Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 25, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Current Reporting Status | Yes | |
Entity Registrant Name | B/E AEROSPACE INC | |
Entity Central Index Key | 861,361 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 102,202,707 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 105 | $ 154.1 |
Accounts receivable | 418.7 | 354.6 |
Inventories | 1,152.1 | 1,091.9 |
Other current assets | 53.8 | 57.8 |
Total current assets | 1,729.6 | 1,658.4 |
Property and equipment, net of accumulated depreciation ($332.0 at March 31, 2016 and $320.0 at December 31, 2015) | 390.8 | 391.2 |
Goodwill | 821.6 | 813.2 |
Identifiable intangible assets | 230.3 | 231.3 |
Other assets | 46.8 | 46.8 |
Total assets | 3,219.1 | 3,140.9 |
Current liabilities: | ||
Accounts payable | 305.8 | 300.5 |
Accrued liabilities | 525.9 | 521.7 |
Total current liabilities | 831.7 | 822.2 |
Long-term debt | 2,060.2 | 2,034.1 |
Deferred income taxes | 95.3 | 92.7 |
Other non-current liabilities | 138.5 | 136.4 |
Stockholders' equity: | ||
Common stock, $0.01 par value; 200.0 shares authorized, 107.5 shares issued as of March 31, 2016 and 107.4 shares issued as of December 31, 2015 | 1.1 | 1.1 |
Additional paid-in capital | (839.6) | (847.8) |
Treasury stock: 5.3 shares at March 31, 2016 and 4.2 shares at December 31, 2015 | (230.7) | (183.9) |
Retained earnings | 1,294 | 1,232.9 |
Accumulated other comprehensive loss | (131.4) | (146.8) |
Total stockholders' equity | 93.4 | 55.5 |
Total liabilities and equity | $ 3,219.1 | $ 3,140.9 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 332 | $ 320 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1 | 1 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200 | 200 |
Common stock, shares issued | 107.5 | 107.4 |
Treasury stock | 5.3 | 4.2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 716.7 | $ 690 |
Cost of sales | 436.6 | 401.6 |
Selling, general and administrative | 83.8 | 87.1 |
Research, development and engineering | 66.9 | 75.6 |
Operating earnings | $ 129.4 | $ 125.7 |
Operating earnings, as percentage of revenues | 18.10% | 18.20% |
Interest expense, net | $ 23.1 | $ 24.3 |
Earnings before income taxes | 106.3 | 101.4 |
Income tax expense | 23.7 | 23.8 |
Net earnings | 82.6 | 77.6 |
Other comprehensive income (loss): | ||
Foreign currency translation adjust and other | 15.4 | (50.6) |
Comprehensive income | $ 98 | $ 27 |
Net earnings per common share: | ||
Basic net earnings per share (in dollars per share) | $ 0.82 | $ 0.74 |
Diluted net earnings per share (in dollars per share) | 0.81 | 0.74 |
Dividends declared per share (in dollars per share) | $ 0.21 | $ 0.19 |
Weighted average common shares: | ||
Weighted average common shares - basic | 101.1 | 104.5 |
Weighted average common shares - diluted | 101.4 | 104.9 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 82.6 | $ 77.6 |
Adjustments to reconcile net earnings to net cash flows provided by operating activities, net of effects from acquisitions: | ||
Depreciation and amortization | 21.4 | 20.4 |
Deferred income taxes | 0.7 | 2.7 |
Non-cash compensation | 8.3 | 6.8 |
Provision for doubtful accounts | 0.5 | |
(Gain)/Loss on disposal of property and equipment | (0.2) | 0.2 |
Tax benefits realized from prior exercises of restricted stock | (0.2) | (1.2) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (62.3) | (75.1) |
Inventories | (59.3) | (61.2) |
Other current and non-current assets | 6 | 40.3 |
Accounts payable and accrued liabilities | 14.6 | 26.9 |
Net cash flow provided by operating activities | 12.1 | 37.4 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (17.6) | (25.3) |
Acquisitions, net of cash acquired | 4 | |
Other | (0.9) | (3.8) |
Net cash flow used in investing activities | (18.5) | (25.1) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchase of treasury stock, including share repurhases | (46.7) | (0.4) |
Tax benefits realized from prior exercises of restricted stock | 0.2 | 1.2 |
Borrowings on line of credit | 100 | |
Repayments on line of credit | (75) | |
Principal payments on long-term debt | (5.5) | |
Dividends | (21.2) | |
Net cash flows used in financing activities | (42.7) | (4.7) |
Effect of foreign exchange rate changes on cash and cash equivalents | (4.7) | |
Net (decrease) increase in cash and cash equivalents | (49.1) | 2.9 |
Cash and cash equivalents, beginning of year | 154.1 | 292.5 |
Cash and cash equivalents, end of year | 105 | 295.4 |
Cash paid (refunded) during period for: | ||
Interest | 22.1 | 13.8 |
Income taxes, net of $5.6 payments in 2015 | 8.1 | (24.4) |
Supplemental schedule of non-cash activities: | ||
