Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019shares | |
Cover page. | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2019 |
Document Transition Report | false |
Entity File Number | 1-3671 |
Entity Registrant Name | GENERAL DYNAMICS CORPORATION |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 13-1673581 |
Entity Address, Address Line One | 2941 Fairview Park Drive |
Entity Address, Address Line Two | Suite 100 |
Entity Address, City or Town | Falls Church |
Entity Address, State or Province | VA |
Entity Address, Postal Zip Code | 22042-4513 |
City Area Code | 703 |
Local Phone Number | 876-3000 |
Title of 12(b) Security | Common Stock |
Trading Symbol | GD |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 288,844,120 |
Entity Central Index Key | 0000040533 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Consolidated Statement of Earni
Consolidated Statement of Earnings (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Revenue: | ||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 |
Operating costs and expenses: | ||||
Cost of sales | (7,869) | (7,486) | (15,502) | (13,476) |
General and administrative (G&A) | (596) | (612) | (1,210) | (1,149) |
Operating costs and expenses, total | (8,465) | (8,098) | (16,712) | (14,625) |
Operating earnings | 1,090 | 1,088 | 2,104 | 2,096 |
Interest, net | (119) | (103) | (236) | (130) |
Other, net | 12 | (15) | 30 | (36) |
Earnings before income tax | 983 | 970 | 1,898 | 1,930 |
Provision for income tax, net | (177) | (184) | (347) | (345) |
Net earnings | $ 806 | $ 786 | $ 1,551 | $ 1,585 |
Earnings per share | ||||
Basic (in dollars per share) | $ 2.80 | $ 2.65 | $ 5.39 | $ 5.35 |
Diluted (in dollars per share) | $ 2.77 | $ 2.62 | $ 5.33 | $ 5.27 |
Products | ||||
Revenue: | ||||
Revenue | $ 5,401 | $ 4,754 | $ 10,652 | $ 9,330 |
Operating costs and expenses: | ||||
Cost of sales | (4,342) | (3,702) | (8,577) | (7,248) |
Services | ||||
Revenue: | ||||
Revenue | 4,154 | 4,432 | 8,164 | 7,391 |
Operating costs and expenses: | ||||
Cost of sales | $ (3,527) | $ (3,784) | $ (6,925) | $ (6,228) |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 806 | $ 786 | $ 1,551 | $ 1,585 |
Gains (losses) on cash flow hedges | 51 | (18) | 68 | (21) |
Foreign currency translation adjustments | 125 | (216) | 156 | (215) |
Change in retirement plans’ funded status | 59 | 79 | 122 | 163 |
Other comprehensive income (loss), pretax | 235 | (155) | 346 | (73) |
Provision for income tax, net | (28) | (12) | (44) | (27) |
Other comprehensive income (loss), net of tax | 207 | (167) | 302 | (100) |
Comprehensive income | $ 1,013 | $ 619 | $ 1,853 | $ 1,485 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash and equivalents | $ 702 | $ 963 | |
Accounts receivable | 3,673 | 3,759 | |
Unbilled receivables | 7,554 | 6,576 | |
Inventories | 6,480 | 5,977 | |
Other current assets | 1,148 | 914 | |
Total current assets | 19,557 | 18,189 | |
Noncurrent assets: | |||
Property, plant and equipment, net | 4,091 | 3,978 | |
Intangible assets, net | 2,457 | 2,585 | |
Goodwill | [1] | 19,662 | 19,594 |
Other assets | 2,307 | 1,062 | |
Total noncurrent assets | 28,517 | 27,219 | |
Total assets | 48,074 | 45,408 | |
Current liabilities: | |||
Short-term debt and current portion of long-term debt | 4,960 | 973 | |
Accounts payable | 2,860 | 3,179 | |
Customer advances and deposits | 6,714 | 7,270 | |
Other current liabilities | 3,480 | 3,317 | |
Total current liabilities | 18,014 | 14,739 | |
Noncurrent liabilities: | |||
Long-term debt | 8,975 | 11,444 | |
Other liabilities | 8,208 | 7,493 | |
Commitments and contingencies | |||
Total noncurrent liabilities | 17,183 | 18,937 | |
Shareholders’ equity: | |||
Common stock | 482 | 482 | |
Surplus | 2,959 | 2,946 | |
Retained earnings | 30,291 | 29,326 | |
Treasury stock | (17,379) | (17,244) | |
Accumulated other comprehensive loss | (3,476) | (3,778) | |
Total shareholders’ equity | 12,877 | 11,732 | |
Total liabilities and shareholders’ equity | $ 48,074 | $ 45,408 | |
[1] | Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | ||
Cash flows from operating activities - continuing operations: | |||
Net earnings | $ 1,551 | $ 1,585 | |
Adjustments to reconcile net earnings to net cash from operating activities: | |||
Depreciation of property, plant and equipment | 232 | 206 | |
Amortization of intangible and finance lease right-of-use assets | 183 | 121 | |
Equity-based compensation expense | 72 | 71 | |
Deferred income tax benefit | (17) | (6) | |
(Increase) decrease in assets, net of effects of business acquisitions: | |||
Accounts receivable | 64 | 344 | |
Unbilled receivables | (1,074) | (1,030) | |
Inventories | (556) | (542) | |
Increase (decrease) in liabilities, net of effects of business acquisitions: | |||
Accounts payable | (301) | (324) | |
Customer advances and deposits | (607) | (159) | |
Other, net | (51) | 25 | |
Net cash (used) provided by operating activities | [1] | (504) | 291 |
Cash flows from investing activities: | |||
Capital expenditures | (362) | (279) | |
Business acquisitions, net of cash acquired | (17) | (10,039) | |
Other, net | 16 | 74 | |
Net cash used by investing activities | (363) | (10,244) | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 1,394 | 2,786 | |
Dividends paid | (563) | (526) | |
Purchases of common stock | (231) | (436) | |
Proceeds from notes | 0 | 6,461 | |
Repayment of CSRA accounts receivable purchase agreement | 0 | (450) | |
Other, net | 30 | 3 | |
Net cash provided by financing activities | 630 | 8,838 | |
Net cash used by discontinued operations | (24) | (6) | |
Net decrease in cash and equivalents | (261) | (1,121) | |
Cash and equivalents at beginning of period | 963 | 2,983 | |
Cash and equivalents at end of period | 702 | 1,862 | |
Supplemental cash flow information: | |||
Income tax payments, net | 397 | 155 | |
Interest payments | 216 | 95 | |
Floating-rate notes | |||
Cash flows from financing activities: | |||
Proceeds from notes | $ 0 | $ 1,000 | |
[1] | * Continuing operations only |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock, Par | Common Stock, Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | |
Cumulative-effect adjustments | [1] | $ 0 | $ 638 | $ (638) | |||
Beginning balance at Dec. 31, 2017 | 11,435 | $ 482 | $ 2,872 | 26,444 | $ (15,543) | (2,820) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,585 | 1,585 | |||||
Cash dividends declared | (552) | (552) | |||||
Equity-based awards | 62 | (7) | 69 | ||||
Shares purchased | (436) | (436) | |||||
Other comprehensive income | (100) | (100) | |||||
Ending balance at Jul. 01, 2018 | 11,994 | 482 | 2,865 | 28,115 | (15,910) | (3,558) | |
Beginning balance at Apr. 01, 2018 | 11,774 | 482 | 2,820 | 27,605 | (15,742) | (3,391) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 786 | 786 | |||||
Cash dividends declared | (276) | (276) | |||||
Equity-based awards | 56 | 45 | 11 | ||||
Shares purchased | (179) | (179) | |||||
Other comprehensive income | (167) | (167) | |||||
Ending balance at Jul. 01, 2018 | 11,994 | 482 | 2,865 | 28,115 | (15,910) | (3,558) | |
Beginning balance at Dec. 31, 2018 | 11,732 | 482 | 2,946 | 29,326 | (17,244) | (3,778) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,551 | 1,551 | |||||
Cash dividends declared | (586) | (586) | |||||
Equity-based awards | 62 | 13 | 49 | ||||
Shares purchased | (184) | (184) | |||||
Other comprehensive income | 302 | 302 | |||||
Ending balance at Jun. 30, 2019 | 12,877 | 482 | 2,959 | 30,291 | (17,379) | (3,476) | |
Beginning balance at Mar. 31, 2019 | 12,234 | 482 | 2,937 | 29,781 | (17,283) | (3,683) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 806 | 806 | |||||
Cash dividends declared | (296) | (296) | |||||
Equity-based awards | 24 | 22 | 2 | ||||
Shares purchased | (98) | (98) | |||||
Other comprehensive income | 207 | 207 | |||||
Ending balance at Jun. 30, 2019 | $ 12,877 | $ 482 | $ 2,959 | $ 30,291 | $ (17,379) | $ (3,476) | |
[1] | Reflects the cumulative effects of Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, and ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which we adopted on January 1, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization. General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services; command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) solutions; and shipbuilding and ship repair. Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements. Some prior-year amounts have been reclassified among financial statement accounts or disclosures to conform to the current-year presentation. Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year. Further discussion of our significant accounting policies is contained in the other notes to these financial statements. Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted. Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and six-month periods ended June 30, 2019 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 . These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 . Accounting Standards Updates . Effective January 1, 2019, we adopted Accounting Standards Codification (ASC) Topic 842, Leases. ASC Topic 842 requires the recognition of lease rights and obligations as assets and liabilities on the balance sheet. Previously, lessees were not required to recognize on the balance sheet assets and liabilities arising from operating leases. As we elected the cumulative-effect adoption method, prior-period information has not been restated. The standard provided several optional practical expedients for use in transition. We elected to use what the Financial Accounting Standards Board (FASB) has deemed the “package of practical expedients,” which allowed us not to reassess our previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. We did not elect the practical expedient pertaining to the use of hindsight. The most significant effects of the standard on our Consolidated Financial Statements are (1) the recognition of new right-of-use assets and lease liabilities on our Consolidated Balance Sheet for our operating leases, and (2) significant new disclosures about our leasing activities (see Note N). On January 1, 2019, we recognized operating lease liabilities and right-of-use assets of $1.4 billion based on the present value of the remaining lease payments over the lease term. The adoption did not result in a cumulative-effect adjustment to retained earnings. The new standard did not have a material impact on our results of operations, financial condition or cash flows. There are several other accounting standards that have been issued by the FASB but are not yet effective, including Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 significantly changes how entities account for credit losses for financial assets and certain other instruments, including trade receivables and contract assets, that are not measured at fair value through net income. The ASU requires a number of changes to the assessment of credit losses, including the utilization of an expected credit loss model, which requires consideration of a broader range of information to estimate expected credit losses over the entire lifetime of the asset, including losses where probability is considered remote. Additionally, the standard requires the estimation of lifetime expected losses for trade receivables and contract assets that are classified as current. We intend to adopt the standard on the effective date of January 1, 2020. We have not yet determined the effect of the ASU on our results of operations, financial condition or cash flows. |
Acquisitions and Divestitures,
Acquisitions and Divestitures, Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisitions and Divestitures, Goodwill and Intangible Assets | ACQUISITIONS AND DIVESTITURES, GOODWILL, AND INTANGIBLE ASSETS CSRA Acquisition On April 3, 2018 , we acquired 100% of the outstanding shares of CSRA Inc. (CSRA) for $41.25 per share in cash plus the assumption of outstanding net debt. CSRA is a provider of IT solutions to the defense, intelligence and federal civilian markets and is included in our Information Technology segment. Fair Value of Net Assets Acquired. The following table summarizes the allocation of the $9.7 billion cash purchase price to the estimated fair values of the assets acquired and liabilities assumed on the acquisition date, with the excess recorded as goodwill: Cash and equivalents $ 45 Accounts receivable 155 Unbilled receivables 415 Other current assets 303 Property, plant and equipment, net 326 Intangible assets, net 2,066 Goodwill 7,935 Other noncurrent assets 369 Total assets $ 11,614 Accounts payable $ (135 ) Customer advances and deposits (151 ) Current lease obligation (51 ) Other current liabilities (434 ) Noncurrent lease obligation (207 ) Noncurrent deferred tax liability (355 ) Other noncurrent liabilities (532 ) Total liabilities $ (1,865 ) Net assets acquired $ 9,749 Pro Forma Information. The following pro forma information presents our consolidated revenue and net earnings as if the acquisition of CSRA and the related financing transactions had occurred on January 1, 2017: Three Months Ended Six Months Ended July 1, 2018 July 1, 2018 Revenue $ 9,225 $ 18,062 Net Earnings 854 1,598 Diluted earnings per share $ 2.85 $ 5.32 The pro forma information was prepared by combining our reported historical results with the historical results of CSRA for the pre-acquisition periods. In addition, the reported historical amounts were adjusted for the following items, net of associated tax effects: • The impact of acquisition financing. • The removal of certain CSRA operations we were required by a government customer to dispose of to address an organizational conflict of interest with respect to services provided to the customer. We completed the sale of these operations in the third quarter of 2018. • The removal of CSRA’s historical pre-acquisition intangible asset amortization expense and debt-related interest expense. • The impact of intangible asset amortization expense assuming our estimate of fair value was applied on January 1, 2017. • The payment of acquisition-related costs assuming they were incurred on January 1, 2017. The pro forma information does not reflect the realization of expected cost savings or synergies from the acquisition, and does not reflect what our combined results of operations would have been had the acquisition occurred on January 1, 2017. Other Acquisitions and Divestitures In the first six months of 2019 , we acquired a business in each of our Aerospace and Missions Systems segments for a total of $17 . In 2018 , we acquired five businesses in addition to the acquisition of CSRA for approximately $400 : Hawker Pacific, a leading provider of integrated aviation solutions across Asia Pacific and the Middle East, and two fixed-base operation (FBO) businesses in our Aerospace segment; a maintenance and service provider for the German Army and other international customers in our Combat Systems segment; and a provider of specialized transmitters and receivers in our Mission Systems segment. The operating results of these acquisitions have been included with our reported results since the respective closing dates. The purchase prices of the acquisitions have been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. In the first six months of 2019 , we completed the sale of a business in our Information Technology segment that was classified as held for sale on the Consolidated Balance Sheet on December 31, 2018. In 2018, we completed the sale of a commercial health products business during the first quarter and the sale of a public-facing contact-center business during the fourth quarter in our Information Technology segment. For the six-month periods ended June 30, 2019 , and July 1, 2018 , the proceeds from the sale of businesses were not material and are included in other investing activities, net, in the unaudited Consolidated Statement of Cash Flows. Goodwill The changes in the carrying amount of goodwill by reporting unit were as follows: Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Goodwill December 31, 2018 (a) $ 2,813 $ 2,633 $ 9,622 $ 4,229 $ 297 $ 19,594 Acquisitions/divestitures (b) 2 7 77 6 — 92 Other (c) 13 32 1 (70 ) — (24 ) June 30, 2019 (a) $ 2,828 $ 2,672 $ 9,700 $ 4,165 $ 297 $ 19,662 (a) Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. (b) Includes adjustments during the purchase price allocation period. (c) Consists primarily of adjustments for foreign currency translation. Also includes an estimated allocation of goodwill in our Mission Systems reporting unit associated with a non-core operation classified as held for sale on the unaudited Consolidated Balance Sheet on June 30, 2019. As we expect this operation to be divested within the next 12 months, the assets and liabilities held for sale are included in other current assets and liabilities on the unaudited Consolidated Balance Sheet. Intangible Assets Intangible assets consisted of the following: Gross Carrying Amount (a) Accumulated Amortization Net Carrying Amount Gross Carrying Amount (a) Accumulated Amortization Net Carrying Amount June 30, 2019 December 31, 2018 Contract and program intangible assets (b) $ 3,777 $ (1,656 ) $ 2,121 $ 3,771 $ (1,531 ) $ 2,240 Trade names and trademarks 472 (186 ) 286 469 (177 ) 292 Technology and software 170 (122 ) 48 165 (116 ) 49 Other intangible assets 159 (157 ) 2 159 (155 ) 4 Total intangible assets $ 4,578 $ (2,121 ) $ 2,457 $ 4,564 $ (1,979 ) $ 2,585 (a) Change in gross carrying amounts consists primarily of adjustments for acquired intangible assets and foreign currency translation. (b) Consists of acquired backlog and probable follow-on work and associated customer relationships. Amortization expense for intangible assets was $70 and $140 for the three- and six-month periods ended June 30, 2019 , and $84 and $104 for the three- and six-month periods ended July 1, 2018 , respectively. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue | REVENUE Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract. Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 75% of our revenue for the three- and six-month periods ended June 30, 2019 , and 78% and 76% of our revenue for the three- and six-month periods ended July 1, 2018 , respectively. Substantially all of our revenue in the defense segments is recognized over time, because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses. Revenue from goods and services transferred to customers at a point in time accounted for 25% of our revenue for the three- and six-month periods ended June 30, 2019 , and 22% and 24% of our revenue for the three- and six-month periods ended July 1, 2018 , respectively. The majority of our revenue recognized at a point in time is for the manufacture of business-jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft. On June 30, 2019 , we had $67.7 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 60% of our remaining performance obligations as revenue by year-end 2020, an additional 25% by year-end 2022 and the balance thereafter. On December 31, 2018 , we had $67.9 billion of remaining performance obligations, at which time we expected to recognize approximately 45% of these remaining performance obligations as revenue in 2019, an additional 35% by year-end 2021 and the balance thereafter. Contract Estimates. The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The nature of our contracts gives rise to several types of variable consideration, including claims and award and incentive fees. We include in our contract estimates additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time. Because of our certainty in estimating these amounts, they are included in the transaction price of our contracts and the associated remaining performance obligations. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates increased our revenue, operating earnings and diluted earnings per share as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Revenue $ 72 $ 91 $ 168 $ 206 Operating earnings 71 83 139 180 Diluted earnings per share $ 0.19 $ 0.22 $ 0.38 $ 0.47 No adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three- and six-month periods ended June 30, 2019 , or July 1, 2018 . Revenue by Category. Our portfolio of products and services consists of approximately 11,000 active contracts. The following series of tables presents our revenue disaggregated by several categories. Revenue by major products and services was as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Aircraft manufacturing and completions $ 1,597 $ 1,362 $ 3,288 $ 2,728 Aircraft services 537 531 1,044 982 Pre-owned aircraft 2 2 44 10 Total Aerospace 2,136 1,895 4,376 3,720 Military vehicles 1,090 990 2,224 1,946 Weapons systems, armament and munitions 461 443 862 826 Engineering and other services 108 101 209 202 Total Combat Systems 1,659 1,534 3,295 2,974 IT services 2,158 2,442 4,327 3,580 Total Information Technology 2,158 2,442 4,327 3,580 C4ISR solutions 1,277 1,147 2,435 2,245 Total Mission Systems 1,277 1,147 2,435 2,245 Nuclear-powered submarines 1,538 1,438 2,915 2,734 Surface ships 528 473 974 956 Repair and other services 259 257 494 512 Total Marine Systems 2,325 2,168 4,383 4,202 Total revenue $ 9,555 $ 9,186 $ 18,816 $ 16,721 Revenue by contract type was as follows: Three Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue Fixed-price $ 1,925 $ 1,427 $ 875 $ 752 $ 1,575 $ 6,554 Cost-reimbursement — 221 858 484 745 2,308 Time-and-materials 211 11 425 41 5 693 Total revenue $ 2,136 $ 1,659 $ 2,158 $ 1,277 $ 2,325 $ 9,555 Three Months Ended July 1, 2018 Fixed-price $ 1,696 $ 1,330 $ 1,059 $ 658 $ 1,372 $ 6,115 Cost-reimbursement — 197 930 451 795 2,373 Time-and-materials 199 7 453 38 1 698 Total revenue $ 1,895 $ 1,534 $ 2,442 $ 1,147 $ 2,168 $ 9,186 Six Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Fixed-price $ 3,965 $ 2,843 $ 1,796 $ 1,403 $ 2,991 $ 12,998 Cost-reimbursement — 432 1,699 947 1,385 4,463 Time-and-materials 411 20 832 85 7 1,355 Total revenue $ 4,376 $ 3,295 $ 4,327 $ 2,435 $ 4,383 $ 18,816 Six Months Ended July 1, 2018 Fixed-price $ 3,364 $ 2,583 $ 1,446 $ 1,278 $ 2,677 $ 11,348 Cost-reimbursement — 376 1,507 891 1,523 4,297 Time-and-materials 356 15 627 76 2 1,076 Total revenue $ 3,720 $ 2,974 $ 3,580 $ 2,245 $ 4,202 $ 16,721 Our segments operate under fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. These fees are determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials. Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts can provide little or no fee for managing material costs, the content mix can impact profitability. Revenue by customer was as follows: Three Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue U.S. government: Department of Defense (DoD) $ 52 $ 910 $ 926 $ 884 $ 2,243 $ 5,015 Non-DoD — 3 1,178 133 1 1,315 Foreign Military Sales (FMS) 14 90 4 12 47 167 Total U.S. government 66 1,003 2,108 1,029 2,291 6,497 U.S. commercial 1,242 59 45 39 30 1,415 Non-U.S. government 141 587 5 181 2 916 Non-U.S. commercial 687 10 — 28 2 727 Total revenue $ 2,136 $ 1,659 $ 2,158 $ 1,277 $ 2,325 $ 9,555 Three Months Ended July 1, 2018 U.S. government: DoD $ 89 $ 660 $ 1,024 $ 764 $ 2,032 $ 4,569 Non-DoD — 3 1,339 130 1 1,473 FMS 19 83 7 14 39 162 Total U.S. government 108 746 2,370 908 2,072 6,204 U.S. commercial 917 58 41 36 91 1,143 Non-U.S. government 143 712 31 161 4 1,051 Non-U.S. commercial 727 18 — 42 1 788 Total revenue $ 1,895 $ 1,534 $ 2,442 $ 1,147 $ 2,168 $ 9,186 Six Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total U.S. government: DoD $ 175 $ 1,703 $ 1,850 $ 1,668 $ 4,218 $ 9,614 Non-DoD — 6 2,370 268 1 2,645 FMS 29 169 9 21 91 319 Total U.S. government 204 1,878 4,229 1,957 4,310 12,578 U.S. commercial 2,571 109 85 74 66 2,905 Non-U.S. government 200 1,288 13 347 4 1,852 Non-U.S. commercial 1,401 20 — 57 3 1,481 Total revenue $ 4,376 $ 3,295 $ 4,327 $ 2,435 $ 4,383 $ 18,816 Six Months Ended July 1, 2018 U.S. government: DoD $ 130 $ 1,267 $ 1,457 $ 1,506 $ 3,982 $ 8,342 Non-DoD — 4 1,976 248 1 2,229 FMS 35 152 15 21 68 291 Total U.S. government 165 1,423 3,448 1,775 4,051 10,862 U.S. commercial 1,759 116 81 63 144 2,163 Non-U.S. government 153 1,409 51 333 6 1,952 Non-U.S. commercial 1,643 26 — 74 1 1,744 Total revenue $ 3,720 $ 2,974 $ 3,580 $ 2,245 $ 4,202 $ 16,721 Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In our defense segments, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. In our Aerospace segment, we generally receive deposits from customers upon contract execution and upon achievement of contractual milestones. These deposits are liquidated when revenue is recognized. Changes in the contract asset and liability balances during the six-month period ended June 30, 2019 , were not materially impacted by any other factors except for the delays in payment on an international wheeled armored vehicle contract in our Combat Systems segment, which contributed to growth in contract assets as further discussed in Note G. Revenue recognized for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 , that was included in the contract liability balance at the beginning of each year was $1.2 billion and $2.9 billion , and $1.1 billion and $2.6 billion , respectively. This revenue represented primarily the sale of business-jet aircraft. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased in 2019 and 2018 due to share repurchases. See Note K for further discussion of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted stock and restricted stock units (RSUs). Basic and diluted weighted average shares outstanding were as follows (in thousands): Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Basic weighted average shares outstanding 288,099 296,153 288,008 296,276 Dilutive effect of stock options and restricted stock/RSUs* 2,716 3,986 2,816 4,318 Diluted weighted average shares outstanding 290,815 300,139 290,824 300,594 * Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 5,396 and 4,685 for the three- and six-month periods ended June 30, 2019 , and 3,511 and 2,851 for the three- and six-month periods ended July 1, 2018 , respectively. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1 - quoted prices in active markets for identical assets or liabilities; • Level 2 - inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly; and • Level 3 - unobservable inputs significant to the fair value measurement. We did not have any significant non-financial assets or liabilities measured at fair value on June 30, 2019 , or December 31, 2018 . Our financial instruments include cash and equivalents, accounts receivable and payable, marketable securities held in trust and other investments, short- and long-term debt, and derivative financial instruments. The carrying values of cash and equivalents and accounts receivable and payable on the unaudited Consolidated Balance Sheet approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on June 30, 2019 , and December 31, 2018 , and the basis for determining their fair values: Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets (Liabilities) June 30, 2019 Measured at fair value: Marketable securities held in trust: Cash and equivalents $ 3 $ 3 $ — $ 3 $ — Available-for-sale debt securities 141 141 — 141 — Equity securities 50 50 50 — — Other investments 4 4 — — 4 Cash flow hedges (19 ) (19 ) — (19 ) — Measured at amortized cost: Short- and long-term debt principal (14,026 ) (14,276 ) — (14,276 ) — December 31, 2018 Measured at fair value: Marketable securities held in trust: Cash and equivalents $ 29 $ 29 $ 23 $ 6 $ — Available-for-sale debt securities 121 121 — 121 — Equity securities 52 52 52 — — Other investments 4 4 — — 4 Cash flow hedges (69 ) (69 ) — (69 ) — Measured at amortized cost: Short- and long-term debt principal (12,518 ) (12,346 ) — (12,346 ) — Our Level 1 assets include investments in publicly traded equity securities valued using quoted prices from the market exchanges. The fair value of our Level 2 assets and liabilities is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Net Deferred Tax Liability. Our deferred tax assets and liabilities are included in other noncurrent assets and liabilities on the Consolidated Balance Sheet. Our net deferred tax liability consisted of the following: June 30, 2019 December 31, 2018 Deferred tax asset $ 37 $ 38 Deferred tax liability (570 ) (577 ) Net deferred tax liability $ (533 ) $ (539 ) Tax Uncertainties. For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50% chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense. The total amount of these tax liabilities on June 30, 2019 , was not material to our results of operations, financial condition or cash flows. We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2017. We do not expect the resolution of tax matters for open years to have a material impact on our results of operations, financial condition, cash flows or effective tax rate. Based on all known facts and circumstances and current tax law, we believe the total amount of any unrecognized tax benefits on June 30, 2019 , was not material to our results of operations, financial condition or cash flows, and if recognized, would not have a material impact on our effective tax rate. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows. |
Unbilled Receivables
Unbilled Receivables | 6 Months Ended |
Jun. 30, 2019 | |
Contractors [Abstract] | |
Unbilled Receivables | UNBILLED RECEIVABLES Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms. Unbilled receivables consisted of the following: June 30, 2019 December 31, 2018 Unbilled revenue $ 31,643 $ 27,908 Advances and progress billings (24,089 ) (21,332 ) Net unbilled receivables $ 7,554 $ 6,576 The increase in net unbilled receivables during the six-month period ended June 30, 2019 , was due primarily to an international wheeled armored vehicle contract in our Combat Systems segment. At June 30, 2019 , the net unbilled receivable related to this contract was $2.4 billion . Our contract is with the Canadian government, who is selling the vehicles to an international customer. We have experienced delays in payment under the contract. We continue to meet our obligations under the contract and are entitled to payment for work performed. Therefore, we expect to collect the full amount currently outstanding. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES The majority of our inventories are for business-jet aircraft. Our inventories are stated at the lower of cost or net realizable value. Work in process represents largely labor, material and overhead costs associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost in a production lot. Raw materials are valued primarily on the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value. Inventories consisted of the following: June 30, 2019 December 31, 2018 Work in process $ 4,749 $ 4,357 Raw materials 1,587 1,504 Finished goods 25 33 Pre-owned aircraft 119 83 Total inventories $ 6,480 $ 5,977 The increase in total inventories during the six-month period ended June 30, 2019 , was due primarily to the ramp-up in production of the new G600 aircraft in our Aerospace segment. We received both type and production certification from the U.S. Federal Aviation Administration (FAA) for the G600 aircraft in June 2019, and we are anticipating deliveries of the newly-certified aircraft to begin in the third quarter of 2019. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Debt consisted of the following: June 30, 2019 December 31, 2018 Fixed-rate notes due: Interest rate: May 2020 2.875% $ 2,000 $ 2,000 May 2021 3.000% 2,000 2,000 July 2021 3.875% 500 500 November 2022 2.250% 1,000 1,000 May 2023 3.375% 750 750 August 2023 1.875% 500 500 November 2024 2.375% 500 500 May 2025 3.500% 750 750 August 2026 2.125% 500 500 November 2027 2.625% 500 500 May 2028 3.750% 1,000 1,000 November 2042 3.600% 500 500 Floating-rate notes due: May 2020 3-month LIBOR + 0.29% 500 500 May 2021 3-month LIBOR + 0.38% 500 500 Commercial paper 2.482% 2,250 850 Other Various 276 168 Total debt principal 14,026 12,518 Less unamortized debt issuance costs and discounts 91 101 Total debt 13,935 12,417 Less current portion 4,960 973 Long-term debt $ 8,975 $ 11,444 Our fixed- and floating-rate notes are fully and unconditionally guaranteed by several of our 100% -owned subsidiaries. See Note Q for condensed consolidating financial statements. We have the option to redeem the fixed-rate notes prior to their maturity in whole or in part for the principal plus any accrued but unpaid interest and applicable make-whole amounts. On June 30, 2019 , we had $2.3 billion of commercial paper outstanding with a dollar-weighted average interest rate of 2.482% . We have $5 billion in committed bank credit facilities to support our commercial paper issuances and for general corporate purposes and working capital needs. These credit facilities include a $2 billion 364 -day facility expiring in March 2020 , a $1 billion multi-year facility expiring in November 2020 and a $2 billion multi-year facility expiring in March 2023 . We may renew or replace these credit facilities in whole or in part at or prior to their expiration dates. Our credit facilities are guaranteed by several of our 100% -owned subsidiaries. We also have an effective shelf registration on file with the Securities and Exchange Commission that allows us to access the debt markets. Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants and restrictions on June 30, 2019 . |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES A summary of significant other liabilities by balance sheet caption follows: June 30, 2019 December 31, 2018 Salaries and wages $ 897 $ 952 Workers’ compensation 267 244 Retirement benefits 265 272 Operating lease liabilities 240 — Fair value of cash flow hedges 79 141 Other (a) 1,732 1,708 Total other current liabilities $ 3,480 $ 3,317 Retirement benefits $ 4,241 $ 4,422 Operating lease liabilities 1,112 — Customer deposits on commercial contracts 630 726 Deferred income taxes 570 577 Other (b) 1,655 1,768 Total other liabilities $ 8,208 $ 7,493 (a) Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, deferred revenue and supplier contributions in the Aerospace segment, liabilities of discontinued operations, finance lease liabilities and insurance-related costs. (b) Consists primarily of warranty reserves, workers’ compensation liabilities, finance lease liabilities and liabilities of discontinued operations. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS ’ EQUITY Share Repurchases. Our board of directors from time to time authorizes management’s repurchase of outstanding shares of our common stock on the open market. On December 5, 2018, the board of directors authorized management to repurchase up to 10 million additional shares of the company’s outstanding stock. In the six -month period ended June 30, 2019 , we repurchased 1.1 million of our outstanding shares for $184 . On June 30, 2019 , 6.4 million shares remained authorized by our board of directors for repurchase, approximately 2% of our total shares outstanding. We repurchased 2.1 million shares for $436 in the six -month period ended July 1, 2018 . Dividends per Share. Our board of directors declared dividends of $1.02 and $2.04 per share for the three- and six-month periods ended June 30, 2019 , and $0.93 and $1.86 per share for the three- and six-month periods ended July 1, 2018 , respectively. We paid cash dividends of $295 and $563 for the three- and six-month periods ended June 30, 2019 , and $276 and $526 for the three- and six-month periods ended July 1, 2018 , respectively. Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following: Losses on Cash Flow Hedges Unrealized Gains on Marketable Securities Foreign Currency Translation Adjustments Changes in Retirement Plans’ Funded Status AOCL December 31, 2018 $ (71 ) $ — $ 102 $ (3,809 ) $ (3,778 ) Other comprehensive income, pretax 68 — 156 122 346 Provision for income tax, net (16 ) — — (28 ) (44 ) Other comprehensive income, net of tax 52 — 156 94 302 June 30, 2019 $ (19 ) $ — $ 258 $ (3,715 ) $ (3,476 ) December 31, 2017 $ (94 ) $ 19 $ 402 $ (3,147 ) $ (2,820 ) Cumulative-effect adjustments* (4 ) (19 ) — (615 ) (638 ) Other comprehensive loss, pretax (21 ) — (215 ) 163 (73 ) Provision for income tax, net 7 — — (34 ) (27 ) Other comprehensive loss, net of tax (14 ) — (215 ) 129 (100 ) July 1, 2018 $ (112 ) $ — $ 187 $ (3,633 ) $ (3,558 ) * Reflects the cumulative effects of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, and ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which we adopted on January 1, 2018. Current-period amounts reclassified out of AOCL related primarily to changes in our retirement plans’ funded status and consisted of pretax recognized net actuarial losses of $136 and $187 for the six-month periods ended June 30, 2019 , and July 1, 2018 , respectively. This was offset partially by pretax amortization of prior service credit of $11 and $24 for the six-month periods ended June 30, 2019 , and July 1, 2018 , respectively. These AOCL components are included in our net periodic pension and other post-retirement benefit cost. See Note O for additional details. |
Derivative Financial Instrument
