Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Sep. 30, 2018 | Oct. 31, 2018 | Mar. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ROCKWELL COLLINS INC | ||
Entity Central Index Key | 1,137,411 | ||
Document and Entity Information | --09-30 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Registrant Name | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 164,629,890 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 22.1 |
Consolidated Statement of Finan
Consolidated Statement of Financial Position - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 738 | $ 703 |
Receivables, net | 2,109 | 1,426 |
Inventories, net | 2,649 | 2,451 |
Businesses held for sale | 91 | 0 |
Other current assets | 191 | 180 |
Total current assets | 5,778 | 4,760 |
Property, Net | 1,429 | 1,398 |
Goodwill | 9,107 | 9,158 |
Customer Relationship Intangible Assets | 1,654 | 1,525 |
Other Intangible Assets | 538 | 604 |
Deferred Income Tax Asset | 16 | 21 |
Other Assets | 504 | 531 |
TOTAL ASSETS | 19,026 | 17,997 |
Current Liabilities: | ||
Short-term debt | 2,248 | 479 |
Accounts payable | 821 | 927 |
Compensation and benefits | 276 | 385 |
Advance payments from customers | 377 | 361 |
Accrued customer incentives | 280 | 287 |
Product warranty costs | 194 | 186 |
Other current liabilities | 490 | 444 |
Total current liabilities | 4,686 | 3,069 |
Long-term Debt, Net | 5,681 | 6,676 |
Retirement Benefits | 525 | 1,208 |
Deferred Income Tax Liability | 346 | 331 |
Other Liabilities | 674 | 663 |
Equity: | ||
Common stock ($0.01 par value; shares authorized: 1,000; shares issued: September 30, 2018, 175.0; September 30, 2017, 175.0) | 2 | 2 |
Additional paid-in capital | 4,604 | 4,559 |
Retained earnings | 4,654 | 3,838 |
Accumulated other comprehensive loss | (1,471) | (1,575) |
Common stock in treasury, at cost (shares held: September 30, 2018, 10.5; September 30, 2017, 12.1) | (682) | (781) |
Total shareowners’ equity | 7,107 | 6,043 |
Noncontrolling interest | 7 | 7 |
Total equity | 7,114 | 6,050 |
TOTAL LIABILITIES AND EQUITY | $ 19,026 | $ 17,997 |
Consolidated Statement of Fin_2
Consolidated Statement of Financial Position (Parenthetical) - $ / shares | Sep. 30, 2018 | Sep. 30, 2017 |
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 | 175,000,000 |
Common stock, shares held in treasury (in shares) | 10,500,000 | 12,100,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sales | |||
Product sales | $ 7,643 | $ 5,885 | $ 4,411 |
Service sales | 1,022 | 937 | 848 |
Total sales | 8,665 | 6,822 | 5,259 |
Costs, expenses and other: | |||
Product cost of sales | 5,699 | 4,237 | 3,045 |
Service cost of sales | 683 | 631 | 597 |
Selling, general and administrative expenses | 817 | 732 | 638 |
Transaction and integration costs | 112 | 120 | 0 |
Interest expense | 262 | 187 | 64 |
Other income, net | (20) | (16) | (20) |
Total costs, expenses and other | 7,553 | 5,891 | 4,324 |
Income from continuing operations before income taxes | 1,112 | 931 | 935 |
Income tax expense | 80 | 226 | 208 |
Income from continuing operations | 1,032 | 705 | 727 |
Income from discontinued operations, net of taxes | 0 | 0 | 1 |
Net income | $ 1,032 | $ 705 | $ 728 |
Basic | |||
Continuing operations (in dollars per share) | $ 6.29 | $ 4.85 | $ 5.57 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 |
Basic earnings per share (in dollars per share) | 6.29 | 4.85 | 5.58 |
Diluted | |||
Continuing operations (in dollars per share) | 6.22 | 4.79 | 5.50 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 |
Diluted earnings per share (in dollars per share) | $ 6.22 | $ 4.79 | $ 5.51 |
Weighted average common shares: | |||
Basic (in shares) | 164 | 145.5 | 130.5 |
Diluted (in shares) | 165.8 | 147.2 | 132.1 |
Cash dividends per share (in dollars per share) | $ 1.32 | $ 1.32 | $ 1.32 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,032 | $ 705 | $ 728 |
Unrealized foreign currency translation and other adjustments | (39) | 77 | (20) |
Pension and other retirement benefits adjustments (net of taxes: 2018, $(46); 2017, $(140); 2016, $102) | 144 | 243 | (181) |
Foreign currency cash flow hedge adjustments (net of taxes: 2018, $0; 2017, $0; 2016, $1) | (1) | 3 | 2 |
Comprehensive income | $ 1,136 | $ 1,028 | $ 529 |
Consolidated Statement of Com_2
Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Pension and other retirement benefits adjustments tax amount | $ (46) | $ (140) | $ 102 |
Foreign currency cash flow hedge adjustments tax amount | $ 0 | $ 0 | $ 1 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Operating Activities: | ||||
Net income | $ 1,032 | $ 705 | $ 728 | |
Income from discontinued operations, net of taxes | 0 | 0 | 1 | |
Income from continuing operations | 1,032 | 705 | 727 | |
Adjustments to arrive at cash (used for) provided by operating activities: | ||||
Non-cash restructuring and impairment charges and settlement of a contract matter | 34 | 0 | 6 | |
Depreciation | 204 | 168 | 144 | |
Amortization of intangible assets, pre-production engineering costs and other | 386 | 226 | 109 | |
Amortization of acquired contract liability | (141) | (69) | 0 | |
Amortization of inventory fair value adjustment | 0 | 74 | 0 | |
Stock-based compensation expense | 35 | 31 | 27 | |
Compensation and benefits paid in common stock | 58 | 67 | 59 | |
Deferred income taxes | (13) | 43 | 48 | |
Pension plan contributions | (467) | (68) | (69) | |
Fair value of acquisition-related contingent consideration | 0 | 0 | 1 | |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||||
Receivables | (680) | 121 | (91) | |
Production inventory | (255) | (50) | (18) | |
Pre-production engineering costs | (85) | (94) | (177) | |
Accounts payable | (102) | 141 | 38 | |
Compensation and benefits | (109) | 39 | (4) | |
Advance payments from customers | 17 | 10 | (82) | |
Accrued customer incentives | (7) | (8) | 14 | |
Product warranty costs | 10 | (21) | (2) | |
Income taxes | 64 | (45) | 25 | |
Other assets and liabilities | [1] | (291) | (6) | (32) |
Cash (Used for) Provided by Operating Activities from Continuing Operations | (310) | 1,264 | 723 | |
Investing Activities: | ||||
Property additions | (257) | (240) | (193) | |
Acquisition of business, net of cash acquired | 0 | (3,429) | (17) | |
Other investing activities | 1 | (5) | 1 | |
Cash (Used for) Investing Activities from Continuing Operations | (256) | (3,674) | (209) | |
Financing Activities: | ||||
Repayment of long-term debt, including current portion | (389) | (930) | 0 | |
Repayment of acquired long-term debt | 0 | (2,119) | 0 | |
Purchases of treasury stock | [2] | (12) | (46) | (261) |
Cash dividends | (216) | (194) | (172) | |
Increase in long-term borrowings | 0 | 6,099 | 0 | |
Increase (decrease) in short-term commercial paper borrowings, net | 1,170 | (110) | (8) | |
Proceeds from the exercise of stock options | 63 | 64 | 21 | |
Other financing activities | (6) | (5) | (2) | |
Cash Provided by (Used for) Financing Activities from Continuing Operations | 610 | 2,759 | (422) | |
Effect of exchange rate changes on cash and cash equivalents | (9) | 14 | (4) | |
Net Change in Cash and Cash Equivalents | 35 | 363 | 88 | |
Cash and Cash Equivalents at Beginning of Period | 703 | 340 | 252 | |
Cash and Cash Equivalents at End of Period | $ 738 | $ 703 | $ 340 | |
[1] | Includes $254 million of up-front sales incentive payments made in 2018 (see Note 3) | |||
[2] | Includes net settlement of employee tax withholding upon vesting of share-based payment awards |
Consolidated Statement of Cas_2
Consolidated Statement of Cash Flows - Footnotes $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Statement of Cash Flows [Abstract] | |
Payments to acquire intangible assets | $ 254 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | |
Shares Outstanding (in shares) at Sep. 30, 2015 | 131,900 | |||||||
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 | 728 | 728 | ||||||
Other comprehensive income | (199) | (199) | ||||||
Cash dividends | (172) | (172) | ||||||
Shares issued: | ||||||||
Exercise of stock options (in shares) | 400 | |||||||
Exercise of stock options | 21 | (2) | 23 | |||||
Vesting of performance shares and restricted stock units (in shares) | 100 | |||||||
Vesting of performance shares and restricted stock units | $ (6) | (10) | 4 | |||||
Employee stock purchase plan (in shares) | 100 | 100 | ||||||
Employee stock purchase plan | $ 10 | 2 | 8 | |||||
Employee savings plan (in shares) | 600 | |||||||
Employee savings plan | 49 | 14 | 35 | |||||
Stock-based compensation | 27 | 27 | ||||||
Treasury share repurchases (in shares) | (2,900) | |||||||
Treasury share repurchases | (255) | (255) | ||||||
Treasury share retirements | [1] | 0 | $ (1) | (44) | (2,353) | 2,398 | ||
Other | 1 | 1 | ||||||
Shares Outstanding (in shares) at Sep. 30, 2016 | 130,200 | |||||||
Ending 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 | 705 | 705 | ||||||
Other comprehensive income | 323 | 323 | ||||||
Cash dividends | (194) | (194) | ||||||
Shares issued: | ||||||||
Exercise of stock options (in shares) | 1,100 | |||||||
Exercise of stock options | 64 | (5) | 69 | |||||
Vesting of performance shares and restricted stock units (in shares) | 200 | |||||||
Vesting of performance shares and restricted stock units | $ (7) | (12) | 5 | |||||
Employee stock purchase plan (in shares) | 100 | 100 | ||||||
Employee stock purchase plan | $ 11 | 4 | 7 | |||||
Employee savings plan (in shares) | 500 | |||||||
Employee savings plan | 56 | 21 | 35 | |||||
B/E Aerospace business acquisition (in shares) | 31,200 | |||||||
B/E Aerospace business acquisition | 3,015 | $ 1 | 3,014 | |||||
Stock-based compensation | 31 | 31 | ||||||
Treasury share repurchases (in shares) | (400) | |||||||
Treasury share repurchases | (39) | (39) | ||||||
Other | 1 | 1 | ||||||
Shares Outstanding (in shares) at Sep. 30, 2017 | 162,900 | |||||||
Ending Balance at Sep. 30, 2017 | 6,050 | $ 2 | 4,559 | 3,838 | (1,575) | (781) | 7 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,032 | 1,032 | ||||||
Other comprehensive income | 104 | 104 | ||||||
Cash dividends | $ (216) | (216) | ||||||
Shares issued: | ||||||||
Exercise of stock options (in shares) | 1,057 | 1,100 | ||||||
Exercise of stock options | $ 63 | (6) | 69 | |||||
Vesting of performance shares and restricted stock units (in shares) | 100 | |||||||
Vesting of performance shares and restricted stock units | $ (12) | (15) | 3 | |||||
Employee stock purchase plan (in shares) | 0 | |||||||
Employee savings plan (in shares) | 400 | |||||||
Employee savings plan | $ 58 | 31 | 27 | |||||
Stock-based compensation | 35 | 35 | ||||||
Shares Outstanding (in shares) at Sep. 30, 2018 | 164,500 | |||||||
Ending Balance at Sep. 30, 2018 | $ 7,114 | $ 2 | $ 4,604 | $ 4,654 | $ (1,471) | $ (682) | $ 7 | |
[1] | During the year ended September 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. |
Consolidated Statement of Equ_2
Consolidated Statement of Equity (Parenthetical) shares in Millions, $ in Millions | 12 Months Ended | |
Sep. 30, 2016USD ($)$ / sharesshares | ||
Treasury share retirements | $ 0 | [1] |
Treasury Stock [Member] | ||
Treasury share retirements (in shares) | shares | 40 | |
Weighted-average price (in dollars per share) | $ / shares | $ 59.95 | |
Treasury share retirements | $ (2,398) | [1] |
[1] | During the year ended September 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 | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation | Business Description and Basis of Presentation Rockwell Collins, Inc. (the Company or Rockwell Collins) designs, produces and supports cabin interior, communications and aviation systems and products for commercial and military customers and provides information management services through voice and data communication networks and solutions worldwide. The Company operates on a 52/53 week fiscal year ending on the Friday closest to September 30. Each of 2018 , 2017 and 2016 were 52-week fiscal years. For ease of presentation, September 30 is utilized consistently throughout these financial statements and notes to represent the fiscal year end date. All date references contained herein relate to the Company's fiscal year unless otherwise stated. On September 4, 2017, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with United Technologies Corporation (UTC). The Merger Agreement provides that the Company will be acquired by UTC. Each Company shareowner will receive $93.33 per share in cash and $46.67 in shares of UTC common stock in the merger, subject to a 7.5 percent collar centered on UTC's August 22, 2017 closing share price of $115.69 . The transaction is subject to the satisfaction of customary closing conditions. The Company incurred $34 million and $24 million of merger-related costs for the year ended September 30, 2018 and 2017, respectively. These costs are included in Transaction and integration costs in the Consolidated Statement of Operations. At September 30, 2018 and 2017, there were $12 million and $24 million , respectively, of merger-related costs that were unpaid and included in Accounts payable and Compensation and benefits on the Consolidated Statement of Financial Position. On April 13, 2017, the Company acquired B/E Aerospace, a leading manufacturer of aircraft cabin interior products and services. Prior to 2018, the financial results of the entire B/E Aerospace business were reported in the Interior Systems segment. Beginning in 2018, the B/E Aerospace thermal and electronic systems product lines, which primarily serve military and government customers, are now being reported in the Government Systems segment. This reorganization is expected to generate additional revenue synergy opportunities for the Company. The results of operations of the acquired B/E Aerospace business are now reported in the Interior Systems and Government Systems business segments. Interior Systems and Government Systems sales and operating earnings for 2017 have been reclassified to conform to the current year presentation. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Consolidation The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. The Company has two consolidated subsidiaries with income attributable to a noncontrolling interest. The net income and comprehensive income attributable to the noncontrolling interest is insignificant. The Company's investments in entities it does not control but over which it has the ability to exercise significant influence are accounted for under the equity method and are included in Other Assets. All intercompany transactions are eliminated. Foreign Currency Translation and Transactions The functional currency for significant subsidiaries operating outside the United States is typically their respective local currency. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange rate at the balance sheet date. Sales, costs and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive loss within the Consolidated Statements of Comprehensive Income and Equity. Foreign exchange transaction losses due to the remeasurement of account balances in foreign currencies are included within the Consolidated Statement of Operations and were $23 million for 2017 and were not material to the Company's results of operations for 2018 and 2016 . Revenue Recognition The Company enters into sales arrangements that may provide for multiple deliverables to a customer. The Company identifies all goods and/or services that are to be delivered separately under a sales arrangement and allocates revenue to each deliverable based on relative fair values. Fair values are generally established based on the prices charged when sold separately by the Company. In general, revenues are separated between products, engineering, maintenance, communication and installation services. The allocated revenue for each deliverable is then recognized using appropriate revenue recognition methods. Sales related to long-term contracts requiring development and delivery of products over several years are generally accounted for under the percentage-of-completion method of accounting in accordance with the Construction-Type and Production-Type Contracts subtopic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. The percentage-of-completion method is predominately used in the Government Systems and Interior Systems segments and sales and earnings under qualifying contracts are recorded either as products are shipped under the units-of-delivery method, or based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method. Purchase options and change orders are accounted for either as an integral part of the original contract or separately depending upon the nature and value of the item. Sales and costs related to profitable purchase options are included in estimates only when the options are exercised whereas sales and costs related to unprofitable purchase options are included in estimates when exercise is determined to be probable. Sales related to change orders are included in estimates only if they can be reliably estimated and collectability is reasonably assured. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. Changes in estimates of profit or loss on contracts are included in earnings on a cumulative basis in the period the estimate is changed. Sales related to long-term separately priced product maintenance or warranty contracts are accounted for based on the terms of the underlying agreements. Certain contracts are fixed-price contracts with sales recognized ratably over the contractual life, while other contracts have a fixed hourly rate with sales recognized based on actual labor or flight hours incurred. The cost of providing these services is expensed as incurred. The Company recognizes sales for most other products or services when all of the following criteria are met: an agreement of sale exists, product delivery and acceptance has occurred or services have been rendered, pricing is fixed or determinable and collection is reasonably assured. As discussed in the Recently Issued Accounting Standards section below, the Company adopted the new accounting guidance with respect to revenue recognition on October 1, 2018. Cash and Cash Equivalents Cash and cash equivalents include time deposits, certificates of deposit with original maturity dates of three months or less and money market funds. Allowance for Doubtful Accounts Allowances are established in order to report receivables at net realizable value on the Company's Consolidated Statement of Financial Position. The determination of these allowances requires Company management to make estimates and judgments as to the collectability of customer account balances. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience and other currently available evidence. Inventories Inventories are stated at the lower of cost or market using costs which approximate the first-in, first-out method, less related progress payments received. Inventoried costs include direct costs of manufacturing, certain engineering costs and allocable overhead costs. The Company regularly compares inventory quantities on hand on a part level basis to estimated forecasts of product demand and production requirements as well as historical usage. Based on these comparisons, management establishes an excess and obsolete inventory reserve as needed. Inventory valuation reserves were $125 million and $89 million at September 30, 2018 and 2017 , respectively. The Company defers certain pre-production engineering costs during the development phase of a program in connection with long-term supply arrangements that contain contractual guarantees for reimbursement from customers. Such customer guarantees generally take the form of a minimum order quantity with quantified reimbursement amounts if the minimum order quantity is not taken by the customer. These costs are deferred to the extent of the contractual guarantees and are amortized over their estimated useful lives using a units-of-delivery method, up to 15 years. This amortization expense is included as a component of cost of sales. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis and begins when the Company starts recognizing revenue as the Company delivers equipment for the program. The estimated useful life is limited to the amount of time the Company is virtually assured to earn revenues under long-term supply arrangements with the Company’s customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain customer guarantees for reimbursement are expensed as incurred. Progress Payments Progress payments relate to both receivables and inventories and represent cash collected from government-related contracts whereby the governments have a legal right of offset related to the receivable or legal title to the work-in-process inventory. Property Property is stated at acquisition cost, net of accumulated depreciation. Depreciation of property is generally provided using straight-line methods over the following estimated useful lives: buildings and improvements, 15 - 50 years; machinery and equipment (including internally developed software and other costs associated with the expansion and construction of Information Management Services network-related assets), 5 - 20 years; information systems software and hardware, 5 - 17 years; and furniture and fixtures, 12 - 16 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Significant renewals and betterments are capitalized and replaced units are written off. Maintenance and repairs, as well as renewals of minor amounts, are charged to expense in the period incurred. The fair value of liabilities associated with the retirement of property is recorded when there is a legal or contractual requirement to incur such costs and the costs can be reasonably estimated. Upon the initial recognition of a contractual or legal liability for an asset retirement obligation, the Company capitalizes the asset retirement cost by increasing the carrying amount of the property by the same amount as the liability. This asset retirement cost is then depreciated over the estimated useful life of the underlying property. The Company did not have any significant asset retirement obligations at September 30, 2018 and 2017 . Goodwill and Intangible Assets Goodwill and intangible assets generally result from business acquisitions. The purchase price of the acquisition is assigned to tangible and intangible assets and liabilities assumed based on fair value. The excess of the purchase price over the amounts assigned is recorded as goodwill. Assets acquired and liabilities assumed are allocated to the Company's reporting units based on the Company's integration plans and internal reporting structure. As of September 30, 2018 the Company had seven reporting units. Purchased intangible assets with finite lives are amortized, generally on a straight-line basis, over their estimated useful lives, ranging from 4 - 23 years. Goodwill and intangible assets with indefinite lives are not amortized, but are reviewed at least annually for impairment. Customer Relationship Up-Front Sales Incentives The Company provides up-front sales incentives prior to delivering products or performing services to certain commercial customers in connection with sales contracts. Up-front sales incentives are recorded as a customer relationship intangible asset and are amortized using a units-of-delivery method over the period the Company has received a contractually enforceable right related to the incentives, up to 15 years after entry into service. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis. Amortization begins when the Company starts recognizing revenue as the Company delivers equipment for the program. Up-front sales incentives consisting of cash payments or customer account credits are amortized as a reduction of sales, whereas incentives consisting of free products are amortized as cost of sales. Accrued Customer Incentives Incentives earned by customers based on purchases of Company products or services are recognized as a liability when the related sale is recorded. Incentives consisting of cash payments or customer account credits are recognized as a reduction of sales, while incentives consisting of free products and account credits where the customer's use is restricted to future purchases are recognized as cost of sales. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when management plans to dispose of assets or when events or circumstances indicate that the carrying amount of a long-lived asset is more-likely-than-not unrecoverable. Assets held for disposal are reported at the lower of the carrying amount or fair value less cost to sell. Management determines fair value using a discounted future cash flow analysis or other accepted valuation techniques. Long-lived assets held for use are reviewed for impairment by comparing the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset over its remaining useful life. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill and indefinite-lived intangible assets are tested annually for impairment with more frequent tests performed if indications of impairment exist. The Company's annual impairment testing date is in the fourth quarter of each fiscal year. Impairment for intangible assets with indefinite lives exists if the carrying value of the intangible asset exceeds its fair value. Goodwill is potentially impaired if the carrying value of a reporting unit exceeds its estimated fair value. Advance Payments from Customers Advance payments from customers represent cash collected from customers in advance of revenue recognition. Capital Leases Assets under capital lease and capital lease obligation are initially measured at the lower of estimated fair value or present value of the minimum lease payments. The present value of minimum lease payments is calculated for payments during the noncancelable lease term using the lower of the Company's estimated incremental borrowing rate or the rate implicit in the lease, if known. Capital lease obligation is recorded within Other Liabilities and the related assets are recorded in Property, Net or Other Assets based upon their intended use. Payments are allocated between a reduction of the lease obligation and interest expense using the interest method. Assets under capital lease are depreciated over the noncancelable lease term, ranging from 5 - 15 years, consistent with the Company's depreciation policy. Research and Development The Company performs R&D activities relating to the development of new products and the improvement of existing products. Company-funded R&D programs are expensed as incurred and included in cost of sales. Company-funded R&D expenditures were $502 million , $327 million and $224 million for fiscal years ended September 30, 2018 , 2017 and 2016 , respectively. Environmental Liabilities for environmental matters are recorded in the period in which it is probable that an obligation has been incurred and the cost can be reasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the Company records a liability for its estimated allocable share of costs related to its involvement with the site as well as an estimated allocable share of costs related to the involvement of insolvent or unidentified parties. At environmental sites in which the Company is the only responsible party, the Company records a liability for the total estimated costs of remediation. Income Taxes Current tax liabilities and assets are based upon an estimate of taxes payable or refundable in the current year for each jurisdiction in which the Company is subject to tax. As part of the determination of its tax liability, management exercises considerable judgment in evaluating tax positions taken by the Company in determining the income tax provision and establishes reserves for uncertain tax positions in accordance with the Income Taxes topic of the FASB Accounting Standards Codification. Deferred tax assets and liabilities are recorded for the estimated future tax effects attributable to temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and their respective carrying amounts for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Derivative Financial Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and interest rate swap contracts for the purpose of reducing exposure to changes in foreign currency exchange rates on business transactions and interest rates, respectively. The Company's policy is to execute such instruments with banks the Company believes to be creditworthy and not enter into derivative financial instruments for speculative purposes or to manage exposure for net investments in non-U.S. subsidiaries. These derivative financial instruments do not subject the Company to undue risk as gains and losses on these instruments generally offset gains and losses on the underlying assets, liabilities or anticipated transactions that are being hedged. All derivative financial instruments are recorded at fair value in the Consolidated Statement of Financial Position. For a derivative that has not been designated as an accounting hedge, the change in fair value is recognized immediately through earnings. For a derivative that has been designated as an accounting hedge of an existing asset or liability (a fair value hedge), the change in the fair value of both the derivative and underlying asset or liability is recognized immediately through earnings. For a derivative designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the Consolidated Statement of Financial Position in Accumulated other comprehensive loss to the extent the derivative is effective in mitigating the exposure related to the anticipated transaction. The change in the fair value related to the ineffective portion of the hedge, if any, is immediately recognized in earnings. The amount recorded within Accumulated other comprehensive loss is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings. The Company does not exclude any amounts from the measure of effectiveness for either fair value or cash flow hedges. Use of Estimates The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, long-term contracts, allowances for doubtful accounts, inventory obsolescence, product warranty cost liabilities, customer incentives, retirement benefits, income taxes, environmental matters, pre-production engineering costs, recoverability of long-lived assets and contingencies. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the Consolidated Statement of Operations in the period they are determined. Concentration of Risks The Company's products and services are concentrated within the aerospace and defense industries with customers consisting primarily of military and commercial aircraft manufacturers, commercial airlines, the U.S. Government and non-U.S. governments. As a result of this industry focus, the Company's current and future financial performance is largely dependent upon the overall economic conditions within these industries. In particular, the commercial aerospace market has been historically cyclical and subject to downturns during periods of weak economic conditions, which could be prompted or exacerbated by political or other U.S. or international events. The defense market may be affected by changes in budget appropriations, procurement policies, political developments both in the U.S. and abroad and other factors. The Company depends to a large degree on U.S. Government spending, as a significant portion of the Company's sales are derived from U.S. Government contracts, both directly and indirectly through subcontracts. The U.S. Government has implemented various initiatives to address its fiscal challenges. In August 2011, Congress enacted the Budget Control Act (BCA) of 2011 which imposed spending caps and certain reductions in defense spending over a ten-year period through 2021. These spending caps and reductions, referred to as sequestration, went into effect in March 2013. Through a series of bipartisan agreements, Congress has been able to temporarily lift discretionary spending limits every year through 2019. However, unless a new agreement is enacted, the BCA will again be in force beginning in 2020. The continued uncertainty surrounding the U.S. defense budget could have a material adverse effect on the Company and the defense industry in general. In years when the U.S. Government does not complete its annual budget and appropriations process prior to the beginning of its fiscal year (October 1), government operations are typically funded through a continuing resolution that authorizes agencies of the U.S. Government to continue to operate in the new year, but generally does not authorize new spending initiatives. During periods covered by a continuing resolution (or until the regular appropriation bills are passed), the Company may experience delays by the government in the procurement of new or existing products and services which can adversely impact results of operations and cause variability in the timing of revenue between periods. During 2018, the U.S. Government completed the fiscal year 2019 Defense budget authorization and approval timeline on schedule and thus avoided the need for a continuing resolution for this part of government operations. Should the U.S. Government not complete fiscal year 2020 budgeting and appropriations in the same manner, the Company expects to be exposed to the effects of a continuing resolution in the future. The Company remains confident that its product offerings are well positioned to meet the needs of government customers in this uncertain environment and the Company continues to enhance international strategies and make proactive adjustments to the Company's cost structure as necessary. In addition to the overall business risks associated with the Company's concentration within the aerospace and defense industries, the Company is also exposed to a concentration of collection risk on credit extended to certain aircraft manufacturers and airlines. The Company performs ongoing credit evaluations on the financial condition of all of its customers and maintains allowances for uncollectible accounts receivable based on expected collectability. Although management believes its allowances are adequate, the Company is not able to predict with certainty the changes in the financial stability of its customers. Any material change in the financial status of any one customer or group of customers could have a material adverse effect on the Company's results of operations, financial position or cash flows. As of September 30, 2018 , approximately 10 percent of the Company's employees in the U.S. were represented by U.S. collective bargaining agreements, most of which were negotiated in 2018 and have varying contract terms between 3 and 5 years. Recently Adopted Accounting Standards In March 2018, the Financial Accounting Standards Board (FASB) issued an amendment to formally codify the guidance provided by the Securities and Exchange Commission (SEC) in Staff Accounting Bulletin (SAB) 118. SAB 118 provides additional guidance allowing companies to use a one year measurement period, similar to that used in business combinations, to account for the impacts of the Tax Cuts and Jobs Act (the Act) in their financial statements. The Company has accounted for the impacts of the Act, including the use of reasonable estimates where necessary. The Company may continue to refine its estimates throughout the measurement period. In March 2016, the FASB issued a new standard simplifying certain aspects of accounting for share-based payments (see Note 12). The new standard requires that excess tax benefits and shortfalls be recorded as income tax benefit or expense in the income statement, rather than in equity, and requires excess tax benefits from stock-based compensation to be classified within operating cash flow. Additionally, the new standard allows a policy election to either estimate the number of awards expected to be forfeited at the time of award issuance or record stock-based compensation for forfeitures as they occur. In order to simplify accounting for share-based payments, the Company adopted the new guidance during the second quarter of 2016, which resulted in a $4 million benefit to tax expense and a favorable impact to operating cash flows of $4 million in 2016. With respect to forfeitures, the Company will continue to estimate the number of awards expected to be forfeited upon award issuance. Recently Issued Accounting Standards In February 2018, the FASB issued a new standard giving companies the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the Act to retained earnings. The guidance can be applied retrospectively or in the period of adoption and is effective for the Company in 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In March 2017, the FASB issued a new standard on the presentation of the net periodic cost of postretirement benefit programs, which the Company adopted retrospectively on October 1, 2018. 