Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2017 | Jul. 24, 2017 | |
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-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 162,475,866 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Financial Position - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 578 | $ 340 |
Receivables, net | 1,644 | 1,094 |
Inventories, net | 2,506 | 1,939 |
Other current assets | 167 | 117 |
Total current assets | 4,895 | 3,490 |
Property | 1,328 | 1,035 |
Goodwill | 8,602 | 1,919 |
Customer Relationship Intangible Assets | 2,092 | 467 |
Other Intangible Assets | 905 | 200 |
Deferred Income Tax Asset | 29 | 219 |
Other Assets | 500 | 369 |
TOTAL ASSETS | 18,351 | 7,699 |
Current Liabilities: | ||
Short-term debt | 511 | 740 |
Accounts payable | 787 | 527 |
Compensation and benefits | 325 | 269 |
Advance payments from customers | 349 | 283 |
Accrued customer incentives | 278 | 246 |
Product warranty costs | 202 | 87 |
Other current liabilities | 422 | 194 |
Total current liabilities | 2,874 | 2,346 |
Long-term Debt, Net | 7,268 | 1,374 |
Retirement Benefits | 1,523 | 1,660 |
Deferred Income Tax Liability | 417 | 1 |
Other Liabilities | 660 | 234 |
Equity: | ||
Common stock ($0.01 par value; shares authorized: 1,000; shares issued: June 30, 2017, 175.0; September 30, 2016, 143.8) | 2 | 1 |
Additional paid-in capital | 4,542 | 1,506 |
Retained earnings | 3,679 | 3,327 |
Accumulated other comprehensive loss | (1,806) | (1,898) |
Common stock in treasury, at cost (shares held: June 30, 2017, 12.6; September 30, 2016, 13.6) | (814) | (858) |
Total shareowners’ equity | 5,603 | 2,078 |
Noncontrolling interest | 6 | 6 |
Total equity | 5,609 | 2,084 |
TOTAL LIABILITIES AND EQUITY | $ 18,351 | $ 7,699 |
Condensed Consolidated Stateme3
Condensed Consolidated Statement of Financial Position (Parenthetical) - $ / shares | Jun. 30, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 175,000,000 | 143,800,000 |
Common stock, shares held in treasury (in shares) | 12,600,000 | 13,600,000 |
Condensed Consolidated Stateme4
Condensed Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Sales: | ||||
Product sales | $ 1,836 | $ 1,129 | $ 3,935 | $ 3,198 |
Service sales | 258 | 205 | 694 | 616 |
Total sales | 2,094 | 1,334 | 4,629 | 3,814 |
Costs, expenses and other: | ||||
Product cost of sales | 1,352 | 772 | 2,799 | 2,223 |
Service cost of sales | 172 | 143 | 471 | 435 |
Selling, general and administrative expenses | 213 | 158 | 514 | 481 |
Transaction and integration costs | 64 | 0 | 80 | 0 |
Interest expense | 77 | 16 | 122 | 48 |
Other income, net | (5) | (2) | (14) | (12) |
Total costs, expenses and other | 1,873 | 1,087 | 3,972 | 3,175 |
Income from continuing operations before income taxes | 221 | 247 | 657 | 639 |
Income tax expense | 42 | 33 | 165 | 120 |
Income from continuing operations | 179 | 214 | 492 | 519 |
Income from discontinued operations, net of taxes | 0 | 0 | 0 | 1 |
Net income | $ 179 | $ 214 | $ 492 | $ 520 |
Basic | ||||
Continuing operations (in dollars per share) | $ 1.13 | $ 1.65 | $ 3.52 | $ 3.97 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.01 |
Basic earnings per share (in dollars per share) | 1.13 | 1.65 | 3.52 | 3.98 |
Diluted | ||||
Continuing operations (in dollars per share) | 1.12 | 1.63 | 3.48 | 3.92 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.01 |
Diluted earnings per share (in dollars per share) | $ 1.12 | $ 1.63 | $ 3.48 | $ 3.93 |
Weighted average common shares: | ||||
Basic (in shares) | 158.2 | 130 | 139.8 | 130.7 |
Diluted (in shares) | 159.9 | 131.5 | 141.4 | 132.3 |
Cash dividends per share (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.99 | $ 0.99 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 179 | $ 214 | $ 492 | $ 520 |
Unrealized foreign currency translation and other adjustments | 50 | (16) | 41 | (16) |
Pension and other retirement benefits adjustments (net of taxes for the three and nine months ended June 30, 2017 of $9 and $27, respectively; net of taxes for the three and nine months ended June 30, 2016 of $7 and $23, respectively) | 15 | 14 | 47 | 40 |
Foreign currency cash flow hedge adjustments (net of taxes for the three and nine months ended June 30, 2017 of $0 and $1, respectively; net of taxes for the three and nine months ended June 30, 2016 of $1 and $2, respectively) | 2 | 0 | 4 | 3 |
Comprehensive income | $ 246 | $ 212 | $ 584 | $ 547 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Pension and other retirement benefits adjustments tax benefit | $ 9 | $ 7 | $ 27 | $ 23 |
Foreign currency cash flow hedge adjustment tax benefit | $ 0 | $ 1 | $ 1 | $ 2 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities: | ||
Net income | $ 492 | $ 520 |
Income from discontinued operations, net of tax | 0 | 1 |
Income from continuing operations | 492 | 519 |
Adjustments to arrive at cash provided by operating activities: | ||
Non-cash restructuring charges | 0 | 6 |
Depreciation | 118 | 107 |
Amortization of intangible assets, pre-production engineering costs and other | 132 | 84 |
Amortization of acquired contract liability | (42) | 0 |
Amortization of inventory fair value adjustment | 44 | 0 |
Stock-based compensation expense | 21 | 21 |
Compensation and benefits paid in common stock | 48 | 41 |
Deferred income taxes | 18 | 39 |
Pension plan contributions | (66) | (66) |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||
Receivables | (60) | (163) |
Production inventory | (88) | (73) |
Pre-production engineering costs | (108) | (141) |
Accounts payable | 21 | 3 |
Compensation and benefits | (19) | (15) |
Advance payments from customers | 1 | (102) |
Accrued customer incentives | (17) | 13 |
Product warranty costs | (4) | (6) |
Income taxes | (56) | 3 |
Other assets and liabilities | (19) | (47) |
Cash Provided by Operating Activities from Continuing Operations | 416 | 223 |
Investing Activities: | ||
Property additions | (165) | (133) |
Acquisition of businesses, net of cash acquired | (3,429) | (17) |
Other investing activities | (5) | (1) |
Cash (Used for) Investing Activities from Continuing Operations | (3,599) | (151) |
Financing Activities: | ||
Repayment of current portion of long-term debt | (338) | 0 |
Repayment of acquired long-term debt | (2,119) | 0 |
Purchases of treasury stock | (46) | (261) |
Cash dividends | (140) | (129) |
Increase in long-term borrowings | 6,099 | 0 |
Increase (decrease) in short-term commercial paper borrowings, net | (78) | 364 |
Proceeds from the exercise of stock options | 41 | 15 |
Other financing activities | (4) | (2) |
Cash Provided by (Used for) Financing Activities from Continuing Operations | 3,415 | (13) |
Effect of exchange rate changes on cash and cash equivalents | 6 | (4) |
Cash Provided by Discontinued Operations | 0 | 0 |
Net Change in Cash and Cash Equivalents | 238 | 55 |
Cash and Cash Equivalents at Beginning of Period | 340 | 252 |
Cash and Cash Equivalents at End of Period | $ 578 | $ 307 |
Condensed Consolidated Stateme8
Condensed Consolidated Statement of Equity - USD ($) shares in Millions, $ 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 (in shares) at Sep. 30, 2015 | 131.9 | |||||||
Beginning balance at Sep. 30, 2015 | $ 1,880 | $ 2 | $ 1,519 | $ 5,124 | $ (1,699) | $ (3,071) | $ 5 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 520 | 520 | ||||||
Other comprehensive income | 27 | 27 | ||||||
Cash dividends | (129) | (129) | ||||||
Exercise of stock options (in shares) | 0.3 | |||||||
Exercise of stock options | 15 | (1) | 16 | |||||
Vesting of performance shares and restricted stock units (in shares) | 0.1 | |||||||
Vesting of performance shares and restricted stock units | (7) | (12) | 5 | |||||
Employee stock purchase plan (in shares) | 0.1 | |||||||
Employee stock purchase plan | 8 | 2 | 6 | |||||
Employee savings plan (in shares) | 0.4 | |||||||
Employee savings plan | 33 | 10 | 23 | |||||
Stock-based compensation | 21 | 21 | ||||||
Treasury share repurchases (in shares) | (2.9) | |||||||
Treasury share repurchases | (255) | (255) | ||||||
Treasury share retirements | [1] | 0 | $ (1) | (44) | (2,353) | 2,398 | ||
Other | 1 | 1 | ||||||
Shares Outstanding (in shares) at Jun. 30, 2016 | 129.9 | |||||||
Ending balance at Jun. 30, 2016 | 2,114 | $ 1 | 1,495 | 3,162 | (1,672) | (878) | 6 | |
Beginning balance at Mar. 31, 2016 | (1,670) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 214 | |||||||
Other comprehensive income | (2) | |||||||
Shares Outstanding (in shares) at Jun. 30, 2016 | 129.9 | |||||||
Ending balance at Jun. 30, 2016 | 2,114 | $ 1 | 1,495 | 3,162 | (1,672) | (878) | 6 | |
Shares Outstanding (in shares) at Sep. 30, 2016 | 130.2 | |||||||
Beginning balance at Sep. 30, 2016 | 2,084 | $ 1 | 1,506 | 3,327 | (1,898) | (858) | 6 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 492 | 492 | ||||||
Other comprehensive income | 92 | 92 | ||||||
Cash dividends | (140) | (140) | ||||||
Exercise of stock options (in shares) | 0.7 | |||||||
Exercise of stock options | 41 | (4) | 45 | |||||
Vesting of performance shares and restricted stock units (in shares) | 0.2 | |||||||
Vesting of performance shares and restricted stock units | (5) | (11) | 6 | |||||
Employee stock purchase plan (in shares) | 0.1 | |||||||
Employee stock purchase plan | 7 | 2 | 5 | |||||
Employee savings plan (in shares) | 0.4 | |||||||
Employee savings plan | 41 | 14 | 27 | |||||
B/E Aerospace business acquisition (in shares) | 31.2 | |||||||
B/E Aerospace business acquisition | 3,015 | $ 1 | 3,014 | |||||
Stock-based compensation | 21 | 21 | ||||||
Treasury share repurchases (in shares) | (0.4) | |||||||
Treasury share repurchases | (39) | (39) | ||||||
Shares Outstanding (in shares) at Jun. 30, 2017 | 162.4 | |||||||
Ending balance at Jun. 30, 2017 | 5,609 | $ 2 | 4,542 | 3,679 | (1,806) | (814) | 6 | |
Beginning balance at Mar. 31, 2017 | (1,873) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 179 | |||||||
Other comprehensive income | 67 | |||||||
Shares Outstanding (in shares) at Jun. 30, 2017 | 162.4 | |||||||
Ending balance at Jun. 30, 2017 | $ 5,609 | $ 2 | $ 4,542 | $ 3,679 | $ (1,806) | $ (814) | $ 6 | |
[1] | During the nine months ended June 30, 2016, the Company retired 40 million shares of treasury stock. These shares were retired at a weighted-average price of $59.95 per share, resulting in a $2.4 billion reduction in treasury stock. The retired shares were returned to the status of authorized and unissued. |
Condensed Consolidated Stateme9
Condensed Consolidated Statement of Equity (Parenthetical ) shares in Millions, $ in Millions | 9 Months Ended | |
Jun. 30, 2016USD ($)$ / sharesshares | ||
Treasury share retirements | $ 0 | [1] |
Treasury Stock [Member] | ||
Treasury stock shares retired (in shares) | shares | 40 | |
Treasury stock retired, weighted-average price (in dollars per share) | $ / shares | $ 59.95 | |
Treasury share retirements | $ 2,398 | [1] |
[1] | During the nine months ended June 30, 2016, the Company retired 40 million shares of treasury stock. These shares were retired at a weighted-average price of $59.95 per share, resulting in a $2.4 billion reduction in treasury stock. The retired shares were returned to the status of authorized and unissued. |
Business Description and Basis
Business Description and Basis of Presentation | 9 Months Ended |
Jun. 30, 2017 | |
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) supplies cabin interior products and services to aircraft manufacturers and airlines, designs, produces and supports communications and aviation systems for commercial and military customers and provides information management services through voice and data communication networks and solutions worldwide. The Company operates on a 52/53 week fiscal year with quarters ending on the Friday closest to the last day of the calendar quarter. For ease of presentation, June 30 and September 30 are utilized consistently throughout these financial statements and notes to represent the period end dates. The Company has two consolidated subsidiaries with income attributable to a noncontrolling interest. The net income and comprehensive income attributable to the noncontrolling interest is insignificant. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended September 30, 2016 . In the opinion of management, the unaudited financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates and assumptions. On April 13, 2017, the Company acquired B/E Aerospace, a leading manufacturer of aircraft cabin interior products and services. As a result of the acquisition, a new Interior Systems segment was created. See Note 3 for additional information. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2017, the Financial Accounting Standards Board (FASB) issued a new standard on the presentation of the net periodic cost of postretirement benefit programs. The new standard requires sponsors of defined benefit postretirement plans to present the non-service cost components of net periodic benefit cost separate from the service cost component on the income statement. The new standard also requires that the non-service cost components of net periodic benefit cost no longer be capitalized within assets. The Company is evaluating the effects the standard will have on the Company's consolidated financial statements and related disclosures beyond the change in income statement presentation. This new standard is effective for the Company in 2019, with early adoption permitted. In January 2017, the FASB issued a new standard which simplifies testing for goodwill impairment. The new standard eliminates Step 2 of the goodwill impairment test, which requires determining the fair value of assets acquired or liabilities assumed in a business combination. Under the amendments in this update, a goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount. This new standard is effective for the Company in 2021, with early adoption permitted. 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 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, and 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 April 2015, the FASB issued a new standard on the presentation of debt issuance costs, which requires debt issuance costs to be presented on the balance sheet as a deduction from the carrying amount of the related debt liability, consistent with the presentation of unamortized debt discounts. Previously, debt issuance costs were presented as a deferred asset. The Company adopted the new guidance during the three months ended December 31, 2016 on a retrospective basis, which resulted in the reclassification of $8 million and $10 million of Other assets to Long-term debt, net as of September 30, 2016 and September 30, 2015, respectively. In May 2014, the FASB issued a comprehensive new revenue recognition standard that effectively replaces all current guidance on the topic. Several amendments to the new standard have been issued, which are intended to resolve potential implementation challenges and drive consistent interpretation and application of the new standard. The new standard is effective for the Company in 2019, with early adoption permitted, but not earlier than 2018. The guidance permits use of either a retrospective or cumulative effect transition method. The Company's interpretation of the new standard is substantially complete and the Company has prepared an initial assessment of the impacts of adoption on its consolidated financial statements and disclosures. Anticipated changes under the new standard include accounting for development costs and associated customer funding related to commercial contracts, increased use over time of revenue recognition based on costs incurred for government contracts and the elimination of customer relationship intangible assets related to free products provided to customers as up-front sales incentives. The new standard also significantly enhances required disclosures regarding revenue and related assets and liabilities. Of the anticipated changes, the Company expects that the change in accounting for commercial contract development costs and associated customer funding is likely to have the most significant impact on its financial statements. Customer funding received for development effort is currently recognized as revenue as the development activities are performed. Under the new standard, the Company has concluded that the development effort does not represent a performance obligation. Therefore, customer funding specific to the development effort must be deferred as a contract liability and recognized as revenue when products are delivered to the customer, delaying the timing of revenue recognition. The Company currently expenses development costs associated with commercial contracts unless the arrangement includes a contractual guarantee for reimbursement from the customer. Upon adoption of the new standard, development costs will be expensed as incurred except for those costs incurred pursuant to customer funding. The amount of development costs eligible for deferral will be equivalent to the associated customer funding. Subsequent to adoption, those deferred development costs will be recognized as expense when products are delivered to the customer, consistent with the amortization of deferred development specific customer funding into revenue. Development costs incurred pursuant to contractual guarantees for reimbursement will no longer be capitalized within Inventory as pre-production engineering costs. The balance of capitalized development costs within Inventory as of the adoption date will be eliminated and the related post-adoption amortization expense avoided. The Company continues to evaluate the impacts associated with the new standard, assess the implications of the B/E Aerospace acquisition on the implementation plan and refine estimated impacts of adoption on the financial statements and related disclosures. The Company is in the process of implementing changes to business processes, systems and internal controls required to implement the new accounting standard. The Company plans to adopt the new standard in 2019 and apply it retrospectively to all periods presented. Other new accounting standards issued but not effective until after June 30, 2017 are not expected to have a material impact on the Company's financial statements. |
Acquisitions, Goodwill and Inta
Acquisitions, Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2017 | |