Derivative Financial Instruments And Hedging Activities | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments And Hedging Activities | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to market risk, primarily from foreign currency exchange rates, interest rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivative financial instruments for trading or speculative purposes. Foreign Currency Risk. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and inter-company transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The dollar-weighted two -year average maturity of these instruments generally matches the duration of the activities that are at risk. Interest Rate Risk. Our financial instruments subject to interest rate risk include variable-rate commercial paper and fixed- and floating-rate long-term debt obligations. We entered into derivative financial instruments, specifically interest rate swap contracts, to eliminate our floating-rate interest risk. The interest rate risk associated with our financial instruments is not material. Commodity Price Risk. We are subject to rising labor and commodity price risk, primarily on long-term, fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivative financial instruments but are not accounted for separately, because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in labor or commodity prices will have a material impact on our results of operations or cash flows. Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years . On June 30, 2019 , and December 31, 2018, we held $702 and $963 in cash and equivalents, respectively, but held no marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified supplemental executive retirement plans. On June 30, 2019 , and December 31, 2018 , these marketable securities totaled $194 and $202 , respectively, and were reflected at fair value on the Consolidated Balance Sheet in other current and noncurrent assets. See Note E for additional details. Hedging Activities. We had notional forward exchange and interest rate swap contracts outstanding of $4.8 billion and $5.8 billion on June 30, 2019 , and December 31, 2018 , respectively. These derivative financial instruments are cash flow hedges, and are reflected at fair value on the Consolidated Balance Sheet in other current assets and liabilities. See Note E for additional details. Changes in fair value (gains and losses) related to derivative financial instruments that qualify as cash flow hedges are deferred in AOCL until the underlying transaction is reflected in earnings. Alternatively, gains and losses on derivative financial instruments that do not qualify for hedge accounting are recorded each period in earnings. All gains and losses from derivative financial instruments recognized in the Consolidated Statement of Earnings are presented in the same line item as the underlying transaction, either operating costs and expenses or interest expense. Net gains and losses recognized in earnings on derivative financial instruments that do not qualify for hedge accounting were not material to our results of operations for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 . Net gains and losses reclassified to earnings from AOCL related to qualified hedges also were not material to our results of operations for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 , and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material. We had no material derivative financial instruments designated as fair value or net investment hedges on June 30, 2019 , or December 31, 2018 . Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses’ functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of AOCL. We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations’ results into U.S. dollars. The impact of translating our non-U.S. operations’ revenue into U.S. dollars was not material to our results of operations for the three- and six-month periods ended June 30, 2019 , or July 1, 2018 . In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material for the six -month periods ended June 30, 2019 , and July 1, 2018 . |
Commitments And Contingencies
Commitments And Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation In 2015, Electric Boat Corporation, a subsidiary of General Dynamics Corporation, received a Civil Investigative Demand from the U.S. Department of Justice regarding an investigation of potential False Claims Act violations relating to alleged failures of Electric Boat’s quality system with respect to allegedly non-conforming parts purchased from a supplier. In 2016, Electric Boat was made aware that it is a defendant in a lawsuit related to this matter filed under seal in U.S. district court. Also in 2016, the Suspending and Debarring Official for the U.S. Department of the Navy issued a Show Cause Letter to Electric Boat requesting that Electric Boat respond to the official’s concerns regarding Electric Boat’s oversight and management with respect to its quality assurance systems for subcontractors and suppliers. Electric Boat responded to the Show Cause Letter and has been engaged in discussions with the U.S. government. Given the current status of these matters, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss. Depending on the outcome of these matters, there could be a material impact on our results of operations, financial condition and cash flows. Additionally, various other claims and legal proceedings incidental to the normal course of business are pending or threatened against us. These other matters relate to such issues as government investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these other matters. However, based on information currently available, we believe any potential liabilities in these other proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows. Environmental We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a Potentially Responsible Party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts. As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows. Other Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows. In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows. Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $1.3 billion on June 30, 2019 . In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts. Aircraft Trade-ins. In connection with orders for new aircraft in contract backlog, our Aerospace segment has outstanding options with some customers to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are generally structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Other trade-in commitments are structured to guarantee a pre-determined trade-in value. These commitments present more risk in the event of an adverse change in market conditions. In either case, any excess of the pre-established trade-in price above the fair market value at the time the new aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction. As of June 30, 2019 , the estimated change in fair market values from the date of the commitments was not material. Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business-jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet. The changes in the carrying amount of warranty liabilities for the six-month periods ended June 30, 2019 , and July 1, 2018 , were as follows: Six Months Ended June 30, 2019 July 1, 2018 Beginning balance $ 480 $ 467 Warranty expense 50 60 Payments (37 ) (54 ) Adjustments (11 ) (15 ) Ending balance $ 482 $ 458 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases, Operating | LEASES We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize an ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 30 years or to terminate the lease within 1 year. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future payments. Our leases commonly include payments that are based on the Consumer Price Index (CPI) or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts, are excluded from the ROU asset and lease liability, and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. Our leases are for office space, manufacturing facilities, and machinery and equipment. Real estate represents over 75% of our lease obligations. The components of lease costs were as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 22 $ 43 Interest on lease liabilities 7 12 Operating lease cost 78 164 Short-term lease cost 19 32 Variable lease cost 1 2 Sublease income (4 ) (8 ) Total lease costs, net $ 123 $ 245 Additional information related to leases was as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 166 Operating cash flows from finance leases 12 Financing cash flows from finance leases 29 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 95 Finance leases 4 Additional quantitative lease information was as follows: June 30, 2019 Weighted-average remaining lease term: Operating leases 10.8 years Finance leases 5.4 years Weighted-average discount rate: Operating leases 4 % Finance leases 9 % The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the unaudited Consolidated Balance Sheet on June 30, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the six months ended June 30, 2019) $ 155 $ 44 2020 259 81 2021 214 75 2022 169 74 2023 126 28 Thereafter 762 66 Total future lease payments 1,685 368 Less imputed interest 333 72 Present value of future lease payments 1,352 296 Less current portion of lease liabilities 240 64 Long-term lease liabilities $ 1,112 $ 232 ROU assets $ 1,280 $ 338 Lease liabilities are included on the Consolidated Balance Sheet in current and noncurrent other liabilities, while ROU assets are included in noncurrent other assets. On June 30, 2019 , we had additional future payments on leases that had not yet commenced of $218 . These leases will commence between 2019 and 2020 , and have lease terms of 1 to 20 years. As we have not restated prior-year information for our adoption of ASC Topic 842, the following presents our future minimum lease payments for operating leases and capital leases under ASC Topic 840 on December 31, 2018 : Year Ended December 31 Operating Leases Capital Leases 2019 $ 297 $ 92 2020 234 84 2021 196 78 2022 154 79 2023 110 30 Thereafter 698 70 Total future minimum lease payments $ 1,689 433 Less amount representing interest * 95 Less amount representing executory costs * 19 Present value of net minimum lease payments * 319 Less current maturities of capital lease liabilities * 64 Noncurrent capital lease liabilities * $ 255 * Not applicable for operating leases. |
Leases, Financing | LEASES We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize an ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 30 years or to terminate the lease within 1 year. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future payments. Our leases commonly include payments that are based on the Consumer Price Index (CPI) or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts, are excluded from the ROU asset and lease liability, and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. Our leases are for office space, manufacturing facilities, and machinery and equipment. Real estate represents over 75% of our lease obligations. The components of lease costs were as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 22 $ 43 Interest on lease liabilities 7 12 Operating lease cost 78 164 Short-term lease cost 19 32 Variable lease cost 1 2 Sublease income (4 ) (8 ) Total lease costs, net $ 123 $ 245 Additional information related to leases was as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 166 Operating cash flows from finance leases 12 Financing cash flows from finance leases 29 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 95 Finance leases 4 Additional quantitative lease information was as follows: June 30, 2019 Weighted-average remaining lease term: Operating leases 10.8 years Finance leases 5.4 years Weighted-average discount rate: Operating leases 4 % Finance leases 9 % The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the unaudited Consolidated Balance Sheet on June 30, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the six months ended June 30, 2019) $ 155 $ 44 2020 259 81 2021 214 75 2022 169 74 2023 126 28 Thereafter 762 66 Total future lease payments 1,685 368 Less imputed interest 333 72 Present value of future lease payments 1,352 296 Less current portion of lease liabilities 240 64 Long-term lease liabilities $ 1,112 $ 232 ROU assets $ 1,280 $ 338 Lease liabilities are included on the Consolidated Balance Sheet in current and noncurrent other liabilities, while ROU assets are included in noncurrent other assets. On June 30, 2019 , we had additional future payments on leases that had not yet commenced of $218 . These leases will commence between 2019 and 2020 , and have lease terms of 1 to 20 years. As we have not restated prior-year information for our adoption of ASC Topic 842, the following presents our future minimum lease payments for operating leases and capital leases under ASC Topic 840 on December 31, 2018 : Year Ended December 31 Operating Leases Capital Leases 2019 $ 297 $ 92 2020 234 84 2021 196 78 2022 154 79 2023 110 30 Thereafter 698 70 Total future minimum lease payments $ 1,689 433 Less amount representing interest * 95 Less amount representing executory costs * 19 Present value of net minimum lease payments * 319 Less current maturities of capital lease liabilities * 64 Noncurrent capital lease liabilities * $ 255 * Not applicable for operating leases. |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | RETIREMENT PLANS We provide defined-contribution benefits to eligible employees, as well as some remaining defined-benefit pension and other post-retirement benefits. Net periodic defined-benefit pension and other post-retirement benefit cost (credit) for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 , consisted of the following: Pension Benefits Other Post-retirement Benefits Three Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Service cost $ 28 $ 44 $ 2 $ 2 Interest cost 150 140 9 8 Expected return on plan assets (228 ) (228 ) (9 ) (10 ) Recognized net actuarial loss (gain) 70 93 (2 ) (1 ) Amortization of prior service credit (5 ) (11 ) (1 ) (1 ) Net periodic benefit cost (credit) $ 15 $ 38 $ (1 ) $ (2 ) Six Months Ended Service cost $ 56 $ 90 $ 4 $ 5 Interest cost 300 254 18 16 Expected return on plan assets (456 ) (407 ) (18 ) (19 ) Recognized net actuarial loss (gain) 140 189 (4 ) (2 ) Amortization of prior service credit (9 ) (22 ) (2 ) (2 ) Net periodic benefit cost (credit) $ 31 $ 104 $ (2 ) $ (2 ) Our contractual arrangements with the U.S. government provide for the recovery of contributions to our pension and other post-retirement benefit plans covering employees working in our defense segments. For non-funded plans, our government contracts allow us to recover claims paid. Following payment, these recoverable amounts are allocated to contracts and billed to the customer in accordance with the Cost Accounting Standards (CAS) and specific contractual terms. For some of these plans, the cumulative pension and other post-retirement benefit cost exceeds the amount currently allocable to contracts. To the extent we consider recovery of the cost to be probable based on our backlog and probable follow-on contracts, we defer the excess in other contract costs in other current assets on the Consolidated Balance Sheet until the cost is allocable to contracts. For other plans, the amount allocated to contracts and included in revenue has exceeded the plans’ cumulative benefit cost. We have similarly deferred recognition of these excess earnings on the Consolidated Balance Sheet. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We have five operating segments: Aerospace, Combat Systems, Information Technology, Mission Systems and Marine Systems. We organize our segments in accordance with the nature of products and services offered. We measure each segment’s profitability based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our segments. Summary financial information for each of our segments follows: Revenue Operating Earnings Three Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Aerospace $ 2,136 $ 1,895 $ 331 $ 386 Combat Systems 1,659 1,534 242 236 Information Technology 2,158 2,442 154 156 Mission Systems 1,277 1,147 162 153 Marine Systems 2,325 2,168 197 195 Corporate — — 4 (38 ) Total $ 9,555 $ 9,186 $ 1,090 $ 1,088 Six Months Ended Aerospace $ 4,376 $ 3,720 $ 659 $ 732 Combat Systems 3,295 2,974 448 460 Information Technology 4,327 3,580 310 257 Mission Systems 2,435 2,245 310 299 Marine Systems 4,383 4,202 377 379 Corporate — — — (31 ) Total $ 18,816 $ 16,721 $ 2,104 $ 2,096 Corporate operating results have two primary components: pension and other post-retirement benefit income, and stock option expense. We are required to report the non-service cost components of pension and other post-retirement benefit cost (e.g., interest cost) in other income (expense) in the Consolidated Statement of Earnings. As described in Note O, in our defense segments, pension and other post-retirement benefit costs are recoverable contract costs. Therefore, the non-service cost components are included in the operating results of these segments, but an offset is reported in Corporate. |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | 6 Months Ended |
Jun. 30, 2019 | |
Consolidating Financial Statements [Abstract] | |