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. Applying a practical expedient to estimate the impact of the reclassification, the Company expects adoption of the new standard to result in a decrease to segment operating earnings of approximately $30 million and $27 million for the years ended September 30, 2018 and 2017, respectively, and a corresponding increase in unallocated corporate income, with no impact to net income. 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. Several amendments to the new standard have been issued, which are intended to drive consistent interpretation and application and simplify implementation of the new standard. The central requirement of the new standard is that lessees must recognize lease-related assets and liabilities for all leases with a term longer than 12 months. The Company is evaluating the effect the standard will have on the Company's consolidated financial statements and related disclosures, but expects a material change to the balance sheet due to the recognition of right-of-use assets and lease liabilities related to the Company's portfolio of real estate leases. The new guidance is not expected to materially impact accounting for those leases the Company enters with customers. The new standard is effective for the Company in 2020, with early adoption permitted. In May 2014, the FASB issued a comprehensive new revenue recognition standard that effectively replaced all guidance on the topic. The Company adopted the new standard and related amendments on October 1, 2018 utilizing the modified retrospective transition method. The Company has substantially completed its evaluation of the new standard and has assessed the impacts of adoption on its consolidated financial statements and disclosures. Changes under the new standard include, among other items, accounting for development costs and associated customer funding related to commercial contracts, the elimination of customer relationship intangible assets related to free products provided to customers as up-front sales incentives and increased use of over time revenue recognition based on costs incurred for certain contracts satisfying the criteria established in the new standard. The new standard also significantly enhances required disclosures regarding revenue and related assets and liabilities. The most significant changes to the Company are described below. Under the Company's historical accounting policy, customer funding received for development effort was recognized as revenue as the development activities were performed. Under the new standard, the Company has concluded that the development effort on commercial contracts 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 revenue is recognized for the related products, 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. Under the new standard, development costs are expensed as incurred except for those costs incurred pursuant to customer funding. Development costs eligible for deferral are limited to an amount equal to the associated customer funding. The development costs will be capitalized as contract fulfillment cost assets and recognized as expense when revenue is recognized for the related products, consistent with the amortization of deferred development specific customer funding into revenue. The Company is still calculating the impact of this change on adoption-date retained earnings. Further, development costs incurred pursuant to contractual guarantees for reimbursement are no longer capitalized within Inventory as pre-production engineering costs. The $1.166 billion adoption-date balance of capitalized development costs within Inventory was eliminated upon adoption and the related post-adoption amortization expense will be avoided. Under the Company's historical accounting policy, up-front sales incentives consisting of free products were capitalized as a customer relationship intangible asset. Upon adoption of the new standard, free product provided to the customer is considered a performance obligation and must be expensed when transferred, with revenue allocated when applicable. As a result of this change, approximately $120 million of customer relationship intangible assets were eliminated as of the adoption date and a corresponding contract asset of approximately $ 20 million was recorded for the uncollected portion of revenue recognized. This change will also result in a decrease in post-adoption amortization expense. Under the Company’s historical accounting policy, certain contracts either recognized revenue based on shipping terms or used a units-of-delivery method. Under the new standard, many of these contracts meet one or more of the mandatory criteria for over time revenue recognition. The Company is still finalizing the adoption-date retained earnings impact for these contracts, but does not expect the ongoing effect of recognizing revenue using an over time method to be material. Beginning in 2019, disclosures in the Company's notes to Consolidated Financial Statements related to revenue recognition will be expanded under the new standard to include discussions on the nature, amount, timing and uncertainty of revenue arising from contracts with customers. Disclosures will include qualitative and quantitative information about performance obligations, contract assets and liabilities, cost to fulfill a contract, disaggregation of revenue and the significant judgments made in applying the new standard. Other new accounting standards issued but not effective until after September 30, 2018 are not expected to have a material impact on the Company's financial statements. |
Acquisitions, Goodwill and Inta
Acquisitions, Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2018 | |
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 Interior Systems and Government Systems business segments (see Note 1). 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 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 purchase price allocation was finalized in the second quarter of 2018 and resulted in the recognition of $7.2 billion of goodwill, none of which is deductible for tax purposes. The goodwill is included in the Interior Systems and Government Systems segments. 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. The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date: (in millions) April 13, 2017 Cash and cash equivalents $ 104 Receivables, net 485 Inventories, net (1) 542 Other current assets 45 Property, net 271 Intangible Assets 1,586 Other Assets 53 Total Identifiable Assets Acquired 3,086 Accounts payable (231 ) Compensation and benefits (75 ) Advance payments from customers (62 ) Accrued customer incentives (48 ) Product warranty costs (117 ) Other current liabilities (2) (366 ) Long-term Debt, Net (2,119 ) Retirement Benefits (12 ) Deferred Income Tax Liability (287 ) Other Liabilities (2) (433 ) Total Liabilities Assumed (3,750 ) Net Identifiable Assets Acquired, excluding Goodwill (664 ) Goodwill 7,200 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 was amortized as a non-cash increase to Cost of sales during the year ended September 30, 2017. (2) As of the acquisition date, the Company made adjustments totaling $486 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 Consolidated Statement of Operations as non-cash reductions to Cost of sales. $141 million of the acquired contract liabilities were recognized as a reduction to Cost of sales during the year ended September 30, 2018. Before the purchase price allocation was finalized in the second quarter of 2018, revisions were made to the estimated acquisition-date fair value of assets acquired and liabilities assumed. The revisions were primarily due to a change in estimate with respect to the future repatriation of certain foreign earnings, adjustments to the income tax accounts as a result of filing the pre-acquisition returns, recognition of a liability associated with the KLX Tax Sharing and Indemnification Agreement (see Note 16) and revisions to the fair value of certain acquired property. These fiscal year 2018 measurement period adjustments resulted in a $15 million net increase to Goodwill and did not have a material impact on the financial results of prior periods. The Intangible Assets included above consist of the following: Weighted Average Life (in years) Fair Value (in millions) Developed technology 9 $ 435 Seating customer relationships 6 860 Other customer relationships 8 291 Total 7 $ 1,586 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. During 2018 and 2017, B/E Aerospace contributed sales of $2.983 billion and $1.406 billion , respectively. Excluding the discrete impacts of the Tax Cuts and Jobs Act (see Note 13) and transaction, integration and financing costs, B/E Aerospace contributed net income of $349 million and $140 million for 2018 and 2017, respectively. Transaction, Integration and Financing Costs The Company recorded total transaction, integration and financing costs related to the B/E Aerospace acquisition in the Consolidated Statement of Operations as follows: (in millions) 2018 2017 2016 Transaction and integration costs $ 78 $ 96 $ — Bridge facility fees (included in Interest expense) — 29 — Total Transaction, integration and financing costs $ 78 $ 125 $ — At September 30, 2018 , $11 million of transaction, integration and financing costs were unpaid and included in Accounts payable and Compensation and benefits on the 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 year prior to acquisition, 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 had 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. (in millions, except per share amounts) 2017 2016 (Pro forma) (Pro forma) Sales $ 8,376 $ 8,121 Net income attributable to common shareowners from continuing operations 900 696 Basic earnings per share from continuing operations 6.18 4.31 Diluted earnings per share from continuing operations 6.11 4.26 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. (in millions) 2017 2016 Increases (decreases) to pro forma net income: Net reduction to depreciation resulting from fixed asset adjustments (1) $ 12 $ 21 Advisory, legal and accounting service fees (2) 156 (123 ) Amortization of acquired B/E Aerospace intangible assets, net (3) (83 ) (152 ) Interest expense incurred on acquisition financing, net (4) (17 ) (65 ) Long-term contract program adjustments (5) (59 ) (128 ) Acquired contract liability amortization (6) 63 124 Inventory fair value adjustment amortization (7) 56 (56 ) Compensation adjustments (8) 6 14 (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 $18 million , of which $14 million was paid during the year ended September 30, 2017 and $4 million was paid during the year ended September 30, 2018 . On the acquisition date, the Company recorded a $5 million liability for the fair value of post-closing consideration that could be paid, contingent upon the achievement of certain revenue targets and development milestones. The Company made contingent consideration payments of $2 million during the year ended September 30, 2017 and $3 million during the year ended September 30, 2018 . 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. The B/E Aerospace acquisition is included in the Interior Systems and Government Systems segments (see Note 1) and the Pulse.aero acquisition is included in the Information Management Services segment. The results of operations for the acquisitions have been included in the Company's operating results for the periods subsequent to their respective acquisition dates. Pro-forma results of operations have not been presented for Pulse.aero as the effect of the acquisition is not material to the Company's 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 7,185 — — — 7,185 Pulse.aero acquisition — — — 12 12 Foreign currency translation adjustments 38 (1 ) 3 2 42 Balance at September 30, 2017 7,223 325 506 1,104 9,158 B/E Aerospace acquisition adjustments (370 ) — 385 — 15 Reclassification of business held for sale (See Note 4) (59 ) — — — (59 ) Foreign currency translation adjustments (5 ) (1 ) (1 ) — (7 ) Balance at September 30, 2018 $ 6,789 $ 324 $ 890 $ 1,104 $ 9,107 The Company performs an impairment test of goodwill and indefinite-lived intangible assets each fiscal year, or at any time there is an indication goodwill or indefinite-lived intangibles are more-likely-than-not impaired, commonly referred to as triggering events. The Company's 2018 , 2017 and 2016 impairment tests resulted in no impairment. Intangible Assets Intangible assets are summarized as follows: September 30, 2018 September 30, 2017 (in millions) Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology and patents $ 807 $ (324 ) $ 483 $ 806 $ (256 ) $ 550 Backlog 6 (6 ) — 6 (5 ) 1 Customer relationships: Acquired 1,489 (413 ) 1,076 1,495 (213 ) 1,282 Up-front sales incentives 692 (114 ) 578 336 (93 ) 243 License agreements 18 (11 ) 7 15 (10 ) 5 Trademarks and tradenames 15 (14 ) 1 15 (14 ) 1 Intangible assets with indefinite lives: Trademarks and tradenames 47 — 47 47 — 47 Intangible assets $ 3,074 $ (882 ) $ 2,192 $ 2,720 $ (591 ) $ 2,129 During 2018, up-front sales incentives increased $335 million , primarily due to the extension of certain long-term sales contracts. Pursuant to the terms of contractual agreements, the Company paid $254 million in cash sales incentives during 2018. Amortization expense for intangible assets for 2018 , 2017 and 2016 was $290 million , $162 million and $60 million , respectively. As of September 30, 2018 , the weighted average amortization period remaining for up-front sales incentives was approximately 12 years. Anticipated annual amortization expense for intangible assets is as follows: (in millions) 2019 2020 2021 2022 2023 Thereafter Anticipated amortization expense for up-front sales incentives $ 24 $ 26 $ 26 $ 26 $ 25 $ 451 Anticipated amortization expense for all other intangible assets 265 264 264 260 192 322 Total $ 289 $ 290 $ 290 $ 286 $ 217 $ 773 As discussed in Note 2, adoption of the new revenue recognition standard on October 1, 2018, resulted in elimination of approximately $120 million of customer relationship intangible assets, therefore, the amortization expense associated with that balance as contemplated in the table above will be avoided. |
Discontinued Operations and Div
Discontinued Operations and Divestitures | 12 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Divestitures | Discontinued Operations and Divestitures Air Transport In-Flight Entertainment Business On August 24, 2018, the Company reached a definitive agreement to sell its air transport in-flight entertainment (IFE) business. The IFE business designs, manufactures and services in-seat video, overhead video and content services and other products for the air transport IFE market. The sale is subject to customary closing conditions and is expected to close in the fourth calendar quarter of 2018. The business is being sold as a result of the Company's prior decision to cease investment in air transport IFE capabilities. The Company does, however, continue to invest in cabin connectivity solutions for the air transport market. During the three months ended September 30, 2018, the Company classified the IFE business as held for sale. As of September 30, 2018, assets of $23 million are included within Businesses held for sale and liabilities of $5 million are included within Other current liabilities on the Consolidated Statement of Financial Position. The major classes of assets and liabilities primarily include net Inventories of $19 million and net Property of $4 million . The operating results of the held for sale business are included in the Commercial Systems segment. ElectroMechanical Systems Business On July 20, 2018, the Company reached a definitive agreement to sell its ElectroMechanical Systems (EMS) business which operates within the Commercial Systems segment. EMS designs, manufactures and services actuation, pilot control and other specialty products for commercial and military aerospace applications. The sale is subject to regulatory approvals, completion of UTC's pending acquisition of Rockwell Collins and other customary closing conditions, which results in the criteria for held for sale accounting treatment not being satisfied as of September 30, 2018. The business is being sold in order to comply with regulatory commitments associated with the pending UTC merger (see Note 1). Engineered Components Business On May 31, 2018, the Company reached a definitive agreement to sell its engineered components business, formerly known as SMR Technologies. SMR Technologies manufactures, sells and services diversified engineering components for niche aerospace, military and industrial applications. The sale is subject to customary closing conditions and is expected to close in the fourth calendar quarter of 2018. The business is being sold in order to comply with regulatory commitments associated with the pending UTC merger (see Note 1). During the three months ended June 30, 2018, the Company classified the engineered components business as held for sale and recorded a pre-tax loss of $9 million ( $22 million after tax) for the write-down to fair value less costs to sell, which was recorded within Other income, net on the Consolidated Statement of Operations. The high effective tax rate is primarily attributable to the non-deductibility of goodwill for income tax purposes. As of September 30, 2018, assets of $68 million are included within Businesses held for sale and liabilities of $3 million are included within Other current liabilities on the Consolidated Statement of Financial Position. The major classes of assets and liabilities primarily include Goodwill of $59 million and Intangible assets of $8 million . The operating results of the held for sale business are included in the Interior Systems segment. ASES Business 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 sales price was $3 million , and additional post-closing consideration of $2 million was received in December 2016. During 2016, the Company recorded $2 million of income from discontinued operations ( $1 million after tax), primarily due to the favorable settlement of a contractual matter with a customer of the ASES business. |
Receivables, Net
Receivables, Net | 12 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Receivables, Net | Receivables, Net Receivables, net are summarized as follows: (in millions) September 30, September 30, 2017 Billed $ 1,639 $ 1,055 Unbilled 596 461 Less progress payments (108 ) (78 ) Total 2,127 1,438 Less allowance for doubtful accounts (18 ) (12 ) Receivables, net $ 2,109 $ 1,426 Receivables expected to be collected beyond the next twelve months are classified as long-term and are included in Other Assets. Total receivables due from the U.S. Government including the Department of Defense and other government agencies, both directly and indirectly through subcontracts, were $337 million and $279 million at September 30, 2018 and 2017 , respectively. U.S. Government unbilled receivables, net of progress payments, were $119 million and $89 million at September 30, 2018 and 2017 , respectively. Receivables, net due from equity affiliates were $61 million at September 30, 2018 . Unbilled receivables principally represent sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms. The Company sells certain accounts receivable on a non-recourse basis to unrelated financial institutions under factoring agreements arranged by certain customers. Under the terms of the agreements, the Company retains no rights or interest and has no obligations with respect to the sold receivables. The Company accounts for these transactions as sales of receivables and records cash proceeds when received as cash provided by operating activities in the Consolidated Statement of Cash Flows. Cash generated by participating in these programs was zero and $154 million in 2018 and 2017 , respectively. The unfavorable impact on cash used for operating activities during 2018 was $154 million . The favorable impact on cash provided by operating activities during 2017 was $94 million . The cost of participating in these programs was immaterial to the Company's results. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories, net are summarized as follows: (in millions) September 30, September 30, 2017 Finished goods $ 289 $ 259 Work in process 381 347 Raw materials, parts and supplies 828 677 Less progress payments (15 ) (7 ) Total 1,483 1,276 Pre-production engineering costs 1,166 1,175 Inventories, net $ 2,649 $ 2,451 Amortization expense for pre-production engineering costs for 2018 , 2017 and 2016 was $87 million , $59 million and $49 million , respectively. As discussed in Note 2, adoption of the new revenue recognition standard on October 1, 2018, resulted in elimination of the $1.166 billion pre-production engineering balance. In accordance with industry practice, inventories include amounts which are not expected to be realized within one year. These amounts primarily relate to pre-production engineering costs and life-time-buy inventory not expected to be realized within one year of $1.129 billion and $1.160 billion at September 30, 2018 and 2017 , respectively. Life-time-buy inventory is inventory that is typically no longer produced by the Company's vendors but for which multiple years of supply are purchased in order to meet production and service requirements over the life span of a product. |
Property, Net
Property, Net | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Net | Property, Net Property, net is summarized as follows: (in millions) September 30, September 30, 2017 Land $ 22 $ 22 Buildings and improvements 659 597 Machinery and equipment 1,463 1,400 Information systems software and hardware 570 510 Furniture and fixtures 93 87 Capital leases 58 58 Construction in progress 246 250 Total 3,111 2,924 Less accumulated depreciation (1,682 ) (1,526 ) Property, Net $ 1,429 $ 1,398 Property additions acquired by incurring accounts payable, which are reflected as a non-cash transaction in the Company's Consolidated Statement of Cash Flows, were $20 million , $23 million and $20 million at September 30, 2018 , 2017 and 2016 , respectively. A portion of the Company's operations are conducted in leased real estate facilities, including both operating and, to a lesser extent, capital leases. Accumulated depreciation relating to assets under capital lease totals $18 million and $14 million as of September 30, 2018 and 2017 , respectively. Amortization of assets under capital lease is recorded as depreciation expense. As of September 30, 2018 , remaining minimum lease payments for Property under capital leases total $65 million , including $17 million of interest. |
Other Assets
Other Assets | 12 Months Ended |
Sep. 30, 2018 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets are summarized as follows: (in millions) September 30, September 30, 2017 Long-term receivables $ 185 $ 211 Investments in equity affiliates 5 7 Exchange and rental assets (net of accumulated depreciation of $111 at September 30, 2018 and $106 at September 30, 2017) 71 71 Other 243 242 Other Assets $ 504 $ 531 Long-term receivables Long-term receivables expected to be collected beyond the next twelve months are principally comprised of unbilled accounts receivable pursuant to sales recorded under the percentage-of-completion method of accounting that have not yet been billed to customers in accordance with applicable contract terms. Investments in Equity Affiliates Investments in equity affiliates primarily consist of seven joint ventures: • ACCEL (Tianjin) Flight Simulation Co., Ltd (ACCEL): ACCEL is a joint venture with Haite Group, for the joint development and production of commercial flight simulators in China • ADARI Aviation Technology Company Limited (ADARI): ADARI is a joint venture with Aviation Data Communication Corporation Co., LTD, that operates remote ground stations around China and develops certain content delivery management software • AVIC Leihua Rockwell Collins Avionics Company (ALRAC): ALRAC is a joint venture with China Leihua Electronic Technology Research Institute (a subsidiary of the Aviation Industry Corporation of China, or AVIC), for the joint production of integrated surveillance system products for the C919 aircraft in China • Data Link Solutions LLC (DLS): DLS is a joint venture with BAE Systems, plc for the joint pursuit of the worldwide military data link market • ESA Vision Systems LLC (ESA): ESA is a joint venture with Elbit Systems, Ltd. for the joint pursuit of helmet-mounted cueing systems for the worldwide military fixed wing aircraft market • Quest Flight Training Limited (Quest): Quest is a joint venture with Quadrant Group plc that provides aircrew training services primarily for the United Kingdom Ministry of Defence • Rockwell Collins CETC Avionics Co., Ltd (RCCAC): RCCAC is a joint venture with CETC Avionics Co., Ltd (CETCA) for the development, production, and maintenance of communication and navigation products on Chinese commercial OEM platforms Each joint venture is 50 percent owned by the Company and accounted for under the equity method. Under the equity method of accounting for investments, the Company’s proportionate share of the earnings or losses of its equity affiliates are included in Net income and classified as Other income, net in the Consolidated Statement of Operations. For segment performance reporting purposes, Rockwell Collins’ share of earnings or losses of ESA, DLS and Quest are included in the operating results of the Government Systems segment, ACCEL, ALRAC and RCCAC are included in the operating results of the Commercial Systems segment and ADARI is included in the operating results of the Information Management Services segment. In the normal course of business or pursuant to the underlying joint venture agreements, the Company may sell products or services to equity affiliates. The Company defers a portion of the profit generated from these sales equal to its ownership interest in the equity affiliates until the underlying product is ultimately sold to an unrelated third party. Sales to equity affiliates were $ 226 million , $262 million and $229 million for the years ended September 30, 2018 , 2017 and 2016 , respectively. The deferred portion of profit generated from sales to equity affiliates was $1 million at September 30, 2018 and $2 million at September 30, 2017 . Exchange and Rental Assets Exchange and rental assets consist primarily of Company products that are either exchanged or rented to customers on a short-term basis in connection with warranty and other service related activities. These assets are recorded at acquisition or production cost and depreciated using the straight-line method over their estimated lives, up to 15 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Depreciation expense for exchange and rental assets was $11 million , $10 million and $9 million for the years ended September 30, 2018 , 2017 and 2016 , respectively. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-term Debt (in millions, except weighted average amounts) September 30, September 30, Short-term commercial paper borrowings outstanding (1) $ 1,500 $ 330 Current portion of long-term debt 748 149 Short-term debt $ 2,248 $ 479 Weighted average annualized interest rate of commercial paper borrowings 2.42 % 1.45 % Weighted average maturity period of commercial paper borrowings (days) 9 18 (1) The maximum amount of short-term commercial paper borrowings outstanding during the year ended September 30, 2018 was $1.5 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 five -year revolving credit facility. Revolving Credit Facilities The Company has a $1.5 billion five -year senior unsecured revolving credit agreement with various banks. At September 30, 2018 and 2017 , there were no outstanding borrowings under the Company's revolving credit facility. Short-term credit facilities available to non-U.S. subsidiaries amounted to $20 million as of September 30, 2018 , of which $2 million was utilized to support commitments in the form of commercial letters of credit. At September 30, 2018 and 2017 , there were no borrowings outstanding under these credit facilities. At September 30, 2018 and September 30, 2017 , 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 notes issued to finance a portion of the B/E Aerospace acquisition. Long-term Debt 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 September 30, 2018 , borrowings under this facility were $481 million and bear interest at LIBOR plus 1.25 percent amortized in equal quarterly installments of 2.5 percent , or $38 million , with the balance payable on April 13, 2020. During the year ended September 30, 2018 , the Company made principal prepayments of $238 million in accordance with the loan's prepayment provisions. 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 65 percent (excluding the equity impact of accumulated other comprehensive loss related to defined benefit retirement plans). The Company was in compliance with this financial covenant at September 30, 2018 . The credit facilities also contain covenants that require the Company to satisfy certain conditions in order to incur debt secured by liens, engage in sale/leaseback transactions or merge or consolidate with another entity. 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 September 30, September 30, 2017 Fixed-rate notes due: July 2019 1.95% $ 300 $ 300 July 2019 5.25% 300 300 November 2021 3.10% 250 250 March 2022 2.80% 1,100 1,100 December 2023 3.70% 400 400 March 2024 3.20% 950 950 March 2027 3.50% 1,300 1,300 December 2043 4.80% 400 400 April 2047 4.35% 1,000 1,000 Variable-rate term loan due: April 2020 1 month LIBOR + 1.25% (1) 481 870 Fair value swap adjustment (Notes 14 and 15) (2 ) 14 Total 6,479 6,884 Less unamortized debt issuance costs and discounts 50 59 Less current portion of long-term debt 748 149 Long-term Debt, Net $ 5,681 $ 6,676 (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 fourth quarter of 2018 . The one-month LIBOR rate at September 30, 2018 was approximately 2.26 percent. Cash payments for debt interest and fees during the year ended September 30, 2018 were $249 million . Cash payments for debt interest and fees during the year ended September 30, 2017 were $192 million , of which $29 million related to fees incurred in connection with the bridge credit facility. Cash payments for debt interest and fees during the year ended September 30, 2016 were $56 million . |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [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. Pension Benefits The Company historically provided pension benefits to most of the Company's U.S. employees in the form of non-contributory, defined benefit plans that are considered qualified plans under applicable laws. The benefits provided under these plans for salaried employees are generally based on years of service and average compensation. The benefits provided under these plans for hourly employees are generally based on specified benefit amounts and years of service. In addition, the Company sponsors an unfunded non-qualified defined benefit plan for certain employees. In 2018, five of the Company's eight collective bargaining agreements were negotiated and participation in the Rockwell Collins Pension Plan is now closed to newly hired employees pursuant to those negotiations. The individuals covered by the agreements will instead receive supplemental Company contributions to the existing defined contribution savings plan. The Company previously amended its U.S. qualified and non-qualified defined benefit pension plans to discontinue benefit accruals for salary increases and services rendered after September 30, 2006 for all salaried and hourly employees who were not covered by collective bargaining agreements. The Company also maintains six defined benefit pension plans in countries outside of the U.S., three of which are unfunded. Other Retirement Benefits Other retirement benefits consist of retiree health care and life insurance benefits that are provided to substantially all of the Company's U.S. employees hired before October 1, 2006 and their beneficiaries. Employees generally become eligible to receive these benefits if they retire after age 55 with at least 10 years of service. Most plans are contributory with retiree contributions generally based upon years of service and adjusted annually by the Company. Retiree medical plans pay a stated percentage of expenses reduced by deductibles and other coverage. The amount the Company will contribute toward retiree medical coverage for most participants is fixed. Additional premium contributions will be required from participants for all costs in excess of the Company's fixed contribution amount. 