Accrued property additions | $ 3.3 | $ 6.2 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and accompanying notes included in the B/E Aerospace, Inc. (the “Company”) Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting , which amends ASC Topic 718, Compensation – Stock Compensation . The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Earlier adoption is permitted. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The Company is currently evaluating the effect of this update on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which supersedes ASC Topic 840, Leases , and creates a new topic, ASC Topic 842, Leases . This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers , which updated the guidance in ASC Topic 606, Revenue Recognition . The new standard was originally effective for reporting periods beginning after December 15, 2016 and early adoption was not permitted. In August 2015, the FASB issued ASU 2015-14 which amended the effective date of this ASU to fiscal years beginning after December 15, 2017, and early adoption is permitted only for fiscal years beginning after December 15, 2016. Accordingly, we plan to adopt this ASU on January 1, 2018. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract(s) and recognize revenue when (or as) the entity satisfies a performance obligation. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures and is currently unable to estimate the impact of adopting this guidance. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3. Inventories Inventories are stated at the lower of cost or market. Cost is determined using FIFO or the weighted average cost method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. In accordance with industry practice, costs in inventory include amounts relating to long-term contracts with long production cycles and inventory items with long procurement cycles, some of which are not expected to be realized within one year. Work-in-process inventories include costs and estimated earnings in excess of billings on uncompleted contracts of $97.1 and $87.7 and capitalized development costs on long-term seller furnished equipment contracts of $472.1 and $438.1 as of March 31, 2016 and December 31, 2015, respectively. Inventories consist of the following: March 31, December 31, 2016 2015 Purchased materials and component parts $ $ Work-in-process Finished goods $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 4. Goodwill and Intangible Assets The table below sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions: March 31, 2016 December 31, 2015 Useful Life Original Accumulated Net Book Original Accumulated Net Book (Years) Cost Amortization Value Cost Amortization Value Customer contracts and relationships 13 - 23 $ $ $ $ $ $ Acquired technologies and other 5 - 34 Trademarks and patents 3 - 20 Covenants not to compete 3 - 5 Trade names 5 - 20 $ $ $ $ $ $ Amortization expense of intangible assets was $4.6 and $4.3 for the three months ended March 31, 2016 and 2015, respectively. The Company currently expects to recognize amortization expense of approximately $18 in each of the next five fiscal years . The future amortization amounts are estimates. Actual future amortization expense may be different due to future acquisitions, impairments, changes in amortization periods or other factors such as changes in exchange rates for assets acquired outside the United States. The Company expenses costs to renew or extend the term of a recognized intangible asset . Goodwill increased $ 8.4 during the three months ended March 31, 2016 due to foreign currency translations. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5. Related Party Transactions On December 16, 2014, we completed the spin-off of KLX Inc. (“KLX”) by means of the transfer of our Consumables Management Segment to KLX and the subsequent distribution to our stockholders of all the outstanding shares of KLX common stock (the “Spin-Off”). We retained our commercial aircraft and business jet segments. We entered into transitional services agreements with KLX prior to the Spin-Off pursuant to which we and KLX are providing various services to each other on an interim transitional basis. Transition services may be provided for up to 24 months, and for information technology services, KLX has an option for a one -year extension. This transitional support will enable KLX to establish its stand-alone processes for various activities that were previously provided by us and does not constitute significant continuing support of KLX’s operations. In addition, we entered into a Tax Sharing and Indemnification Agreement with KLX. Under this agreement, we generally assume liability for all federal and state income taxes for all tax periods ending on or prior to December 31, 2014. Sales and cost of sales to KLX for the three months ended March 31, 2016 and 2015 were immaterial to the consolidated financial statements. There were no material balances due to or due from KLX as of March 31, 2016 or December 31, 2015. Total purchases from KLX for the three months ended March 31, 2016 and 2015 were approximately $6.2 and $5.1 , respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 6. Long-Term Debt The Company entered into a credit agreement dated as of December 16, 2014 (the “Credit Agreement”) governing its senior secured bank credit facilities, consisting of (a) a five -year, $600.0 revolving credit facility (the “Revolving Credit Facility”) and (b) a seven -year, $2,200.0 term loan facility (the “Term Loan Facility”). Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate (“LIBOR”) plus 200 basis points or prime (as defined therein) plus 100 basis points (2.5% at March 31, 2016). There was $25.0 outstanding under the Revolving Credit Facility as of March 31, 2016 (no amount outstanding as of December 31, 2015). Borrowings under the Term Loan Facility bear interest at an annual rate equal to LIBOR plus 325 basis points (LIBOR shall not be less than 75 basis points per annum) or ABR (as defined therein) plus 225 basis points ( 4.0% at March 31, 2016). As of March 31, 2016, l ong-term debt consisted of $2,064.0 outstanding under the Term Loan Facility and $ 25.0 outstand ing under the Revolving Credit Facility, neither of which were current. On a net basis, after taking into consideration unamortized original issue discount and debt issue costs for the Term Loan Facility, total debt was $2,060.2 . Letters of credit outstanding under the Revolving Credit Facility aggregated $8.8 at March 31, 2016 ( $ 7.7 at December 31, 2015). The Revolving Credit Facility contains an interest coverage ratio financial covenant (as defined therein) that must be maintained at a level greater than 3.0 to 1 and a total leverage ratio covenant (as defined therein) which limits gross debt to a 4.5 to 1 multiple of EBITDA (as defined therein). The Credit Agreement is collateralized by substantially all of the Company’s assets and contains customary affirmative covenants, negative covenants, restrictions on the payment of dividends and the repurchase of our stock, and conditions precedent for borrowings, all of which were met as of March 31, 2016. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 7. Fair Value Measurements All short-term financial instruments are generally carried at amounts that approximate estimated fair value. The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. Assets measured at fair value are categorized based upon the lowest level of significant input to the valuations. Level 1 – quoted prices in active markets for identical assets and liabilities. Level 2 – quoted prices for identical assets and liabilities in markets that are not active, or observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. The carrying amounts of cash and cash equivalents (which the Company classifies as Level 1 assets), accounts receivable – trade and accounts payable represent their respective fair values due to their short- term nature. The carrying value of the Revolving Credit Facility and Term Loan Facility approximates fair value based upon observable market data (which the Company classifies as Level 2). The fair value information presented herein is based on pertinent information available to management at March 31, 2016 and December 31, 2015, respectively. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these condensed consolidated financial statements since those dates, and current estimates of fair value may differ significantly from the amounts presented herein. |
Commitments, Contingencies and
Commitments, Contingencies and Off-Balance Sheet Arrangements | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | Note 8. Commitments, Contingencies and Off-Balance Sheet Arrangements Lease Commitments – The Company finances its use of certain facilities and equipment under committed lease arrangements provided by various institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected on the condensed consolidated balance sheets. At March 31, 2016, future minimum lease payments under t hese arrangements approximated $178.0 , the majority of which related to long-term real estate leases. Litigation – The Company is a defendant in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate, are likely to result in a material adverse effect on the Company’s condensed consolidated financial statements. Indemnities, Commitments and Guarantees – During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include non-infringement of patents and intellectual property indemnities to the Company’s customers in connection with the design, manufacture, sale and delivery of its products, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases is indefinite. Many of these indemnities, commitments and guarantees provide for limitations on the maximum potential future payments the Company could be obligated to make. However, the Company is unable to estimate the maximum amount of liability related to its indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events that are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to the accompanying condensed consolidated financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees. Product Warranty Costs – Estimated costs related to product warranties are accrued at the time products are sold. In estimating its future warranty obligations, the Company considers various relevant factors, including the Company’s stated warranty policies and practices, the historical frequency of claims and the cost to replace or repair its products under warranty. |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Accounting for Stock-Based Compensation | Note 9. Accounting for Stock-Based Compensation The Company has a Long-Term Incentive Plan (“LTIP”) under which the Company’s Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards. Compensation cost generally is recognized on a straight-line basis over the vesting period of the shares. Share-based compensation of $ 7.9 and $6.3 was recognized during the three months ended March 31, 2016 and 2015, respectively, related to the equity grants made pursuant to the LTIP. Unrecognized compensation expense related to equity grants, including the estimated impact of any future forfeitures, was $71.7 at March 31, 2016. The Company has established a qualified Employee Stock Purchase Plan which allows qualified employees (as defined therein) to purchase shares of the Company’s common stock at a price equal to 85% of the closing price at the end of each semi-annual stock purchase period. Compensation cost for this plan was not material to any of the periods presented. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 10. Segment Reporting The Company is organized based on the products and services it offers. The Company’s reportable segments, which are also its operating segments, are comprised of commercial aircraft and business jet. Each segment regularly reports its results of operations and makes requests for capital expenditures and acquisition funding to the Company’s chief operational decision-making group. This group is comprised of the Executive Chairman of the Board of Directors, the President and Chief Executive Officer and the Vice President and Chief Financial Officer. Each operating segment has separate management teams and infrastructures dedicated to providing a full range of products and services to their commercial, business jet, military, maintenance, repair and overhaul providers, aircraft leasing and aircraft manufacturing customers. The Company has not included product line information due to the similarity of commercial aircraft segment product offerings. The following table presents revenues and operating earnings by reportable segment: Three months ended March 31, 2016 2015 Revenues: Commercial aircraft $ $ Business jet $ $ Operating earnings (1) Commercial aircraft $ $ Business jet Operating earnings Interest expense, net Earnings before income taxes $ $ (1) Operating earnings includes an allocation of corporate IT costs, employee benefits and general and administrative costs based on the proportion of each segment’s systems users, number of employees and sales, respectively. The following table presents capital expenditures (1) by reportable segment: Three months ended March 31, 2016 2015 Commercial aircraft $ $ Business jet $ $ (1) Corporate capital expenditures have been allocated to the above segments in a manner consistent with our corporate expense allocations. The following table presents goodwill and total assets (1) by reportable segment: March 31, 2016 December 31, 2015 Commercial Business Commercial Business Aircraft Jet Consolidated Aircraft Jet Consolidated Goodwill $ $ $ $ $ $ Total assets (1) Corporate assets (including cash and cash equivalents) of $273.2 and $322.2 at March 31, 2016 and December 31, 2015, respectively, have been allocated to the above segments in a manner consistent with our corporate expense allocations. |
Net Earnings Per Common Share
