 (1) On October 29, 2015, Bombardier announced the cancellation of the Learjet 85 program. Pre-production engineering costs associated with the Learjet 85 program have been excluded from anticipated amortization expense, as these costs are expected to be recovered through consideration received from Bombardier pursuant to contractual guarantees and not amortized against future hardware deliveries. In accordance with industry practice, inventories include amounts which are not expected to be realized within one year. These amounts primarily relate to pre-production engineering costs and life-time-buy inventory not expected to be realized within one year of $1.130 billion and $1.006 billion at September 30, 2016 and 2015 , respectively. Life-time-buy inventory is inventory that is typically no longer produced by the Company's vendors but for which multiple years of supply are purchased in order to meet production and service requirements over the life span of a product. |
Property
Property | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment, Net [Abstract] | |
Property | Property Property is summarized as follows: (in millions) September 30, September 30, 2015 Land $ 15 $ 15 Buildings and improvements 468 429 Machinery and equipment 1,218 1,164 Information systems software and hardware 435 406 Furniture and fixtures 74 66 Capital leases 58 58 Construction in progress 183 180 Total 2,451 2,318 Less accumulated depreciation (1,416 ) (1,354 ) Property $ 1,035 $ 964 Property additions acquired by incurring accounts payable, which are reflected as a non-cash transaction in the Company's Consolidated Statement of Cash Flows, were $20 million , $19 million and $37 million at September 30, 2016 , 2015 and 2014 , respectively. Property additions acquired by incurring capital leases, which are reflected as non-cash transactions in the Company's Consolidated Statement of Cash Flows were $0 million , $0 million and $56 million at September 30, 2016 , 2015 and 2014 , 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 $10 million and $6 million as of September 30, 2016 and 2015 , respectively. Amortization of assets under capital lease is recorded as depreciation expense. As of September 30, 2016 , remaining minimum lease payments for Property under capital leases total $76 million , including $22 million of interest. |
Other Assets
Other Assets | 12 Months Ended |
Sep. 30, 2016 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets are summarized as follows: (in millions) September 30, September 30, 2015 Long-term receivables $ 146 $ 109 Investments in equity affiliates 10 13 Exchange and rental assets (net of accumulated depreciation of $101 at September 30, 2016 and $97 at September 30, 2015) 68 66 Other 153 156 Other assets $ 377 $ 344 Long-term receivables Long-term receivables expected to be collected beyond the next twelve months are principally comprised of unbilled accounts receivable pursuant to sales recorded under the percentage-of-completion method of accounting that have not yet been billed to customers in accordance with applicable contract terms. Investments in Equity Affiliates Investments in equity affiliates primarily consist of eight joint ventures: • ACCEL (Tianjin) Flight Simulation Co., Ltd (ACCEL): ACCEL is a joint venture with Haite Group, for the joint development and production of commercial flight simulators in China • ADARI Aviation Technology Limited (ADARI): ADARI is a joint venture with Aviation Data Communication Corporation Co., LTD, that operates remote ground stations around China and develops certain content delivery management software • AVIC Leihua Rockwell Collins Avionics Company (ALRAC): ALRAC is a joint venture with China Leihua Electronic Technology Research Institute (a subsidiary of the Aviation Industry Corporation of China, or AVIC), for the joint production of integrated surveillance system products for the C919 aircraft in China • Data Link Solutions LLC (DLS): DLS is a joint venture with BAE Systems, plc for the joint pursuit of the worldwide military data link market • ESA Vision Systems LLC (ESA): ESA is a joint venture with Elbit Systems, Ltd. for the joint pursuit of helmet-mounted cueing systems for the worldwide military fixed wing aircraft market • Integrated Guidance Systems LLC (IGS): IGS is a joint venture with Honeywell International Inc. for the joint pursuit of integrated precision guidance solutions for worldwide guided weapons systems • Quest Flight Training Limited (Quest): Quest is a joint venture with Quadrant Group plc that provides aircrew training services primarily for the United Kingdom Ministry of Defence • Rockwell Collins CETC Avionics Co., Ltd (RCCAC): RCCAC is a joint venture with CETC Avionics Co., Ltd (CETCA) for the development and delivery of products related to the C919 program Each joint venture is 50 percent owned by the Company and 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 Consolidated Statement of Operations. For segment performance reporting purposes, Rockwell Collins’ share of earnings or losses of ESA, DLS, IGS and Quest are included in the operating results of the Government Systems segment, ACCEL, ALRAC and RCCAC are included in the operating results of the Commercial Systems segment and ADARI is included in the operating results of the Information Management Services 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 $ 229 million , $ 196 million and $177 million for the years ended September 30, 2016 , 2015 and 2014 , respectively. The deferred portion of profit generated from sales to equity affiliates was $ 2 million at September 30, 2016 and $ 1 million at September 30, 2015 . 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 $9 million , $10 million and $10 million for the years ended September 30, 2016 , 2015 and 2014 , respectively. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-term Debt (in millions, except weighted average amounts) September 30, September 30, Short-term commercial paper borrowings outstanding (1) $ 440 $ 448 Current portion of long-term debt 300 — Short-term debt $ 740 $ 448 Weighted average interest rate of commercial paper borrowings 0.79 % 0.52 % Weighted average maturity period of commercial paper borrowings (days) 15 25 (1) The maximum amount of short-term commercial paper borrowings outstanding during the year ended September 30, 2016 was $929 million . 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 program is supported by the Company's $ 1 billion five-year and $200 million 364-day revolving credit facilities. Revolving Credit Facilities The Company has a five-year $1 billion credit facility that expires in December 2018 and a 364-day $200 million credit facility that was executed in February 2016 and expires in February 2017. At September 30, 2016 and 2015 , there were no outstanding borrowings under these revolving credit facilities. 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 (excluding the equity impact on accumulated other comprehensive loss related to defined benefit retirement plans). The Company was in compliance with this financial covenant at September 30, 2016 . 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. Short-term credit facilities available to non-U.S. subsidiaries amounted to $38 million as of September 30, 2016 , of which $3 million was utilized to support commitments in the form of commercial letters of credit. At September 30, 2016 and September 30, 2015 , there were no borrowings outstanding under these credit facilities. At September 30, 2016 and 2015 , there were no significant commitment fees or compensating balance requirements under any of the Company’s credit facilities. Long-term Debt The principal amount of long-term debt, net of discount, is summarized as follows: (in millions, except interest rate figures) Interest Rate September 30, September 30, 2015 Fixed-rate notes due: December 2043 4.80% $ 398 $ 398 December 2023 3.70% 399 399 November 2021 3.10% 250 250 July 2019 5.25% 300 299 Variable-rate note due: December 2016 3 month LIBOR + 0.35% (1) 300 300 Fair value swap adjustment (Notes 14 and 15) 35 34 Total $ 1,682 $ 1,680 Less current portion of long-term debt 300 — Long-term Debt, Net $ 1,382 $ 1,680 (1) The three-month LIBOR rate at September 30, 2016 was approximately 0.85 percent. The notes listed above are included in the Consolidated Statement of Financial Position, net of any unamortized discount, within the caption Long-term Debt, Net. Debt issuance costs are capitalized within Other Assets on the Consolidated Statement of Financial Position. Debt issuance costs and any discount are amortized over the life of the debt and recorded in Interest expense on the Consolidated Statement of Operations. Interest paid on debt for the years ended September 30, 2016 , 2015 and 2014 was $56 million , $54 million and $47 million , respectively. |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Sep. 30, 2016 | |
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 2015, the Company early adopted a new accounting standard (see Note 2) that provides a practical expedient permitting entities with a fiscal year end that does not coincide with a month end to measure defined benefit plan assets and obligations using the month end date closest to the fiscal year end. The Company used September 30 as the date closest to its fiscal year end to value plan assets of all its defined benefit plans. There was no material impact of adoption of this accounting standard on the fair value of plan assets in 2015. In 2016, there is no impact due to the fiscal year ending on September 30. Pension Benefits The Company historically provided pension benefits to most of the Company's U.S. employees in the form of non-contributory, defined benefit plans that are considered qualified plans under applicable laws. The benefits provided under these plans for salaried employees are generally based on years of service and average compensation. The benefits provided under these plans for hourly employees are generally based on specified benefit amounts and years of service. In addition, the Company sponsors an unfunded non-qualified defined benefit plan for certain employees. In June 2003, the Company amended its U.S. qualified and non-qualified defined benefit pension plans to discontinue benefit accruals for salary increases and services rendered after September 30, 2006. These changes impacted all of the Company's U.S. pension plans for all salaried and hourly employees who were not covered by collective bargaining agreements. Concurrently, the Company supplemented its existing defined contribution savings plan effective October 1, 2006 to include an additional Company contribution. The Company also maintains five defined benefit pension plans in countries outside of the U.S., two of which are unfunded. Other Retirement Benefits Other retirement benefits consist of retiree health care and life insurance benefits that are provided to substantially all of the Company's U.S. employees hired before October 1, 2006 and their beneficiaries. Employees generally become eligible to receive these benefits if they retire after age 55 with at least 10 years of service. Most plans are contributory with retiree contributions generally based upon years of service and adjusted annually by the Company. Retiree medical plans pay a stated percentage of expenses reduced by deductibles and other coverage. The amount the Company will contribute toward retiree medical coverage for most participants is fixed. Additional premium contributions will be required from participants for all costs in excess of the Company's fixed contribution amount. Retiree life insurance plans provide coverage at a flat dollar amount or as a multiple of salary. With the exception of certain bargaining unit plans, Other Retirement Benefits are funded as expenses are incurred. ARINC Pension Plan With the acquisition of ARINC in 2014, the Company acquired ARINC’s pension plan, which was comprised of two 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 a result, 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 plans continue to earn vesting rights and accrue interest on their account balance at rates established by the plans. Effective January 1, 2016, ARINC’s pension plan merged with the Company’s legacy pension plan, and the two ARINC sub-plans became sub-plans of the Company’s pension plan. ARINC Other Retirement Benefits ARINC also provides postretirement health coverage for many of its 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. Components of Expense (Income) The components of expense (income) for Pension Benefits and Other Retirement Benefits are summarized below: Pension Benefits Other Retirement Benefits (in millions) 2016 2015 2014 2016 2015 2014 Service cost $ 11 $ 12 $ 10 $ 3 $ 3 $ 3 Interest cost 126 155 168 6 7 9 Expected return on plan assets (238 ) (242 ) (228 ) (2 ) (1 ) (1 ) Amortization: Prior service credit (1 ) (3 ) (12 ) (1 ) (5 ) (9 ) Net actuarial loss 78 72 72 8 7 8 Net benefit expense (income) $ (24 ) $ (6 ) $ 10 $ 14 $ 11 $ 10 In 2015 and prior, the Company used a single-weighted average discount rate to calculate pension interest and service cost. Beginning in 2016, a "spot rate approach" is being used to calculate pension interest and service cost. The spot rate approach applies separate discount rates for each projected benefit payment in the calculation of pension interest and service cost. This calculation change is considered a change in accounting estimate and was applied prospectively beginning in 2016. The use of the spot rate approach had a favorable impact to pension income and pre-tax earnings of $35 million in 2016, relative to the estimated pension income amount had the Company not changed its approach. Funded Status and Net Liability The Company recognizes the unfunded status of defined benefit retirement plans on the Consolidated Statement of Financial Position as Retirement Benefits. The current portion of the liability is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next twelve months exceeds the fair value of the plan assets and is reflected in Compensation and benefits in the Consolidated Statement of Financial Position. The following table reconciles the projected benefit obligations (PBO), plan assets, funded status and net liability for the Company's Pension Benefits and Other Retirement Benefits: Pension Benefits Other Retirement Benefits (in millions) 2016 2015 2016 2015 PBO at beginning of period $ 4,167 $ 4,086 $ 221 $ 213 Service cost 11 12 3 3 Interest cost 126 155 6 7 Discount rate and other assumption changes 436 315 17 6 Actuarial losses (gains) 29 (52 ) (1 ) 7 Plan participant contributions — — 5 3 Benefits paid (229 ) (330 ) (18 ) (18 ) Plan amendments — — (2 ) — Other (13 ) (19 ) — — PBO at end of period 4,527 4,167 231 221 Plan assets at beginning of period 2,902 3,185 19 18 Actual return on plan assets 346 (16 ) 1 — Company contributions 69 69 12 16 Plan participant contributions — — 5 3 Benefits paid (229 ) (330 ) (18 ) (18 ) Other (14 ) (6 ) — — Plan assets at end of period 3,074 2,902 19 19 Funded status of plans $ (1,453 ) $ (1,265 ) $ (212 ) $ (202 ) Funded status consists of: Retirement benefits liability $ (1,448 ) $ (1,264 ) $ (212 ) $ (202 ) Compensation and benefits liability (10 ) (11 ) — — Other assets 5 10 — — Net liability $ (1,453 ) $ (1,265 ) $ (212 ) $ (202 ) During 2015 , the Company's pension plan made $121 million of benefit payments for terminated vested lump sum payouts to certain participants. In October 2014, the Society of Actuaries published a new set of mortality tables (RP-2014) and a new mortality improvement scale (MP-2014), which updated life expectancy assumptions. The tables generally reflect longer life expectancy than was projected by past tables. For the Company's 2016 and 2015 year-end pension liability valuation, the Company used the RP-2014 tables with an adjustment for plan experience and the MP-2014 improvement scale adjusted to reflect convergence to an ultimate annual rate of mortality improvement of 0.75 percent by 2022. The Company's non-U.S. defined benefit pension plans represented 5 percent of the total PBO at September 30, 2016 and 2015 . The accumulated benefit obligation for all defined benefit pension plans was $4.509 billion and $4.153 billion at September 30, 2016 and 2015 , respectively. Other Comprehensive Loss The following table summarizes the amounts included in Accumulated other comprehensive loss before tax related to retirement benefits as of September 30, 2016 and 2015 and changes recognized in Other comprehensive loss before tax for the years ended September 30, 2016 and 2015 : Pension Benefits Other Retirement Benefits (in millions) Prior Service Cost (Credit) Net Actuarial Loss Prior Service Cost (Credit) Net Actuarial Loss Balance at September 30, 2014 $ 6 $ 2,035 $ (9 ) $ 99 Current year net actuarial loss — 515 — 14 Amortization of prior service cost 3 — 5 — Amortization of actuarial loss — (72 ) — (7 ) Balance at September 30, 2015 9 2,478 (4 ) 106 Current year prior service cost — — (2 ) — Current year net actuarial loss — 351 — 18 Amortization of prior service cost 1 — 1 — Amortization of actuarial loss — (78 ) — (8 ) Balance at September 30, 2016 $ 10 $ 2,751 $ (5 ) $ 116 The estimated amounts that will be amortized from Accumulated other comprehensive loss into expense (income) for Pension Benefits and Other Retirement Benefits during the year ending September 30, 2017 are as follows: (in millions) Pension Benefits Other Retirement Benefits Total Prior service cost $ — $ (1 ) $ (1 ) Net actuarial loss 92 8 100 Total $ 92 $ 7 $ 99 Actuarial Assumptions The following table presents the significant assumptions used in determining the benefit obligations: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2016 2015 2016 2015 2016 2015 Discount rate 3.22 % 3.96 % 1.72 % 2.94 % 3.02 % 3.73 % Compensation increase rate 4.00 % 4.00 % 3.03 % 3.04 % 4.00 % 4.00 % Discount rates used to determine the benefit obligations are determined by using a weighted average of market-observed yields for high quality, fixed-income securities that correspond to the payment of benefits. The Company's U.S. qualified and non-qualified plans were amended to discontinue benefit accruals for salary increases and services rendered after September 30, 2006 and after April 1, 2006 for ARINC. In the U.S., certain plans associated with collective bargaining agreements continue to accrue benefits, and only the ARINC sub-plans are impacted by increases in compensation. Significant assumptions used in determining the net benefit expense (income) are as follows: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2016 2015 2016 2015 2016 2015 Discount rate 3.96 % 3.96 % 2.94 % 3.15 % 3.73 % 3.70 % Expected long-term return on plan assets 8.23 % 8.23 % 6.73 % 6.70 % 8.25 % 8.25 % Compensation increase rate 4.00 % 4.00 % 3.04 % 3.48 % 4.00 % 4.00 % Health care cost gross trend rate (1) — — — — 7.00 % 7.48 % Ultimate trend rate (1) — — — — 5.00 % 4.98 % Year that trend reaches ultimate rate (1) — — — — 2019 2019 (1) Due to the effect of the fixed Company contribution, increasing or decreasing the health care cost trend rate by one percentage point would not have a significant impact on the Company's cost of providing Other Retirement Benefits. Expected long-term return on plan assets for each year presented is based on both historical long-term actual and expected future investment returns considering the current investment mix of plan assets. The Company uses a market-related value of plan assets reflecting changes in the fair value of plan assets over a five-year period. The Company amortizes actuarial gains and losses in excess of 10 percent of the greater of the market-related value of plan assets or the projected benefit obligation (the corridor) on a straight-line basis over the expected future lifetime of inactive participants, which was approximately 25 years at September 30, 2016 , as almost all of the plan's participants are considered inactive. Prior service costs resulting from plan amendments are amortized in equal annual amounts over the average remaining service period of affected active participants or over the remaining life expectancy of affected retired participants. Plan Assets Total plan assets for Pension Benefits and Other Retirement Benefits as of September 30, 2016 and 2015 were $3.093 billion and $2.921 billion , respectively. The Company has established investment objectives that seek to preserve and maximize the amount of plan assets available to pay plan benefits. These objectives are achieved through investment guidelines requiring diversification and allocation strategies designed to maximize the long-term returns on plan assets while maintaining a prudent level of investment risk. These investment strategies are implemented using actively managed and indexed assets. Target and actual asset allocations as of September 30, 2016 and 2015 are as follows: Target Mix 2016 2015 Equities 40% - 70% 53 % 54 % Fixed income 25% - 60% 45 % 44 % Alternative investments 0% - 15% 0 % 0 % Cash 0% - 5% 2 % 2 % Alternative investments may include real estate, hedge funds, venture capital and private equity. There were no plan assets invested in the securities of the Company as of September 30, 2016 and 2015 or at any time during the years then ended. Target and actual asset allocations are periodically rebalanced between asset classes in order to mitigate investment risk and maintain asset classes within target allocations. The following table presents the fair value of the Company's pension plans' assets as of September 30, 2016 and 2015 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2016 September 30, 2015 Asset category (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity securities: U.S. equity $ 560 $ 347 $ — $ 907 $ 533 $ 362 $ — $ 895 Non-U.S. equity 683 40 — 723 575 93 — 668 Fixed income securities: Corporate — 1,143 — 1,143 — 1,088 — 1,088 U.S. government 94 89 — 183 65 83 — 148 Mortgage and asset-backed — 2 — 2 — 2 — 2 Other — 42 3 45 — 40 3 43 Cash and cash equivalents — 93 — 93 — 55 — 55 Sub-total 1,337 1,756 3 3,096 1,173 1,723 3 2,899 Net receivables (payables) related to investment transactions (22 ) 3 Total $ 3,074 $ 2,902 The following table presents the fair value of the Company's other retirement benefits plan's assets as of September 30, 2016 and 2015 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2016 September 30, 2015 Asset category (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity securities: U.S. equity $ 8 $ — $ — $ 8 $ 7 $ — $ — $ 7 Non-U.S. equity 1 — — 1 — — — — Fixed income securities: Corporate — 2 — 2 — 2 — 2 U.S. government 2 1 — 3 2 1 — 3 Mortgage and asset-backed — — — — — 1 — 1 Cash and cash equivalents — 5 — 5 — 6 — 6 Total $ 11 $ 8 $ — $ 19 $ 9 $ 10 $ — $ 19 Valuation Techniques Level 1 assets for the pension plans and other retirement benefits plan are primarily comprised of equity and fixed income securities. Level 1 equity securities are actively traded on U.S. and non-U.S. exchanges and are valued using the market approach at quoted market prices on the measurement date. Level 1 fixed income securities are valued using quoted market prices. Level 2 equity securities contain equity funds that hold investments with values based on quoted market prices, but for which the funds are not valued on a quoted market basis. Level 2 fixed income securities are primarily valued using pricing models that use observable market data or bids provided by independent investment brokerage firms. Cash and cash equivalents includes cash which is used to pay benefits and cash invested in a short-term investment fund that holds securities with values based on quoted market prices, but for which the funds are not valued on a quoted market basis. As such, the cash and cash equivalents in our pension and other retirement plan assets are classified as Level 2 in the tables above. The Level 3 assets represent general insurance company contracts in the pension plans and are not significant. As described in Note 14, the fair value of a Level 3 asset is derived from unobservable inputs that are based on the Company's own assumptions. Contributions For the years ended September 30, 2016 and 2015 , the Company made contributions to its pension plans as follows: (in millions) 2016 2015 Contributions to U.S. qualified plan $ 55 $ 55 Contributions to U.S. non-qualified plan 9 9 Contributions to non-U.S. plans 5 5 Total $ 69 $ 69 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 2016, the Company voluntarily contributed $ 55 million to its U.S. qualified pension plans, subsequent to its 2016 fiscal year end. There is no minimum statutory funding requirement for 2017 and the Company does not currently expect to make any additional discretionary contributions during 2017 to these plans. Any additional future contributions necessary to satisfy minimum statutory funding requirements are dependent upon actual plan asset returns, interest rates and actuarial assumptions. Contributions to the non-U.S. plans and the U.S. non-qualified plan are expected to total $13 million in 2017 . The Company participates in a multi-employer arrangement that provides postretirement benefits other than pension benefits. This arrangement provides medical benefits to certain bargaining unit active employees and retirees and their dependents. Contributions to this multi-employer arrangement for postretirement benefits were $1 million in 2016 , $1 million in 2015 and $0 million in 2014 . Benefit Payments The following table reflects estimated benefit payments to be made to eligible participants for each of the next five years and the following five years in the aggregate: (in millions) Pension Benefits Other Retirement Benefits 2017 $ 241 $ 16 2018 235 16 2019 240 17 2020 244 17 2021 246 16 2022-2026 1,249 76 Estimated benefit payments for Other Retirement Benefits in the table above are shown net of plan participant contributions and therefore reflect the Company's portion only. Substantially all of the Pension Benefit payments relate to the Company's U.S. qualified funded plans which are paid from the pension trust. Defined Contribution Savings Plan The Company sponsors a defined contribution savings plan that is available to the majority of its employees. The plan allows employees to contribute a portion of their compensation on a pre-tax and/or after-tax basis in accordance with specified guidelines. The Company matches a percentage of employee contributions using common stock of the Company up to certain limits. Employees may transfer at any time all or a portion of their balance in Company common stock to any of the other investment options offered within the plans. The Company is authorized to issue 16.3 million shares under the defined contribution savings plans, of which 1.1 million shares are available for future contributions at September 30, 2016 . Additionally, for the majority of the Company's employees, the Company's defined contribution savings plan includes a cash contribution based on an employee's age and service. Prior to January 1, 2016, ARINC had a defined contribution savings plan that was available to most of its employees. The plan allowed employees to contribute a portion of their compensation on a pre-tax and/or after-tax basis in accordance with specified guidelines. The Company made certain matching cash contributions to the plan, which totaled $1 million for 2016. The ARINC defined contribution savings plan was merged into the Company defined contribution savings plan on January 1, 2016. The Company's expense related to the defined contribution savings plans for 2016 , 2015 and 2014 was as follows: 2016 2015 2014 (in millions) Shares Expense Shares Expense Shares Expense Contribution in shares 0.6 $ 49 0.4 $ 39 0.5 $ 40 Contribution in cash 46 47 50 Total $ 95 $ 86 $ 90 Employee Stock Purchase Plan The Company also offers an Employee Stock Purchase Plan (ESPP) which allows employees to have their base compensation withheld to purchase the Company's common stock each month at 95 percent of the fair market value on the last day of the month. As of September 30, 2016 , 2.5 million shares are available for future purchase. The ESPP is considered a non-compensatory plan and accordingly no compensation expense is recorded in connection with this benefit. During 2016 , 2015 and 2014 , 0.1 million , 0.1 million and 0.1 million shares, respectively, of Company common stock were issued to employees at a value of $11 million , $11 million and $10 million for the respective periods. |