2018 bargaining unit negotiations closed participation in the retiree health plan to certain newly hired employees and in some instances to individuals retiring after specified dates ranging from 2020 to 2022. Retiree life insurance plans provide coverage at a flat dollar amount or as a multiple of salary. With the exception of certain bargaining unit plans, Other Retirement Benefits are funded as expenses are incurred. Components of Expense (Income) The components of expense (income) for Pension Benefits and Other Retirement Benefits are summarized below: Pension Benefits Other Retirement Benefits (in millions) 2018 2017 2016 2018 2017 2016 Service cost $ 12 $ 13 $ 11 $ 2 $ 3 $ 3 Interest cost 120 111 126 6 5 6 Expected return on plan assets (243 ) (241 ) (238 ) (2 ) (2 ) (2 ) Amortization: Prior service credit — — (1 ) — (1 ) (1 ) Net actuarial loss 82 92 78 7 9 8 Net benefit expense (income) $ (29 ) $ (25 ) $ (24 ) $ 13 $ 14 $ 14 A spot rate approach, which applies separate discount rates for each projected benefit payment, has been used to calculate pension interest and service cost. Funded Status and Net Liability The Company recognizes the unfunded status of defined benefit retirement plans on the Consolidated Statement of Financial Position as Retirement Benefits. The current portion of the liability is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next twelve months exceeds the fair value of the plan assets and is reflected in Compensation and benefits in the Consolidated Statement of Financial Position. The following table reconciles the projected benefit obligations (PBO), plan assets, funded status and net liability for the Company's Pension Benefits and Other Retirement Benefits: Pension Benefits Other Retirement Benefits (in millions) 2018 2017 2018 2017 PBO at beginning of period $ 4,202 $ 4,527 $ 213 $ 231 Service cost 12 13 2 3 Interest cost 120 111 6 5 Discount rate and other assumption changes (200 ) (156 ) (9 ) (7 ) Actuarial losses (gains) 9 4 (5 ) (6 ) Plan participant contributions — — 4 4 Benefits paid (219 ) (223 ) (14 ) (17 ) Group annuity purchase — (101 ) — — Plan amendments (11 ) — (7 ) — B/E Aerospace acquisition — 16 — — Other (5 ) 11 — — PBO at end of period 3,908 4,202 190 213 Plan assets at beginning of period 3,186 3,074 20 19 Actual return on plan assets 120 362 2 2 Company contributions 467 68 9 12 Plan participant contributions — — 4 4 Benefits paid (219 ) (223 ) (14 ) (17 ) Group annuity purchase — (103 ) — — B/E Aerospace acquisition — 4 — — Other (2 ) 4 — — Plan assets at end of period 3,552 3,186 21 20 Funded status of plans $ (356 ) $ (1,016 ) $ (169 ) $ (193 ) Funded status consists of: Retirement benefits liability $ (356 ) $ (1,015 ) $ (169 ) $ (193 ) Compensation and benefits liability (12 ) (11 ) — — Other assets 12 10 — — Net liability $ (356 ) $ (1,016 ) $ (169 ) $ (193 ) In July 2017, an agreement to purchase a group annuity contract was entered into by the Company's pension plan. The pension plan transferred $103 million of plan assets to an insurance company. The agreement resulted in a reduction of the Company's PBO by $101 million and transferred the administrative responsibilities for these participants to the insurance company. For the Company's 2017 year end pension liability valuation, the Company used the RP-2014 tables with an adjustment for plan experience, and utilized the MP-2016 mortality improvement scale adjusted to reflect convergence to an ultimate annual rate of mortality improvement of 0.75 percent by 2032. For the 2018 year end pension liability valuation, the Company continued to use the RP-2014 tables with an adjustment for plan experience, but utilized the MP-2017 mortality improvement scale adjusted to reflect convergence to an ultimate annual rate of mortality improvement of 0.75 percent by 2033. Both the MP-2016 and MP-2017 mortality improvement scales indicate that U.S. mortality continues to improve, but at a slower average rate. The Company's non-U.S. defined benefit pension plans represented 5 percent of the total PBO at September 30, 2018 and 2017 , respectively. The accumulated benefit obligation for all defined benefit pension plans was $3.903 billion and $4.185 billion at September 30, 2018 and 2017 , respectively. Other Comprehensive Loss The following table summarizes the amounts included in Accumulated other comprehensive loss before tax related to retirement benefits as of September 30, 2018 and 2017 and changes recognized in Other comprehensive loss before tax for the years ended September 30, 2018 and 2017 : Pension Benefits Other Retirement Benefits (in millions) Prior Service Cost (Credit) Net Actuarial Loss Prior Service Cost (Credit) Net Actuarial Loss Balance at September 30, 2016 $ 10 $ 2,751 $ (5 ) $ 116 Current year prior service cost — — — — Current year net actuarial gain — (270 ) — (13 ) Amortization of prior service cost — — 1 — Amortization of actuarial loss — (92 ) — (9 ) Balance at September 30, 2017 10 2,389 (4 ) 94 Current year prior service cost (11 ) — (6 ) — Current year net actuarial gain — (70 ) — (14 ) Amortization of prior service cost — — — — Amortization of actuarial loss — (82 ) — (7 ) Balance at September 30, 2018 $ (1 ) $ 2,237 $ (10 ) $ 73 The estimated amounts that will be amortized from Accumulated other comprehensive loss into expense (income) for Pension Benefits and Other Retirement Benefits during the year ending September 30, 2019 are as follows: (in millions) Pension Benefits Other Retirement Benefits Total Prior service cost $ — $ (2 ) $ (2 ) Net actuarial loss 75 5 80 Total $ 75 $ 3 $ 78 Actuarial Assumptions The following table presents the significant assumptions used in determining the benefit obligations: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2018 2017 2018 2017 2018 2017 Discount rate 4.02 % 3.53 % 2.28 % 2.29 % 3.94 % 3.39 % Compensation increase rate 4.00 % 4.00 % 2.89 % 3.05 % 4.00 % 4.00 % Discount rates used to calculate the benefit obligations are determined by using a weighted average of market-observed yields for high quality, fixed-income securities that correspond to the payment of benefits. The Company's U.S. qualified and non-qualified plans were previously amended to discontinue benefit accruals for salary increases and services rendered after 2006 for non-union employees. 2018 bargaining unit negotiations closed participation in the Rockwell Collins Pension Plan to certain newly hired employees. In the U.S., certain sub-plans associated with collective bargaining agreements continue to accrue benefits, and only the ARINC Union sub-plan is impacted by increases in compensation. Significant assumptions used in determining the net benefit expense (income) are as follows: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2018 2017 2018 2017 2018 2017 Discount rate 3.53 % 3.22 % 2.29 % 1.72 % 3.39 % 3.39 % Expected long-term return on plan assets 8.00 % 8.00 % 6.73 % 6.74 % 8.00 % 8.00 % Compensation increase rate 4.00 % 4.00 % 3.05 % 3.03 % 4.00 % 4.00 % Health care cost gross trend rate (1) — — — — 7.50 % 7.50 % Ultimate trend rate (1) — — — — 5.00 % 5.00 % Year that trend reaches ultimate rate (1) — — — — 2022 2022 (1) Due to the effect of the fixed Company contribution, increasing or decreasing the health care cost trend rate by one percentage point would not have a significant impact on the Company's cost of providing Other Retirement Benefits. Expected long-term return on plan assets for each year presented is based on both historical long-term actual and expected future investment returns considering the current investment mix of plan assets. The Company uses a market-related value of plan assets reflecting changes in the fair value of plan assets over a five-year period. The Company amortizes actuarial gains and losses in excess of 10 percent of the greater of the market-related value of plan assets or the projected benefit obligation (the corridor) on a straight-line basis over the expected future lifetime of inactive participants, which was approximately 24 years at September 30, 2018 , as almost all of the plan's participants are considered inactive. Prior service costs resulting from plan amendments are amortized in equal annual amounts over the average remaining service period of affected active participants or over the remaining life expectancy of affected retired participants. Plan Assets Total plan assets for Pension Benefits and Other Retirement Benefits as of September 30, 2018 and 2017 were $3.573 billion and $3.206 billion , respectively. The Company has established investment objectives that seek to preserve and maximize the amount of plan assets available to pay plan benefits. These objectives are achieved through investment guidelines requiring diversification and allocation strategies designed to maximize the long-term returns on plan assets while maintaining a prudent level of investment risk. These investment strategies are implemented using actively managed and indexed assets. Target and actual asset allocations as of September 30, 2018 and 2017 are as follows: Target Mix 2018 2017 Equities 40 % - 70 % 52 % 57 % Fixed income 25 % - 60 % 46 % 40 % Alternative investments 0 % - 15 % 0 % 0 % Cash 0 % - 5 % 2 % 3 % Alternative investments may include real estate, hedge funds, venture capital and private equity. There were no plan assets invested in the securities of the Company as of September 30, 2018 and 2017 or at any time during the years then ended. Target and actual asset allocations are periodically rebalanced between asset classes in order to mitigate investment risk and maintain asset classes within target allocations. The following table presents the fair value of the Company's pension plans' assets as of September 30, 2018 and 2017 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2018 September 30, 2017 Asset category (in millions) Level 1 Level 2 Level 3 Not Leveled (1) Total Level 1 Level 2 Level 3 Not Leveled (1) Total Equity securities: U.S. equity $ 552 $ 8 $ — $ 592 $ 1,152 $ 558 $ 15 $ — $ 394 $ 967 Non-U.S. equity 693 10 — — 703 814 28 — — 842 Fixed income securities: Corporate 1 713 — 313 1,027 — 795 — 305 1,100 U.S. government 401 31 — 69 501 42 24 — 68 134 Mortgage and asset-backed — 1 — — 1 — 1 — — 1 Other — 29 3 75 107 — 50 3 — 53 Cash and cash equivalents — 47 — — 47 — 82 — — 82 Sub-total $ 1,647 $ 839 $ 3 $ 1,049 3,538 $ 1,414 $ 995 $ 3 $ 767 3,179 Net receivables related to investment transactions 14 7 Total (2) $ 3,552 $ 3,186 (1) Certain investments measured using the net asset value (NAV) practical expedient have not been classified in the fair value hierarchy. (2) The Rockwell Collins Pension Plan participates in a securities lending program through its Trustee. Under this program, the Plan's investment securities may be loaned to investment brokers for a fee. Securities so loaned are fully collateralized by cash, letters of credit and securities issued or guaranteed by the U.S. government, its agencies and instrumentalities. At September 30, 2018 and 2017, $424 million and $333 million , respectively, of the Plan's securities were on loan under the Trustee's securities lending program. The following table presents the fair value of the Company's other retirement benefits plan's assets as of September 30, 2018 and 2017 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2018 September 30, 2017 Asset category (in millions) Level 1 Level 2 Level 3 Not Leveled Total Level 1 Level 2 Level 3 Not Leveled Total Equity securities: U.S. equity $ 11 $ — $ — $ — $ 11 $ 9 $ — $ — $ — $ 9 Non-U.S. equity — — — — — — — — — — Fixed income securities: Corporate — 3 — — 3 — 3 — — 3 U.S. government 2 1 — — 3 2 1 — — 3 Mortgage and asset-backed — 1 — — 1 — 1 — — 1 Cash and cash equivalents — 3 — — 3 — 4 — — 4 Total $ 13 $ 8 $ — $ — $ 21 $ 11 $ 9 $ — $ — $ 20 Valuation Techniques Level 1 assets for the pension plans and other retirement benefits plan are primarily comprised of equity and fixed income securities. Level 1 equity securities are actively traded on U.S. and non-U.S. exchanges and are valued using the market approach at quoted market prices on the measurement date. Level 1 fixed income securities are valued using quoted market prices. Level 2 equity securities contain equity funds that hold investments with values based on quoted market prices, but for which the funds are not valued on a quoted market basis. Level 2 fixed income securities are primarily valued using pricing models that use observable market data or bids provided by independent investment brokerage firms. Cash and cash equivalents includes cash which is used to pay benefits and cash invested in a short-term investment fund that holds securities with values based on quoted market prices, but for which the funds are not valued on a quoted market basis. As such, the cash and cash equivalents in our pension and other retirement plan assets are classified as Level 2 in the tables above. The Level 3 assets represent general insurance company contracts in the pension plans and are not significant. As described in Note 14, the fair value of a Level 3 asset is derived from unobservable inputs that are based on the Company's own assumptions. Contributions For the years ended September 30, 2018 and 2017 , the Company made contributions to its pension plans as follows: (in millions) 2018 2017 Contributions to U.S. qualified plans $ 455 $ 55 Contributions to U.S. non-qualified plan 8 8 Contributions to non-U.S. plans 4 5 Total $ 467 $ 68 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. The year over year increase in contributions to U.S. qualified pension plans were discretionary in nature and made by the Company to achieve a tax deduction and reduce future Pension Benefit Guaranty Corporation premiums. There is no minimum statutory funding requirement for 2019 and the Company does not currently expect to make any additional discretionary contributions during 2019 to these plans. Any additional future contributions necessary to satisfy minimum statutory funding requirements are dependent upon actual plan asset returns, interest rates and actuarial assumptions. The Company participates in a multi-employer arrangement that provides postretirement benefits other than pension benefits. This arrangement provides medical benefits to certain bargaining unit active employees and retirees and their dependents. Contributions to this multi-employer arrangement for postretirement benefits were $1 million in 2018 , $1 million in 2017 and $1 million in 2016 . Benefit Payments The following table reflects estimated benefit payments to be made to eligible participants for each of the next five years and the following five years in the aggregate: (in millions) Pension Benefits Other Retirement Benefits 2019 $ 245 $ 15 2020 240 15 2021 242 16 2022 244 16 2023 246 16 2024-2028 1,228 69 Estimated benefit payments for Other Retirement Benefits in the table above are shown net of plan participant contributions and therefore reflect the Company's portion only. Substantially all of the Pension Benefit payments relate to the Company's U.S. qualified funded plans which are paid from the pension trust. Defined Contribution Savings Plan The Company sponsors defined contribution savings plans that are available to the majority of its employees. The plans allow employees to contribute a portion of their compensation on a pre-tax and/or after-tax basis in accordance with specified guidelines. For most plans, the Company matches a percentage of employee contributions using common stock of the Company up to certain limits. Employees may transfer at any time all or a portion of their balance in Company common stock to any of the other investment options offered within the plans. The Company is authorized to issue 16.8 million shares under the defined contribution savings plans, of which 0.4 million shares are available for future contributions at September 30, 2018 . Additionally, for the majority of the Company's employees, the Company's defined contribution savings plan includes a cash contribution based on an employee's age and service. The Company's expense related to the defined contribution savings plans for 2018 , 2017 and 2016 was as follows: 2018 2017 2016 (in millions) Shares Expense Shares Expense Shares Expense Contribution in shares 0.4 $ 58 0.5 $ 56 0.6 $ 49 Contribution in cash 69 54 46 Total $ 127 $ 110 $ 95 The Company's cash contributions for 2018 and 2017 include $11 million and $5 million respectively to the B/E Aerospace defined contribution savings plan. Employee Stock Purchase Plan The Company also offered an Employee Stock Purchase Plan (ESPP) which allowed employees to have their base compensation withheld to purchase the Company's common stock each month at 95 percent of the fair market value on the last day of the month. The ESPP is considered a non-compensatory plan and accordingly no compensation expense is recorded in connection with this benefit. During 2018 , 2017 and 2016 , 0.0 million , 0.1 million and 0.1 million shares, respectively, of Company common stock were issued to employees at a value of $0 million , $11 million and $11 million for the respective periods. Further purchases under the ESPP were suspended on September 29, 2017 pursuant to the Merger Agreement. If the UTC Merger is completed, the ESPP will be terminated. |
Shareowners' Equity
Shareowners' Equity | 12 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareowners' Equity | Shareowners' Equity Common Stock The Company is authorized to issue one billion shares of common stock, par value $0.01 per share, and 25 million shares of preferred stock, without par value. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss (AOCL), net of tax, by component are as follows: Foreign Exchange Translation and Other Adjustments Pension and Other Postretirement Adjustments (1) Change in the Fair Value of Effective Cash Flow Hedges Total Balance at September 30, 2015 $ (56 ) $ (1,637 ) $ (6 ) $ (1,699 ) Other comprehensive (loss) before reclassifications (20 ) (234 ) (2 ) (256 ) Amounts reclassified from accumulated other comprehensive income — 53 4 57 Net current period other comprehensive income (loss) (20 ) (181 ) 2 (199 ) Balance at September 30, 2016 (76 ) (1,818 ) (4 ) (1,898 ) Other comprehensive income before reclassifications 77 180 1 258 Amounts reclassified from accumulated other comprehensive income — 63 2 65 Net current period other comprehensive income 77 243 3 323 Balance at September 30, 2017 1 (1,575 ) (1 ) (1,575 ) Other comprehensive income (loss) before reclassifications (39 ) 79 (1 ) 39 Amounts reclassified from accumulated other comprehensive income — 65 — 65 Net current period other comprehensive income (loss) (39 ) 144 (1 ) 104 Balance at September 30, 2018 $ (38 ) $ (1,431 ) $ (2 ) $ (1,471 ) (1) Reclassifications from AOCL to net income related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans and were $ 89 million ($ 65 million net of tax), $100 million ( $63 million net of tax) and $84 million ( $53 million net of tax) for 2018 , 2017 and 2016 , respectively. The reclassifications are included in the computation of net benefit expense. See Note 10, Retirement Benefits, for additional details. |
Stock-Based Compensation and Ea
Stock-Based Compensation and Earnings Per Share | 12 Months Ended |
Sep. 30, 2018 | |
Stock Based Compensation and Earnings Per Share Abstract | |
Stock-Based Compensation and Earnings Per Share | Stock-Based Compensation and Earnings Per Share Stock-Based Compensation Program Description In February 2015, the Company's shareholders approved the Company's 2015 Long-Term Incentives Plan (2015 Plan), replacing the 2006 Long-Term Incentives Plan (2006 Plan). Under the 2015 Plan, up to 11 million shares of common stock may be issued by the Company as non-qualified options, performance units, performance shares, stock appreciation rights, restricted shares and restricted stock units. Each share issued pursuant to an award of restricted shares, restricted stock units, performance shares and performance units counts as 3.55 shares against the authorized limit. Shares available for future grant or payment under these plans were 5 million at September 30, 2018 . No shares are available for future grant under the 2006 Plan. Options to purchase common stock of the Company have been granted under various incentive plans to directors, officers and other key employees. All of the Company's stock-based incentive plans require options to be granted at prices equal to or above the fair market value of the common stock on the dates the options are granted. The plans provide that the option price for certain options granted under the plans may be paid by the employee in cash, shares of common stock or a combination thereof. Option awards provide for accelerated vesting if there is a termination of employment in connection with a change in control. Stock options generally expire 10 years from the date they are granted and generally vest ratably over three years. The Company utilizes performance shares, restricted stock and restricted stock units that generally cliff vest at the end of three years. The fair value of restricted stock and restricted stock units is estimated using the closing share price on the day of grant. The number of performance shares that will ultimately be issued is based on achievement of performance targets over a three-year period that consider cumulative sales growth and free cash flow as a percentage of net income or free cash flow with an additional potential adjustment up or down depending on the Company's total return to shareowners compared to a group of peer companies. The fair value of performance shares is estimated using a Monte Carlo model that considers the likelihood of a payout adjustment for the total shareowner return in comparison to the peer group. Up to 240 percent of the performance shares the Company grants can be earned if maximum performance is achieved. The Company's stock-based compensation awards are designed to align management's interests with those of the Company's shareowners and to reward outstanding Company performance. The Company has an ongoing share repurchase plan and expects to satisfy stock option exercises and stock award issuances from treasury stock. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Total stock-based compensation expense and related income tax benefit included within the Consolidated Statement of Operations for 2018 , 2017 and 2016 is as follows: (in millions) 2018 2017 2016 Stock-based compensation expense included in: Product cost of sales $ 8 $ 9 $ 8 Selling, general and administrative expenses 27 22 19 Total $ 35 $ 31 $ 27 Income tax benefit $ 9 $ 10 $ 9 General Option Information The following summarizes the activity of the Company's stock options for 2018 : Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2017 3,478 $ 71.67 Granted — — Exercised (1,057 ) 59.82 Forfeited or expired (5 ) 87.99 Outstanding at September 30, 2018 2,416 $ 76.82 5.8 $ 154 Vested or expected to vest (1) 2,413 $ 76.81 5.8 $ 154 Exercisable at September 30, 2018 1,782 $ 72.75 5.1 $ 121 (1) Represents outstanding options reduced by expected forfeitures 2018 2017 2016 Weighted-average fair value per share of options granted $ — $ 17.26 $ 17.75 Intrinsic value of options exercised (in millions) (2) $ 80 $ 49 $ 13 (2) Represents the amount by which the stock price exceeded the exercise price of the options on the date of the exercise The total fair value of options vested was $11 million , $10 million and $10 million during the years ended September 30, 2018 , 2017 and 2016 , respectively. Total unrecognized compensation expense for options that have not vested as of September 30, 2018 is $2 million and will be recognized over a weighted average period of 0.5 years. Stock Option Fair Value Information The Company's determination of the fair value of option awards on the date of grant using an option-pricing model is affected by the Company's stock price as well as assumptions regarding a number of subjective variables. These assumptions include: the Company's expected stock price volatility, the projected employee stock option exercise term, the expected dividend yield and the risk-free interest rate. Changes in these assumptions can materially affect the estimated value of the stock options. The fair value of each option granted by the Company was estimated using a binomial lattice pricing model and the following weighted average assumptions: 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 The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding. The binomial lattice model assumes that employees' exercise behavior is a function of the option's remaining expected life and the extent to which the option is in-the-money. The binomial lattice model estimates the probability of exercise as a function of these two variables based on the entire history of exercises and forfeitures on all past option grants made by the Company. Performance Shares, Restricted Stock and Restricted Stock Units Information The following summarizes the Company's performance shares, restricted stock and restricted stock units for 2018 : Performance Shares Restricted Stock Restricted Stock Units (shares in thousands) Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Nonvested at September 30, 2017 370 $ 85.44 23 $ 30.24 512 $ 80.56 Granted 142 138.66 — — 265 133.60 Vested (120 ) 82.77 — — (113 ) 91.28 Forfeited (9 ) 120.03 — — (31 ) 111.13 Nonvested at September 30, 2018 383 $ 105.25 23 $ 30.24 633 $ 99.16 (in millions) Performance Shares Restricted Stock Restricted Stock Units Total unrecognized compensation costs at September 30, 2018 $ 17 $ — $ 30 Weighted-average life remaining at September 30, 2018, in years 1.0 0 1.1 Weighted-average fair value per share granted in 2017 $ 88.25 $ — $ 92.84 Weighted-average fair value per share granted in 2016 $ 85.13 $ — $ 85.85 The maximum number of shares of common stock that can be issued in respect of performance shares granted in 2018 based on the achievement of performance targets for 2018 through 2020 is approximately 328,000 . 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 2017 through 2019 is approximately 299,000 . For purposes of determining the maximum number of shares of common stock that can be issued with respect to the performance shares granted in 2017 and 2018 , the maximums have been updated to reflect reductions arising as a result of terminations and retirements. The number of shares of common stock that will be issued in respect of performance shares granted in 2016 based on the achievement of performance targets for 2016 through 2018 is approximately 159,000 . Earnings Per Share and Diluted Share Equivalents The computation of basic and diluted earnings per share is as follows: (in millions, except per share amounts) 2018 2017 2016 Numerator for basic and diluted earnings per share: Income from continuing operations $ 1,032 $ 705 $ 727 Income from discontinued operations, net of taxes — — 1 Net income $ 1,032 $ 705 $ 728 Denominator: Denominator for basic earnings per share – weighted average common shares 164.0 145.5 130.5 Effect of dilutive securities: Stock options 1.2 1.2 1.0 Performance shares, restricted stock and restricted stock units 0.6 0.5 0.6 Dilutive potential common shares 1.8 1.7 1.6 Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion 165.8 147.2 132.1 Earnings per share: Basic Continuing operations $ 6.29 $ 4.85 $ 5.57 Discontinued operations — — 0.01 Basic earnings per share $ 6.29 $ 4.85 $ 5.58 Diluted Continuing operations $ 6.22 $ 4.79 $ 5.50 Discontinued operations — — 0.01 Diluted earnings per share $ 6.22 $ 4.79 $ 5.51 The Company adopted the new standard on accounting for share-based payments (see Note 2) during 2016. This standard requires excess tax benefits or deficiencies associated with share-based payments to be recorded as a discrete income tax benefit or expense in the period incurred, rather than within Additional paid-in capital. The new standard also requires excess tax benefits and deficiencies to be excluded from assumed future proceeds in the calculation of diluted shares outstanding. The Company adopted the standard prospectively, resulting in a $4 million and $0.02 increase to net income from continuing operations and diluted earnings per share from continuing operations, respectively, in 2016. The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period. Stock options excluded from the average outstanding diluted shares calculation were 0.0 million , 0.0 million and 0.6 million in 2018 , 2017 and 2016 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the Act). The Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits and deductions for individuals and businesses. For businesses, the Act reduces the corporate federal tax rate from a maximum of 35.0 percent to a flat 21.0 percent rate, effective January 1, 2018, and transitions from a worldwide tax system to a modified territorial tax system. The Act also adds many new provisions including changes to bonus depreciation, changes to the deduction for executive compensation and interest expense, a tax on global intangible low-taxed income (GILTI), the base erosion anti-abuse tax (BEAT) and a deduction for foreign-derived intangible income (FDII). Many of these provisions, including the tax on GILTI, the BEAT and the deduction for FDII, do not apply to the Company until 2019 and the Company continues to assess the impact of these provisions. The Company has elected to account for the tax on GILTI as a period cost and thus has not adjusted any of the deferred tax assets/liabilities of its foreign subsidiaries for the new tax. The two material items that impact the Company for 2018 are the reduction in the tax rate and a one-time tax that is imposed on the Company’s unremitted foreign earnings. On December 22, 2017, the SEC issued Staff Accounting Bulletin 118 that provides additional guidance allowing companies to use a one year measurement period, similar to that used in business combinations, to account for the impacts of the Act in their financial statements. As of the end of the fiscal year, the Company has accounted for the impacts of the Act, including the use of reasonable estimates where necessary. The Company may continue to refine its estimates throughout the measurement period. Due to the Company’s fiscal year, the Company’s 2018 blended U.S. federal statutory tax rate was 24.6 percent. The Company’s U.S. federal statutory tax rate will be 21.0 percent starting in 2019. The Company completed its analysis of the rate impact on the deferred tax accounts due to the reduction in the U.S. corporate income tax rate from 35.0 percent to 21.0 percent under the Act in prior quarters which resulted in a $ 154 million reduction in deferred tax liabilities. As of the December 31, 2017 deemed repatriation date, the Company estimates that it had approximately $ 1.1 billion of unremitted foreign earnings that would be subject to the tax imposed under Section 965 of the Internal Revenue Code. The Act imposes a tax on these earnings at either a 15.5 percent rate or an 8.0 percent rate. The higher rate applies to the extent the Company's foreign subsidiaries have cash and cash equivalents at certain measurement dates, whereas the lower rate applies to any earnings that are in excess of the cash and cash equivalents balance. After accounting for foreign tax credits related to the deemed repatriated earnings, the Company estimates the tax liability to be approximately $ 69 million and has recorded $ 24 million of tax expense. Before the purchase price allocation was finalized in the second quarter of 2018, the Company determined that $250 million of certain B/E Aerospace unremitted earnings previously deemed to be permanently reinvested are now available to be repatriated. In connection with this determination, the Company reclassified $ 35 million of its deferred tax liability to its income tax payable. Additionally, as a result of Section 965, the Company reversed $10 million of an uncertain tax liability. The Company’s accounting for the tax on unremitted foreign earnings is incomplete due to the complexity of determining the various components of the calculation. Some of the information necessary to determine the amount of the tax includes the analysis of current year earnings and of the cash equivalents of its foreign subsidiaries. Income tax expense from continuing operations was calculated based on the following components of income before income taxes: (in millions) 2018 2017 2016 U.S. income $ 723 $ 688 $ 824 Non-U.S. income 389 243 111 Total $ 1,112 $ 931 $ 935 The components of income tax expense from continuing operations are as follows: (in millions) 2018 2017 2016 Current: U.S. federal $ (16 ) $ 97 $ 120 Non-U.S. 105 68 29 U.S. state and local 4 18 11 Total current 93 183 160 Deferred: U.S. federal (9 ) 48 47 Non-U.S. (16 ) (5 ) — U.S. state and local 12 — 1 Total deferred (13 ) 43 48 Income tax expense $ 80 $ 226 $ 208 The effective income tax rate from continuing operations differed from the U.S. statutory tax rate as detailed below: 2018 2017 2016 Statutory tax rate 24.6 % 35.0 % 35.0 % Impact of International Operations (0.7 ) (4.4 ) (0.6 ) State and local income taxes 0.7 1.6 1.1 Research and development credit (5.6 ) (5.0 ) (6.4 ) Domestic manufacturing deduction (0.6 ) (2.1 ) (2.0 ) U.S. Tax Reform (10.9 ) — — Non-deductible goodwill 1.3 — — Tax settlements (0.7 ) (0.1 ) — Stock compensation - excess tax benefits (1.8 ) (1.3 ) (0.4 ) Change in valuation allowance (0.1 ) 0.1 (4.5 ) Other 1.0 0.5 — Effective income tax rate 7.2 % 24.3 % 22.2 % The Company's operations in the Philippines have been granted various tax incentives that will begin to expire in 2019. The tax holiday allows for tax-free operations through various dates based on product lines, followed by a reduced income tax rate of 5 percent . Net income for 2018 increased $ 21 million ($ 0.13 per share) as a result of the tax holiday. Net long-term deferred income tax benefits (liabilities) consist of the tax effects of temporary differences related to the following: September 30 (in millions) 2018 2017 Inventory $ (176 ) $ (276 ) Product warranty costs 28 45 Customer incentives 31 66 Contract reserves 17 49 Retirement benefits 116 400 Intangibles (352 ) (602 ) Capital lease liability 11 19 Property (138 ) (196 ) Stock-based compensation 20 37 Deferred compensation 17 27 Compensation and benefits 17 38 Research and development credit carryforward 54 25 Valuation allowance (22 ) (23 ) Other 47 81 Deferred income taxes, net $ (330 ) $ (310 ) Management believes it is more likely than not that the deferred tax assets, except for certain net operating loss carryforwards and tax credit carryforwards, will be realized through the reduction of future taxable income. Significant factors considered by management in its determination of the probability of the realization of the deferred tax assets include: (a) the historical operating results of the Company ( $2.219 billion of U.S. taxable income over the past three years), (b) expectations of future earnings and (c) our ability to implement tax planning strategies. As of September 30, 2018 , the Company had state net operating loss carryforwards of $ 34 million which begin expiring in 2019, state tax credit carryforwards of $ 55 million which begin expiring in 2022, a foreign tax credit carryforward of $ 27 million which will begin to expire in 2027 and federal R&D credit carryforward of $ 17 million which will begin to expire in 2027. Changes in the valuation allowance for deferred tax assets are summarized as follows: September 30 (in millions) 2018 2017 2016 Balance at beginning of year $ 23 $ — $ 42 Charged to costs and expenses — 1 — B/E Aerospace acquisition — 22 — Deductions (1) (1 ) — (42 ) Balance at September 30 $ 22 $ 23 $ — (1) 2016 deduction of $42 million was primarily due to the creation of a tax planning strategy The Company's U.S. Federal income tax returns for the tax year ended September 30, 2013 and prior years have been audited by the IRS and are closed to further adjustments. 