Business Combination, Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisitions, Goodwill and Intangible Assets | Acquisitions, Goodwill and Intangible Assets Acquisitions B/E Aerospace On April 13, 2017, the Company completed the acquisition of B/E Aerospace, a leading manufacturer of aircraft cabin interior products and services, for $6.5 billion in cash and stock, plus the assumption of $2.0 billion of debt, net of cash acquired. The transaction combines the Company's capabilities in flight deck avionics, cabin electronics, mission communication and navigation, simulation and training and information management services with B/E Aerospace's range of cabin interior products, which include seating, food and beverage preparation and storage equipment, lighting and oxygen systems, and modular galley and lavatory systems for commercial airliners and business jets. The acquisition advances the Company’s global growth strategy by expanding the Company's previous focus on cockpit, cabin management, communication and connectivity solutions, and diversifies the Company's product portfolio and customer mix. Results of the acquired business are reported in the newly formed Interior Systems business segment. The $6.5 billion gross purchase price for the acquisition of B/E Aerospace includes the following: (in millions) Cash consideration $ 3,521 Value of common stock issued for B/E Aerospace common stock (1) 3,015 Total purchase price $ 6,536 (1) 31.2 million shares of common stock issued to B/E Aerospace shareholders at the Company's April 13, 2017 closing share price of $96.63 . The cash consideration was financed through the issuance of $4.35 billion of senior unsecured notes and $1.5 billion borrowed under a new senior unsecured syndicated term loan facility (see Note 9). The remaining proceeds of the debt offering were used to repay assumed B/E Aerospace debt and a portion of the Company's outstanding short-term commercial paper borrowings. The following table, which is preliminary and subject to change, summarizes the estimated fair value of assets acquired and liabilities assumed at the acquisition date. The final determination of the fair value of assets and liabilities will be completed within the one year measurement period as allowed by FASB Accounting Standards Codification Topic 805, Business Combinations. As of June 30, 2017 , the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary. The size and breadth of the B/E Aerospace acquisition necessitates use of the one year measurement period to adequately analyze all the factors used in establishing the asset and liability fair values as of the acquisition date, including, but not limited to, intangible assets, inventory, real property, leases, deferred tax liabilities related to the unremitted earnings of foreign subsidiaries, certain reserves and the related tax impacts of any changes made. Any potential adjustments will be made retroactively and could be material to the preliminary values presented below. (in millions) April 13, 2017 Cash and cash equivalents $ 104 Receivables, net 496 Inventories, net (1) 556 Other current assets 56 Property 253 Intangible Assets 2,381 Other Assets 59 Total Identifiable Assets Acquired 3,905 Accounts payable (251 ) Compensation and benefits (75 ) Advance payments from customers (62 ) Accrued customer incentives (48 ) Product warranty costs (117 ) Other current liabilities (2) (361 ) Long-term Debt, Net (2,119 ) Retirement Benefits (12 ) Deferred Income Tax Liability (521 ) Other Liabilities (2) (448 ) Total Liabilities Assumed (4,014 ) Net Identifiable Assets Acquired, excluding Goodwill (109 ) Goodwill 6,645 Net Assets Acquired $ 6,536 (1) Inventories, net includes a $74 million adjustment to state Work in process and Finished goods inventories at their fair value as of the acquisition date. The inventory fair value adjustment is being amortized as a non-cash increase to Cost of sales ratably over the estimated inventory turnover period. $44 million of the fair value adjustment was recognized in Cost of sales in the three months ended June 30, 2017. (2) As of the acquisition date, the Company made adjustments totaling $457 million related to acquired existing long-term contracts with terms less favorable than could be realized in market transactions as of the acquisition date. The adjustments were primarily recognized within Other current liabilities and Other Liabilities based upon estimates regarding the period in which the liabilities will be amortized to the Condensed Consolidated Statement of Operations as non-cash reductions to Cost of sales. $42 million of the acquired contract liabilities were recognized in Cost of sales in the three months ended June 30, 2017. The Intangible Assets included above consist of the following: Weighted Average Life (in years) Fair Value (in millions) Developed technology 12 $ 723 Airline customer relationships 10 1,450 OEM customer relationships 13 208 Total 11 $ 2,381 The preliminary purchase price allocation resulted in the recognition of $6.645 billion of goodwill, none of which is expected to be deductible for tax purposes. The Company is in the process of allocating goodwill by segment, and as of June 30, 2017 the Company has preliminarily included all of the goodwill in the new Interior Systems segment. The goodwill is a result of expected cost synergies from the consolidation of certain corporate and administrative functions, supply chain savings and low-cost manufacturing, expected revenue synergies from the integration of legacy products and technologies with those of B/E Aerospace and intangible assets that do not qualify for separate recognition, such as the assembled B/E Aerospace workforce. B/E Aerospace's results of operations have been included in the Company's operating results for the period subsequent to the completion of the acquisition on April 13, 2017. B/E Aerospace contributed sales of $695 million for the three months ended June 30, 2017, and net income of $58 million for the three months ended June 30, 2017. Transaction, Integration and Financing Costs During the three and nine months ended June 30, 2017, the Company recorded total transaction, integration and financing costs in the Condensed Consolidated Statement of Operations as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Transaction and integration costs $ 64 $ — $ 80 $ — Interest expense 18 — 29 — Total Transaction, integration and financing costs $ 82 $ — $ 109 $ — During the three months ended June 30, 2017, $16 million of transaction and integration costs previously reported within Selling, general and administrative expense were reclassified to Transaction and integration costs on the Condensed Consolidated Statement of Operations. At June 30, 2017 , $29 million of transaction, integration and financing costs were unpaid and included in Accounts payable on the Condensed Consolidated Statement of Financial Position. Supplemental Pro Forma Data The following unaudited supplemental pro forma data presents consolidated pro forma information as if the acquisition and related financing had been completed as of the beginning of the prior year, or on October 1, 2015. The unaudited supplemental pro forma financial information does not reflect the potential realization of revenue synergies or cost savings, nor does it reflect other costs relating to the integration of the two companies. This pro forma data should not be considered indicative of the results that would have actually occurred if the acquisition and related financing been consummated on October 1, 2015, 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 B/E Aerospace for the pre-acquisition periods, which were adjusted to account for certain transactions and other costs that would have been incurred during this pre-acquisition period. The pro forma information included herein is preliminary and may be revised as additional information becomes available and as additional analysis is performed within the one year measurement period allowed by ASC 805. Any potential future adjustments could be material. Three Months Ended Nine Months Ended June 30 June 30 (in millions, except per share amounts) 2017 2016 2017 2016 Pro forma sales $ 2,219 $ 2,087 $ 6,182 $ 5,943 Pro forma net income attributable to common shareowners from continuing operations 247 263 636 466 Pro forma basic earnings per share from continuing operations 1.53 1.63 3.93 2.88 Pro forma diluted earnings per share from continuing operations 1.52 1.62 3.89 2.85 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, 2015. These adjustments are net of any applicable tax impact and were included to arrive at the pro forma results above. As the acquisition of B/E Aerospace was completed on April 13, 2017, the pro forma adjustments for the three and nine months ended June 30, 2017 in the table below include only the required adjustments through April 13, 2017. Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Increases/ (decreases) to pro forma net income: Net reduction to depreciation resulting from fixed asset adjustments (1) $ 1 $ 5 $ 11 $ 16 Advisory, legal and accounting service fees (2) 123 — 156 (123 ) Amortization of acquired B/E Aerospace intangible assets, net (3) (6 ) (36 ) (79 ) (109 ) Interest expense incurred on acquisition financing, net (4) 8 (16 ) (17 ) (49 ) Long-term contract program adjustments (5) (6 ) (21 ) (59 ) (104 ) Acquired contract liability amortization (6) 3 30 62 109 Inventory fair value adjustment amortization (7) — — — (56 ) Compensation adjustments (8) — 4 6 10 (1) Captures the net impact to depreciation expense resulting from various purchase accounting adjustments to fixed assets. (2) Reflects the elimination of transaction-related fees incurred by B/E Aerospace and Rockwell Collins in connection with the acquisition and assumes all of the fees were incurred during the first quarter of 2016. (3) Eliminates amortization of the historical B/E Aerospace intangible assets and replaces it with the new amortization for the acquired intangible assets. (4) Reflects the addition of interest expense for the debt incurred by Rockwell Collins to finance the B/E Aerospace acquisition, net of interest expense that was eliminated on the historical B/E Aerospace debt that was repaid at the acquisition date. The adjustment also reflects the elimination of interest expense incurred by Rockwell Collins for bridge loan financing which was assumed to not be required for purposes of the pro forma periods presented. (5) Eliminates B/E Aerospace capitalized development costs and deferred revenues on certain long-term contracts. (6) Reflects amortization of liabilities recognized for acquired contracts with terms less favorable than could be realized in market transactions as of the acquisition date. (7) Reflects amortization of adjustment made to state Work in process and Finished goods inventories at fair value as of the acquisition date. (8) Reflects reduction in compensation expense due to the vesting of B/E Aerospace stock awards upon the acquisition and the termination of certain B/E Aerospace executives and board members. Pulse.aero On December 20, 2016, the Company acquired 100 percent of the outstanding shares of Pulse.aero, a United Kingdom based company specializing in self-bag drop technologies used by airlines and airports. The purchase price, net of cash acquired, was $15 million , of which $14 million was paid during the nine months ended June 30, 2017 . On the acquisition date, the Company recorded a $5 million liability for the fair value of post-closing consideration that may be paid, contingent upon the achievement of certain revenue targets and development milestones. During the nine months ended June 30, 2017 , the Company made contingent consideration payments of $2 million . In the third quarter of 2017, the purchase price allocation was finalized, with $12 million allocated to goodwill and $6 million to intangible assets. The intangible assets have a weighted average life of approximately 9 years. None of the 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 expand the Company's airport passenger processing offerings. Matrix product line 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. International Communications Group, Inc. 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. 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. The B/E Aerosapce acquisition is included in the new Interior Systems segment, the Pulse.aero acquisition is included in the Information Management Services segment, the Matrix product line acquisition is included in the Government Systems segment and the ICG acquisition is included in the Commercial Systems segment. The results of operations for the acquisitions have been included in the Company's operating results for the periods subsequent to the acquisition dates. Pro forma results of operations have not been presented for Pulse.aero, the Matrix product line or ICG, as the effect of the acquisitions are not material to the Company's condensed consolidated results of operations. Goodwill Changes in the carrying amount of goodwill are summarized as follows: (in millions) Interior Systems Commercial Systems Government Systems Information Management Services Total Balance at September 30, 2016 $ — $ 326 $ 503 $ 1,090 $ 1,919 B/E Aerospace acquisition 6,645 — — — 6,645 Pulse.aero acquisition — — — 12 12 Foreign currency translation adjustments 24 — 1 1 26 Balance at June 30, 2017 $ 6,669 $ 326 $ 504 $ 1,103 $ 8,602 The Company performs an annual impairment test of goodwill and indefinite-lived intangible assets during the second quarter of each fiscal year, or at any time there is an indication goodwill or indefinite-lived intangibles are more-likely-than-not impaired, commonly referred to as triggering events. There have been no such triggering events during any of the periods presented and the Company's second quarter 2017 impairment tests resulted in no impairment. Intangible Assets Intangible assets are summarized as follows: June 30, 2017 September 30, 2016 (in millions) Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology and patents $ 1,092 $ (242 ) $ 850 $ 354 $ (216 ) $ 138 Backlog 6 (4 ) 2 6 (3 ) 3 Customer relationships: Acquired 2,001 (156 ) 1,845 340 (106 ) 234 Up-front sales incentives 336 (89 ) 247 313 (80 ) 233 License agreements 15 (10 ) 5 14 (10 ) 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 Intangible assets $ 3,512 $ (515 ) $ 2,997 $ 1,096 $ (429 ) $ 667 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. As of June 30, 2017 , the weighted average amortization period remaining for up-front sales incentives was approximately 9 years. Anticipated annual amortization expense for intangible assets is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Anticipated amortization expense for up-front sales incentives $ 13 $ 19 $ 25 $ 28 $ 28 $ 143 Anticipated amortization expense for all other intangible assets 143 262 259 257 257 1,602 Total $ 156 $ 281 $ 284 $ 285 $ 285 $ 1,745 Amortization expense for intangible assets for the three and nine months ended June 30, 2017 was $61 million and $86 million , respectively, compared to $15 million and $46 million for the three and nine months ended June 30, 2016 . |
Discontinued Operations and Div
Discontinued Operations and Divestitures | 9 Months Ended |
Jun. 30, 2017 | |
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 initial sale price was $3 million , and additional post-closing consideration of $2 million was received in December 2016. During the nine months ended June 30, 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. In April 2014, the FASB issued guidance that modifies the definition of a discontinued operation and provides new disclosure requirements for divestitures. This guidance was effective for the Company in 2016. The ASES divestiture occurred in 2015 and is being reported based upon the previous guidance for discontinued operations. Results of discontinued operations are as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Income from discontinued operations before income taxes $ — $ — $ — $ 2 Income tax (expense) from discontinued operations — — — (1 ) |
Receivables, Net
Receivables, Net | 9 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Receivables, Net | Receivables, Net Receivables, net are summarized as follows: (in millions) June 30, September 30, Billed $ 1,211 $ 748 Unbilled 485 439 Less progress payments (44 ) (87 ) Total 1,652 1,100 Less allowance for doubtful accounts (8 ) (6 ) Receivables, net $ 1,644 $ 1,094 Receivables expected to be collected beyond the next twelve months are classified as long-term and are included in Other Assets. Receivables, net due from equity affiliates were $68 million and $68 million at June 30, 2017 and September 30, 2016 , respectively. Unbilled receivables principally represent sales recorded under the percentage-of-completion method of accounting that have not yet 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 Condensed Consolidated Statement of Cash Flows. Cash provided by operating activities from participating in these programs was $198 million and $8 million during the nine months ended June 30, 2017 and 2016 , respectively. The cost of participating in these programs was immaterial to the Company's results. |
Inventories, Net
Inventories, Net | 9 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories, net are summarized as follows: (in millions) June 30, September 30, Finished goods $ 306 $ 210 Work in process 340 236 Raw materials, parts and supplies 702 354 Less progress payments (10 ) (1 ) Total 1,338 799 Pre-production engineering costs 1,168 1,140 Inventories, net $ 2,506 $ 1,939 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 contractual guarantees for reimbursement are expensed as incurred. 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 $ 59 $ 99 $ 137 $ 157 $ 148 $ 611 Amortization expense for pre-production engineering costs for the three and nine months ended June 30, 2017 was $18 million and $43 million , respectively, compared to $14 million and $37 million for the three and nine months ended June 30, 2016 . As of June 30, 2017 , the weighted average amortization period remaining for pre-production engineering costs included in Inventories, net was approximately 10 years. |
Property
Property | 9 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property | Property Property is summarized as follows: (in millions) June 30, September 30, 2016 Land $ 20 $ 15 Buildings and improvements 569 468 Machinery and equipment 1,359 1,218 Information systems software and hardware 496 435 Furniture and fixtures 85 74 Capital leases 58 58 Construction in progress 229 183 Total 2,816 2,451 Less accumulated depreciation (1,488 ) (1,416 ) Property $ 1,328 $ 1,035 |
Other Assets
Other Assets | 9 Months Ended |