Shareowners' Equity
Shareowners' Equity | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareowners' Equity | Shareowners' Equity Common Stock The Company is authorized to issue one billion shares of common stock, par value $0.01 per share, and 25 million shares of preferred stock, without par value. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss (AOCL), net of tax, by component are as follows: Foreign Exchange Translation Adjustment Pension and Other Postretirement Adjustments (1) Change in the Fair Value of Effective Cash Flow Hedges Total Balance at September 30, 2013 $ 12 $ (1,293 ) $ (6 ) $ (1,287 ) Other comprehensive income (loss) before reclassifications (27 ) (92 ) 3 (116 ) Amounts reclassified from accumulated other comprehensive income — 37 — 37 Net current period other comprehensive income (loss) (27 ) (55 ) 3 (79 ) Balance at September 30, 2014 (15 ) (1,348 ) (3 ) (1,366 ) Other comprehensive (loss) before reclassifications (41 ) (334 ) (7 ) (382 ) Amounts reclassified from accumulated other comprehensive income — 45 4 49 Net current period other comprehensive (loss) (41 ) (289 ) (3 ) (333 ) Balance at September 30, 2015 (56 ) (1,637 ) (6 ) (1,699 ) Other comprehensive (loss) before reclassifications (20 ) (234 ) (2 ) (256 ) Amounts reclassified from accumulated other comprehensive income — 53 4 57 Net current period other comprehensive income (loss) (20 ) (181 ) 2 (199 ) Balance at September 30, 2016 $ (76 ) $ (1,818 ) $ (4 ) $ (1,898 ) (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 and were $ 84 million ($ 53 million net of tax), $71 million ( $45 million net of tax) and $59 million ( $37 million net of tax) for 2016 , 2015 and 2014, respectively. The reclassifications are included in the computation of net benefit expense. See Note 10, Retirement Benefits, for additional details. |
Stock-Based Compensation and Ea
Stock-Based Compensation and Earnings Per Share | 12 Months Ended |
Sep. 30, 2016 | |
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 Program Description In February 2015, the Company's shareholders approved the Company's 2015 Long-Term Incentives Plan (2015 Plan), replacing the 2006 Long-Term Incentives Plan (2006 Plan). Under the 2015 Plan, up to 11 million shares of common stock may be issued by the Company as non-qualified options, performance units, performance shares, stock appreciation rights, restricted shares and restricted stock units. Each share issued pursuant to an award of restricted shares, restricted stock units, performance shares and performance units counts as 3.55 shares against the authorized limit. Shares available for future grant or payment under these plans were 9 million at September 30, 2016 . No shares are available for future grant under the 2006 Plan. Options to purchase common stock of the Company have been granted under various incentive plans to directors, officers and other key employees. All of the Company's stock-based incentive plans require options to be granted at prices equal to or above the fair market value of the common stock on the dates the options are granted. The plans provide that the option price for certain options granted under the plans may be paid by the employee in cash, shares of common stock or a combination thereof. Option awards provide for accelerated vesting if there is a termination of employment in connection with a change in control. Stock options generally expire 10 years from the date they are granted and generally vest ratably over three years. The Company utilizes performance shares, restricted stock and restricted stock units that generally cliff vest at the end of three years. The fair value of restricted stock and restricted stock units is estimated using the closing share price on the day of grant. The number of performance shares that will ultimately be issued is based on achievement of performance targets over a three-year period that may consider cumulative sales growth, return on sales and/or free cash flow as a percentage of net income, with an additional potential adjustment up or down depending on the Company's total return to shareowners compared to a group of peer companies. The fair value of performance shares is estimated using a Monte Carlo model that considers the likelihood of a payout adjustment for the total shareowner return in comparison to the peer group. Up to 240 percent of the performance shares the Company grants can be earned if maximum performance is achieved. The Company's stock-based compensation awards are designed to align management's interests with those of the Company's shareowners and to reward outstanding Company performance. The Company has an ongoing share repurchase plan and expects to satisfy stock option exercises and stock award issuances from treasury stock. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Total stock-based compensation expense and related income tax benefit included within the Consolidated Statement of Operations for 2016 , 2015 and 2014 is as follows: (in millions) 2016 2015 2014 Stock-based compensation expense included in: Product cost of sales $ 8 $ 7 $ 7 Selling, general and administrative expenses 19 17 17 Total $ 27 $ 24 $ 24 Income tax benefit $ 9 $ 8 $ 8 General Option Information The following summarizes the activity of the Company's stock options for 2016 : Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2015 3,699 $ 61.02 Granted 642 86.77 Exercised (387 ) 56.31 Forfeited or expired (40 ) 83.85 Outstanding at September 30, 2016 3,914 $ 65.48 5.5 $ 75 Vested or expected to vest (1) 3,905 $ 65.43 5.5 $ 75 Exercisable at September 30, 2016 2,759 $ 57.93 4.2 $ 73 (1) Represents outstanding options reduced by expected forfeitures 2016 2015 2014 Weighted-average fair value per share of options granted $ 17.75 $ 19.59 $ 18.60 Intrinsic value of options exercised (in millions) (2) $ 13 $ 48 $ 26 (2) Represents the amount by which the stock price exceeded the exercise price of the options on the date of the exercise The total fair value of options vested was $10 million , $10 million and $10 million during the years ended September 30, 2016 , 2015 and 2014 , respectively. Total unrecognized compensation expense for options that have not vested as of September 30, 2016 is $7 million and will be recognized over a weighted average period of 0.8 years. Stock Option Fair Value Information The Company's determination of the fair value of option awards on the date of grant using an option-pricing model is affected by the Company's stock price as well as assumptions regarding a number of subjective variables. These assumptions include: the Company's expected stock price volatility, the projected employee stock option exercise term, the expected dividend yield and the risk-free interest rate. Changes in these assumptions can materially affect the estimated value of the stock options. The fair value of each option granted by the Company was estimated using a binomial lattice pricing model and the following weighted average assumptions: 2016 Grants 2015 Grants 2014 Grants Risk-free interest rate 0.7% - 2.5% 0.5% - 2.6% 0.3% - 3.0% Expected dividend yield 1.4% - 1.6% 1.6 % 1.9 % Expected volatility 20.0 % 24.0 % 28.0 % Expected life 7 years 7 years 7 years The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding. The binomial lattice model assumes that employees' exercise behavior is a function of the option's remaining expected life and the extent to which the option is in-the-money. The binomial lattice model estimates the probability of exercise as a function of these two variables based on the entire history of exercises and forfeitures on all past option grants made by the Company. Performance Shares, Restricted Stock and Restricted Stock Units Information The following summarizes the Company's performance shares, restricted stock and restricted stock units for 2016 : Performance Shares Restricted Stock Restricted Stock Units (shares in thousands) Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Nonvested at September 30, 2015 438 $ 68.92 23 $ 30.24 340 $ 64.34 Granted 131 85.13 — — 72 85.85 Vested (168 ) 56.10 — — (54 ) 54.37 Forfeited (15 ) 79.47 — — (7 ) 78.68 Nonvested at September 30, 2016 386 $ 79.60 23 $ 30.24 351 $ 69.86 (in millions) Performance Shares Restricted Stock Restricted Stock Units Total unrecognized compensation costs at September 30, 2016 $ 12 $ — $ 5 Weighted-average life remaining at September 30, 2016, in years 0.9 0 0.9 Weighted-average fair value per share granted in 2015 $ 82.76 $ — $ 84.63 Weighted-average fair value per share granted in 2014 $ 71.63 $ — $ 72.42 The maximum number of shares of common stock that can be issued in respect of performance shares granted in 2016 based on the achievement of performance targets for 2016 through 2018 is approximately 304,000 . The maximum number of shares of common stock that can be issued in respect of performance shares granted in 2015 based on the achievement of performance targets for 2015 through 2017 is approximately 295,000 . For purposes of determining the maximum number of shares of common stock that can be issued with respect to the performance shares granted in 2015 and 2016 , the maximums have been updated to reflect reductions arising as a result of terminations and retirements. The number of shares of common stock that will be issued in respect of performance shares granted in 2014 based on the achievement of performance targets for 2014 through 2016 is approximately 134,000 . Earnings Per Share and Diluted Share Equivalents The computation of basic and diluted earnings per share is as follows: (in millions, except per share amounts) 2016 2015 2014 Numerator for basic and diluted earnings per share: Income from continuing operations $ 727 $ 694 $ 618 Income (loss) from discontinued operations, net of taxes 1 (8 ) (14 ) Net income $ 728 $ 686 $ 604 Denominator: Denominator for basic earnings per share – weighted average common shares 130.5 132.3 135.1 Effect of dilutive securities: Stock options 1.0 1.0 1.2 Performance shares, restricted stock and restricted stock units 0.6 0.4 0.4 Dilutive potential common shares 1.6 1.4 1.6 Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion 132.1 133.7 136.7 Earnings (loss) per share: Basic Continuing operations $ 5.57 $ 5.25 $ 4.57 Discontinued operations 0.01 (0.06 ) (0.10 ) Basic earnings per share $ 5.58 $ 5.19 $ 4.47 Diluted Continuing operations $ 5.50 $ 5.19 $ 4.52 Discontinued operations 0.01 (0.06 ) (0.10 ) Diluted earnings per share $ 5.51 $ 5.13 $ 4.42 The Company adopted the new standard on accounting for share-based payments (see Note 2) during 2016. This standard requires excess tax benefits or deficiencies associated with share-based payments to be recorded as a discrete income tax benefit or expense in the period incurred, rather than within Additional paid-in capital. The new standard also requires excess tax benefits and deficiencies to be excluded from assumed future proceeds in the calculation of diluted shares outstanding. The Company adopted the standard prospectively, resulting in a $4 million and $0.02 increase to net income from continuing operations and diluted earnings per share from continuing operations, respectively, in 2016. The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period. Stock options excluded from the average outstanding diluted shares calculation were 0.6 million , 0.0 million and 0.0 million in 2016 , 2015 and 2014 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense from continuing operations was calculated based on the following components of income before income taxes: (in millions) 2016 2015 2014 U.S. income $ 824 $ 835 $ 754 Non-U.S. income 111 127 128 Total $ 935 $ 962 $ 882 The components of income tax expense from continuing operations are as follows: (in millions) 2016 2015 2014 Current: U.S. federal $ 120 $ 169 $ 110 Non-U.S. 29 38 37 U.S. state and local 11 11 4 Total current 160 218 151 Deferred: U.S. federal 47 49 105 Non-U.S. — (4 ) (2 ) U.S. state and local 1 5 10 Total deferred 48 50 113 Income tax expense $ 208 $ 268 $ 264 The effective income tax rate from continuing operations differed from the U.S. statutory tax rate as detailed below: 2016 2015 2014 Statutory tax rate 35.0 % 35.0 % 35.0 % Foreign rate differential (0.7 ) (1.0 ) (1.1 ) State and local income taxes 1.1 1.2 1.3 Research and development credit (6.4 ) (3.2 ) (1.1 ) Domestic manufacturing deduction (2.0 ) (2.0 ) (1.7 ) Tax settlements — (1.6 ) (0.9 ) Change in valuation allowance (4.5 ) — — Other (0.3 ) (0.5 ) (1.6 ) Effective income tax rate 22.2 % 27.9 % 29.9 % Deferred income tax assets and liabilities are included in the Consolidated Statement of Financial Position as follows: September 30 (in millions) 2016 2015 Deferred income taxes $ 219 $ 165 Other liabilities (1 ) (3 ) Deferred income taxes, net $ 218 $ 162 As discussed in Note 2, during 2016, the Company retrospectively adopted a new standard related to the balance sheet classification of deferred taxes. The effects of the accounting change on the September 30, 2015 Consolidated Statement of Financial Position were as follows: September 30, 2015 (in millions) Revised As Reported Current deferred income tax asset $ — $ 9 Current deferred income tax liability — (84 ) Current deferred income taxes, net $ — $ (75 ) Long-term deferred income taxes $ 165 $ 241 Other liabilities (3 ) (4 ) Long-term deferred income taxes, net $ 162 $ 237 Net long-term deferred income tax benefits (liabilities) consist of the tax effects of temporary differences related to the following: September 30 (in millions) 2016 2015 Inventory $ (282 ) $ (226 ) Product warranty costs 29 29 Customer incentives 68 62 Contract reserves 6 11 Retirement benefits 549 487 Intangibles (171 ) (177 ) Capital lease liability 20 21 Property (179 ) (154 ) Stock-based compensation 33 30 Deferred compensation 16 15 Capital loss carryover 41 42 Compensation and benefits 28 29 Valuation allowance — (42 ) Other 60 35 Deferred income taxes, net $ 218 $ 162 Management believes it is more likely than not that the long-term deferred tax assets will be realized through the reduction of future taxable income. Significant factors considered by management in its determination of the probability of the realization of the deferred tax assets include: (a) the historical operating results of the Company ( $1.549 billion of U.S. taxable income over the past three years), (b) expectations of future earnings, (c) the extended period of time over which the retirement benefit liabilities will be paid and (d) our ability to implement tax planning strategies. Changes in the valuation allowance for deferred tax assets are summarized as follows: September 30 (in millions) 2016 2015 2014 Balance at beginning of year $ 42 $ 43 $ 11 Charged to costs and expenses (1) — — 43 Deductions (2) (3) (42 ) (1 ) (11 ) Balance at September 30 $ — $ 42 $ 43 (1) 2014 increase was recorded in discontinued operations (2) 2014 deduction of $11 million was due to the divestiture of a foreign subsidiary (3) 2016 deduction of $42 million was primarily due to the creation of a tax planning strategy 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. The IRS has closed its audit of the Company's tax returns for the years ended September 30, 2012 and 2013; however, the Company has filed a protest related to the taxation of a foreign subsidiary. An acquired subsidiary is also under examination by the IRS for calendar years 2012 and 2013 legacy tax filings. The Company is also currently under audit in various U.S. states and non-U.S. jurisdictions. The U.S. states 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. No provision has been made as of September 30, 2016 for U.S. federal or state, or additional non-U.S. income taxes related to approximately $551 million of undistributed earnings of non-U.S. subsidiaries which have been or are intended to be permanently reinvested. Thus, it is not practicable to estimate the amount of tax that might be payable on the undistributed earnings. The Company had net income tax payments of $130 million , $182 million and $182 million in 2016 , 2015 and 2014 , respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: September 30 (in millions) 2016 2015 2014 Beginning balance $ 39 $ 48 $ 56 Additions for tax positions related to the current year 11 8 13 Additions for tax positions of prior years 7 6 1 Additions for tax positions related to acquisitions — — 8 Reductions for tax positions of prior years (10 ) (17 ) (17 ) Reductions for tax positions of prior years related to lapse of statute of limitations — (1 ) (2 ) Reductions for tax positions related to settlements with taxing authorities (2 ) (5 ) (11 ) Ending balance $ 45 $ 39 $ 48 The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate were $20 million , $11 million and $25 million as of September 30, 2016 , 2015 and 2014 , respectively. Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months a reduction in unrecognized tax benefits may occur in the range of $0 to $1 million based on the outcome of tax examinations or as a result of the expiration of various statutes of limitations. The Company includes income tax-related interest and penalties in income tax expense. The total amount of interest and penalties recognized within Other Liabilities in the Consolidated Statement of Financial Position were not significant as of September 30, 2016 and 2015 . The total amount of interest and penalties recorded as an expense or (income) within Income tax expense in the Consolidated Statement of Operations were not significant for the years ended September 30, 2016 , 2015 and 2014 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2016 | |
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. Assets and liabilities The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and 2015 are as follows: September 30, 2016 September 30, 2015 (in millions) Fair Value Hierarchy Fair Value Asset (Liability) Fair Value Asset (Liability) Deferred compensation plan investments Level 1 $ 55 $ 50 Interest rate swap assets Level 2 35 34 Foreign currency forward exchange contract assets Level 2 11 7 Foreign currency forward exchange contract liabilities Level 2 (13 ) (11 ) Contingent consideration for ICG acquisition Level 3 (13 ) (12 ) During 2016, a corporate asset was written down to its fair market value of $3 million , resulting in an asset impairment charge of $4 million recorded in Selling, general and administrative expenses on the Consolidated Statement of Operations (see Note 20). The asset is recognized at fair value on a nonrecurring basis and is classified within Level 2 of the fair value hierarchy. The change in fair value of the Level 3 contingent consideration is as follows: (in millions) Fair Value (Liability) Balance at September 30, 2015 $ (12 ) Fair value adjustment (1) (1 ) Balance at September 30, 2016 $ (13 ) (1) The fair value adjustment is included in Interest expense on the Consolidated Statement of Operations. There were no transfers between Levels of the fair value hierarchy during 2016 or 2015. Valuation Techniques The deferred compensation plan investments consist of investments in marketable securities (primarily mutual funds) and the fair value is determined using the market approach based on quoted market prices of identical assets in active markets. The fair value of the interest rate swaps is determined using the market approach and is calculated by a pricing model with observable market inputs. The fair value of foreign currency forward exchange contracts is determined using the market approach and is calculated as the value of the quoted forward currency exchange rate less the contract rate multiplied by the notional amount. The contingent consideration for the ICG acquisition represents the estimated fair value of post-closing consideration owed to the sellers associated with the acquisition. This is categorized as Level 3 in the fair value hierarchy and the fair value is determined using a probability-weighted approach. The liability recorded was derived from the estimated probability that certain contingent payment milestones will be met in accordance with the terms of the purchase agreement. As of September 30, 2016 , there has not been any impact to the fair value of derivative liabilities due to the Company's own credit risk. Similarly, there has not been any impact to the fair value of derivative assets based on the Company's evaluation of counterparties' credit risks. Financial Instruments The carrying amounts and fair values of the Company's financial instruments are as follows: Asset (Liability) September 30, 2016 September 30, 2015 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 340 $ 340 $ 252 $ 252 Short-term debt (740 ) (740 ) (448 ) (448 ) Long-term debt (1,347 ) (1,508 ) (1,646 ) (1,750 ) The fair value of cash and cash equivalents, and the commercial paper portion of 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 notes due December 2016 classified as short-term debt, and all long-term debt, is within Level 2 of the fair value hierarchy. The fair value of these financial instruments was 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 Instrument
Derivative Financial Instruments | 12 Months Ended |
Sep. 30, 2016 | |