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 2014 calendar year. 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 has recorded a $ 14 million liability as of September 30, 2018 for U.S. federal or state income taxes, or additional non-U.S. income taxes related to approximately $ 250 million of undistributed earnings of non-U.S. subsidiaries which are available to be distributed to the United States. No provision has been made as of September 30, 2018 for U.S. federal or state income taxes, or additional non-U.S. income taxes related to approximately $ 1.058 billion of undistributed earnings of non-U.S. subsidiaries which have been or are intended to be permanently reinvested. Because of the complexities and uncertainties associated with the Act, it is not practicable to estimate the amount of tax that might be payable on the undistributed earnings. The Company had net income tax payments of $28 million , $230 million and $130 million in 2018 , 2017 and 2016 , respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: September 30 (in millions) 2018 2017 2016 Beginning balance $ 201 $ 45 $ 39 Additions for tax positions related to the current year 24 73 11 Additions for tax positions of prior years 16 1 7 Additions for tax positions related to acquisitions 1 86 — Reductions for tax positions of prior years (24 ) (1 ) (10 ) Reductions for tax positions related to settlements with taxing authorities (4 ) (3 ) (2 ) Ending balance $ 214 $ 201 $ 45 The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate was $200 million , $169 million and $20 million as of September 30, 2018 , 2017 and 2016 , respectively. Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months a reduction in unrecognized tax benefits may occur in the range of $0 to $44 million based on the outcome of tax examinations or as a result of the expiration of various statutes of limitations. The Company includes income tax-related interest and penalties in income tax expense. The total amount of interest and penalties recognized within Other Liabilities in the Consolidated Statement of Financial Position were $9 million and $8 million as of September 30, 2018 and 2017 , respectively. The total amount of interest and penalties recorded as an expense or (income) within Income tax expense in the Consolidated Statement of Operations was not significant for the years ended September 30, 2018 , 2017 and 2016 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The FASB defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The FASB’s guidance classifies the inputs used to measure fair value into the following hierarchy: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument Level 3 - unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and 2017 are as follows: September 30, 2018 September 30, 2017 (in millions) Fair Value Hierarchy Fair Value Asset (Liability) Fair Value Asset (Liability) Deferred compensation plan investments Level 1 $ 70 $ 63 Deferred compensation plan investments Level 2 27 24 Interest rate swap assets Level 2 1 14 Interest rate swap liabilities Level 2 (3 ) — Foreign currency forward exchange contract assets Level 2 — 8 Foreign currency forward exchange contract liabilities Level 2 — (7 ) Acquisition-related contingent consideration Level 3 (14 ) (17 ) There were no transfers between Levels of the fair value hierarchy during 2018 or 2017 . In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities at fair value on a nonrecurring basis, generally as a result of acquisitions or the remeasurement of assets related to certain divestitures to reflect the contracted sales price. See Note 3 for further discussion of the fair value of assets and liabilities associated with acquisitions. See Note 4 for further discussion of the fair value of assets and liabilities associated with held for sale businesses. 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 September 30, 2018 , 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. As of September 30, 2018, contingent consideration represents the estimated fair value of post-closing consideration owed to the sellers associated with the International Communications Group (ICG) acquisition, which occurred on August 6, 2015. The final contingent consideration payment owed to the sellers associated with the Pulse.aero acquisition, which occurred on December 20, 2016, was made during the year ended September 30, 2018. 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, 2017 $ (17 ) Payment of contingent consideration (see Note 3) 3 Balance at September 30, 2018 $ (14 ) Financial Instruments The carrying amounts and fair values of the Company's financial instruments are as follows: Asset (Liability) September 30, 2018 September 30, 2017 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 738 $ 738 $ 703 $ 703 Short-term debt (2,248 ) (2,252 ) (479 ) (479 ) Long-term debt (5,683 ) (5,560 ) (6,662 ) (6,898 ) 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 is based on current market interest rates and estimates of current market conditions for instruments with similar terms, maturities and degree of risk. The carrying amount and fair value of short-term and long-term debt excludes the interest rate swaps fair value adjustment. These fair value estimates do not necessarily reflect the amounts the Company would realize in a current market exchange. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Sep. 30, 2018 | |
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 the 2019 and 2023 Swaps (the Swaps) as fair value hedges. The Swaps are recorded within Other Assets at a fair value of $1 million and Other Liabilities at a fair value of $ 3 million , offset by a fair value adjustment to Long-term Debt (Note 9) of $(2) million at September 30, 2018 . At September 30, 2017 , the Swaps were recorded within Other Assets at a fair value of $14 million , offset by a fair value adjustment to Long-term Debt (Note 9) of $14 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 September 30, 2018 and September 30, 2017 , the Company had outstanding foreign currency forward exchange contracts with notional amounts of $0 million and $1.312 billion , respectively. The decrease in the notional amount of outstanding foreign currency contracts is primarily due to the maturation of certain foreign currency contracts entered into to offset remeasurement of certain intercompany loans that matured in the current fiscal year. The 2017 notional values consist primarily of contracts for the British pound sterling and European euro, and are stated in U.S. dollar equivalents at spot exchange rates at September 30, 2017. Fair Value of Derivative Instruments Fair values of derivative instruments in the Consolidated Statement of Financial Position as of September 30, 2018 and 2017 are as follows: Asset Derivatives (in millions) Classification September 30, September 30, 2017 Foreign currency forward exchange contracts Other current assets $ — $ 8 Interest rate swaps Other assets 1 14 Total $ 1 $ 22 Liability Derivatives (in millions) Classification September 30, September 30, 2017 Foreign currency forward exchange contracts Other current liabilities $ — $ 7 Interest rate swaps Other liabilities 3 — Total $ 3 $ 7 The fair values of derivative instruments are presented on a gross basis as the Company does not have any derivative contracts which are subject to master netting arrangements. As of September 30, 2018 , there were no undesignated foreign currency forward exchange contracts classified within Other current assets or Other current liabilities. The effect of derivative instruments on the Consolidated Statement of Operations for the fiscal years ended September 30, 2018 and 2017 is as follows: Amount of Gain (Loss) (in millions) Location of Gain (Loss) September 30, September 30, 2017 Derivatives Designated as Hedging Instruments: Fair Value Hedges Interest rate swaps Interest expense $ 4 $ 8 Cash Flow Hedges Foreign currency forward exchange contracts: Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) AOCL (2 ) 1 Amount of (loss) reclassified from AOCL into income Cost of sales (1 ) (2 ) Derivatives Not Designated as Hedging Instruments: Foreign currency forward exchange contracts Cost of sales (16 ) (1 ) Foreign currency forward exchange contracts Transaction and integration costs (6 ) — There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the fiscal year ended September 30, 2018 . In addition, there was no significant impact to the Company’s earnings when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge during the fiscal year ended September 30, 2018 . The Company did not have any hedges with credit-risk-related contingent features or that required the posting of collateral as of September 30, 2018 . The cash flows from derivative contracts are recorded in operating activities in the Consolidated Statement of Cash Flows. The Company has no AOCL gains from cash flow hedges to reclassify into earnings over the next 12 months. |
Guarantees and Indemnifications
Guarantees and Indemnifications | 12 Months Ended |
Sep. 30, 2018 | |
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: September 30 (in millions) 2018 2017 2016 Balance at beginning of year $ 186 $ 87 $ 89 Warranty costs incurred (87 ) (61 ) (42 ) Product warranty accrual 106 59 46 Changes in estimates for prior years (9 ) (16 ) (6 ) Reclassification of business to held for sale (see Note 4) (2 ) — — Increase from acquisitions — 117 — Balance at September 30 $ 194 $ 186 $ 87 Letters of credit The Company has contingent commitments in the form of letters of credit. Outstanding letters of credit are issued by banks on the Company’s behalf to support certain contractual obligations to its customers. If the Company fails to meet these contractual obligations, these letters of credit may become liabilities of the Company. Total outstanding letters of credit at September 30, 2018 were $ 364 million . These commitments are not reflected as liabilities on the Company’s Consolidated Statement of Financial Position. Indemnifications The Company enters into indemnifications with lenders, counterparties in transactions, such as administration of employee benefit plans, and other customary indemnifications with third parties in the normal course of business. The following are other than customary indemnifications based on the judgment of management: In connection with agreements for the sale of portions of its business, the Company at times retains various liabilities of a business that relate to events occurring prior to its sale, such as tax, environmental, litigation and employment matters. The Company at times indemnifies the purchaser of a Rockwell Collins business in the event 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 its acquisition by the Company, 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. During the three months ended December 31, 2017, the Company received notification of the resolution of a competent authority filing between the U.K. and U.S. related to 2010 pre-acquisition U.K. tax adjustments. Pursuant to the Tax Sharing and Indemnification Agreement the Company accrued a $9 million payable to KLX through purchase accounting during the three months ended December 31, 2017. The amount the Company could be required to pay under its indemnification agreements is generally limited based on amounts specified in the underlying agreements, or in the case of some agreements, the maximum potential amount of future payments that could be required is not limited. When a potential claim is asserted under these agreements, the Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. A liability is recorded when a potential claim is both probable and estimable. The nature of these agreements prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay should counterparties to these agreements assert a claim; however, the Company currently has no material claims pending related to such agreements. |
Contractual Obligations and Oth
Contractual Obligations and Other Commitments | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligations and Other Commitments | Contractual Obligations and Other Commitments The following table reflects certain of the Company's non-cancelable contractual commitments as of September 30, 2018 : Payments Due By Period (in millions) 2019 2020 2021 2022 2023 Thereafter Total Non-cancelable operating leases $ 89 $ 75 $ 59 $ 49 $ 38 $ 196 $ 506 Purchase contracts 35 33 25 15 5 20 133 Long-term debt 750 331 — 1,350 — 4,050 6,481 Interest on long-term debt 231 200 192 173 153 1,600 2,549 Total $ 1,105 $ 639 $ 276 $ 1,587 $ 196 $ 5,866 $ 9,669 Non-cancelable Operating Leases The Company leases certain office and manufacturing facilities as well as certain machinery and equipment under various lease contracts with terms that meet the accounting definition of operating leases. Some leases include renewal options, which permit extensions of the expiration dates at rates approximating fair market rental rates. Rent expense for the years ended September 30, 2018 , 2017 and 2016 was $94 million , $84 million and $77 million , respectively. The Company's commitments under these operating leases, in the form of non-cancelable future lease payments, are not reflected as a liability on the Consolidated Statement of Financial Position. Purchase Contracts The Company may enter into purchase contracts with suppliers under which there is a commitment to buy a minimum amount of products or pay a specified amount. These commitments are not reflected as a liability on the Company's Consolidated Statement of Financial Position. Amounts purchased under these agreements for the years ended September 30, 2018 , 2017 and 2016 were $38 million , $41 million and $57 million , respectively. Interest on Long-term Debt Interest payments under long-term debt obligations exclude the potential effects of the related interest rate swap contracts. |
Environmental Matters
Environmental Matters | 12 Months Ended |
Sep. 30, 2018 | |
Environmental Remediation Obligations [Abstract] | |
Environmental Matters | Environmental Matters The Company is subject to federal, state and local regulations relating to the discharge of substances into the environment, the disposal of hazardous wastes and other activities affecting the environment that have had and will continue to have an impact on the Company’s manufacturing operations. These environmental protection regulations may require the investigation and remediation of environmental impairments at current and previously owned or leased properties. In addition, lawsuits, claims and proceedings have been asserted on occasion against the Company alleging violations of environmental protection regulations, or seeking remediation of alleged environmental impairments, principally at previously owned or leased properties. As of September 30, 2018 , the Company is involved in the investigation or remediation of ten 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 nine of these sites is not significant. Management estimates that the total reasonably possible future costs the Company could incur from one of these sites to be approximately $12 million . The Company has recorded environmental reserves for this site of $6 million as of September 30, 2018 , which represents management’s best estimate of the probable future cost for this site. To date, compliance with environmental regulations and resolution of environmental claims has been accomplished without material effect on the Company’s liquidity and capital resources, competitive position or financial condition. Management believes that expenditures for environmental capital investment and remediation necessary to comply with present regulations governing environmental protection and other expenditures for the resolution of environmental claims will not have a material effect on the Company’s business or financial position. |
Legal Matters
Legal Matters | 12 Months Ended |
Sep. 30, 2018 | |
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. Related to the acquisition and post-closing compliance review of B/E Aerospace, as previously disclosed, the Company identified and is investigating the circumstances surrounding an employee's submission of certain expense reports for customer entertainment and gifts that preceded the acquisition and do not appear to have complied with applicable company policy. In March 2018, the Company voluntarily notified the Department of Justice (DOJ) and SEC Division of Enforcement of its investigation. The Company's investigation into this and other customer related expenditures is ongoing, and the outcome or the consequences thereof cannot be predicted at this time. As of September 30, 2018, the Company employs approximately 3,100 employees under eight collective bargaining agreements. Five of the collective bargaining agreements, representing approximately 2,200 employees were negotiated in 2018. These new agreements have terms varying between 3 and 5 years. |
Restructuring and Impairment Ch
Restructuring and Impairment Charges and Settlement of a Contract Matter | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Restructuring and Impairment Charges and Settlement of a Contract Matter | Restructuring and Impairment Charges and Settlement of a Contract Matter During the year ended September 30, 2018 the Company recorded corporate charges of $39 million as follows: (in millions) Cost of Sales Other Income, Net Total Settlement of a contract matter $ 25 $ — $ 25 Asset impairment charges — 9 9 Employee separation costs 5 — 5 Total $ 30 $ 9 $ 39 The $25 million charge for the settlement of a contract matter was triggered by the anticipated divestiture of the ElectroMechanical Systems business and included impairment of $7 million and $4 million of Commercial Systems Pre-production engineering costs and Property, net, respectively (see Note 4). Asset impairment charges were due to the planned sale of SMR Technologies (see Note 4). The employee separation costs primarily resulted from the Company's decision to close a facility. At September 30, 2018, the $5 million employee separation costs were unpaid and included in Compensation and benefits on the Consolidated Statement of Financial Position. There were no corporate restructuring or asset impairment charges recorded during the year ended September 30, 2017. During the first quarter of 2016, the Company recorded corporate restructuring and asset impairment charges of $45 million as follows: (in millions) Cost of Sales Selling, General and Administrative Expenses Total Employee separation costs $ 31 $ 8 $ 39 Asset impairment charges 2 4 6 Total $ 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 relate 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 | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information Rockwell Collins designs, produces and supports cabin interior, communications and aviation systems and products for commercial and military customers and provides information management services through voice and data communication networks and solutions worldwide. The Company currently has four operating segments consisting of the Interior Systems, Commercial Systems, Government Systems and Information Management Services (IMS) businesses. In October 2018, the Company announced that IMS will become part of the Commercial Systems segment. This reorganization will enable the Company to further capitalize on customers' increasing need for aviation connectivity solutions. This change will require the Company to revise its segment reporting beginning in the first quarter of fiscal 2019 to report the IMS business within the Commercial Systems segment. Interior Systems manufactures cabin interior products for the commercial aircraft and business aviation markets. The Company sells products and provides services directly to virtually all of the world’s major airlines and aerospace manufacturers. Commercial Systems supplies aviation electronics systems, products and services to customers located throughout the world. The customer base is comprised of OEMs of commercial air transport, business and regional aircraft, commercial airlines and business aircraft operators. Government Systems provides communication and navigation products and avionics to the U.S. Department of Defense, state and local governments, other government agencies, civil agencies, defense contractors and foreign ministries of defense around the world. Information Management Services enables mission-critical data and voice communications throughout the world to customers using high-performance, high-quality and high-assurance proprietary radio and terrestrial networks, enhancing customer efficiency, safety and connectivity. Direct and indirect sales to the U.S. Government were 23 percent , 25 percent and 33 percent of total sales for the years ended September 30, 2018 , 2017 and 2016 , respectively. Sales to The Boeing Company represented 16 percent and 15 percent of total sales for the years ended September 30, 2018 and 2017, 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 impairment charges and other special items as identified by management from time to time. Intersegment sales are not material and have been eliminated. The accounting policies used in preparing the segment information are consistent with the policies described in Note 2. The sales and earnings of continuing operations of the Company's operating segments are summarized as follows: (in millions) 2018 2017 2016 Sales: Interior Systems $ 2,709 $ 1,302 $ — Commercial Systems 2,580 2,418 2,395 Government Systems 2,631 2,384 2,206 Information Management Services 745 718 658 Total sales $ 8,665 $ 6,822 $ 5,259 Segment operating earnings: Interior Systems $ 406 $ 168 $ — Commercial Systems 557 519 531 Government Systems 515 502 477 Information Management Services 138 137 107 Total segment operating earnings 1,616 1,326 1,115 Interest expense (1) (262 ) (187 ) (64 ) Stock-based compensation (35 ) (31 ) (27 ) General corporate, net (56 ) (57 ) (44 ) Restructuring and impairment charges and settlement of a contract matter (see Note 20) (39 ) — (45 ) Transaction and integration costs (1) (112 ) (120 ) — Income from continuing operations before income taxes 1,112 931 935 Income tax expense (80 ) (226 ) (208 ) Income from continuing operations $ 1,032 $ 705 $ 727 (1) During the year ended September 30, 2018 , the Company incurred $78 million of transaction and integration costs related to the B/E Aerospace acquisition and $34 million of transaction costs related to the proposed acquisition of Rockwell Collins by UTC. During the year ended September 30, 2017 , the Company incurred $96 million of transaction and integration costs related to the B/E Aerospace acquisition and $24 million of transaction costs related to the proposed acquisition of Rockwell Collins by UTC. During this period, the Company also incurred $29 million of bridge facility fees related to the B/E Aerospace acquisition, which are included in Interest expense. Therefore, total transaction, integration and financing costs during this period were $149 million . The following tables summarize the identifiable assets and investments in equity affiliates at September 30, 2018 , 2017 and 2016 , as well as the provision for depreciation and amortization, the amount of capital expenditures for property and earnings from equity affiliates for each of the three years ended September 30, for each of the operating segments and Corporate: (in millions) 2018 2017 2016 Identifiable assets: Interior Systems $ 9,534 $ 9,896 $ — Commercial Systems 3,817 3,124 3,050 Government Systems 2,802 2,156 2,052 Information Management Services 1,854 1,917 1,906 Corporate 1,019 904 691 Total identifiable assets $ 19,026 $ 17,997 $ 7,699 Investments in equity affiliates: Interior Systems $ — $ — $ — Commercial Systems — 1 4 Government Systems 5 6 6 Information Management Services — — — Total investments in equity affiliates $ 5 $ 7 $ 10 Depreciation and amortization: Interior Systems $ 129 $ 129 $ — Commercial Systems 160 132 125 Government Systems 93 80 74 Information Management Services 67 58 54 Total depreciation and amortization $ 449 $ 399 $ 253 Capital expenditures for property: Interior Systems $ 79 $ 41 $ — Commercial Systems 61 72 74 Government Systems 67 70 69 Information Management Services 50 57 50 Total capital expenditures for property $ 257 $ 240 $ 193 Earnings (loss) from equity affiliates: Interior Systems $ — $ — $ — Commercial Systems (1 ) (2 ) (3 ) Government Systems — — 2 Information Management Services — — — Total (loss) from equity affiliates $ (1 ) $ (2 ) $ (1 ) The Company's operating segments share many common resources, infrastructures and assets in the normal course of business. Certain assets have been allocated between the operating segments primarily based on occupancy or usage, principally property, plant and equipment. Identifiable assets at Corporate consist principally of cash, tax assets and deferred compensation plan investments for all years presented. The following table summarizes sales by product category for the years ended September 30, 2018 , 2017 and 2016 : (in millions) 2018 2017 2016 Interior Systems sales categories: Interior products and services $ 1,472 $ 717 $ — Aircraft seating 1,237 585 — Interior Systems sales 2,709 1,302 — Commercial Systems sales categories: Air transport aviation electronics 1,573 1,470 1,430 Business and regional aviation electronics 1,007 948 965 Commercial Systems sales 2,580 2,418 2,395 Government Systems sales categories: Avionics 1,503 1,472 1,483 Communication and navigation 1,128 912 723 Government Systems sales 2,631 2,384 2,206 Information Management Services sales 745 718 658 Total sales $ 8,665 $ 6,822 $ 5,259 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 years ended September 30, 2018 , 2017 and 2016 , sales for air transport aviation electronics include revenue from wide-body in-flight entertainment products and services of $ 15 million , $ 19 million and $38 million , respectively. The Government Systems avionics and communication and navigation sales categories are delineated based upon underlying product technologies. The following table reflects sales for the years ended September 30, 2018 , 2017 and 2016 by location of the Company's customers and property at September 30, 2018 , 2017 and 2016 by geographic region: Sales Property (in millions) 2018 2017 2016 2018 2017 2016 U.S. (1) $ 4,666 $ 3,873 $ 3,292 $ 1,131 $ 1,134 $ 921 Europe / Africa / Middle East 2,315 1,607 937 153 152 86 Asia-Pacific 1,064 787 545 129 94 17 Americas, excluding U.S. 620 555 485 16 18 11 Non U.S. 3,999 2,949 1,967 298 264 114 Total $ 8,665 $ 6,822 $ 5,259 $ 1,429 $ 1,398 $ 1,035 (1) For the years ended September 30, 2018 , 2017 and 2016 , U.S. sales include revenue from foreign military sales of $163 million , $139 million and $171 million , respectively. Sales are attributable to geographic region based on the location of the Company's customers. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) Quarterly financial information for the years ended September 30, 2018 and 2017 is summarized as follows: 2018 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 2,011 $ 2,180 $ 2,208 $ 2,266 $ 8,665 Gross profit (total sales less product and service cost of sales) 548 582 583 570 2,283 Net income 280 237 275 240 1,032 Earnings per share: Basic earnings per share $ 1.71 $ 1.44 $ 1.67 $ 1.46 $ 6.29 Diluted earnings per share $ 1.69 $ 1.43 $ 1.66 $ 1.44 $ 6.22 Net income includes $17 million , $24 million , $23 million and $14 million of pre-tax transaction and integration costs associated with the B/E Aerospace acquisition for the first, second, third and fourth quarters of 2018, respectively. In addition, Net income includes $10 million , $11 million , $6 million and $7 million of pre-tax transaction and integration costs associated with the pending acquisition of the Company by UTC for the first, second, third and fourth quarters of 2018, respectively. Net income includes $62 million , $(18) million , $70 million and $16 million of discrete tax benefit/(expense) associated with enactment of the Tax Cuts and Jobs Act. 2017 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 1,193 $ 1,342 $ 2,094 $ 2,193 $ 6,822 Gross profit (total sales less product and service cost of sales) 377 412 570 595 1,954 Net income 145 168 179 213 705 Earnings per share: Basic earnings per share $ 1.11 $ 1.28 $ 1.13 $ 1.31 $ 4.85 Diluted earnings per share $ 1.10 $ 1.27 $ 1.12 $ 1.29 $ 4.79 Net income includes $14 million , $13 million , $82 million and $16 million of pre-tax transaction, integration and financing costs associated with the B/E Aerospace acquisition for the first, second, third and fourth quarters of 2017, respectively. In addition, Net income in the fourth quarter of 2017 includes $24 million of pre-tax transaction costs associated with the pending acquisition of the Company by UTC. Earnings per share amounts are computed independently each quarter. As a result, the sum of each quarter's per share amount may not equal the total per share amount for the respective year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On November 1, 2018, the Board of Directors declared a quarterly cash dividend of $0.33 per share on its common stock, payable December 10, 2018, to shareholders of record at the close of business on November 16, 2018. On November 23, 2018, UTC announced that the final regulatory approval required to close its acquisition of Rockwell Collins had been received and that the acquisition was expected to close within three business days. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. 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 Company's investments in entities it does not control but over which it has the ability to exercise significant influence are accounted for under the equity method and are included in Other Assets. All intercompany transactions are eliminated. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currency for significant subsidiaries operating outside the United States is typically their respective local currency. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange rate at the balance sheet date. Sales, costs and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive loss within the Consolidated Statements of Comprehensive Income and Equity. |
Revenue Recognition | Revenue Recognition The Company enters into sales arrangements that may provide for multiple deliverables to a customer. The Company identifies all goods and/or services that are to be delivered separately under a sales arrangement and allocates revenue to each deliverable based on relative fair values. Fair values are generally established based on the prices charged when sold separately by the Company. In general, revenues are separated between products, engineering, maintenance, communication and installation services. The allocated revenue for each deliverable is then recognized using appropriate revenue recognition methods. Sales related to long-term contracts requiring development and delivery of products over several years are generally accounted for under the percentage-of-completion method of accounting in accordance with the Construction-Type and Production-Type Contracts subtopic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. The percentage-of-completion method is predominately used in the Government Systems and Interior Systems segments and sales and earnings under qualifying contracts are recorded either as products are shipped under the units-of-delivery method, or based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method. Purchase options and change orders are accounted for either as an integral part of the original contract or separately depending upon the nature and value of the item. Sales and costs related to profitable purchase options are included in estimates only when the options are exercised whereas sales and costs related to unprofitable purchase options are included in estimates when exercise is determined to be probable. Sales related to change orders are included in estimates only if they can be reliably estimated and collectability is reasonably assured. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. Changes in estimates of profit or loss on contracts are included in earnings on a cumulative basis in the period the estimate is changed. Sales related to long-term separately priced product maintenance or warranty contracts are accounted for based on the terms of the underlying agreements. Certain contracts are fixed-price contracts with sales recognized ratably over the contractual life, while other contracts have a fixed hourly rate with sales recognized based on actual labor or flight hours incurred. The cost of providing these services is expensed as incurred. The Company recognizes sales for most other products or services when all of the following criteria are met: an agreement of sale exists, product delivery and acceptance has occurred or services have been rendered, pricing is fixed or determinable and collection is reasonably assured. As discussed in the Recently Issued Accounting Standards section below, the Company adopted the new accounting guidance with respect to revenue recognition on October 1, 2018. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include time deposits, certificates of deposit with original maturity dates of three months or less and money market funds. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Allowances are established in order to report receivables at net realizable value on the Company's Consolidated Statement of Financial Position. The determination of these allowances requires Company management to make estimates and judgments as to the collectability of customer account balances. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience and other currently available evidence. |