Condensed Consolidating Financial Statements | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The fixed- and floating-rate notes described in Note I are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of our 100% -owned subsidiaries (the guarantors). The following condensed consolidating financial statements illustrate the composition of the parent, the guarantors on a combined basis (each guarantor together with its majority-owned subsidiaries) and all other subsidiaries on a combined basis. CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (UNAUDITED) Three Months Ended June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Revenue $ — $ 7,437 $ 2,118 $ — $ 9,555 Cost of sales 21 (6,111 ) (1,779 ) — (7,869 ) G&A (19 ) (428 ) (149 ) — (596 ) Operating earnings 2 898 190 — 1,090 Interest, net (110 ) 1 (10 ) — (119 ) Other, net (10 ) 3 19 — 12 Earnings before income tax (118 ) 902 199 — 983 Provision for income tax, net 40 (173 ) (44 ) — (177 ) Equity in net earnings of subsidiaries 884 — — (884 ) — Net earnings $ 806 $ 729 $ 155 $ (884 ) $ 806 Comprehensive income $ 1,013 $ 733 $ 315 $ (1,048 ) $ 1,013 Three Months Ended July 1, 2018 Revenue $ — $ 6,793 $ 2,393 $ — $ 9,186 Cost of sales 9 (5,475 ) (2,020 ) — (7,486 ) G&A (45 ) (418 ) (149 ) — (612 ) Operating earnings (36 ) 900 224 — 1,088 Interest, net (94 ) (1 ) (8 ) — (103 ) Other, net (38 ) 4 19 — (15 ) Earnings before income tax (168 ) 903 235 — 970 Provision for income tax, net 43 (178 ) (49 ) — (184 ) Equity in net earnings of subsidiaries 911 — — (911 ) — Net earnings $ 786 $ 725 $ 186 $ (911 ) $ 786 Comprehensive income $ 619 $ 740 $ (41 ) $ (699 ) $ 619 Six Months Ended June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Revenue $ — $ 14,382 $ 4,434 $ — $ 18,816 Cost of sales 39 (11,837 ) (3,704 ) — (15,502 ) G&A (41 ) (847 ) (322 ) — (1,210 ) Operating earnings (2 ) 1,698 408 — 2,104 Interest, net (217 ) 1 (20 ) — (236 ) Other, net (18 ) 7 41 — 30 Earnings before income tax (237 ) 1,706 429 — 1,898 Provision for income tax, net 71 (328 ) (90 ) — (347 ) Equity in net earnings of subsidiaries 1,717 — — (1,717 ) — Net earnings $ 1,551 $ 1,378 $ 339 $ (1,717 ) $ 1,551 Comprehensive income $ 1,853 $ 1,385 $ 552 $ (1,937 ) $ 1,853 Six Months Ended July 1, 2018 Revenue $ — $ 13,277 $ 3,444 $ — $ 16,721 Cost of sales 28 (10,677 ) (2,827 ) — (13,476 ) G&A (58 ) (854 ) (237 ) — (1,149 ) Operating earnings (30 ) 1,746 380 — 2,096 Interest, net (120 ) (1 ) (9 ) — (130 ) Other, net (62 ) 5 21 — (36 ) Earnings before income tax (212 ) 1,750 392 — 1,930 Provision for income tax, net 85 (343 ) (87 ) — (345 ) Equity in net earnings of subsidiaries 1,712 — — (1,712 ) — Net earnings $ 1,585 $ 1,407 $ 305 $ (1,712 ) $ 1,585 Comprehensive income $ 1,485 $ 1,425 $ 96 $ (1,521 ) $ 1,485 CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED) June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated ASSETS Current assets: Cash and equivalents $ 243 $ — $ 459 $ — $ 702 Accounts receivable — 1,260 2,413 — 3,673 Unbilled receivables — 2,864 4,690 — 7,554 Inventories — 6,350 130 — 6,480 Other current assets (59 ) 648 559 — 1,148 Total current assets 184 11,122 8,251 — 19,557 Noncurrent assets: Property, plant and equipment (PP&E) 302 7,327 1,609 — 9,238 Accumulated depreciation of PP&E (87 ) (4,175 ) (885 ) — (5,147 ) Intangible assets, net — 230 2,227 — 2,457 Goodwill — 7,960 11,702 — 19,662 Other assets 194 1,015 1,098 — 2,307 Net investment in subsidiaries 27,981 — — (27,981 ) — Total noncurrent assets 28,390 12,357 15,751 (27,981 ) 28,517 Total assets $ 28,574 $ 23,479 $ 24,002 $ (27,981 ) $ 48,074 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 4,741 $ — $ 219 $ — $ 4,960 Customer advances and deposits — 4,194 2,520 — 6,714 Other current liabilities 564 4,036 1,740 — 6,340 Total current liabilities 5,305 8,230 4,479 — 18,014 Noncurrent liabilities: Long-term debt 8,918 42 15 — 8,975 Other liabilities 1,474 4,583 2,151 — 8,208 Total noncurrent liabilities 10,392 4,625 2,166 — 17,183 Total shareholders’ equity 12,877 10,624 17,357 (27,981 ) 12,877 Total liabilities and shareholders’ equity $ 28,574 $ 23,479 $ 24,002 $ (27,981 ) $ 48,074 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2018 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated ASSETS Current assets: Cash and equivalents $ 460 $ — $ 503 $ — $ 963 Accounts receivable — 1,171 2,588 — 3,759 Unbilled receivables — 2,758 3,818 — 6,576 Inventories — 5,855 122 — 5,977 Other current assets (45 ) 441 518 — 914 Total current assets 415 10,225 7,549 — 18,189 Noncurrent assets: PP&E 273 7,177 1,522 — 8,972 Accumulated depreciation of PP&E (83 ) (4,071 ) (840 ) — (4,994 ) Intangible assets, net — 251 2,334 — 2,585 Goodwill — 8,031 11,563 — 19,594 Other assets 195 274 593 — 1,062 Net investment in subsidiaries 25,313 — — (25,313 ) — Total noncurrent assets 25,698 11,662 15,172 (25,313 ) 27,219 Total assets $ 26,113 $ 21,887 $ 22,721 $ (25,313 ) $ 45,408 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 850 $ — $ 123 $ — $ 973 Customer advances and deposits — 4,541 2,729 — 7,270 Other current liabilities 552 3,944 2,000 — 6,496 Total current liabilities 1,402 8,485 4,852 — 14,739 Noncurrent liabilities: Long-term debt 11,398 39 7 — 11,444 Other liabilities 1,581 4,073 1,839 — 7,493 Total noncurrent liabilities 12,979 4,112 1,846 — 18,937 Total shareholders’ equity 11,732 9,290 16,023 (25,313 ) 11,732 Total liabilities and shareholders’ equity $ 26,113 $ 21,887 $ 22,721 $ (25,313 ) $ 45,408 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Net cash used by operating activities* $ 64 $ 166 $ (734 ) $ — $ (504 ) Cash flows from investing activities: Capital expenditures (27 ) (238 ) (97 ) — (362 ) Other, net 5 18 (24 ) — (1 ) Net cash used by investing activities (22 ) (220 ) (121 ) — (363 ) Cash flows from financing activities: Proceeds from commercial paper, net 1,394 — — — 1,394 Dividends paid (563 ) — — — (563 ) Purchases of common stock (231 ) — — — (231 ) Other, net (19 ) — 49 — 30 Net cash provided by financing activities 581 — 49 — 630 Net cash used by discontinued operations (24 ) — — — (24 ) Cash sweep/funding by parent (816 ) 54 762 — — Net decrease in cash and equivalents (217 ) — (44 ) — (261 ) Cash and equivalents at beginning of period 460 — 503 — 963 Cash and equivalents at end of period $ 243 $ — $ 459 $ — $ 702 Six Months Ended July 1, 2018 Net cash provided by operating activities* $ 41 $ 468 $ (218 ) $ — $ 291 Cash flows from investing activities: Business acquisitions, net of cash acquired (9,749 ) (74 ) (216 ) — (10,039 ) Capital expenditures (22 ) (215 ) (42 ) — (279 ) Other, net 2 72 — — 74 Net cash used by investing activities (9,769 ) (217 ) (258 ) — (10,244 ) Cash flows from financing activities: Proceeds from fixed-rate notes 6,461 — — — 6,461 Proceeds from commercial paper, net 2,786 — — — 2,786 Proceeds from floating-rate notes 1,000 — — — 1,000 Dividends paid (526 ) — — — (526 ) Repayment of CSRA accounts receivable purchase agreement — — (450 ) — (450 ) Purchases of common stock (436 ) — — — (436 ) Other, net (45 ) — 48 — 3 Net cash provided by financing activities 9,240 — (402 ) — 8,838 Net cash used by discontinued operations (6 ) — — — (6 ) Cash sweep/funding by parent (107 ) (251 ) 358 — — Net decrease in cash and equivalents (601 ) — (520 ) — (1,121 ) Cash and equivalents at beginning of period 1,930 — 1,053 — 2,983 Cash and equivalents at end of period $ 1,329 $ — $ 533 $ — $ 1,862 * Continuing operations only. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Classification | Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements. Some prior-year amounts have been reclassified among financial statement accounts or disclosures to conform to the current-year presentation. Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year. |
Interim Financial Statements | Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted. Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and six-month periods ended June 30, 2019 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 . These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 . |
Accounting Standards Updates | Accounting Standards Updates . Effective January 1, 2019, we adopted Accounting Standards Codification (ASC) Topic 842, Leases. ASC Topic 842 requires the recognition of lease rights and obligations as assets and liabilities on the balance sheet. Previously, lessees were not required to recognize on the balance sheet assets and liabilities arising from operating leases. As we elected the cumulative-effect adoption method, prior-period information has not been restated. The standard provided several optional practical expedients for use in transition. We elected to use what the Financial Accounting Standards Board (FASB) has deemed the “package of practical expedients,” which allowed us not to reassess our previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. We did not elect the practical expedient pertaining to the use of hindsight. The most significant effects of the standard on our Consolidated Financial Statements are (1) the recognition of new right-of-use assets and lease liabilities on our Consolidated Balance Sheet for our operating leases, and (2) significant new disclosures about our leasing activities (see Note N). On January 1, 2019, we recognized operating lease liabilities and right-of-use assets of $1.4 billion based on the present value of the remaining lease payments over the lease term. The adoption did not result in a cumulative-effect adjustment to retained earnings. The new standard did not have a material impact on our results of operations, financial condition or cash flows. There are several other accounting standards that have been issued by the FASB but are not yet effective, including Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 significantly changes how entities account for credit losses for financial assets and certain other instruments, including trade receivables and contract assets, that are not measured at fair value through net income. The ASU requires a number of changes to the assessment of credit losses, including the utilization of an expected credit loss model, which requires consideration of a broader range of information to estimate expected credit losses over the entire lifetime of the asset, including losses where probability is considered remote. Additionally, the standard requires the estimation of lifetime expected losses for trade receivables and contract assets that are classified as current. We intend to adopt the standard on the effective date of January 1, 2020. We have not yet determined the effect of the ASU on our results of operations, financial condition or cash flows. |
Revenue Recognition | Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract. Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 75% of our revenue for the three- and six-month periods ended June 30, 2019 , and 78% and 76% of our revenue for the three- and six-month periods ended July 1, 2018 , respectively. Substantially all of our revenue in the defense segments is recognized over time, because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses. Revenue from goods and services transferred to customers at a point in time accounted for 25% of our revenue for the three- and six-month periods ended June 30, 2019 , and 22% and 24% of our revenue for the three- and six-month periods ended July 1, 2018 , respectively. The majority of our revenue recognized at a point in time is for the manufacture of business-jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft. On June 30, 2019 , we had $67.7 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 60% of our remaining performance obligations as revenue by year-end 2020, an additional 25% by year-end 2022 and the balance thereafter. On December 31, 2018 , we had $67.9 billion of remaining performance obligations, at which time we expected to recognize approximately 45% of these remaining performance obligations as revenue in 2019, an additional 35% by year-end 2021 and the balance thereafter. Contract Estimates. The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. The nature of our contracts gives rise to several types of variable consideration, including claims and award and incentive fees. We include in our contract estimates additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time. Because of our certainty in estimating these amounts, they are included in the transaction price of our contracts and the associated remaining performance obligations. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified. Contract Balances. Our segments operate under fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. These fees are determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials. Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts can provide little or no fee for managing material costs, the content mix can impact profitability. |
Earnings Per Share | We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1 - quoted prices in active markets for identical assets or liabilities; • Level 2 - inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly; and • Level 3 - unobservable inputs significant to the fair value measurement. Our Level 1 assets include investments in publicly traded equity securities valued using quoted prices from the market exchanges. The fair value of our Level 2 assets and liabilities is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant. |
Tax Uncertainties | Tax Uncertainties. For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50% chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense. The total amount of these tax liabilities on June 30, 2019 , was not material to our results of operations, financial condition or cash flows. We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2017. We do not expect the resolution of tax matters for open years to have a material impact on our results of operations, financial condition, cash flows or effective tax rate. Based on all known facts and circumstances and current tax law, we believe the total amount of any unrecognized tax benefits on June 30, 2019 , was not material to our results of operations, financial condition or cash flows, and if recognized, would not have a material impact on our effective tax rate. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows. |
Unbilled Receivables | Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms. |
Inventories | The majority of our inventories are for business-jet aircraft. Our inventories are stated at the lower of cost or net realizable value. Work in process represents largely labor, material and overhead costs associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost in a production lot. Raw materials are valued primarily on the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value. |
Derivative Financial Instruments and Hedging Activities | Hedging Activities. We had notional forward exchange and interest rate swap contracts outstanding of $4.8 billion and $5.8 billion on June 30, 2019 , and December 31, 2018 , respectively. These derivative financial instruments are cash flow hedges, and are reflected at fair value on the Consolidated Balance Sheet in other current assets and liabilities. See Note E for additional details. Changes in fair value (gains and losses) related to derivative financial instruments that qualify as cash flow hedges are deferred in AOCL until the underlying transaction is reflected in earnings. Alternatively, gains and losses on derivative financial instruments that do not qualify for hedge accounting are recorded each period in earnings. All gains and losses from derivative financial instruments recognized in the Consolidated Statement of Earnings are presented in the same line item as the underlying transaction, either operating costs and expenses or interest expense. Foreign Currency Risk. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and inter-company transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The dollar-weighted two We are exposed to market risk, primarily from foreign currency exchange rates, interest rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivative financial instruments for trading or speculative purposes. Interest Rate Risk. Our financial instruments subject to interest rate risk include variable-rate commercial paper and fixed- and floating-rate long-term debt obligations. We entered into derivative financial instruments, specifically interest rate swap contracts, to eliminate our floating-rate interest risk. The interest rate risk associated with our financial instruments is not material. Commodity Price Risk. We are subject to rising labor and commodity price risk, primarily on long-term, fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivative financial instruments but are not accounted for separately, because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in labor or commodity prices will have a material impact on our results of operations or cash flows. Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years |
Foreign Currency and Financial Statement Translation | Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses’ functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of AOCL. We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations’ results into U.S. dollars. The impact of translating our non-U.S. operations’ revenue into U.S. dollars was not material to our results of operations for the three- and six-month periods ended June 30, 2019 , or July 1, 2018 . In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material for the six -month periods ended June 30, 2019 , and July 1, 2018 . |
Commitments and Contingencies | Environmental We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a Potentially Responsible Party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts. As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows. |
Product Warranties | Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business-jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet. |
Leases | LEASES We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize an ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 30 years or to terminate the lease within 1 year. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future payments. Our leases commonly include payments that are based on the Consumer Price Index (CPI) or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts, are excluded from the ROU asset and lease liability, and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. Our leases are for office space, manufacturing facilities, and machinery and equipment. Real estate represents over 75% of our lease obligations. |
Retirement Plans | We provide defined-contribution benefits to eligible employees, as well as some remaining defined-benefit pension and other post-retirement benefits. Our contractual arrangements with the U.S. government provide for the recovery of contributions to our pension and other post-retirement benefit plans covering employees working in our defense segments. For non-funded plans, our government contracts allow us to recover claims paid. Following payment, these recoverable amounts are allocated to contracts and billed to the customer in accordance with the Cost Accounting Standards (CAS) and specific contractual terms. For some of these plans, the cumulative pension and other post-retirement benefit cost exceeds the amount currently allocable to contracts. To the extent we consider recovery of the cost to be probable based on our backlog and probable follow-on contracts, we defer the excess in other contract costs in other current assets on the Consolidated Balance Sheet until the cost is allocable to contracts. For other plans, the amount allocated to contracts and included in revenue has exceeded the plans’ cumulative benefit cost. We have similarly deferred recognition of these excess earnings on the Consolidated Balance Sheet. |