Jun. 30, 2017 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets are summarized as follows: (in millions) June 30, September 30, Long-term receivables $ 199 $ 146 Investments in equity affiliates 7 10 Exchange and rental assets (net of accumulated depreciation of $105 at June 30, 2017 and $101 at September 30, 2016) 71 68 Other 223 145 Other Assets $ 500 $ 369 Long-Term Receivables Long-term receivables expected to be collected beyond the next twelve months are principally comprised of unbilled accounts receivables 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 The Company's investments in equity affiliates primarily consist of seven joint ventures, each 50 percent owned and accounted for under the equity method. The Company records income or loss from equity affiliates in Other income, net on the Condensed Consolidated Statement of Operations. The Company's sales to equity affiliates were $57 million and $193 million for the three and nine months ended June 30, 2017 , respectively, compared to $ 58 million and $ 159 million for the three and nine months ended June 30, 2016 . Deferred profit from sales to equity affiliates was $2 million at June 30, 2017 and $2 million at September 30, 2016 . 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 cost or production cost and depreciated using the straight-line method over their estimated lives, up to 15 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Depreciation expense for exchange and rental assets was $3 million and $8 million for the three and nine months ended June 30, 2017 , respectively, and $2 million and $7 million for the three and nine months ended June 30, 2016 . |
Debt
Debt | 9 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-term Debt (in millions, except weighted average amounts) June 30, September 30, Short-term commercial paper borrowings outstanding (1) $ 362 $ 440 Current portion of long-term debt 149 300 Short-term debt $ 511 $ 740 Weighted average interest rate of commercial paper borrowings 1.43 % 0.79 % Weighted average maturity period of commercial paper borrowings (days) 12 15 (1) The maximum amount of short-term commercial paper borrowings outstanding during the nine months ended June 30, 2017 was $1.058 billion . Commercial Paper Program Under the Company’s commercial paper program, the Company may sell up to $1.5 billion face amount of unsecured short-term promissory notes in the commercial paper market. The commercial paper program is supported by the Company's $1.5 billion revolving credit facility. Revolving Credit Facilities On December 16, 2016, the Company entered into a new $1.2 billion five -year senior unsecured revolving credit agreement with various banks. The $1.2 billion credit facility increased to $1.5 billion concurrent with the consummation of the B/E Aerospace acquisition on April 13, 2017. This revolving credit facility replaces the previous $1 billion and $200 million revolving credit facilities that would have expired in December 2018 and February 2017, respectively. Both of these revolving credit facilities were terminated upon the closing of the new revolving credit facility. At June 30, 2017 , there were no outstanding borrowings under the Company's revolving credit facility and at September 30, 2016 there were no outstanding borrowings under the previous revolving credit facilities. Short-term credit facilities available to non-U.S. subsidiaries were $38 million as of June 30, 2017 , of which $2 million was utilized to support commitments in the form of commercial letters of credit. At June 30, 2017 and September 30, 2016 , there were no borrowings outstanding under these credit facilities. At June 30, 2017 and September 30, 2016 , there were no significant commitment fees or compensating balance requirements under any of the Company’s credit facilities. Bridge Credit Facility On December 16, 2016, pursuant to the B/E Aerospace acquisition, the Company entered into a $4.35 billion 364 -day senior unsecured bridge term loan credit agreement with various banks. This bridge facility terminated upon receipt of proceeds from the new notes issued to finance a portion of the B/E Aerospace acquisition. Term Loan Credit Facility On December 16, 2016, pursuant to the B/E Aerospace acquisition, the Company entered into a $1.5 billion three -year senior unsecured term loan credit agreement with various banks. As of June 30, 2017 , borrowings under this facility totaled $1.462 billion . As of June 30, 2017 , borrowings under this term loan facility bear interest at LIBOR plus 1.25 percent and amortize in equal quarterly installments of 2.5 percent , or $38 million , with the balance payable on April 13, 2020. Proceeds of borrowings under the term loan facility were used to finance a portion of the B/E Aerospace acquisition and to pay related transaction fees and expenses. The revolving credit agreement and term loan credit agreement each include one financial covenant requiring the Company to maintain a consolidated debt to total capitalization ratio of not greater than 68 percent (excluding the equity impact on accumulated other comprehensive loss related to defined benefit retirement plans). This financial covenant ratio will decrease to 65 percent on June 30, 2018. The Company was in compliance with this financial covenant at June 30, 2017 . The credit agreements 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. Long-term Debt On April 10, 2017, the Company issued $4.65 billion of senior unsecured notes. The net proceeds of the offering were principally used to finance a portion of the B/E Aerospace acquisition and to pay related transaction fees and expenses. Net proceeds of $300 million were used to repay a portion of the Company's outstanding short-term commercial paper borrowings. The principal amount of long-term debt, net of discount and debt issuance costs, is summarized as follows: (in millions, except interest rate figures) Interest Rate June 30, September 30, Fixed-rate notes due: July 2019 1.95% $ 300 $ — July 2019 5.25% 300 300 November 2021 3.10% 250 250 March 2022 2.80% 1,100 — December 2023 3.70% 400 400 March 2024 3.20% 950 — March 2027 3.50% 1,300 — December 2043 4.80% 400 400 April 2047 4.35% 1,000 — Variable-rate term loan due: April 2020 1 month LIBOR + 1.25% (1) 1,462 — Variable-rate note due: December 2016 3 month LIBOR + 0.35% — 300 Fair value swap adjustment (see Notes 14 and 15) 15 35 Total 7,477 1,685 Less unamortized debt issuance costs and discounts 60 11 Less current portion of long-term debt 149 300 Long-term Debt, Net $ 7,268 $ 1,374 (1) The Company has the option to elect a one, two, three or six-month LIBOR interest rate and has elected the one-month rate during the third quarter of 2017. The one-month LIBOR rate at June 30, 2017 was approximately 1.13 percent. As discussed in Note 2, the Company adopted new accounting guidance during the three months ended December 31, 2016 which required debt issuance costs to be presented on the balance sheet as a deduction from the carrying amount of the related debt liability. As a result, $8 million of debt issuance costs were reclassified from Other Assets to Long-term Debt, Net as of September 30, 2016. The notes listed above are included in the Condensed Consolidated Statement of Financial Position, net of any unamortized debt issuance costs and discounts, within the caption Long-term Debt, Net. Debt issuance costs and discounts are amortized over the life of the debt and recorded in Interest expense on the Condensed Consolidated Statement of Operations. Cash payments for debt interest and fees during the nine months ended June 30, 2017 were $129 million , of which $28 million related to fees incurred in connection with the bridge credit facility. Cash payments for debt interest and fees during the nine months ended June 30, 2016 were $49 million . |
Retirement Benefits
Retirement Benefits | 9 Months Ended |
Jun. 30, 2017 | |
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. Components of Expense (Income) The components of expense (income) for Pension Benefits and Other Retirement Benefits for the three and nine months ended June 30, 2017 and 2016 are summarized as follows: Pension Benefits Other Retirement Benefits Three Months Ended Three Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Service cost $ 4 $ 2 $ 1 $ 1 Interest cost 28 32 1 1 Expected return on plan assets (61 ) (60 ) — — Amortization: Prior service credit — — (1 ) (1 ) Net actuarial loss 23 20 2 2 Net benefit expense (income) $ (6 ) $ (6 ) $ 3 $ 3 Pension Benefits Other Retirement Benefits Nine Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Service cost $ 10 $ 8 $ 2 $ 2 Interest cost 83 95 4 4 Expected return on plan assets (181 ) (179 ) (1 ) (1 ) Amortization: Prior service credit — (1 ) (1 ) (1 ) Net actuarial loss 69 59 6 6 Net benefit expense (income) $ (19 ) $ (18 ) $ 10 $ 10 Pension Plan Funding The Company’s objective with respect to the funding of its pension plans is to provide adequate assets for the payment of future benefits. Pursuant to this objective, the Company will fund its pension plans as required by governmental regulations and may consider discretionary contributions as conditions warrant. In October 2016, the Company voluntarily contributed $55 million to its U.S. qualified pension plan. 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 this plan. 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 pension plan are expected to total $13 million in 2017. During the nine months ended June 30, 2017 , the Company made contributions to the non-U.S. plans and the U.S. non-qualified pension plan of $11 million . |
Stock-Based Compensation and Ea
Stock-Based Compensation and Earnings Per Share | 9 Months Ended |
Jun. 30, 2017 | |
Stock Based Compensation and Earnings Per Share Abstract | |
Stock-Based Compensation and Earnings Per Share | Stock-Based Compensation and Earnings Per Share Stock-based compensation expense, which is calculated net of an assumed forfeiture rate, and related income tax benefit included within the Condensed Consolidated Statement of Operations is as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Stock-based compensation expense included in: Product cost of sales $ 2 $ 1 $ 6 $ 6 Selling, general and administrative expenses 6 5 15 15 Total $ 8 $ 6 $ 21 $ 21 Income tax benefit $ 3 $ 2 $ 7 $ 7 The Company issued awards of equity instruments for the nine months ended June 30, 2017 and 2016 as follows: Options Performance Shares Restricted Stock Units (shares in thousands) Number Issued Weighted Average Fair Value Number Issued Weighted Average Fair Value Number Issued Weighted Average Fair Value Nine months ended June 30, 2017 667.2 $ 17.26 129.0 $ 87.38 224.2 $ 91.94 Nine months ended June 30, 2016 641.5 $ 17.75 131.0 $ 85.13 70.4 $ 85.91 These awards were issued under one of the Company's long-term incentive plans or assumed by the Company under the B/E Aerospace 2005 Long-Term Incentive Plan. The increase in issued Restricted Stock Units was primarily due to the conversion of B/E Aerospace Restricted Stock Units upon completion of the acquisition. Except for Restricted Stock Units, the Company did not assume any other B/E Aerospace equity awards. The maximum number of shares of common stock that can be issued in respect of performance shares granted in 2017 based on the achievement of performance targets for years 2017 through 2019 is approximately 304,000 . The fair value of each option granted by the Company was estimated using a binomial lattice pricing model and the following weighted average assumptions: 2017 Grants 2016 Grants Risk-free interest rate 1.0% - 2.7% 0.7% - 2.5% Expected dividend yield 1.3% - 1.5% 1.4% - 1.6% Expected volatility 19.0 % 20.0 % Expected life 7 years 7 years Employee Benefits Paid in Company Stock During the nine months ended June 30, 2017 and 2016 , 0.5 million and 0.5 million shares, respectively, of the Company's common stock were issued to employees under the Company's employee stock purchase and defined contribution savings plans at a value of $48 million and $41 million for the respective periods. Earnings Per Share and Diluted Share Equivalents The computation of basic and diluted earnings per share is as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions, except per share amounts) 2017 2016 2017 2016 Numerator for basic and diluted earnings per share: Income from continuing operations $ 179 $ 214 $ 492 $ 519 Income from discontinued operations, net of taxes — — — 1 Net income $ 179 $ 214 $ 492 $ 520 Denominator: Denominator for basic earnings per share – weighted average common shares 158.2 130.0 139.8 130.7 Effect of dilutive securities: Stock options 1.1 1.0 1.1 1.1 Performance shares, restricted stock and restricted stock units 0.6 0.5 0.5 0.5 Dilutive potential common shares 1.7 1.5 1.6 1.6 Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion 159.9 131.5 141.4 132.3 Earnings per share: Basic Continuing operations $ 1.13 $ 1.65 $ 3.52 $ 3.97 Discontinued operations — — — 0.01 Basic earnings per share $ 1.13 $ 1.65 $ 3.52 $ 3.98 Diluted Continuing operations $ 1.12 $ 1.63 $ 3.48 $ 3.92 Discontinued operations — — — 0.01 Diluted earnings per share $ 1.12 $ 1.63 $ 3.48 $ 3.93 The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period. There were no stock options excluded from the average outstanding diluted shares calculation for the three and nine months ended June 30, 2017 and June 30, 2016 . Earnings per share amounts are computed independently each quarter. As a result, the sum of each quarter's per share amount may not equal the total per share amount for the full year. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss (AOCL), net of tax, by component for the three and nine months ended June 30, 2017 and 2016 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 March 31, 2017 $ (85 ) $ (1,786 ) $ (2 ) $ (1,873 ) Other comprehensive income before reclassifications 50 — 2 52 Amounts reclassified from accumulated other comprehensive loss — 15 — 15 Net current period other comprehensive income 50 15 2 67 Balance at June 30, 2017 $ (35 ) $ (1,771 ) $ — $ (1,806 ) Balance at September 30, 2016 $ (76 ) $ (1,818 ) $ (4 ) $ (1,898 ) Other comprehensive income before reclassifications 41 — 2 43 Amounts reclassified from accumulated other comprehensive loss — 47 2 49 Net current period other comprehensive income 41 47 4 92 Balance at June 30, 2017 $ (35 ) $ (1,771 ) $ — $ (1,806 ) Balance at March 31, 2016 $ (56 ) $ (1,611 ) $ (3 ) $ (1,670 ) Other comprehensive loss before reclassifications (16 ) — — (16 ) Amounts reclassified from accumulated other comprehensive loss — 14 — 14 Net current period other comprehensive income (loss) (16 ) 14 — (2 ) Balance at June 30, 2016 $ (72 ) $ (1,597 ) $ (3 ) $ (1,672 ) Balance at September 30, 2015 $ (56 ) $ (1,637 ) $ (6 ) $ (1,699 ) Other comprehensive loss before reclassifications (16 ) — (1 ) (17 ) Amounts reclassified from accumulated other comprehensive loss — 40 4 44 Net current period other comprehensive income (loss) (16 ) 40 3 27 Balance at June 30, 2016 $ (72 ) $ (1,597 ) $ (3 ) $ (1,672 ) (1) Reclassifications from AOCL to net income, related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans, were $24 million ( $15 million net of tax) and $21 million ( $14 million net of tax) for the three months ended June 30, 2017 and 2016 , respectively, and were $74 million ( $47 million net of tax) and $ 63 million ( $40 million net of tax) for the nine months ended June 30, 2017 and 2016 , respectively. The reclassifications are included in the computation of net benefit expense. See Note 10 for additional details. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. During the three months ended June 30, 2017 and 2016 , the effective income tax rate from continuing operations was 19.0 percent and 13.4 percent, respectively. The prior year effective income tax rate from continuing operations was impacted by the release of a $41 million valuation allowance related to a U.S. capital loss carryforward. The current year effective income tax rate was impacted by a lower estimated annual effective tax rate, which applies to year-to-date earnings, due to the jursidictional mix of income as a result of the B/E Aerospace acquisition. During the nine months ended June 30, 2017 and 2016 , the effective income tax rate from continuing operations was 25.1 percent and 18.8 percent, respectively. The prior year effective income tax rate from continuing operations was impacted by the retroactive reinstatement of the Federal R&D Tax Credit and the release of a $41 million valuation allowance related to a U.S. capital loss carryforward. The current year effective income tax rate was impacted by a lower estimated annual effective tax rate, which applies to year-to-date earnings, due to the jursidictional mix of income as a result of of the B/E Aerospace acquisition. The Company's U.S. Federal income tax returns for the tax year ended September 30, 2013 and prior years have been audited by the IRS and are closed to further adjustments by the IRS. The IRS is currently auditing the Company's tax returns for the years ended September 30, 2014 and 2015. The IRS is currently auditing the legacy tax filings of certain acquired subsidiaries for the 2012, 2013 and 2014 calendar years. 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. The Company had net income tax payments of $202 million and $76 million during the nine months ended June 30, 2017 and 2016 , respectively. No provision has been made as of June 30, 2017 for U.S. federal or state, or additional non-U.S. income taxes related to an estimated amount of $1.6 billion of undistributed earnings of our foreign subsidiaries because such earnings are intended to be indefinitely reinvested. The Company has gross unrecognized tax benefits recorded within Other Liabilities in the Condensed Consolidated Statement of Financial Position of $139 million and $45 million as of June 30, 2017 and September 30, 2016 , respectively. The significant increase in unrecognized tax benefits is primarily due to the inclusion of certain B/E Aerospace tax positions. The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate was $111 million and $20 million as of June 30, 2017 and September 30, 2016 , respectively. Although the timing and outcome of tax settlements are uncertain, the Company does not anticipate any material reduction in the unrecognized tax benefits during the next 12 months. The Company includes interest and penalties related to unrecognized tax benefits in Income tax expense. The total amount of interest and penalties recognized within Other Liabilities in the Condensed Consolidated Statement of Financial Position was $ 7 million and $ 0 million as of June 30, 2017 and September 30, 2016 , respectively. The total amount of interest and penalties recorded as an expense or (income) within Income tax expense in the Condensed Consolidated Statement of Operations were not significant for the nine months ended June 30, 2017 and 2016 , respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2017 | |