Inventories | The Company defers certain pre-production engineering costs during the development phase of a program in connection with long-term supply arrangements that contain contractual guarantees for reimbursement from customers. Such customer guarantees generally take the form of a minimum order quantity with quantified reimbursement amounts if the minimum order quantity is not taken by the customer. These costs are deferred to the extent of the contractual guarantees and are amortized over their estimated useful lives using a units-of-delivery method, up to 15 years. This amortization expense is included as a component of cost of sales. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis and begins when the Company starts recognizing revenue as the Company delivers equipment for the program. The estimated useful life is limited to the amount of time the Company is virtually assured to earn revenues under long-term supply arrangements with the Company’s customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain customer guarantees for reimbursement are expensed as incurred. Inventories Inventories are stated at the lower of cost or market using costs which approximate the first-in, first-out method, less related progress payments received. Inventoried costs include direct costs of manufacturing, certain engineering costs and allocable overhead costs. The Company regularly compares inventory quantities on hand on a part level basis to estimated forecasts of product demand and production requirements as well as historical usage. Based on these comparisons, management establishes an excess and obsolete inventory reserve as needed. |
Progress Payments | Progress Payments Progress payments relate to both receivables and inventories and represent cash collected from government-related contracts whereby the governments have a legal right of offset related to the receivable or legal title to the work-in-process inventory. |
Property | Property Property is stated at acquisition cost, net of accumulated depreciation. Depreciation of property is generally provided using straight-line methods over the following estimated useful lives: buildings and improvements, 15 - 50 years; machinery and equipment (including internally developed software and other costs associated with the expansion and construction of Information Management Services network-related assets), 5 - 20 years; information systems software and hardware, 5 - 17 years; and furniture and fixtures, 12 - 16 years. Depreciation methods and lives are reviewed periodically with any changes recorded on a prospective basis. Significant renewals and betterments are capitalized and replaced units are written off. Maintenance and repairs, as well as renewals of minor amounts, are charged to expense in the period incurred. The fair value of liabilities associated with the retirement of property is recorded when there is a legal or contractual requirement to incur such costs and the costs can be reasonably estimated. Upon the initial recognition of a contractual or legal liability for an asset retirement obligation, the Company capitalizes the asset retirement cost by increasing the carrying amount of the property by the same amount as the liability. This asset retirement cost is then depreciated over the estimated useful life of the underlying property. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets generally result from business acquisitions. The purchase price of the acquisition is assigned to tangible and intangible assets and liabilities assumed based on fair value. The excess of the purchase price over the amounts assigned is recorded as goodwill. Assets acquired and liabilities assumed are allocated to the Company's reporting units based on the Company's integration plans and internal reporting structure. As of September 30, 2018 the Company had seven reporting units. Purchased intangible assets with finite lives are amortized, generally on a straight-line basis, over their estimated useful lives, ranging from 4 - 23 years. Goodwill and intangible assets with indefinite lives are not amortized, but are reviewed at least annually for impairment. |
Customer Relationship Up-Front Sales and Accrued Customer Incentives | Customer Relationship Up-Front Sales Incentives The Company provides up-front sales incentives prior to delivering products or performing services to certain commercial customers in connection with sales contracts. Up-front sales incentives are recorded as a customer relationship intangible asset and are amortized using a units-of-delivery method over the period the Company has received a contractually enforceable right related to the incentives, up to 15 years after entry into service. Amortization is based on the Company’s expectation of delivery rates on a program-by-program basis. Amortization begins when the Company starts recognizing revenue as the Company delivers equipment for the program. Up-front sales incentives consisting of cash payments or customer account credits are amortized as a reduction of sales, whereas incentives consisting of free products are amortized as cost of sales. Accrued Customer Incentives Incentives earned by customers based on purchases of Company products or services are recognized as a liability when the related sale is recorded. Incentives consisting of cash payments or customer account credits are recognized as a reduction of sales, while incentives consisting of free products and account credits where the customer's use is restricted to future purchases are recognized as cost of sales. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when management plans to dispose of assets or when events or circumstances indicate that the carrying amount of a long-lived asset is more-likely-than-not unrecoverable. Assets held for disposal are reported at the lower of the carrying amount or fair value less cost to sell. Management determines fair value using a discounted future cash flow analysis or other accepted valuation techniques. Long-lived assets held for use are reviewed for impairment by comparing the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset over its remaining useful life. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill and indefinite-lived intangible assets are tested annually for impairment with more frequent tests performed if indications of impairment exist. The Company's annual impairment testing date is in the fourth quarter of each fiscal year. Impairment for intangible assets with indefinite lives exists if the carrying value of the intangible asset exceeds its fair value. Goodwill is potentially impaired if the carrying value of a reporting unit exceeds its estimated fair value. |
Advance Payments from Customers | Advance Payments from Customers Advance payments from customers represent cash collected from customers in advance of revenue recognition. |
Capital Leases | Capital Leases Assets under capital lease and capital lease obligation are initially measured at the lower of estimated fair value or present value of the minimum lease payments. The present value of minimum lease payments is calculated for payments during the noncancelable lease term using the lower of the Company's estimated incremental borrowing rate or the rate implicit in the lease, if known. Capital lease obligation is recorded within Other Liabilities and the related assets are recorded in Property, Net or Other Assets based upon their intended use. Payments are allocated between a reduction of the lease obligation and interest expense using the interest method. Assets under capital lease are depreciated over the noncancelable lease term, ranging from 5 - 15 years, consistent with the Company's depreciation policy. |
Research and Development | Research and Development The Company performs R&D activities relating to the development of new products and the improvement of existing products. Company-funded R&D programs are expensed as incurred and included in cost of sales. |
Environmental | Environmental Liabilities for environmental matters are recorded in the period in which it is probable that an obligation has been incurred and the cost can be reasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the Company records a liability for its estimated allocable share of costs related to its involvement with the site as well as an estimated allocable share of costs related to the involvement of insolvent or unidentified parties. At environmental sites in which the Company is the only responsible party, the Company records a liability for the total estimated costs of remediation. |
Income Taxes | Income Taxes Current tax liabilities and assets are based upon an estimate of taxes payable or refundable in the current year for each jurisdiction in which the Company is subject to tax. As part of the determination of its tax liability, management exercises considerable judgment in evaluating tax positions taken by the Company in determining the income tax provision and establishes reserves for uncertain tax positions in accordance with the Income Taxes topic of the FASB Accounting Standards Codification. Deferred tax assets and liabilities are recorded for the estimated future tax effects attributable to temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and their respective carrying amounts for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and interest rate swap contracts for the purpose of reducing exposure to changes in foreign currency exchange rates on business transactions and interest rates, respectively. The Company's policy is to execute such instruments with banks the Company believes to be creditworthy and not enter into derivative financial instruments for speculative purposes or to manage exposure for net investments in non-U.S. subsidiaries. These derivative financial instruments do not subject the Company to undue risk as gains and losses on these instruments generally offset gains and losses on the underlying assets, liabilities or anticipated transactions that are being hedged. All derivative financial instruments are recorded at fair value in the Consolidated Statement of Financial Position. For a derivative that has not been designated as an accounting hedge, the change in fair value is recognized immediately through earnings. For a derivative that has been designated as an accounting hedge of an existing asset or liability (a fair value hedge), the change in the fair value of both the derivative and underlying asset or liability is recognized immediately through earnings. For a derivative designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the Consolidated Statement of Financial Position in Accumulated other comprehensive loss to the extent the derivative is effective in mitigating the exposure related to the anticipated transaction. The change in the fair value related to the ineffective portion of the hedge, if any, is immediately recognized in earnings. The amount recorded within Accumulated other comprehensive loss is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings. The Company does not exclude any amounts from the measure of effectiveness for either fair value or cash flow hedges. |
Use of Estimates | Use of Estimates The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, long-term contracts, allowances for doubtful accounts, inventory obsolescence, product warranty cost liabilities, customer incentives, retirement benefits, income taxes, environmental matters, pre-production engineering costs, recoverability of long-lived assets and contingencies. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the Consolidated Statement of Operations in the period they are determined. |
Concentration of Risks | Concentration of Risks The Company's products and services are concentrated within the aerospace and defense industries with customers consisting primarily of military and commercial aircraft manufacturers, commercial airlines, the U.S. Government and non-U.S. governments. As a result of this industry focus, the Company's current and future financial performance is largely dependent upon the overall economic conditions within these industries. In particular, the commercial aerospace market has been historically cyclical and subject to downturns during periods of weak economic conditions, which could be prompted or exacerbated by political or other U.S. or international events. The defense market may be affected by changes in budget appropriations, procurement policies, political developments both in the U.S. and abroad and other factors. The Company depends to a large degree on U.S. Government spending, as a significant portion of the Company's sales are derived from U.S. Government contracts, both directly and indirectly through subcontracts. The U.S. Government has implemented various initiatives to address its fiscal challenges. In August 2011, Congress enacted the Budget Control Act (BCA) of 2011 which imposed spending caps and certain reductions in defense spending over a ten-year period through 2021. These spending caps and reductions, referred to as sequestration, went into effect in March 2013. Through a series of bipartisan agreements, Congress has been able to temporarily lift discretionary spending limits every year through 2019. However, unless a new agreement is enacted, the BCA will again be in force beginning in 2020. The continued uncertainty surrounding the U.S. defense budget could have a material adverse effect on the Company and the defense industry in general. In years when the U.S. Government does not complete its annual budget and appropriations process prior to the beginning of its fiscal year (October 1), government operations are typically funded through a continuing resolution that authorizes agencies of the U.S. Government to continue to operate in the new year, but generally does not authorize new spending initiatives. During periods covered by a continuing resolution (or until the regular appropriation bills are passed), the Company may experience delays by the government in the procurement of new or existing products and services which can adversely impact results of operations and cause variability in the timing of revenue between periods. During 2018, the U.S. Government completed the fiscal year 2019 Defense budget authorization and approval timeline on schedule and thus avoided the need for a continuing resolution for this part of government operations. Should the U.S. Government not complete fiscal year 2020 budgeting and appropriations in the same manner, the Company expects to be exposed to the effects of a continuing resolution in the future. The Company remains confident that its product offerings are well positioned to meet the needs of government customers in this uncertain environment and the Company continues to enhance international strategies and make proactive adjustments to the Company's cost structure as necessary. In addition to the overall business risks associated with the Company's concentration within the aerospace and defense industries, the Company is also exposed to a concentration of collection risk on credit extended to certain aircraft manufacturers and airlines. The Company performs ongoing credit evaluations on the financial condition of all of its customers and maintains allowances for uncollectible accounts receivable based on expected collectability. Although management believes its allowances are adequate, the Company is not able to predict with certainty the changes in the financial stability of its customers. Any material change in the financial status of any one customer or group of customers could have a material adverse effect on the Company's results of operations, financial position or cash flows. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In March 2018, the Financial Accounting Standards Board (FASB) issued an amendment to formally codify the guidance provided by the Securities and Exchange Commission (SEC) in Staff Accounting Bulletin (SAB) 118. SAB 118 provides additional guidance allowing companies to use a one year measurement period, similar to that used in business combinations, to account for the impacts of the Tax Cuts and Jobs Act (the Act) in their financial statements. The Company has accounted for the impacts of the Act, including the use of reasonable estimates where necessary. The Company may continue to refine its estimates throughout the measurement period. In March 2016, the FASB issued a new standard simplifying certain aspects of accounting for share-based payments (see Note 12). The new standard requires that excess tax benefits and shortfalls be recorded as income tax benefit or expense in the income statement, rather than in equity, and requires excess tax benefits from stock-based compensation to be classified within operating cash flow. Additionally, the new standard allows a policy election to either estimate the number of awards expected to be forfeited at the time of award issuance or record stock-based compensation for forfeitures as they occur. In order to simplify accounting for share-based payments, the Company adopted the new guidance during the second quarter of 2016, which resulted in a $4 million benefit to tax expense and a favorable impact to operating cash flows of $4 million in 2016. With respect to forfeitures, the Company will continue to estimate the number of awards expected to be forfeited upon award issuance. Recently Issued Accounting Standards In February 2018, the FASB issued a new standard giving companies the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the Act to retained earnings. The guidance can be applied retrospectively or in the period of adoption and is effective for the Company in 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In March 2017, the FASB issued a new standard on the presentation of the net periodic cost of postretirement benefit programs, which the Company adopted retrospectively on October 1, 2018. 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. Applying a practical expedient to estimate the impact of the reclassification, the Company expects adoption of the new standard to result in a decrease to segment operating earnings of approximately $30 million and $27 million for the years ended September 30, 2018 and 2017, respectively, and a corresponding increase in unallocated corporate income, with no impact to net income. 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. Several amendments to the new standard have been issued, which are intended to drive consistent interpretation and application and simplify implementation of the new standard. The central requirement of the new standard is that lessees must recognize lease-related assets and liabilities for all leases with a term longer than 12 months. The Company is evaluating the effect the standard will have on the Company's consolidated financial statements and related disclosures, but expects a material change to the balance sheet due to the recognition of right-of-use assets and lease liabilities related to the Company's portfolio of real estate leases. The new guidance is not expected to materially impact accounting for those leases the Company enters with customers. The new standard is effective for the Company in 2020, with early adoption permitted. In May 2014, the FASB issued a comprehensive new revenue recognition standard that effectively replaced all guidance on the topic. The Company adopted the new standard and related amendments on October 1, 2018 utilizing the modified retrospective transition method. The Company has substantially completed its evaluation of the new standard and has assessed the impacts of adoption on its consolidated financial statements and disclosures. Changes under the new standard include, among other items, accounting for development costs and associated customer funding related to commercial contracts, the elimination of customer relationship intangible assets related to free products provided to customers as up-front sales incentives and increased use of over time revenue recognition based on costs incurred for certain contracts satisfying the criteria established in the new standard. The new standard also significantly enhances required disclosures regarding revenue and related assets and liabilities. The most significant changes to the Company are described below. Under the Company's historical accounting policy, customer funding received for development effort was recognized as revenue as the development activities were performed. Under the new standard, the Company has concluded that the development effort on commercial contracts 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 revenue is recognized for the related products, 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. Under the new standard, development costs are expensed as incurred except for those costs incurred pursuant to customer funding. Development costs eligible for deferral are limited to an amount equal to the associated customer funding. The development costs will be capitalized as contract fulfillment cost assets and recognized as expense when revenue is recognized for the related products, consistent with the amortization of deferred development specific customer funding into revenue. The Company is still calculating the impact of this change on adoption-date retained earnings. Further, development costs incurred pursuant to contractual guarantees for reimbursement are no longer capitalized within Inventory as pre-production engineering costs. The $1.166 billion adoption-date balance of capitalized development costs within Inventory was eliminated upon adoption and the related post-adoption amortization expense will be avoided. Under the Company's historical accounting policy, up-front sales incentives consisting of free products were capitalized as a customer relationship intangible asset. Upon adoption of the new standard, free product provided to the customer is considered a performance obligation and must be expensed when transferred, with revenue allocated when applicable. As a result of this change, approximately $120 million of customer relationship intangible assets were eliminated as of the adoption date and a corresponding contract asset of approximately $ 20 million was recorded for the uncollected portion of revenue recognized. This change will also result in a decrease in post-adoption amortization expense. Under the Company’s historical accounting policy, certain contracts either recognized revenue based on shipping terms or used a units-of-delivery method. Under the new standard, many of these contracts meet one or more of the mandatory criteria for over time revenue recognition. The Company is still finalizing the adoption-date retained earnings impact for these contracts, but does not expect the ongoing effect of recognizing revenue using an over time method to be material. Beginning in 2019, disclosures in the Company's notes to Consolidated Financial Statements related to revenue recognition will be expanded under the new standard to include discussions on the nature, amount, timing and uncertainty of revenue arising from contracts with customers. Disclosures will include qualitative and quantitative information about performance obligations, contract assets and liabilities, cost to fulfill a contract, disaggregation of revenue and the significant judgments made in applying the new standard. Other new accounting standards issued but not effective until after September 30, 2018 are not expected to have a material impact on the Company's financial statements. |
Acquisitions, Goodwill and In_2
Acquisitions, Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
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 Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date: (in millions) April 13, 2017 Cash and cash equivalents $ 104 Receivables, net 485 Inventories, net (1) 542 Other current assets 45 Property, net 271 Intangible Assets 1,586 Other Assets 53 Total Identifiable Assets Acquired 3,086 Accounts payable (231 ) Compensation and benefits (75 ) Advance payments from customers (62 ) Accrued customer incentives (48 ) Product warranty costs (117 ) Other current liabilities (2) (366 ) Long-term Debt, Net (2,119 ) Retirement Benefits (12 ) Deferred Income Tax Liability (287 ) Other Liabilities (2) (433 ) Total Liabilities Assumed (3,750 ) Net Identifiable Assets Acquired, excluding Goodwill (664 ) Goodwill 7,200 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 was amortized as a non-cash increase to Cost of sales during the year ended September 30, 2017. (2) As of the acquisition date, the Company made adjustments totaling $486 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 Consolidated Statement of Operations as non-cash reductions to Cost of sales. $141 million of the acquired contract liabilities were recognized as a reduction to Cost of sales during the year ended September 30, 2018. |
Schedule of Acquired Intangible Assets | The Intangible Assets included above consist of the following: Weighted Average Life (in years) Fair Value (in millions) Developed technology 9 $ 435 Seating customer relationships 6 860 Other customer relationships 8 291 Total 7 $ 1,586 |
Schedule of Transaction, Integration and Financing Costs | The Company recorded total transaction, integration and financing costs related to the B/E Aerospace acquisition in the Consolidated Statement of Operations as follows: (in millions) 2018 2017 2016 Transaction and integration costs $ 78 $ 96 $ — Bridge facility fees (included in Interest expense) — 29 — Total Transaction, integration and financing costs $ 78 $ 125 $ — |
Schedule of Pro Forma Information | 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 year prior to acquisition, 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 had 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. (in millions, except per share amounts) 2017 2016 (Pro forma) (Pro forma) Sales $ 8,376 $ 8,121 Net income attributable to common shareowners from continuing operations 900 696 Basic earnings per share from continuing operations 6.18 4.31 Diluted earnings per share from continuing operations 6.11 4.26 |
Schedule of Nonrecurring 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. (in millions) 2017 2016 Increases (decreases) to pro forma net income: Net reduction to depreciation resulting from fixed asset adjustments (1) $ 12 $ 21 Advisory, legal and accounting service fees (2) 156 (123 ) Amortization of acquired B/E Aerospace intangible assets, net (3) (83 ) (152 ) Interest expense incurred on acquisition financing, net (4) (17 ) (65 ) Long-term contract program adjustments (5) (59 ) (128 ) Acquired contract liability amortization (6) 63 124 Inventory fair value adjustment amortization (7) 56 (56 ) Compensation adjustments (8) 6 14 (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 7,185 — — — 7,185 Pulse.aero acquisition — — — 12 12 Foreign currency translation adjustments 38 (1 ) 3 2 42 Balance at September 30, 2017 7,223 325 506 1,104 9,158 B/E Aerospace acquisition adjustments (370 ) — 385 — 15 Reclassification of business held for sale (See Note 4) (59 ) — — — (59 ) Foreign currency translation adjustments (5 ) (1 ) (1 ) — (7 ) Balance at September 30, 2018 $ 6,789 $ 324 $ 890 $ 1,104 $ 9,107 |
Summary of Intangible Assets | Intangible assets are summarized as follows: September 30, 2018 September 30, 2017 (in millions) Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology and patents $ 807 $ (324 ) $ 483 $ 806 $ (256 ) $ 550 Backlog 6 (6 ) — 6 (5 ) 1 Customer relationships: Acquired 1,489 (413 ) 1,076 1,495 (213 ) 1,282 Up-front sales incentives 692 (114 ) 578 336 (93 ) 243 License agreements 18 (11 ) 7 15 (10 ) 5 Trademarks and tradenames 15 (14 ) 1 15 (14 ) 1 Intangible assets with indefinite lives: Trademarks and tradenames 47 — 47 47 — 47 Intangible assets $ 3,074 $ (882 ) $ 2,192 $ 2,720 $ (591 ) $ 2,129 |
Schedule of Intangible Asset Expected Amortization Expense | Anticipated annual amortization expense for intangible assets is as follows: (in millions) 2019 2020 2021 2022 2023 Thereafter Anticipated amortization expense for up-front sales incentives $ 24 $ 26 $ 26 $ 26 $ 25 $ 451 Anticipated amortization expense for all other intangible assets 265 264 264 260 192 322 Total $ 289 $ 290 $ 290 $ 286 $ 217 $ 773 |
Receivables, Net (Tables)
Receivables, Net (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Receivables, net are summarized as follows: (in millions) September 30, September 30, 2017 Billed $ 1,639 $ 1,055 Unbilled 596 461 Less progress payments (108 ) (78 ) Total 2,127 1,438 Less allowance for doubtful accounts (18 ) (12 ) Receivables, net $ 2,109 $ 1,426 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net are summarized as follows: (in millions) September 30, September 30, 2017 Finished goods $ 289 $ 259 Work in process 381 347 Raw materials, parts and supplies 828 677 Less progress payments (15 ) (7 ) Total 1,483 1,276 Pre-production engineering costs 1,166 1,175 Inventories, net $ 2,649 $ 2,451 |
Property, Net (Tables)
Property, Net (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property | Property, net is summarized as follows: (in millions) September 30, September 30, 2017 Land $ 22 $ 22 Buildings and improvements 659 597 Machinery and equipment 1,463 1,400 Information systems software and hardware 570 510 Furniture and fixtures 93 87 Capital leases 58 58 Construction in progress 246 250 Total 3,111 2,924 Less accumulated depreciation (1,682 ) (1,526 ) Property, Net $ 1,429 $ 1,398 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Other Assets [Abstract] | |
Other Assets | Other assets are summarized as follows: (in millions) September 30, September 30, 2017 Long-term receivables $ 185 $ 211 Investments in equity affiliates 5 7 Exchange and rental assets (net of accumulated depreciation of $111 at September 30, 2018 and $106 at September 30, 2017) 71 71 Other 243 242 Other Assets $ 504 $ 531 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term Debt (in millions, except weighted average amounts) September 30, September 30, Short-term commercial paper borrowings outstanding (1) $ 1,500 $ 330 Current portion of long-term debt 748 149 Short-term debt $ 2,248 $ 479 Weighted average annualized interest rate of commercial paper borrowings 2.42 % 1.45 % Weighted average maturity period of commercial paper borrowings (days) 9 18 (1) The maximum amount of short-term commercial paper borrowings outstanding during the year ended September 30, 2018 was $1.5 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 September 30, September 30, 2017 Fixed-rate notes due: July 2019 1.95% $ 300 $ 300 July 2019 5.25% 300 300 November 2021 3.10% 250 250 March 2022 2.80% 1,100 1,100 December 2023 3.70% 400 400 March 2024 3.20% 950 950 March 2027 3.50% 1,300 1,300 December 2043 4.80% 400 400 April 2047 4.35% 1,000 1,000 Variable-rate term loan due: April 2020 1 month LIBOR + 1.25% (1) 481 870 Fair value swap adjustment (Notes 14 and 15) (2 ) 14 Total 6,479 6,884 Less unamortized debt issuance costs and discounts 50 59 Less current portion of long-term debt 748 149 Long-term Debt, Net $ 5,681 $ 6,676 (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 fourth quarter of 2018 . The one-month LIBOR rate at September 30, 2018 was approximately 2.26 percent. |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan Disclosure | |
Schedule of Defined Benefit Plans Components of Expense (Income) | The components of expense (income) for Pension Benefits and Other Retirement Benefits are summarized below: Pension Benefits Other Retirement Benefits (in millions) 2018 2017 2016 2018 2017 2016 Service cost $ 12 $ 13 $ 11 $ 2 $ 3 $ 3 Interest cost 120 111 126 6 5 6 Expected return on plan assets (243 ) (241 ) (238 ) (2 ) (2 ) (2 ) Amortization: Prior service credit — — (1 ) — (1 ) (1 ) Net actuarial loss 82 92 78 7 9 8 Net benefit expense (income) $ (29 ) $ (25 ) $ (24 ) $ 13 $ 14 $ 14 |
Reconciliation of Pension Benefit Obligation, Plan Assets, Funded Status and Net Liability for Pension Benefits and Other Retirement Benefits | The following table reconciles the projected benefit obligations (PBO), plan assets, funded status and net liability for the Company's Pension Benefits and Other Retirement Benefits: Pension Benefits Other Retirement Benefits (in millions) 2018 2017 2018 2017 PBO at beginning of period $ 4,202 $ 4,527 $ 213 $ 231 Service cost 12 13 2 3 Interest cost 120 111 6 5 Discount rate and other assumption changes (200 ) (156 ) (9 ) (7 ) Actuarial losses (gains) 9 4 (5 ) (6 ) Plan participant contributions — — 4 4 Benefits paid (219 ) (223 ) (14 ) (17 ) Group annuity purchase — (101 ) — — Plan amendments (11 ) — (7 ) — B/E Aerospace acquisition — 16 — — Other (5 ) 11 — — PBO at end of period 3,908 4,202 190 213 Plan assets at beginning of period 3,186 3,074 20 19 Actual return on plan assets 120 362 2 2 Company contributions 467 68 9 12 Plan participant contributions — — 4 4 Benefits paid (219 ) (223 ) (14 ) (17 ) Group annuity purchase — (103 ) — — B/E Aerospace acquisition — 4 — — Other (2 ) 4 — — Plan assets at end of period 3,552 3,186 21 20 Funded status of plans $ (356 ) $ (1,016 ) $ (169 ) $ (193 ) Funded status consists of: Retirement benefits liability $ (356 ) $ (1,015 ) $ (169 ) $ (193 ) Compensation and benefits liability (12 ) (11 ) — — Other assets 12 10 — — Net liability $ (356 ) $ (1,016 ) $ (169 ) $ (193 ) |
Schedule of Other Comprehensive Loss Related to Retirement Benefits | The following table summarizes the amounts included in Accumulated other comprehensive loss before tax related to retirement benefits as of September 30, 2018 and 2017 and changes recognized in Other comprehensive loss before tax for the years ended September 30, 2018 and 2017 : Pension Benefits Other Retirement Benefits (in millions) Prior Service Cost (Credit) Net Actuarial Loss Prior Service Cost (Credit) Net Actuarial Loss Balance at September 30, 2016 $ 10 $ 2,751 $ (5 ) $ 116 Current year prior service cost — — — — Current year net actuarial gain — (270 ) — (13 ) Amortization of prior service cost — — 1 — Amortization of actuarial loss — (92 ) — (9 ) Balance at September 30, 2017 10 2,389 (4 ) 94 Current year prior service cost (11 ) — (6 ) — Current year net actuarial gain — (70 ) — (14 ) Amortization of prior service cost — — — — Amortization of actuarial loss — (82 ) — (7 ) Balance at September 30, 2018 $ (1 ) $ 2,237 $ (10 ) $ 73 |
Schedule of Amounts Amortized From Accumulated Other Comprehensive Loss in Next Fiscal Year | The estimated amounts that will be amortized from Accumulated other comprehensive loss into expense (income) for Pension Benefits and Other Retirement Benefits during the year ending September 30, 2019 are as follows: (in millions) Pension Benefits Other Retirement Benefits Total Prior service cost $ — $ (2 ) $ (2 ) Net actuarial loss 75 5 80 Total $ 75 $ 3 $ 78 |