Segment Information | We organize our segments in accordance with the nature of products and services offered. We measure each segment’s profitability based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our segments. |
Acquisitions and Divestitures_2
Acquisitions and Divestitures, Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated Fair Value of Assets Acquired and Liabilities Assumed on Acquisition Date | The following table summarizes the allocation of the $9.7 billion cash purchase price to the estimated fair values of the assets acquired and liabilities assumed on the acquisition date, with the excess recorded as goodwill: Cash and equivalents $ 45 Accounts receivable 155 Unbilled receivables 415 Other current assets 303 Property, plant and equipment, net 326 Intangible assets, net 2,066 Goodwill 7,935 Other noncurrent assets 369 Total assets $ 11,614 Accounts payable $ (135 ) Customer advances and deposits (151 ) Current lease obligation (51 ) Other current liabilities (434 ) Noncurrent lease obligation (207 ) Noncurrent deferred tax liability (355 ) Other noncurrent liabilities (532 ) Total liabilities $ (1,865 ) Net assets acquired $ 9,749 |
Pro Forma Information | The following pro forma information presents our consolidated revenue and net earnings as if the acquisition of CSRA and the related financing transactions had occurred on January 1, 2017: Three Months Ended Six Months Ended July 1, 2018 July 1, 2018 Revenue $ 9,225 $ 18,062 Net Earnings 854 1,598 Diluted earnings per share $ 2.85 $ 5.32 |
Changes In The Carrying Amount of Goodwill By Reporting Unit | The changes in the carrying amount of goodwill by reporting unit were as follows: Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Goodwill December 31, 2018 (a) $ 2,813 $ 2,633 $ 9,622 $ 4,229 $ 297 $ 19,594 Acquisitions/divestitures (b) 2 7 77 6 — 92 Other (c) 13 32 1 (70 ) — (24 ) June 30, 2019 (a) $ 2,828 $ 2,672 $ 9,700 $ 4,165 $ 297 $ 19,662 (a) Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. (b) Includes adjustments during the purchase price allocation period. (c) Consists primarily of adjustments for foreign currency translation. Also includes an estimated allocation of goodwill in our Mission Systems reporting unit associated with a non-core operation classified as held for sale on the unaudited Consolidated Balance Sheet on June 30, 2019. As we expect this operation to be divested within the next 12 months, the assets and liabilities held for sale are included in other current assets and liabilities on the unaudited Consolidated Balance Sheet. |
Intangible Assets | Intangible assets consisted of the following: Gross Carrying Amount (a) Accumulated Amortization Net Carrying Amount Gross Carrying Amount (a) Accumulated Amortization Net Carrying Amount June 30, 2019 December 31, 2018 Contract and program intangible assets (b) $ 3,777 $ (1,656 ) $ 2,121 $ 3,771 $ (1,531 ) $ 2,240 Trade names and trademarks 472 (186 ) 286 469 (177 ) 292 Technology and software 170 (122 ) 48 165 (116 ) 49 Other intangible assets 159 (157 ) 2 159 (155 ) 4 Total intangible assets $ 4,578 $ (2,121 ) $ 2,457 $ 4,564 $ (1,979 ) $ 2,585 (a) Change in gross carrying amounts consists primarily of adjustments for acquired intangible assets and foreign currency translation. (b) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of Impact of Adjustments in Contract Estimates | The aggregate impact of adjustments in contract estimates increased our revenue, operating earnings and diluted earnings per share as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Revenue $ 72 $ 91 $ 168 $ 206 Operating earnings 71 83 139 180 Diluted earnings per share $ 0.19 $ 0.22 $ 0.38 $ 0.47 |
Revenue by Major Product Line | Revenue by major products and services was as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Aircraft manufacturing and completions $ 1,597 $ 1,362 $ 3,288 $ 2,728 Aircraft services 537 531 1,044 982 Pre-owned aircraft 2 2 44 10 Total Aerospace 2,136 1,895 4,376 3,720 Military vehicles 1,090 990 2,224 1,946 Weapons systems, armament and munitions 461 443 862 826 Engineering and other services 108 101 209 202 Total Combat Systems 1,659 1,534 3,295 2,974 IT services 2,158 2,442 4,327 3,580 Total Information Technology 2,158 2,442 4,327 3,580 C4ISR solutions 1,277 1,147 2,435 2,245 Total Mission Systems 1,277 1,147 2,435 2,245 Nuclear-powered submarines 1,538 1,438 2,915 2,734 Surface ships 528 473 974 956 Repair and other services 259 257 494 512 Total Marine Systems 2,325 2,168 4,383 4,202 Total revenue $ 9,555 $ 9,186 $ 18,816 $ 16,721 |
Revenue by Contract Type | Revenue by contract type was as follows: Three Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue Fixed-price $ 1,925 $ 1,427 $ 875 $ 752 $ 1,575 $ 6,554 Cost-reimbursement — 221 858 484 745 2,308 Time-and-materials 211 11 425 41 5 693 Total revenue $ 2,136 $ 1,659 $ 2,158 $ 1,277 $ 2,325 $ 9,555 Three Months Ended July 1, 2018 Fixed-price $ 1,696 $ 1,330 $ 1,059 $ 658 $ 1,372 $ 6,115 Cost-reimbursement — 197 930 451 795 2,373 Time-and-materials 199 7 453 38 1 698 Total revenue $ 1,895 $ 1,534 $ 2,442 $ 1,147 $ 2,168 $ 9,186 Six Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Fixed-price $ 3,965 $ 2,843 $ 1,796 $ 1,403 $ 2,991 $ 12,998 Cost-reimbursement — 432 1,699 947 1,385 4,463 Time-and-materials 411 20 832 85 7 1,355 Total revenue $ 4,376 $ 3,295 $ 4,327 $ 2,435 $ 4,383 $ 18,816 Six Months Ended July 1, 2018 Fixed-price $ 3,364 $ 2,583 $ 1,446 $ 1,278 $ 2,677 $ 11,348 Cost-reimbursement — 376 1,507 891 1,523 4,297 Time-and-materials 356 15 627 76 2 1,076 Total revenue $ 3,720 $ 2,974 $ 3,580 $ 2,245 $ 4,202 $ 16,721 |
Revenue by Customer | Revenue by customer was as follows: Three Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue U.S. government: Department of Defense (DoD) $ 52 $ 910 $ 926 $ 884 $ 2,243 $ 5,015 Non-DoD — 3 1,178 133 1 1,315 Foreign Military Sales (FMS) 14 90 4 12 47 167 Total U.S. government 66 1,003 2,108 1,029 2,291 6,497 U.S. commercial 1,242 59 45 39 30 1,415 Non-U.S. government 141 587 5 181 2 916 Non-U.S. commercial 687 10 — 28 2 727 Total revenue $ 2,136 $ 1,659 $ 2,158 $ 1,277 $ 2,325 $ 9,555 Three Months Ended July 1, 2018 U.S. government: DoD $ 89 $ 660 $ 1,024 $ 764 $ 2,032 $ 4,569 Non-DoD — 3 1,339 130 1 1,473 FMS 19 83 7 14 39 162 Total U.S. government 108 746 2,370 908 2,072 6,204 U.S. commercial 917 58 41 36 91 1,143 Non-U.S. government 143 712 31 161 4 1,051 Non-U.S. commercial 727 18 — 42 1 788 Total revenue $ 1,895 $ 1,534 $ 2,442 $ 1,147 $ 2,168 $ 9,186 Six Months Ended June 30, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total U.S. government: DoD $ 175 $ 1,703 $ 1,850 $ 1,668 $ 4,218 $ 9,614 Non-DoD — 6 2,370 268 1 2,645 FMS 29 169 9 21 91 319 Total U.S. government 204 1,878 4,229 1,957 4,310 12,578 U.S. commercial 2,571 109 85 74 66 2,905 Non-U.S. government 200 1,288 13 347 4 1,852 Non-U.S. commercial 1,401 20 — 57 3 1,481 Total revenue $ 4,376 $ 3,295 $ 4,327 $ 2,435 $ 4,383 $ 18,816 Six Months Ended July 1, 2018 U.S. government: DoD $ 130 $ 1,267 $ 1,457 $ 1,506 $ 3,982 $ 8,342 Non-DoD — 4 1,976 248 1 2,229 FMS 35 152 15 21 68 291 Total U.S. government 165 1,423 3,448 1,775 4,051 10,862 U.S. commercial 1,759 116 81 63 144 2,163 Non-U.S. government 153 1,409 51 333 6 1,952 Non-U.S. commercial 1,643 26 — 74 1 1,744 Total revenue $ 3,720 $ 2,974 $ 3,580 $ 2,245 $ 4,202 $ 16,721 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and diluted weighted average shares outstanding | Basic and diluted weighted average shares outstanding were as follows (in thousands): Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Basic weighted average shares outstanding 288,099 296,153 288,008 296,276 Dilutive effect of stock options and restricted stock/RSUs* 2,716 3,986 2,816 4,318 Diluted weighted average shares outstanding 290,815 300,139 290,824 300,594 * Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 5,396 and 4,685 for the three- and six-month periods ended June 30, 2019 , and 3,511 and 2,851 for the three- and six-month periods ended July 1, 2018 , respectively. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Carrying And Fair Values Of Other Financial Assets And Liabilities | The following tables present the fair values of our other financial assets and liabilities on June 30, 2019 , and December 31, 2018 , and the basis for determining their fair values: Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets (Liabilities) June 30, 2019 Measured at fair value: Marketable securities held in trust: Cash and equivalents $ 3 $ 3 $ — $ 3 $ — Available-for-sale debt securities 141 141 — 141 — Equity securities 50 50 50 — — Other investments 4 4 — — 4 Cash flow hedges (19 ) (19 ) — (19 ) — Measured at amortized cost: Short- and long-term debt principal (14,026 ) (14,276 ) — (14,276 ) — December 31, 2018 Measured at fair value: Marketable securities held in trust: Cash and equivalents $ 29 $ 29 $ 23 $ 6 $ — Available-for-sale debt securities 121 121 — 121 — Equity securities 52 52 52 — — Other investments 4 4 — — 4 Cash flow hedges (69 ) (69 ) — (69 ) — Measured at amortized cost: Short- and long-term debt principal (12,518 ) (12,346 ) — (12,346 ) — |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets and Liabilities | Our net deferred tax liability consisted of the following: June 30, 2019 December 31, 2018 Deferred tax asset $ 37 $ 38 Deferred tax liability (570 ) (577 ) Net deferred tax liability $ (533 ) $ (539 ) |
Unbilled Receivables (Tables)
Unbilled Receivables (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Contractors [Abstract] | |
Schedule of Unbilled Receivables | Unbilled receivables consisted of the following: June 30, 2019 December 31, 2018 Unbilled revenue $ 31,643 $ 27,908 Advances and progress billings (24,089 ) (21,332 ) Net unbilled receivables $ 7,554 $ 6,576 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventories | Inventories consisted of the following: June 30, 2019 December 31, 2018 Work in process $ 4,749 $ 4,357 Raw materials 1,587 1,504 Finished goods 25 33 Pre-owned aircraft 119 83 Total inventories $ 6,480 $ 5,977 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | Debt consisted of the following: June 30, 2019 December 31, 2018 Fixed-rate notes due: Interest rate: May 2020 2.875% $ 2,000 $ 2,000 May 2021 3.000% 2,000 2,000 July 2021 3.875% 500 500 November 2022 2.250% 1,000 1,000 May 2023 3.375% 750 750 August 2023 1.875% 500 500 November 2024 2.375% 500 500 May 2025 3.500% 750 750 August 2026 2.125% 500 500 November 2027 2.625% 500 500 May 2028 3.750% 1,000 1,000 November 2042 3.600% 500 500 Floating-rate notes due: May 2020 3-month LIBOR + 0.29% 500 500 May 2021 3-month LIBOR + 0.38% 500 500 Commercial paper 2.482% 2,250 850 Other Various 276 168 Total debt principal 14,026 12,518 Less unamortized debt issuance costs and discounts 91 101 Total debt 13,935 12,417 Less current portion 4,960 973 Long-term debt $ 8,975 $ 11,444 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Summary Of Significant Other Liabilities By Balance Sheet Caption | A summary of significant other liabilities by balance sheet caption follows: June 30, 2019 December 31, 2018 Salaries and wages $ 897 $ 952 Workers’ compensation 267 244 Retirement benefits 265 272 Operating lease liabilities 240 — Fair value of cash flow hedges 79 141 Other (a) 1,732 1,708 Total other current liabilities $ 3,480 $ 3,317 Retirement benefits $ 4,241 $ 4,422 Operating lease liabilities 1,112 — Customer deposits on commercial contracts 630 726 Deferred income taxes 570 577 Other (b) 1,655 1,768 Total other liabilities $ 8,208 $ 7,493 (a) Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, deferred revenue and supplier contributions in the Aerospace segment, liabilities of discontinued operations, finance lease liabilities and insurance-related costs. (b) Consists primarily of warranty reserves, workers’ compensation liabilities, finance lease liabilities and liabilities of discontinued operations. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following: Losses on Cash Flow Hedges Unrealized Gains on Marketable Securities Foreign Currency Translation Adjustments Changes in Retirement Plans’ Funded Status AOCL December 31, 2018 $ (71 ) $ — $ 102 $ (3,809 ) $ (3,778 ) Other comprehensive income, pretax 68 — 156 122 346 Provision for income tax, net (16 ) — — (28 ) (44 ) Other comprehensive income, net of tax 52 — 156 94 302 June 30, 2019 $ (19 ) $ — $ 258 $ (3,715 ) $ (3,476 ) December 31, 2017 $ (94 ) $ 19 $ 402 $ (3,147 ) $ (2,820 ) Cumulative-effect adjustments* (4 ) (19 ) — (615 ) (638 ) Other comprehensive loss, pretax (21 ) — (215 ) 163 (73 ) Provision for income tax, net 7 — — (34 ) (27 ) Other comprehensive loss, net of tax (14 ) — (215 ) 129 (100 ) July 1, 2018 $ (112 ) $ — $ 187 $ (3,633 ) $ (3,558 ) * Reflects the cumulative effects of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, and ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which we adopted on January 1, 2018. |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Changes In Carrying Amount Of Warranty Liabilities | The changes in the carrying amount of warranty liabilities for the six-month periods ended June 30, 2019 , and July 1, 2018 , were as follows: Six Months Ended June 30, 2019 July 1, 2018 Beginning balance $ 480 $ 467 Warranty expense 50 60 Payments (37 ) (54 ) Adjustments (11 ) (15 ) Ending balance $ 482 $ 458 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Costs | The components of lease costs were as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 22 $ 43 Interest on lease liabilities 7 12 Operating lease cost 78 164 Short-term lease cost 19 32 Variable lease cost 1 2 Sublease income (4 ) (8 ) Total lease costs, net $ 123 $ 245 |
Schedule of Additional Information Related Leases | Additional information related to leases was as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 166 Operating cash flows from finance leases 12 Financing cash flows from finance leases 29 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 95 Finance leases 4 Additional quantitative lease information was as follows: |
Schedule of Future Minimum Lease Payments for Operating Leases Under ASC 842 Guidance | The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the unaudited Consolidated Balance Sheet on June 30, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the six months ended June 30, 2019) $ 155 $ 44 2020 259 81 2021 214 75 2022 169 74 2023 126 28 Thereafter 762 66 Total future lease payments 1,685 368 Less imputed interest 333 72 Present value of future lease payments 1,352 296 Less current portion of lease liabilities 240 64 Long-term lease liabilities $ 1,112 $ 232 ROU assets $ 1,280 $ 338 |
Schedule of Future Minimum Lease Payments for Finance Leases Under ASC 842 Guidance | The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the unaudited Consolidated Balance Sheet on June 30, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the six months ended June 30, 2019) $ 155 $ 44 2020 259 81 2021 214 75 2022 169 74 2023 126 28 Thereafter 762 66 Total future lease payments 1,685 368 Less imputed interest 333 72 Present value of future lease payments 1,352 296 Less current portion of lease liabilities 240 64 Long-term lease liabilities $ 1,112 $ 232 ROU assets $ 1,280 $ 338 |
Schedule of Future Minimum Lease Payments for Operating Leases Under ASC 840 Guidance | As we have not restated prior-year information for our adoption of ASC Topic 842, the following presents our future minimum lease payments for operating leases and capital leases under ASC Topic 840 on December 31, 2018 : Year Ended December 31 Operating Leases Capital Leases 2019 $ 297 $ 92 2020 234 84 2021 196 78 2022 154 79 2023 110 30 Thereafter 698 70 Total future minimum lease payments $ 1,689 433 Less amount representing interest * 95 Less amount representing executory costs * 19 Present value of net minimum lease payments * 319 Less current maturities of capital lease liabilities * 64 Noncurrent capital lease liabilities * $ 255 * Not applicable for operating leases. |
Schedule of Future Minimum Lease Payments for Capital Leases Under ASC 840 Guidance | As we have not restated prior-year information for our adoption of ASC Topic 842, the following presents our future minimum lease payments for operating leases and capital leases under ASC Topic 840 on December 31, 2018 : Year Ended December 31 Operating Leases Capital Leases 2019 $ 297 $ 92 2020 234 84 2021 196 78 2022 154 79 2023 110 30 Thereafter 698 70 Total future minimum lease payments $ 1,689 433 Less amount representing interest * 95 Less amount representing executory costs * 19 Present value of net minimum lease payments * 319 Less current maturities of capital lease liabilities * 64 Noncurrent capital lease liabilities * $ 255 * Not applicable for operating leases. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Net Periodic Defined-Benefit Pension And Other Post-Retirement Benefit Cost | Net periodic defined-benefit pension and other post-retirement benefit cost (credit) for the three- and six-month periods ended June 30, 2019 , and July 1, 2018 , consisted of the following: Pension Benefits Other Post-retirement Benefits Three Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Service cost $ 28 $ 44 $ 2 $ 2 Interest cost 150 140 9 8 Expected return on plan assets (228 ) (228 ) (9 ) (10 ) Recognized net actuarial loss (gain) 70 93 (2 ) (1 ) Amortization of prior service credit (5 ) (11 ) (1 ) (1 ) Net periodic benefit cost (credit) $ 15 $ 38 $ (1 ) $ (2 ) Six Months Ended Service cost $ 56 $ 90 $ 4 $ 5 Interest cost 300 254 18 16 Expected return on plan assets (456 ) (407 ) (18 ) (19 ) Recognized net actuarial loss (gain) 140 189 (4 ) (2 ) Amortization of prior service credit (9 ) (22 ) (2 ) (2 ) Net periodic benefit cost (credit) $ 31 $ 104 $ (2 ) $ (2 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary Of Financial Information For Each Of Our Segments | Summary financial information for each of our segments follows: Revenue Operating Earnings Three Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Aerospace $ 2,136 $ 1,895 $ 331 $ 386 Combat Systems 1,659 1,534 242 236 Information Technology 2,158 2,442 154 156 Mission Systems 1,277 1,147 162 153 Marine Systems 2,325 2,168 197 195 Corporate — — 4 (38 ) Total $ 9,555 $ 9,186 $ 1,090 $ 1,088 Six Months Ended Aerospace $ 4,376 $ 3,720 $ 659 $ 732 Combat Systems 3,295 2,974 448 460 Information Technology 4,327 3,580 310 257 Mission Systems 2,435 2,245 310 299 Marine Systems 4,383 4,202 377 379 Corporate — — — (31 ) Total $ 18,816 $ 16,721 $ 2,104 $ 2,096 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Statements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Consolidating Financial Statements [Abstract] | |