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. To meet this objective, the Company may use financial instruments in the form of interest rate swaps. In January 2010, the Company entered into two interest rate swap contracts which expire on July 15, 2019 and effectively converted $150 million of the 2019 Notes to floating rate debt based on six-month LIBOR plus 1.235 percent . In June 2015, the Company entered into two interest rate swap contracts which expire on July 15, 2019 and effectively converted the remaining $150 million of the 2019 Notes to floating rate debt based on three-month LIBOR plus 3.56 percent (collectively the 2019 Swaps). 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 . The Company designated the 2019 and 2023 Swaps (the Swaps) as fair value hedges. The Swaps are recorded within Other Assets at a fair value of $35 million , offset by a fair value adjustment to Long-term Debt (Note 9) of $35 million at September 30, 2016 . At September 30, 2015 , the Swaps were recorded within Other Assets at a fair value of $34 million , offset by a fair value adjustment to Long-term Debt (Note 9) of $34 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 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 in the 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 September 30, 2016 and September 30, 2015 , the Company had outstanding foreign currency forward exchange contracts with notional amounts of $384 million and $359 million , respectively. These notional values consist primarily of contracts for the British pound sterling, European euro and Swedish krona, and are stated in U.S. dollar equivalents at spot exchange rates at the respective dates. Fair Value of Derivative Instruments Fair values of derivative instruments in the Consolidated Statement of Financial Position as of September 30, 2016 and 2015 are as follows: Asset Derivatives (in millions) Classification September 30, September 30, 2015 Foreign currency forward exchange contracts Other current assets $ 11 $ 7 Interest rate swaps Other assets 35 34 Total $ 46 $ 41 Liability Derivatives (in millions) Classification September 30, September 30, 2015 Foreign currency forward exchange contracts Other current liabilities $ 13 $ 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 September 30, 2016 , there were undesignated foreign currency forward exchange contracts classified within Other current assets of $2 million and Other current liabilities of $2 million . The effect of derivative instruments on the Consolidated Statement of Operations for the fiscal years ended September 30, 2016 and 2015 is as follows: Amount of Gain (Loss) (in millions) Location of Gain (Loss) September 30, September 30, 2015 Derivatives Designated as Hedging Instruments: Fair Value Hedges Interest rate swaps Interest expense $ 10 $ 11 Cash Flow Hedges Foreign currency forward exchange contracts: Amount of (loss) recognized in AOCL (effective portion, before deferred tax impact) AOCL (3 ) (10 ) Amount of (loss) reclassified from AOCL into income Cost of sales (6 ) (6 ) Derivatives Not Designated as Hedging Instruments: Foreign currency forward exchange contracts Cost of sales (1 ) (8 ) There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the fiscal year ended September 30, 2016 . 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 fiscal year ended September 30, 2016 . The Company did not have any hedges with credit-risk-related contingent features or that required the posting of collateral as of September 30, 2016 . The cash flows from derivative contracts are recorded in operating activities in the Consolidated Statement of Cash Flows. The Company expects to reclassify approximately $1 million of AOCL losses from cash flow hedges into earnings over the next 12 months. The maximum duration of a foreign currency cash flow hedge contract at September 30, 2016 was 64 months. |
Guarantees and Indemnifications
Guarantees and Indemnifications | 12 Months Ended |
Sep. 30, 2016 | |
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 within product cost of sales 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: September 30 (in millions) 2016 2015 2014 Balance at beginning of year $ 89 $ 104 $ 121 Warranty costs incurred (42 ) (46 ) (47 ) Product warranty accrual 46 42 46 Changes in estimates for prior years (6 ) (10 ) (15 ) Increase from acquisitions — 1 — Foreign currency translation adjustments and other — (2 ) (1 ) Balance at September 30 $ 87 $ 89 $ 104 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 September 30, 2016 were $ 239 million . These commitments are not reflected as liabilities on the Company’s Consolidated Statement of Financial Position. Indemnifications The Company enters into indemnifications with lenders, counterparties in transactions such as administration of employee benefit plans 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. |
Contractual Obligations and Oth
Contractual Obligations and Other Commitments | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligations and Other Commitments | Contractual Obligations and Other Commitments The following table reflects certain of the Company's non-cancelable contractual commitments as of September 30, 2016 : Payments Due By Period (in millions) 2017 2018 2019 2020 2021 Thereafter Total Non-cancelable operating leases $ 63 $ 52 $ 39 $ 28 $ 21 $ 113 $ 316 Purchase contracts 34 32 29 27 26 40 188 Long-term debt 300 — 300 — — 1,050 1,650 Interest on long-term debt 58 58 58 42 42 473 731 Total $ 455 $ 142 $ 426 $ 97 $ 89 $ 1,676 $ 2,885 Non-cancelable Operating Leases The Company leases certain office and manufacturing facilities as well as certain machinery and equipment under various lease contracts with terms that meet the accounting definition of operating leases. Some leases include renewal options, which permit extensions of the expiration dates at rates approximating fair market rental rates. Rent expense for the years ended September 30, 2016 , 2015 and 2014 was $77 million , $73 million and $65 million , respectively. The Company's commitments under these operating leases, in the form of non-cancelable future lease payments, are not reflected as a liability on the Consolidated Statement of Financial Position. Purchase Contracts The Company may enter into purchase contracts with suppliers under which there is a commitment to buy a minimum amount of products or pay a specified amount. These commitments are not reflected as a liability on the Company's Consolidated Statement of Financial Position. Amounts purchased under these agreements for the years ended September 30, 2016 , 2015 and 2014 were $57 million , $50 million and $38 million , respectively. Interest on Long-term Debt Interest payments under long-term debt obligations exclude the potential effects of the related interest rate swap contracts. |
Environmental Matters
Environmental Matters | 12 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 , the Company is involved in the investigation or remediation of seven 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 six 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 . The Company has recorded environmental reserves for this site of $ 6 million as of September 30, 2016 , 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 | 12 Months Ended |
Sep. 30, 2016 | |
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, Pension Settleme
Restructuring, Pension Settlement and Asset Impairment Charges, Net | 12 Months Ended |
Sep. 30, 2016 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Restructuring, Pension Settlement, and Asset Impairment Charges, Net | Restructuring, Pension Settlement and Asset Impairment Charges, Net During the first quarter of 2016, the Company recorded corporate restructuring and asset impairment charges totaling $45 million as follows: (in millions) Cost of Sales Selling, General and Administrative Expenses Total Employee separation costs $ 31 $ 8 $ 39 Asset impairment charges 2 4 6 Restructuring and asset impairment charges $ 33 $ 12 $ 45 The 2016 employee separation costs primarily resulted from the Company's execution of a voluntary separation incentive program in response to certain challenging market conditions, particularly in business aviation. As of September 30, 2016 , all employee separation costs have been paid. Asset impairment charges primarily relate to the write-down to fair market value of a corporate asset, as well as the write-off of certain long-lived assets. In 2014, the Company recorded pension settlement and restructuring charges totaling $9 million . This amount was comprised of (i) $5 million for pension settlement charges (included within Selling, general and administrative expense) and (ii) $4 million for employee severance costs related to the consolidation and closure of two service centers as part of a plan to optimize the efficiency of the Company's global service center footprint. These severance costs were included within cost of sales. Through September 30, 2015, the Company completed all cash payments associated with these actions. |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | Operating Segment Information 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 has three operating segments consisting of the Commercial Systems, Government Systems and Information Management Services businesses. Commercial Systems supplies aviation electronics systems, products and services to customers located throughout the world. The customer base is comprised of OEMs of commercial air transport, business and regional aircraft, commercial airlines and business aircraft operators. Government Systems provides avionics, communication products, surface solutions and navigation products to the U.S. Department of Defense, other government agencies, civil agencies, aerospace and defense contractors and foreign ministries of defense around the world. Information Management Services enables mission-critical data and voice communications throughout the world to customers using high-performance, high-quality and high-assurance proprietary radio and terrestrial networks, enhancing customer efficiency, safety and connectivity. Sales made by the Company to the U.S. Government were 33 percent , 29 percent and 30 percent of total sales for the years ended September 30, 2016 , 2015 and 2014 , respectively. 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, significant gains and losses from the disposition of businesses and other special items as identified by management from time to time, such as significant restructuring and asset impairment charges. Intersegment sales are not material and have been eliminated. The accounting policies used in preparing the segment information are consistent with the policies described in Note 2. The sales and earnings of continuing operations of the Company's operating segments are summarized as follows: (in millions) 2016 2015 2014 Sales: Commercial Systems $ 2,395 $ 2,434 $ 2,299 Government Systems 2,206 2,187 2,209 Information Management Services 658 623 471 Total sales $ 5,259 $ 5,244 $ 4,979 Segment operating earnings: Commercial Systems $ 531 $ 554 $ 509 Government Systems 477 457 465 Information Management Services 107 95 62 Total segment operating earnings 1,115 1,106 1,036 Interest expense (1) (64 ) (61 ) (59 ) Stock-based compensation (27 ) (24 ) (24 ) General corporate, net (44 ) (59 ) (59 ) Gain on divestiture of business — — 10 ARINC transaction costs (1) — — (13 ) Restructuring, pension settlement and asset impairment charges, net (45 ) — (9 ) Income from continuing operations before income taxes 935 962 882 Income tax expense (208 ) (268 ) (264 ) Income from continuing operations $ 727 $ 694 $ 618 (1) During the year ended September 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 this period was $16 million . The following tables summarize the identifiable assets and investments in equity affiliates at September 30, 2016 , 2015 and 2014 , as well as the provision for depreciation and amortization, the amount of capital expenditures for property and earnings from equity affiliates for each of the three years ended September 30, for each of the operating segments and Corporate: (in millions) 2016 2015 2014 Identifiable assets: Commercial Systems $ 3,050 $ 2,906 $ 2,655 Government Systems 2,052 1,953 1,938 Information Management Services 1,906 1,886 1,885 Corporate 699 559 527 Total identifiable assets $ 7,707 $ 7,304 $ 7,005 Investments in equity affiliates: Commercial Systems $ 4 $ 7 $ — Government Systems 6 6 8 Information Management Services — — — Total investments in equity affiliates $ 10 $ 13 $ 8 Depreciation and amortization: Commercial Systems $ 125 $ 117 $ 108 Government Systems 74 83 80 Information Management Services 54 52 37 Total depreciation and amortization $ 253 $ 252 $ 225 Capital expenditures for property: Commercial Systems $ 74 $ 90 $ 68 Government Systems 69 81 66 Information Management Services 50 39 29 Total capital expenditures for property $ 193 $ 210 $ 163 Earnings (loss) from equity affiliates: Commercial Systems $ (3 ) $ — $ — Government Systems 2 3 7 Information Management Services — — — Total earnings (loss) from equity affiliates $ (1 ) $ 3 $ 7 The Company's operating segments share many common resources, infrastructures and assets in the normal course of business. Certain assets have been allocated between the operating segments primarily based on occupancy or usage, principally property, plant and equipment. Identifiable assets at Corporate consist principally of cash and net deferred income tax assets for all years presented. The following table summarizes sales by product category for the years ended September 30, 2016 , 2015 and 2014 : (in millions) 2016 2015 2014 Commercial Systems product categories: Air transport aviation electronics $ 1,430 $ 1,385 $ 1,285 Business and regional aviation electronics 965 1,049 1,014 Commercial Systems sales 2,395 2,434 2,299 Government Systems product categories: Avionics 1,483 1,436 1,409 Communication and Navigation 723 751 800 Government Systems sales 2,206 2,187 2,209 Information Management Services sales 658 623 471 Total sales $ 5,259 $ 5,244 $ 4,979 The air transport and business and regional aviation electronics sales categories are delineated based on the difference in underlying customer base, size of aircraft and markets served. For the years ended September 30, 2016 , 2015 and 2014 , product category sales for air transport aviation electronics include revenue from wide-body in-flight entertainment products and services of $ 38 million , $ 57 million and $70 million , respectively. Beginning in 2016, product category sales for Government Systems have been consolidated as a result of an internal reorganization and are delineated based upon underlying product technologies. The previously reported sales categories of Communication products, Surface solutions and Navigation products are now primarily consolidated into Communication and navigation. Government Systems sales have been reclassified to conform to the current year presentation. The following table reflects sales for the years ended September 30, 2016 , 2015 and 2014 by location of our customers and property at September 30, 2016 , 2015 and 2014 by geographic region: Sales Property (in millions) 2016 2015 2014 2016 2015 2014 U.S. (1) $ 3,292 $ 3,174 $ 2,993 $ 921 $ 861 $ 805 Europe / Africa / Middle East 937 1,070 1,040 86 83 90 Asia-Pacific 545 503 486 17 15 19 Americas, excluding U.S. 485 497 460 11 5 5 Non U.S. 1,967 2,070 1,986 114 103 114 Total $ 5,259 $ 5,244 $ 4,979 $ 1,035 $ 964 $ 919 (1) For the years ended September 30, 2016 , 2015 and 2014 , U.S. sales include revenue from foreign military sales of $171 million , $171 million and $176 million , respectively. Sales are attributable to geographic region based on the location of our customers. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) Quarterly financial information for the years ended September 30, 2016 and 2015 is summarized as follows: 2016 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 1,169 $ 1,311 $ 1,334 $ 1,445 $ 5,259 Gross profit (total sales less product and service cost of sales) 333 404 419 461 1,617 Income from continuing operations 133 172 214 208 727 Income (loss) from discontinued operations, net of taxes 2 (1 ) — — 1 Net income $ 135 $ 171 $ 214 $ 208 $ 728 Earnings (loss) per share: Basic Continuing operations $ 1.01 $ 1.31 $ 1.65 $ 1.60 $ 5.57 Discontinued operations 0.02 — — — 0.01 Basic earnings per share $ 1.03 $ 1.31 $ 1.65 $ 1.60 $ 5.58 Diluted Continuing operations $ 1.00 $ 1.30 $ 1.63 $ 1.58 $ 5.50 Discontinued operations 0.02 (0.01 ) — — 0.01 Diluted earnings per share $ 1.02 $ 1.29 $ 1.63 $ 1.58 $ 5.51 Net income in the first quarter of 2016 includes $45 million of pre-tax restructuring and asset impairment charges primarily related to employee separation costs. In addition, net income includes a $24 million income tax benefit from the retroactive reinstatement of the Federal R&D Tax Credit. Net income in the third quarter of 2016 includes a $41 million income tax benefit due to the release of a valuation allowance for a U.S. capital loss carryforward. 2015 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 1,226 $ 1,341 $ 1,293 $ 1,384 $ 5,244 Gross profit (total sales less product and service cost of sales) 369 404 405 436 1,614 Income from continuing operations 169 163 178 184 694 Income (loss) from discontinued operations, net of taxes (2 ) (6 ) — — (8 ) Net income $ 167 $ 157 $ 178 $ 184 $ 686 Earnings (loss) per share: Basic Continuing operations $ 1.28 $ 1.23 $ 1.35 $ 1.40 $ 5.25 Discontinued operations (0.02 ) (0.04 ) — — (0.06 ) Basic earnings per share $ 1.26 $ 1.19 $ 1.35 $ 1.40 $ 5.19 Diluted Continuing operations $ 1.26 $ 1.22 $ 1.33 $ 1.38 $ 5.19 Discontinued operations (0.02 ) (0.05 ) — — (0.06 ) Diluted earnings per share $ 1.24 $ 1.17 $ 1.33 $ 1.38 $ 5.13 Net income in the first quarter of 2015 includes a $22 million income tax benefit from the retroactive reinstatement of the Federal R&D Tax Credit. Net income in the third quarter of 2015 includes a $14 million income tax benefit related to the remeasurement of certain prior year tax positions. 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 respective year. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event On October 23, 2016, the Company reached a definitive agreement to acquire B/E Aerospace, a leading manufacturer of aircraft cabin interior products, for approximately $6.4 billion in cash and stock, plus the assumption of $1.9 billion in net debt. Under the terms of the agreement, each B/E Aerospace shareowner will receive total consideration of $62.00 per share, comprised of $34.10 per share in cash and $27.90 in shares of the Company's common stock, subject to a 7.5 percent collar. The transaction, which is expected to close during the spring of 2017, has been unanimously approved by the Boards of Directors of both companies and is subject to the the satisfaction of customary closing conditions and approval by certain regulators, the Company's shareowners and B/E Aerospace shareowners. Upon closing, B/E Aerospace results will be reported as part of a newly created aircraft interior systems segment. The Company intends to finance the cash portion of the transaction with debt financing, of which a significant portion has been committed. For additional information regarding the agreement, refer to the Form 8-K filed by the Company on October 27, 2016. |
Significant Accounting Polici32
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. 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 Company's investments in entities it does not control but over which it has the ability to exercise significant influence are accounted for under the equity method and are included in Other Assets. All intercompany transactions are eliminated. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currency for significant subsidiaries operating outside the United States is typically their respective local currency. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange rate at the balance sheet date. Sales, costs and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive loss within the Consolidated Statements of Comprehensive Income and Equity. Foreign exchange transaction gains and losses due to the remeasurement of account balances in foreign currencies are included within the Consolidated Statement of Operations and were not material to the Company's results of operations for 2016 , 2015 and 2014 . |
Revenue Recognition | Revenue Recognition The Company enters into sales arrangements that may provide for multiple deliverables to a customer. The Company identifies all goods and/or services that are to be delivered separately under a sales arrangement and allocates revenue to each deliverable based on relative fair values. Fair values are generally established based on the prices charged when sold separately by the Company. In general, revenues are separated between hardware, engineering services, maintenance services and installation services. The allocated revenue for each deliverable is then recognized using appropriate revenue recognition methods. Sales related to long-term contracts requiring development and delivery of products over several years are generally accounted for under the percentage-of-completion method of accounting in accordance with the Construction-Type and Production-Type Contracts subtopic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. The percentage-of-completion method is predominately used in the Government Systems segment and sales and earnings under qualifying contracts are recorded either as products are shipped under the units-of-delivery method (for production effort), or based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method (for development effort). Purchase options and change orders are accounted for either as an integral part of the original contract or separately depending upon the nature and value of the item. Sales and costs related to profitable purchase options are included in estimates only when the options are exercised whereas sales and costs related to unprofitable purchase options are included in estimates when exercise is determined to be probable. Sales related to change orders are included in estimates only if they can be reliably estimated and collectability is reasonably assured. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. Changes in estimates of profit or loss on contracts are included in earnings on a cumulative basis in the period the estimate is changed. Sales related to long-term separately priced product maintenance or warranty contracts are accounted for based on the terms of the underlying agreements. Certain contracts are fixed-price contracts with sales recognized ratably over the contractual life, while other contracts have a fixed hourly rate with sales recognized based on actual labor or flight hours incurred. The cost of providing these services is expensed as incurred. The Company recognizes sales for most other products or services when all of the following criteria are met: an agreement of sale exists, product delivery and acceptance has occurred or services have been rendered, pricing is fixed or determinable and collection is reasonably assured. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include time deposits, certificates of deposit with original maturity dates of three months or less and money market funds. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Allowances are established in order to report receivables at net realizable value on the Company's Consolidated Statement of Financial Position. The determination of these allowances requires Company management to make estimates and judgments as to the collectability of customer account balances. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience and other currently available evidence. |
Inventories | Inventories Inventories are stated at the lower of cost or market using costs which approximate the first-in, first-out method, less related progress payments received. Inventoried costs include direct costs of manufacturing, certain engineering costs and allocable overhead costs. The Company regularly compares inventory quantities on hand on a part level basis to estimated forecasts of product demand and production requirements as well as historical usage. Based on these comparisons, management establishes an excess and obsolete inventory reserve as needed. Inventory valuation reserves were $95 million and $87 million at September 30, 2016 and 2015 , respectively. 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 under long-term supply arrangements with the Company’s customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain customer guarantees for reimbursement are expensed as incurred. |
Progress Payments | Progress Payments Progress payments relate to both receivables and inventories and represent cash collected from government-related contracts whereby the governments have a legal right of offset related to the receivable or legal title to the work-in-process inventory. |
Property | Property Property is stated at acquisition cost, net of accumulated depreciation. Depreciation of property is generally provided using straight-line methods over the following estimated useful lives: buildings and improvements, 15 - 40 years; machinery and equipment (including internally developed software and other costs associated with the expansion and construction of ARINC's network-related assets), 5 - 15 years; information systems software and hardware, 5 - 10 years; and furniture and fixtures, 12 - 15 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Significant renewals and betterments are capitalized and replaced units are written off. Maintenance and repairs, as well as renewals of minor amounts, are charged to expense in the period incurred. The fair value of liabilities associated with the retirement of property is recorded when there is a legal or contractual requirement to incur such costs and the costs can be reasonably estimated. Upon the initial recognition of a contractual or legal liability for an asset retirement obligation, the Company capitalizes the asset retirement cost by increasing the carrying amount of the property by the same amount as the liability. This asset retirement cost is then depreciated over the estimated useful life of the underlying property. The Company did not have any significant asset retirement obligations at September 30, 2016 and 2015 . |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets generally result from business acquisitions. The purchase price of the acquisition is assigned to tangible and intangible assets and liabilities assumed based on fair value. The excess of the purchase price over the amounts assigned is recorded as goodwill. Assets acquired and liabilities assumed are allocated to the Company's reporting units based on the Company's integration plans and internal reporting structure. As of September 30, 2016 the Company had six reporting units. Purchased intangible assets with finite lives are amortized over their estimated useful lives, ranging from 4 - 23 years. Goodwill and intangible assets with indefinite lives are not amortized, but are reviewed at least annually for impairment. |