Schedule of Assumptions Used | The following table presents the significant assumptions used in determining the benefit obligations: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2018 2017 2018 2017 2018 2017 Discount rate 4.02 % 3.53 % 2.28 % 2.29 % 3.94 % 3.39 % Compensation increase rate 4.00 % 4.00 % 2.89 % 3.05 % 4.00 % 4.00 % Significant assumptions used in determining the net benefit expense (income) are as follows: Pension Benefits Other Retirement Benefits U.S. Non-U.S. U.S. 2018 2017 2018 2017 2018 2017 Discount rate 3.53 % 3.22 % 2.29 % 1.72 % 3.39 % 3.39 % Expected long-term return on plan assets 8.00 % 8.00 % 6.73 % 6.74 % 8.00 % 8.00 % Compensation increase rate 4.00 % 4.00 % 3.05 % 3.03 % 4.00 % 4.00 % Health care cost gross trend rate (1) — — — — 7.50 % 7.50 % Ultimate trend rate (1) — — — — 5.00 % 5.00 % Year that trend reaches ultimate rate (1) — — — — 2022 2022 (1) Due to the effect of the fixed Company contribution, increasing or decreasing the health care cost trend rate by one percentage point would not have a significant impact on the Company's cost of providing Other Retirement Benefits. |
Schedule of Target and Actual Asset Allocations | Target and actual asset allocations as of September 30, 2018 and 2017 are as follows: Target Mix 2018 2017 Equities 40 % - 70 % 52 % 57 % Fixed income 25 % - 60 % 46 % 40 % Alternative investments 0 % - 15 % 0 % 0 % Cash 0 % - 5 % 2 % 3 % |
Schedule of Company Contributions to Pension Plans | For the years ended September 30, 2018 and 2017 , the Company made contributions to its pension plans as follows: (in millions) 2018 2017 Contributions to U.S. qualified plans $ 455 $ 55 Contributions to U.S. non-qualified plan 8 8 Contributions to non-U.S. plans 4 5 Total $ 467 $ 68 |
Schedule of Estimated Benefit Payments | The following table reflects estimated benefit payments to be made to eligible participants for each of the next five years and the following five years in the aggregate: (in millions) Pension Benefits Other Retirement Benefits 2019 $ 245 $ 15 2020 240 15 2021 242 16 2022 244 16 2023 246 16 2024-2028 1,228 69 |
Schedule of Defined Contribution Savings Plan Expense | The Company's expense related to the defined contribution savings plans for 2018 , 2017 and 2016 was as follows: 2018 2017 2016 (in millions) Shares Expense Shares Expense Shares Expense Contribution in shares 0.4 $ 58 0.5 $ 56 0.6 $ 49 Contribution in cash 69 54 46 Total $ 127 $ 110 $ 95 |
Pension Benefits [Member] | |
Defined Benefit Plan Disclosure | |
Schedule of Fair Value of Plan Assets, by Level Within Fair Value Hierarchy | The following table presents the fair value of the Company's pension plans' assets as of September 30, 2018 and 2017 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2018 September 30, 2017 Asset category (in millions) Level 1 Level 2 Level 3 Not Leveled (1) Total Level 1 Level 2 Level 3 Not Leveled (1) Total Equity securities: U.S. equity $ 552 $ 8 $ — $ 592 $ 1,152 $ 558 $ 15 $ — $ 394 $ 967 Non-U.S. equity 693 10 — — 703 814 28 — — 842 Fixed income securities: Corporate 1 713 — 313 1,027 — 795 — 305 1,100 U.S. government 401 31 — 69 501 42 24 — 68 134 Mortgage and asset-backed — 1 — — 1 — 1 — — 1 Other — 29 3 75 107 — 50 3 — 53 Cash and cash equivalents — 47 — — 47 — 82 — — 82 Sub-total $ 1,647 $ 839 $ 3 $ 1,049 3,538 $ 1,414 $ 995 $ 3 $ 767 3,179 Net receivables related to investment transactions 14 7 Total (2) $ 3,552 $ 3,186 (1) Certain investments measured using the net asset value (NAV) practical expedient have not been classified in the fair value hierarchy. (2) The Rockwell Collins Pension Plan participates in a securities lending program through its Trustee. Under this program, the Plan's investment securities may be loaned to investment brokers for a fee. Securities so loaned are fully collateralized by cash, letters of credit and securities issued or guaranteed by the U.S. government, its agencies and instrumentalities. At September 30, 2018 and 2017, $424 million and $333 million , respectively, of the Plan's securities were on loan under the Trustee's securities lending program. |
Other Retirement Benefits [Member] | |
Defined Benefit Plan Disclosure | |
Schedule of Fair Value of Plan Assets, by Level Within Fair Value Hierarchy | The following table presents the fair value of the Company's other retirement benefits plan's assets as of September 30, 2018 and 2017 , by asset category segregated by level within the fair value hierarchy, as described in Note 14: September 30, 2018 September 30, 2017 Asset category (in millions) Level 1 Level 2 Level 3 Not Leveled Total Level 1 Level 2 Level 3 Not Leveled Total Equity securities: U.S. equity $ 11 $ — $ — $ — $ 11 $ 9 $ — $ — $ — $ 9 Non-U.S. equity — — — — — — — — — — Fixed income securities: Corporate — 3 — — 3 — 3 — — 3 U.S. government 2 1 — — 3 2 1 — — 3 Mortgage and asset-backed — 1 — — 1 — 1 — — 1 Cash and cash equivalents — 3 — — 3 — 4 — — 4 Total $ 13 $ 8 $ — $ — $ 21 $ 11 $ 9 $ — $ — $ 20 |
Shareowners' Equity (Tables)
Shareowners' Equity (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income Loss | Changes in accumulated other comprehensive loss (AOCL), net of tax, by component are as follows: Foreign Exchange Translation and Other Adjustments Pension and Other Postretirement Adjustments (1) Change in the Fair Value of Effective Cash Flow Hedges Total Balance at September 30, 2015 $ (56 ) $ (1,637 ) $ (6 ) $ (1,699 ) Other comprehensive (loss) before reclassifications (20 ) (234 ) (2 ) (256 ) Amounts reclassified from accumulated other comprehensive income — 53 4 57 Net current period other comprehensive income (loss) (20 ) (181 ) 2 (199 ) Balance at September 30, 2016 (76 ) (1,818 ) (4 ) (1,898 ) Other comprehensive income before reclassifications 77 180 1 258 Amounts reclassified from accumulated other comprehensive income — 63 2 65 Net current period other comprehensive income 77 243 3 323 Balance at September 30, 2017 1 (1,575 ) (1 ) (1,575 ) Other comprehensive income (loss) before reclassifications (39 ) 79 (1 ) 39 Amounts reclassified from accumulated other comprehensive income — 65 — 65 Net current period other comprehensive income (loss) (39 ) 144 (1 ) 104 Balance at September 30, 2018 $ (38 ) $ (1,431 ) $ (2 ) $ (1,471 ) (1) Reclassifications from AOCL to net income related to the amortization of net actuarial losses and prior service credits for the Company's retirement benefit plans and were $ 89 million ($ 65 million net of tax), $100 million ( $63 million net of tax) and $84 million ( $53 million net of tax) for 2018 , 2017 and 2016 , respectively. The reclassifications are included in the computation of net benefit expense. See Note 10, Retirement Benefits, for additional details. |
Stock-Based Compensation and _2
Stock-Based Compensation and Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Stock Based Compensation and Earnings Per Share Abstract | |
Stock-Based Compensation Expense Categorization | Total stock-based compensation expense and related income tax benefit included within the Consolidated Statement of Operations for 2018 , 2017 and 2016 is as follows: (in millions) 2018 2017 2016 Stock-based compensation expense included in: Product cost of sales $ 8 $ 9 $ 8 Selling, general and administrative expenses 27 22 19 Total $ 35 $ 31 $ 27 Income tax benefit $ 9 $ 10 $ 9 |
Schedule of Stock Option Activity | The following summarizes the activity of the Company's stock options for 2018 : Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2017 3,478 $ 71.67 Granted — — Exercised (1,057 ) 59.82 Forfeited or expired (5 ) 87.99 Outstanding at September 30, 2018 2,416 $ 76.82 5.8 $ 154 Vested or expected to vest (1) 2,413 $ 76.81 5.8 $ 154 Exercisable at September 30, 2018 1,782 $ 72.75 5.1 $ 121 (1) Represents outstanding options reduced by expected forfeitures 2018 2017 2016 Weighted-average fair value per share of options granted $ — $ 17.26 $ 17.75 Intrinsic value of options exercised (in millions) (2) $ 80 $ 49 $ 13 (2) Represents the amount by which the stock price exceeded the exercise price of the options on the date of the exercise |
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 |
Schedule of Performance Shares, Restricted Shares, and Restricted Stock Units Activity | The following summarizes the Company's performance shares, restricted stock and restricted stock units for 2018 : Performance Shares Restricted Stock Restricted Stock Units (shares in thousands) Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Shares Weighted Grant Date Fair Value Nonvested at September 30, 2017 370 $ 85.44 23 $ 30.24 512 $ 80.56 Granted 142 138.66 — — 265 133.60 Vested (120 ) 82.77 — — (113 ) 91.28 Forfeited (9 ) 120.03 — — (31 ) 111.13 Nonvested at September 30, 2018 383 $ 105.25 23 $ 30.24 633 $ 99.16 (in millions) Performance Shares Restricted Stock Restricted Stock Units Total unrecognized compensation costs at September 30, 2018 $ 17 $ — $ 30 Weighted-average life remaining at September 30, 2018, in years 1.0 0 1.1 Weighted-average fair value per share granted in 2017 $ 88.25 $ — $ 92.84 Weighted-average fair value per share granted in 2016 $ 85.13 $ — $ 85.85 |
Earnings Per Share and Diluted Share Equivalents | The computation of basic and diluted earnings per share is as follows: (in millions, except per share amounts) 2018 2017 2016 Numerator for basic and diluted earnings per share: Income from continuing operations $ 1,032 $ 705 $ 727 Income from discontinued operations, net of taxes — — 1 Net income $ 1,032 $ 705 $ 728 Denominator: Denominator for basic earnings per share – weighted average common shares 164.0 145.5 130.5 Effect of dilutive securities: Stock options 1.2 1.2 1.0 Performance shares, restricted stock and restricted stock units 0.6 0.5 0.6 Dilutive potential common shares 1.8 1.7 1.6 Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion 165.8 147.2 132.1 Earnings per share: Basic Continuing operations $ 6.29 $ 4.85 $ 5.57 Discontinued operations — — 0.01 Basic earnings per share $ 6.29 $ 4.85 $ 5.58 Diluted Continuing operations $ 6.22 $ 4.79 $ 5.50 Discontinued operations — — 0.01 Diluted earnings per share $ 6.22 $ 4.79 $ 5.51 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | Income tax expense from continuing operations was calculated based on the following components of income before income taxes: (in millions) 2018 2017 2016 U.S. income $ 723 $ 688 $ 824 Non-U.S. income 389 243 111 Total $ 1,112 $ 931 $ 935 |
Schedule of Components of Income Tax Expense | The components of income tax expense from continuing operations are as follows: (in millions) 2018 2017 2016 Current: U.S. federal $ (16 ) $ 97 $ 120 Non-U.S. 105 68 29 U.S. state and local 4 18 11 Total current 93 183 160 Deferred: U.S. federal (9 ) 48 47 Non-U.S. (16 ) (5 ) — U.S. state and local 12 — 1 Total deferred (13 ) 43 48 Income tax expense $ 80 $ 226 $ 208 |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation | The effective income tax rate from continuing operations differed from the U.S. statutory tax rate as detailed below: 2018 2017 2016 Statutory tax rate 24.6 % 35.0 % 35.0 % Impact of International Operations (0.7 ) (4.4 ) (0.6 ) State and local income taxes 0.7 1.6 1.1 Research and development credit (5.6 ) (5.0 ) (6.4 ) Domestic manufacturing deduction (0.6 ) (2.1 ) (2.0 ) U.S. Tax Reform (10.9 ) — — Non-deductible goodwill 1.3 — — Tax settlements (0.7 ) (0.1 ) — Stock compensation - excess tax benefits (1.8 ) (1.3 ) (0.4 ) Change in valuation allowance (0.1 ) 0.1 (4.5 ) Other 1.0 0.5 — Effective income tax rate 7.2 % 24.3 % 22.2 % |
Schedule of Deferred Tax Assets and Liabilities | Net long-term deferred income tax benefits (liabilities) consist of the tax effects of temporary differences related to the following: September 30 (in millions) 2018 2017 Inventory $ (176 ) $ (276 ) Product warranty costs 28 45 Customer incentives 31 66 Contract reserves 17 49 Retirement benefits 116 400 Intangibles (352 ) (602 ) Capital lease liability 11 19 Property (138 ) (196 ) Stock-based compensation 20 37 Deferred compensation 17 27 Compensation and benefits 17 38 Research and development credit carryforward 54 25 Valuation allowance (22 ) (23 ) Other 47 81 Deferred income taxes, net $ (330 ) $ (310 ) |
Summary of Valuation Allowance | Changes in the valuation allowance for deferred tax assets are summarized as follows: September 30 (in millions) 2018 2017 2016 Balance at beginning of year $ 23 $ — $ 42 Charged to costs and expenses — 1 — B/E Aerospace acquisition — 22 — Deductions (1) (1 ) — (42 ) Balance at September 30 $ 22 $ 23 $ — (1) 2016 deduction of $42 million was primarily due to the creation of a tax planning strategy |
Summary of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: September 30 (in millions) 2018 2017 2016 Beginning balance $ 201 $ 45 $ 39 Additions for tax positions related to the current year 24 73 11 Additions for tax positions of prior years 16 1 7 Additions for tax positions related to acquisitions 1 86 — Reductions for tax positions of prior years (24 ) (1 ) (10 ) Reductions for tax positions related to settlements with taxing authorities (4 ) (3 ) (2 ) Ending balance $ 214 $ 201 $ 45 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities at Fair Value on Recurring Basis | The fair value of the Company's financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and 2017 are as follows: September 30, 2018 September 30, 2017 (in millions) Fair Value Hierarchy Fair Value Asset (Liability) Fair Value Asset (Liability) Deferred compensation plan investments Level 1 $ 70 $ 63 Deferred compensation plan investments Level 2 27 24 Interest rate swap assets Level 2 1 14 Interest rate swap liabilities Level 2 (3 ) — Foreign currency forward exchange contract assets Level 2 — 8 Foreign currency forward exchange contract liabilities Level 2 — (7 ) Acquisition-related contingent consideration Level 3 (14 ) (17 ) |
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, 2017 $ (17 ) Payment of contingent consideration (see Note 3) 3 Balance at September 30, 2018 $ (14 ) |
Financial Instruments at Fair Value and Carrying Value | The carrying amounts and fair values of the Company's financial instruments are as follows: Asset (Liability) September 30, 2018 September 30, 2017 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 738 $ 738 $ 703 $ 703 Short-term debt (2,248 ) (2,252 ) (479 ) (479 ) Long-term debt (5,683 ) (5,560 ) (6,662 ) (6,898 ) |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments in Consolidated Statement of Financial Position | Fair values of derivative instruments in the Consolidated Statement of Financial Position as of September 30, 2018 and 2017 are as follows: Asset Derivatives (in millions) Classification September 30, September 30, 2017 Foreign currency forward exchange contracts Other current assets $ — $ 8 Interest rate swaps Other assets 1 14 Total $ 1 $ 22 Liability Derivatives (in millions) Classification September 30, September 30, 2017 Foreign currency forward exchange contracts Other current liabilities $ — $ 7 Interest rate swaps Other liabilities 3 — Total $ 3 $ 7 |
Effect of Derivative Instruments on the Consolidated Statement of Operations | The effect of derivative instruments on the Consolidated Statement of Operations for the fiscal years ended September 30, 2018 and 2017 is as follows: Amount of Gain (Loss) (in millions) Location of Gain (Loss) September 30, September 30, 2017 Derivatives Designated as Hedging Instruments: Fair Value Hedges Interest rate swaps Interest expense $ 4 $ 8 Cash Flow Hedges Foreign currency forward exchange contracts: Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) AOCL (2 ) 1 Amount of (loss) reclassified from AOCL into income Cost of sales (1 ) (2 ) Derivatives Not Designated as Hedging Instruments: Foreign currency forward exchange contracts Cost of sales (16 ) (1 ) Foreign currency forward exchange contracts Transaction and integration costs (6 ) — |
Guarantees and Indemnificatio_2
Guarantees and Indemnifications (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Guarantees and Indemnifications Abstract | |
Changes in Accrued Product Warranty Costs | Changes in the carrying amount of accrued product warranty costs are summarized as follows: September 30 (in millions) 2018 2017 2016 Balance at beginning of year $ 186 $ 87 $ 89 Warranty costs incurred (87 ) (61 ) (42 ) Product warranty accrual 106 59 46 Changes in estimates for prior years (9 ) (16 ) (6 ) Reclassification of business to held for sale (see Note 4) (2 ) — — Increase from acquisitions — 117 — Balance at September 30 $ 194 $ 186 $ 87 |
Contractual Obligations and O_2
Contractual Obligations and Other Commitments (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations and Other Commitments | The following table reflects certain of the Company's non-cancelable contractual commitments as of September 30, 2018 : Payments Due By Period (in millions) 2019 2020 2021 2022 2023 Thereafter Total Non-cancelable operating leases $ 89 $ 75 $ 59 $ 49 $ 38 $ 196 $ 506 Purchase contracts 35 33 25 15 5 20 133 Long-term debt 750 331 — 1,350 — 4,050 6,481 Interest on long-term debt 231 200 192 173 153 1,600 2,549 Total $ 1,105 $ 639 $ 276 $ 1,587 $ 196 $ 5,866 $ 9,669 |
Restructuring and Impairment _2
Restructuring and Impairment Charges and Settlement of a Contract Matter (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Restructuring and Related Costs | During the year ended September 30, 2018 the Company recorded corporate charges of $39 million as follows: (in millions) Cost of Sales Other Income, Net Total Settlement of a contract matter $ 25 $ — $ 25 Asset impairment charges — 9 9 Employee separation costs 5 — 5 Total $ 30 $ 9 $ 39 During the first quarter of 2016, the Company recorded corporate restructuring and asset impairment charges of $45 million as follows: (in millions) Cost of Sales Selling, General and Administrative Expenses Total Employee separation costs $ 31 $ 8 $ 39 Asset impairment charges 2 4 6 Total $ 33 $ 12 $ 45 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Sales and Results of Continuing Operations of Operating Segments | The sales and earnings of continuing operations of the Company's operating segments are summarized as follows: (in millions) 2018 2017 2016 Sales: Interior Systems $ 2,709 $ 1,302 $ — Commercial Systems 2,580 2,418 2,395 Government Systems 2,631 2,384 2,206 Information Management Services 745 718 658 Total sales $ 8,665 $ 6,822 $ 5,259 Segment operating earnings: Interior Systems $ 406 $ 168 $ — Commercial Systems 557 519 531 Government Systems 515 502 477 Information Management Services 138 137 107 Total segment operating earnings 1,616 1,326 1,115 Interest expense (1) (262 ) (187 ) (64 ) Stock-based compensation (35 ) (31 ) (27 ) General corporate, net (56 ) (57 ) (44 ) Restructuring and impairment charges and settlement of a contract matter (see Note 20) (39 ) — (45 ) Transaction and integration costs (1) (112 ) (120 ) — Income from continuing operations before income taxes 1,112 931 935 Income tax expense (80 ) (226 ) (208 ) Income from continuing operations $ 1,032 $ 705 $ 727 (1) During the year ended September 30, 2018 , the Company incurred $78 million of transaction and integration costs related to the B/E Aerospace acquisition and $34 million of transaction costs related to the proposed acquisition of Rockwell Collins by UTC. During the year ended September 30, 2017 , the Company incurred $96 million of transaction and integration costs related to the B/E Aerospace acquisition and $24 million of transaction costs related to the proposed acquisition of Rockwell Collins by UTC. During this period, the Company also incurred $29 million of bridge facility fees related to the B/E Aerospace acquisition, which are included in Interest expense. Therefore, total transaction, integration and financing costs during this period were $149 million . |
Investments in Equity Affiliates, Depreciation and Amortization, Capital Expenditures, and Earnings from Equity Affiliates, by Segment | The following tables summarize the identifiable assets and investments in equity affiliates at September 30, 2018 , 2017 and 2016 , as well as the provision for depreciation and amortization, the amount of capital expenditures for property and earnings from equity affiliates for each of the three years ended September 30, for each of the operating segments and Corporate: (in millions) 2018 2017 2016 Identifiable assets: Interior Systems $ 9,534 $ 9,896 $ — Commercial Systems 3,817 3,124 3,050 Government Systems 2,802 2,156 2,052 Information Management Services 1,854 1,917 1,906 Corporate 1,019 904 691 Total identifiable assets $ 19,026 $ 17,997 $ 7,699 Investments in equity affiliates: Interior Systems $ — $ — $ — Commercial Systems — 1 4 Government Systems 5 6 6 Information Management Services — — — Total investments in equity affiliates $ 5 $ 7 $ 10 Depreciation and amortization: Interior Systems $ 129 $ 129 $ — Commercial Systems 160 132 125 Government Systems 93 80 74 Information Management Services 67 58 54 Total depreciation and amortization $ 449 $ 399 $ 253 Capital expenditures for property: Interior Systems $ 79 $ 41 $ — Commercial Systems 61 72 74 Government Systems 67 70 69 Information Management Services 50 57 50 Total capital expenditures for property $ 257 $ 240 $ 193 Earnings (loss) from equity affiliates: Interior Systems $ — $ — $ — Commercial Systems (1 ) (2 ) (3 ) Government Systems — — 2 Information Management Services — — — Total (loss) from equity affiliates $ (1 ) $ (2 ) $ (1 ) |
Summary of Sales by Product Category | The following table summarizes sales by product category for the years ended September 30, 2018 , 2017 and 2016 : (in millions) 2018 2017 2016 Interior Systems sales categories: Interior products and services $ 1,472 $ 717 $ — Aircraft seating 1,237 585 — Interior Systems sales 2,709 1,302 — Commercial Systems sales categories: Air transport aviation electronics 1,573 1,470 1,430 Business and regional aviation electronics 1,007 948 965 Commercial Systems sales 2,580 2,418 2,395 Government Systems sales categories: Avionics 1,503 1,472 1,483 Communication and navigation 1,128 912 723 Government Systems sales 2,631 2,384 2,206 Information Management Services sales 745 718 658 Total sales $ 8,665 $ 6,822 $ 5,259 |
Schedule of Sales and Property by Geographic Region | The following table reflects sales for the years ended September 30, 2018 , 2017 and 2016 by location of the Company's customers and property at September 30, 2018 , 2017 and 2016 by geographic region: Sales Property (in millions) 2018 2017 2016 2018 2017 2016 U.S. (1) $ 4,666 $ 3,873 $ 3,292 $ 1,131 $ 1,134 $ 921 Europe / Africa / Middle East 2,315 1,607 937 153 152 86 Asia-Pacific 1,064 787 545 129 94 17 Americas, excluding U.S. 620 555 485 16 18 11 Non U.S. 3,999 2,949 1,967 298 264 114 Total $ 8,665 $ 6,822 $ 5,259 $ 1,429 $ 1,398 $ 1,035 (1) For the years ended September 30, 2018 , 2017 and 2016 , U.S. sales include revenue from foreign military sales of $163 million , $139 million and $171 million , respectively. |
Quarterly Financial informati_2
Quarterly Financial information (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | 2017 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 1,193 $ 1,342 $ 2,094 $ 2,193 $ 6,822 Gross profit (total sales less product and service cost of sales) 377 412 570 595 1,954 Net income 145 168 179 213 705 Earnings per share: Basic earnings per share $ 1.11 $ 1.28 $ 1.13 $ 1.31 $ 4.85 Diluted earnings per share $ 1.10 $ 1.27 $ 1.12 $ 1.29 $ 4.79 Quarterly financial information for the years ended September 30, 2018 and 2017 is summarized as follows: 2018 Quarters (in millions, except per share amounts) First Second Third Fourth Total Sales $ 2,011 $ 2,180 $ 2,208 $ 2,266 $ 8,665 Gross profit (total sales less product and service cost of sales) 548 582 583 570 2,283 Net income 280 237 275 240 1,032 Earnings per share: Basic earnings per share $ 1.71 $ 1.44 $ 1.67 $ 1.46 $ 6.29 Diluted earnings per share $ 1.69 $ 1.43 $ 1.66 $ 1.44 $ 6.22 |
Business Description and Basi_2
Business Description and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 04, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 22, 2017 |
Business Acquisition [Line Items] | |||||
Merger-related costs | $ 112 | $ 120 | $ 0 | ||
Accounts payable [Member] | |||||
Business Acquisition [Line Items] | |||||
Merger-related costs unpaid | 12 | 24 | |||
Merger Agreement with UTC [Member] | |||||
Business Acquisition [Line Items] | |||||
Consideration received in cash (in dollars per share) | $ 93.33 | ||||
Consideration received in stock (in dollars per share) | $ 46.67 | ||||
Collar rate | 7.50% | ||||
Merger-related costs | $ 34 | $ 24 | |||
Merger Agreement with UTC [Member] | UTC [Member] | |||||
Business Acquisition [Line Items] | |||||
Closing share price | $ 115.69 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | |||
Sep. 30, 2018USD ($)subsidiaryreporting_unit | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Oct. 01, 2018USD ($) | |
Significant Accounting Policies | ||||
Number of consolidated subsidiaries with income attributable to noncontrolling interest | subsidiary | 2 | |||
Foreign exchange transaction losses due to remeasurement | $ 0 | $ 23 | $ 0 | |
Inventory valuation reserves | $ 125 | 89 | ||
Preproduction engineering costs estimated useful life | 15 years | |||
Asset retirement obligation | $ 0 | 0 | ||
Number of reporting units | reporting_unit | 7 | |||
Up-front sales incentives amortization period (up to) | 15 years | |||
Company-funded R&D expenditures | $ 502 | 327 | 224 | |
Income tax benefit | (80) | (226) | (208) | |
Segment operating earnings | 1,616 | 1,326 | 1,115 | |
General corporate, net | 56 | 57 | 44 | |
Capitalized development costs | 1,166 | 1,175 | ||
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||||
Significant Accounting Policies | ||||
Income tax benefit | 4 | |||
Impact to operating cash flows | $ 4 | |||
Accounting Standards Update 2017-07 [Member] | ||||
Significant Accounting Policies | ||||
General corporate, net | $ (30) | (27) | ||
Workforce Subject to Collective Bargaining Arrangements [Member] | ||||
Significant Accounting Policies | ||||
Concentration risk | 10.00% | |||
Minimum [Member] | ||||
Significant Accounting Policies | ||||
Weighted average useful life of acquired finite-lived intangible assets | 4 years | |||
Collective-bargaining agreement contract terms | 3 years | |||
Maximum [Member] | ||||
Significant Accounting Policies | ||||
Weighted average useful life of acquired finite-lived intangible assets | 23 years | |||
Collective-bargaining agreement contract terms | 5 years | |||
Building and improvements [Member] | Minimum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 15 years | |||
Building and improvements [Member] | Maximum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 50 years | |||
Machinery and equipment [Member] | Minimum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 5 years | |||
Machinery and equipment [Member] | Maximum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 20 years | |||
Information systems software and hardware [Member] | Minimum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 5 years | |||
Information systems software and hardware [Member] | Maximum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 17 years | |||
Furniture and fixtures [Member] | Minimum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 12 years | |||
Furniture and fixtures [Member] | Maximum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 16 years | |||
Capital leases [Member] | Minimum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 5 years | |||
Capital leases [Member] | Maximum [Member] | ||||
Significant Accounting Policies | ||||
Property useful life | 15 years | |||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Subsequent Event [Member] | Accounting Standards Update 2014-09 [Member] | ||||
Significant Accounting Policies | ||||
Capitalized development costs | $ (1,166) | |||
Customer relationship intangible assets | (120) | |||
Contract asset | $ 20 | |||
Pro Forma [Member] | Accounting Standards Update 2017-07 [Member] | ||||
Significant Accounting Policies | ||||
Segment operating earnings | $ (30) | $ (27) |
Acquisitions, Goodwill and In_3
Acquisitions, Goodwill and Intangible Assets (Acquisitions Narrative) (Details) - USD ($) | Apr. 13, 2017 | Dec. 20, 2016 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Oct. 01, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Apr. 10, 2017 |
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 9,158,000,000 | $ 9,107,000,000 | $ 9,158,000,000 | $ 1,919,000,000 | ||||||
Measurement adjustment, goodwill | 15,000,000 | |||||||||
Purchase price, net of cash acquired | 0 | 3,429,000,000 | 17,000,000 | |||||||
Impairment of goodwill | 0 | 0 | 0 | |||||||
Amortization expense for intangible assets | $ 290,000,000 | 162,000,000 | $ 60,000,000 | |||||||
Weighted average amortization period remaining for up-front sales incentives | 12 years | |||||||||
Customer relationship intangible assets | 1,525,000,000 | $ 1,654,000,000 | 1,525,000,000 | |||||||
Accounts payable [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Transaction, integration and financing costs unpaid | 24,000,000 | 12,000,000 | 24,000,000 | |||||||
Unsecured Notes [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 | $ 7,200,000,000 | $ 7,200,000,000 | ||||||||
Goodwill, expected tax deductible amount | $ 0 | |||||||||
Measurement adjustment, goodwill | 15,000,000 | |||||||||
Sales for the period subsequent to the completion of the acquisition | 1,406,000,000 | 2,983,000,000 | ||||||||
Net income for the period subsequent to the completion of the acquisition | $ 140,000,000 | 349,000,000 | ||||||||
Weighted average useful life of acquired finite-lived intangible assets | 7 years | |||||||||
B/E Aerospace [Member] | Accounts payable [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Transaction, integration and financing costs unpaid | 11,000,000 | |||||||||
B/E Aerospace [Member] | Unsecured Notes [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 | |||||||||
Goodwill, expected tax deductible amount | $ 0 | |||||||||
Voting interests acquired (percent) | 100.00% | |||||||||
Purchase price, net of cash acquired | $ 18,000,000 | |||||||||
Purchase price paid | 4,000,000 | 14,000,000 | ||||||||
Liability for the fair value of post-closing consideration | $ 5,000,000 | |||||||||
Contingent consideration payments | 3,000,000 | $ 2,000,000 | ||||||||
Intangible assets | $ 6,000,000 | |||||||||
Weighted average useful life of acquired finite-lived intangible assets | 9 years | |||||||||
Up-front sales incentives customer relationships [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets, increase | 335,000,000 | |||||||||
Payments to acquire intangible assets | $ 254,000,000 | |||||||||
Subsequent Event [Member] | Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Customer Relationships, Gross | $ (120,000,000) |
Acquisitions, Goodwill and In_4
Acquisitions, Goodwill and Intangible Assets Acquisitions, Goodwill and Intangible Assets (B/E Aerospace) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 13, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
B/E Aerospace acquisition adjustments | $ 15 | |||||||||||
Goodwill | $ 9,107 | $ 9,158 | 9,107 | $ 9,158 | $ 1,919 | |||||||
Business Combination, Transaction, Integration, And Financing Costs [Abstract] | ||||||||||||
Transaction and integration costs | 112 | 120 | 0 | |||||||||
Total Transaction, integration and financing costs | 149 | |||||||||||
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 price (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 | 485 | |||||||||||
Inventories, net | 542 | |||||||||||
Other current assets | 45 | |||||||||||
Property, net | 271 | |||||||||||
Intangible Assets | 1,586 | |||||||||||
Other Assets | 53 | |||||||||||
Total Identifiable Assets Acquired | 3,086 | |||||||||||
Accounts payable | (231) | |||||||||||
Compensation and benefits | (75) | |||||||||||
Advance payments from customers | (62) | |||||||||||
Accrued customer incentives | (48) | |||||||||||
Product warranty costs | (117) | |||||||||||
Other current liabilities | (366) | |||||||||||
Long-term Debt, Net | (2,119) | |||||||||||
Retirement Benefits | (12) | |||||||||||
Deferred Income Tax Liability | (287) | |||||||||||
Other Liabilities | (433) | |||||||||||
Total Liabilities Assumed | (3,750) | |||||||||||
Net Identifiable Assets Acquired, excluding Goodwill | (664) | |||||||||||
B/E Aerospace acquisition adjustments | 15 | |||||||||||
Goodwill | 7,200 | $ 7,200 | ||||||||||
Net Assets Acquired | 6,536 | |||||||||||
Inventory adjustment | 74 | |||||||||||
Adjustments to acquired existing long-term contracts | $ 486 | |||||||||||
Business Combination, Intangible Assets Acquired [Abstract] | ||||||||||||
Weighted Average Life (in years) | 7 years | |||||||||||
Fair Value (in millions) | $ 1,586 | |||||||||||
Business Combination, Transaction, Integration, And Financing Costs [Abstract] | ||||||||||||
Transaction and integration costs | 78 | 96 | 0 | |||||||||
Bridge facility fees (included in Interest expense) | 0 | 29 | 0 | |||||||||
Total Transaction, integration and financing costs | $ 14 | $ 23 | $ 24 | $ 17 | $ 16 | $ 82 | $ 13 | $ 14 | 78 | $ 125 | $ 0 | |
B/E Aerospace [Member] | Developed technology [Member] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
Intangible Assets | $ 435 | |||||||||||
Business Combination, Intangible Assets Acquired [Abstract] | ||||||||||||
Weighted Average Life (in years) | 9 years | |||||||||||
Fair Value (in millions) | $ 435 | |||||||||||
B/E Aerospace [Member] | Seating customer relationships [Member] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
Intangible Assets | $ 860 | |||||||||||
Business Combination, Intangible Assets Acquired [Abstract] | ||||||||||||
Weighted Average Life (in years) | 6 years | |||||||||||
Fair Value (in millions) | $ 860 | |||||||||||
B/E Aerospace [Member] | Other customer relationships [Member] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
Intangible Assets | $ 291 | |||||||||||
Business Combination, Intangible Assets Acquired [Abstract] | ||||||||||||
Weighted Average Life (in years) | 8 years | |||||||||||
Fair Value (in millions) | $ 291 | |||||||||||
B/E Aerospace [Member] | Cost of Sales [Member] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
Adjustments to acquired existing long-term contracts | $ 141 |
Acquisitions, Goodwill and In_5
Acquisitions, Goodwill and Intangible Assets (Pro Forma Results) (Details) - B/E Aerospace [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Pro forma sales | $ 8,376 | $ 8,121 |