Condensed Consolidating Statement of Earnings (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (UNAUDITED) Three Months Ended June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Revenue $ — $ 7,437 $ 2,118 $ — $ 9,555 Cost of sales 21 (6,111 ) (1,779 ) — (7,869 ) G&A (19 ) (428 ) (149 ) — (596 ) Operating earnings 2 898 190 — 1,090 Interest, net (110 ) 1 (10 ) — (119 ) Other, net (10 ) 3 19 — 12 Earnings before income tax (118 ) 902 199 — 983 Provision for income tax, net 40 (173 ) (44 ) — (177 ) Equity in net earnings of subsidiaries 884 — — (884 ) — Net earnings $ 806 $ 729 $ 155 $ (884 ) $ 806 Comprehensive income $ 1,013 $ 733 $ 315 $ (1,048 ) $ 1,013 Three Months Ended July 1, 2018 Revenue $ — $ 6,793 $ 2,393 $ — $ 9,186 Cost of sales 9 (5,475 ) (2,020 ) — (7,486 ) G&A (45 ) (418 ) (149 ) — (612 ) Operating earnings (36 ) 900 224 — 1,088 Interest, net (94 ) (1 ) (8 ) — (103 ) Other, net (38 ) 4 19 — (15 ) Earnings before income tax (168 ) 903 235 — 970 Provision for income tax, net 43 (178 ) (49 ) — (184 ) Equity in net earnings of subsidiaries 911 — — (911 ) — Net earnings $ 786 $ 725 $ 186 $ (911 ) $ 786 Comprehensive income $ 619 $ 740 $ (41 ) $ (699 ) $ 619 Six Months Ended June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Revenue $ — $ 14,382 $ 4,434 $ — $ 18,816 Cost of sales 39 (11,837 ) (3,704 ) — (15,502 ) G&A (41 ) (847 ) (322 ) — (1,210 ) Operating earnings (2 ) 1,698 408 — 2,104 Interest, net (217 ) 1 (20 ) — (236 ) Other, net (18 ) 7 41 — 30 Earnings before income tax (237 ) 1,706 429 — 1,898 Provision for income tax, net 71 (328 ) (90 ) — (347 ) Equity in net earnings of subsidiaries 1,717 — — (1,717 ) — Net earnings $ 1,551 $ 1,378 $ 339 $ (1,717 ) $ 1,551 Comprehensive income $ 1,853 $ 1,385 $ 552 $ (1,937 ) $ 1,853 Six Months Ended July 1, 2018 Revenue $ — $ 13,277 $ 3,444 $ — $ 16,721 Cost of sales 28 (10,677 ) (2,827 ) — (13,476 ) G&A (58 ) (854 ) (237 ) — (1,149 ) Operating earnings (30 ) 1,746 380 — 2,096 Interest, net (120 ) (1 ) (9 ) — (130 ) Other, net (62 ) 5 21 — (36 ) Earnings before income tax (212 ) 1,750 392 — 1,930 Provision for income tax, net 85 (343 ) (87 ) — (345 ) Equity in net earnings of subsidiaries 1,712 — — (1,712 ) — Net earnings $ 1,585 $ 1,407 $ 305 $ (1,712 ) $ 1,585 Comprehensive income $ 1,485 $ 1,425 $ 96 $ (1,521 ) $ 1,485 |
Condensed Consolidating Balance Sheet (Unaudited) | CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED) June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated ASSETS Current assets: Cash and equivalents $ 243 $ — $ 459 $ — $ 702 Accounts receivable — 1,260 2,413 — 3,673 Unbilled receivables — 2,864 4,690 — 7,554 Inventories — 6,350 130 — 6,480 Other current assets (59 ) 648 559 — 1,148 Total current assets 184 11,122 8,251 — 19,557 Noncurrent assets: Property, plant and equipment (PP&E) 302 7,327 1,609 — 9,238 Accumulated depreciation of PP&E (87 ) (4,175 ) (885 ) — (5,147 ) Intangible assets, net — 230 2,227 — 2,457 Goodwill — 7,960 11,702 — 19,662 Other assets 194 1,015 1,098 — 2,307 Net investment in subsidiaries 27,981 — — (27,981 ) — Total noncurrent assets 28,390 12,357 15,751 (27,981 ) 28,517 Total assets $ 28,574 $ 23,479 $ 24,002 $ (27,981 ) $ 48,074 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 4,741 $ — $ 219 $ — $ 4,960 Customer advances and deposits — 4,194 2,520 — 6,714 Other current liabilities 564 4,036 1,740 — 6,340 Total current liabilities 5,305 8,230 4,479 — 18,014 Noncurrent liabilities: Long-term debt 8,918 42 15 — 8,975 Other liabilities 1,474 4,583 2,151 — 8,208 Total noncurrent liabilities 10,392 4,625 2,166 — 17,183 Total shareholders’ equity 12,877 10,624 17,357 (27,981 ) 12,877 Total liabilities and shareholders’ equity $ 28,574 $ 23,479 $ 24,002 $ (27,981 ) $ 48,074 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2018 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated ASSETS Current assets: Cash and equivalents $ 460 $ — $ 503 $ — $ 963 Accounts receivable — 1,171 2,588 — 3,759 Unbilled receivables — 2,758 3,818 — 6,576 Inventories — 5,855 122 — 5,977 Other current assets (45 ) 441 518 — 914 Total current assets 415 10,225 7,549 — 18,189 Noncurrent assets: PP&E 273 7,177 1,522 — 8,972 Accumulated depreciation of PP&E (83 ) (4,071 ) (840 ) — (4,994 ) Intangible assets, net — 251 2,334 — 2,585 Goodwill — 8,031 11,563 — 19,594 Other assets 195 274 593 — 1,062 Net investment in subsidiaries 25,313 — — (25,313 ) — Total noncurrent assets 25,698 11,662 15,172 (25,313 ) 27,219 Total assets $ 26,113 $ 21,887 $ 22,721 $ (25,313 ) $ 45,408 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 850 $ — $ 123 $ — $ 973 Customer advances and deposits — 4,541 2,729 — 7,270 Other current liabilities 552 3,944 2,000 — 6,496 Total current liabilities 1,402 8,485 4,852 — 14,739 Noncurrent liabilities: Long-term debt 11,398 39 7 — 11,444 Other liabilities 1,581 4,073 1,839 — 7,493 Total noncurrent liabilities 12,979 4,112 1,846 — 18,937 Total shareholders’ equity 11,732 9,290 16,023 (25,313 ) 11,732 Total liabilities and shareholders’ equity $ 26,113 $ 21,887 $ 22,721 $ (25,313 ) $ 45,408 |
Condensed Consolidating Statement of Cash Flows (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Net cash used by operating activities* $ 64 $ 166 $ (734 ) $ — $ (504 ) Cash flows from investing activities: Capital expenditures (27 ) (238 ) (97 ) — (362 ) Other, net 5 18 (24 ) — (1 ) Net cash used by investing activities (22 ) (220 ) (121 ) — (363 ) Cash flows from financing activities: Proceeds from commercial paper, net 1,394 — — — 1,394 Dividends paid (563 ) — — — (563 ) Purchases of common stock (231 ) — — — (231 ) Other, net (19 ) — 49 — 30 Net cash provided by financing activities 581 — 49 — 630 Net cash used by discontinued operations (24 ) — — — (24 ) Cash sweep/funding by parent (816 ) 54 762 — — Net decrease in cash and equivalents (217 ) — (44 ) — (261 ) Cash and equivalents at beginning of period 460 — 503 — 963 Cash and equivalents at end of period $ 243 $ — $ 459 $ — $ 702 Six Months Ended July 1, 2018 Net cash provided by operating activities* $ 41 $ 468 $ (218 ) $ — $ 291 Cash flows from investing activities: Business acquisitions, net of cash acquired (9,749 ) (74 ) (216 ) — (10,039 ) Capital expenditures (22 ) (215 ) (42 ) — (279 ) Other, net 2 72 — — 74 Net cash used by investing activities (9,769 ) (217 ) (258 ) — (10,244 ) Cash flows from financing activities: Proceeds from fixed-rate notes 6,461 — — — 6,461 Proceeds from commercial paper, net 2,786 — — — 2,786 Proceeds from floating-rate notes 1,000 — — — 1,000 Dividends paid (526 ) — — — (526 ) Repayment of CSRA accounts receivable purchase agreement — — (450 ) — (450 ) Purchases of common stock (436 ) — — — (436 ) Other, net (45 ) — 48 — 3 Net cash provided by financing activities 9,240 — (402 ) — 8,838 Net cash used by discontinued operations (6 ) — — — (6 ) Cash sweep/funding by parent (107 ) (251 ) 358 — — Net decrease in cash and equivalents (601 ) — (520 ) — (1,121 ) Cash and equivalents at beginning of period 1,930 — 1,053 — 2,983 Cash and equivalents at end of period $ 1,329 $ — $ 533 $ — $ 1,862 * Continuing operations only. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements | ||
Length of fiscal quarters, weeks | 91 days | |
Operating lease liability | $ 1,352 | |
Operating lease, right-of-use asset | $ 1,280 | |
ASC Topic 842 - Leases | ||
New Accounting Pronouncements | ||
Operating lease liability | $ 1,400 | |
Operating lease, right-of-use asset | $ 1,400 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures, Goodwill and Intangible Assets - Additional Information (Details) $ / shares in Units, $ in Millions | Apr. 03, 2018USD ($)$ / shares | Jun. 30, 2019USD ($) | Jul. 01, 2018USD ($) | Jun. 30, 2019USD ($)business | Jul. 01, 2018USD ($) | Dec. 31, 2018USD ($)business |
Business Acquisition [Line Items] | ||||||
Amortization expense of intangibles | $ | $ 70 | $ 84 | $ 140 | $ 104 | ||
CSRA | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses, gross | $ | $ 9,700 | |||||
Series of Individually Immaterial Business Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses, gross | $ | $ 17 | $ 400 | ||||
Number of businesses acquired | 5 | |||||
Series of Individually Immaterial Business Acquisitions | Aerospace | ||||||
Business Acquisition [Line Items] | ||||||
Number of businesses acquired | 1 | 2 | ||||
Series of Individually Immaterial Business Acquisitions | Mission Systems | ||||||
Business Acquisition [Line Items] | ||||||
Number of businesses acquired | 1 | |||||
Series of Individually Immaterial Business Acquisitions | Information Technology | ||||||
Business Acquisition [Line Items] | ||||||
Number of businesses sold | 1 | 2 | ||||
Common Stock | CSRA | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of interest acquired | 100.00% | |||||
Cash acquisition price (in dollars per share) | $ / shares | $ 41.25 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures, Goodwill and Intangible Assets - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 03, 2018 | |
Business Acquisition [Line Items] | ||||
Goodwill | [1] | $ 19,662 | $ 19,594 | |
CSRA | ||||
Business Acquisition [Line Items] | ||||
Cash and equivalents | $ 45 | |||
Accounts receivable | 155 | |||
Unbilled receivables | 415 | |||
Other current assets | 303 | |||
Property, plant and equipment, net | 326 | |||
Intangible assets, net | 2,066 | |||
Goodwill | 7,935 | |||
Other noncurrent assets | 369 | |||
Total assets | 11,614 | |||
Accounts payable | (135) | |||
Customer advances and deposits | (151) | |||
Current lease obligation | (51) | |||
Other current liabilities | (434) | |||
Noncurrent lease obligation | (207) | |||
Noncurrent deferred tax liability | (355) | |||
Other noncurrent liabilities | (532) | |||
Total liabilities | (1,865) | |||
Net assets acquired | $ 9,749 | |||
[1] | Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. |
Acquisitions and Divestitures_5
Acquisitions and Divestitures, Goodwill and Intangible Assets - Pro Forma Information (Details) - CSRA - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended |
Jul. 01, 2018 | Jul. 01, 2018 | |
Business Acquisition [Line Items] | ||
Revenue | $ 9,225 | $ 18,062 |
Net Earnings | $ 854 | $ 1,598 |
Diluted earnings per share | $ 2.85 | $ 5.32 |
Acquisitions and Divestitures_6
Acquisitions and Divestitures, Goodwill and Intangible Assets - Changes In Amount of Goodwill (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($) | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 19,594 | [1] |
Acquisitions/divestitures | 92 | [2] |
Other | (24) | [3] |
Goodwill, end of period | 19,662 | [1] |
Aerospace | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 2,813 | [1] |
Acquisitions/divestitures | 2 | [2] |
Other | 13 | [3] |
Goodwill, end of period | 2,828 | [1] |
Combat Systems | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 2,633 | [1] |
Acquisitions/divestitures | 7 | [2] |
Other | 32 | [3] |
Goodwill, end of period | 2,672 | [1] |
Information Technology | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 9,622 | [1] |
Acquisitions/divestitures | 77 | [2] |
Other | 1 | [3] |
Goodwill, end of period | 9,700 | [1] |
Accumulated impairment losses | 536 | |
Mission Systems | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 4,229 | [1] |
Acquisitions/divestitures | 6 | [2] |
Other | (70) | [3] |
Goodwill, end of period | 4,165 | [1] |
Accumulated impairment losses | 1,300 | |
Marine Systems | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 297 | [1] |
Acquisitions/divestitures | 0 | [2] |
Other | 0 | [3] |
Goodwill, end of period | $ 297 | [1] |
[1] | Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. | |
[2] | Includes adjustments during the purchase price allocation period. | |
[3] | Consists primarily of adjustments for foreign currency translation |
Acquisitions and Divestitures_7
Acquisitions and Divestitures, Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | $ 4,578 | $ 4,564 |
Accumulated Amortization | (2,121) | (1,979) | |
Net Carrying Amount | 2,457 | 2,585 | |
Contract and Program Intangible Assets | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1],[2] | 3,777 | 3,771 |
Accumulated Amortization | [2] | (1,656) | (1,531) |
Net Carrying Amount | [2] | 2,121 | 2,240 |
Trade Names and Trademarks | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 472 | 469 |
Accumulated Amortization | (186) | (177) | |
Net Carrying Amount | 286 | 292 | |
Technology and Software | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 170 | 165 |
Accumulated Amortization | (122) | (116) | |
Net Carrying Amount | 48 | 49 | |
Other Intangible Assets | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 159 | 159 |
Accumulated Amortization | (157) | (155) | |
Net Carrying Amount | $ 2 | $ 4 | |
[1] | Change in gross carrying amounts consists primarily of adjustments for acquired intangible assets and foreign currency translation. | ||
[2] | Consists of acquired backlog and probable follow-on work and associated customer relationships. |
Revenue - Additional Informatio
Revenue - Additional Information (Details) contract in Thousands, $ in Billions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jul. 01, 2018USD ($) | Jun. 30, 2019USD ($)contract | Jul. 01, 2018USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Number of active contracts | contract | 11 | |||
Revenue recognized in contract liability balance | $ | $ 1.2 | $ 1.1 | $ 2.9 | $ 2.6 |
Transferred over Time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue, percentage from products and services transferred to customers | 75.00% | 78.00% | 75.00% | 76.00% |
Transferred at Point in Time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue, percentage from products and services transferred to customers | 25.00% | 22.00% | 25.00% | 24.00% |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations to be Recognized as Revenue (Details) - USD ($) $ in Billions | Jun. 30, 2019 | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligations | $ 67.9 | |
Revenue, remaining performance obligation, percentage recognized | 45.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligations | $ 67.7 | |
Revenue, remaining performance obligation, percentage recognized | 60.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year 6 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligation, percentage recognized | 35.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligation, percentage recognized | 25.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Revenue - Impact of Adjustments
Revenue - Impact of Adjustments in Contract Estimates (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 |
Operating earnings | 1,090 | 1,088 | 2,104 | 2,096 |
Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 72 | 91 | 168 | 206 |
Operating earnings | $ 71 | $ 83 | $ 139 | $ 180 |
Diluted earnings per share | $ 0.19 | $ 0.22 | $ 0.38 | $ 0.47 |
Revenue - Revenue by Products a
Revenue - Revenue by Products and Services (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | ||
Revenue [Line Items] | |||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 | |
Aerospace | |||||
Revenue [Line Items] | |||||
Revenue | 2,136 | 1,895 | 4,376 | 3,720 | |
Aerospace | Aircraft manufacturing and completions | |||||
Revenue [Line Items] | |||||
Revenue | 1,597 | 1,362 | 3,288 | 2,728 | |
Aerospace | Aircraft services | |||||
Revenue [Line Items] | |||||
Revenue | 537 | 531 | 1,044 | 982 | |
Aerospace | Pre-owned aircraft | |||||
Revenue [Line Items] | |||||
Revenue | 2 | 2 | 44 | 10 | |
Combat Systems | |||||
Revenue [Line Items] | |||||
Revenue | 1,659 | 1,534 | 3,295 | 2,974 | |
Combat Systems | Military vehicles | |||||
Revenue [Line Items] | |||||
Revenue | 1,090 | 990 | 2,224 | 1,946 | |
Combat Systems | Weapons systems, armament and munitions | |||||
Revenue [Line Items] | |||||
Revenue | 461 | 443 | 862 | 826 | |
Combat Systems | Engineering and other services | |||||
Revenue [Line Items] | |||||
Revenue | 108 | 101 | 209 | 202 | |
Information Technology | |||||
Revenue [Line Items] | |||||
Revenue | 2,158 | 2,442 | 4,327 | 3,580 | |
Information Technology | Information technology services | |||||
Revenue [Line Items] | |||||
Revenue | 2,158 | 2,442 | 4,327 | 3,580 | |
Mission Systems | |||||
Revenue [Line Items] | |||||
Revenue | 1,277 | 1,147 | 2,435 | 2,245 | |
Mission Systems | C4ISR solutions | |||||
Revenue [Line Items] | |||||
Revenue | [1] | 1,277 | 1,147 | 2,435 | 2,245 |
Marine Systems | |||||
Revenue [Line Items] | |||||
Revenue | 2,325 | 2,168 | 4,383 | 4,202 | |
Marine Systems | Nuclear-powered submarines | |||||
Revenue [Line Items] | |||||
Revenue | 1,538 | 1,438 | 2,915 | 2,734 | |
Marine Systems | Surface ships | |||||
Revenue [Line Items] | |||||
Revenue | 528 | 473 | 974 | 956 | |
Marine Systems | Repair and other services | |||||
Revenue [Line Items] | |||||
Revenue | $ 259 | $ 257 | $ 494 | $ 512 | |
[1] |
Revenue - Revenue by Contract T
Revenue - Revenue by Contract Type (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Revenue [Line Items] | ||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 |
Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 2,136 | 1,895 | 4,376 | 3,720 |
Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,659 | 1,534 | 3,295 | 2,974 |
Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 2,158 | 2,442 | 4,327 | 3,580 |
Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,277 | 1,147 | 2,435 | 2,245 |
Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 2,325 | 2,168 | 4,383 | 4,202 |
Fixed-price | ||||
Revenue [Line Items] | ||||
Revenue | 6,554 | 6,115 | 12,998 | 11,348 |
Fixed-price | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 1,925 | 1,696 | 3,965 | 3,364 |
Fixed-price | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,427 | 1,330 | 2,843 | 2,583 |
Fixed-price | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 875 | 1,059 | 1,796 | 1,446 |
Fixed-price | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 752 | 658 | 1,403 | 1,278 |
Fixed-price | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,575 | 1,372 | 2,991 | 2,677 |
Cost-reimbursement | ||||
Revenue [Line Items] | ||||
Revenue | 2,308 | 2,373 | 4,463 | 4,297 |
Cost-reimbursement | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost-reimbursement | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 221 | 197 | 432 | 376 |
Cost-reimbursement | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 858 | 930 | 1,699 | 1,507 |