Customer Incentives | Customer Relationship Up-Front Sales Incentives The Company 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 after entry into service. 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. Accrued Customer Incentives Incentives earned by customers based on purchases of Company products or services are recognized as a liability when the related sale is recorded. Incentives consisting of cash payments or customer account credits are recognized as a reduction of sales, while incentives consisting of free products and account credits where the customer's use is restricted to future purchases are recognized as cost of sales. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when management plans to dispose of assets or when events or circumstances indicate that the carrying amount of a long-lived asset is more-likely-than-not unrecoverable. Assets held for disposal are reported at the lower of the carrying amount or fair value less cost to sell. Management determines fair value using a discounted future cash flow analysis or other accepted valuation techniques. Long-lived assets held for use are reviewed for impairment by comparing the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset over its remaining useful life. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill and indefinite-lived intangible assets are tested annually for impairment with more frequent tests performed if indications of impairment exist. The Company's annual impairment testing date is in the second quarter of each fiscal year. Impairment for intangible assets with indefinite lives exists if the carrying value of the intangible asset exceeds its fair value. Goodwill is potentially impaired if the carrying value of a reporting unit exceeds its estimated fair value. |
Advance Payments From Customers | Advance Payments from Customers Advance payments from customers represent cash collected from customers in advance of revenue recognition. |
Capital Leases | Capital Leases Assets under capital lease and capital lease obligation are initially measured at the lower of estimated fair value or present value of the minimum lease payments. The present value of minimum lease payments is calculated for payments during the noncancelable lease term using the lower of the Company's estimated incremental borrowing rate or the rate implicit in the lease, if known. Capital lease obligation is recorded within Other Liabilities and the related assets are recorded in Property or Other Assets based upon their intended use. Payments are allocated between a reduction of the lease obligation and interest expense using the interest method. Assets under capital lease are depreciated over the noncancelable lease term, ranging from 5 - 15 years, consistent with the Company's depreciation policy. |
Research and Development | Research and Development The Company performs R&D activities relating to the development of new products and the improvement of existing products. Company-funded R&D programs are expensed as incurred and included in cost of sales. Company-funded R&D expenditures were $224 million , $272 million and $268 million for fiscal years ended September 30, 2016 , 2015 and 2014 , respectively. |
Environmental | Environmental Liabilities for environmental matters are recorded in the period in which it is probable that an obligation has been incurred and the cost can be reasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the Company records a liability for its estimated allocable share of costs related to its involvement with the site as well as an estimated allocable share of costs related to the involvement of insolvent or unidentified parties. At environmental sites in which the Company is the only responsible party, the Company records a liability for the total estimated costs of remediation. |
Income Taxes | Income Taxes Current tax liabilities and assets are based upon an estimate of taxes payable or refundable in the current year for each jurisdiction in which the Company is subject to tax. As part of the determination of its tax liability, management exercises considerable judgment in evaluating tax positions taken by the Company in determining the income tax provision and establishes reserves for uncertain tax positions in accordance with the Income Taxes topic of the FASB Accounting Standards Codification. Deferred tax assets and liabilities are recorded for the estimated future tax effects attributable to temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and their respective carrying amounts for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and interest rate swap contracts for the purpose of minimizing exposure to changes in foreign currency exchange rates on business transactions and interest rates, respectively. The Company's policy is to execute such instruments with banks the Company believes to be creditworthy and not enter into derivative financial instruments for speculative purposes or to manage exposure for net investments in non-U.S. subsidiaries. These derivative financial instruments do not subject the Company to undue risk as gains and losses on these instruments generally offset gains and losses on the underlying assets, liabilities or anticipated transactions that are being hedged. All derivative financial instruments are recorded at fair value in the Consolidated Statement of Financial Position. For a derivative that has not been designated as an accounting hedge, the change in fair value is recognized immediately through earnings. For a derivative that has been designated as an accounting hedge of an existing asset or liability (a fair value hedge), the change in the fair value of both the derivative and underlying asset or liability is recognized immediately through earnings. For a derivative designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the Consolidated Statement of Financial Position in Accumulated other comprehensive loss to the extent the derivative is effective in mitigating the exposure related to the anticipated transaction. The change in the fair value related to the ineffective portion of the hedge, if any, is immediately recognized in earnings. The amount recorded within Accumulated other comprehensive loss is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings. The Company does not exclude any amounts from the measure of effectiveness for both fair value and cash flow hedges. |
Use of Estimates | Use of Estimates The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, long-term contracts, allowances for doubtful accounts, inventory obsolescence, product warranty cost liabilities, customer incentives, retirement benefits, income taxes, environmental matters, pre-production engineering costs, recoverability of long-lived assets and contingencies. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the Consolidated Statement of Operations in the period they are determined. |
Concentration of Risks | Concentration of Risks The Company's products and services are concentrated within the aerospace and defense industries with customers consisting primarily of military and commercial aircraft manufacturers, commercial airlines, the U.S. Government and non-U.S. governments. As a result of this industry focus, the Company's current and future financial performance is largely dependent upon the overall economic conditions within these industries. In particular, the commercial aerospace market has been historically cyclical and subject to downturns during periods of weak economic conditions, which could be prompted or exacerbated by political or other U.S. or international events. The defense market may be affected by changes in budget appropriations, procurement policies, political developments both in the U.S. and abroad and other factors. The Company depends to a large degree on U.S. Government spending, as a significant portion of the Company's sales are derived from U.S. Government contracts, both directly and indirectly through subcontracts. The U.S. Government has implemented various initiatives to address its fiscal challenges. In August 2011, Congress enacted the Budget Control Act of 2011 which imposed spending caps and certain reductions in security spending over a ten-year period through 2021. These spending caps and reductions, referred to as sequestration, went into effect in March 2013. In December 2013, Congress enacted the Murray-Ryan Bipartisan Budget Act of 2013, raising government discretionary spending limits temporarily for 2014 and 2015. More recently, the Bipartisan Budget Act of 2015 again raised the government discretionary spending limits temporarily for 2016 and 2017, after which the BCA will again be in force. The continued uncertainty surrounding the defense budget could have a material adverse effect on the Company and the defense industry in general. In years when the U.S. Government does not complete its annual budget and appropriations process prior to the beginning of its fiscal year (October 1), government operations are typically funded through a continuing resolution that authorizes agencies of the U.S. Government to continue to operate in the new year, but generally does not authorize new spending initiatives. During periods covered by continuing resolutions (or until the regular appropriation bills are passed), the Company may experience delays by the government in procurement of new or existing products and services which can adversely impact our results of operations and cause variability in the timing of revenue between periods. The government began operations in fiscal year 2017 under a continuing resolution that is set to expire in December 2016. The Company remains confident that its product offerings are well positioned to meet the needs of government customers in this uncertain environment and the Company continues to enhance international strategies and make proactive adjustments to the Company's cost structure as necessary. In addition to the overall business risks associated with the Company's concentration within the aerospace and defense industries, the Company is also exposed to a concentration of collection risk on credit extended to certain business jet aircraft manufacturers. At September 30, 2016 , receivables due from these business jet aircraft manufacturers were approximately $162 million . The Company performs ongoing credit evaluations on the financial condition of all of its customers and maintains allowances for uncollectible accounts receivable based on expected collectability. Although management believes its allowances are adequate, the Company is not able to predict with certainty the changes in the financial stability of its customers. Any material change in the financial status of any one customer or group of customers could have a material adverse effect on the Company's results of operations, financial position or cash flows. As of September 30, 2016 , approximately 12 percent of the Company's employees in the U.S. were represented by U.S. collective bargaining agreements, most of which were renewed without disruption in May 2013 and are set to expire in 2018. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In March 2016, the FASB issued a new standard simplifying certain aspects of accounting for share-based payments (see Note 12). The new standard requires that excess tax benefits and shortfalls be recorded as income tax benefit or expense in the income statement, rather than in equity, and requires excess tax benefits from stock-based compensation to be classified within operating cash flow. Additionally, the new standard allows a policy election to either estimate the number of awards expected to be forfeited at the time of award issuance or record stock-based compensation for forfeitures as they occur. In order to simplify accounting for share-based payments, the Company adopted the new guidance during the second quarter of 2016, which resulted in a $4 million benefit to tax expense and a favorable impact to operating cash flows of $4 million in 2016. With respect to forfeitures, the Company will continue to estimate the number of awards expected to be forfeited upon award issuance. In November 2015, the FASB issued new guidance requiring all deferred tax assets and liabilities to be classified as noncurrent on the balance sheet instead of separating those balances into current and noncurrent amounts. In order to simplify the accounting for income taxes, the Company adopted the new guidance in the first quarter of 2016 on a retrospective basis, which resulted in the reclassification of $9 million of current deferred tax assets and $84 million of current deferred tax liabilities to noncurrent as of September 30, 2015. In April 2015, the FASB issued a new standard that provides a practical expedient permitting entities with a fiscal year end that does not coincide with a month end to measure defined benefit plan assets and obligations using the month end date closest to the fiscal year end. The new standard was early adopted by the Company for each of its defined benefit plans effective for the 2015 fiscal year end with no significant impact to the Company's financial statements. Recently Issued Accounting Standards In June 2016, the FASB issued a new standard on the measurement of credit losses, which will impact the Company's measurement of trade receivables. The new standard replaces the current incurred loss model with a forward-looking expected loss model that is likely to result in earlier recognition of losses. The new standard also increases disclosure requirements and is effective for the Company in 2021, with early adoption permitted, but not earlier than 2020. The Company has completed an evaluation of the new standard and does not expect that adoption will have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued a comprehensive new lease accounting standard, which provides revised guidance on accounting for lease arrangements by both lessors and lessees. The central requirement of the new standard is that lessees must recognize lease-related assets and liabilities for all leases with a term longer than 12 months. The Company is evaluating the effect the standard will have on the Company's consolidated financial statements and related disclosures, but expects a material change to the balance sheet due to the recognition of right-of-use assets and lease liabilities related to the Company's portfolio of real estate leases. The new guidance is not expected to materially impact accounting for those leases the Company enters with customers. The new standard is effective for the Company in 2020, with early adoption permitted. In May 2014, the FASB issued a comprehensive new revenue recognition standard that effectively replaces all current guidance on the topic and expands disclosures regarding revenue. Several amendments to the new standard have been issued or proposed, which are intended to resolve potential implementation challenges and drive consistent interpretation and application of the new standard. The guidance permits use of either a retrospective or cumulative effect transition method. Based upon the FASB's decision to approve a one year delay in implementation, the new standard is now effective for the Company in 2019, with early adoption permitted, but not earlier than 2018. The Company continues to evaluate the transition methods allowed under the new standard and the effect the standard will have on the Company's consolidated financial statements and related disclosures. Anticipated changes under the new standard include increased use of the percentage-of-completion method of accounting for government contracts, elimination of the units-of-delivery method, and the elimination of Customer relationship intangible assets related to free products provided to customers as up-front sales incentives. The Company continues to monitor the work of standard setters and the interpretive efforts of other non-authoritative groups with respect to other areas of potential material change. Other new accounting standards issued but not effective until after September 30, 2016 are not expected to have a material impact on the Company's financial statements. |
Acquisitions, Goodwill and In33
Acquisitions, Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date: (in millions) December 23, 2013 Restricted Cash (1) $ 61 Receivables and Other current assets 216 Building held for sale (2) 81 Business held for sale (3) 15 Property 49 Intangible Assets 431 Other Assets 11 Total Identifiable Assets Acquired 864 Payable to ARINC option holders (1) (61 ) Current Liabilities (171 ) Liability related to building held for sale (2) (81 ) Liabilities associated with business held for sale (3) (12 ) Long-term deferred income taxes (182 ) Retirement Benefits and Other Long-term Liabilities (39 ) Total Liabilities Assumed (546 ) Net Identifiable Assets Acquired, excluding Goodwill 318 Goodwill 1,087 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 was 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 a building which was classified as held for sale at the acquisition date. (3) Assets and liabilities associated with the Business held for sale relate to ASES, which the Company divested, as detailed in Note 4. |
Business Acquisition, Pro Forma Information | (in millions, except per share amounts) 2016 (as Reported) 2015 (as Reported) 2014 (Pro-forma) Sales $ 5,259 $ 5,244 $ 5,085 Net income attributable to common shareowners from continuing operations $ 727 $ 694 $ 624 Basic earnings per share from continuing operations $ 5.57 $ 5.25 $ 4.62 Diluted earnings per share from continuing operations $ 5.50 $ 5.19 $ 4.56 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments | (in millions) 2016 2015 2014 Increases / (decreases) to pro-forma net income: Net reduction to depreciation resulting from fixed asset purchase accounting adjustments (1) $ — $ — $ 2 Advisory, legal and accounting service fees (2) — — 21 Amortization of acquired ARINC intangible assets, net (3) — — (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 |
Schedule of Goodwill | Changes in the carrying amount of goodwill are summarized as follows: (in millions) Commercial Systems Government Systems Information Management Services Total Balance at September 30, 2014 $ 262 $ 508 $ 1,093 $ 1,863 ICG acquisition 38 — — 38 Pacific Avionics acquisition 15 — — 15 ARINC acquisition adjustment — — (3 ) (3 ) Foreign currency translation adjustments and other (1 ) (8 ) — (9 ) Balance at September 30, 2015 314 500 1,090 1,904 ICG acquisition adjustment 13 — — 13 Matrix product line acquisition — 6 — 6 Foreign currency translation adjustments (1 ) (3 ) — (4 ) Balance at September 30, 2016 $ 326 $ 503 $ 1,090 $ 1,919 |
Summary of Intangible Assets | Intangible assets are summarized as follows: September 30, 2016 September 30, 2015 (in millions) Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology and patents $ 354 $ (216 ) $ 138 $ 346 $ (195 ) $ 151 Backlog 6 (3 ) 3 5 (2 ) 3 Customer relationships: Acquired 340 (106 ) 234 338 (87 ) 251 Up-front sales incentives 313 (80 ) 233 301 (62 ) 239 License agreements 14 (10 ) 4 13 (9 ) 4 Trademarks and tradenames 15 (14 ) 1 15 (14 ) 1 Intangible assets with indefinite lives: Trademarks and tradenames 47 — 47 47 — 47 In process research and development 7 — 7 7 — 7 Intangible assets $ 1,096 $ (429 ) $ 667 $ 1,072 $ (369 ) $ 703 |
Schedule of Intangible Asset Expected Amortization Expense | Anticipated annual amortization expense for intangible assets is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Anticipated amortization expense for up-front sales incentives $ 16 $ 19 $ 24 $ 26 $ 26 $ 122 Anticipated amortization expense for all other intangible assets 40 38 37 33 32 200 Total $ 56 $ 57 $ 61 $ 59 $ 58 $ 322 |
Discontinued Operations and D34
Discontinued Operations and Divestitures (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | Results of discontinued operations are as follows: Year Ended September 30 (in millions) 2016 2015 2014 Sales $ — $ 18 $ 94 Income (loss) from discontinued operations before income taxes 2 (13 ) (29 ) Income tax benefit (expense) from discontinued operations (1 ) 5 15 |
Receivables, Net (Tables)
Receivables, Net (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Receivables, net are summarized as follows: (in millions) September 30, September 30, 2015 Billed $ 748 $ 752 Unbilled 439 403 Less progress payments (87 ) (110 ) Total 1,100 1,045 Less allowance for doubtful accounts (6 ) (7 ) Receivables, net $ 1,094 $ 1,038 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net are summarized as follows: (in millions) September 30, September 30, 2015 Finished goods $ 210 $ 216 Work in process 236 250 Raw materials, parts and supplies 354 353 Less progress payments (1 ) (7 ) Total 799 812 Pre-production engineering costs 1,140 1,012 Inventories, net $ 1,939 $ 1,824 |
Schedule of Pre-Production Engineering Expected Amortization | Anticipated annual amortization expense for pre-production engineering costs is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Anticipated amortization expense for pre-production engineering costs (1) $ 60 $ 102 $ 137 $ 154 $ 139 $ 521 (1) On October 29, 2015, Bombardier announced the cancellation of the Learjet 85 program. Pre-production engineering costs associated with the Learjet 85 program have been excluded from anticipated amortization expense, as these costs are expected to be recovered through consideration received from Bombardier pursuant to contractual guarantees and not amortized against future hardware deliveries. |
Property (Tables)
Property (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment, Net [Abstract] | |
Property | Property is summarized as follows: (in millions) September 30, September 30, 2015 Land $ 15 $ 15 Buildings and improvements 468 429 Machinery and equipment 1,218 1,164 Information systems software and hardware 435 406 Furniture and fixtures 74 66 Capital leases 58 58 Construction in progress 183 180 Total 2,451 2,318 Less accumulated depreciation (1,416 ) (1,354 ) Property $ 1,035 $ 964 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Other Assets [Abstract] | |
Other Assets | Other assets are summarized as follows: (in millions) September 30, September 30, 2015 Long-term receivables $ 146 $ 109 Investments in equity affiliates 10 13 Exchange and rental assets (net of accumulated depreciation of $101 at September 30, 2016 and $97 at September 30, 2015) 68 66 Other 153 156 Other assets $ 377 $ 344 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | (in millions, except weighted average amounts) September 30, September 30, Short-term commercial paper borrowings outstanding (1) $ 440 $ 448 Current portion of long-term debt 300 — Short-term debt $ 740 $ 448 Weighted average interest rate of commercial paper borrowings 0.79 % 0.52 % Weighted average maturity period of commercial paper borrowings (days) 15 25 (1) The maximum amount of short-term commercial paper borrowings outstanding during the year ended September 30, 2016 was $929 million . |
Long-Term Debt Reconciliation to Carrying Amount | The principal amount of long-term debt, net of discount, is summarized as follows: (in millions, except interest rate figures) Interest Rate September 30, September 30, 2015 Fixed-rate notes due: December 2043 4.80% $ 398 $ 398 December 2023 3.70% 399 399 November 2021 3.10% 250 250 July 2019 5.25% 300 299 Variable-rate note due: December 2016 3 month LIBOR + 0.35% (1) 300 300 Fair value swap adjustment (Notes 14 and 15) 35 34 Total $ 1,682 $ 1,680 Less current portion of long-term debt 300 — Long-term Debt, Net $ 1,382 $ 1,680 (1) The three-month LIBOR rate at September 30, 2016 was approximately 0.85 percent. |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Defined Benefit Plan Disclosure | |
Schedule of Defined Benefit Plans Components of Expense (Income) | The components of expense (income) for Pension Benefits and Other Retirement Benefits are summarized below: Pension Benefits Other Retirement Benefits (in millions) 2016 2015 2014 2016 2015 2014 Service cost $ 11 $ 12 $ 10 $ 3 $ 3 $ 3 Interest cost 126 155 168 6 7 9 Expected return on plan assets (238 ) (242 ) (228 ) (2 ) (1 ) (1 ) Amortization: Prior service credit (1 ) (3 ) (12 ) (1 ) (5 ) (9 ) Net actuarial loss 78 72 72 8 7 8 Net benefit expense (income) $ (24 ) $ (6 ) $ 10 $ 14 $ 11 $ 10 |