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 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's 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 June 30, 2017 and September 30, 2016 are as follows: June 30, 2017 September 30, 2016 (in millions) Fair Value Hierarchy Fair Value Asset (Liability) Fair Value Asset (Liability) Deferred compensation plan investments Level 1 $ 60 $ 55 Deferred compensation plan investments Level 2 23 — Interest rate swap assets Level 2 15 35 Foreign currency forward exchange contract assets Level 2 9 11 Foreign currency forward exchange contract liabilities Level 2 (6 ) (13 ) Contingent consideration for ICG acquisition Level 3 (14 ) (13 ) Contingent consideration for Pulse.aero acquisition Level 3 (3 ) — There were no transfers between Levels of the fair value hierarchy during the nine months ended June 30, 2017 or 2016 . Valuation Techniques The Level 1 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 Level 2 deferred compensation plan investments consist of investments in variable insurance trust funds and the fair value is determined using the market approach and is calculated by a pricing model with observable market inputs. 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. As of June 30, 2017 , 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. Contingent consideration represents the estimated fair value of post-closing consideration owed to the sellers associated with the ICG acquisition, which occurred on August 6, 2015, and the Pulse.aero acquisition, which occurred on December 20, 2016. The contingent consideration is categorized as Level 3 in the fair value hierarchy and the fair value is determined using a probability-weighted approach. The liabilities recorded were derived from the estimated probability that certain contingent payment milestones will be met in accordance with the terms of the purchase agreements. The change in fair value of the Level 3 contingent consideration related to the ICG and Pulse.aero acquisitions is as follows: (in millions) Fair Value (Liability) Balance at September 30, 2016 $ (13 ) Acquisition date fair value of Pulse.aero contingent consideration (see Note 3) (5 ) Payment of contingent consideration (see Note 3) 2 Fair value adjustment (1) (1 ) Balance at June 30, 2017 $ (17 ) (1) The fair value adjustment is included in Interest expense on the Condensed Consolidated Statement of Operations. Financial instruments The carrying amounts and fair values of the Company's financial instruments are as follows: Asset (Liability) June 30, 2017 September 30, 2016 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 578 $ 578 $ 340 $ 340 Short-term debt (511 ) (511 ) (740 ) (740 ) Long-term debt (7,253 ) (7,478 ) (1,339 ) (1,508 ) 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 the current portion of long-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 | 9 Months Ended |
Jun. 30, 2017 | |
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 a mix of fixed and variable rate debt, which over time should moderate the costs of debt financing. To help 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 5.25 percent 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 5.25 percent 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 both the 2019 and the 2023 Swaps (the Swaps) as fair value hedges. The Swaps are recorded within Other Assets at a fair value of $15 million , offset by a fair value adjustment to Long-term Debt (Note 9) of $15 million at June 30, 2017 . At September 30, 2016 , the Swaps were 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 . Cash payments or receipts between the Company and the counterparties to the Swaps are recorded as an adjustment to interest expense. Foreign Currency Forward Exchange Contracts The Company transacts business in various foreign currencies which subjects the Company’s cash flows and earnings to exposure related to changes in foreign currency exchange rates. These exposures arise primarily from purchases or sales of products and services from third parties and intercompany transactions. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates and are used to offset changes in the fair value of certain assets or liabilities or forecasted cash flows resulting from transactions denominated in foreign currencies. As of June 30, 2017 and September 30, 2016 , the Company had outstanding foreign currency forward exchange contracts with notional amounts of $286 million and $384 million , respectively. These notional values consist primarily of contracts for the European euro, British pound sterling and Japanese yen, and are stated in U.S. dollar equivalents at spot exchange rates at the respective dates. Fair Value of Derivative Instruments Fair values of derivative instruments in the Condensed Consolidated Statement of Financial Position as of June 30, 2017 and September 30, 2016 are as follows: Asset Derivatives (in millions) Classification June 30, September 30, 2016 Foreign currency forward exchange contracts Other current assets $ 9 $ 11 Interest rate swaps Other assets 15 35 Total $ 24 $ 46 Liability Derivatives (in millions) Classification June 30, September 30, 2016 Foreign currency forward exchange contracts Other current liabilities $ 6 $ 13 The fair values of derivative instruments are presented on a gross basis, as the Company does not have any derivative contracts which are subject to master netting arrangements. As of June 30, 2017 , there were undesignated foreign currency forward exchange contracts classified within Other current assets of $1 million and Other current liabilities of $1 million . The effect of derivative instruments on the Condensed Consolidated Statement of Operations for the three and nine months ended June 30, 2017 and 2016 is as follows: Amount of Gain (Loss) Amount of Gain (Loss) Three Months Ended Nine Months Ended June 30 June 30 (in millions) Location of Gain (Loss) 2017 2016 2017 2016 Derivatives Designated as Hedging Instruments: Fair Value Hedges Interest rate swaps Interest expense $ 2 $ 3 $ 6 $ 8 Cash Flow Hedges Foreign currency forward exchange contracts: Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) AOCL 2 — 2 (1 ) Amount of loss reclassified from AOCL into income Cost of sales — (1 ) (3 ) (6 ) Derivatives Not Designated as Hedging Instruments: Foreign currency forward exchange contracts Cost of sales — (1 ) (1 ) (1 ) There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the nine months ended June 30, 2017 . In addition, there was no significant impact to the Company’s earnings when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge during the three and nine months ended June 30, 2017 . The Company did not have any hedges with credit-risk-related contingent features or that required the posting of collateral as of June 30, 2017 . The cash flows from derivative contracts are recorded in operating activities in the Condensed Consolidated Statement of Cash Flows. The Company expects to reclassify approximately $3 million of AOCL gains from cash flow hedges into earnings over the next 12 months. The maximum duration of a foreign currency cash flow hedge contract at June 30, 2017 was 72 months. |
Guarantees and Indemnifications
Guarantees and Indemnifications | 9 Months Ended |
Jun. 30, 2017 | |
Guarantees and Indemnifications Abstract | |
Guarantees and Indemnifications | Guarantees and Indemnifications Product warranty costs Accrued liabilities are recorded to reflect the Company’s contractual obligations relating to warranty commitments to customers. Warranty coverage of various lengths and terms is provided to customers depending on standard offerings and negotiated contractual agreements. An estimate for warranty expense is recorded at the time of sale based on the length of the warranty and historical warranty return rates and repair costs. Changes in the carrying amount of accrued product warranty costs are summarized as follows: Nine Months Ended June 30 (in millions) 2017 2016 Balance at beginning of year $ 87 $ 89 Warranty costs incurred (39 ) (32 ) Product warranty accrual 43 29 Changes in estimates for prior years (6 ) (3 ) Increase from acquisitions 117 — Balance at June 30, 2017 $ 202 $ 83 Letters of credit The Company has contingent commitments in the form of letters of credit. Outstanding letters of credit are issued by banks on the Company’s behalf to support certain contractual obligations to its customers. If the Company fails to meet these contractual obligations, these letters of credit may become liabilities of the Company. Total outstanding letters of credit at June 30, 2017 were $237 million . These commitments are not reflected as liabilities on the Company’s Condensed Consolidated Statement of Financial Position. Indemnifications The Company enters into indemnifications with lenders, counterparties in transactions, such as administration of employee benefit plans, 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 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. Under a 2014 Tax Sharing and Indemnification Agreement entered into by B/E Aerospace prior to the acquisition, the Company assumes certain potential tax liabilities related to the 2014 KLX spin-off from B/E Aerospace. If it is determined that the KLX spin-off by B/E Aerospace fails to qualify for certain tax-free treatment as a result of the Company's merger with B/E Aerospace (for example, if the merger is viewed as part of a plan or series of related transactions that includes the KLX spin-off or the KLX spin-off is found to have been used principally as a device for the distribution of earnings and profits), or because of the failure of the KLX spin-off to initially qualify for the tax-free treatment, the B/E Aerospace subsidiary could incur significant tax liabilities pursuant to the Tax Sharing and Indemnification Agreement or otherwise. 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 | 9 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligations and Other Commitments | Contractual Obligations and Other Commitments The following table reflects certain of the Company's annual non-cancelable contractual commitments: Payments by Period (in millions) 2017 2018 2019 2020 2021 Thereafter Total Non-cancelable operating leases $ 74 $ 81 $ 66 $ 50 $ 39 $ 197 $ 507 Purchase contracts 38 35 30 27 24 47 201 Long-term debt 375 150 750 1,125 — 5,400 7,800 Interest on long-term debt 120 253 254 213 192 1,926 2,958 Total $ 607 $ 519 $ 1,100 $ 1,415 $ 255 $ 7,570 $ 11,466 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. 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 Condensed Consolidated Statement of Financial Position. 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 | 9 Months Ended |
Jun. 30, 2017 | |
Environmental Remediation Obligations [Abstract] | |
Environmental Matters | Environmental Matters The Company is subject to federal, state and local regulations relating to the discharge of substances into the environment, the disposal of hazardous wastes and other activities affecting the environment that have had, and will continue to have, an impact on the Company’s manufacturing operations. These environmental protection regulations may require the investigation and remediation of environmental impairments at current and previously owned or leased properties. In addition, lawsuits, claims and proceedings have been asserted on occasion against the Company, alleging violations of environmental protection regulations, or seeking remediation of alleged environmental impairments, principally at previously owned or leased properties. As of June 30, 2017 , the Company is involved in the investigation or remediation of nine sites under these regulations or pursuant to lawsuits asserted by third parties. Management estimates that the total reasonably possible future costs the Company could incur for eight of these sites is not significant. Management estimates that the total reasonably possible future costs the Company could incur for one of these sites to be approximately $12 million . The Company has recorded environmental reserves for this site of $6 million as of June 30, 2017 , which represents management’s best estimate of the probable future cost for this site. To date, compliance with environmental regulations and resolution of environmental claims has been accomplished without material effect on the Company’s liquidity and capital resources, competitive position or financial condition. Management believes that expenditures for environmental capital investment and remediation necessary to comply with present regulations governing environmental protection and other expenditures for the resolution of environmental claims will not have a material effect on the Company’s business or financial position. |
Legal Matters
Legal Matters | 9 Months Ended |
Jun. 30, 2017 | |
Legal Matters Abstract | |
Legal Matters | Legal Matters The Company is subject to various lawsuits, claims and proceedings that have been, or may be, instituted or asserted against the Company relating to the conduct of the Company's business, including those pertaining to product liability, antitrust, intellectual property, safety and health, exporting and importing, contract, employment and regulatory matters. Although the outcome of these matters cannot be predicted with certainty, and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, management believes there are no material pending legal proceedings. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 9 Months Ended |
Jun. 30, 2017 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges During the three months ended December 31, 2015, the Company recorded corporate restructuring and asset impairment charges of $45 million . There were no corporate restructuring or asset impairment charges recorded during the nine months ended June 30, 2017 . The $45 million of charges were recorded in 2016 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 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. All employee separation costs were paid in 2016. Asset impairment charges primarily related to the write-down to fair market value of a corporate asset, as well as the write-off of certain long-lived assets. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information Sales and earnings from continuing operations of the Company's operating segments are summarized as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Sales: Interior Systems $ 695 $ — $ 695 $ — Commercial Systems 658 612 1,801 1,785 Government Systems 558 555 1,598 1,544 Information Management Services 183 167 535 485 Total sales $ 2,094 $ 1,334 $ 4,629 $ 3,814 Segment operating earnings: Interior Systems $ 80 $ — $ 80 $ — Commercial Systems 144 141 401 401 Government Systems 123 115 333 309 Information Management Services 39 26 105 79 Total segment operating earnings 386 282 919 789 Interest expense (1) (77 ) (16 ) (122 ) (48 ) Stock-based compensation (8 ) (6 ) (21 ) (21 ) General corporate, net (16 ) (13 ) (39 ) (36 ) Transaction and integration costs (1) (64 ) — (80 ) — Restructuring and asset impairment charges — — — (45 ) Income from continuing operations before income taxes 221 247 657 639 Income tax expense (42 ) (33 ) (165 ) (120 ) Income from continuing operations $ 179 $ 214 $ 492 $ 519 (1) During the three and nine months ended June 30, 2017 , the Company incurred $18 million and $29 million , respectively, of bridge facility fees related to the B/E Aerospace acquisition. These costs are included in Interest expense. Therefore, total transaction, integration and financing costs related to the acquisition of B/E Aerospace during the three and nine months ended June 30, 2017 were $82 million and $109 million , 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, transaction and integration costs, restructuring and asset impairment charges and other special items as identified by management from time to time. Intersegment sales are not material and have been eliminated. The following table summarizes sales by category for the three and nine months ended June 30, 2017 and 2016 : Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Interior Systems sales categories: Interior products and services $ 400 $ — $ 400 $ — Aircraft seating 295 — 295 — Interior Systems sales 695 — 695 — Commercial Systems sales categories: Air transport aviation electronics 405 370 1,098 1,052 Business and regional aviation electronics 253 242 703 733 Commercial Systems sales 658 612 1,801 1,785 Government Systems sales categories: Avionics 342 376 1,028 1,026 Communication and navigation 216 179 570 518 Government Systems sales 558 555 1,598 1,544 Information Management Services sales 183 167 535 485 Total sales $ 2,094 $ 1,334 $ 4,629 $ 3,814 The Interior Systems interior products and services and aircraft seating sales categories are delineated based on the nature of underlying products. The Commercial Systems 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 three and nine months ended June 30, 2017 , sales for air transport aviation electronics include revenue from wide-body in-flight entertainment products and services of $5 million and $15 million , respectively, compared to $9 million and $30 million for the three and nine months ended June 30, 2016 . The Government Systems avionics and communication and navigation sales categories are delineated based upon underlying product technologies. The following table summarizes the identifiable assets at June 30, 2017 and September 30, 2016 for each of the operating segments and corporate: (in millions) June 30, 2017 September 30, 2016 Identifiable assets: Interior Systems $ 10,346 $ — Commercial Systems 3,272 3,050 Government Systems 2,097 2,052 Information Management Services 1,903 1,906 Corporate 733 691 Total identifiable assets $ 18,351 $ 7,699 |
Business Description and Basi31