Pro forma net income attributable to common shareowners from continuing operations | $ 900 | $ 696 |
Basic earnings per share from continuing operations (in dollars per share) | $ 6.18 | $ 4.31 |
Diluted earnings per share from continuing operations (in dollars per share) | $ 6.11 | $ 4.26 |
Acquisitions, Goodwill and In_6
Acquisitions, Goodwill and Intangible Assets (Pro Forma Nonrecurring Adjustments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | $ 240 | $ 275 | $ 237 | $ 280 | $ 213 | $ 179 | $ 168 | $ 145 | $ 1,032 | $ 705 | $ 728 |
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 | 12 | 21 | |||||||||
B/E Aerospace [Member] | Advisory, legal and accounting service fees [Member] | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | 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 | (83) | (152) | |||||||||
B/E Aerospace [Member] | Interest expense incurred on acquisition financing, net [Member] | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | (17) | (65) | |||||||||
B/E Aerospace [Member] | Long-term contract program adjustments [Member] | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | (59) | (128) | |||||||||
B/E Aerospace [Member] | Acquired contract liability amortization [Member] | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | 63 | 124 | |||||||||
B/E Aerospace [Member] | Inventory fair value adjustment amortization[Member] | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | 56 | (56) | |||||||||
B/E Aerospace [Member] | Compensation adjustments [Member] | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Net income | $ 6 | $ 14 |
Acquisitions, Goodwill and In_7
Acquisitions, Goodwill and Intangible Assets (Changes in the Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 9,158 | $ 1,919 |
B/E Aerospace acquisition adjustments | 15 | |
Reclassification of business held for sale (See Note 4) | (59) | |
Foreign currency translation adjustments | (7) | 42 |
Goodwill | 9,107 | 9,158 |
B/E Aerospace [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 7,185 | |
B/E Aerospace acquisition adjustments | 15 | |
Pulse.aero [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 12 | |
Interior Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 7,223 | 0 |
B/E Aerospace acquisition adjustments | (370) | |
Reclassification of business held for sale (See Note 4) | (59) | |
Foreign currency translation adjustments | (5) | 38 |
Goodwill | 6,789 | 7,223 |
Interior Systems [Member] | B/E Aerospace [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 7,185 | |
Interior Systems [Member] | Pulse.aero [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 0 | |
Commercial Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 325 | 326 |
B/E Aerospace acquisition adjustments | 0 | |
Reclassification of business held for sale (See Note 4) | 0 | |
Foreign currency translation adjustments | (1) | (1) |
Goodwill | 324 | 325 |
Commercial Systems [Member] | B/E Aerospace [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 0 | |
Commercial Systems [Member] | Pulse.aero [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 0 | |
Government Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 506 | 503 |
B/E Aerospace acquisition adjustments | 385 | |
Reclassification of business held for sale (See Note 4) | 0 | |
Foreign currency translation adjustments | (1) | 3 |
Goodwill | 890 | 506 |
Government Systems [Member] | B/E Aerospace [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 0 | |
Government Systems [Member] | Pulse.aero [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 0 | |
Information Management Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 1,104 | 1,090 |
B/E Aerospace acquisition adjustments | 0 | |
Reclassification of business held for sale (See Note 4) | 0 | |
Foreign currency translation adjustments | 0 | 2 |
Goodwill | $ 1,104 | 1,104 |
Information Management Services [Member] | B/E Aerospace [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | 0 | |
Information Management Services [Member] | Pulse.aero [Member] | ||
Goodwill [Roll Forward] | ||
Acquisition | $ 12 |
Acquisitions, Goodwill and In_8
Acquisitions, Goodwill and Intangible Assets (Summary of Intangible Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Accum Amort | $ (882) | $ (591) |
Intangible assets, gross | 3,074 | 2,720 |
Intangible assets, net | 2,192 | 2,129 |
Trademarks and tradenames [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets with indefinite lives | 47 | 47 |
Developed technology and patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 807 | 806 |
Accum Amort | (324) | (256) |
Net | 483 | 550 |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 6 | 6 |
Accum Amort | (6) | (5) |
Net | 0 | 1 |
Acquired customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 1,489 | 1,495 |
Accum Amort | (413) | (213) |
Net | 1,076 | 1,282 |
Up-front sales incentives customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 692 | 336 |
Accum Amort | (114) | (93) |
Net | 578 | 243 |
License agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 18 | 15 |
Accum Amort | (11) | (10) |
Net | 7 | 5 |
Trademarks and tradenames [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 15 | 15 |
Accum Amort | (14) | (14) |
Net | $ 1 | $ 1 |
Acquisitions, Goodwill and In_9
Acquisitions, Goodwill and Intangible Assets (Expected annual amortization expense for intangible assets) (Details) $ in Millions | Sep. 30, 2018USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,019 | $ 289 |
2,020 | 290 |
2,021 | 290 |
2,022 | 286 |
2,023 | 217 |
Thereafter | 773 |
Up-front sales incentives customer relationships [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,019 | 24 |
2,020 | 26 |
2,021 | 26 |
2,022 | 26 |
2,023 | 25 |
Thereafter | 451 |
All other intangible assets [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,019 | 265 |
2,020 | 264 |
2,021 | 264 |
2,022 | 260 |
2,023 | 192 |
Thereafter | $ 322 |
Discontinued Operations and D_2
Discontinued Operations and Divestitures (Details) - USD ($) $ in Millions | Mar. 10, 2015 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Discontinued Operations | ||||||
Current assets | $ 91 | $ 0 | ||||
Income from discontinued operations, net of taxes | 0 | $ 0 | $ 1 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Air Transport In-Flight Entertainment [Member] | ||||||
Discontinued Operations | ||||||
Current assets | 23 | |||||
Current liabilities | 5 | |||||
Inventory | 19 | |||||
Property | 4 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | SMR Technologies [Member] | ||||||
Discontinued Operations | ||||||
Current assets | 68 | |||||
Current liabilities | 3 | |||||
Pre-tax loss related to pending divestiture | $ 9 | |||||
After-tax loss relating to pending divestiture | $ 22 | |||||
Goodwill | 59 | |||||
Intangible assets | $ 8 | |||||
Disposed of by sale [Member] | ASES [Member] | ||||||
Discontinued Operations | ||||||
Sale price | $ 3 | |||||
Post-closing consideration received | $ 2 | |||||
Income (loss) from discontinued operations before income taxes | 2 | |||||
Income from discontinued operations, net of taxes | $ 1 |
Receivables, Net (Details)
Receivables, Net (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Receivables, Net | ||
Billed | $ 1,639,000,000 | $ 1,055,000,000 |
Unbilled | 596,000,000 | 461,000,000 |
Less progress payments | (108,000,000) | (78,000,000) |
Total | 2,127,000,000 | 1,438,000,000 |
Less allowance for doubtful accounts | (18,000,000) | (12,000,000) |
Receivables, net | 2,109,000,000 | 1,426,000,000 |
Receivables due from equity affiliate | 61,000,000 | |
Sales Under Factoring Agreements [Member] | ||
Receivables, Net | ||
Cash generated under factoring agreements | 0 | 154,000,000 |
Beneficial impact on cash provided by operating activities | (154,000,000) | 94,000,000 |
U.S. Government [Member] | ||
Receivables, Net | ||
Receivables, net | 337,000,000 | 279,000,000 |
Unbilled receivables net of progress payments | $ 119,000,000 | $ 89,000,000 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Oct. 01, 2018 | |
Inventory [Line Items] | ||||
Finished goods | $ 289 | $ 259 | ||
Work in process | 381 | 347 | ||
Raw materials, parts and supplies | 828 | 677 | ||
Less progress payments | (15) | (7) | ||
Total | 1,483 | 1,276 | ||
Pre-production engineering costs | 1,166 | 1,175 | ||
Inventories, net | 2,649 | 2,451 | ||
Pre-production engineering amortization expense | 87 | 59 | $ 49 | |
Noncurrent inventory | $ 1,129 | $ 1,160 | ||
Subsequent Event [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||
Inventory [Line Items] | ||||
Pre-production engineering costs | $ (1,166) |
Property, Net (Details)
Property, Net (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Property | |||
Property, Total | $ 3,111 | $ 2,924 | |
Less accumulated depreciation | (1,682) | (1,526) | |
Property, Net | 1,429 | 1,398 | $ 1,035 |
Property additions in accounts payable | 20 | 23 | $ 20 |
Remaining minimum lease payments under capital lease | 65 | ||
Remaining minimum interest payments under capital lease | 17 | ||
Land [Member] | |||
Property | |||
Property, Total | 22 | 22 | |
Building and improvements [Member] | |||
Property | |||
Property, Total | 659 | 597 | |
Machinery and equipment [Member] | |||
Property | |||
Property, Total | 1,463 | 1,400 | |
Information systems software and hardware [Member] | |||
Property | |||
Property, Total | 570 | 510 | |
Furniture and fixtures [Member] | |||
Property | |||
Property, Total | 93 | 87 | |
Capital leases [Member] | |||
Property | |||
Property, Total | 58 | 58 | |
Less accumulated depreciation | (18) | (14) | |
Construction in progress [Member] | |||
Property | |||
Property, Total | $ 246 | $ 250 |
Other Assets (Summary of Other
Other Assets (Summary of Other Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Other Assets [Abstract] | |||
Long-term receivables | $ 185 | $ 211 | |
Investments in equity affiliates | 5 | 7 | $ 10 |
Exchange and rental assets (net of accumulated depreciation of $111 at September 30, 2018 and $106 at September 30, 2017) | 71 | 71 | |
Other | 243 | 242 | |
Other Assets | 504 | 531 | |
Accumulated depreciation, exchange and rental assets | $ 111 | $ 106 |
Other Assets (Narrative) (Detai
Other Assets (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018USD ($)joint_venture | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Other Assets [Abstract] | |||
Number of equity affiliates (joint ventures) | joint_venture | 7 | ||
Ownership percentage | 50.00% | ||
Sales to equity affiliates | $ 226 | $ 262 | $ 229 |
Deferred profit generated from sales to equity affiliates | $ 1 | 2 | |
Exchange and rental assets estimated useful life | 15 years | ||
Depreciation expense, exchange and rental assets | $ 11 | $ 10 | $ 9 |
Debt (Short-term Debt) (Details
Debt (Short-term Debt) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | |
Short-term Debt [Line Items] | |||
Current portion of long-term debt | $ 748,000,000 | $ 149,000,000 | $ 748,000,000 |
Short-term debt | 2,248,000,000 | 479,000,000 | 2,248,000,000 |
Revolving Credit Agreement [Member] | |||
Short-term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 1,500,000,000 | $ 1,500,000,000 | |
Debt term | 5 years | ||
Short-term commercial paper borrowings [Member] | |||
Short-term Debt [Line Items] | |||
Short-term commercial paper borrowings outstanding | $ 1,500,000,000 | $ 330,000,000 | $ 1,500,000,000 |
Weighted average annualized interest rate of commercial paper borrowings | 2.42% | 1.45% | 2.42% |
Weighted average maturity period of commercial paper borrowings (days) | 9 days | 18 days | |
Maximum amount of short-term commercial paper borrowing outstanding | $ 1,500,000,000 | ||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 | $ 1,500,000,000 |
Debt (Credit Facilities) (Detai
Debt (Credit Facilities) (Details) - USD ($) | Dec. 16, 2016 | Sep. 30, 2018 | Sep. 30, 2017 |
Revolving Credit Facility [Line Items] | |||
Commitment fees or compensating balance requirements | $ 0 | $ 0 | |
Short-term Credit Facility Non-U.S. Subs [Member] | |||
Revolving Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 20,000,000 | ||
Outstanding borrowings | 0 | 0 | |
Amount utilized to support commitments in the form of letters of credit | 2,000,000 | ||
Bridge Credit Facility [Member] | |||
Revolving Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 4,350,000,000 | ||
Debt term | 364 days | ||
Revolving Credit Agreement [Member] | |||
Revolving Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||
Debt term | 5 years | ||
Outstanding borrowings | $ 0 | $ 0 |
Debt (Long-term Debt) (Details)
Debt (Long-term Debt) (Details) - USD ($) | Apr. 10, 2017 | Dec. 16, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2015 | Jan. 31, 2010 |
Long-term Debt | |||||||
Repayments of short-term commercial paper borrowings | $ 300,000,000 | ||||||
Current portion of long-term debt | $ 748,000,000 | $ 149,000,000 | |||||
Fair value swap adjustment (Notes 14 and 15) | (2,000,000) | 14,000,000 | |||||
Total | 6,479,000,000 | 6,884,000,000 | |||||
Less unamortized debt issuance costs and discounts | 50,000,000 | 59,000,000 | |||||
Long-term Debt, Net | 5,681,000,000 | 6,676,000,000 | |||||
Cash payments for debt interest and fees | 249,000,000 | 192,000,000 | $ 56,000,000 | ||||
Bridge Loan [Member] | |||||||
Long-term Debt | |||||||
Debt term | 364 days | ||||||
Cash payments for debt interest and fees | 29,000,000 | ||||||
Term Loan [Member] | |||||||
Long-term Debt | |||||||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||||||
Debt term | 3 years | ||||||
Borrowings under credit facility | 481,000,000 | ||||||
Quarterly installments, as a percent | 2.50% | ||||||
Quarterly installments | $ 38,000,000 | ||||||
Prepayment | $ 238,000,000 | ||||||
Term Loan [Member] | LIBOR [Member] | |||||||
Long-term Debt | |||||||
Basis spread on variable rate | 1.25% | ||||||
Revolving Credit Agreement [Member] | |||||||
Long-term Debt | |||||||
Debt term | 5 years | ||||||
Total capitalization ratio | 65.00% | ||||||
Fixed-rate notes [Member] | |||||||
Long-term Debt | |||||||
Issuance of debt | $ 4,650,000,000 | ||||||
Fixed-rate notes [Member] | July 2019 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 1.95% | ||||||
Principal amount of notes | $ 300,000,000 | 300,000,000 | |||||
Fixed-rate notes [Member] | July 2019 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 5.25% | 525.00% | 525.00% | ||||
Principal amount of notes | $ 300,000,000 | 300,000,000 | |||||
Fixed-rate notes [Member] | November 2021 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 3.10% | ||||||
Principal amount of notes | $ 250,000,000 | 250,000,000 | |||||
Fixed-rate notes [Member] | March 2022 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 2.80% | ||||||
Principal amount of notes | $ 1,100,000,000 | 1,100,000,000 | |||||
Fixed-rate notes [Member] | December 2023 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 3.70% | ||||||
Principal amount of notes | $ 400,000,000 | 400,000,000 | |||||
Fixed-rate notes [Member] | March 2024 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 3.20% | ||||||
Principal amount of notes | $ 950,000,000 | 950,000,000 | |||||
Fixed-rate notes [Member] | March 2027 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 3.50% | ||||||
Principal amount of notes | $ 1,300,000,000 | 1,300,000,000 | |||||
Fixed-rate notes [Member] | December 2043 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 4.80% | ||||||
Principal amount of notes | $ 400,000,000 | 400,000,000 | |||||
Fixed-rate notes [Member] | April 2047 [Member] | |||||||
Long-term Debt | |||||||
Interest Rate | 4.35% | ||||||
Principal amount of notes | $ 1,000,000,000 | 1,000,000,000 | |||||
Fixed-rate notes [Member] | April 2020 [Member] | |||||||
Long-term Debt | |||||||
Current portion of long-term debt | $ 481,000,000 | $ 870,000,000 | |||||
One-month LIBOR rate | 2.26% | ||||||
Fixed-rate notes [Member] | April 2020 [Member] | 1 month LIBOR [Member] | |||||||
Long-term Debt | |||||||
Basis spread on variable rate | 1.25% |
Retirement Benefits (Pension Be
Retirement Benefits (Pension Benefits and Other Retirement Benefits) (Details) | 12 Months Ended |
Sep. 30, 2018collective_bargaining_planplan | |
Multiemployer Plans [Line Items] | |
Number of defined benefit pension plans in countries outside of the U.S. | plan | 6 |
Number of defined benefit pension plans in countries outside of the U.S. which are unfunded | plan | 3 |
Retirement age employees are eligible to receive other retirement benefits | 55 |
Years of service required to receive other retirement benefits | 10 years |
Five Collective Bargaining Plans [Member] | |
Multiemployer Plans [Line Items] | |
Number of collective-bargaining arrangement plans | collective_bargaining_plan | 5 |
Eight Collective Bargaining Plans [Member] | |
Multiemployer Plans [Line Items] | |
Number of collective-bargaining arrangement plans | collective_bargaining_plan | 8 |
Retirement Benefits (Components
Retirement Benefits (Components of Expense (Income)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits [Member] | |||
Components of Expense (Income) | |||
Service cost | $ 12 | $ 13 | $ 11 |
Interest cost | 120 | 111 | 126 |
Expected return on plan assets | (243) | (241) | (238) |
Amortization: | |||
Prior service credit | 0 | 0 | (1) |
Net actuarial loss | 82 | 92 | 78 |
Net benefit expense (income) | (29) | (25) | (24) |
Other Retirement Benefits [Member] | |||
Components of Expense (Income) | |||
Service cost | 2 | 3 | 3 |
Interest cost | 6 | 5 | 6 |
Expected return on plan assets | (2) | (2) | (2) |
Amortization: | |||
Prior service credit | 0 | (1) | (1) |
Net actuarial loss | 7 | 9 | 8 |
Net benefit expense (income) | $ 13 | $ 14 | $ 14 |
Retirement Benefits (Funded Sta
Retirement Benefits (Funded Status and Net Liability) (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Defined Benefit Plan, Change in Fair Value of Plan Assets | ||||
Plan assets at beginning of period | $ 3,206 | |||
Company contributions | 467 | $ 68 | $ 69 | |
Plan assets at end of period | 3,573 | 3,206 | ||
Funded status consists of: | ||||
Retirement benefits liability | $ (525) | $ (1,208) | ||
Non-U.S. defined benefit pension plan percent of total PBO | 5.00% | 5.00% | ||
Accumulated benefit obligation | $ 3,903 | $ 4,185 | ||
Pension Benefits [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation | ||||
PBO at beginning of period | 4,202 | 4,527 | ||
Service cost | 12 | 13 | 11 | |
Interest cost | 120 | 111 | 126 | |
Discount rate and other assumption changes | (200) | (156) | ||
Actuarial losses (gains) | 9 | 4 | ||
Plan participant contributions | 0 | 0 | ||
Benefits paid | (219) | (223) | ||
Group annuity purchase | $ 101 | 0 | (101) | |
Plan amendments | (11) | 0 | ||
B/E Aerospace acquisition | 0 | 16 | ||
Other | (5) | 11 | ||
PBO at end of period | 3,908 | 4,202 | 4,527 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets | ||||
Plan assets at beginning of period | 3,186 | 3,074 | ||
Actual return on plan assets | 120 | 362 | ||
Company contributions | 467 | 68 | ||
Plan participant contributions | 0 | 0 | ||
Benefits paid | (219) | (223) | ||
Group annuity purchase | (103) | 0 | (103) | |
B/E Aerospace acquisition | 0 | 4 | ||
Other | (2) | 4 | ||
Plan assets at end of period | 3,552 | 3,186 | 3,074 | |
Funded status of plans | (356) | (1,016) | ||
Funded status consists of: | ||||
Retirement benefits liability | (356) | (1,015) | ||
Compensation and benefits liability | (12) | (11) | ||
Other assets | 12 | 10 | ||
Net liability | (356) | (1,016) | ||
Group annuity purchase | $ (103) | $ 0 | $ (103) | |
Annual rate of mortality improvement | 0.0075 | 0.0075 | ||
Other Retirement Benefits [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation | ||||
PBO at beginning of period | $ 213 | $ 231 | ||
Service cost | 2 | 3 | 3 | |
Interest cost | 6 | 5 | 6 | |
Discount rate and other assumption changes | (9) | (7) | ||
Actuarial losses (gains) | (5) | (6) | ||
Plan participant contributions | 4 | 4 | ||
Benefits paid | (14) | (17) | ||
Group annuity purchase | 0 | 0 | ||
Plan amendments | (7) | 0 | ||
B/E Aerospace acquisition | 0 | 0 | ||
Other | 0 | 0 | ||
PBO at end of period | 190 | 213 | 231 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets | ||||
Plan assets at beginning of period | 20 | 19 | ||
Actual return on plan assets | 2 | 2 | ||
Company contributions | 9 | 12 | ||
Plan participant contributions | 4 | 4 | ||
Benefits paid | (14) | (17) | ||
Group annuity purchase | 0 | 0 | ||
B/E Aerospace acquisition | 0 | 0 | ||
Other | 0 | 0 | ||
Plan assets at end of period | 21 | 20 | $ 19 | |
Funded status of plans | (169) | (193) | ||
Funded status consists of: | ||||
Retirement benefits liability | (169) | (193) | ||
Compensation and benefits liability | 0 | 0 | ||
Other assets | 0 | 0 | ||
Net liability | (169) | (193) | ||
Group annuity purchase | $ 0 | $ 0 |
Retirement Benefits (Other Comp
Retirement Benefits (Other Comprehensive Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Prior service cost | $ (2) | |
Net actuarial loss | 80 | |
Total | 78 | |
Pension Benefits [Member] | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Prior service cost | 0 | |
Net actuarial loss | 75 | |
Total | 75 | |
Pension Benefits [Member] | Prior Service Cost (Credit) [Member] | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Beginning balance | 10 | $ 10 |
Current year prior service cost | (11) | 0 |
Current year net actuarial gain | 0 | 0 |
Amortization of prior service cost | 0 | 0 |
Amortization of actuarial loss | 0 | 0 |
Ending balance | (1) | 10 |
Pension Benefits [Member] | Net Actuarial Loss [Member] | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Beginning balance | 2,389 | 2,751 |
Current year prior service cost | 0 | 0 |
Current year net actuarial gain | (70) | (270) |
Amortization of prior service cost | 0 | 0 |
Amortization of actuarial loss | (82) | (92) |
Ending balance | 2,237 | 2,389 |
Other Retirement Benefits [Member] | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Prior service cost | (2) | |
Net actuarial loss | 5 | |
Total | 3 | |
Other Retirement Benefits [Member] | Prior Service Cost (Credit) [Member] | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Beginning balance | (4) | (5) |
Current year prior service cost | (6) | 0 |
Current year net actuarial gain | 0 | 0 |
Amortization of prior service cost | 0 | 1 |
Amortization of actuarial loss | 0 | 0 |
Ending balance | (10) | (4) |
Other Retirement Benefits [Member] | Net Actuarial Loss [Member] | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss [Roll Forward] | ||
Beginning balance | 94 | 116 |
Current year prior service cost | 0 | 0 |
Current year net actuarial gain | (14) | (13) |
Amortization of prior service cost | 0 | 0 |
Amortization of actuarial loss | (7) | (9) |
Ending balance | $ 73 | $ 94 |
Retirement Benefits (Actuarial
Retirement Benefits (Actuarial Assumptions) (Details) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure | ||
Actuarial gains losses amortization threshold | 10.00% | |
Expected future lifetime of inactive participants | 24 years | |
Domestic Plan [Member] | Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure | ||
Discount rate | 4.02% | 3.53% |
Compensation increase rate | 4.00% | 4.00% |
Discount rate | 3.53% | 3.22% |
Expected long-term return on plan assets | 8.00% | 8.00% |
Compensation increase rate | 4.00% | 4.00% |
Health care cost gross trend rate | 0.00% | 0.00% |
Ultimate trend rate | 0.00% | 0.00% |
Year that trend reaches ultimate rate | 0 | 0 |
Domestic Plan [Member] | Other Retirement Benefits [Member] | ||
Defined Benefit Plan Disclosure | ||
Discount rate | 3.94% | 3.39% |
Compensation increase rate | 4.00% | 4.00% |
Discount rate | 3.39% | 3.39% |
Expected long-term return on plan assets | 8.00% | 8.00% |
Compensation increase rate | 4.00% | 4.00% |
Health care cost gross trend rate | 7.50% | 7.50% |
Ultimate trend rate | 5.00% | 5.00% |
Year that trend reaches ultimate rate | 2,022 | 2,022 |
Foreign Plan [Member] | Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure | ||
Discount rate | 2.28% | 2.29% |
Compensation increase rate | 2.89% | 3.05% |
Discount rate | 2.29% | 1.72% |
Expected long-term return on plan assets | 6.73% | 6.74% |
Compensation increase rate | 3.05% | 3.03% |
Health care cost gross trend rate | 0.00% | 0.00% |
Ultimate trend rate | 0.00% | 0.00% |
Year that trend reaches ultimate rate | 0 | 0 |
Retirement Benefits (Plan Asset
Retirement Benefits (Plan Assets) (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Defined Benefit Plan Disclosure | |||
Plan assets | $ 3,573,000,000 | $ 3,206,000,000 | |
Plan assets invested in the securities of the Company | 0 | 0 | |
Securities on loan | 424,000,000 | 333,000,000 | |
Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,552,000,000 | 3,186,000,000 | $ 3,074,000,000 |
Plan assets, not leveled | 1,049,000,000 | 767,000,000 | |
Sub-total | 3,538,000,000 | 3,179,000,000 | |
Net receivables related to investment transactions | 14,000,000 | 7,000,000 | |
Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Sub-total | 1,647,000,000 | 1,414,000,000 | |
Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Sub-total | 839,000,000 | 995,000,000 | |
Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Sub-total | 3,000,000 | 3,000,000 | |
Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 21,000,000 | 20,000,000 | $ 19,000,000 |
Plan assets, not leveled | 0 | 0 | |
Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 13,000,000 | 11,000,000 | |
Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 8,000,000 | 9,000,000 | |
Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | $ 0 | $ 0 | |
Equities [Member] | |||
Defined Benefit Plan Disclosure | |||
Actual plan asset allocations | 52.00% | 57.00% | |
U.S. Equity [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | $ 1,152,000,000 | $ 967,000,000 | |
Plan assets, not leveled | 592,000,000 | 394,000,000 | |
U.S. Equity [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 552,000,000 | 558,000,000 | |
U.S. Equity [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 8,000,000 | 15,000,000 | |
U.S. Equity [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
U.S. Equity [Member] | Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 11,000,000 | 9,000,000 | |
Plan assets, not leveled | 0 | 0 | |
U.S. Equity [Member] | Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 11,000,000 | 9,000,000 | |
U.S. Equity [Member] | Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
U.S. Equity [Member] | Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Non-U.S. Equity [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 703,000,000 | 842,000,000 | |
Plan assets, not leveled | 0 | 0 | |
Non-U.S. Equity [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 693,000,000 | 814,000,000 | |
Non-U.S. Equity [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 10,000,000 | 28,000,000 | |
Non-U.S. Equity [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Non-U.S. Equity [Member] | Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Plan assets, not leveled | 0 | 0 | |
Non-U.S. Equity [Member] | Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Non-U.S. Equity [Member] | Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Non-U.S. Equity [Member] | Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | $ 0 | $ 0 | |
Fixed income [Member] | |||
Defined Benefit Plan Disclosure | |||
Actual plan asset allocations | 46.00% | 40.00% | |
Corporate [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | $ 1,027,000,000 | $ 1,100,000,000 | |
Plan assets, not leveled | 313,000,000 | 305,000,000 | |
Corporate [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 1,000,000 | 0 | |
Corporate [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 713,000,000 | 795,000,000 | |
Corporate [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Corporate [Member] | Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,000,000 | 3,000,000 | |
Plan assets, not leveled | 0 | 0 | |
Corporate [Member] | Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Corporate [Member] | Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,000,000 | 3,000,000 | |
Corporate [Member] | Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
U.S. government [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 501,000,000 | 134,000,000 | |
Plan assets, not leveled | 69,000,000 | 68,000,000 | |
U.S. government [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 401,000,000 | 42,000,000 | |
U.S. government [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 31,000,000 | 24,000,000 | |
U.S. government [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
U.S. government [Member] | Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,000,000 | 3,000,000 | |
Plan assets, not leveled | 0 | 0 | |
U.S. government [Member] | Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 2,000,000 | 2,000,000 | |
U.S. government [Member] | Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 1,000,000 | 1,000,000 | |
U.S. government [Member] | Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Mortgage and asset-backed [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 1,000,000 | 1,000,000 | |
Plan assets, not leveled | 0 | 0 | |
Mortgage and asset-backed [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Mortgage and asset-backed [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 1,000,000 | 1,000,000 | |
Mortgage and asset-backed [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Mortgage and asset-backed [Member] | Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 1,000,000 | 1,000,000 | |
Plan assets, not leveled | 0 | 0 | |
Mortgage and asset-backed [Member] | Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Mortgage and asset-backed [Member] | Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 1,000,000 | 1,000,000 | |
Mortgage and asset-backed [Member] | Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Other [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 107,000,000 | 53,000,000 | |
Plan assets, not leveled | 75,000,000 | 0 | |
Other [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Other [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 29,000,000 | 50,000,000 | |
Other [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,000,000 | 3,000,000 | |
Cash and cash equivalents [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 47,000,000 | 82,000,000 | |
Plan assets, not leveled | 0 | 0 | |
Cash and cash equivalents [Member] | Pension Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Cash and cash equivalents [Member] | Pension Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 47,000,000 | 82,000,000 | |
Cash and cash equivalents [Member] | Pension Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Cash and cash equivalents [Member] | Other Retirement Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,000,000 | 4,000,000 | |
Plan assets, not leveled | 0 | 0 | |
Cash and cash equivalents [Member] | Other Retirement Benefits [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 0 | 0 | |
Cash and cash equivalents [Member] | Other Retirement Benefits [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | 3,000,000 | 4,000,000 | |
Cash and cash equivalents [Member] | Other Retirement Benefits [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure | |||
Plan assets | $ 0 | $ 0 | |
Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure | |||
Actual plan asset allocations | 0.00% | 0.00% | |
Cash [Member] | |||
Defined Benefit Plan Disclosure | |||
Actual plan asset allocations | 2.00% | 3.00% | |
Minimum [Member] | Equities [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 40.00% | ||
Minimum [Member] | Fixed income [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 25.00% | ||
Minimum [Member] | Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 0.00% | ||
Minimum [Member] | Cash [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 0.00% | ||
Maximum [Member] | Equities [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 70.00% | ||
Maximum [Member] | Fixed income [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 60.00% | ||
Maximum [Member] | Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 15.00% | ||
Maximum [Member] | Cash [Member] | |||
Defined Benefit Plan Disclosure | |||
Target plan asset allocations | 5.00% |
Retirement Benefits (Contributi
Retirement Benefits (Contributions) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure | |||
Contributions | $ 467 | $ 68 | $ 69 |
Contributions made to multi-employer arrangements | 1 | 1 | $ 1 |
Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure | |||
Contributions | 467 | 68 | |
Pension Benefits [Member] | Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure | |||
Contributions | 4 | 5 | |
Pension Benefits [Member] | Qualified Plan [Member] | Domestic Plan [Member] | |||
Defined Benefit Plan Disclosure | |||
Contributions | 455 | 55 | |
Pension Benefits [Member] | Nonqualified Plan [Member] | Domestic Plan [Member] | |||
Defined Benefit Plan Disclosure | |||
Contributions | $ 8 | $ 8 |
Retirement Benefits (Benefit Pa
Retirement Benefits (Benefit Payments) (Details) $ in Millions | Sep. 30, 2018USD ($) |
Pension Benefits [Member] | |
Defined Benefit Plan Disclosure | |
2,019 | $ 245 |
2,020 | 240 |
2,021 | 242 |
2,022 | 244 |
2,023 | 246 |
2024-2028 | 1,228 |
Other Retirement Benefits [Member] | |
Defined Benefit Plan Disclosure | |
2,019 | 15 |
2,020 | 15 |
2,021 | 16 |
2,022 | 16 |
2,023 | 16 |
2024-2028 | $ 69 |
Retirement Benefits (Defined Co
Retirement Benefits (Defined Contribution Savings Plans and Employee Stock Purchase Plan) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure | |||
Share authorized to issue under the defined contribution savings plans (in shares) | 16,800,000 | ||
Shares available for future contributions (in shares) | 400,000 | ||
Contribution in shares (in shares) | 400,000 | 500,000 | 600,000 |
Contribution in shares, Expense | $ 58 | $ 56 | $ 49 |
Contribution in cash, Expense | 69 | 54 | 46 |
Total, Expense | $ 127 | $ 110 | $ 95 |
Percent of fair market value employees can purchase common stock under Employee Stock Purchase Plan | 95.00% | ||
Common stock issued to employees (in shares) | 0 | 100,000 | 100,000 |
Common stock issued to employees value | $ 11 | $ 10 | |
Employee Stock [Member] | |||
Defined Benefit Plan Disclosure | |||
Common stock issued to employees value | $ 0 | 11 | $ 11 |
B/E Aerospace [Member] | |||
Defined Benefit Plan Disclosure | |||
Contribution in cash, Expense | $ 11 | $ 5 |
Shareowners' Equity (Details)
Shareowners' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Shareowners' Equity | |||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, shares authorized (in shares) | 25,000,000 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | $ 6,050 | $ 2,084 | $ 1,880 |
Other comprehensive income (loss) before reclassifications | 39 | 258 | (256) |