Reconciliation of pension benefit obligation, plan assets, funded status and net liability for Pension Benefits and Other Retirement Benefits | The following table reconciles the projected benefit obligations (PBO), plan assets, funded status and net liability for the Company's Pension Benefits and Other Retirement Benefits: Pension Benefits Other Retirement Benefits (in millions) 2016 2015 2016 2015 PBO at beginning of period $ 4,167 $ 4,086 $ 221 $ 213 Service cost 11 12 3 3 Interest cost 126 155 6 7 Discount rate and other assumption changes 436 315 17 6 Actuarial losses (gains) 29 (52 ) (1 ) 7 Plan participant contributions — — 5 3 Benefits paid (229 ) (330 ) (18 ) (18 ) Plan amendments — — (2 ) — Other (13 ) (19 ) — — PBO at end of period 4,527 4,167 231 221 Plan assets at beginning of period 2,902 3,185 19 18 Actual return on plan assets 346 (16 ) 1 — Company contributions 69 69 12 16 Plan participant contributions — — 5 3 Benefits paid (229 ) (330 ) (18 ) (18 ) Other (14 ) (6 ) — — Plan assets at end of period 3,074 2,902 19 19 Funded status of plans $ (1,453 ) $ (1,265 ) $ (212 ) $ (202 ) Funded status consists of: Retirement benefits liability $ (1,448 ) $ (1,264 ) $ (212 ) $ (202 ) Compensation and benefits liability (10 ) (11 ) — — Other assets 5 10 — — Net liability $ (1,453 ) $ (1,265 ) $ (212 ) $ (202 ) |
Schedule Of Other Comprehensive Loss Related to Retirement Benefits | The following table summarizes the amounts included in Accumulated other comprehensive loss before tax related to retirement benefits as of September 30, 2016 and 2015 and changes recognized in Other comprehensive loss before tax for the years ended September 30, 2016 and 2015 : Pension Benefits Other Retirement Benefits (in millions) Prior Service Cost (Credit) Net Actuarial Loss Prior Service Cost (Credit) Net Actuarial Loss Balance at September 30, 2014 $ 6 $ 2,035 $ (9 ) $ 99 Current year net actuarial loss — 515 — 14 Amortization of prior service cost 3 — 5 — Amortization of actuarial loss — (72 ) — (7 ) Balance at September 30, 2015 9 2,478 (4 ) 106 Current year prior service cost — — (2 ) — Current year net actuarial loss — 351 — 18 Amortization of prior service cost 1 — 1 — Amortization of actuarial loss — (78 ) — (8 ) Balance at September 30, 2016 $ 10 $ 2,751 $ (5 ) $ 116 |
Schedule Of Amounts Amortized From Accumulated Other Comprehensive Loss In Next Fiscal Year | The estimated amounts that will be amortized from Accumulated other comprehensive loss into expense (income) for Pension Benefits and Other Retirement Benefits during the year ending September 30, 2017 are as follows: (in millions) Pension Benefits Other Retirement Benefits Total Prior service cost $ — $ (1 ) $ (1 ) Net actuarial loss 92 8 100 Total $ 92 $ 7 $ 99 |
Schedule Of Assumptions Used | The following table presents the significant assumptions used in determining the benefit obligations: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2016 2015 2016 2015 2016 2015 Discount rate 3.22 % 3.96 % 1.72 % 2.94 % 3.02 % 3.73 % Compensation increase rate 4.00 % 4.00 % 3.03 % 3.04 % 4.00 % 4.00 % Significant assumptions used in determining the net benefit expense (income) are as follows: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2016 2015 2016 2015 2016 2015 Discount rate 3.96 % 3.96 % 2.94 % 3.15 % 3.73 % 3.70 % Expected long-term return on plan assets 8.23 % 8.23 % 6.73 % 6.70 % 8.25 % 8.25 % Compensation increase rate 4.00 % 4.00 % 3.04 % 3.48 % 4.00 % 4.00 % Health care cost gross trend rate (1) — — — — 7.00 % 7.48 % Ultimate trend rate (1) — — — — 5.00 % 4.98 % Year that trend reaches ultimate rate (1) — — — — 2019 2019 (1) Due to the effect of the fixed Company contribution, increasing or decreasing the health care cost trend rate by one percentage point would not have a significant impact on the Company's cost of providing Other Retirement Benefits. |
Schedule Of Target And Actual Asset Allocations | Target and actual asset allocations as of September 30, 2016 and 2015 are as follows: Target Mix 2016 2015 Equities 40% - 70% 53 % 54 % Fixed income 25% - 60% 45 % 44 % Alternative investments 0% - 15% 0 % 0 % Cash 0% - 5% 2 % 2 % |
Schedule Of Company Contributions To Pension Plans | For the years ended September 30, 2016 and 2015 , the Company made contributions to its pension plans as follows: (in millions) 2016 2015 Contributions to U.S. qualified plan $ 55 $ 55 Contributions to U.S. non-qualified plan 9 9 Contributions to non-U.S. plans 5 5 Total $ 69 $ 69 |
Schedule Of Estimated Benefit Payments | The following table reflects estimated benefit payments to be made to eligible participants for each of the next five years and the following five years in the aggregate: (in millions) Pension Benefits Other Retirement Benefits 2017 $ 241 $ 16 2018 235 16 2019 240 17 2020 244 17 2021 246 16 2022-2026 1,249 76 |
Schedule Of Defined Contribution Savings Plan Expense | The Company's expense related to the defined contribution savings plans for 2016 , 2015 and 2014 was as follows: 2016 2015 2014 (in millions) Shares Expense Shares Expense Shares Expense Contribution in shares 0.6 $ 49 0.4 $ 39 0.5 $ 40 Contribution in cash 46 47 50 Total $ 95 $ 86 $ 90 |
Pension Plans, Defined Benefit [Member] | |
Defined Benefit Plan Disclosure | |
Schedule of Fair Value of Plan Assets, by Level Within Fair Value Hierarchy | The following table presents the fair value of the Company's pension plans' assets as of September 30, 2016 and 2015 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2016 September 30, 2015 Asset category (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity securities: U.S. equity $ 560 $ 347 $ — $ 907 $ 533 $ 362 $ — $ 895 Non-U.S. equity 683 40 — 723 575 93 — 668 Fixed income securities: Corporate — 1,143 — 1,143 — 1,088 — 1,088 U.S. government 94 89 — 183 65 83 — 148 Mortgage and asset-backed — 2 — 2 — 2 — 2 Other — 42 3 45 — 40 3 43 Cash and cash equivalents — 93 — 93 — 55 — 55 Sub-total 1,337 1,756 3 3,096 1,173 1,723 3 2,899 Net receivables (payables) related to investment transactions (22 ) 3 Total $ 3,074 $ 2,902 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | |
Defined Benefit Plan Disclosure | |
Schedule of Fair Value of Plan Assets, by Level Within Fair Value Hierarchy | The following table presents the fair value of the Company's other retirement benefits plan's assets as of September 30, 2016 and 2015 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2016 September 30, 2015 Asset category (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity securities: U.S. equity $ 8 $ — $ — $ 8 $ 7 $ — $ — $ 7 Non-U.S. equity 1 — — 1 — — — — Fixed income securities: Corporate — 2 — 2 — 2 — 2 U.S. government 2 1 — 3 2 1 — 3 Mortgage and asset-backed — — — — — 1 — 1 Cash and cash equivalents — 5 — 5 — 6 — 6 Total $ 11 $ 8 $ — $ 19 $ 9 $ 10 $ — $ 19 |
Shareowners' Equity (Tables)
Shareowners' Equity (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Accumulated Other Comprehensive Income Loss | Changes in accumulated other comprehensive loss (AOCL), net of tax, by component are as follows: Foreign Exchange Translation Adjustment Pension and Other Postretirement Adjustments (1) Change in the Fair Value of Effective Cash Flow Hedges Total Balance at September 30, 2013 $ 12 $ (1,293 ) $ (6 ) $ (1,287 ) Other comprehensive income (loss) before reclassifications (27 ) (92 ) 3 (116 ) Amounts reclassified from accumulated other comprehensive income — 37 — 37 Net current period other comprehensive income (loss) (27 ) (55 ) 3 (79 ) Balance at September 30, 2014 (15 ) (1,348 ) (3 ) (1,366 ) Other comprehensive (loss) before reclassifications (41 ) (334 ) (7 ) (382 ) Amounts reclassified from accumulated other comprehensive income — 45 4 49 Net current period other comprehensive (loss) (41 ) (289 ) (3 ) (333 ) Balance at September 30, 2015 (56 ) (1,637 ) (6 ) (1,699 ) Other comprehensive (loss) before reclassifications (20 ) (234 ) (2 ) (256 ) Amounts reclassified from accumulated other comprehensive income — 53 4 57 Net current period other comprehensive income (loss) (20 ) (181 ) 2 (199 ) Balance at September 30, 2016 $ (76 ) $ (1,818 ) $ (4 ) $ (1,898 ) (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 and were $ 84 million ($ 53 million net of tax), $71 million ( $45 million net of tax) and $59 million ( $37 million net of tax) for 2016 , 2015 and 2014, respectively. The reclassifications are included in the computation of net benefit expense. See Note 10, Retirement Benefits, for additional details. |
Stock-Based Compensation and 42
Stock-Based Compensation and Earnings Per Share (Tables) | 12 Months Ended | |
Sep. 30, 2016 | ||
Stock Based Compensation and Earnings Per Share Abstract | ||
Stock-Based Compensation Expense Categorization | Total stock-based compensation expense and related income tax benefit included within the Consolidated Statement of Operations for 2016 , 2015 and 2014 is as follows: (in millions) 2016 2015 2014 Stock-based compensation expense included in: Product cost of sales $ 8 $ 7 $ 7 Selling, general and administrative expenses 19 17 17 Total $ 27 $ 24 $ 24 Income tax benefit $ 9 $ 8 $ 8 | |
Schedule of Stock Option Activity | The following summarizes the activity of the Company's stock options for 2016 : Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2015 3,699 $ 61.02 Granted 642 86.77 Exercised (387 ) 56.31 Forfeited or expired (40 ) 83.85 Outstanding at September 30, 2016 3,914 $ 65.48 5.5 $ 75 Vested or expected to vest (1) 3,905 $ 65.43 5.5 $ 75 Exercisable at September 30, 2016 2,759 $ 57.93 4.2 $ 73 (1) Represents outstanding options reduced by expected forfeitures 2016 2015 2014 Weighted-average fair value per share of options granted $ 17.75 $ 19.59 $ 18.60 Intrinsic value of options exercised (in millions) (2) $ 13 $ 48 $ 26 (2) Represents the amount by which the stock price exceeded the exercise price of the options on the date of the exercise | [1] |
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: 2016 Grants 2015 Grants 2014 Grants Risk-free interest rate 0.7% - 2.5% 0.5% - 2.6% 0.3% - 3.0% Expected dividend yield 1.4% - 1.6% 1.6 % 1.9 % Expected volatility 20.0 % 24.0 % 28.0 % Expected life 7 years 7 years 7 years | |
Schedule of Performance Shares, Restricted Shares, and Restricted Stock Units Activity | The following summarizes the Company's performance shares, restricted stock and restricted stock units for 2016 : Performance Shares Restricted Stock Restricted Stock Units (shares in thousands) Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Nonvested at September 30, 2015 438 $ 68.92 23 $ 30.24 340 $ 64.34 Granted 131 85.13 — — 72 85.85 Vested (168 ) 56.10 — — (54 ) 54.37 Forfeited (15 ) 79.47 — — (7 ) 78.68 Nonvested at September 30, 2016 386 $ 79.60 23 $ 30.24 351 $ 69.86 (in millions) Performance Shares Restricted Stock Restricted Stock Units Total unrecognized compensation costs at September 30, 2016 $ 12 $ — $ 5 Weighted-average life remaining at September 30, 2016, in years 0.9 0 0.9 Weighted-average fair value per share granted in 2015 $ 82.76 $ — $ 84.63 Weighted-average fair value per share granted in 2014 $ 71.63 $ — $ 72.42 | |
Earnings Per Share and Diluted Share Equivalents | The computation of basic and diluted earnings per share is as follows: (in millions, except per share amounts) 2016 2015 2014 Numerator for basic and diluted earnings per share: Income from continuing operations $ 727 $ 694 $ 618 Income (loss) from discontinued operations, net of taxes 1 (8 ) (14 ) Net income $ 728 $ 686 $ 604 Denominator: Denominator for basic earnings per share – weighted average common shares 130.5 132.3 135.1 Effect of dilutive securities: Stock options 1.0 1.0 1.2 Performance shares, restricted stock and restricted stock units 0.6 0.4 0.4 Dilutive potential common shares 1.6 1.4 1.6 Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion 132.1 133.7 136.7 Earnings (loss) per share: Basic Continuing operations $ 5.57 $ 5.25 $ 4.57 Discontinued operations 0.01 (0.06 ) (0.10 ) Basic earnings per share $ 5.58 $ 5.19 $ 4.47 Diluted Continuing operations $ 5.50 $ 5.19 $ 4.52 Discontinued operations 0.01 (0.06 ) (0.10 ) Diluted earnings per share $ 5.51 $ 5.13 $ 4.42 | |
[1] | Represents the amount by which the stock price exceeded the exercise price of the options on the date of the exercise |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | Income tax expense from continuing operations was calculated based on the following components of income before income taxes: (in millions) 2016 2015 2014 U.S. income $ 824 $ 835 $ 754 Non-U.S. income 111 127 128 Total $ 935 $ 962 $ 882 |
Schedule Of Components Of Income Tax Expense | The components of income tax expense from continuing operations are as follows: (in millions) 2016 2015 2014 Current: U.S. federal $ 120 $ 169 $ 110 Non-U.S. 29 38 37 U.S. state and local 11 11 4 Total current 160 218 151 Deferred: U.S. federal 47 49 105 Non-U.S. — (4 ) (2 ) U.S. state and local 1 5 10 Total deferred 48 50 113 Income tax expense $ 208 $ 268 $ 264 |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation | The effective income tax rate from continuing operations differed from the U.S. statutory tax rate as detailed below: 2016 2015 2014 Statutory tax rate 35.0 % 35.0 % 35.0 % Foreign rate differential (0.7 ) (1.0 ) (1.1 ) State and local income taxes 1.1 1.2 1.3 Research and development credit (6.4 ) (3.2 ) (1.1 ) Domestic manufacturing deduction (2.0 ) (2.0 ) (1.7 ) Tax settlements — (1.6 ) (0.9 ) Change in valuation allowance (4.5 ) — — Other (0.3 ) (0.5 ) (1.6 ) Effective income tax rate 22.2 % 27.9 % 29.9 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred income tax assets and liabilities are included in the Consolidated Statement of Financial Position as follows: September 30 (in millions) 2016 2015 Deferred income taxes $ 219 $ 165 Other liabilities (1 ) (3 ) Deferred income taxes, net $ 218 $ 162 As discussed in Note 2, during 2016, the Company retrospectively adopted a new standard related to the balance sheet classification of deferred taxes. The effects of the accounting change on the September 30, 2015 Consolidated Statement of Financial Position were as follows: September 30, 2015 (in millions) Revised As Reported Current deferred income tax asset $ — $ 9 Current deferred income tax liability — (84 ) Current deferred income taxes, net $ — $ (75 ) Long-term deferred income taxes $ 165 $ 241 Other liabilities (3 ) (4 ) Long-term deferred income taxes, net $ 162 $ 237 Net long-term deferred income tax benefits (liabilities) consist of the tax effects of temporary differences related to the following: September 30 (in millions) 2016 2015 Inventory $ (282 ) $ (226 ) Product warranty costs 29 29 Customer incentives 68 62 Contract reserves 6 11 Retirement benefits 549 487 Intangibles (171 ) (177 ) Capital lease liability 20 21 Property (179 ) (154 ) Stock-based compensation 33 30 Deferred compensation 16 15 Capital loss carryover 41 42 Compensation and benefits 28 29 Valuation allowance — (42 ) Other 60 35 Deferred income taxes, net $ 218 $ 162 |
Summary of Valuation Allowance | Changes in the valuation allowance for deferred tax assets are summarized as follows: September 30 (in millions) 2016 2015 2014 Balance at beginning of year $ 42 $ 43 $ 11 Charged to costs and expenses (1) — — 43 Deductions (2) (3) (42 ) (1 ) (11 ) Balance at September 30 $ — $ 42 $ 43 (1) 2014 increase was recorded in discontinued operations (2) 2014 deduction of $11 million was due to the divestiture of a foreign subsidiary (3) 2016 deduction of $42 million was primarily due to the creation of a tax planning strategy |
Summary of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: September 30 (in millions) 2016 2015 2014 Beginning balance $ 39 $ 48 $ 56 Additions for tax positions related to the current year 11 8 13 Additions for tax positions of prior years 7 6 1 Additions for tax positions related to acquisitions — — 8 Reductions for tax positions of prior years (10 ) (17 ) (17 ) Reductions for tax positions of prior years related to lapse of statute of limitations — (1 ) (2 ) Reductions for tax positions related to settlements with taxing authorities (2 ) (5 ) (11 ) Ending balance $ 45 $ 39 $ 48 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 and 2015 are as follows: September 30, 2016 September 30, 2015 (in millions) Fair Value Hierarchy Fair Value Asset (Liability) Fair Value Asset (Liability) Deferred compensation plan investments Level 1 $ 55 $ 50 Interest rate swap assets Level 2 35 34 Foreign currency forward exchange contract assets Level 2 11 7 Foreign currency forward exchange contract liabilities Level 2 (13 ) (11 ) Contingent consideration for ICG acquisition Level 3 (13 ) (12 ) |
Change in Fair Value of Level 3 Contingent Consideration | The change in fair value of the Level 3 contingent consideration is as follows: (in millions) Fair Value (Liability) Balance at September 30, 2015 $ (12 ) Fair value adjustment (1) (1 ) Balance at September 30, 2016 $ (13 ) (1) The fair value adjustment is included in Interest expense on the Consolidated Statement of Operations. |
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) September 30, 2016 September 30, 2015 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 340 $ 340 $ 252 $ 252 Short-term debt (740 ) (740 ) (448 ) (448 ) Long-term debt (1,347 ) (1,508 ) (1,646 ) (1,750 ) |
Derivative Financial Instrume45
Derivative Financial Instruments (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments in Consolidated Statement of Financial Position | Fair values of derivative instruments in the Consolidated Statement of Financial Position as of September 30, 2016 and 2015 are as follows: Asset Derivatives (in millions) Classification September 30, September 30, 2015 Foreign currency forward exchange contracts Other current assets $ 11 $ 7 Interest rate swaps Other assets 35 34 Total $ 46 $ 41 Liability Derivatives (in millions) Classification September 30, September 30, 2015 Foreign currency forward exchange contracts Other current liabilities $ 13 $ 11 |
Effect of Derivative Instruments on the Consolidated Statement of Operations | The effect of derivative instruments on the Consolidated Statement of Operations for the fiscal years ended September 30, 2016 and 2015 is as follows: Amount of Gain (Loss) (in millions) Location of Gain (Loss) September 30, September 30, 2015 Derivatives Designated as Hedging Instruments: Fair Value Hedges Interest rate swaps Interest expense $ 10 $ 11 Cash Flow Hedges Foreign currency forward exchange contracts: Amount of (loss) recognized in AOCL (effective portion, before deferred tax impact) AOCL (3 ) (10 ) Amount of (loss) reclassified from AOCL into income Cost of sales (6 ) (6 ) Derivatives Not Designated as Hedging Instruments: Foreign currency forward exchange contracts Cost of sales (1 ) (8 ) |
Guarantees and Indemnificatio46
Guarantees and Indemnifications (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Guarantees and Indemnifications Abstract | |
Changes in Accrued Product Warranty Costs | Changes in the carrying amount of accrued product warranty costs are summarized as follows: September 30 (in millions) 2016 2015 2014 Balance at beginning of year $ 89 $ 104 $ 121 Warranty costs incurred (42 ) (46 ) (47 ) Product warranty accrual 46 42 46 Changes in estimates for prior years (6 ) (10 ) (15 ) Increase from acquisitions — 1 — Foreign currency translation adjustments and other — (2 ) (1 ) Balance at September 30 $ 87 $ 89 $ 104 |
Contractual Obligations and O47
Contractual Obligations and Other Commitments (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations and Other Commitments | The following table reflects certain of the Company's non-cancelable contractual commitments as of September 30, 2016 : Payments Due By Period (in millions) 2017 2018 2019 2020 2021 Thereafter Total Non-cancelable operating leases $ 63 $ 52 $ 39 $ 28 $ 21 $ 113 $ 316 Purchase contracts 34 32 29 27 26 40 188 Long-term debt 300 — 300 — — 1,050 1,650 Interest on long-term debt 58 58 58 42 42 473 731 Total $ 455 $ 142 $ 426 $ 97 $ 89 $ 1,676 $ 2,885 |
Restructuring, Pension Settle48
Restructuring, Pension Settlement and Asset Impairment Charges, Net (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Restructuring and Related Costs [Table Text Block] | During the first quarter of 2016, the Company recorded corporate restructuring and asset impairment charges totaling $45 million as follows: (in millions) Cost of Sales Selling, General and Administrative Expenses Total Employee separation costs $ 31 $ 8 $ 39 Asset impairment charges 2 4 6 Restructuring and asset impairment charges $ 33 $ 12 $ 45 |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Sales and Results of Continuing Operations of Operating Segments | The sales and earnings of continuing operations of the Company's operating segments are summarized as follows: (in millions) 2016 2015 2014 Sales: Commercial Systems $ 2,395 $ 2,434 $ 2,299 Government Systems 2,206 2,187 2,209 Information Management Services 658 623 471 Total sales $ 5,259 $ 5,244 $ 4,979 Segment operating earnings: Commercial Systems $ 531 $ 554 $ 509 Government Systems 477 457 465 Information Management Services 107 95 62 Total segment operating earnings 1,115 1,106 1,036 Interest expense (1) (64 ) (61 ) (59 ) Stock-based compensation (27 ) (24 ) (24 ) General corporate, net (44 ) (59 ) (59 ) Gain on divestiture of business — — 10 ARINC transaction costs (1) — — (13 ) Restructuring, pension settlement and asset impairment charges, net (45 ) — (9 ) Income from continuing operations before income taxes 935 962 882 Income tax expense (208 ) (268 ) (264 ) Income from continuing operations $ 727 $ 694 $ 618 (1) During the year ended September 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 this period was $16 million . |
Investments in Equity Affiliates, Depreciation and Amortization, Capital Expenditures, and Earnings from Equity Affiliates, by Segment | The following tables summarize the identifiable assets and investments in equity affiliates at September 30, 2016 , 2015 and 2014 , as well as the provision for depreciation and amortization, the amount of capital expenditures for property and earnings from equity affiliates for each of the three years ended September 30, for each of the operating segments and Corporate: (in millions) 2016 2015 2014 Identifiable assets: Commercial Systems $ 3,050 $ 2,906 $ 2,655 Government Systems 2,052 1,953 1,938 Information Management Services 1,906 1,886 1,885 Corporate 699 559 527 Total identifiable assets $ 7,707 $ 7,304 $ 7,005 Investments in equity affiliates: Commercial Systems $ 4 $ 7 $ — Government Systems 6 6 8 Information Management Services — — — Total investments in equity affiliates $ 10 $ 13 $ 8 Depreciation and amortization: Commercial Systems $ 125 $ 117 $ 108 Government Systems 74 83 80 Information Management Services 54 52 37 Total depreciation and amortization $ 253 $ 252 $ 225 Capital expenditures for property: Commercial Systems $ 74 $ 90 $ 68 Government Systems 69 81 66 Information Management Services 50 39 29 Total capital expenditures for property $ 193 $ 210 $ 163 Earnings (loss) from equity affiliates: Commercial Systems $ (3 ) $ — $ — Government Systems 2 3 7 Information Management Services — — — Total earnings (loss) from equity affiliates $ (1 ) $ 3 $ 7 |
Summary of Sales by Product Category | The following table summarizes sales by product category for the years ended September 30, 2016 , 2015 and 2014 : (in millions) 2016 2015 2014 Commercial Systems product categories: Air transport aviation electronics $ 1,430 $ 1,385 $ 1,285 Business and regional aviation electronics 965 1,049 1,014 Commercial Systems sales 2,395 2,434 2,299 Government Systems product categories: Avionics 1,483 1,436 1,409 Communication and Navigation 723 751 800 Government Systems sales 2,206 2,187 2,209 Information Management Services sales 658 623 471 Total sales $ 5,259 $ 5,244 $ 4,979 |
Schedule of Sales and Property by Geographic Region | The following table reflects sales for the years ended September 30, 2016 , 2015 and 2014 by location of our customers and property at September 30, 2016 , 2015 and 2014 by geographic region: Sales Property (in millions) 2016 2015 2014 2016 2015 2014 U.S. (1) $ 3,292 $ 3,174 $ 2,993 $ 921 $ 861 $ 805 Europe / Africa / Middle East 937 1,070 1,040 86 83 90 Asia-Pacific 545 503 486 17 15 19 Americas, excluding U.S. 485 497 460 11 5 5 Non U.S. 1,967 2,070 1,986 114 103 114 Total $ 5,259 $ 5,244 $ 4,979 $ 1,035 $ 964 $ 919 (1) For the years ended September 30, 2016 , 2015 and 2014 , U.S. sales include revenue from foreign military sales of $171 million , $171 million and $176 million , respectively. |
Quarterly Financial informati50
Quarterly Financial information (Unaudited) (Tables) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Schedule of Quarterly Financial Information | Quarterly financial information for the years ended September 30, 2016 and 2015 is summarized as follows: 2016 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 1,169 $ 1,311 $ 1,334 $ 1,445 $ 5,259 Gross profit (total sales less product and service cost of sales) 333 404 419 461 1,617 Income from continuing operations 133 172 214 208 727 Income (loss) from discontinued operations, net of taxes 2 (1 ) — — 1 Net income $ 135 $ 171 $ 214 $ 208 $ 728 Earnings (loss) per share: Basic Continuing operations $ 1.01 $ 1.31 $ 1.65 $ 1.60 $ 5.57 Discontinued operations 0.02 — — — 0.01 Basic earnings per share $ 1.03 $ 1.31 $ 1.65 $ 1.60 $ 5.58 Diluted Continuing operations $ 1.00 $ 1.30 $ 1.63 $ 1.58 $ 5.50 Discontinued operations 0.02 (0.01 ) — — 0.01 Diluted earnings per share $ 1.02 $ 1.29 $ 1.63 $ 1.58 $ 5.51 | 2015 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 1,226 $ 1,341 $ 1,293 $ 1,384 $ 5,244 Gross profit (total sales less product and service cost of sales) 369 404 405 436 1,614 Income from continuing operations 169 163 178 184 694 Income (loss) from discontinued operations, net of taxes (2 ) (6 ) — — (8 ) Net income $ 167 $ 157 $ 178 $ 184 $ 686 Earnings (loss) per share: Basic Continuing operations $ 1.28 $ 1.23 $ 1.35 $ 1.40 $ 5.25 Discontinued operations (0.02 ) (0.04 ) — — (0.06 ) Basic earnings per share $ 1.26 $ 1.19 $ 1.35 $ 1.40 $ 5.19 Diluted Continuing operations $ 1.26 $ 1.22 $ 1.33 $ 1.38 $ 5.19 Discontinued operations (0.02 ) (0.05 ) — — (0.06 ) Diluted earnings per share $ 1.24 $ 1.17 $ 1.33 $ 1.38 $ 5.13 |