Cost-reimbursement | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 484 | 451 | 947 | 891 |
Cost-reimbursement | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 745 | 795 | 1,385 | 1,523 |
Time-and-materials | ||||
Revenue [Line Items] | ||||
Revenue | 693 | 698 | 1,355 | 1,076 |
Time-and-materials | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 211 | 199 | 411 | 356 |
Time-and-materials | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 11 | 7 | 20 | 15 |
Time-and-materials | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 425 | 453 | 832 | 627 |
Time-and-materials | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 41 | 38 | 85 | 76 |
Time-and-materials | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | $ 5 | $ 1 | $ 7 | $ 2 |
Revenue - Revenue by Customer (
Revenue - Revenue by Customer (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Revenue [Line Items] | ||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 |
Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 2,136 | 1,895 | 4,376 | 3,720 |
Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,659 | 1,534 | 3,295 | 2,974 |
Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 2,158 | 2,442 | 4,327 | 3,580 |
Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,277 | 1,147 | 2,435 | 2,245 |
Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 2,325 | 2,168 | 4,383 | 4,202 |
U.S. Government - Department of Defense (DoD) | ||||
Revenue [Line Items] | ||||
Revenue | 5,015 | 4,569 | 9,614 | 8,342 |
U.S. Government - Department of Defense (DoD) | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 52 | 89 | 175 | 130 |
U.S. Government - Department of Defense (DoD) | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 910 | 660 | 1,703 | 1,267 |
U.S. Government - Department of Defense (DoD) | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 926 | 1,024 | 1,850 | 1,457 |
U.S. Government - Department of Defense (DoD) | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 884 | 764 | 1,668 | 1,506 |
U.S. Government - Department of Defense (DoD) | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 2,243 | 2,032 | 4,218 | 3,982 |
U.S. Government - Non Department of Defense (Non-DoD) | ||||
Revenue [Line Items] | ||||
Revenue | 1,315 | 1,473 | 2,645 | 2,229 |
U.S. Government - Non Department of Defense (Non-DoD) | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
U.S. Government - Non Department of Defense (Non-DoD) | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 3 | 3 | 6 | 4 |
U.S. Government - Non Department of Defense (Non-DoD) | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 1,178 | 1,339 | 2,370 | 1,976 |
U.S. Government - Non Department of Defense (Non-DoD) | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 133 | 130 | 268 | 248 |
U.S. Government - Non Department of Defense (Non-DoD) | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1 | 1 | 1 | 1 |
U.S. Government - Foreign Military Sales (FMS) | ||||
Revenue [Line Items] | ||||
Revenue | 167 | 162 | 319 | 291 |
U.S. Government - Foreign Military Sales (FMS) | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 14 | 19 | 29 | 35 |
U.S. Government - Foreign Military Sales (FMS) | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 90 | 83 | 169 | 152 |
U.S. Government - Foreign Military Sales (FMS) | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 4 | 7 | 9 | 15 |
U.S. Government - Foreign Military Sales (FMS) | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 12 | 14 | 21 | 21 |
U.S. Government - Foreign Military Sales (FMS) | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 47 | 39 | 91 | 68 |
U.S. Government | ||||
Revenue [Line Items] | ||||
Revenue | 6,497 | 6,204 | 12,578 | 10,862 |
U.S. Government | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 66 | 108 | 204 | 165 |
U.S. Government | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,003 | 746 | 1,878 | 1,423 |
U.S. Government | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 2,108 | 2,370 | 4,229 | 3,448 |
U.S. Government | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 1,029 | 908 | 1,957 | 1,775 |
U.S. Government | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 2,291 | 2,072 | 4,310 | 4,051 |
U.S. Commercial | ||||
Revenue [Line Items] | ||||
Revenue | 1,415 | 1,143 | 2,905 | 2,163 |
U.S. Commercial | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 1,242 | 917 | 2,571 | 1,759 |
U.S. Commercial | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 59 | 58 | 109 | 116 |
U.S. Commercial | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 45 | 41 | 85 | 81 |
U.S. Commercial | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 39 | 36 | 74 | 63 |
U.S. Commercial | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 30 | 91 | 66 | 144 |
Non-U.S. Government | ||||
Revenue [Line Items] | ||||
Revenue | 916 | 1,051 | 1,852 | 1,952 |
Non-U.S. Government | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 141 | 143 | 200 | 153 |
Non-U.S. Government | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 587 | 712 | 1,288 | 1,409 |
Non-U.S. Government | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 5 | 31 | 13 | 51 |
Non-U.S. Government | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 181 | 161 | 347 | 333 |
Non-U.S. Government | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | 2 | 4 | 4 | 6 |
Non-U.S. Commercial | ||||
Revenue [Line Items] | ||||
Revenue | 727 | 788 | 1,481 | 1,744 |
Non-U.S. Commercial | Aerospace | ||||
Revenue [Line Items] | ||||
Revenue | 687 | 727 | 1,401 | 1,643 |
Non-U.S. Commercial | Combat Systems | ||||
Revenue [Line Items] | ||||
Revenue | 10 | 18 | 20 | 26 |
Non-U.S. Commercial | Information Technology | ||||
Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Non-U.S. Commercial | Mission Systems | ||||
Revenue [Line Items] | ||||
Revenue | 28 | 42 | 57 | 74 |
Non-U.S. Commercial | Marine Systems | ||||
Revenue [Line Items] | ||||
Revenue | $ 2 | $ 1 | $ 3 | $ 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | ||
Earnings Per Share [Abstract] | |||||
Basic weighted average shares outstanding (shares) | 288,099 | 296,153 | 288,008 | 296,276 | |
Dilutive effect of stock options and restricted stock/RSUs (shares) | [1] | 2,716 | 3,986 | 2,816 | 4,318 |
Diluted weighted average shares outstanding (shares) | 290,815 | 300,139 | 290,824 | 300,594 | |
[1] | Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 5,396 and 4,685 for the three- and six-month periods ended June 30, 2019 , and 3,511 and 2,851 for the three- and six-month periods ended July 1, 2018 , respectively. |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Stock Options and Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (shares) | 5,396 | 3,511 | 4,685 | 2,851 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value | ||
Financial assets (liabilities) | ||
Cash and equivalents | $ 3 | $ 29 |
Available-for-sale debt securities | 141 | 121 |
Equity securities | 50 | 52 |
Other investments | 4 | 4 |
Cash flow hedges | (19) | (69) |
Short- and long-term debt principal | (14,276) | (12,346) |
Carrying Value | ||
Financial assets (liabilities) | ||
Cash and equivalents | 3 | 29 |
Available-for-sale debt securities | 141 | 121 |
Equity securities | 50 | 52 |
Other investments | 4 | 4 |
Cash flow hedges | (19) | (69) |
Short- and long-term debt principal | (14,026) | (12,518) |
Fair Value, Inputs, Level 1 | ||
Financial assets (liabilities) | ||
Cash and equivalents | 0 | 23 |
Available-for-sale debt securities | 0 | 0 |
Equity securities | 50 | 52 |
Other investments | 0 | 0 |
Cash flow hedges | 0 | 0 |
Short- and long-term debt principal | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Financial assets (liabilities) | ||
Cash and equivalents | 3 | 6 |
Available-for-sale debt securities | 141 | 121 |
Equity securities | 0 | 0 |
Other investments | 0 | 0 |
Cash flow hedges | (19) | (69) |
Short- and long-term debt principal | (14,276) | (12,346) |
Fair Value, Inputs, Level 3 | ||
Financial assets (liabilities) | ||
Cash and equivalents | 0 | 0 |
Available-for-sale debt securities | 0 | 0 |
Equity securities | 0 | 0 |
Other investments | 4 | 4 |
Cash flow hedges | 0 | 0 |
Short- and long-term debt principal | $ 0 | $ 0 |
Income Taxes - Deferred Tax (De
Income Taxes - Deferred Tax (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 37 | $ 38 |
Deferred tax liability | (570) | (577) |
Net deferred tax liability | $ (533) | $ (539) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | Jun. 30, 2019USD ($) |
Income Tax Disclosure [Abstract] | |
Possible chance of tax position sustained, percentage | 50.00% |
Amount of unrecorded benefit | $ 0 |
Unbilled Receivables (Details)
Unbilled Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Contracts In Process [Line Items] | ||
Unbilled revenue | $ 31,643 | $ 27,908 |
Advances and progress billings | (24,089) | (21,332) |
Net unbilled receivables | 7,554 | $ 6,576 |
Combat Systems | ||
Contracts In Process [Line Items] | ||
Net unbilled receivables | $ 2,400 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Work in process | $ 4,749 | $ 4,357 |
Raw materials | 1,587 | 1,504 |
Finished goods | 25 | 33 |
Pre-owned aircraft | 119 | 83 |
Total inventories | $ 6,480 | $ 5,977 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total debt principal | $ 14,026 | $ 12,518 |
Less unamortized debt issuance costs and discounts | 91 | 101 |
Total debt | 13,935 | 12,417 |
Less current portion | 4,960 | 973 |
Long-term debt | 8,975 | 11,444 |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Short term debt | $ 2,250 | 850 |
Weighted average interest rate | 2.482% | |
Fixed Rate Notes Due May 2020 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 2,000 | 2,000 |
Interest rate | 2.875% | |
Fixed Rate Notes Due May 2021 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 2,000 | 2,000 |
Interest rate | 3.00% | |
Fixed-Rate Notes Due July 2021 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 3.875% | |
Fixed Rate Notes Due November 2022 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 1,000 | 1,000 |
Interest rate | 2.25% | |
Fixed Rate Notes Due May 2023 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 750 | 750 |
Interest rate | 3.375% | |
Fixed Rate Notes Due August 2023 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 1.875% | |
Fixed Rate Notes Due November 2024 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 2.375% | |
Fixed Rate Notes Due May 2025 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 750 | 750 |
Interest rate | 3.50% | |
Fixed Rate Notes Due August 2026 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 2.125% | |
Fixed Rate Notes Due November 2027 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 2.625% | |
Fixed Rate Notes Due May 2028 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 1,000 | 1,000 |
Interest rate | 3.75% | |
Fixed Rate Notes Due November 2042 | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Interest rate | 3.60% | |
Floating Rate Notes Due May 2020 | LIBOR | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Basis spread on variable rate | 0.29% | |
Floating Rate Notes Due May 2021 | LIBOR | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 500 | 500 |
Basis spread on variable rate | 0.38% | |
Other Debt Securities | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 276 | $ 168 |
Other Interest rate | Various |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Billions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Debt Instrument [Line Items] | |
Percentage of owned subsidiaries guaranteed fixed- and floating-rate notes | 100.00% |
Credit facility, maximum borrowing capacity | $ 5 |
Commercial Paper | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 2.3 |
Weighted average interest rate | 2.482% |
Credit Facility | Committed Bank Credit Facility | |
Debt Instrument [Line Items] | |
Credit facility, maximum borrowing capacity | $ 2 |
Debt Instrument, Term | 364 days |
Credit Facility | Multi-year Facility Expiring November 2020 | |
Debt Instrument [Line Items] | |
Credit facility, maximum borrowing capacity | $ 1 |
Credit Facility | Multi-year Facility Expiring March 2023 | |
Debt Instrument [Line Items] | |
Credit facility, maximum borrowing capacity | $ 2 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |||
Salaries and wages | $ 897 | $ 952 | |
Workers’ compensation | 267 | 244 | |
Retirement benefits | 265 | 272 | |
Operating lease liabilities | 240 | 0 | |
Fair value of cash flow hedges | 79 | 141 | |
Other | [1] | 1,732 | 1,708 |
Total other current liabilities | 3,480 | 3,317 | |
Retirement benefits | 4,241 | 4,422 | |
Operating lease liabilities | 1,112 | 0 | |
Customer deposits on commercial contracts | 630 | 726 | |
Deferred income taxes | 570 | 577 | |
Other | [2] | 1,655 | 1,768 |
Total other liabilities | $ 8,208 | $ 7,493 | |
[1] | Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, deferred revenue and supplier contributions in the Aerospace segment, liabilities of discontinued operations, finance lease liabilities and insurance-related costs. | ||
[2] | Consists primarily of warranty reserves, workers’ compensation liabilities, finance lease liabilities and liabilities of discontinued operations. |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | Dec. 05, 2018 | |
Equity [Abstract] | |||||
Stock repurchase program, number of shares authorized to be repurchased | 10 | ||||
Stock repurchased during the period (shares) | 1.1 | 2.1 | |||
Stock repurchased during the period, value | $ 184 | $ 436 | |||
Remaining number of shares authorized to be repurchased (shares) | 6.4 | 6.4 | |||
Shares remaining to be repurchased as a percent of total shares outstanding | 2.00% | 2.00% | |||
Dividends declared per share | $ 1.02 | $ 0.93 | $ 2.04 | $ 1.86 | |
Dividends paid in cash | $ 295 | $ 276 | $ 563 | $ 526 | |
Recognized net actuarial losses (pretax) | 136 | 187 | |||
Amortization of prior service credit (pretax) | $ 11 | $ 24 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | $ (3,778) | $ (2,820) | |
Cumulative effect adjustments | [1] | (638) | |
Other comprehensive income, pretax | 346 | (73) | |
Provision for income tax, net | (44) | (27) | |
Other comprehensive loss, net of tax | 302 | (100) | |
Ending Balance | (3,476) | (3,558) | |
Losses on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (71) | (94) | |
Cumulative effect adjustments | [1] | (4) | |
Other comprehensive income, pretax | 68 | (21) | |
Provision for income tax, net | (16) | 7 | |
Other comprehensive loss, net of tax | 52 | (14) | |
Ending Balance | (19) | (112) | |
Unrealized Gains on Marketable Securities | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | 0 | 19 | |
Cumulative effect adjustments | [1] | (19) | |
Other comprehensive income, pretax | 0 | 0 | |
Provision for income tax, net | 0 | 0 | |
Other comprehensive loss, net of tax | 0 | 0 | |
Ending Balance | 0 | 0 | |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | 102 | 402 | |
Cumulative effect adjustments | [1] | 0 | |
Other comprehensive income, pretax | 156 | (215) | |
Provision for income tax, net | 0 | 0 | |
Other comprehensive loss, net of tax | 156 | (215) | |
Ending Balance | 258 | 187 | |
Changes in Retirement Plans’ Funded Status | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (3,809) | (3,147) | |
Cumulative effect adjustments | [1] | (615) | |
Other comprehensive income, pretax | 122 | 163 | |
Provision for income tax, net | (28) | (34) | |
Other comprehensive loss, net of tax | 94 | 129 | |
Ending Balance | $ (3,715) | $ (3,633) | |
[1] | Reflects the cumulative effects of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, and ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which we adopted on January 1, 2018. |
Derivative Financial Instrume_2
Derivative Financial Instruments And Hedging Activities (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2019 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional forward foreign exchange contracts outstanding | $ 4,800 | $ 5,800 | ||
Average maturity of foreign currency forward contracts, in years | 2 years | |||
Cash and equivalents | $ 702 | 963 | $ 1,862 | $ 2,983 |
Marketable securities held in trust | $ 194 | $ 202 | ||
Maximum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Maturity of fixed-income securities, in years | 5 years |
Commitments And Contingencies -
Commitments And Contingencies - Additional Information (Details) $ in Billions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Other Commitments [Line Items] | |
Letters of credit and guarantees | $ 1.3 |
Maximum | |
Other Commitments [Line Items] | |
Period preceding delivery of aircraft to customer fair market value of trade-in aircraft is established, days, maximum | 45 days |
Commitments And Contingencies_2
Commitments And Contingencies - Product Guarantee (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning balance | $ 480 | $ 467 |
Warranty expense | 50 | 60 |
Payments | (37) | (54) |
Adjustments | (11) | (15) |
Ending balance | $ 482 | $ 458 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Option to extend lease period | 30 years |
Option to terminate lease period | 1 year |
Percentage of leased real estate of total lease obligation | 75.00% |
Additional leases that have not yet commenced | $ 218 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of leases that have not yet commenced | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of leases that have not yet commenced | 20 years |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 22 | $ 43 |
Interest on lease liabilities | 7 | 12 |
Operating lease cost | 78 | 164 |
Short-term lease cost | 19 | 32 |
Variable lease cost | 1 | 2 |
Sublease income | (4) | (8) |
Total lease costs, net | $ 123 | $ 245 |
Leases - Additional Informati_2
Leases - Additional Information Related to Leases (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 166 |
Operating cash flows from finance leases | 12 |
Financing cash flows from finance leases | 29 |
Right-of-use assets obtained in exchange for lease liabilities: | |
Operating leases | 95 |
Finance leases | $ 4 |
Weighted-average remaining lease term: | |
Operating leases | 10 years 9 months 18 days |
Finance leases | 5 years 4 months 24 days |
Weighted-average discount rate: | |
Operating leases | 4.00% |
Finance leases | 9.00% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Due Under ASC 842 Guidance (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2019 (excluding the six months ended June 30, 2019) | $ 155 | |
2020 | 259 | |
2021 | 214 | |
2022 | 169 | |
2023 | 126 | |
Thereafter | 762 | |
Total future lease payments | 1,685 | |