Business Description and Basis of Presentation (Policies) | 9 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2017, the Financial Accounting Standards Board (FASB) issued a new standard on the presentation of the net periodic cost of postretirement benefit programs. The new standard requires sponsors of defined benefit postretirement plans to present the non-service cost components of net periodic benefit cost separate from the service cost component on the income statement. The new standard also requires that the non-service cost components of net periodic benefit cost no longer be capitalized within assets. The Company is evaluating the effects the standard will have on the Company's consolidated financial statements and related disclosures beyond the change in income statement presentation. This new standard is effective for the Company in 2019, with early adoption permitted. In January 2017, the FASB issued a new standard which simplifies testing for goodwill impairment. The new standard eliminates Step 2 of the goodwill impairment test, which requires determining the fair value of assets acquired or liabilities assumed in a business combination. Under the amendments in this update, a goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount. This new standard is effective for the Company in 2021, with early adoption permitted. 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 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, and 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 April 2015, the FASB issued a new standard on the presentation of debt issuance costs, which requires debt issuance costs to be presented on the balance sheet as a deduction from the carrying amount of the related debt liability, consistent with the presentation of unamortized debt discounts. Previously, debt issuance costs were presented as a deferred asset. The Company adopted the new guidance during the three months ended December 31, 2016 on a retrospective basis, which resulted in the reclassification of $8 million and $10 million of Other assets to Long-term debt, net as of September 30, 2016 and September 30, 2015, respectively. In May 2014, the FASB issued a comprehensive new revenue recognition standard that effectively replaces all current guidance on the topic. Several amendments to the new standard have been issued, which are intended to resolve potential implementation challenges and drive consistent interpretation and application of the new standard. The new standard is effective for the Company in 2019, with early adoption permitted, but not earlier than 2018. The guidance permits use of either a retrospective or cumulative effect transition method. The Company's interpretation of the new standard is substantially complete and the Company has prepared an initial assessment of the impacts of adoption on its consolidated financial statements and disclosures. Anticipated changes under the new standard include accounting for development costs and associated customer funding related to commercial contracts, increased use over time of revenue recognition based on costs incurred for government contracts and the elimination of customer relationship intangible assets related to free products provided to customers as up-front sales incentives. The new standard also significantly enhances required disclosures regarding revenue and related assets and liabilities. Of the anticipated changes, the Company expects that the change in accounting for commercial contract development costs and associated customer funding is likely to have the most significant impact on its financial statements. Customer funding received for development effort is currently recognized as revenue as the development activities are performed. Under the new standard, the Company has concluded that the development effort does not represent a performance obligation. Therefore, customer funding specific to the development effort must be deferred as a contract liability and recognized as revenue when products are delivered to the customer, delaying the timing of revenue recognition. The Company currently expenses development costs associated with commercial contracts unless the arrangement includes a contractual guarantee for reimbursement from the customer. Upon adoption of the new standard, development costs will be expensed as incurred except for those costs incurred pursuant to customer funding. The amount of development costs eligible for deferral will be equivalent to the associated customer funding. Subsequent to adoption, those deferred development costs will be recognized as expense when products are delivered to the customer, consistent with the amortization of deferred development specific customer funding into revenue. Development costs incurred pursuant to contractual guarantees for reimbursement will no longer be capitalized within Inventory as pre-production engineering costs. The balance of capitalized development costs within Inventory as of the adoption date will be eliminated and the related post-adoption amortization expense avoided. The Company continues to evaluate the impacts associated with the new standard, assess the implications of the B/E Aerospace acquisition on the implementation plan and refine estimated impacts of adoption on the financial statements and related disclosures. The Company is in the process of implementing changes to business processes, systems and internal controls required to implement the new accounting standard. The Company plans to adopt the new standard in 2019 and apply it retrospectively to all periods presented. Other new accounting standards issued but not effective until after June 30, 2017 are not expected to have a material impact on the Company's financial statements. |
Customer 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. |
Preproduction Engineering Costs | 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 contractual guarantees for reimbursement are expensed as incurred. |
Acquisitions, Goodwill and In32
Acquisitions, Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Business Combination, Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Purchase Price | The $6.5 billion gross purchase price for the acquisition of B/E Aerospace includes the following: (in millions) Cash consideration $ 3,521 Value of common stock issued for B/E Aerospace common stock (1) 3,015 Total purchase price $ 6,536 (1) 31.2 million shares of common stock issued to B/E Aerospace shareholders at the Company's April 13, 2017 closing share price of $96.63 . |
Schedule of Assets Acquired and Liabilities Assumed | The following table, which is preliminary and subject to change, summarizes the estimated fair value of assets acquired and liabilities assumed at the acquisition date. The final determination of the fair value of assets and liabilities will be completed within the one year measurement period as allowed by FASB Accounting Standards Codification Topic 805, Business Combinations. As of June 30, 2017 , the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary. The size and breadth of the B/E Aerospace acquisition necessitates use of the one year measurement period to adequately analyze all the factors used in establishing the asset and liability fair values as of the acquisition date, including, but not limited to, intangible assets, inventory, real property, leases, deferred tax liabilities related to the unremitted earnings of foreign subsidiaries, certain reserves and the related tax impacts of any changes made. Any potential adjustments will be made retroactively and could be material to the preliminary values presented below. (in millions) April 13, 2017 Cash and cash equivalents $ 104 Receivables, net 496 Inventories, net (1) 556 Other current assets 56 Property 253 Intangible Assets 2,381 Other Assets 59 Total Identifiable Assets Acquired 3,905 Accounts payable (251 ) Compensation and benefits (75 ) Advance payments from customers (62 ) Accrued customer incentives (48 ) Product warranty costs (117 ) Other current liabilities (2) (361 ) Long-term Debt, Net (2,119 ) Retirement Benefits (12 ) Deferred Income Tax Liability (521 ) Other Liabilities (2) (448 ) Total Liabilities Assumed (4,014 ) Net Identifiable Assets Acquired, excluding Goodwill (109 ) Goodwill 6,645 Net Assets Acquired $ 6,536 (1) Inventories, net includes a $74 million adjustment to state Work in process and Finished goods inventories at their fair value as of the acquisition date. The inventory fair value adjustment is being amortized as a non-cash increase to Cost of sales ratably over the estimated inventory turnover period. $44 million of the fair value adjustment was recognized in Cost of sales in the three months ended June 30, 2017. (2) As of the acquisition date, the Company made adjustments totaling $457 million related to acquired existing long-term contracts with terms less favorable than could be realized in market transactions as of the acquisition date. The adjustments were primarily recognized within Other current liabilities and Other Liabilities based upon estimates regarding the period in which the liabilities will be amortized to the Condensed Consolidated Statement of Operations as non-cash reductions to Cost of sales. $42 million of the acquired contract liabilities were recognized in Cost of sales in the three months ended June 30, 2017. |
Schedule of Intangible Assets Acquired | The Intangible Assets included above consist of the following: Weighted Average Life (in years) Fair Value (in millions) Developed technology 12 $ 723 Airline customer relationships 10 1,450 OEM customer relationships 13 208 Total 11 $ 2,381 |
Schedule Of Transaction, Integration, And Financing Costs | During the three and nine months ended June 30, 2017, the Company recorded total transaction, integration and financing costs in the Condensed Consolidated Statement of Operations as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Transaction and integration costs $ 64 $ — $ 80 $ — Interest expense 18 — 29 — Total Transaction, integration and financing costs $ 82 $ — $ 109 $ — |
Pro Forma Information | Three Months Ended Nine Months Ended June 30 June 30 (in millions, except per share amounts) 2017 2016 2017 2016 Pro forma sales $ 2,219 $ 2,087 $ 6,182 $ 5,943 Pro forma net income attributable to common shareowners from continuing operations 247 263 636 466 Pro forma basic earnings per share from continuing operations 1.53 1.63 3.93 2.88 Pro forma diluted earnings per share from continuing operations 1.52 1.62 3.89 2.85 |
Schedule of Required Pro Forma Adjustments | 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, 2015. These adjustments are net of any applicable tax impact and were included to arrive at the pro forma results above. As the acquisition of B/E Aerospace was completed on April 13, 2017, the pro forma adjustments for the three and nine months ended June 30, 2017 in the table below include only the required adjustments through April 13, 2017. Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Increases/ (decreases) to pro forma net income: Net reduction to depreciation resulting from fixed asset adjustments (1) $ 1 $ 5 $ 11 $ 16 Advisory, legal and accounting service fees (2) 123 — 156 (123 ) Amortization of acquired B/E Aerospace intangible assets, net (3) (6 ) (36 ) (79 ) (109 ) Interest expense incurred on acquisition financing, net (4) 8 (16 ) (17 ) (49 ) Long-term contract program adjustments (5) (6 ) (21 ) (59 ) (104 ) Acquired contract liability amortization (6) 3 30 62 109 Inventory fair value adjustment amortization (7) — — — (56 ) Compensation adjustments (8) — 4 6 10 (1) Captures the net impact to depreciation expense resulting from various purchase accounting adjustments to fixed assets. (2) Reflects the elimination of transaction-related fees incurred by B/E Aerospace and Rockwell Collins in connection with the acquisition and assumes all of the fees were incurred during the first quarter of 2016. (3) Eliminates amortization of the historical B/E Aerospace intangible assets and replaces it with the new amortization for the acquired intangible assets. (4) Reflects the addition of interest expense for the debt incurred by Rockwell Collins to finance the B/E Aerospace acquisition, net of interest expense that was eliminated on the historical B/E Aerospace debt that was repaid at the acquisition date. The adjustment also reflects the elimination of interest expense incurred by Rockwell Collins for bridge loan financing which was assumed to not be required for purposes of the pro forma periods presented. (5) Eliminates B/E Aerospace capitalized development costs and deferred revenues on certain long-term contracts. (6) Reflects amortization of liabilities recognized for acquired contracts with terms less favorable than could be realized in market transactions as of the acquisition date. (7) Reflects amortization of adjustment made to state Work in process and Finished goods inventories at fair value as of the acquisition date. (8) Reflects reduction in compensation expense due to the vesting of B/E Aerospace stock awards upon the acquisition and the termination of certain B/E Aerospace executives and board members. |
Schedule of Goodwill | Changes in the carrying amount of goodwill are summarized as follows: (in millions) Interior Systems Commercial Systems Government Systems Information Management Services Total Balance at September 30, 2016 $ — $ 326 $ 503 $ 1,090 $ 1,919 B/E Aerospace acquisition 6,645 — — — 6,645 Pulse.aero acquisition — — — 12 12 Foreign currency translation adjustments 24 — 1 1 26 Balance at June 30, 2017 $ 6,669 $ 326 $ 504 $ 1,103 $ 8,602 |
Summary of Intangible Assets | Intangible assets are summarized as follows: June 30, 2017 September 30, 2016 (in millions) Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology and patents $ 1,092 $ (242 ) $ 850 $ 354 $ (216 ) $ 138 Backlog 6 (4 ) 2 6 (3 ) 3 Customer relationships: Acquired 2,001 (156 ) 1,845 340 (106 ) 234 Up-front sales incentives 336 (89 ) 247 313 (80 ) 233 License agreements 15 (10 ) 5 14 (10 ) 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 Intangible assets $ 3,512 $ (515 ) $ 2,997 $ 1,096 $ (429 ) $ 667 |
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 $ 13 $ 19 $ 25 $ 28 $ 28 $ 143 Anticipated amortization expense for all other intangible assets 143 262 259 257 257 1,602 Total $ 156 $ 281 $ 284 $ 285 $ 285 $ 1,745 |
Discontinued Operations and D33
Discontinued Operations and Divestitures (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | Results of discontinued operations are as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Income from discontinued operations before income taxes $ — $ — $ — $ 2 Income tax (expense) from discontinued operations — — — (1 ) |
Receivables, Net (Tables)
Receivables, Net (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Receivables, net are summarized as follows: (in millions) June 30, September 30, Billed $ 1,211 $ 748 Unbilled 485 439 Less progress payments (44 ) (87 ) Total 1,652 1,100 Less allowance for doubtful accounts (8 ) (6 ) Receivables, net $ 1,644 $ 1,094 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net are summarized as follows: (in millions) June 30, September 30, Finished goods $ 306 $ 210 Work in process 340 236 Raw materials, parts and supplies 702 354 Less progress payments (10 ) (1 ) Total 1,338 799 Pre-production engineering costs 1,168 1,140 Inventories, net $ 2,506 $ 1,939 |
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 $ 59 $ 99 $ 137 $ 157 $ 148 $ 611 |
Property (Tables)
Property (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property | Property is summarized as follows: (in millions) June 30, September 30, 2016 Land $ 20 $ 15 Buildings and improvements 569 468 Machinery and equipment 1,359 1,218 Information systems software and hardware 496 435 Furniture and fixtures 85 74 Capital leases 58 58 Construction in progress 229 183 Total 2,816 2,451 Less accumulated depreciation (1,488 ) (1,416 ) Property $ 1,328 $ 1,035 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Other Assets [Abstract] | |
Other Assets | Other assets are summarized as follows: (in millions) June 30, September 30, Long-term receivables $ 199 $ 146 Investments in equity affiliates 7 10 Exchange and rental assets (net of accumulated depreciation of $105 at June 30, 2017 and $101 at September 30, 2016) 71 68 Other 223 145 Other Assets $ 500 $ 369 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | (in millions, except weighted average amounts) June 30, September 30, Short-term commercial paper borrowings outstanding (1) $ 362 $ 440 Current portion of long-term debt 149 300 Short-term debt $ 511 $ 740 Weighted average interest rate of commercial paper borrowings 1.43 % 0.79 % Weighted average maturity period of commercial paper borrowings (days) 12 15 (1) The maximum amount of short-term commercial paper borrowings outstanding during the nine months ended June 30, 2017 was $1.058 billion . |
Long-Term Debt Reconciliation to Carrying Amount | The principal amount of long-term debt, net of discount and debt issuance costs, is summarized as follows: (in millions, except interest rate figures) Interest Rate June 30, September 30, Fixed-rate notes due: July 2019 1.95% $ 300 $ — July 2019 5.25% 300 300 November 2021 3.10% 250 250 March 2022 2.80% 1,100 — December 2023 3.70% 400 400 March 2024 3.20% 950 — March 2027 3.50% 1,300 — December 2043 4.80% 400 400 April 2047 4.35% 1,000 — Variable-rate term loan due: April 2020 1 month LIBOR + 1.25% (1) 1,462 — Variable-rate note due: December 2016 3 month LIBOR + 0.35% — 300 Fair value swap adjustment (see Notes 14 and 15) 15 35 Total 7,477 1,685 Less unamortized debt issuance costs and discounts 60 11 Less current portion of long-term debt 149 300 Long-term Debt, Net $ 7,268 $ 1,374 (1) The Company has the option to elect a one, two, three or six-month LIBOR interest rate and has elected the one-month rate during the third quarter of 2017. The one-month LIBOR rate at June 30, 2017 was approximately 1.13 percent. |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans Components of Expense (Income) | The components of expense (income) for Pension Benefits and Other Retirement Benefits for the three and nine months ended June 30, 2017 and 2016 are summarized as follows: Pension Benefits Other Retirement Benefits Three Months Ended Three Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Service cost $ 4 $ 2 $ 1 $ 1 Interest cost 28 32 1 1 Expected return on plan assets (61 ) (60 ) — — Amortization: Prior service credit — — (1 ) (1 ) Net actuarial loss 23 20 2 2 Net benefit expense (income) $ (6 ) $ (6 ) $ 3 $ 3 Pension Benefits Other Retirement Benefits Nine Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Service cost $ 10 $ 8 $ 2 $ 2 Interest cost 83 95 4 4 Expected return on plan assets (181 ) (179 ) (1 ) (1 ) Amortization: Prior service credit — (1 ) (1 ) (1 ) Net actuarial loss 69 59 6 6 Net benefit expense (income) $ (19 ) $ (18 ) $ 10 $ 10 |
Stock-Based Compensation and 40
Stock-Based Compensation and Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Stock Based Compensation and Earnings Per Share Abstract | |
Stock-Based Compensation Expense Categorization | Stock-based compensation expense, which is calculated net of an assumed forfeiture rate, and related income tax benefit included within the Condensed Consolidated Statement of Operations is as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Stock-based compensation expense included in: Product cost of sales $ 2 $ 1 $ 6 $ 6 Selling, general and administrative expenses 6 5 15 15 Total $ 8 $ 6 $ 21 $ 21 Income tax benefit $ 3 $ 2 $ 7 $ 7 |
Schedule of Stock Option Activity | The Company issued awards of equity instruments for the nine months ended June 30, 2017 and 2016 as follows: Options Performance Shares Restricted Stock Units (shares in thousands) Number Issued Weighted Average Fair Value Number Issued Weighted Average Fair Value Number Issued Weighted Average Fair Value Nine months ended June 30, 2017 667.2 $ 17.26 129.0 $ 87.38 224.2 $ 91.94 Nine months ended June 30, 2016 641.5 $ 17.75 131.0 $ 85.13 70.4 $ 85.91 |