Business Description and Basi51
Business Description and Basis of Presentation (Details) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Operating Cycle | 52/53 weeks | ||
Current Year Fiscal Period | P52W | P52W | P53W |
Significant Accounting Polici52
Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016USD ($)Subsidiary | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Significant Accounting Policies | |||
Income Tax Expense (Benefit) | $ 208 | $ 268 | $ 264 |
Number of Consolidated Subsidiaries with Income Attributable to Noncontrolling Interest | Subsidiary | 1 | ||
Other Research and Development Expense | $ 224 | 272 | 268 |
Number of Reporting Units | 6 | ||
Inventory Valuation Reserves | $ 95 | 87 | |
Preproduction Engineering Costs Useful Life Maximum, in Years | 15 years | ||
Up-Front Sales Incentives Amortization Period Maximum, in Years | 15 years | ||
Receivables, net | $ 1,094 | 1,038 | |
Excess Tax Benefit from Share-based Compensation, Operating Activities | 0 | 13 | $ 6 |
Deferred Tax Assets, Net of Valuation Allowance, Current | 0 | ||
Deferred Tax Liabilities, Net, Current | 0 | ||
Business Jet Aircraft Manufacturers [Member] | |||
Significant Accounting Policies | |||
Receivables, net | $ 162 | ||
Workforce Subject to Collective Bargaining Arrangements [Member] | |||
Significant Accounting Policies | |||
Concentration Risk, Percentage | 12.00% | ||
Minimum [Member] | |||
Significant Accounting Policies | |||
Weighted average useful life of Acquired Finite-lived Intangible Assets | 4 years | ||
Minimum [Member] | Building and Building Improvements [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Minimum [Member] | Machinery and Equipment [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Minimum [Member] | Information Systems Software and Hardware [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Minimum [Member] | Furniture and Fixtures [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 12 years | ||
Minimum [Member] | Capital Lease Obligations [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Maximum [Member] | |||
Significant Accounting Policies | |||
Weighted average useful life of Acquired Finite-lived Intangible Assets | 23 years | ||
Maximum [Member] | Building and Building Improvements [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 40 years | ||
Maximum [Member] | Machinery and Equipment [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Maximum [Member] | Information Systems Software and Hardware [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Maximum [Member] | Furniture and Fixtures [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Maximum [Member] | Capital Lease Obligations [Member] | |||
Significant Accounting Policies | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
New Accounting Pronouncement, Early Adoption, Effect [Member] | |||
Significant Accounting Policies | |||
Income Tax Expense (Benefit) | $ (4) | ||
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ (4) | ||
Deferred Tax Assets, Net of Valuation Allowance, Current | 9 | ||
Deferred Tax Liabilities, Net, Current | $ 84 |
Acquisitions, Goodwill and In53
Acquisitions, Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | Feb. 25, 2016 | Aug. 06, 2015 | Mar. 20, 2015 | Dec. 23, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Acquisitions | |||||||
Payments to acquire businesses, net of cash acquired | $ 17 | $ 74 | $ 1,405 | ||||
Goodwill | 1,919 | 1,904 | 1,863 | ||||
Intangible Assets, Net (Excluding Goodwill) | 667 | 703 | |||||
Goodwill, Impairment Loss | 0 | 0 | 0 | ||||
Matrix Series Projector Product Line [Member] | |||||||
Acquisitions | |||||||
Payments to acquire businesses, net of cash acquired | $ 17 | ||||||
Goodwill | 6 | ||||||
Intangible Assets | $ 11 | ||||||
Weighted average useful life of Acquired Finite-lived Intangible Assets | 10 years | ||||||
Goodwill, expected tax deductible amount | $ 6 | ||||||
ICG [Member] | |||||||
Acquisitions | |||||||
Payments to acquire businesses, net of cash acquired | $ 50 | ||||||
Voting interests acquired (percent) | 100.00% | ||||||
Goodwill | $ 51 | ||||||
Intangible Assets, Net (Excluding Goodwill) | $ 23 | ||||||
Weighted average useful life of Acquired Finite-lived Intangible Assets | 8 years | ||||||
Goodwill, expected tax deductible amount | $ 51 | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 14 | ||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | $ 12 | ||||||
Pacific Avionics [Member] | |||||||
Acquisitions | |||||||
Payments to acquire businesses, net of cash acquired | $ 24 | ||||||
Voting interests acquired (percent) | 100.00% | ||||||
Goodwill | $ 15 | ||||||
Intangible Assets, Net (Excluding Goodwill) | $ 10 | ||||||
Weighted average useful life of Acquired Finite-lived Intangible Assets | 7 years | ||||||
Goodwill, expected tax deductible amount | $ 0 | ||||||
ARINC [Member] | |||||||
Acquisitions | |||||||
Payments to acquire businesses, net of cash acquired | $ 1,405 | ||||||
Voting interests acquired (percent) | 100.00% | ||||||
Goodwill | $ 1,087 | ||||||
Intangible Assets | $ 431 | ||||||
Weighted average useful life of Acquired Finite-lived Intangible Assets | 15 years | ||||||
Goodwill, expected tax deductible amount | $ 0 | ||||||
Commercial Systems [Member] | |||||||
Acquisitions | |||||||
Goodwill | $ 326 | $ 314 | $ 262 |
Acquisitions, Goodwill and In54
Acquisitions, Goodwill and Intangible Assets (Acquisition Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Jun. 30, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 23, 2013 | |||
Acquisitions | |||||||
Business Combination, Acquisition Related Costs | $ 0 | $ 0 | $ 13 | [1] | |||
Debt Instrument, Fee Amount | 0 | 0 | |||||
Goodwill | $ 1,919 | $ 1,904 | 1,863 | ||||
ARINC [Member] | |||||||
Acquisitions | |||||||
Proceeds from Previous Acquisition | $ 10 | ||||||
Business Combination, Acquisition Related Costs | 16 | ||||||
Restricted Cash | [2] | $ 61 | |||||
Receivables and Other current assets | 216 | ||||||
Building held for sale | [3] | 81 | |||||
Business held for sale | [4] | 15 | |||||
Property | 49 | ||||||
Intangible Assets | 431 | ||||||
Other Assets | 11 | ||||||
Total Identifiable Assets Acquired | 864 | ||||||
Payable to ARINC option holders | [2] | (61) | |||||
Current Liabilities | (171) | ||||||
Liability related to building held for sale | [3] | (81) | |||||
Liabilities associated with business held for sale | [4] | (12) | |||||
Long-term deferred income taxes | (182) | ||||||
Retirement Benefits and Other Long-term Liabilities | (39) | ||||||
Total Liabilities Assumed | 546 | ||||||
Net Identifiable Assets Acquired, excluding Goodwill | 318 | ||||||
Goodwill | 1,087 | ||||||
Net Assets Acquired | $ 1,405 | ||||||
Selling, General and Administrative Expenses [Member] | ARINC [Member] | |||||||
Acquisitions | |||||||
Business Combination, Acquisition Related Costs | 13 | ||||||
Bridge Loan [Member] | Interest Expense [Member] | ARINC [Member] | |||||||
Acquisitions | |||||||
Debt Instrument, Fee Amount | $ 3 | ||||||
[1] | During the year ended September 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 this period was $16 million. | ||||||
[2] | 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 was prepared as of December 23, 2013, includes restricted cash of $61 million and a current liability payable to the ARINC option holders for an equal amount. | ||||||
[3] | On March 28, 2014, the Company sold a building which was classified as held for sale at the acquisition date. | ||||||
[4] | Assets and liabilities associated with the Business held for sale relate to ASES, which the Company divested, as detailed in Note 4. |
Acquisitions, Goodwill and In55
Acquisitions, Goodwill and Intangible Assets (Proforma Results) (Details) - ARINC [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Acquisitions | |||
Sales | $ 5,259 | $ 5,244 | $ 5,085 |
Net income attributable to common shareowners from continuing operations | $ 727 | $ 694 | $ 624 |
Basic earnings per share from continuing operations | $ 5.57 | $ 5.25 | $ 4.62 |
Diluted earnings per share from continuing operations | $ 5.50 | $ 5.19 | $ 4.56 |
Acquisitions, Goodwill and In56
Acquisitions, Goodwill and Intangible Assets (Proforma Nonrecurring Adjustments) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments | $ (144) | $ (152) | $ (141) | |
Amortization of acquired ARINC intangible assets, net | (60) | (53) | (48) | |
ARINC [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net reduction to depreciation resulting from fixed asset purchase accounting adjustments | [1] | 0 | 0 | 2 |
Advisory, legal and accounting service fees | [2] | 0 | 0 | 21 |
Amortization of acquired ARINC intangible assets, net | [3] | $ 0 | $ 0 | $ (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 |
Acquisitions, Goodwill and In57
Acquisitions, Goodwill and Intangible Assets (Changes in the carrying amount of goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 1,904 | $ 1,863 |
Goodwill, Translation and Purchase Accounting Adjustments | (4) | (9) |
Goodwill | 1,919 | 1,904 |
Commercial Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 314 | 262 |
Goodwill, Translation and Purchase Accounting Adjustments | (1) | (1) |
Goodwill | 326 | 314 |
Government Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 500 | 508 |
Goodwill, Translation and Purchase Accounting Adjustments | (3) | (8) |
Goodwill | 503 | 500 |
Information Management Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 1,090 | 1,093 |
Goodwill, Translation and Purchase Accounting Adjustments | 0 | 0 |
Goodwill | 1,090 | 1,090 |
ICG [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | 13 | |
Goodwill, Acquired During Period | 38 | |
ICG [Member] | Commercial Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | 13 | |
Goodwill, Acquired During Period | 38 | |
ICG [Member] | Government Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | 0 | |
Goodwill, Acquired During Period | 0 | |
ICG [Member] | Information Management Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | 0 | |
Goodwill, Acquired During Period | 0 | |
Pacific Avionics [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 15 | |
Pacific Avionics [Member] | Commercial Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 15 | |
Pacific Avionics [Member] | Government Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 0 | |
Pacific Avionics [Member] | Information Management Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 0 | |
Matrix Series Projector Product Line [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 6 | |
Matrix Series Projector Product Line [Member] | Commercial Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 0 | |
Matrix Series Projector Product Line [Member] | Government Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 6 | |
Matrix Series Projector Product Line [Member] | Information Management Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | $ 0 | |
ARINC [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | (3) | |
ARINC [Member] | Commercial Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | 0 | |
ARINC [Member] | Government Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | 0 | |
ARINC [Member] | Information Management Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Purchase Accounting Adjustments | $ (3) |
Acquisitions, Goodwill and In58
Acquisitions, Goodwill and Intangible Assets (Summary of Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 60 | $ 53 | $ 48 |
Up Front Sales Incentives Weighted Average Useful Life | 10 years | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ (429) | (369) | |
Finite-lived and Indefinite-lived Intangible Assets, Gross | 1,096 | 1,072 | |
Intangible Assets, Net (Excluding Goodwill) | 667 | 703 | |
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 354 | 346 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (216) | (195) | |
Finite-Lived Intangible Assets, Net | 138 | 151 | |
Order or Production Backlog [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 6 | 5 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3) | (2) | |
Finite-Lived Intangible Assets, Net | 3 | 3 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 340 | 338 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (106) | (87) | |
Finite-Lived Intangible Assets, Net | 234 | 251 | |
Customer Relationships Up Front Sales Incentives [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 313 | 301 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (80) | (62) | |
Finite-Lived Intangible Assets, Net | 233 | 239 | |
Licensing Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 14 | 13 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (10) | (9) | |
Finite-Lived Intangible Assets, Net | 4 | 4 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 15 | 15 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (14) | (14) | |
Finite-Lived Intangible Assets, Net | 1 | 1 | |
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 47 | 47 | |
In Process Research and Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 7 | $ 7 |
Acquisitions, Goodwill and In59
Acquisitions, Goodwill and Intangible Assets (Expected annual amortization expense for intangible assets) (Details) $ in Millions | Sep. 30, 2016USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,017 | $ 56 |
2,018 | 57 |
2,019 | 61 |
2,020 | 59 |
2,021 | 58 |
Thereafter | 322 |
Customer Relationships Up Front Sales Incentives [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,017 | 16 |
2,018 | 19 |
2,019 | 24 |
2,020 | 26 |
2,021 | 26 |
Thereafter | 122 |
Intangible Assets Excluding Up Front Sales Incentives [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,017 | 40 |
2,018 | 38 |
2,019 | 37 |
2,020 | 33 |
2,021 | 32 |
Thereafter | $ 200 |
Discontinued Operations and D60
Discontinued Operations and Divestitures (Details) - USD ($) $ in Millions | Mar. 10, 2015 | Jul. 25, 2014 | Nov. 22, 2013 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Discontinued Operations | ||||||||||||||
Proceeds from divestiture of businesses | $ 0 | $ 0 | $ 24 | |||||||||||
Gain (loss) on sale of business | 0 | 0 | 10 | |||||||||||
Income (loss) from discontinued operations, net of taxes | $ 0 | $ 0 | $ (1) | $ 2 | $ 0 | $ 0 | $ (6) | $ (2) | 1 | (8) | (14) | |||
Sales | 0 | 18 | 94 | |||||||||||
Income (loss) from discontinued operations before income taxes | 2 | (13) | (29) | |||||||||||
Income tax benefit (expense) from discontinued operations | (1) | $ 5 | $ 15 | |||||||||||
ASES [Member] | ||||||||||||||
Discontinued Operations | ||||||||||||||
Proceeds from divestiture of businesses | $ 3 | |||||||||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 2 | 2 | ||||||||||||
Gain (loss) on sale of business | (5) | |||||||||||||
Loss on sale of business, net of tax | $ 3 | |||||||||||||
Income (loss) from discontinued operations, net of taxes | 1 | |||||||||||||
Income (loss) from discontinued operations before income taxes | $ 2 | |||||||||||||
Datapath [Member] | ||||||||||||||
Discontinued Operations | ||||||||||||||
Proceeds from divestiture of businesses | $ 10 | |||||||||||||
Gain (loss) on sale of business | (12) | |||||||||||||
Loss on sale of business, net of tax | $ 2 | |||||||||||||
KOSI [Member] | ||||||||||||||
Discontinued Operations | ||||||||||||||
Proceeds from divestiture of businesses | $ 23 | |||||||||||||
Gain (loss) on sale of business | $ 10 |
Receivables, Net (Details)
Receivables, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Receivables, Net | |||
Billed | $ 748 | $ 752 | |
Unbilled | 439 | 403 | |
Less progress payments | (87) | (110) | |
Total | 1,100 | 1,045 | |
Less allowance for doubtful accounts | (6) | (7) | |
Receivables, net | 1,094 | 1,038 | |
Receivables due from equity affiliate | 68 | ||
Net Cash Provided by Operating Activities, Continuing Operations | 723 | 749 | $ 660 |
U.S. Government [Member] | |||
Receivables, Net | |||
Receivables, net | 306 | 286 | |
Unbilled receivables net of progress payments | 99 | 91 | |
Sales Under Factoring Agreements [Member] | |||
Receivables, Net | |||
Net Cash Provided by Operating Activities, Continuing Operations | $ 60 | $ 12 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Inventories, Net | ||||
Finished goods | $ 210 | $ 216 | ||
Work in process | 236 | 250 | ||
Raw materials, parts and supplies | 354 | 353 | ||
Less progress payments | (1) | (7) | ||
Total | 799 | 812 | ||
Pre-production engineering costs | 1,140 | 1,012 | ||
Inventories, net | 1,939 | 1,824 | ||
Pre-production engineering amortization expense | $ 49 | 47 | $ 36 | |
Capitalized pre-production engineering weighted average amortization period remaining | 10 years | |||
Anticipated Amortization Expense for Pre-production Engineering Costs [Abstract] | ||||
2,017 | [1] | $ 60 | ||
2,018 | [1] | 102 | ||
2,019 | [1] | 137 | ||
2,020 | [1] | 154 | ||
2,021 | [1] | 139 | ||
Thereafter | [1] | 521 | ||
Noncurrent inventory | 1,130 | $ 1,006 | ||
Bombardier [Member] | ||||
Inventories, Net | ||||
Pre-production engineering costs | 414 | |||
Airbus [Member] | ||||
Inventories, Net | ||||
Pre-production engineering costs | 253 | |||
Boeing [Member] | ||||
Inventories, Net | ||||
Pre-production engineering costs | $ 249 | |||
[1] | On October 29, 2015, Bombardier announced the cancellation of the Learjet 85 program. Pre-production engineering costs associated with the Learjet 85 program have been excluded from anticipated amortization expense, as these costs are expected to be recovered through consideration received from Bombardier pursuant to contractual guarantees and not amortized against future hardware deliveries. |
Property (Details)
Property (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property | |||
Property, Total | $ 2,451 | $ 2,318 | |
Less accumulated depreciation | (1,416) | (1,354) | |
Property | 1,035 | 964 | $ 919 |
Property additions in accounts payable | 20 | 19 | 37 |
Property additions acquired by incurring capital leases | 0 | 0 | $ 56 |
Remaining minimum lease payments under capital lease | 76 | ||
Remaining minimum interest payments under capital lease | 22 | ||
Land [Member] | |||
Property | |||
Property, Total | 15 | 15 | |
Building and Building Improvements [Member] | |||
Property | |||
Property, Total | 468 | 429 | |
Machinery and Equipment [Member] | |||
Property | |||
Property, Total | 1,218 | 1,164 | |
Information Systems Software and Hardware [Member] | |||
Property | |||
Property, Total | 435 | 406 | |
Furniture and Fixtures [Member] | |||
Property | |||
Property, Total | 74 | 66 | |
Capital Lease Obligations [Member] | |||
Property | |||
Property, Total | 58 | 58 | |
Less accumulated depreciation | (10) | (6) | |
Construction in Progress [Member] | |||
Property | |||
Property, Total | $ 183 | $ 180 |
Other Assets (Summary of other
Other Assets (Summary of other assets) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Other Assets [Abstract] | |||
Long-term receivables | $ 146 | $ 109 | |
Investments in equity affiliates | 10 | 13 | $ 8 |
Exchange and rental assets (net of accumulated depreciation of $101 at September 30, 2016 and $97 at September 30, 2015) | 68 | 66 | |
Other | 153 | 156 | |
Other assets | 377 | 344 | |
Accumulated depreciation, exchange and rental assets | $ 101 | $ 97 |
Other Assets (Narrative) (Detai
Other Assets (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016USD ($)Joint_Venture | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Other Assets [Abstract] | |||
Number of equity affiliates (joint ventures) | Joint_Venture | 8 | ||
Ownership Percentage in Equity Affiliates | 50.00% | ||
Sales to equity affiliates | $ 229 | $ 196 | $ 177 |
Deferred profit generated from sales to equity affiliates | $ 2 | 1 | |
Exchange and rental assets estimated useful life | 15 years | ||
Depreciation expense, exchange and rental assets | $ 9 | $ 10 | $ 10 |
Debt (Short-term Borrowings) (D
Debt (Short-term Borrowings) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | |||
Short-term Debt [Line Items] | |||||
Long-term Debt, Current Maturities | $ 300,000,000 | $ 0 | $ 300,000,000 | ||
Short-term debt | 740,000,000 | 448,000,000 | 740,000,000 | ||
Short-term commercial paper borrowings [Member] | |||||
Short-term Debt [Line Items] | |||||
Short-term commercial paper borrowings outstanding | $ 440,000,000 | [1] | $ 448,000,000 | $ 440,000,000 | [1] |
Weighted Average Interest Rate | 0.79% | 0.52% | 0.79% | ||
Weighted average maturity period | 15 days | 25 days | |||
Short-term Debt, Maximum Amount Outstanding During Period | $ 929,000,000 | ||||
Line of credit facility, maximum borrowing capacity | $ 1,200,000,000 | 1,200,000,000 | |||
Short term Credit Facility [Member] | |||||
Short-term Debt [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | $ 200,000,000 | |||
[1] | The maximum amount of short-term commercial paper borrowings outstanding during the year ended September 30, 2016 was $929 million. |
Debt (Revolving Credit Faciliti
Debt (Revolving Credit Facilities) (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Revolving Credit Facility [Line Items] | ||
Debt Instrument, Fee Amount | $ 0 | $ 0 |
Revolving Credit Facility [Member] | ||
Revolving Credit Facility [Line Items] | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | 0 |
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000 | |
Maximum debt to total capitalization ratio per the debt covenants | 60.00% | |
Short term Credit Facility [Member] | ||
Revolving Credit Facility [Line Items] | ||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | 0 |
Line of credit facility, maximum borrowing capacity | 200,000,000 | |
Short term Credit Facility Non US Subs [Member] | ||
Revolving Credit Facility [Line Items] | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | $ 0 |
Line of credit facility, maximum borrowing capacity | 38,000,000 | |
Amount utilized to support commitments in the form of letters of credit | $ 3,000,000 | |
2016 Notes [Member] | Three month LIBOR [Member] | Unsecured Notes [Member] | ||
Revolving Credit Facility [Line Items] | ||
Derivative, Basis Spread on Variable Rate | 0.35% |
Debt (Other Long-Term Debt) (De
Debt (Other Long-Term Debt) (Details) - Unsecured Notes [Member] | Sep. 30, 2016 |
2043 Notes [Member] | |
Long-term Debt | |
Interest rate | 4.80% |
2023 Notes [Member] | |
Long-term Debt | |
Interest rate | 3.70% |
2021 Notes [Member] | |
Long-term Debt | |
Interest rate | 3.10% |
2019 Notes [Member] | |
Long-term Debt | |
Interest rate | 5.25% |
Debt (Summary of long-term debt
Debt (Summary of long-term debt and a reconciliation to the carrying amount) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2014 | Jan. 31, 2010 | ||
Long-term Debt | |||||||
Long-term Debt, Current Maturities | $ 300 | $ 0 | |||||
Total Long-term Debt | 1,682 | 1,680 | |||||
Interest Paid on Debt | 56 | 54 | $ 47 | ||||
Long-term Debt, Excluding Current Maturities | $ 1,382 | 1,680 | |||||
2043 Notes [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.80% | ||||||
Principal amount of notes | $ 398 | 398 | |||||
2023 Notes [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Derivative, Basis Spread on Variable Rate | 0.94% | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.70% | ||||||
Principal amount of notes | $ 399 | 399 | |||||
2021 Notes [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.10% | ||||||
Principal amount of notes | $ 250 | 250 | |||||
2019 Notes [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Derivative, Basis Spread on Variable Rate | 3.56% | 1.235% | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | ||||||
Principal amount of notes | $ 300 | 299 | |||||
2016 Notes [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Principal amount of notes | $ 300 | [1] | 300 | ||||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 0.85% | ||||||
Long-term Debt [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Fair value, swap adjustment | $ 35 | $ 34 | |||||
Three month LIBOR [Member] | 2016 Notes [Member] | Unsecured Notes [Member] | |||||||
Long-term Debt | |||||||
Derivative, Basis Spread on Variable Rate | 0.35% | ||||||
[1] | The three-month LIBOR rate at September 30, 2016 was approximately 0.85 percent. |
Retirement Benefits (Pension Be
Retirement Benefits (Pension Benefits and Other Retirement Benefits) (Details) | 12 Months Ended |
Sep. 30, 2016yrplan | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Benefit Pension Plans Outside United States | (5) |
Unfunded Defined Benefit Pension Plans Outside United States | 2 |
Retirement age employees are eligible to receive other retirement benefits | yr | 55 |
Years of Service required to receive other retirement benefits | 10 years |
Retirement Benefits (Components
Retirement Benefits (Components of Expense (Income)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Pension Plans, Defined Benefit [Member] | |||
Components of Expense (Income) | |||
Service cost | $ 11 | $ 12 | $ 10 |