Less imputed interest | 333 | |
Present value of future lease payments | 1,352 | |
Less current portion of lease liabilities | 240 | $ 0 |
Long-term lease liabilities | 1,112 | $ 0 |
ROU assets | 1,280 | |
Finance Leases | ||
2019 (excluding the six months ended June 30, 2019) | 44 | |
2020 | 81 | |
2021 | 75 | |
2022 | 74 | |
2023 | 28 | |
Thereafter | 66 | |
Total future lease payments | 368 | |
Less imputed interest | 72 | |
Present value of future lease payments | 296 | |
Less current portion of lease liabilities | 64 | |
Long-term lease liabilities | 232 | |
ROU assets | $ 338 |
Leases - Future Minimum Lease_2
Leases - Future Minimum Lease Payments Due Under ASC 840 Guidance (Details) $ in Millions | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 297 |
2020 | 234 |
2021 | 196 |
2022 | 154 |
2023 | 110 |
Thereafter | 698 |
Total future minimum lease payments | 1,689 |
Capital Leases | |
2019 | 92 |
2020 | 84 |
2021 | 78 |
2022 | 79 |
2023 | 30 |
Thereafter | 70 |
Total future minimum lease payments | 433 |
Less amount representing interest | 95 |
Less amount representing executory costs | 19 |
Present value of net minimum lease payments | 319 |
Less current maturities of capital lease liabilities | 64 |
Noncurrent capital lease liabilities | $ 255 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 28 | $ 44 | $ 56 | $ 90 |
Interest cost | 150 | 140 | 300 | 254 |
Expected return on plan assets | (228) | (228) | (456) | (407) |
Recognized net actuarial loss (gain) | 70 | 93 | 140 | 189 |
Amortization of prior service credit | (5) | (11) | (9) | (22) |
Net periodic benefit cost (credit) | 15 | 38 | 31 | 104 |
Other Postretirement Benefit Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 2 | 4 | 5 |
Interest cost | 9 | 8 | 18 | 16 |
Expected return on plan assets | (9) | (10) | (18) | (19) |
Recognized net actuarial loss (gain) | (2) | (1) | (4) | (2) |
Amortization of prior service credit | (1) | (1) | (2) | (2) |
Net periodic benefit cost (credit) | $ (1) | $ (2) | $ (2) | $ (2) |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2019Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 5 |
Segment Information - Summary o
Segment Information - Summary of Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 |
Operating earnings | 1,090 | 1,088 | 2,104 | 2,096 |
Aerospace | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,136 | 1,895 | 4,376 | 3,720 |
Combat Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,659 | 1,534 | 3,295 | 2,974 |
Information Technology | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,158 | 2,442 | 4,327 | 3,580 |
Mission Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,277 | 1,147 | 2,435 | 2,245 |
Marine Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,325 | 2,168 | 4,383 | 4,202 |
Operating Segments | Aerospace | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,136 | 1,895 | 4,376 | 3,720 |
Operating earnings | 331 | 386 | 659 | 732 |
Operating Segments | Combat Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,659 | 1,534 | 3,295 | 2,974 |
Operating earnings | 242 | 236 | 448 | 460 |
Operating Segments | Information Technology | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,158 | 2,442 | 4,327 | 3,580 |
Operating earnings | 154 | 156 | 310 | 257 |
Operating Segments | Mission Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,277 | 1,147 | 2,435 | 2,245 |
Operating earnings | 162 | 153 | 310 | 299 |
Operating Segments | Marine Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,325 | 2,168 | 4,383 | 4,202 |
Operating earnings | 197 | 195 | 377 | 379 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating earnings | $ 4 | $ (38) | $ 0 | $ (31) |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Statements - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Consolidating Financial Statements [Abstract] | |
Percentage of owned subsidiaries (the guarantors) | 100.00% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Statements - Condensed Consolidating Statements of Earnings (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Condensed Financial Statements [Line Items] | ||||
Revenue | $ 9,555 | $ 9,186 | $ 18,816 | $ 16,721 |
Cost of sales | (7,869) | (7,486) | (15,502) | (13,476) |
G&A | (596) | (612) | (1,210) | (1,149) |
Operating earnings | 1,090 | 1,088 | 2,104 | 2,096 |
Interest, net | (119) | (103) | (236) | (130) |
Other, net | 12 | (15) | 30 | (36) |
Earnings before income tax | 983 | 970 | 1,898 | 1,930 |
Provision for income tax, net | (177) | (184) | (347) | (345) |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net earnings | 806 | 786 | 1,551 | 1,585 |
Comprehensive income | 1,013 | 619 | 1,853 | 1,485 |
Consolidating Adjustments | ||||
Condensed Financial Statements [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of sales | 0 | 0 | 0 | 0 |
G&A | 0 | 0 | 0 | 0 |
Operating earnings | 0 | 0 | 0 | 0 |
Interest, net | 0 | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 | 0 |
Earnings before income tax | 0 | 0 | 0 | 0 |
Provision for income tax, net | 0 | 0 | 0 | 0 |
Equity in net earnings of subsidiaries | (884) | (911) | (1,717) | (1,712) |
Net earnings | (884) | (911) | (1,717) | (1,712) |
Comprehensive income | (1,048) | (699) | (1,937) | (1,521) |
Parent Company | ||||
Condensed Financial Statements [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of sales | 21 | 9 | 39 | 28 |
G&A | (19) | (45) | (41) | (58) |
Operating earnings | 2 | (36) | (2) | (30) |
Interest, net | (110) | (94) | (217) | (120) |
Other, net | (10) | (38) | (18) | (62) |
Earnings before income tax | (118) | (168) | (237) | (212) |
Provision for income tax, net | 40 | 43 | 71 | 85 |
Equity in net earnings of subsidiaries | 884 | 911 | 1,717 | 1,712 |
Net earnings | 806 | 786 | 1,551 | 1,585 |
Comprehensive income | 1,013 | 619 | 1,853 | 1,485 |
Guarantor Subsidiaries | ||||
Condensed Financial Statements [Line Items] | ||||
Revenue | 7,437 | 6,793 | 14,382 | 13,277 |
Cost of sales | (6,111) | (5,475) | (11,837) | (10,677) |
G&A | (428) | (418) | (847) | (854) |
Operating earnings | 898 | 900 | 1,698 | 1,746 |
Interest, net | 1 | (1) | 1 | (1) |
Other, net | 3 | 4 | 7 | 5 |
Earnings before income tax | 902 | 903 | 1,706 | 1,750 |
Provision for income tax, net | (173) | (178) | (328) | (343) |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net earnings | 729 | 725 | 1,378 | 1,407 |
Comprehensive income | 733 | 740 | 1,385 | 1,425 |
Non-Guarantor Subsidiaries | ||||
Condensed Financial Statements [Line Items] | ||||
Revenue | 2,118 | 2,393 | 4,434 | 3,444 |
Cost of sales | (1,779) | (2,020) | (3,704) | (2,827) |
G&A | (149) | (149) | (322) | (237) |
Operating earnings | 190 | 224 | 408 | 380 |
Interest, net | (10) | (8) | (20) | (9) |
Other, net | 19 | 19 | 41 | 21 |
Earnings before income tax | 199 | 235 | 429 | 392 |
Provision for income tax, net | (44) | (49) | (90) | (87) |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net earnings | 155 | 186 | 339 | 305 |
Comprehensive income | $ 315 | $ (41) | $ 552 | $ 96 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | |
Current assets: | |||||||
Cash and equivalents | $ 702 | $ 963 | $ 1,862 | $ 2,983 | |||
Accounts receivable | 3,673 | 3,759 | |||||
Unbilled receivables | 7,554 | 6,576 | |||||
Inventories | 6,480 | 5,977 | |||||
Other current assets | 1,148 | 914 | |||||
Total current assets | 19,557 | 18,189 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment (PP&E) | 9,238 | 8,972 | |||||
Accumulated depreciation of PP&E | (5,147) | (4,994) | |||||
Intangible assets, net | 2,457 | 2,585 | |||||
Goodwill | [1] | 19,662 | 19,594 | ||||
Other assets | 2,307 | 1,062 | |||||
Net investment in subsidiaries | 0 | 0 | |||||
Total noncurrent assets | 28,517 | 27,219 | |||||
Total assets | 48,074 | 45,408 | |||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | 4,960 | 973 | |||||
Customer advances and deposits | 6,714 | 7,270 | |||||
Other current liabilities | 6,340 | 6,496 | |||||
Total current liabilities | 18,014 | 14,739 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 8,975 | 11,444 | |||||
Other liabilities | 8,208 | 7,493 | |||||
Total noncurrent liabilities | 17,183 | 18,937 | |||||
Total shareholders’ equity | 12,877 | $ 12,234 | 11,732 | 11,994 | $ 11,774 | 11,435 | |
Total liabilities and shareholders’ equity | 48,074 | 45,408 | |||||
Consolidating Adjustments | |||||||
Current assets: | |||||||
Cash and equivalents | 0 | 0 | 0 | 0 | |||
Accounts receivable | 0 | 0 | |||||
Unbilled receivables | 0 | 0 | |||||
Inventories | 0 | 0 | |||||
Other current assets | 0 | 0 | |||||
Total current assets | 0 | 0 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment (PP&E) | 0 | 0 | |||||
Accumulated depreciation of PP&E | 0 | 0 | |||||
Intangible assets, net | 0 | 0 | |||||
Goodwill | 0 | 0 | |||||
Other assets | 0 | 0 | |||||
Net investment in subsidiaries | (27,981) | (25,313) | |||||
Total noncurrent assets | (27,981) | (25,313) | |||||
Total assets | (27,981) | (25,313) | |||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | 0 | 0 | |||||
Customer advances and deposits | 0 | 0 | |||||
Other current liabilities | 0 | 0 | |||||
Total current liabilities | 0 | 0 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 0 | 0 | |||||
Other liabilities | 0 | 0 | |||||
Total noncurrent liabilities | 0 | 0 | |||||
Total shareholders’ equity | (27,981) | (25,313) | |||||
Total liabilities and shareholders’ equity | (27,981) | (25,313) | |||||
Parent Company | |||||||
Current assets: | |||||||
Cash and equivalents | 243 | 460 | 1,329 | 1,930 | |||
Accounts receivable | 0 | 0 | |||||
Unbilled receivables | 0 | 0 | |||||
Inventories | 0 | 0 | |||||
Other current assets | (59) | (45) | |||||
Total current assets | 184 | 415 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment (PP&E) | 302 | 273 | |||||
Accumulated depreciation of PP&E | (87) | (83) | |||||
Intangible assets, net | 0 | 0 | |||||
Goodwill | 0 | 0 | |||||
Other assets | 194 | 195 | |||||
Net investment in subsidiaries | 27,981 | 25,313 | |||||
Total noncurrent assets | 28,390 | 25,698 | |||||
Total assets | 28,574 | 26,113 | |||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | 4,741 | 850 | |||||
Customer advances and deposits | 0 | 0 | |||||
Other current liabilities | 564 | 552 | |||||
Total current liabilities | 5,305 | 1,402 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 8,918 | 11,398 | |||||
Other liabilities | 1,474 | 1,581 | |||||
Total noncurrent liabilities | 10,392 | 12,979 | |||||
Total shareholders’ equity | 12,877 | 11,732 | |||||
Total liabilities and shareholders’ equity | 28,574 | 26,113 | |||||
Guarantor Subsidiaries | |||||||
Current assets: | |||||||
Cash and equivalents | 0 | 0 | 0 | 0 | |||
Accounts receivable | 1,260 | 1,171 | |||||
Unbilled receivables | 2,864 | 2,758 | |||||
Inventories | 6,350 | 5,855 | |||||
Other current assets | 648 | 441 | |||||
Total current assets | 11,122 | 10,225 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment (PP&E) | 7,327 | 7,177 | |||||
Accumulated depreciation of PP&E | (4,175) | (4,071) | |||||
Intangible assets, net | 230 | 251 | |||||
Goodwill | 7,960 | 8,031 | |||||
Other assets | 1,015 | 274 | |||||
Net investment in subsidiaries | 0 | 0 | |||||
Total noncurrent assets | 12,357 | 11,662 | |||||
Total assets | 23,479 | 21,887 | |||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | 0 | 0 | |||||
Customer advances and deposits | 4,194 | 4,541 | |||||
Other current liabilities | 4,036 | 3,944 | |||||
Total current liabilities | 8,230 | 8,485 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 42 | 39 | |||||
Other liabilities | 4,583 | 4,073 | |||||
Total noncurrent liabilities | 4,625 | 4,112 | |||||
Total shareholders’ equity | 10,624 | 9,290 | |||||
Total liabilities and shareholders’ equity | 23,479 | 21,887 | |||||
Non-Guarantor Subsidiaries | |||||||
Current assets: | |||||||
Cash and equivalents | 459 | 503 | $ 533 | $ 1,053 | |||
Accounts receivable | 2,413 | 2,588 | |||||
Unbilled receivables | 4,690 | 3,818 | |||||
Inventories | 130 | 122 | |||||
Other current assets | 559 | 518 | |||||
Total current assets | 8,251 | 7,549 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment (PP&E) | 1,609 | 1,522 | |||||
Accumulated depreciation of PP&E | (885) | (840) | |||||
Intangible assets, net | 2,227 | 2,334 | |||||
Goodwill | 11,702 | 11,563 | |||||
Other assets | 1,098 | 593 | |||||
Net investment in subsidiaries | 0 | 0 | |||||
Total noncurrent assets | 15,751 | 15,172 | |||||
Total assets | 24,002 | 22,721 | |||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | 219 | 123 | |||||
Customer advances and deposits | 2,520 | 2,729 | |||||
Other current liabilities | 1,740 | 2,000 | |||||
Total current liabilities | 4,479 | 4,852 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 15 | 7 | |||||
Other liabilities | 2,151 | 1,839 | |||||
Total noncurrent liabilities | 2,166 | 1,846 | |||||
Total shareholders’ equity | 17,357 | 16,023 | |||||
Total liabilities and shareholders’ equity | $ 24,002 | $ 22,721 | |||||
[1] | Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Statements - Condensed Consolidating Statements of Cash Flows (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | ||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | $ (504) | $ 291 | ||
Cash flows from investing activities: | |||||
Business acquisitions, net of cash acquired | (17) | (10,039) | |||
Capital expenditures | (362) | (279) | |||
Other, net | (1) | 74 | |||
Net cash used by investing activities | (363) | (10,244) | |||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | 6,461 | |||
Proceeds from commercial paper, net | 1,394 | 2,786 | |||
Dividends paid | $ (295) | $ (276) | (563) | (526) | |
Repayment of CSRA accounts receivable purchase agreement | 0 | (450) | |||
Purchases of common stock | (231) | (436) | |||
Other, net | 30 | 3 | |||
Net cash provided by financing activities | 630 | 8,838 | |||
Net cash used by discontinued operations | (24) | (6) | |||
Cash sweep/funding by parent | 0 | 0 | |||
Net decrease in cash and equivalents | (261) | (1,121) | |||
Cash and equivalents at beginning of period | 963 | 2,983 | |||
Cash and equivalents at end of period | 702 | 1,862 | 702 | 1,862 | |
Floating-rate notes | |||||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | 1,000 | |||
Consolidating Adjustments | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | 0 | 0 | ||
Cash flows from investing activities: | |||||
Business acquisitions, net of cash acquired | 0 | ||||
Capital expenditures | 0 | 0 | |||
Other, net | 0 | 0 | |||
Net cash used by investing activities | 0 | 0 | |||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | ||||
Proceeds from commercial paper, net | 0 | 0 | |||
Dividends paid | 0 | 0 | |||
Repayment of CSRA accounts receivable purchase agreement | 0 | ||||
Purchases of common stock | 0 | 0 | |||
Other, net | 0 | 0 | |||
Net cash provided by financing activities | 0 | 0 | |||
Net cash used by discontinued operations | 0 | 0 | |||
Cash sweep/funding by parent | 0 | 0 | |||
Net decrease in cash and equivalents | 0 | 0 | |||
Cash and equivalents at beginning of period | 0 | 0 | |||
Cash and equivalents at end of period | 0 | 0 | 0 | 0 | |
Consolidating Adjustments | Floating-rate notes | |||||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | ||||
Parent Company | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | 64 | 41 | ||
Cash flows from investing activities: | |||||
Business acquisitions, net of cash acquired | (9,749) | ||||
Capital expenditures | (27) | (22) | |||
Other, net | 5 | 2 | |||
Net cash used by investing activities | (22) | (9,769) | |||
Cash flows from financing activities: | |||||
Proceeds from notes | 6,461 | ||||
Proceeds from commercial paper, net | 1,394 | 2,786 | |||
Dividends paid | (563) | (526) | |||
Repayment of CSRA accounts receivable purchase agreement | 0 | ||||
Purchases of common stock | (231) | (436) | |||
Other, net | (19) | (45) | |||
Net cash provided by financing activities | 581 | 9,240 | |||
Net cash used by discontinued operations | (24) | (6) | |||
Cash sweep/funding by parent | (816) | (107) | |||
Net decrease in cash and equivalents | (217) | (601) | |||
Cash and equivalents at beginning of period | 460 | 1,930 | |||
Cash and equivalents at end of period | 243 | 1,329 | 243 | 1,329 | |
Parent Company | Floating-rate notes | |||||
Cash flows from financing activities: | |||||
Proceeds from notes | 1,000 | ||||
Guarantor Subsidiaries | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | 166 | 468 | ||
Cash flows from investing activities: | |||||
Business acquisitions, net of cash acquired | (74) | ||||
Capital expenditures | (238) | (215) | |||
Other, net | 18 | 72 | |||
Net cash used by investing activities | (220) | (217) | |||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | ||||
Proceeds from commercial paper, net | 0 | 0 | |||
Dividends paid | 0 | 0 | |||
Repayment of CSRA accounts receivable purchase agreement | 0 | ||||
Purchases of common stock | 0 | 0 | |||
Other, net | 0 | 0 | |||
Net cash provided by financing activities | 0 | 0 | |||
Net cash used by discontinued operations | 0 | 0 | |||
Cash sweep/funding by parent | 54 | (251) | |||
Net decrease in cash and equivalents | 0 | 0 | |||
Cash and equivalents at beginning of period | 0 | 0 | |||
Cash and equivalents at end of period | 0 | 0 | 0 | 0 | |
Guarantor Subsidiaries | Floating-rate notes | |||||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | ||||
Non-Guarantor Subsidiaries | |||||
Condensed Financial Statements [Line Items] | |||||
Net cash (used) provided by operating activities | [1] | (734) | (218) | ||
Cash flows from investing activities: | |||||
Business acquisitions, net of cash acquired | (216) | ||||
Capital expenditures | (97) | (42) | |||
Other, net | (24) | 0 | |||
Net cash used by investing activities | (121) | (258) | |||
Cash flows from financing activities: | |||||
Proceeds from notes | 0 | ||||
Proceeds from commercial paper, net | 0 | 0 | |||
Dividends paid | 0 | 0 | |||
Repayment of CSRA accounts receivable purchase agreement | (450) | ||||
Purchases of common stock | 0 | 0 | |||
Other, net | 49 | 48 | |||
Net cash provided by financing activities | 49 | (402) | |||
Net cash used by discontinued operations | 0 | 0 | |||
Cash sweep/funding by parent | 762 | 358 | |||
Net decrease in cash and equivalents | (44) | (520) | |||
Cash and equivalents at beginning of period | 503 | 1,053 | |||
Cash and equivalents at end of period | $ 459 | $ 533 | $ 459 | 533 | |
Non-Guarantor Subsidiaries | Floating-rate notes | |||||
Cash flows from financing activities: | |||||
Proceeds from notes | $ 0 | ||||
[1] | * Continuing operations only |