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: 2017 Grants 2016 Grants Risk-free interest rate 1.0% - 2.7% 0.7% - 2.5% Expected dividend yield 1.3% - 1.5% 1.4% - 1.6% Expected volatility 19.0 % 20.0 % Expected life 7 years 7 years |
Earnings Per Share and Diluted Share Equivalents | The computation of basic and diluted earnings per share is as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions, except per share amounts) 2017 2016 2017 2016 Numerator for basic and diluted earnings per share: Income from continuing operations $ 179 $ 214 $ 492 $ 519 Income from discontinued operations, net of taxes — — — 1 Net income $ 179 $ 214 $ 492 $ 520 Denominator: Denominator for basic earnings per share – weighted average common shares 158.2 130.0 139.8 130.7 Effect of dilutive securities: Stock options 1.1 1.0 1.1 1.1 Performance shares, restricted stock and restricted stock units 0.6 0.5 0.5 0.5 Dilutive potential common shares 1.7 1.5 1.6 1.6 Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion 159.9 131.5 141.4 132.3 Earnings per share: Basic Continuing operations $ 1.13 $ 1.65 $ 3.52 $ 3.97 Discontinued operations — — — 0.01 Basic earnings per share $ 1.13 $ 1.65 $ 3.52 $ 3.98 Diluted Continuing operations $ 1.12 $ 1.63 $ 3.48 $ 3.92 Discontinued operations — — — 0.01 Diluted earnings per share $ 1.12 $ 1.63 $ 3.48 $ 3.93 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss (AOCL), net of tax, by component for the three and nine months ended June 30, 2017 and 2016 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 March 31, 2017 $ (85 ) $ (1,786 ) $ (2 ) $ (1,873 ) Other comprehensive income before reclassifications 50 — 2 52 Amounts reclassified from accumulated other comprehensive loss — 15 — 15 Net current period other comprehensive income 50 15 2 67 Balance at June 30, 2017 $ (35 ) $ (1,771 ) $ — $ (1,806 ) Balance at September 30, 2016 $ (76 ) $ (1,818 ) $ (4 ) $ (1,898 ) Other comprehensive income before reclassifications 41 — 2 43 Amounts reclassified from accumulated other comprehensive loss — 47 2 49 Net current period other comprehensive income 41 47 4 92 Balance at June 30, 2017 $ (35 ) $ (1,771 ) $ — $ (1,806 ) Balance at March 31, 2016 $ (56 ) $ (1,611 ) $ (3 ) $ (1,670 ) Other comprehensive loss before reclassifications (16 ) — — (16 ) Amounts reclassified from accumulated other comprehensive loss — 14 — 14 Net current period other comprehensive income (loss) (16 ) 14 — (2 ) Balance at June 30, 2016 $ (72 ) $ (1,597 ) $ (3 ) $ (1,672 ) Balance at September 30, 2015 $ (56 ) $ (1,637 ) $ (6 ) $ (1,699 ) Other comprehensive loss before reclassifications (16 ) — (1 ) (17 ) Amounts reclassified from accumulated other comprehensive loss — 40 4 44 Net current period other comprehensive income (loss) (16 ) 40 3 27 Balance at June 30, 2016 $ (72 ) $ (1,597 ) $ (3 ) $ (1,672 ) (1) Reclassifications from AOCL to net income, related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans, were $24 million ( $15 million net of tax) and $21 million ( $14 million net of tax) for the three months ended June 30, 2017 and 2016 , respectively, and were $74 million ( $47 million net of tax) and $ 63 million ( $40 million net of tax) for the nine months ended June 30, 2017 and 2016 , respectively. The reclassifications are included in the computation of net benefit expense. See Note 10 for additional details. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities at Fair Value on Recurring Basis | The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and September 30, 2016 are as follows: June 30, 2017 September 30, 2016 (in millions) Fair Value Hierarchy Fair Value Asset (Liability) Fair Value Asset (Liability) Deferred compensation plan investments Level 1 $ 60 $ 55 Deferred compensation plan investments Level 2 23 — Interest rate swap assets Level 2 15 35 Foreign currency forward exchange contract assets Level 2 9 11 Foreign currency forward exchange contract liabilities Level 2 (6 ) (13 ) Contingent consideration for ICG acquisition Level 3 (14 ) (13 ) Contingent consideration for Pulse.aero acquisition Level 3 (3 ) — |
Change in Fair Value of Level 3 Contingent Consideration | The change in fair value of the Level 3 contingent consideration related to the ICG and Pulse.aero acquisitions is as follows: (in millions) Fair Value (Liability) Balance at September 30, 2016 $ (13 ) Acquisition date fair value of Pulse.aero contingent consideration (see Note 3) (5 ) Payment of contingent consideration (see Note 3) 2 Fair value adjustment (1) (1 ) Balance at June 30, 2017 $ (17 ) (1) The fair value adjustment is included in Interest expense on the Condensed 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) June 30, 2017 September 30, 2016 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 578 $ 578 $ 340 $ 340 Short-term debt (511 ) (511 ) (740 ) (740 ) Long-term debt (7,253 ) (7,478 ) (1,339 ) (1,508 ) |
Derivative Financial Instrume43
Derivative Financial Instruments (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments in Condensed Consolidated Statement of Financial Position | Fair values of derivative instruments in the Condensed Consolidated Statement of Financial Position as of June 30, 2017 and September 30, 2016 are as follows: Asset Derivatives (in millions) Classification June 30, September 30, 2016 Foreign currency forward exchange contracts Other current assets $ 9 $ 11 Interest rate swaps Other assets 15 35 Total $ 24 $ 46 Liability Derivatives (in millions) Classification June 30, September 30, 2016 Foreign currency forward exchange contracts Other current liabilities $ 6 $ 13 |
Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations | The effect of derivative instruments on the Condensed Consolidated Statement of Operations for the three and nine months ended June 30, 2017 and 2016 is as follows: Amount of Gain (Loss) Amount of Gain (Loss) Three Months Ended Nine Months Ended June 30 June 30 (in millions) Location of Gain (Loss) 2017 2016 2017 2016 Derivatives Designated as Hedging Instruments: Fair Value Hedges Interest rate swaps Interest expense $ 2 $ 3 $ 6 $ 8 Cash Flow Hedges Foreign currency forward exchange contracts: Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) AOCL 2 — 2 (1 ) Amount of loss reclassified from AOCL into income Cost of sales — (1 ) (3 ) (6 ) Derivatives Not Designated as Hedging Instruments: Foreign currency forward exchange contracts Cost of sales — (1 ) (1 ) (1 ) |
Guarantees and Indemnificatio44
Guarantees and Indemnifications (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Guarantees and Indemnifications Abstract | |
Changes in Accrued Product Warranty Costs | Changes in the carrying amount of accrued product warranty costs are summarized as follows: Nine Months Ended June 30 (in millions) 2017 2016 Balance at beginning of year $ 87 $ 89 Warranty costs incurred (39 ) (32 ) Product warranty accrual 43 29 Changes in estimates for prior years (6 ) (3 ) Increase from acquisitions 117 — Balance at June 30, 2017 $ 202 $ 83 |
Contractual Obligations and O45
Contractual Obligations and Other Commitments (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations and Other Commitments | The following table reflects certain of the Company's annual non-cancelable contractual commitments: Payments by Period (in millions) 2017 2018 2019 2020 2021 Thereafter Total Non-cancelable operating leases $ 74 $ 81 $ 66 $ 50 $ 39 $ 197 $ 507 Purchase contracts 38 35 30 27 24 47 201 Long-term debt 375 150 750 1,125 — 5,400 7,800 Interest on long-term debt 120 253 254 213 192 1,926 2,958 Total $ 607 $ 519 $ 1,100 $ 1,415 $ 255 $ 7,570 $ 11,466 |
Restructuring and Asset Impai46
Restructuring and Asset Impairment Charges (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Summary of Restructuring and Asset Impairment Charges | The $45 million of charges were recorded in 2016 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 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Sales and Earnings of Continuing Operations of Operating Segments | Sales and earnings from continuing operations of the Company's operating segments are summarized as follows: Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Sales: Interior Systems $ 695 $ — $ 695 $ — Commercial Systems 658 612 1,801 1,785 Government Systems 558 555 1,598 1,544 Information Management Services 183 167 535 485 Total sales $ 2,094 $ 1,334 $ 4,629 $ 3,814 Segment operating earnings: Interior Systems $ 80 $ — $ 80 $ — Commercial Systems 144 141 401 401 Government Systems 123 115 333 309 Information Management Services 39 26 105 79 Total segment operating earnings 386 282 919 789 Interest expense (1) (77 ) (16 ) (122 ) (48 ) Stock-based compensation (8 ) (6 ) (21 ) (21 ) General corporate, net (16 ) (13 ) (39 ) (36 ) Transaction and integration costs (1) (64 ) — (80 ) — Restructuring and asset impairment charges — — — (45 ) Income from continuing operations before income taxes 221 247 657 639 Income tax expense (42 ) (33 ) (165 ) (120 ) Income from continuing operations $ 179 $ 214 $ 492 $ 519 (1) During the three and nine months ended June 30, 2017 , the Company incurred $18 million and $29 million , respectively, of bridge facility fees related to the B/E Aerospace acquisition. These costs are included in Interest expense. Therefore, total transaction, integration and financing costs related to the acquisition of B/E Aerospace during the three and nine months ended June 30, 2017 were $82 million and $109 million , respectively. |
Summary of Sales by Product Category | The following table summarizes sales by category for the three and nine months ended June 30, 2017 and 2016 : Three Months Ended Nine Months Ended June 30 June 30 (in millions) 2017 2016 2017 2016 Interior Systems sales categories: Interior products and services $ 400 $ — $ 400 $ — Aircraft seating 295 — 295 — Interior Systems sales 695 — 695 — Commercial Systems sales categories: Air transport aviation electronics 405 370 1,098 1,052 Business and regional aviation electronics 253 242 703 733 Commercial Systems sales 658 612 1,801 1,785 Government Systems sales categories: Avionics 342 376 1,028 1,026 Communication and navigation 216 179 570 518 Government Systems sales 558 555 1,598 1,544 Information Management Services sales 183 167 535 485 Total sales $ 2,094 $ 1,334 $ 4,629 $ 3,814 |
Summary of Identifiable Net Assets | The following table summarizes the identifiable assets at June 30, 2017 and September 30, 2016 for each of the operating segments and corporate: (in millions) June 30, 2017 September 30, 2016 Identifiable assets: Interior Systems $ 10,346 $ — Commercial Systems 3,272 3,050 Government Systems 2,097 2,052 Information Management Services 1,903 1,906 Corporate 733 691 Total identifiable assets $ 18,351 $ 7,699 |
Business Description and Basi48
Business Description and Basis of Presentation (Details) | 9 Months Ended |
Jun. 30, 2017subsidiary | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of consolidated subsidiaries with income attributable to a noncontrolling interest | 2 |
Recently Issued Accounting St49
Recently Issued Accounting Standards (Details) - Standard on Presentation of Debt Issuance Costs [Member] - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 30, 2015 |
Other assets [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs | $ (8) | $ (10) |
Long-Term Debt, Net [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs | $ 8 | $ 10 |
Acquisitions, Goodwill and In50
Acquisitions, Goodwill and Intangible Assets (Acquisitions Narrative) (Details) - USD ($) | Apr. 13, 2017 | Dec. 20, 2016 | Dec. 16, 2016 | Feb. 25, 2016 | Aug. 06, 2015 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Apr. 10, 2017 |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 8,602,000,000 | $ 1,919,000,000 | $ 8,602,000,000 | ||||||||
Payments to acquire businesses, net of cash acquired | 3,429,000,000 | $ 17,000,000 | |||||||||
Unsecured Debt [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Issuance of debt | $ 4,650,000,000 | ||||||||||
B/E Aerospace [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 6,536,000,000 | ||||||||||
Assumption of net debt | 2,000,000,000 | ||||||||||
Goodwill | $ 6,645,000,000 | ||||||||||
Sales | 695,000,000 | ||||||||||
Net income | 58,000,000 | ||||||||||
Weighted Average Life (in years) | 11 years | ||||||||||
Goodwill, expected tax deductible amount | $ 0 | ||||||||||
B/E Aerospace [Member] | Accounts Payable [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Unpaid transaction, integration and financing costs | 29,000,000 | ||||||||||
B/E Aerospace [Member] | Selling, General and Administrative Expenses [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Reclassification of transaction and integration costs | (16,000,000) | ||||||||||
B/E Aerospace [Member] | Transaction and Integration Costs [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Reclassification of transaction and integration costs | 16,000,000 | ||||||||||
B/E Aerospace [Member] | Unsecured Debt [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Issuance of debt | $ 4,350,000,000 | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||||||||||
Pulse.aero [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | 12,000,000 | 12,000,000 | |||||||||
Voting interests acquired (percent) | 100.00% | ||||||||||
Payments to acquire businesses, net of cash acquired | $ 15,000,000 | ||||||||||
Cash paid for acquisition | 14,000,000 | ||||||||||
Liability for the fair value of post-closing consideration | 5,000,000 | ||||||||||
Contingent consideration payments | 2,000,000 | ||||||||||
Intangible Assets | $ 6,000,000 | $ 6,000,000 | |||||||||
Weighted Average Life (in years) | 9 years | ||||||||||
Goodwill, expected tax deductible amount | $ 0 | ||||||||||
Matrix product line [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 6,000,000 | 6,000,000 | |||||||||
Payments to acquire businesses, net of cash acquired | $ 17,000,000 | ||||||||||
Intangible Assets | $ 11,000,000 | $ 11,000,000 | |||||||||
Weighted Average Life (in years) | 10 years | ||||||||||
Goodwill, expected tax deductible amount | $ 6,000,000 | ||||||||||
ICG [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | 51,000,000 | ||||||||||
Voting interests acquired (percent) | 100.00% | ||||||||||
Payments to acquire businesses, net of cash acquired | $ 50,000,000 | ||||||||||
Liability for the fair value of post-closing consideration | 14,000,000 | ||||||||||
Intangible Assets | $ 23,000,000 | ||||||||||
Weighted Average Life (in years) | 8 years | ||||||||||
Goodwill, expected tax deductible amount | 51,000,000 | ||||||||||
Liability for the fair value of contingent consideration | $ 12,000,000 |
Acquisitions, Goodwill and In51
Acquisitions, Goodwill and Intangible Assets (B/E Aerospace Acquisition) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 13, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Goodwill | $ 8,602 | $ 8,602 | $ 1,919 | |||
Business Combination, Transaction, Integration, And Financing Costs [Abstract] | ||||||
Transaction and integration costs | 64 | $ 0 | 80 | $ 0 | ||
B/E Aerospace [Member] | ||||||
Business Combination, Consideration Transferred [Abstract] | ||||||
Cash consideration | $ 3,521 | |||||
Value of common stock issued for B/E Aerospace common stock | 3,015 | |||||
Total purchase price | $ 6,536 | |||||
Common stock issued (in shares) | 31.2 | |||||
Closing share prince (in dollars per share) | $ 96.63 | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Cash and cash equivalents | $ 104 | |||||
Receivables, net | 496 | |||||
Inventories, net | 556 | |||||
Other current assets | 56 | |||||
Property | 253 | |||||
Intangible Assets | 2,381 | |||||
Other Assets | 59 | |||||
Total Identifiable Assets Acquired | 3,905 | |||||
Accounts payable | (251) | |||||
Compensation and benefits | (75) | |||||
Advance payments from customers | (62) | |||||
Accrued customer incentives | (48) | |||||
Product warranty costs | (117) | |||||
Other current liabilities | (361) | |||||
Long-term Debt, Net | (2,119) | |||||
Retirement Benefits | (12) | |||||
Deferred Income Tax Liability | (521) | |||||
Other Liabilities | (448) | |||||
Total Liabilities Assumed | (4,014) | |||||
Net Identifiable Assets Acquired, excluding Goodwill | (109) | |||||
Goodwill | 6,645 | |||||
Net Assets Acquired | 6,536 | |||||
Adjustment to inventories at fair value | 74 | |||||
Adjustment to existing long-term contracts | $ 457 | |||||
Business Combinations, Intangible Assets Acquired [Abstract] | ||||||
Weighted Average Life (in years) | 11 years | |||||
Fair Value (in millions) | $ 2,381 | |||||
Business Combination, Transaction, Integration, And Financing Costs [Abstract] | ||||||
Transaction and integration costs | 64 | 0 | 80 | 0 | ||
Interest expense | 18 | 0 | 29 | 0 | ||
Total Transaction, integration and financing costs | 82 | $ 0 | $ 109 | $ 0 | ||
B/E Aerospace [Member] | Developed technology [Member] | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Intangible Assets | $ 723 | |||||
Business Combinations, Intangible Assets Acquired [Abstract] | ||||||
Weighted Average Life (in years) | 12 years | |||||
Fair Value (in millions) | $ 723 | |||||
B/E Aerospace [Member] | Airline customer relationships [Member] | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Intangible Assets | $ 1,450 | |||||
Business Combinations, Intangible Assets Acquired [Abstract] | ||||||
Weighted Average Life (in years) | 10 years | |||||
Fair Value (in millions) | $ 1,450 | |||||
B/E Aerospace [Member] | OEM customer relationships [Member] | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Intangible Assets | $ 208 | |||||
Business Combinations, Intangible Assets Acquired [Abstract] | ||||||
Weighted Average Life (in years) | 13 years | |||||
Fair Value (in millions) | $ 208 | |||||
Cost of Sales [Member] | B/E Aerospace [Member] | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Adjustment to inventories at fair value | 44 | |||||
Adjustment to existing long-term contracts | $ 42 |
Acquisitions, Goodwill and In52
Acquisitions, Goodwill and Intangible Assets (Pro Forma Results of Operations) (Details) - B/E Aerospace [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Pro forma sales | $ 2,219 | $ 2,087 | $ 6,182 | $ 5,943 |
Pro forma net income attributable to common shareowners from continuing operations | $ 247 | $ 263 | $ 636 | $ 466 |
Pro forma basic earnings per share from continuing operations (in dollars per share) | $ 1.53 | $ 1.63 | $ 3.93 | $ 2.88 |
Pro forma diluted earnings per share from continuing operations (in dollars per share) | $ 1.52 | $ 1.62 | $ 3.89 | $ 2.85 |
Acquisitions, Goodwill and In53
Acquisitions, Goodwill and Intangible Assets (Pro Forma Adjustments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | $ 179 | $ 214 | $ 492 | $ 520 |