Interest cost | (126) | (155) | (168) |
Expected return on plan assets | (238) | (242) | (228) |
Prior service credit | (1) | (3) | (12) |
Net actuarial loss | 78 | 72 | 72 |
Net benefit expense (income) | (24) | (6) | 10 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | |||
Components of Expense (Income) | |||
Service cost | 3 | 3 | 3 |
Interest cost | (6) | (7) | (9) |
Expected return on plan assets | (2) | (1) | (1) |
Prior service credit | (1) | (5) | (9) |
Net actuarial loss | 8 | 7 | 8 |
Net benefit expense (income) | 14 | $ 11 | $ 10 |
Change in Assumptions for Pension Plans [Member] | Pension Plans, Defined Benefit [Member] | |||
Components of Expense (Income) | |||
Interest cost | $ 35 |
Retirement Benefits (Funded Sta
Retirement Benefits (Funded Status and Net Liability) (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Defined Benefit Plan Disclosure | |||
Retirement benefits liability | $ (1,660) | $ (1,466) | |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Plan assets at beginning of period | 2,921 | ||
Company contributions | 69 | 69 | $ 75 |
Plan assets at end of period | $ 3,093 | 2,921 | |
Non-U.S. Defined Benefit Pension Plans Ratio | 5.00% | ||
Defined Benefit Pension Plans, Accumulated Benefit Obligation | $ 4,509 | 4,153 | |
Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure | |||
Funded status of plans | (1,453) | (1,265) | |
Retirement benefits liability | (1,448) | (1,264) | |
Compensation and benefits liability | (10) | (11) | |
Other assets | 5 | 10 | |
Net liability | (1,453) | (1,265) | |
Defined Benefit Plan, Change in Benefit Obligation | |||
PBO at beginning of period | 4,167 | 4,086 | |
Service cost | 11 | 12 | 10 |
Interest cost | 126 | 155 | 168 |
Discount rate and other assumption changes | 436 | 315 | |
Actuarial losses (gains) | 29 | (52) | |
Plan participant contributions | 0 | 0 | |
Benefits paid | (229) | (330) | |
Defined Benefit Plan, Plan Amendments | 0 | 0 | |
Other | (13) | (19) | |
PBO at end of period | 4,527 | 4,167 | 4,086 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Plan assets at beginning of period | 2,902 | 3,185 | |
Actual return on plan assets | 346 | (16) | |
Company contributions | 69 | 69 | |
Plan participant contributions | 0 | 0 | |
Benefits paid | (229) | (330) | |
Other | (14) | (6) | |
Plan assets at end of period | $ 3,074 | 2,902 | 3,185 |
Terminated Vested Lump Sum Payouts | (121) | ||
Defined Benefit Plan, Assumptions Used Calculating Pension Liability, Adjusted Annual Mortality Improvement Rate | 0.0075 | ||
Other Postretirement Benefit Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure | |||
Funded status of plans | $ (212) | (202) | |
Retirement benefits liability | (212) | (202) | |
Compensation and benefits liability | 0 | 0 | |
Other assets | 0 | 0 | |
Net liability | (212) | (202) | |
Defined Benefit Plan, Change in Benefit Obligation | |||
PBO at beginning of period | 221 | 213 | |
Service cost | 3 | 3 | 3 |
Interest cost | 6 | 7 | 9 |
Discount rate and other assumption changes | 17 | 6 | |
Actuarial losses (gains) | (1) | 7 | |
Plan participant contributions | 5 | 3 | |
Benefits paid | (18) | (18) | |
Defined Benefit Plan, Plan Amendments | (2) | 0 | |
Other | 0 | 0 | |
PBO at end of period | 231 | 221 | 213 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Plan assets at beginning of period | 19 | 18 | |
Actual return on plan assets | 1 | 0 | |
Company contributions | 12 | 16 | |
Plan participant contributions | 5 | 3 | |
Benefits paid | (18) | (18) | |
Other | 0 | 0 | |
Plan assets at end of period | $ 19 | $ 19 | $ 18 |
Retirement Benefits (Other Comp
Retirement Benefits (Other Comprehensive Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plan Disclosure | ||
Prior service cost | $ (1) | |
Net actuarial loss | 100 | |
Total | 99 | |
Pension Plans, Defined Benefit [Member] | ||
Defined Benefit Plan Disclosure | ||
Prior service cost | 0 | |
Net actuarial loss | 92 | |
Total | 92 | |
Pension Plans, Defined Benefit [Member] | Prior Service Cost (Credit) [Member] | ||
Defined Benefit Plan Disclosure | ||
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax | 0 | |
Accumulated Other Comprehensive Loss Balance | 9 | $ 6 |
Current year net actuarial loss | 0 | 0 |
Amortization of prior service cost | 1 | 3 |
Amortization of actuarial loss | 0 | 0 |
Accumulated Other Comprehensive Loss Balance | 10 | 9 |
Pension Plans, Defined Benefit [Member] | Net Actuarial Loss [Member] | ||
Defined Benefit Plan Disclosure | ||
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax | 0 | |
Accumulated Other Comprehensive Loss Balance | 2,478 | 2,035 |
Current year net actuarial loss | 351 | 515 |
Amortization of prior service cost | 0 | 0 |
Amortization of actuarial loss | (78) | (72) |
Accumulated Other Comprehensive Loss Balance | 2,751 | 2,478 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||
Defined Benefit Plan Disclosure | ||
Prior service cost | (1) | |
Net actuarial loss | 8 | |
Total | 7 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Prior Service Cost (Credit) [Member] | ||
Defined Benefit Plan Disclosure | ||
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax | 2 | |
Accumulated Other Comprehensive Loss Balance | (4) | (9) |
Current year net actuarial loss | 0 | 0 |
Amortization of prior service cost | 1 | 5 |
Amortization of actuarial loss | 0 | 0 |
Accumulated Other Comprehensive Loss Balance | (5) | (4) |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Net Actuarial Loss [Member] | ||
Defined Benefit Plan Disclosure | ||
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax | 0 | |
Accumulated Other Comprehensive Loss Balance | 106 | 99 |
Current year net actuarial loss | 18 | 14 |
Amortization of prior service cost | 0 | 0 |
Amortization of actuarial loss | (8) | (7) |
Accumulated Other Comprehensive Loss Balance | $ 116 | $ 106 |
Retirement Benefits (Actuarial
Retirement Benefits (Actuarial Assumptions) (Details) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Defined Benefit Plan Disclosure | |||
Compensation increase rate | 4.00% | ||
Actuarial gains losses amortization threshold | 10.00% | ||
Expected Future Lifetime Of Inactive Participants | 25 years | ||
U.S. Qualified Pension Plan [Member] | |||
Defined Benefit Plan Disclosure | |||
Discount rate | 3.22% | 3.96% | |
Compensation increase rate | 4.00% | 4.00% | |
Discount rate | 3.96% | 3.96% | |
Expected long-term return on plan assets | 8.23% | 8.23% | |
Compensation increase rate | 4.00% | 4.00% | |
Health care cost gross trend rate | 0.00% | 0.00% | |
Ultimate trend rate | 0.00% | 0.00% | |
Foreign Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure | |||
Discount rate | 1.72% | 2.94% | |
Compensation increase rate | 3.03% | 3.04% | |
Discount rate | 2.94% | 3.15% | |
Expected long-term return on plan assets | 6.73% | 6.70% | |
Compensation increase rate | 3.04% | 3.48% | |
Health care cost gross trend rate | 0.00% | 0.00% | |
Ultimate trend rate | 0.00% | 0.00% | |
United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure | |||
Discount rate | 3.02% | 3.73% | |
Compensation increase rate | 4.00% | 4.00% | |
Discount rate | 3.73% | 3.70% | |
Expected long-term return on plan assets | 8.25% | 8.25% | |
Compensation increase rate | 4.00% | ||
Health care cost gross trend rate | [1] | 7.00% | 7.48% |
Ultimate trend rate | [1] | 5.00% | 4.98% |
Year that trend reaches ultimate rate | [1] | 2,019 | 2,019 |
[1] | Due to the effect of the fixed Company contribution, increasing or decreasing the health care cost trend rate by one percentage point would not have a significant impact on the Company's cost of providing Other Retirement Benefits. |
Retirement Benefits (Plan Asset
Retirement Benefits (Plan Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 3,093 | $ 2,921 | |
Defined Benefit Plan, Amount of Employer and Related Party Securities Included in Plan Assets | $ 0 | ||
Equity Securities [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 40.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 70.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations | 53.00% | 54.00% | |
Debt Securities [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 25.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 60.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations | 45.00% | 44.00% | |
Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 0.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 15.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations | 0.00% | 0.00% | |
Cash and Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations Range Minimum | 0.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations Range Maximum | 5.00% | ||
Defined Benefit Plan, Target Plan Asset Allocations | 2.00% | 2.00% | |
Pension Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 3,074 | $ 2,902 | $ 3,185 |
Subtotal Pension Securities At Fair Value | 3,096 | 2,899 | |
Receivables Related To Investment Transactions | (22) | 3 | |
Pension Plans, Defined Benefit [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Subtotal Pension Securities At Fair Value | 1,337 | 1,173 | |
Pension Plans, Defined Benefit [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Subtotal Pension Securities At Fair Value | 1,756 | 1,723 | |
Pension Plans, Defined Benefit [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Subtotal Pension Securities At Fair Value | 3 | 3 | |
Pension Plans, Defined Benefit [Member] | U.S. Equity [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 907 | 895 | |
Pension Plans, Defined Benefit [Member] | U.S. Equity [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 560 | 533 | |
Pension Plans, Defined Benefit [Member] | U.S. Equity [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 347 | 362 | |
Pension Plans, Defined Benefit [Member] | U.S. Equity [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 723 | 668 | |
Pension Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 683 | 575 | |
Pension Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 40 | 93 | |
Pension Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Corporate [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,143 | 1,088 | |
Pension Plans, Defined Benefit [Member] | Corporate [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Corporate [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,143 | 1,088 | |
Pension Plans, Defined Benefit [Member] | Corporate [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | U.S. government [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 183 | 148 | |
Pension Plans, Defined Benefit [Member] | U.S. government [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 94 | 65 | |
Pension Plans, Defined Benefit [Member] | U.S. government [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 89 | 83 | |
Pension Plans, Defined Benefit [Member] | U.S. government [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 2 | |
Pension Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 2 | |
Pension Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Other [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 45 | 43 | |
Pension Plans, Defined Benefit [Member] | Other [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Other [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 42 | 40 | |
Pension Plans, Defined Benefit [Member] | Other [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 3 | 3 | |
Pension Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 93 | 55 | |
Pension Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Pension Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 93 | 55 | |
Pension Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 19 | 19 | $ 18 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 11 | 9 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 8 | 10 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. Equity [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 8 | 7 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. Equity [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 8 | 7 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. Equity [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. Equity [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Non-U.S. Equity [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Corporate [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 2 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Corporate [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Corporate [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 2 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Corporate [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. government [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 3 | 3 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. government [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 2 | 2 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. government [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1 | 1 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | U.S. government [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 1 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 1 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Mortgage and asset-backed [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 5 | 6 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | 5 | 6 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | Cash and Cash Equivalents [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 |
Retirement Benefits (Contributi
Retirement Benefits (Contributions) (Details) - USD ($) $ in Millions | Oct. 24, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Defined Benefit Plan Disclosure | ||||
Pension Contributions | $ 69 | $ 69 | $ 75 | |
Contributions made to multi-employer arrangements | 1 | 1 | $ 0 | |
Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Pension Contributions | 69 | 69 | ||
U.S. Qualified Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Pension Contributions | 55 | 55 | ||
U.S. Non-qualified Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Pension Contributions | 9 | 9 | ||
Foreign Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Pension Contributions | 5 | 5 | ||
Non-U.S. Plans and U.S. Non-Qualified Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Expected contributions pension and other postretirement plans | 13 | |||
Other Postretirement Benefit Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Pension Contributions | $ 12 | $ 16 | ||
Subsequent Event [Member] | U.S. Qualified Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Pension Contributions | $ 55 |
Retirement Benefits (Benefit Pa
Retirement Benefits (Benefit Payments) (Details) $ in Millions | Sep. 30, 2016USD ($) |
Pension Plans, Defined Benefit [Member] | |
Defined Benefit Plan Disclosure | |
2,017 | $ 241 |
2,018 | 235 |
2,019 | 240 |
2,020 | 244 |
2,021 | 246 |
2022-2026 | 1,249 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | |
Defined Benefit Plan Disclosure | |
2,017 | 16 |
2,018 | 16 |
2,019 | 17 |
2,020 | 17 |
2,021 | 16 |
2022-2026 | $ 76 |
Retirement Benefits (Defined Co
Retirement Benefits (Defined Contribution Savings Plans and Employee Stock Purchase Plan) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure | |||
Shares Authorized To Issue Under Defined Contribution Savings Plans | 16.3 | ||
Authorized Shares Available For Future Contribution Under Defined Contribution Savings Plans | 1.1 | ||
Defined Contribution Savings Plans Contributions In Shares | 0.6 | 0.4 | 0.5 |
Defined Contribution Savings Plans Value Of Shares Contributed | $ 49 | $ 39 | $ 40 |
Defined Contribution Savings Plans Cash Retirement Contribution | 46 | 47 | 50 |
Defined Contribution Savings Plan Expense | $ 95 | $ 86 | $ 90 |
Percent of fair market value employees can purchase common stock under Employee Stock Purchase Plan | 95.00% | ||
Employee Stock Purchase Plan Shares Available For Future Grant | 2.5 | ||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 0.1 | 0.1 | 0.1 |
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 10 | $ 11 | $ 10 |
ARINC [Member] | |||
Defined Benefit Plan Disclosure | |||
Defined Contribution Savings Plans Cash Retirement Contribution | 1 | ||
Employee Stock [Member] | |||
Defined Benefit Plan Disclosure | |||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 11 | $ 11 | $ 10 |
Shareowners' Equity (Details)
Shareowners' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Shareowners' Equity | ||||
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 | ||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Preferred Stock, Shares Authorized | 25,000,000 | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | $ (1,699) | $ (1,366) | $ (1,287) | |
Other comprehensive income (loss) before reclassifications | (256) | (382) | (116) | |
Amounts reclassified from accumulated other comprehensive income | 57 | 49 | 37 | |
Net current period other comprehensive income (loss) | (199) | (333) | (79) | |
Accumulated other comprehensive income (loss) at end of period | (1,898) | (1,699) | (1,366) | |
Foreign Exchange Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | (56) | (15) | 12 | |
Other comprehensive income (loss) before reclassifications | (20) | (41) | (27) | |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | |
Net current period other comprehensive income (loss) | (20) | (41) | (27) | |
Accumulated other comprehensive income (loss) at end of period | (76) | (56) | (15) | |
Pension and Other Postretirement Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | [1] | (1,637) | (1,348) | (1,293) |
Other comprehensive income (loss) before reclassifications | [1] | (234) | (334) | (92) |
Amounts reclassified from accumulated other comprehensive income | [1] | 53 | 45 | 37 |
Net current period other comprehensive income (loss) | [1] | (181) | (289) | (55) |
Accumulated other comprehensive income (loss) at end of period | [1] | (1,818) | (1,637) | (1,348) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 84 | 71 | 59 | |
Change in the Fair Value of Effective Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | (6) | (3) | (6) | |
Other comprehensive income (loss) before reclassifications | (2) | (7) | 3 | |
Amounts reclassified from accumulated other comprehensive income | 4 | 4 | 0 | |
Net current period other comprehensive income (loss) | 2 | (3) | 3 | |
Accumulated other comprehensive income (loss) at end of period | $ (4) | $ (6) | $ (3) | |
[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 and were $84 million ($53 million net of tax), $71 million ($45 million net of tax) and $59 million ($37 million net of tax) for 2016, 2015 and 2014, respectively. The reclassifications are included in the computation of net benefit expense. See Note 10, Retirement Benefits, for additional details. |
Stock-Based Compensation and 80
Stock-Based Compensation and Earnings Per Share (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Income from continuing operations | $ 208 | $ 214 | $ 172 | $ 133 | $ 184 | $ 178 | $ 163 | $ 169 | $ 727 | $ 694 | $ 618 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||||||||
Max Performance Shares Earned if Maximum Performance Achieved | 240.00% | 240.00% | |||||||||
Continuing operations | $ 1.58 | $ 1.63 | $ 1.30 | $ 1 | $ 1.38 | $ 1.33 | $ 1.22 | $ 1.26 | $ 5.50 | $ 5.19 | $ 4.52 |
Employee Stock Option [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||||||||
2015 Long-Term Incentives Plan (2015 Plan) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares Of Common Stock May Be Issued Under Long Term Incentives Plan And Directors Stock Plan | 11,000,000 | 11,000,000 | |||||||||
Shares Each Share Issued Counts Against Authorized Limit | 3.55 | 3.55 | |||||||||
Shares Available For Future Grant Or Payment Under Long Term Incentives Plan And Directors Stock Plan | 9,000,000 | 9,000,000 | |||||||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Income from continuing operations | $ 4 | ||||||||||
Continuing operations | $ 0.02 |
Stock-Based Compensation and 81
Stock-Based Compensation and Earnings Per Share (Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ 27 | $ 24 | $ 24 |
Income tax benefit | 9 | 8 | 8 |
Employee Share Based Compensation Allocation Of Recognized Expense Cost Of Sales [Member] | |||
Stock-Based Compensation | |||
Stock-based compensation expense | 8 | 7 | 7 |
Employee Service Share Based Compensation Allocation Of Recognized Expense Selling General and Administrative [Member] | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ 19 | $ 17 | $ 17 |
Stock-Based Compensation and 82
Stock-Based Compensation and Earnings Per Share (General Option Information) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Shares (in thousands) | ||||
Outstanding at September 30, 2015 (shares) | 3,699 | |||
Granted (shares) | 642 | |||
Exercised (shares) | (387) | |||
Forfeited or expired (shares) | (40) | |||
Outstanding at September 30, 2016 (shares) | 3,914 | 3,699 | ||
Vested or expected to vest (shares) | [1] | 3,905 | ||
Exercisable at September 30, 2016 (shares) | 2,759 | |||
Weighted Average Exercise Price | ||||
Outstanding at September 30, 2015 (usd per share) | $ 61.02 | |||
Granted (usd per share) | 86.77 | |||
Exercised (usd per share) | 56.31 | |||
Forfeited or expired (usd per share) | 83.85 | |||
Outstanding at September 30, 2016 (usd per share) | 65.48 | $ 61.02 | ||
Vested or expected to vest (usd per share) | [1] | 65.43 | ||
Exercisable at September 30, 2016 (usd per share) | $ 57.93 | |||
Weighted Average Remaining Life (in years) | ||||
Outstanding at September 30, 2016 | 5 years 6 months | |||
Vested or expected to vest (in years) | [1] | 5 years 6 months | ||
Exercisable at September 30, 2016 | 4 years 2 months 12 days | |||
Aggregate Intrinsic Value (in millions) | ||||
Outstanding at September 30, 2016 | $ 75 | |||
Vested or expected to vest | [1] | 75 | ||
Exercisable at September 30, 2016 | $ 73 | |||
Weighted-average fair value per share of options granted | $ 17.75 | $ 19.59 | $ 18.60 | |
Intrinsic value of options exercised (in millions) | [2] | $ 13 | $ 48 | $ 26 |
Fair value of options vested in period | 10 | $ 10 | $ 10 | |
Unrecognized compensation costs on nonvested awards | $ 7 | |||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 9 months 18 days | |||
[1] | Represents outstanding options reduced by expected forfeitures | |||
[2] | Represents the amount by which the stock price exceeded the exercise price of the options on the date of the exercise |
Stock-Based Compensation and 83
Stock-Based Compensation and Earnings Per Share (Stock Option Fair Value Information) (Details) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk Free Interest Rate, Minimum | 0.70% | 0.50% | 0.30% |
Risk Free Interest Rate, Maximum | 2.50% | 2.60% | 3.00% |
Expected dividend yield | 1.60% | 1.90% | |
Expected volatility | 20.00% | 24.00% | 28.00% |
Expected life | 7 years | 7 years | 7 years |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 1.60% | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 1.40% |
Stock-Based Compensation and 84
Stock-Based Compensation and Earnings Per Share (Performance Shares, Restricted Shares and Restricted Stock Units) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Weighted Average Grant Date Fair Value | |||
Share Based Compensation Arrangement By Share Based Payment Award Maximum Number Of Performance Shares (shares in thousands) | 304 | 295 | 134 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested at September 30, 2015 (Shares) | 438 | ||
Granted (Shares) | 131 | ||
Vested (Shares) | (168) | ||
Forfeited (Shares) | (15) | ||
Nonvested at September 30, 2016 (Shares) | 386 | 438 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at September 30, 2015 (usd per share) | $ 68.92 | ||
Granted (usd per share) | 85.13 | $ 82.76 | $ 71.63 |
Vested (usd per share) | 56.10 | ||
Forfeited (usd per share) | 79.47 | ||
Nonvested at September 30, 2016 (usd per share) | $ 79.60 | $ 68.92 | |
Total unrecognized compensation costs at September 30, 2016 | $ 12 | ||
Weighted average life remaining at September 30, 2016, in years | 10 months 24 days | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested at September 30, 2015 (Shares) | 23 | ||
Granted (Shares) | 0 | ||
Vested (Shares) | 0 | ||
Forfeited (Shares) | 0 | ||
Nonvested at September 30, 2016 (Shares) | 23 | 23 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at September 30, 2015 (usd per share) | $ 30.24 | ||
Granted (usd per share) | 0 | $ 0 | 0 |
Vested (usd per share) | 0 | ||
Forfeited (usd per share) | 0 | ||
Nonvested at September 30, 2016 (usd per share) | $ 30.24 | $ 30.24 | |
Total unrecognized compensation costs at September 30, 2016 | $ 0 | ||
Weighted average life remaining at September 30, 2016, in years | 0 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested at September 30, 2015 (Shares) | 340 | ||
Granted (Shares) | 72 | ||
Vested (Shares) | (54) | ||
Forfeited (Shares) | (7) | ||
Nonvested at September 30, 2016 (Shares) | 351 | 340 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at September 30, 2015 (usd per share) | $ 64.34 | ||
Granted (usd per share) | 85.85 | $ 84.63 | $ 72.42 |
Vested (usd per share) | 54.37 | ||
Forfeited (usd per share) | 78.68 | ||
Nonvested at September 30, 2016 (usd per share) | $ 69.86 | $ 64.34 | |
Total unrecognized compensation costs at September 30, 2016 | $ 5 | ||
Weighted average life remaining at September 30, 2016, in years | 10 months 24 days |
Stock-Based Compensation and 85