Amounts reclassified from accumulated other comprehensive income | 65 | 65 | 57 |
Net current period other comprehensive income (loss) | 104 | 323 | (199) |
Ending Balance | 7,114 | 6,050 | 2,084 |
Foreign Exchange Translation and Other Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | 1 | (76) | (56) |
Other comprehensive income (loss) before reclassifications | (39) | 77 | (20) |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | (39) | 77 | (20) |
Ending Balance | (38) | 1 | (76) |
Pension and Other Postretirement Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (1,575) | (1,818) | (1,637) |
Other comprehensive income (loss) before reclassifications | 79 | 180 | (234) |
Amounts reclassified from accumulated other comprehensive income | 65 | 63 | 53 |
Net current period other comprehensive income (loss) | 144 | 243 | (181) |
Ending Balance | (1,431) | (1,575) | (1,818) |
Reclassifications from AOCL to net income related to the amortization of net actuarial losses and prior service credits | 89 | 100 | 84 |
Change in the Fair Value of Effective Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (1) | (4) | (6) |
Other comprehensive income (loss) before reclassifications | (1) | 1 | (2) |
Amounts reclassified from accumulated other comprehensive income | 0 | 2 | 4 |
Net current period other comprehensive income (loss) | (1) | 3 | 2 |
Ending Balance | (2) | (1) | (4) |
Total [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (1,575) | (1,898) | (1,699) |
Net current period other comprehensive income (loss) | 104 | 323 | (199) |
Ending Balance | $ (1,471) | $ (1,575) | $ (1,898) |
Stock-Based Compensation and _3
Stock-Based Compensation and Earnings Per Share (Narrative) (Details) - shares | 12 Months Ended | |
Sep. 30, 2018 | Feb. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options vesting period | 3 years | |
Percent of grants earned if maximum performance is achieved (up to) | 240.00% | |
Stock options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expiration period | 10 years | |
Stock options vesting period | 3 years | |
2015 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized (in shares) | 11,000,000 | |
Number of shares that count against the authorized limit (in shares) | 3.55 | |
Shares available for future grant or payment under plans | 5,000,000 | |
2006 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future grant or payment under plans | 0 |
Stock-Based Compensation and _4
Stock-Based Compensation and Earnings Per Share (Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ 35 | $ 31 | $ 27 |
Income tax benefit | 9 | 10 | 9 |
Product cost of sales [Member] | |||
Stock-Based Compensation | |||
Stock-based compensation expense | 8 | 9 | 8 |
Selling, general and administrative expenses [Member] | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ 27 | $ 22 | $ 19 |
Stock-Based Compensation and _5
Stock-Based Compensation and Earnings Per Share (General Option Information) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Shares (in thousands) | |||
Outstanding at September 30, 2017 (in shares) | 3,478 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (1,057) | ||
Forfeited or expired (in shares) | (5) | ||
Outstanding at September 30, 2018 (in shares) | 2,416 | 3,478 | |
Vested or expected to vest (in shares) | 2,413 | ||
Exercisable at September 30, 2018 (in shares) | 1,782 | ||
Weighted Average Exercise Price | |||
Outstanding at September 30, 2017 (in dollars per share) | $ 71.67 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 59.82 | ||
Forfeited or expired (in dollars per share) | 87.99 | ||
Outstanding at September 30, 2018 (in dollars per share) | 76.82 | $ 71.67 | |
Vested or expected to vest (in dollars per share) | 76.81 | ||
Exercisable at September 30, 2018 (in dollars per share) | $ 72.75 | ||
Weighted Average Remaining Life (in years) | |||
Outstanding at September 30, 2018 (in years) | 5 years 9 months 18 days | ||
Vested or expected to vest (in years) | 5 years 9 months 18 days | ||
Exercisable at September 30, 2018 (in years) | 5 years 1 month 6 days | ||
Aggregate Intrinsic Value (in millions) | |||
Outstanding at September 30, 2018 | $ 154 | ||
Vested or expected to vest | 154 | ||
Exercisable at September 30, 2018 | $ 121 | ||
Weighted-average fair value per share of options granted | $ 0 | $ 17.26 | $ 17.75 |
Intrinsic value of options exercised (in millions) | $ 80 | $ 49 | $ 13 |
Total fair value of options vested | 11 | $ 10 | $ 10 |
Total unrecognized compensation expense for options that have not vested | $ 2 | ||
Total unrecognized compensation expense weighted average period for recognition | 6 months |
Stock-Based Compensation and _6
Stock-Based Compensation and Earnings Per Share (Stock Option Fair Value Information) (Details) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [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 |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 1.30% | 1.40% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 1.50% | 1.60% |
Stock-Based Compensation and _7
Stock-Based Compensation and Earnings Per Share (Performance Shares, Restricted Shares and Restricted Stock Units) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted Average Grant Date Fair Value | |||
Maximum number of shares that can be issued in respect of performance shares granted (in shares) | 328 | 299 | 159 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested at September 30, 2017 (in shares) | 370 | ||
Granted (in shares) | 142 | ||
Vested (in shares) | (120) | ||
Forfeited (in shares) | (9) | ||
Nonvested at September 30, 2018 (in shares) | 383 | 370 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at September 30, 2017 (in dollars per share) | $ 85.44 | ||
Granted (in dollars per share) | 138.66 | $ 88.25 | $ 85.13 |
Vested (in dollars per share) | 82.77 | ||
Forfeited (in dollars per share) | 120.03 | ||
Nonvested at September 30, 2018 (in dollars per share) | $ 105.25 | $ 85.44 | |
Total unrecognized compensation costs at September 30, 2018 | $ 17 | ||
Weighted-average life remaining at September 30, 2018, in years | 1 year | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested at September 30, 2017 (in shares) | 23 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Nonvested at September 30, 2018 (in shares) | 23 | 23 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at September 30, 2017 (in dollars per share) | $ 30.24 | ||
Granted (in dollars per share) | 0 | $ 0 | 0 |
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
Nonvested at September 30, 2018 (in dollars per share) | $ 30.24 | $ 30.24 | |
Total unrecognized compensation costs at September 30, 2018 | $ 0 | ||
Weighted-average life remaining at September 30, 2018, in years | 0 years | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested at September 30, 2017 (in shares) | 512 | ||
Granted (in shares) | 265 | ||
Vested (in shares) | (113) | ||
Forfeited (in shares) | (31) | ||
Nonvested at September 30, 2018 (in shares) | 633 | 512 | |
Weighted Average Grant Date Fair Value | |||
Nonvested at September 30, 2017 (in dollars per share) | $ 80.56 | ||
Granted (in dollars per share) | 133.60 | $ 92.84 | $ 85.85 |
Vested (in dollars per share) | 91.28 | ||
Forfeited (in dollars per share) | 111.13 | ||
Nonvested at September 30, 2018 (in dollars per share) | $ 99.16 | $ 80.56 | |
Total unrecognized compensation costs at September 30, 2018 | $ 30 | ||
Weighted-average life remaining at September 30, 2018, in years | 1 year 1 month 6 days |
Stock-Based Compensation and _8
Stock-Based Compensation and Earnings Per Share (Earnings Per Share and Diluted Share Equivalents) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Computation of Basic and Diluted Earnings Per Share | |||||||||||
Income from continuing operations | $ 1,032 | $ 705 | $ 727 | ||||||||
Income from discontinued operations, net of taxes | 0 | 0 | 1 | ||||||||
Net income | $ 240 | $ 275 | $ 237 | $ 280 | $ 213 | $ 179 | $ 168 | $ 145 | $ 1,032 | $ 705 | $ 728 |
Denominator: | |||||||||||
Denominator for basic earnings per share – weighted average common shares (in shares) | 164 | 145.5 | 130.5 | ||||||||
Stock options (in shares) | 1.2 | 1.2 | 1 | ||||||||
Performance shares, restricted stock and restricted stock units (in shares) | 0.6 | 0.5 | 0.6 | ||||||||
Dilutive potential common shares (in shares) | 1.8 | 1.7 | 1.6 | ||||||||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion (in shares) | 165.8 | 147.2 | 132.1 | ||||||||
Basic | |||||||||||
Continuing operations (in dollars per share) | $ 6.29 | $ 4.85 | $ 5.57 | ||||||||
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | ||||||||
Basic earnings per share (in dollars per share) | $ 1.46 | $ 1.67 | $ 1.44 | $ 1.71 | $ 1.31 | $ 1.13 | $ 1.28 | $ 1.11 | 6.29 | 4.85 | 5.58 |
Diluted | |||||||||||
Continuing operations (in dollars per share) | 6.22 | 4.79 | 5.50 | ||||||||
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | ||||||||
Diluted earnings per share (in dollars per share) | $ 1.44 | $ 1.66 | $ 1.43 | $ 1.69 | $ 1.29 | $ 1.12 | $ 1.27 | $ 1.10 | $ 6.22 | $ 4.79 | $ 5.51 |
Stock options [Member] | |||||||||||
Diluted | |||||||||||
Stock options excluded from the average outstanding diluted shares calculation (in shares) | 0 | 0 | 0.6 | ||||||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | |||||||||||
Computation of Basic and Diluted Earnings Per Share | |||||||||||
Income from continuing operations | $ 4 | ||||||||||
Diluted | |||||||||||
Continuing operations (in dollars per share) | $ 0.02 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense from Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. income | $ 723 | $ 688 | $ 824 |
Non-U.S. income | 389 | 243 | 111 |
Total | 1,112 | 931 | 935 |
Current: | |||
U.S. federal | (16) | 97 | 120 |
Non-U.S. | 105 | 68 | 29 |
U.S. state and local | 4 | 18 | 11 |
Total current | 93 | 183 | 160 |
Deferred: | |||
U.S. federal | (9) | 48 | 47 |
Non-U.S. | (16) | (5) | 0 |
U.S. state and local | 12 | 0 | 1 |
Total deferred | (13) | 43 | 48 |
Income tax expense | $ 80 | $ 226 | $ 208 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate and U.S. Statutory Tax Rate Reconciliation) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 24.60% | 35.00% | 35.00% |
Foreign rate differential | (0.70%) | (4.40%) | (0.60%) |
State and local income taxes | 0.70% | 1.60% | 1.10% |
Research and development credit | (5.60%) | (5.00%) | (6.40%) |
Domestic manufacturing deduction | (0.60%) | (2.10%) | (2.00%) |
U.S. Tax Reform | (10.90%) | 0.00% | 0.00% |
Non-deductible goodwill | 1.30% | 0.00% | 0.00% |
Tax settlements | (0.70%) | (0.10%) | 0.00% |
Stock compensation - excess tax benefits | (1.80%) | (1.30%) | (0.40%) |
Change in valuation allowance | (0.10%) | 0.10% | (4.50%) |
Other | 1.00% | 0.50% | 0.00% |
Effective income tax rate | 7.20% | 24.30% | 22.20% |
Income tax rate reduction | 5.00% | ||
Increase in net income | $ 21 | ||
Increase in net income per share (in dollars per share) | $ 0.13 |
Income Taxes (Net Long-Term Def
Income Taxes (Net Long-Term Deferred Income Tax Benefits (Liabilities) Temporary Differences) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | ||
Inventory | $ (176) | $ (276) |
Product warranty costs | 28 | 45 |
Customer incentives | 31 | 66 |
Contract reserves | 17 | 49 |
Retirement benefits | 116 | 400 |
Intangibles | (352) | (602) |
Capital lease liability | 11 | 19 |
Property | (138) | (196) |
Stock-based compensation | 20 | 37 |
Deferred compensation | 17 | 27 |
Compensation and benefits | 17 | 38 |
Research and development credit carryforward | 54 | 25 |
Valuation allowance | (22) | (23) |
Other | 47 | 81 |
Deferred tax (liabilities), net | $ (330) | $ (310) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes | ||||||
Statutory tax rate | 24.60% | 35.00% | 35.00% | |||
Decrease in income tax expense due to change in enacted rate | $ 154 | |||||
Deferred tax liabilities, repatriation of foreign earnings | 69 | |||||
Transition tax for accumulated foreign earnings | 24 | |||||
Foreign earnings deemed eligible to be repatriated | $ 1,100 | |||||
Increase to income tax payable | 64 | $ (45) | $ 25 | |||
U.S. taxable income over the past three years | 2,219 | |||||
State net operating loss carryforwards | 34 | |||||
State tax credit carryforwards | 55 | |||||
Foreign tax credit carryforward | 27 | |||||
Research and development credit carryforward | $ 54 | 25 | ||||
Statute of limitations, minimum (in years) | 3 years | |||||
Statute of limitations, maximum (in years) | 5 years | |||||
Provision for taxes related non-U.S. subsidiaries | $ 14 | |||||
Undistributed earnings of non-U.S. subsidiaries available for distribution to US | 250 | |||||
Undistributed earnings of non-U.S. subsidiaries | 1,058 | |||||
Net income tax payments | 28 | 230 | 130 | |||
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 200 | 169 | 20 | |||
Interest and penalties recognized within Other Liabilities | 9 | 8 | ||||
Interest and penalties recorded as an expense or (income) within Income tax expense | 0 | $ 0 | $ 0 | |||
Minimum [Member] | ||||||
Income Taxes | ||||||
Reasonably possible reduction in unrecognized tax benefits | 0 | |||||
Maximum [Member] | ||||||
Income Taxes | ||||||
Reasonably possible reduction in unrecognized tax benefits | 44 | |||||
B/E Aerospace [Member] | ||||||
Income Taxes | ||||||
Foreign earnings deemed eligible to be repatriated | $ 250 | |||||
Increase to income tax payable | 35 | |||||
Reversal of uncertain tax liability | $ 10 | |||||
Domestic Tax Authority [Member] | ||||||
Income Taxes | ||||||
Research and development credit carryforward | $ 17 | |||||
Forecast [Member] | ||||||
Income Taxes | ||||||
Statutory tax rate | 21.00% |
Income Taxes Income Taxes (Chan
Income Taxes Income Taxes (Change in Valuation Allowance for Deferred Tax Assets) (Details) - Deferred tax assets [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 23 | $ 0 | $ 42 |
Charged to costs and expenses | 0 | 1 | 0 |
Deductions | (1) | 0 | (42) |
Balance at September 30 | 22 | 23 | 0 |
B/E Aerospace [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
B/E Aerospace acquisition | $ 0 | $ 22 | $ 0 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Beginning balance | $ 201 | $ 45 | $ 39 |
Additions for tax positions related to the current year | 24 | 73 | 11 |
Additions for tax positions of prior years | 16 | 1 | 7 |
Additions for tax positions related to acquisitions | 1 | 86 | 0 |
Reductions for tax positions of prior years | (24) | (1) | (10) |
Reductions for tax positions related to settlements with taxing authorities | (4) | (3) | (2) |
Ending balance | $ 214 | $ 201 | $ 45 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis) (Details) - Recurring Basis [Member] - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Level 1 [Member] | Deferred compensation plan investments [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Assets at fair value | $ 70 | $ 63 |
Level 2 [Member] | Interest rate swap [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Liabilities at fair value | (3) | 0 |
Level 2 [Member] | Foreign currency forward exchange contract liabilities [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Liabilities at fair value | 0 | (7) |
Level 2 [Member] | Deferred compensation plan investments [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Assets at fair value | 27 | 24 |
Level 2 [Member] | Interest rate swap [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Assets at fair value | 1 | 14 |
Level 2 [Member] | Foreign currency forward exchange contract liabilities [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Assets at fair value | 0 | 8 |
Level 3 [Member] | Contingent consideration [Member] | ||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ||
Liabilities at fair value | $ (14) | $ (17) |
Fair Value Measurements (Change
Fair Value Measurements (Change In Fair Value of Level 3) (Details) - Recurring Basis [Member] - Level 3 [Member] - Contingent consideration [Member] $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at September 30, 2017 | $ (17) |
Payment of contingent consideration (see Note 3) | 3 |
Balance at September 30, 2018 | $ (14) |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Amounts and Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | $ 738 | $ 703 | $ 340 | $ 252 |
Short-term debt | (2,248) | (479) | ||
Long-term debt | (5,681) | (6,676) | ||
Carrying Amount [Member] | ||||
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 738 | 703 | ||
Short-term debt | (2,248) | (479) | ||
Long-term debt | (5,683) | (6,662) | ||
Fair Value [Member] | ||||
Carrying Amounts and Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 738 | 703 | ||
Short-term debt | (2,252) | (479) | ||
Long-term debt | $ (5,560) | $ (6,898) |
Derivative Financial Instrume_3
Derivative Financial Instruments (Narrative) (Details) | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2015USD ($)contract | Mar. 31, 2014USD ($)contract | Jan. 31, 2010USD ($)contract | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Derivative Financial Instruments | |||||
Number of interest rate swap contracts | contract | 2 | 3 | 2 | ||
Derivative asset | $ 1,000,000 | $ 22,000,000 | |||
Derivative liability | 3,000,000 | 7,000,000 | |||
Fair value adjustment | (2,000,000) | 14,000,000 | |||
Impact to earnings related to the ineffective portion of any hedging instruments | 0 | ||||
Impact to 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 | 0 | ||||
Cash flow hedge gain (loss) to be reclassified within twelve months | 0 | ||||
Foreign currency forward exchange contracts [Member] | |||||
Derivative Financial Instruments | |||||
Notional amount of foreign currency forward exchange contracts | 0 | 1,312,000,000 | |||
Other Assets [Member] | Interest rate swap [Member] | |||||
Derivative Financial Instruments | |||||
Derivative asset | 1,000,000 | 14,000,000 | |||
Other liabilities [Member] | Interest rate swap [Member] | |||||
Derivative Financial Instruments | |||||
Derivative liability | 3,000,000 | 0 | |||
Long-term Debt [Member] | Interest rate swap [Member] | |||||
Derivative Financial Instruments | |||||
Fair value adjustment | $ (2,000,000) | $ 14,000,000 | |||
Unsecured Notes [Member] | 2019 Notes [Member] | |||||
Derivative Financial Instruments | |||||
Derivative amount of hedged item | $ 150,000,000 | $ 150,000,000 | |||
Interest rate | 525.00% | 525.00% | 5.25% | ||
Basis spread on variable rate | 3.56% | 1.235% | |||
Unsecured Notes [Member] | 2023 Notes [Member] | |||||
Derivative Financial Instruments | |||||
Derivative amount of hedged item | $ 200,000,000 | ||||
Interest rate | 3.70% | ||||
Basis spread on variable rate | 0.94% |
Derivative Financial Instrume_4
Derivative Financial Instruments (Fair Values of Derivative Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Derivative Financial Instruments | ||
Derivative asset | $ 1 | $ 22 |
Derivative liability | 3 | 7 |
Foreign Exchange Forward [Member] | Other current assets [Member] | ||
Derivative Financial Instruments | ||
Derivative asset | 0 | 8 |
Foreign Exchange Forward [Member] | Other current liabilities [Member] | ||
Derivative Financial Instruments | ||
Derivative liability | 0 | 7 |
Interest rate swap [Member] | Other assets [Member] | ||
Derivative Financial Instruments | ||
Derivative asset | 1 | 14 |
Interest rate swap [Member] | Other liabilities [Member] | ||
Derivative Financial Instruments | ||
Derivative liability | $ 3 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Effect of Derivative Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Designated as Hedging Instrument [Member] | Fair Value Hedges [Member] | Interest expense [Member] | ||
Derivative Financial Instruments | ||
Amount of gain (loss) from interest rate swaps | $ 4 | $ 8 |
Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | AOCL [Member] | ||
Derivative Financial Instruments | ||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact) | (2) | 1 |
Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | Cost of sales [Member] | ||
Derivative Financial Instruments | ||
Amount of gain (loss) from foreign currency forward exchange contracts reclassified from AOCL into income | (1) | (2) |
Not Designated as Hedging Instrument [Member] | Cost of sales [Member] | ||
Derivative Financial Instruments | ||
Amount of gain (loss) from foreign currency forward exchange contracts | (16) | (1) |
Not Designated as Hedging Instrument [Member] | Transaction And Integration Costs [Member] | ||
Derivative Financial Instruments | ||
Amount of gain (loss) from foreign currency forward exchange contracts | $ (6) | $ 0 |
Guarantees and Indemnificatio_3
Guarantees and Indemnifications (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | |
Guarantees and Indemnifications | ||||
Balance at beginning of year | $ 186 | $ 87 | $ 89 | |
Warranty costs incurred | (87) | (61) | (42) | |
Product warranty accrual | 106 | 59 | 46 | |
Changes in estimates for prior years | (9) | (16) | (6) | |
Reclassification of business to held for sale (see Note 4) | (2) | 0 | 0 | |
Increase from acquisitions | 0 | 117 | 0 | |
Balance at September 30 | 194 | $ 186 | $ 87 | |
Total outstanding letters of credit | $ 364 | |||
Payable to KLX | $ 9 |
Contractual Obligations and O_3
Contractual Obligations and Other Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Non-cancelable operating leases | |||
2,019 | $ 89 | ||
2,020 | 75 | ||
2,021 | 59 | ||
2,022 | 49 | ||
2,023 | 38 | ||
Thereafter | 196 | ||
Total | 506 | ||
Purchase contracts | |||
2,019 | 35 | ||
2,020 | 33 | ||
2,021 | 25 | ||
2,022 | 15 | ||
2,023 | 5 | ||
Thereafter | 20 | ||
Total | 133 | ||
Long-term debt | |||
2,019 | 750 | ||
2,020 | 331 | ||
2,021 | 0 | ||
2,022 | 1,350 | ||
2,023 | 0 | ||
Thereafter | 4,050 | ||
Total | 6,481 | ||
Interest on long-term debt | |||
2,019 | 231 | ||
2,020 | 200 | ||
2,021 | 192 | ||
2,022 | 173 | ||
2,023 | 153 | ||
Thereafter | 1,600 | ||
Total | 2,549 | ||
Total | |||
2,019 | 1,105 | ||
2,020 | 639 | ||
2,021 | 276 | ||
2,022 | 1,587 | ||
2,023 | 196 | ||
Thereafter | 5,866 | ||
Total | 9,669 | ||
Rent expense | 94 | $ 84 | $ 77 |
Amounts purchased under purchase contracts | $ 38 | $ 41 | $ 57 |
Environmental Matters (Details)
Environmental Matters (Details) $ in Millions | Sep. 30, 2018USD ($)site |
Environmental Remediation Obligations [Abstract] | |
Number of sites involved in investigation or remediation | site | 10 |
Number of sites where reasonably possible future costs is not significant | site | 9 |
Total reasonably possible future costs from sites | $ | $ 12 |
Environmental reserves | $ | $ 6 |
Legal Matters Legal Matters (De
Legal Matters Legal Matters (Details) | 12 Months Ended |
Sep. 30, 2018collective_bargaining_planemployee | |
Minimum [Member] | |
Legal Matters [Line Items] | |
Collective bargaining agreement, term | 3 years |
Maximum [Member] | |
Legal Matters [Line Items] | |
Collective bargaining agreement, term | 5 years |
Eight Collective Bargaining Plans [Member] | |
Legal Matters [Line Items] | |
Number of employees under collective bargaining agreement | employee | 3,100 |
Number of collective-bargaining arrangement plans | collective_bargaining_plan | 8 |
Five Collective Bargaining Plans [Member] | |
Legal Matters [Line Items] | |
Number of employees under collective bargaining agreement | employee | 2,200 |
Number of collective-bargaining arrangement plans | collective_bargaining_plan | 5 |
Restructuring and Impairment _3
Restructuring and Impairment Charges and Settlement of a Contract Matter - Schedule of Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring and Asset Impairment Charges [Line Items] | ||||
Settlement of a contract matter | $ 25 | |||
Asset impairment charges | $ 6 | 9 | ||
Employee separation costs | 39 | 5 | ||
Total | 45 | 39 | $ 0 | $ 45 |
Cost of Sales [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Settlement of a contract matter | 25 | |||
Asset impairment charges | 2 | 0 | ||
Employee separation costs | 31 | 5 | ||
Total | 33 | 30 | ||
Selling, General and Administrative Expenses [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Asset impairment charges | 4 | |||
Employee separation costs | 8 | |||
Total | $ 12 | |||
Other Income [Member] | ||||
Restructuring and Asset Impairment Charges [Line Items] | ||||
Settlement of a contract matter | 0 | |||
Asset impairment charges | 9 | |||
Employee separation costs | 0 | |||
Total | $ 9 |
Restructuring and Impairment _4
Restructuring and Impairment Charges and Settlement of a Contract Matter (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Restructuring and Asset Impairment Charges [Line Items] | |
Settlement of a contract matter | $ 25 |
Cost of Sales [Member] | |
Restructuring and Asset Impairment Charges [Line Items] | |
Settlement of a contract matter | 25 |
Commercial Systems Preproduction Engineering Costs [Member] | |
Restructuring and Asset Impairment Charges [Line Items] | |
Impairment of assets to be disposed of | 7 |
Property, Net [Member] | |
Restructuring and Asset Impairment Charges [Line Items] | |
Impairment of assets to be disposed of | 4 |
Employee-related Liabilities [Member] | Employee Severance [Member] | |
Restructuring and Asset Impairment Charges [Line Items] | |
Restructuring reserve | $ 5 |
Business Segment Information (N
Business Segment Information (Narrative) (Details) - segment | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting [Abstract] | |||
Number of operating segments | 4 | ||
Sales [Member] | U.S. Government [Member] | |||
Concentration Risk [Line Items] | |||
Sales | 23.00% | 25.00% | 33.00% |
Sales [Member] | Customer [Member] | The Boeing Company [Member] | |||
Concentration Risk [Line Items] | |||
Sales | 16.00% | 15.00% |
Business Segment Information (S
Business Segment Information (Sales and Results of Operations of Operating Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Segment Information | |||||||||||
Sales | $ 2,266 | $ 2,208 | $ 2,180 | $ 2,011 | $ 2,193 | $ 2,094 | $ 1,342 | $ 1,193 | $ 8,665 | $ 6,822 | $ 5,259 |
Segment operating earnings | 1,616 | 1,326 | 1,115 | ||||||||
Interest expense | (262) | (187) | (64) | ||||||||
Stock-based compensation | (35) | (31) | (27) | ||||||||
General corporate, net | (56) | (57) | (44) | ||||||||
Restructuring and impairment charges and settlement of a contract matter (see Note 20) | (45) | (39) | 0 | (45) | |||||||
Transaction and integration costs | (112) | (120) | 0 | ||||||||
Income from continuing operations before income taxes | 1,112 | 931 | 935 | ||||||||
Income tax expense | (80) | (226) | (208) | ||||||||
Income from continuing operations | 1,032 | 705 | 727 | ||||||||
Total transaction, integration and financing costs | 149 | ||||||||||
B/E Aerospace [Member] | |||||||||||
Business Segment Information | |||||||||||
Transaction and integration costs | (78) | (96) | 0 | ||||||||
Total transaction, integration and financing costs | 14 | 23 | 24 | 17 | 16 | $ 82 | $ 13 | $ 14 | 78 | 125 | 0 |
B/E Aerospace [Member] | Bridge Loan [Member] | |||||||||||
Business Segment Information | |||||||||||
Interest expense | (29) | ||||||||||
Merger Agreement with UTC [Member] | |||||||||||
Business Segment Information | |||||||||||
Transaction and integration costs | (34) | (24) | |||||||||
Total transaction, integration and financing costs | $ 7 | $ 6 | $ 11 | $ 10 | $ 24 | ||||||
Interior Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 2,709 | 1,302 | 0 | ||||||||
Segment operating earnings | 406 | 168 | 0 | ||||||||
Commercial Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 2,580 | 2,418 | 2,395 | ||||||||
Segment operating earnings | 557 | 519 | 531 | ||||||||
Government Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 2,631 | 2,384 | 2,206 | ||||||||
Segment operating earnings | 515 | 502 | 477 | ||||||||
Information Management Services [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 745 | 718 | 658 | ||||||||
Segment operating earnings | $ 138 | $ 137 | $ 107 |
Business Segment Information (I
Business Segment Information (Identifiable Assets and Investments in Equity Affiliates) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Segment Information | |||
Identifiable assets | $ 19,026 | $ 17,997 | $ 7,699 |
Investments in equity affiliates | 5 | 7 | 10 |
Depreciation and amortization | 449 | 399 | 253 |
Capital expenditures for property | 257 | 240 | 193 |
Earnings (loss) from equity affiliates | (1) | (2) | (1) |
Interior Systems [Member] | |||
Business Segment Information | |||
Investments in equity affiliates | 0 | 0 | 0 |
Depreciation and amortization | 129 | 129 | 0 |
Capital expenditures for property | 79 | 41 | 0 |
Earnings (loss) from equity affiliates | 0 | 0 | 0 |
Commercial Systems [Member] | |||
Business Segment Information | |||
Investments in equity affiliates | 0 | 1 | 4 |
Depreciation and amortization | 160 | 132 | 125 |
Capital expenditures for property | 61 | 72 | 74 |
Earnings (loss) from equity affiliates | (1) | (2) | (3) |
Government Systems [Member] | |||
Business Segment Information | |||
Investments in equity affiliates | 5 | 6 | 6 |
Depreciation and amortization | 93 | 80 | 74 |
Capital expenditures for property | 67 | 70 | 69 |
Earnings (loss) from equity affiliates | 0 | 0 | 2 |
Information Management Services [Member] | |||
Business Segment Information | |||
Investments in equity affiliates | 0 | 0 | 0 |
Depreciation and amortization | 67 | 58 | 54 |
Capital expenditures for property | 50 | 57 | 50 |
Earnings (loss) from equity affiliates | 0 | 0 | 0 |
Operating Segments [Member] | Interior Systems [Member] | |||
Business Segment Information | |||
Identifiable assets | 9,534 | 9,896 | 0 |
Operating Segments [Member] | Commercial Systems [Member] | |||
Business Segment Information | |||
Identifiable assets | 3,817 | 3,124 | 3,050 |
Operating Segments [Member] | Government Systems [Member] | |||
Business Segment Information | |||
Identifiable assets | 2,802 | 2,156 | 2,052 |
Operating Segments [Member] | Information Management Services [Member] | |||
Business Segment Information | |||
Identifiable assets | 1,854 | 1,917 | 1,906 |
Corporate [Member] | |||
Business Segment Information | |||
Identifiable assets | $ 1,019 | $ 904 | $ 691 |
Business Segment Information _2
Business Segment Information (Summary of Sales by Product Category) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Segment Information | |||||||||||
Sales | $ 2,266 | $ 2,208 | $ 2,180 | $ 2,011 | $ 2,193 | $ 2,094 | $ 1,342 | $ 1,193 | $ 8,665 | $ 6,822 | $ 5,259 |
Interior Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 2,709 | 1,302 | 0 | ||||||||
Interior Systems [Member] | Interior products and services [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 1,472 | 717 | 0 | ||||||||
Interior Systems [Member] | Aircraft seating [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 1,237 | 585 | 0 | ||||||||
Commercial Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 2,580 | 2,418 | 2,395 | ||||||||
Commercial Systems [Member] | Air transport aviation electronics [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 1,573 | 1,470 | 1,430 | ||||||||
Commercial Systems [Member] | Business and regional aviation electronics [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 1,007 | 948 | 965 | ||||||||
Commercial Systems [Member] | Wide-body in-flight entertainment products and services [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 15 | 19 | 38 | ||||||||
Government Systems [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 2,631 | 2,384 | 2,206 | ||||||||
Government Systems [Member] | Avionics [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 1,503 | 1,472 | 1,483 | ||||||||
Government Systems [Member] | Communication and Navigation [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | 1,128 | 912 | 723 | ||||||||
Information Management Services [Member] | |||||||||||
Business Segment Information | |||||||||||
Sales | $ 745 | $ 718 | $ 658 |
Business Segment Information _3
Business Segment Information (Sales and Property by Geographic Region) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues from External Customers and Property | |||||||||||
Sales | $ 2,266 | $ 2,208 | $ 2,180 | $ 2,011 | $ 2,193 | $ 2,094 | $ 1,342 | $ 1,193 | $ 8,665 | $ 6,822 | $ 5,259 |
Property, Net | 1,429 | 1,398 | 1,429 | 1,398 | 1,035 | ||||||
Foreign Military [Member] | |||||||||||
Revenues from External Customers and Property | |||||||||||
Sales | 163 | 139 | 171 | ||||||||
U.S. [Member] | |||||||||||
Revenues from External Customers and Property | |||||||||||
Sales | 4,666 | 3,873 | 3,292 | ||||||||
Property, Net | 1,131 | 1,134 | 1,131 | 1,134 | 921 | ||||||
Europe / Africa / Middle East [Member] | |||||||||||
Revenues from External Customers and Property | |||||||||||
Sales | 2,315 | 1,607 | 937 | ||||||||
Property, Net | 153 | 152 | 153 | 152 | 86 | ||||||
Asia-Pacific [Member] | |||||||||||
Revenues from External Customers and Property | |||||||||||
Sales | 1,064 | 787 | 545 | ||||||||
Property, Net | 129 | 94 | 129 | 94 | 17 | ||||||
Americas, excluding U.S. [Member] | |||||||||||
Revenues from External Customers and Property | |||||||||||
Sales | 620 | 555 | 485 | ||||||||
Property, Net | 16 | 18 | 16 | 18 | 11 | ||||||
Non U.S. [Member] | |||||||||||
Revenues from External Customers and Property | |||||||||||
Sales | 3,999 | 2,949 | 1,967 | ||||||||
Property, Net | $ 298 | $ 264 | $ 298 | $ 264 | $ 114 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 2,266 | $ 2,208 | $ 2,180 | $ 2,011 | $ 2,193 | $ 2,094 | $ 1,342 | $ 1,193 | $ 8,665 | $ 6,822 | $ 5,259 |
Gross profit (total sales less product and service cost of sales) | 570 | 583 | 582 | 548 | 595 | 570 | 412 | 377 | 2,283 | 1,954 | |
Net income | $ 240 | $ 275 | $ 237 | $ 280 | $ 213 | $ 179 | $ 168 | $ 145 | $ 1,032 | $ 705 | $ 728 |
Earnings per share: | |||||||||||
Basic earnings per share (in dollars per share) | $ 1.46 | $ 1.67 | $ 1.44 | $ 1.71 | $ 1.31 | $ 1.13 | $ 1.28 | $ 1.11 | $ 6.29 | $ 4.85 | $ 5.58 |
Diluted earnings per share (in dollars per share) | $ 1.44 | $ 1.66 | $ 1.43 | $ 1.69 | $ 1.29 | $ 1.12 | $ 1.27 | $ 1.10 | $ 6.22 | $ 4.79 | $ 5.51 |
Business Acquisition [Line Items] | |||||||||||
Pre-tax transaction, integration and financing cost | $ 149 | ||||||||||
Discrete tax benefit (expense) from Tax Cuts and Jobs Act of 2017 | $ 16 | $ 70 | $ (18) | $ 62 | |||||||
B/E Aerospace [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Pre-tax transaction, integration and financing cost | 14 | 23 | 24 | 17 | $ 16 | $ 82 | $ 13 | $ 14 | $ 78 | $ 125 | $ 0 |
Merger Agreement with UTC [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Pre-tax transaction, integration and financing cost | $ 7 | $ 6 | $ 11 | $ 10 | $ 24 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 01, 2018$ / shares |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Common stock, dividends, declared (in dollars per share) | $ 0.33 |