B/E Aerospace [Member] | Net reduction to depreciation resulting from fixed asset adjustments [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | 1 | 5 | 11 | 16 |
B/E Aerospace [Member] | Advisory, legal and accounting service fees [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | 123 | 0 | 156 | (123) |
B/E Aerospace [Member] | Amortization of acquired B/E Aerospace intangible assets, net [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | (6) | (36) | (79) | (109) |
B/E Aerospace [Member] | Interest expense incurred on acquisition financing, net [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | 8 | (16) | (17) | (49) |
B/E Aerospace [Member] | Long-term contract program adjustments [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | (6) | (21) | (59) | (104) |
B/E Aerospace [Member] | Acquired contract liability amortization [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | 3 | 30 | 62 | 109 |
B/E Aerospace [Member] | Inventory fair value adjustment amortization [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | 0 | 0 | 0 | (56) |
B/E Aerospace [Member] | Compensation adjustments [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | $ 0 | $ 4 | $ 6 | $ 10 |
Acquisitions, Goodwill and In54
Acquisitions, Goodwill and Intangible Assets (Goodwill) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Jun. 30, 2017 | |
Goodwill | ||
Goodwill beginning balance | $ 1,919,000,000 | |
Foreign currency translation adjustments | 26,000,000 | |
Goodwill ending balance | 8,602,000,000 | |
Goodwill impairment loss | $ 0 | |
B/E Aerospace [Member] | ||
Goodwill | ||
Acquisition | 6,645,000,000 | |
Pulse.aero [Member] | ||
Goodwill | ||
Acquisition | 12,000,000 | |
Goodwill ending balance | 12,000,000 | |
Interior Systems [Member] | ||
Goodwill | ||
Goodwill beginning balance | 0 | |
Foreign currency translation adjustments | 24,000,000 | |
Goodwill ending balance | 6,669,000,000 | |
Interior Systems [Member] | B/E Aerospace [Member] | ||
Goodwill | ||
Acquisition | 6,645,000,000 | |
Interior Systems [Member] | Pulse.aero [Member] | ||
Goodwill | ||
Acquisition | 0 | |
Commercial Systems [Member] | ||
Goodwill | ||
Goodwill beginning balance | 326,000,000 | |
Foreign currency translation adjustments | 0 | |
Goodwill ending balance | 326,000,000 | |
Commercial Systems [Member] | B/E Aerospace [Member] | ||
Goodwill | ||
Acquisition | 0 | |
Commercial Systems [Member] | Pulse.aero [Member] | ||
Goodwill | ||
Acquisition | 0 | |
Government Systems [Member] | ||
Goodwill | ||
Goodwill beginning balance | 503,000,000 | |
Foreign currency translation adjustments | 1,000,000 | |
Goodwill ending balance | 504,000,000 | |
Government Systems [Member] | B/E Aerospace [Member] | ||
Goodwill | ||
Acquisition | 0 | |
Government Systems [Member] | Pulse.aero [Member] | ||
Goodwill | ||
Acquisition | 0 | |
Information Management Services [Member] | ||
Goodwill | ||
Goodwill beginning balance | 1,090,000,000 | |
Foreign currency translation adjustments | 1,000,000 | |
Goodwill ending balance | 1,103,000,000 | |
Information Management Services [Member] | B/E Aerospace [Member] | ||
Goodwill | ||
Acquisition | 0 | |
Information Management Services [Member] | Pulse.aero [Member] | ||
Goodwill | ||
Acquisition | $ 12,000,000 |
Acquisitions, Goodwill and In55
Acquisitions, Goodwill and Intangible Assets (Intangible assets) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | |
Intangible Assets | ||
Accumulated Amortization | $ (515) | $ (429) |
Intangible assets, Gross | 3,512 | 1,096 |
Intangible assets, Net | $ 2,997 | 667 |
Maximum up-front sales incentives amortization period | 15 years | |
Weighted-average amortization period remaining for up-front sales incentives | 9 years | |
Trademarks and tradenames [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets with indefinite lives | $ 47 | 47 |
In process research and development [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets with indefinite lives | 0 | 7 |
Developed technology and patents [Member] | ||
Intangible Assets | ||
Gross | 1,092 | 354 |
Accumulated Amortization | (242) | (216) |
Finite-Lived Intangible Assets, Net | 850 | 138 |
Backlog [Member] | ||
Intangible Assets | ||
Gross | 6 | 6 |
Accumulated Amortization | (4) | (3) |
Finite-Lived Intangible Assets, Net | 2 | 3 |
Customer relationships: Acquired [Member] | ||
Intangible Assets | ||
Gross | 2,001 | 340 |
Accumulated Amortization | (156) | (106) |
Finite-Lived Intangible Assets, Net | 1,845 | 234 |
Customer relationships: Up-front sales incentives [Member] | ||
Intangible Assets | ||
Gross | 336 | 313 |
Accumulated Amortization | (89) | (80) |
Finite-Lived Intangible Assets, Net | 247 | 233 |
License agreements [Member] | ||
Intangible Assets | ||
Gross | 15 | 14 |
Accumulated Amortization | (10) | (10) |
Finite-Lived Intangible Assets, Net | 5 | 4 |
Trademarks and tradenames [Member] | ||
Intangible Assets | ||
Gross | 15 | 15 |
Accumulated Amortization | (14) | (14) |
Finite-Lived Intangible Assets, Net | $ 1 | $ 1 |
Acquisitions, Goodwill and In56
Acquisitions, Goodwill and Intangible Assets (Expected Annual Amortization Expense for Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Anticipated Future Amortization Expense [Abstract] | ||||
2,017 | $ 156 | $ 156 | ||
2,018 | 281 | 281 | ||
2,019 | 284 | 284 | ||
2,020 | 285 | 285 | ||
2,021 | 285 | 285 | ||
Thereafter | 1,745 | 1,745 | ||
Amortization expense | 61 | $ 15 | 86 | $ 46 |
Up-front sales incentives [Member] | ||||
Anticipated Future Amortization Expense [Abstract] | ||||
2,017 | 13 | 13 | ||
2,018 | 19 | 19 | ||
2,019 | 25 | 25 | ||
2,020 | 28 | 28 | ||
2,021 | 28 | 28 | ||
Thereafter | 143 | 143 | ||
All other intangible assets [Member] | ||||
Anticipated Future Amortization Expense [Abstract] | ||||
2,017 | 143 | 143 | ||
2,018 | 262 | 262 | ||
2,019 | 259 | 259 | ||
2,020 | 257 | 257 | ||
2,021 | 257 | 257 | ||
Thereafter | $ 1,602 | $ 1,602 |
Discontinued Operations and D57
Discontinued Operations and Divestitures (Narrative) (Details) - USD ($) $ in Millions | Mar. 10, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Discontinued Operations | ||||||
Income from discontinued operations, net of taxes | $ 0 | $ 0 | $ 0 | $ 1 | ||
Disposed of by Sale [Member] | ||||||
Discontinued Operations | ||||||
Income from discontinued operations before income taxes | $ 0 | $ 0 | $ 0 | 2 | ||
Disposed of by Sale [Member] | ASES [Member] | ||||||
Discontinued Operations | ||||||
Proceeds from divestiture of businesses | $ 3 | |||||
Post closing consideration received | $ 2 | |||||
Income from discontinued operations before income taxes | 2 | |||||
Income from discontinued operations, net of taxes | $ 1 |
Discontinued Operations and D58
Discontinued Operations and Divestitures (Details) - Disposed of by Sale [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Discontinued Operations | ||||
Income from discontinued operations before income taxes | $ 0 | $ 0 | $ 0 | $ 2 |
Income tax (expense) from discontinued operations | $ 0 | $ 0 | $ 0 | (1) |
ASES [Member] | ||||
Discontinued Operations | ||||
Income from discontinued operations before income taxes | $ 2 |
Receivables, Net (Details)
Receivables, Net (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed | $ 1,211 | $ 748 | |
Unbilled | 485 | 439 | |
Less progress payments | (44) | (87) | |
Total | 1,652 | 1,100 | |
Less allowance for doubtful accounts | (8) | (6) | |
Receivables, net | 1,644 | 1,094 | |
Receivables, net due from equity affiliates | 68 | $ 68 | |
Cash provided by operating activities from continuing operations | 416 | $ 223 | |
Sales Under Factoring Agreements [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Cash provided by operating activities from continuing operations | $ 198 | $ 8 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |||||
Finished goods | $ 306 | $ 306 | $ 210 | ||
Work in process | 340 | 340 | 236 | ||
Raw materials, parts and supplies | 702 | 702 | 354 | ||
Less progress payments | (10) | (10) | (1) | ||
Total | 1,338 | 1,338 | 799 | ||
Pre-production engineering costs | 1,168 | 1,168 | 1,140 | ||
Inventories, net | 2,506 | $ 2,506 | $ 1,939 | ||
Pre-production engineering costs useful life maximum | 15 years | ||||
Anticipated Amortization Expense for Pre-production Engineering Costs [Abstract] | |||||
2,017 | $ 59 | ||||
2,018 | 99 | ||||
2,019 | 137 | ||||
2,020 | 157 | ||||
2,021 | 148 | ||||
Thereafter | 611 | ||||
Pre-production engineering amortization expense | $ 18 | $ 14 | $ 43 | $ 37 | |
Capitalized pre-production engineering weighted average amortization period remaining | 10 years |
Property (Details)
Property (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total, Property | $ 2,816 | $ 2,451 |
Less accumulated depreciation | (1,488) | (1,416) |
Property | 1,328 | 1,035 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | 20 | 15 |
Building and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | 569 | 468 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | 1,359 | 1,218 |
Information systems software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | 496 | 435 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | 85 | 74 |
Capital leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | 58 | 58 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total, Property | $ 229 | $ 183 |
Other Assets (Summary of Other
Other Assets (Summary of Other Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Other Assets [Abstract] | ||
Long-term receivables | $ 199 | $ 146 |
Investments in equity affiliates | 7 | 10 |
Exchange and rental assets (net of accumulated depreciation of $105 at June 30, 2017 and $101 at September 30, 2016) | 71 | 68 |
Other | 223 | 145 |
Other Assets | 500 | 369 |
Accumulated depreciation, exchange and rental assets | $ 105 | $ 101 |
Other Assets (Narrative) (Detai
Other Assets (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2017USD ($)joint_venture | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)joint_venture | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | |
Other Assets [Abstract] | |||||
Number of equity affiliates (joint ventures) | joint_venture | 7 | 7 | |||
Ownership percentage | 50.00% | 50.00% | |||
Sales to equity affiliates | $ 57 | $ 58 | $ 193 | $ 159 | |
Deferred profit generated from sales to equity affiliates | $ 2 | $ 2 | |||
Exchange and rental assets estimated useful life | 15 years | ||||
Depreciation expense, exchange and rental assets | $ 3 | $ 2 | $ 8 | $ 7 |
Debt (Short-term Debt) (Details
Debt (Short-term Debt) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Short-term Debt [Line Items] | ||
Current portion of long-term debt | $ 149,000,000 | $ 300,000,000 |
Short-term debt | 511,000,000 | 740,000,000 |
Short-term commercial paper borrowings [Member] | ||
Short-term Debt [Line Items] | ||
Short-term commercial paper borrowings outstanding | $ 362,000,000 | $ 440,000,000 |
Weighted average interest rate of commercial paper borrowings | 1.43% | 0.79% |
Weighted average maturity period of commercial paper borrowings (days) | 12 days | 15 days |
Maximum amount of short-term commercial paper borrowings outstanding | $ 1,058,000,000 | |
Maximum face amount of short-term promissory notes in the commercial paper market | $ 1,500,000,000 |
Debt (Credit Facilities) (Detai
Debt (Credit Facilities) (Details) - USD ($) | Dec. 16, 2016 | Jun. 30, 2017 | Jun. 30, 2018 | Apr. 13, 2017 | Sep. 30, 2016 |
Credit Facility [Line Items] | |||||
Commitment fees or compensating balance requirements | $ 0 | $ 0 | |||
Revolving Credit Facility [Member] | |||||
Credit Facility [Line Items] | |||||
Revolving credit facility terminated | $ 200,000,000 | ||||
Outstanding borrowings | 0 | ||||
Short term Credit Facility Non US Subs [Member] | |||||
Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 38,000,000 | ||||
Outstanding borrowings | 0 | 0 | |||
Amount utilized to support commitments in the form of letters of credit | 2,000,000 | ||||
Bridge Loan [Member] | |||||
Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 4,350,000,000 | ||||
Debt term | 364 days | ||||
Revolving Credit Facility [Member] | |||||
Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 1,200,000,000 | $ 1,500,000,000 | |||
Debt term | 5 years | ||||
Revolving credit facility terminated | $ 1,000,000,000 | ||||
Outstanding borrowings | 0 | $ 0 | |||
Maximum debt to total capitalization ratio per the debt covenants | 68.00% | ||||
Revolving Credit Facility [Member] | Forecast [Member] | |||||
Credit Facility [Line Items] | |||||
Maximum debt to total capitalization ratio per the debt covenants | 65.00% | ||||
Term Loan [Member] | |||||
Credit Facility [Line Items] | |||||
Debt term | 3 years | ||||
Borrowings under credit facility | $ 1,462,000,000 | ||||
Quarterly installments (as a percent) | 2.50% | ||||
Quarterly installments | $ 38,000,000 | ||||
Maximum debt to total capitalization ratio per the debt covenants | 68.00% | ||||
Term Loan [Member] | Forecast [Member] | |||||
Credit Facility [Line Items] | |||||
Maximum debt to total capitalization ratio per the debt covenants | 65.00% | ||||
Term Loan [Member] | LIBOR | |||||
Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.25% |
Debt (Long-term Debt) (Details)
Debt (Long-term Debt) (Details) - USD ($) | Apr. 10, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Long-term Debt | |||||
Repayment of short-term commercial paper borrowings | $ 300,000,000 | ||||
Current portion of long-term debt | $ 149,000,000 | $ 300,000,000 | |||
Fair value swap adjustment (see Notes 14 and 15) | 15,000,000 | 35,000,000 | |||
Total | 7,477,000,000 | 1,685,000,000 | |||
Less unamortized debt issuance costs and discounts | 60,000,000 | 11,000,000 | |||
Long-term Debt, Net | 7,268,000,000 | 1,374,000,000 | |||
Cash payments for debt interest and fees | 129,000,000 | $ 49,000,000 | |||
Standard on Presentation of Debt Issuance Costs [Member] | Other assets [Member] | |||||
Long-term Debt | |||||
Debt issuance costs | (8,000,000) | $ (10,000,000) | |||
Standard on Presentation of Debt Issuance Costs [Member] | Long-Term Debt, Net [Member] | |||||
Long-term Debt | |||||
Debt issuance costs | 8,000,000 | $ 10,000,000 | |||
Bridge Loan [Member] | |||||
Long-term Debt | |||||
Cash payments for debt interest and fees | $ 28,000,000 | ||||
1 month LIBOR [Member] | |||||
Long-term Debt | |||||
Interest rate | 1.13% | ||||
Unsecured Debt [Member] | |||||
Long-term Debt | |||||
Issuance of senior notes | $ 4,650,000,000 | ||||
Unsecured Debt [Member] | Long-Term Debt, Net [Member] | |||||
Long-term Debt | |||||
Fair value swap adjustment (see Notes 14 and 15) | $ 15,000,000 | 35,000,000 | |||
Unsecured Debt [Member] | July 2019 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 1.95% | ||||
Principal amount of notes | $ 300,000,000 | 0 | |||
Unsecured Debt [Member] | July 2019 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 5.25% | ||||
Principal amount of notes | $ 300,000,000 | 300,000,000 | |||
Unsecured Debt [Member] | November 2021 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 3.10% | ||||
Principal amount of notes | $ 250,000,000 | 250,000,000 | |||
Unsecured Debt [Member] | March 2022 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 2.80% | ||||
Principal amount of notes | $ 1,100,000,000 | 0 | |||
Unsecured Debt [Member] | December 2023 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 3.70% | ||||
Principal amount of notes | $ 400,000,000 | 400,000,000 | |||
Unsecured Debt [Member] | March 2024 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 3.20% | ||||
Principal amount of notes | $ 950,000,000 | 0 | |||
Unsecured Debt [Member] | March 2027 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 3.50% | ||||
Principal amount of notes | $ 1,300,000,000 | 0 | |||
Unsecured Debt [Member] | December 2043 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 4.80% | ||||
Principal amount of notes | $ 400,000,000 | 400,000,000 | |||
Unsecured Debt [Member] | April 2047 [Member] | |||||
Long-term Debt | |||||
Interest Rate | 4.35% | ||||
Principal amount of notes | $ 1,000,000,000 | 0 | |||
Unsecured Debt [Member] | April 2020 [Member] | |||||
Long-term Debt | |||||
Current portion of long-term debt | $ 1,462,000,000 | 0 | |||
Unsecured Debt [Member] | April 2020 [Member] | 1 month LIBOR [Member] | |||||
Long-term Debt | |||||
Basis spread on variable rate | 1.25% | ||||
Unsecured Debt [Member] | December 2016 [Member] | |||||
Long-term Debt | |||||
Current portion of long-term debt | $ 0 | $ 300,000,000 | |||
Unsecured Debt [Member] | December 2016 [Member] | 3 month LIBOR [Member] | |||||
Long-term Debt | |||||
Basis spread on variable rate | 0.35% |
Retirement Benefits (Components
Retirement Benefits (Components of Expense (Income)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Pension Benefits [Member] | ||||
Components of Expense (Income) | ||||
Service cost | $ 4 | $ 2 | $ 10 | $ 8 |
Interest cost | 28 | 32 | 83 | 95 |
Expected return on plan assets | (61) | (60) | (181) | (179) |
Amortization: | ||||
Prior service credit | 0 | 0 | 0 | (1) |
Net actuarial loss | 23 | 20 | 69 | 59 |
Net benefit expense (income) | (6) | (6) | (19) | (18) |
Other Retirement Benefits [Member] | ||||
Components of Expense (Income) | ||||
Service cost | 1 | 1 | 2 | 2 |
Interest cost | 1 | 1 | 4 | 4 |
Expected return on plan assets | 0 | 0 | (1) | (1) |
Amortization: | ||||
Prior service credit | (1) | (1) | (1) | (1) |
Net actuarial loss | 2 | 2 | 6 | 6 |
Net benefit expense (income) | $ 3 | $ 3 | $ 10 | $ 10 |
Retirement Benefits (Narrative)
Retirement Benefits (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure | |||
Pension contributions | $ 66 | $ 66 | |
U.S. Qualified Pension Plans [Member] | |||
Defined Benefit Plan Disclosure | |||
Pension contributions | $ 55 | ||
Non-U.S. Plans and U.S. Non-Qualified Pension Plans [Member] | |||
Defined Benefit Plan Disclosure | |||
Pension contributions | 11 | ||
Expected contributions in current fiscal year | $ 13 |
Stock-Based Compensation and 69
Stock-Based Compensation and Earnings Per Share (Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 8 | $ 6 | $ 21 | $ 21 |
Income tax benefit | 3 | 2 | 7 | 7 |
Product cost of sales [Member] | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 2 | 1 | 6 | 6 |
Selling, general and administrative expenses [Member] | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 6 | $ 5 | $ 15 | $ 15 |
Stock-Based Compensation and 70
Stock-Based Compensation and Earnings Per Share (Awards of Equity Instruments) (Details) - $ / shares | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock-Based Compensation | ||
Maximum number of common stock shares that can be issued in respect of performance shares granted (in shares) | 304,000 | |
Options [Member] | ||
Stock-Based Compensation | ||
Number Issued (in shares) | 667,200 | 641,500 |