Stock-Based Compensation and Earnings Per Share (Earnings Per Share and Diluted Share Equivalents) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Computation of Basic and Diluted Earnings Per Share | |||||||||||
Income from continuing operations | $ 208 | $ 214 | $ 172 | $ 133 | $ 184 | $ 178 | $ 163 | $ 169 | $ 727 | $ 694 | $ 618 |
Income (loss) from discontinued operations, net of taxes | 0 | 0 | (1) | 2 | 0 | 0 | (6) | (2) | 1 | (8) | (14) |
Net income | $ 208 | $ 214 | $ 171 | $ 135 | $ 184 | $ 178 | $ 157 | $ 167 | $ 728 | $ 686 | $ 604 |
Denominator: | |||||||||||
Denominator for basic earnings per share – weighted average common shares | 130.5 | 132.3 | 135.1 | ||||||||
Stock options | 1 | 1 | 1.2 | ||||||||
Performance shares, restricted stock and restricted stock units | 0.6 | 0.4 | 0.4 | ||||||||
Dilutive potential common shares | 1.6 | 1.4 | 1.6 | ||||||||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion | 132.1 | 133.7 | 136.7 | ||||||||
Basic | |||||||||||
Continuing operations | $ 1.60 | $ 1.65 | $ 1.31 | $ 1.01 | $ 1.40 | $ 1.35 | $ 1.23 | $ 1.28 | $ 5.57 | $ 5.25 | $ 4.57 |
Discontinued operations | 0 | 0 | 0 | 0.02 | 0 | 0 | (0.04) | (0.02) | 0.01 | (0.06) | (0.10) |
Basic earnings per share | 1.60 | 1.65 | 1.31 | 1.03 | 1.40 | 1.35 | 1.19 | 1.26 | 5.58 | 5.19 | 4.47 |
Diluted | |||||||||||
Continuing operations | 1.58 | 1.63 | 1.30 | 1 | 1.38 | 1.33 | 1.22 | 1.26 | 5.50 | 5.19 | 4.52 |
Discontinued operations | 0 | 0 | (0.01) | 0.02 | 0 | 0 | (0.05) | (0.02) | 0.01 | (0.06) | (0.10) |
Diluted earnings per share | $ 1.58 | $ 1.63 | $ 1.29 | $ 1.02 | $ 1.38 | $ 1.33 | $ 1.17 | $ 1.24 | $ 5.51 | $ 5.13 | $ 4.42 |
Employee Stock Option [Member] | |||||||||||
Diluted | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.6 | 0 | 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes | |||
U.S. taxable income over the past three years | $ 1,549 | ||
Statute of Limitations, Range, Minimum (in years) | 3 years | ||
Statute of Limitations, Range, Maximum (in years) | 5 years | ||
Provision for Income Taxes related to Undistributed Earnings of Foreign Subsidiaries | $ 0 | ||
Undistributed Earnings Of Foreign Subsidiaries | 551 | ||
Income tax payments, net | 130 | $ 182 | $ 182 |
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 20 | $ 11 | $ 25 |
Minimum [Member] | |||
Income Taxes | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 0 | ||
Maximum [Member] | |||
Income Taxes | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 1 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense from Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||
U.S. income | $ 824 | $ 835 | $ 754 |
Non-U.S. income | 111 | 127 | 128 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 935 | 962 | 882 |
Current: | |||
U.S. federal | 120 | 169 | 110 |
Non-U.S. | 29 | 38 | 37 |
U.S. state and local | 11 | 11 | 4 |
Total current | 160 | 218 | 151 |
Deferred: | |||
U.S. federal | 47 | 49 | 105 |
Non-U.S. | 0 | (4) | (2) |
U.S. state and local | 1 | 5 | 10 |
Total deferred | 48 | 50 | 113 |
Income tax expense | $ 208 | $ 268 | $ 264 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate and U.S. Statutory Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 35.00% | 35.00% | 35.00% |
Foreign rate differential | (0.70%) | (1.00%) | (1.10%) |
State and local income taxes | 1.10% | 1.20% | 1.30% |
Research and development credit | (6.40%) | (3.20%) | (1.10%) |
Domestic manufacturing deduction | (2.00%) | (2.00%) | (1.70%) |
Tax settlements | 0.00% | (1.60%) | (0.90%) |
Change in valuation allowance | (4.50%) | 0.00% | 0.00% |
Other | (0.30%) | (0.50%) | (1.60%) |
Effective income tax rate | 22.20% | 27.90% | 29.90% |
Income Taxes (Deferred Income T
Income Taxes (Deferred Income Tax Assets and Liabilities in Statement of Financial Position) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Deferred income taxes | $ 219 | $ 165 |
Other liabilities | (1) | (3) |
Deferred income taxes, net | 218 | 162 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Current deferred income tax asset | 0 | |
Current deferred income tax liability | 0 | |
Current deferred income taxes, net | 0 | |
Long-term deferred income taxes | $ 219 | 165 |
Other liabilities | (3) | |
Long-term deferred income taxes, net | 162 | |
Previous Accounting Guidance [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Current deferred income tax asset | 9 | |
Current deferred income tax liability | (84) | |
Current deferred income taxes, net | (75) | |
Long-term deferred income taxes | 241 | |
Other liabilities | (4) | |
Long-term deferred income taxes, net | $ 237 |
Income Taxes (Net Long-Term Def
Income Taxes (Net Long-Term Deferred Income Tax Benefits (Liabilities) Temporary Differences) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Inventory | $ (282) | $ (226) |
Product warranty costs | 29 | 29 |
Customer incentives | 68 | 62 |
Contract reserves | 6 | 11 |
Retirement benefits | 549 | 487 |
Intangibles | (171) | (177) |
Capital lease liability | 20 | 21 |
Property | (179) | (154) |
Stock-based compensation | 33 | 30 |
Deferred compensation | 16 | 15 |
Capital loss carryover | 41 | 42 |
Compensation and benefits | 28 | 29 |
Valuation allowance | 0 | (42) |
Other | 60 | 35 |
Deferred income taxes, net | $ 218 | $ 162 |
Income Taxes Income Taxes (Chan
Income Taxes Income Taxes (Change in Valuation Allowance for Deferred Tax Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |||
Income Tax Disclosure [Abstract] | |||||
Valuation Allowance, Amount | $ 42 | $ 43 | $ 11 | ||
Charged to costs and expenses | 0 | 0 | 43 | [1] | |
Deductions | (42) | [2] | (1) | (11) | [3] |
Valuation Allowance, Amount | $ 0 | $ 42 | $ 43 | ||
[1] | 2014 increase was recorded in discontinued operations | ||||
[2] | 2016 deduction of $42 million was primarily due to the creation of a tax planning strategy | ||||
[3] | 2014 deduction of $11 million was due to the divestiture of a foreign subsidiary |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||||
Beginning balance | $ 39 | $ 39 | $ 48 | $ 56 | |
Additions for tax positions related to the current year | 11 | 8 | 13 | ||
Additions for tax positions of prior years | $ 24 | $ 14 | 7 | 6 | 1 |
Additions for tax positions related to acquisitions | 0 | 0 | 8 | ||
Reductions for tax positions of prior years | (10) | (17) | (17) | ||
Reductions for tax positions of prior years related to lapse of statute of limitations | 0 | (1) | (2) | ||
Reductions for tax positions related to settlements with taxing authorities | (2) | (5) | (11) | ||
Ending balance | $ 45 | $ 39 | $ 48 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Transfers between Levels of the fair value hierarchy - 1 asset to 2 | $ 0 | $ 0 | ||
Transfers between Levels of the fair value hierarchy - 2 asset to 1 | 0 | 0 | ||
Transfers between Levels of the fair value hierarchy - 2 liability to 1 | 0 | 0 | ||
Transfers between Levels of the fair value hierarchy - 1& 2 asset to 3 | 0 | 0 | ||
Transfers between Levels of the fair value hierarchy - 2 liability to 3 | 0 | 0 | ||
Transfers between Levels of the fair value hierarchy - 3 liability to 1 & 2 | 0 | 0 | ||
Asset Impairment Charges | $ 6,000,000 | |||
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Deferred Compensation Plan Investments [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Assets at fair value | 55,000,000 | 50,000,000 | ||
Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Assets, Fair Value Disclosure, Nonrecurring | 3,000,000 | |||
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Foreign Exchange Forward Exchange Contract [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Liabilities at fair value | (13,000,000) | (11,000,000) | ||
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Interest Rate Swap Assets [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Assets at fair value | 35,000,000 | 34,000,000 | ||
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Foreign Exchange Forward Exchange Contract [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Assets at fair value | 11,000,000 | 7,000,000 | ||
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Contingent Consideration [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Liabilities at fair value | (13,000,000) | $ (12,000,000) | ||
Liabilities, Fair Value Adjustment | [1] | $ (1,000,000) | ||
Selling, General and Administrative Expenses [Member] | ||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||||
Asset Impairment Charges | $ 4,000,000 | |||
[1] | The fair value adjustment is included in Interest expense on the Consolidated Statement of Operations. |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Amounts and Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 |
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | $ 340 | $ 252 | $ 323 | $ 391 |
Short-term debt | (740) | (448) | ||
Long-term debt | (1,382) | (1,680) | ||
Carrying Amount [Member] | ||||
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 340 | 252 | ||
Short-term debt | (740) | (448) | ||
Long-term debt | (1,347) | (1,646) | ||
Fair Value [Member] | ||||
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 340 | 252 | ||
Short-term debt | (740) | (448) | ||
Long-term debt | $ (1,508) | $ (1,750) |
Derivative Financial Instrume95
Derivative Financial Instruments (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2014 | Jan. 31, 2010 | Dec. 31, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Oct. 31, 2013 | Sep. 30, 2013 | |
Derivative Financial Instruments | ||||||||
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 | 64 months | |||||||
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 | ||||||
Other Assets [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Interest rate swap assets | 35,000,000 | 34,000,000 | ||||||
Unsecured Notes [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Description of variable rate basis | three-month LIBOR | one-month LIBOR | six-month LIBOR | |||||
Swap expiration date | Jul. 15, 2019 | Dec. 15, 2023 | Jul. 15, 2019 | |||||
Unsecured Notes [Member] | Other Assets [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Interest rate swap assets | 35,000,000 | 34,000,000 | ||||||
Unsecured Notes [Member] | Long-term Debt [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Interest Rates Swap Assets | 35,000,000 | 34,000,000 | ||||||
Unsecured Notes [Member] | 2023 Notes [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative amount of hedged item | $ 200,000,000 | |||||||
Basis spread on variable rate | (0.94%) | |||||||
Unsecured Notes [Member] | 2019 Notes [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative amount of hedged item | $ 150,000,000 | $ 150,000,000 | ||||||
Basis spread on variable rate | (3.56%) | (1.235%) | ||||||
Forward Starting Interest Rate Swap [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Notional amount of foreign currency derivatives | $ 300,000,000 | $ 200,000,000 | ||||||
Foreign Exchange Contract [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Notional amount of foreign currency derivatives | 384,000,000 | $ 359,000,000 | ||||||
Foreign Exchange Contract [Member] | Other Current Assets [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 2,000,000 | |||||||
Foreign Exchange Contract [Member] | Other Current Liabilities [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | $ 2,000,000 | |||||||
Cash Flow Hedging [Member] | AOCL [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative Instruments, Loss Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ 2,000,000 | |||||||
Minimum [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative, Forward Interest Rate | 2.815% | |||||||
Maximum [Member] | ||||||||
Derivative Financial Instruments | ||||||||
Derivative, Forward Interest Rate | 3.8775% |
Derivative Financial Instrume96
Derivative Financial Instruments (Fair Values of Derivative Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 |
Derivative Financial Instruments | ||
Derivative Asset, Fair Value, Total Assets | $ 46 | $ 41 |
Other Current Assets [Member] | ||
Derivative Financial Instruments | ||
Foreign currency forward exchange contracts | 11 | 7 |
Other Assets [Member] | ||
Derivative Financial Instruments | ||
Interest rate swap assets | 35 | 34 |
Other Current Liabilities [Member] | ||
Derivative Financial Instruments | ||
Foreign currency forward exchange contracts | $ 13 | $ 11 |
Derivative Financial Instrume97
Derivative Financial Instruments (Effect of Derivative Instruments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | |
Cost of Sales [Member] | |||
Derivative Financial Instruments | |||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (1) | $ (8) | |
Fair Value Hedging [Member] | Interest Expense [Member] | |||
Derivative Financial Instruments | |||
Gain (loss) recognized from interest rate swaps | 10 | 11 | |
Cash Flow Hedging [Member] | Cost of Sales [Member] | |||
Derivative Financial Instruments | |||
Amount of gain (loss) reclassified from AOCL into income | (6) | (6) | |
Cash Flow Hedging [Member] | AOCL [Member] | |||
Derivative Financial Instruments | |||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) | $ (3) | $ (10) | |
Derivative Instruments, Loss Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ 2 |
Guarantees and Indemnificatio98
Guarantees and Indemnifications (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Guarantees and Indemnifications | |||
Balance at beginning of year | $ 89 | $ 104 | $ 121 |
Warranty costs incurred | (42) | (46) | (47) |
Product warranty accrual | 46 | 42 | 46 |
Changes in estimates for prior years | (6) | (10) | (15) |
Increase from acquisitions | 0 | 1 | 0 |
Foreign currency translation adjustments and other | 0 | (2) | (1) |
Balance at September 30 | 87 | $ 89 | $ 104 |
Outstanding letters of credit | $ 239 |
Contractual Obligations and O99
Contractual Obligations and Other Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Non-cancelable operating leases | |||
2,017 | $ 63 | ||
2,018 | 52 | ||
2,019 | 39 | ||
2,020 | 28 | ||
2,021 | 21 | ||
Thereafter | 113 | ||
Total | 316 | ||
Purchase contracts | |||
2,017 | 34 | ||
2,018 | 32 | ||
2,019 | 29 | ||
2,020 | 27 | ||
2,021 | 26 | ||
Thereafter | 40 | ||
Total | 188 | ||
Long-term debt | |||
2,017 | 300 | ||
2,018 | 0 | ||
2,019 | 300 | ||
2,020 | 0 | ||
2,021 | 0 | ||
Thereafter | 1,050 | ||
Total | 1,650 | ||
Interest on long-term debt | |||
2,017 | 58 | ||
2,018 | 58 | ||
2,019 | 58 | ||
2,020 | 42 | ||
2,021 | 42 | ||
Thereafter | 473 | ||
Total | 731 | ||
Total | |||
2,017 | 455 | ||
2,018 | 142 | ||
2,019 | 426 | ||
2,020 | 97 | ||
2,021 | 89 | ||
Thereafter | 1,676 | ||
Total | 2,885 | ||
Rent Expense | 77 | $ 73 | $ 65 |
Amounts purchased under purchase contracts | $ 57 | $ 50 | $ 38 |
Environmental Matters (Details)
Environmental Matters (Details) $ in Millions | Sep. 30, 2016USD ($)Site |
Environmental Remediation Obligations [Abstract] | |
Number of Sites Involved in Investigation | Site | 7 |
Environmental Loss Contingency Number of Sites Where Reasonably Possible Future Costs is Insignificant | Site | 6 |
Site contingency reasonably possible future costs | $ | $ 12 |
Accrual for environmental loss contingencies | $ | $ 6 |
Restructuring, Pension Settl101
Restructuring, Pension Settlement and Asset Impairment Charges, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended |
Dec. 31, 2015 | Jun. 30, 2016 | Sep. 30, 2014 | Sep. 30, 2015 | |
Restructuring and Asset Impairment Charges [Line Items] | ||||
Payments for pension settlement and restructuring | $ 9,000,000 | |||
Employee separation costs | $ 39,000,000 | |||
Asset Impairment Charges | 6,000,000 | |||
Restructuring Charges | 45,000,000 | |||
Pension Settlement and Restructuring Charges | $ 9,000,000 | |||
Pension Settlement | 5,000,000 | |||
Employee Severance [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Employee separation costs | $ 4,000,000 | |||
Special Termination Benefits [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Payments for Restructuring | $ 39,000,000 | |||
Cost of Sales [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Employee separation costs | 31,000,000 | |||
Asset Impairment Charges | 2,000,000 | |||
Restructuring Charges | 33,000,000 | |||
Selling, General and Administrative Expenses [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Employee separation costs | 8,000,000 | |||
Asset Impairment Charges | 4,000,000 | |||
Restructuring Charges | $ 12,000,000 |
Operating Segment Informatio102
Operating Segment Information (Narrative) (Details) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Segment Information | |||
Percent of Total Sales To U.S. Government | 33.00% | 29.00% | 30.00% |
Operating Segment Informatio103
Operating Segment Information (Sales and Results of Operations of Operating Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Business Segment Information | ||||||||||||
Sales: | $ 1,445 | $ 1,334 | $ 1,311 | $ 1,169 | $ 1,384 | $ 1,293 | $ 1,341 | $ 1,226 | $ 5,259 | $ 5,244 | $ 4,979 | |
Segment operating earnings: | 1,115 | 1,106 | 1,036 | |||||||||
Interest expense | (64) | (61) | (59) | [1] | ||||||||
Stock-based compensation | (27) | (24) | (24) | |||||||||
General corporate, net | (44) | (59) | (59) | |||||||||
Gain on divestiture of business | 0 | 0 | 10 | |||||||||
ARINC transaction costs | 0 | 0 | (13) | [1] | ||||||||
Restructuring, pension settlement and asset impairment charges, net | (45) | 0 | (9) | |||||||||
Income from continuing operations before income taxes | 935 | 962 | 882 | |||||||||
Income tax expense | (208) | (268) | (264) | |||||||||
Income from continuing operations | 208 | $ 214 | $ 172 | $ 133 | 184 | $ 178 | $ 163 | $ 169 | 727 | 694 | 618 | |
Debt Instrument, Fee Amount | $ 0 | $ 0 | 0 | 0 | ||||||||
Commercial Systems [Member] | ||||||||||||
Business Segment Information | ||||||||||||
Sales: | 2,395 | 2,434 | 2,299 | |||||||||
Segment operating earnings: | 531 | 554 | 509 | |||||||||
Government Systems [Member] | ||||||||||||
Business Segment Information | ||||||||||||
Sales: | 2,206 | 2,187 | 2,209 | |||||||||
Segment operating earnings: | 477 | 457 | 465 | |||||||||
Information Management Services [Member] | ||||||||||||
Business Segment Information | ||||||||||||
Sales: | 658 | 623 | 471 | |||||||||
Segment operating earnings: | $ 107 | $ 95 | 62 | |||||||||
ARINC [Member] | ||||||||||||
Business Segment Information | ||||||||||||
ARINC transaction costs | (16) | |||||||||||
Interest Expense [Member] | ARINC [Member] | Bridge Loan [Member] | ||||||||||||
Business Segment Information | ||||||||||||
Debt Instrument, Fee Amount | $ 3 | |||||||||||
[1] | During the year ended September 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 this period was $16 million. |
Operating Segment Informatio104
Operating Segment Information (Identifiable Assets and Investments in Equity Affiliates) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Segment Information | |||
Identifiable assets: | $ 7,707 | $ 7,304 | $ 7,005 |
Investments in equity affiliates: | 10 | 13 | 8 |
Depreciation and amortization: | 253 | 252 | 225 |
Capital expenditures for property: | 193 | 210 | 163 |
Earnings (loss) from equity affiliates: | (1) | 3 | 7 |
Commercial Systems [Member] | |||
Business Segment Information | |||
Identifiable assets: | 3,050 | 2,906 | 2,655 |
Investments in equity affiliates: | 4 | 7 | 0 |
Depreciation and amortization: | 125 | 117 | 108 |
Capital expenditures for property: | 74 | 90 | 68 |
Earnings (loss) from equity affiliates: | (3) | 0 | 0 |
Government Systems [Member] | |||
Business Segment Information | |||
Identifiable assets: | 2,052 | 1,953 | 1,938 |
Investments in equity affiliates: | 6 | 6 | 8 |
Depreciation and amortization: | 74 | 83 | 80 |
Capital expenditures for property: | 69 | 81 | 66 |
Earnings (loss) from equity affiliates: | 2 | 3 | 7 |
Information Management Services [Member] | |||
Business Segment Information | |||
Identifiable assets: | 1,906 | 1,886 | 1,885 |
Investments in equity affiliates: | 0 | 0 | 0 |
Depreciation and amortization: | 54 | 52 | 37 |
Capital expenditures for property: | 50 | 39 | 29 |
Earnings (loss) from equity affiliates: | 0 | 0 | 0 |
Corporate [Member] | |||
Business Segment Information | |||
Identifiable assets: | $ 699 | $ 559 | $ 527 |
Operating Segment Informatio105
Operating Segment Information (Summary of Sales by Product Category) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Segment Information | |||||||||||
Sales: | $ 1,445 | $ 1,334 | $ 1,311 | $ 1,169 | $ 1,384 | $ 1,293 | $ 1,341 | $ 1,226 | $ 5,259 | $ 5,244 | $ 4,979 |
Commercial Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 2,395 | 2,434 | 2,299 | ||||||||
Government Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 2,206 | 2,187 | 2,209 | ||||||||
Information Management Services [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 658 | 623 | 471 | ||||||||
Air Transport Aviation Electronics [Member] | Commercial Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 1,430 | 1,385 | 1,285 | ||||||||
Business And Regional Aviation Electronics [Member] | Commercial Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 965 | 1,049 | 1,014 | ||||||||
Avionics [Member] | Government Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 1,483 | 1,436 | 1,409 | ||||||||
Communication and Navigation [Member] | Government Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | 723 | 751 | 800 | ||||||||
Wide-Body In-Flight Entertainment Products and Services [Member] | Commercial Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales: | $ 38 | $ 57 | $ 70 |
Operating Segment Informatio106
Operating Segment Information (Sales and Property by Geographic Region) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenues from External Customers and Property | ||||||||||||
Sales: | $ 1,445 | $ 1,334 | $ 1,311 | $ 1,169 | $ 1,384 | $ 1,293 | $ 1,341 | $ 1,226 | $ 5,259 | $ 5,244 | $ 4,979 | |
Property | 1,035 | 964 | 1,035 | 964 | 919 | |||||||
U.S. [Member] | ||||||||||||
Revenues from External Customers and Property | ||||||||||||
Sales: | [1] | 3,292 | 3,174 | 2,993 | ||||||||
Property | 921 | 861 | 921 | 861 | 805 | |||||||
Europe/Africa/Middle East [Member] | ||||||||||||
Revenues from External Customers and Property | ||||||||||||
Sales: | 937 | 1,070 | 1,040 | |||||||||
Property | 86 | 83 | 86 | 83 | 90 | |||||||
Asia Pacific [Member] | ||||||||||||
Revenues from External Customers and Property | ||||||||||||
Sales: | 545 | 503 | 486 | |||||||||
Property | 17 | 15 | 17 | 15 | 19 | |||||||
Americas excluding U.S. [Member] | ||||||||||||
Revenues from External Customers and Property | ||||||||||||
Sales: | 485 | 497 | 460 | |||||||||
Property | 11 | 5 | 11 | 5 | 5 | |||||||
Non U.S. [Member] | ||||||||||||
Revenues from External Customers and Property | ||||||||||||
Sales: | 1,967 | 2,070 | 1,986 | |||||||||
Property | $ 114 | $ 103 | 114 | 103 | 114 | |||||||
Foreign Military [Member] | ||||||||||||
Revenues from External Customers and Property | ||||||||||||
Sales: | $ 171 | $ 171 | $ 176 | |||||||||
[1] | For the years ended September 30, 2016, 2015 and 2014, U.S. sales include revenue from foreign military sales of $171 million, $171 million and $176 million, respectively. |
Quarterly Financial Informat107
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 1,445 | $ 1,334 | $ 1,311 | $ 1,169 | $ 1,384 | $ 1,293 | $ 1,341 | $ 1,226 | $ 5,259 | $ 5,244 | $ 4,979 |
Gross profit (total sales less product and service cost of sales) | 461 | 419 | 404 | 333 | 436 | 405 | 404 | 369 | 1,617 | 1,614 | |
Income from continuing operations | 208 | 214 | 172 | 133 | 184 | 178 | 163 | 169 | 727 | 694 | 618 |
Income (loss) from discontinued operations, net of taxes | 0 | 0 | (1) | 2 | 0 | 0 | (6) | (2) | 1 | (8) | (14) |
Net income | $ 208 | 214 | $ 171 | 135 | $ 184 | 178 | $ 157 | 167 | 728 | 686 | 604 |
Restructuring Charges | 45 | ||||||||||
Additions for tax positions of prior years | $ 24 | $ 14 | $ 7 | $ 6 | $ 1 | ||||||
Valuation Allowances and Reserves, Deductions | $ 41 | ||||||||||
Tax Benefit from Retroactive Reinstatement of Federal Research and Development Tax Credit | $ 22 | ||||||||||
Basic Earnings per Share | |||||||||||
Continuing operations | $ 1.60 | $ 1.65 | $ 1.31 | $ 1.01 | $ 1.40 | $ 1.35 | $ 1.23 | $ 1.28 | $ 5.57 | $ 5.25 | $ 4.57 |
Discontinued operations | 0 | 0 | 0 | 0.02 | 0 | 0 | (0.04) | (0.02) | 0.01 | (0.06) | (0.10) |
Basic earnings per share | 1.60 | 1.65 | 1.31 | 1.03 | 1.40 | 1.35 | 1.19 | 1.26 | 5.58 | 5.19 | 4.47 |
Diluted Earnings per Share | |||||||||||
Continuing operations | 1.58 | 1.63 | 1.30 | 1 | 1.38 | 1.33 | 1.22 | 1.26 | 5.50 | 5.19 | 4.52 |
Discontinued operations | 0 | 0 | (0.01) | 0.02 | 0 | 0 | (0.05) | (0.02) | 0.01 | (0.06) | (0.10) |
Diluted earnings per share | $ 1.58 | $ 1.63 | $ 1.29 | $ 1.02 | $ 1.38 | $ 1.33 | $ 1.17 | $ 1.24 | $ 5.51 | $ 5.13 | $ 4.42 |
Subsequent Event (Details)
Subsequent Event (Details) - Merger Agreement [Member] - Subsequent Event [Member] - B/E Aerospace [Member] $ / shares in Units, $ in Billions | Oct. 23, 2016USD ($)$ / shares |
Subsequent Event [Line Items] | |
Payments to Acquire Businesses, Gross | $ | $ 6.4 |
Business Combination, Consideration Transferred, Liabilities Incurred | $ | $ 1.9 |
Total Shareowner Consideration Received (USD per share amount) | $ 62 |
Consideration Received by Shareowners, Cash (USD per share amount) | 34.10 |
Consideration Received by Shareowners, Company Stock (USD per share amount) | $ 27.90 |
Collar Rate (as percent) | 7.50% |