Weighted Average Fair Value (in dollars per share) | $ 17.26 | $ 17.75 |
Performance Shares [Member] | ||
Stock-Based Compensation | ||
Number Issued (in shares) | 129,000 | 131,000 |
Weighted Average Fair Value (in dollars per share) | $ 87.38 | $ 85.13 |
Restricted Stock Units [Member] | ||
Stock-Based Compensation | ||
Number Issued (in shares) | 224,200 | 70,400 |
Weighted Average Fair Value (in dollars per share) | $ 91.94 | $ 85.91 |
Stock-Based Compensation and 71
Stock-Based Compensation and Earnings Per Share (Stock Option Fair Value Information) (Details) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Options Assumptions [Line Items] | |||
Risk Free Interest Rate, Minimum | 1.00% | 0.70% | |
Risk Free Interest Rate, Maximum | 2.70% | 2.50% | |
Expected volatility | 19.00% | 20.00% | |
Expected life | 7 years | 7 years | |
Company Common stock issued to employees under employee stock purchase and defined contribution savings plans (in shares) | 0.5 | 0.5 | |
Compensation and benefits paid in common stock | $ 48 | $ 41 | |
Minimum [Member] | |||
Options Assumptions [Line Items] | |||
Expected dividend yield | 1.30% | 1.40% | |
Maximum [Member] | |||
Options Assumptions [Line Items] | |||
Expected dividend yield | 1.50% | 1.60% |
Stock-Based Compensation and 72
Stock-Based Compensation and Earnings Per Share (Earnings Per Share and Diluted Share Equivalents) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Computation of Basic and Diluted Earnings Per Share | ||||
Income from continuing operations | $ 179 | $ 214 | $ 492 | $ 519 |
Income from discontinued operations, net of taxes | 0 | 0 | 0 | 1 |
Net income | $ 179 | $ 214 | $ 492 | $ 520 |
Denominator: | ||||
Denominator for basic earnings per share – weighted average common shares (in shares) | 158,200,000 | 130,000,000 | 139,800,000 | 130,700,000 |
Effect of dilutive securities: | ||||
Stock options (in shares) | 1,100,000 | 1,000,000 | 1,100,000 | 1,100,000 |
Performance shares, restricted stock and restricted stock units (in shares) | 600,000 | 500,000 | 500,000 | 500,000 |
Dilutive potential common shares (in shares) | 1,700,000 | 1,500,000 | 1,600,000 | 1,600,000 |
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion (in shares) | 159,900,000 | 131,500,000 | 141,400,000 | 132,300,000 |
Basic | ||||
Continuing operations (in dollars per share) | $ 1.13 | $ 1.65 | $ 3.52 | $ 3.97 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.01 |
Basic earnings per share (in dollars per share) | 1.13 | 1.65 | 3.52 | 3.98 |
Diluted | ||||
Continuing operations (in dollars per share) | 1.12 | 1.63 | 3.48 | 3.92 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.01 |
Diluted earnings per share (in dollars per share) | $ 1.12 | $ 1.63 | $ 3.48 | $ 3.93 |
Stock Options [Member] | ||||
Diluted | ||||
Stock options excluded from the average outstanding diluted shares calculation | 0 | 0 | 0 | 0 |
Accumulated Other Comprehensi73
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | $ 2,084 | $ 1,880 | ||
Other comprehensive income (loss) before reclassifications | $ 52 | $ (16) | 43 | (17) |
Amounts reclassified from accumulated other comprehensive loss | 15 | 14 | 49 | 44 |
Net current period other comprehensive income (loss) | 67 | (2) | 92 | 27 |
Ending balance | 5,609 | 2,114 | 5,609 | 2,114 |
Foreign Exchange Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (85) | (56) | (76) | (56) |
Other comprehensive income (loss) before reclassifications | 50 | (16) | 41 | (16) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | 50 | (16) | 41 | (16) |
Ending balance | (35) | (72) | (35) | (72) |
Pension and Other Postretirement Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (1,786) | (1,611) | (1,818) | (1,637) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 15 | 14 | 47 | 40 |
Net current period other comprehensive income (loss) | 15 | 14 | 47 | 40 |
Ending balance | (1,771) | (1,597) | (1,771) | (1,597) |
Reclassifications from AOCL to net income, related to amortization of net actuarial losses and prior service credits for retirement benefit plans, before Tax | 24 | 21 | 74 | 63 |
Reclassifications from AOCL to net income, related to amortization of net actuarial losses and prior service credits for retirement benefit plans, Net of Tax | 15 | 14 | 47 | 40 |
Change in the Fair Value of Effective Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (2) | (3) | (4) | (6) |
Other comprehensive income (loss) before reclassifications | 2 | 0 | 2 | (1) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 2 | 4 |
Net current period other comprehensive income (loss) | 2 | 0 | 4 | 3 |
Ending balance | 0 | (3) | 0 | (3) |
Total [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (1,873) | (1,670) | (1,898) | (1,699) |
Net current period other comprehensive income (loss) | 92 | 27 | ||
Ending balance | $ (1,806) | $ (1,672) | $ (1,806) | $ (1,672) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Income Taxes | |||||
Effective income tax rate from continuing operations | 19.00% | 13.40% | 25.10% | 18.80% | |
Release of valuation allowance related to U.S. capitol loss carryforward | $ 41,000,000 | $ 41,000,000 | |||
Statute of limitations, minimum, in years | 3 years | ||||
Statute of limitations, maximum, in years | 5 years | ||||
Net income tax payments | $ 202,000,000 | 76,000,000 | |||
Provision for undistributed earnings of foreign subsidiaries | $ 0 | 0 | |||
Undistributed earnings of foreign subsidiaries | 1,600,000,000 | 1,600,000,000 | |||
Gross unrecognized tax benefits | 139,000,000 | 139,000,000 | $ 45,000,000 | ||
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 111,000,000 | 111,000,000 | 20,000,000 | ||
Anticipated reduction in the unrecognized tax benefits during the next 12 months | 0 | 0 | |||
Accrued interest and penalties related to unrecognized tax benefits recognized within Other Liabilities | $ 7,000,000 | 7,000,000 | $ 0 | ||
Interest and penalties related to unrecognized tax benefits recognized within Income tax expense | $ 0 | $ 0 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Level 1 [Member] | Deferred Compensation Plan Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets at fair value | $ 60 | $ 55 |
Level 2 [Member] | Foreign Currency Forward Exchange Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | (6) | (13) |
Level 2 [Member] | Deferred Compensation Plan Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets at fair value | 23 | 0 |
Level 2 [Member] | Interest Rate Swap Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets at fair value | 15 | 35 |
Level 2 [Member] | Foreign Currency Forward Exchange Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets at fair value | 9 | 11 |
Level 3 [Member] | ICG [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | (14) | (13) |
Level 3 [Member] | Pulse.aero [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | $ (3) | $ 0 |
Fair Value Measurements (Change
Fair Value Measurements (Change in Fair Value of Level 3 Contingent Consideration) (Details) - Contingent Consideration [Member] - Level 3 [Member] $ in Millions | 9 Months Ended |
Jun. 30, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ (13) |
Acquisition date fair value of Pulse.aero contingent consideration (see Note 3) | (5) |
Payment of contingent consideration (see Note 3) | 2 |
Fair value adjustment | (1) |
Ending balance | $ (17) |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Amounts and Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2015 |
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | $ 578 | $ 340 | $ 307 | $ 252 |
Long-term debt | (7,268) | (1,374) | ||
Carrying Amount [Member] | ||||
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 340 | |||
Short-term debt | (511) | (740) | ||
Long-term debt | (7,253) | (1,339) | ||
Fair Value [Member] | ||||
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 340 | |||
Short-term debt | (511) | (740) | ||
Long-term debt | $ (7,478) | $ (1,508) |
Derivative Financial Instrume78
Derivative Financial Instruments (Narrative) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015USD ($)contract | Mar. 31, 2014USD ($)contract | Jan. 31, 2010USD ($)contract | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Derivative Financial Instruments | ||||||
Number of interest rate swap contracts entered into by company | contract | 2 | 3 | 2 | |||
Interest rate swap assets | $ 15 | $ 15 | $ 35 | |||
Impact to earnings related to the ineffective portion of hedging instruments | 0 | |||||
Gain (Loss) recognized when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge | 0 | 0 | ||||
Amount of cash flow hedge loss to be reclassified into earnings over next 12 months | 3 | $ 3 | ||||
Maximum duration of a foreign currency cash flow hedge contract in months | 72 months | |||||
Foreign Exchange Contract [Member] | ||||||
Derivative Financial Instruments | ||||||
Notional amount of foreign currency derivatives | 286 | $ 286 | 384 | |||
Other assets [Member] | ||||||
Derivative Financial Instruments | ||||||
Interest rate swap assets | 15 | 15 | 35 | |||
Other current assets [Member] | Foreign Exchange Contract [Member] | ||||||
Derivative Financial Instruments | ||||||
Fair value of derivative asset not designated as hedging instrument | 1 | 1 | ||||
Other current liabilities [Member] | Foreign Exchange Contract [Member] | ||||||
Derivative Financial Instruments | ||||||
Fair value of derivative liability not designated as hedging instrument | 1 | 1 | ||||
Unsecured Debt [Member] | Other assets [Member] | ||||||
Derivative Financial Instruments | ||||||
Interest rate swap assets | 15 | 15 | 35 | |||
Unsecured Debt [Member] | Long-term Debt [Member] | ||||||
Derivative Financial Instruments | ||||||
Interest rate swap assets | $ 15 | $ 15 | $ 35 | |||
Unsecured Debt [Member] | December 2023 [Member] | ||||||
Derivative Financial Instruments | ||||||
Derivative amount of hedged item | $ 200 | |||||
Basis spread on variable rate | 0.94% | |||||
Unsecured Debt [Member] | July 2019 [Member] | ||||||
Derivative Financial Instruments | ||||||
Derivative amount of hedged item | $ 150 | $ 150 | ||||
Basis spread on variable rate | 3.56% | 1.235% |
Derivative Financial Instrume79
Derivative Financial Instruments (Fair Values of Derivative Instruments) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Derivative Financial Instruments | ||
Total derivative assets | $ 24 | $ 46 |
Other current assets [Member] | ||
Derivative Financial Instruments | ||
Foreign currency forward exchange contracts | 9 | 11 |
Other assets [Member] | ||
Derivative Financial Instruments | ||
Interest rate swap assets | 15 | 35 |
Other current liabilities [Member] | ||
Derivative Financial Instruments | ||
Foreign currency forward exchange contracts | $ 6 | $ 13 |
Derivative Financial Instrume80
Derivative Financial Instruments (Effect of Derivative Instruments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Cost of Sales [Member] | ||||
Derivative Financial Instruments | ||||
Gain (loss) recognized from foreign currently forward exchange contracts not designated as hedging instruments | $ 0 | $ (1) | $ (1) | $ (1) |
Fair Value Hedges [Member] | Interest Expense [Member] | ||||
Derivative Financial Instruments | ||||
Gain (loss) recognized from interest rate swaps | 2 | 3 | 6 | 8 |
Cash Flow Hedges [Member] | AOCL [Member] | ||||
Derivative Financial Instruments | ||||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) | 2 | 0 | 2 | (1) |
Cash Flow Hedges [Member] | Cost of Sales [Member] | ||||
Derivative Financial Instruments | ||||
Amount of loss reclassified from AOCL into income | $ 0 | $ (1) | $ (3) | $ (6) |
Guarantees and Indemnificatio81
Guarantees and Indemnifications (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Guarantees and Indemnifications | ||
Balance at beginning of year | $ 87 | $ 89 |
Warranty costs incurred | (39) | (32) |
Product warranty accrual | 43 | 29 |
Changes in estimates for prior years | (6) | (3) |
Increase from acquisitions | 117 | 0 |
Balance at end of year | 202 | $ 83 |
Outstanding letters of credit | $ 237 |
Contractual Obligations and O82
Contractual Obligations and Other Commitments (Details) $ in Millions | Jun. 30, 2017USD ($) |
Non-cancelable operating leases | |
2,017 | $ 74 |
2,018 | 81 |
2,019 | 66 |
2,020 | 50 |
2,021 | 39 |
Thereafter | 197 |
Total | 507 |
Purchase contracts | |
2,017 | 38 |
2,018 | 35 |
2,019 | 30 |
2,020 | 27 |
2,021 | 24 |
Thereafter | 47 |
Total | 201 |
Long-term debt | |
2,017 | 375 |
2,018 | 150 |
2,019 | 750 |
2,020 | 1,125 |
2,021 | 0 |
Thereafter | 5,400 |
Total | 7,800 |
Interest on long-term debt | |
2,017 | 120 |
2,018 | 253 |
2,019 | 254 |
2,020 | 213 |
2,021 | 192 |
Thereafter | 1,926 |
Total | 2,958 |
Total | |
2,017 | 607 |
2,018 | 519 |
2,019 | 1,100 |
2,020 | 1,415 |
2,021 | 255 |
Thereafter | 7,570 |
Total | $ 11,466 |
Environmental Matters (Details)
Environmental Matters (Details) $ in Millions | Jun. 30, 2017USD ($)site |
Environmental Remediation Obligations [Abstract] | |
Number of sites involved in investigation or remediation | site | 9 |
Number of sights where reasonably possible future costs is significant | site | 8 |
Site contingency reasonably possible future costs | $ | $ 12 |
Accrual for environmental loss contingencies | $ | $ 6 |
Restructuring and Asset Impai84
Restructuring and Asset Impairment Charges (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring and Asset Impairment Charges [Line Items] | |||||
Employee separation costs | $ 39,000,000 | ||||
Asset impairment charges | 6,000,000 | ||||
Restructuring and asset impairment charges | $ 0 | $ 0 | 45,000,000 | $ 0 | $ 45,000,000 |
Cost of Sales [Member] | |||||
Restructuring and Asset Impairment Charges [Line Items] | |||||
Employee separation costs | 31,000,000 | ||||
Asset impairment charges | 2,000,000 | ||||
Restructuring and asset impairment 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 and asset impairment charges | $ 12,000,000 |
Business Segment Information (S
Business Segment Information (Sales and Earnings of Operating Segments) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||
Sales | $ 2,094,000,000 | $ 1,334,000,000 | $ 4,629,000,000 | $ 3,814,000,000 | |
Segment operating earnings | 386,000,000 | 282,000,000 | 919,000,000 | 789,000,000 | |
Interest expense | (77,000,000) | (16,000,000) | (122,000,000) | (48,000,000) | |
Stock-based compensation | (8,000,000) | (6,000,000) | (21,000,000) | (21,000,000) | |
General corporate, net | (16,000,000) | (13,000,000) | (39,000,000) | (36,000,000) | |
Transaction and integration costs | (64,000,000) | 0 | (80,000,000) | 0 | |
Restructuring and asset impairment charges | 0 | 0 | $ (45,000,000) | 0 | (45,000,000) |
Income from continuing operations before income taxes | 221,000,000 | 247,000,000 | 657,000,000 | 639,000,000 | |
Income tax expense | (42,000,000) | (33,000,000) | (165,000,000) | (120,000,000) | |
Income from continuing operations | 179,000,000 | 214,000,000 | 492,000,000 | 519,000,000 | |
Additional acquisition fees | 64,000,000 | 0 | 80,000,000 | 0 | |
B/E Aerospace [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Transaction, integration and financing costs | 82,000,000 | 0 | 109,000,000 | 0 | |
B/E Aerospace [Member] | Interest Expense [Member] | Bridge Loan [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Transaction and integration costs | (18,000,000) | (29,000,000) | |||
Additional acquisition fees | 18,000,000 | 29,000,000 | |||
Interior Systems [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 695,000,000 | 0 | 695,000,000 | 0 | |
Segment operating earnings | 80,000,000 | 0 | 80,000,000 | 0 | |
Commercial Systems [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 658,000,000 | 612,000,000 | 1,801,000,000 | 1,785,000,000 | |
Segment operating earnings | 144,000,000 | 141,000,000 | 401,000,000 | 401,000,000 | |
Government Systems [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 558,000,000 | 555,000,000 | 1,598,000,000 | 1,544,000,000 | |
Segment operating earnings | 123,000,000 | 115,000,000 | 333,000,000 | 309,000,000 | |
Information Management Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 183,000,000 | 167,000,000 | 535,000,000 | 485,000,000 | |
Segment operating earnings | $ 39,000,000 | $ 26,000,000 | $ 105,000,000 | $ 79,000,000 |
Business Segment Information 86
Business Segment Information (Summary of Sales by Product Category) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Segment Information | ||||
Sales | $ 2,094 | $ 1,334 | $ 4,629 | $ 3,814 |
Interior Systems [Member] | ||||
Business Segment Information | ||||
Sales | 695 | 0 | 695 | 0 |
Interior Systems [Member] | Interior Products And Services [Member] | ||||
Business Segment Information | ||||
Sales | 400 | 0 | 400 | 0 |
Interior Systems [Member] | Aircraft Seating [Member] | ||||
Business Segment Information | ||||
Sales | 295 | 0 | 295 | 0 |
Commercial Systems [Member] | ||||
Business Segment Information | ||||
Sales | 658 | 612 | 1,801 | 1,785 |
Commercial Systems [Member] | Air Transport Aviation Electronics [Member] | ||||
Business Segment Information | ||||
Sales | 405 | 370 | 1,098 | 1,052 |
Commercial Systems [Member] | Business And Regional Aviation Electronics [Member] | ||||
Business Segment Information | ||||
Sales | 253 | 242 | 703 | 733 |
Government Systems [Member] | ||||
Business Segment Information | ||||
Sales | 558 | 555 | 1,598 | 1,544 |
Government Systems [Member] | Avionics [Member] | ||||
Business Segment Information | ||||
Sales | 342 | 376 | 1,028 | 1,026 |
Government Systems [Member] | Communication and Navigation [Member] | ||||
Business Segment Information | ||||
Sales | 216 | 179 | 570 | 518 |
Information Management Services [Member] | ||||
Business Segment Information | ||||
Sales | $ 183 | $ 167 | $ 535 | $ 485 |
Business Segment Information (N
Business Segment Information (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 2,094 | $ 1,334 | $ 4,629 | $ 3,814 |
Commercial Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 658 | 612 | 1,801 | 1,785 |
Commercial Systems [Member] | Wide Body In Flight Entertainment Products and Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | $ 5 | $ 9 | $ 15 | $ 30 |
Business Segment Information (I
Business Segment Information (Identifiable Segment Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Segment Reporting Information [Line Items] | ||
Assets | $ 18,351 | $ 7,699 |
Operating Segments [Member] | Interior Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 10,346 | 0 |
Operating Segments [Member] | Commercial Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 3,272 | 3,050 |
Operating Segments [Member] | Government Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 2,097 | 2,052 |
Operating Segments [Member] | Information Management Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,903 | 1,906 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 733 | $ 691 |