Net Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Common Share | Note 11. Net Earnings Per Common Share Basic net earnings per common share is computed using the weighted average common shares outstanding during the period. Diluted net earnings per common share is computed by using the weighted average common shares outstanding including the dilutive effect of shares issued under the Employee Stock Purchase Plan and restricted shares based on an average share price during the period. For the three months ended March 31, 2016 and 2015, approximately 0.3 and 0.7 of the Company’s common stock, respectively, were excluded from the determination of diluted earnings per common share because their effect would have been anti-dilutive. The computations of basic and diluted earnings per share for the three months ended March 31, 2016 and 2015, respectively, are as follows: Three months ended March 31, 2016 2015 Net earnings $ $ Basic weighted average common shares Effect of restricted shares issued Diluted weighted average common shares Basic net earnings per common share $ $ Diluted net earnings per common share $ $ |
Accounting for Uncertainty in I
Accounting for Uncertainty in Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Accounting for Uncertainty in Income Taxes | Note 12. Accounting for Uncertainty in Income Taxes In accordance with ASC Topic 740, Income Taxes , the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of March 31, 2016 and December 31, 2015, the Company had $90.1 and $89.0 , respectively, of net unrecognized tax benefits. This liability, if recognized, would affect the Company’s effective tax rate. The Company is currently undergoing a U.S. federal income tax examination for the year 2013. The Company is currently open to audit by the tax authorities for the nine tax years ended December 31, 2015. The Company classifies interest and penalties related to income tax as income tax expense. The amount included in the Company’s liability for unrecognized tax benefits for interest and penalties was $2.9 and $ 2.3 as of March 31, 2016 and December 31, 2015, respectively. |
Restructuring and Other Charges
Restructuring and Other Charges | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Other Charges | |
Restructuring and Other Charges | Note 13. Restructuring and Other Charges During 2015, the Company recognized charges totaling $49.0 in connection with its cost reduction program. The charges reflect costs associated with facilities consolidation, product rationalization, workforce reductions and program discontinuance. The charges are included in the amounts and descriptions below, as appropriate. The Company expects the cost reduction initiatives to offset inflationary pressures on wages, occupancy and infrastructure costs. The majority of the activities related to the cost reduction program are expected to be completed by the third quarter of 2016 and future charges are not expected to be material. No additional restructuring charges were incurred during the three months ended March 31, 2016. The following table presents the liability balance and activity related to restructuring and other charges: Disposals Balance at and Other Balance at December 31, 2015 Noncash Charges Cash Paid March 31, 2016 Facility Consolidations $ $ $ $ Employee Severance $ $ $ $ |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | March 31, December 31, 2016 2015 Purchased materials and component parts $ $ Work-in-process Finished goods $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets by Major Asset Class | March 31, 2016 December 31, 2015 Useful Life Original Accumulated Net Book Original Accumulated Net Book (Years) Cost Amortization Value Cost Amortization Value Customer contracts and relationships 13 - 23 $ $ $ $ $ $ Acquired technologies and other 5 - 34 Trademarks and patents 3 - 20 Covenants not to compete 3 - 5 Trade names 5 - 20 $ $ $ $ $ $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenues and Operating Earnings by Reportable Segment | Three months ended March 31, 2016 2015 Revenues: Commercial aircraft $ $ Business jet $ $ Operating earnings (1) Commercial aircraft $ $ Business jet Operating earnings Interest expense, net Earnings before income taxes $ $ |
Capital Expenditures by Reportable Segment | Three months ended March 31, 2016 2015 Commercial aircraft $ $ Business jet $ $ |
Goodwill and Total Assets by Reportable Segment | March 31, 2016 December 31, 2015 Commercial Business Commercial Business Aircraft Jet Consolidated Aircraft Jet Consolidated Goodwill $ $ $ $ $ $ Total assets |
Net Earnings Per Common Share (
Net Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Earnings Per Share | Three months ended March 31, 2016 2015 Net earnings $ $ Basic weighted average common shares Effect of restricted shares issued Diluted weighted average common shares Basic net earnings per common share $ $ Diluted net earnings per common share $ $ |
Restructuring and Other Charg23
Restructuring and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Other Charges | |
The summary of liability balance and activity related to restructuring and other charges | Disposals Balance at and Other Balance at December 31, 2015 Noncash Charges Cash Paid March 31, 2016 Facility Consolidations $ $ $ $ Employee Severance $ $ $ $ |
Inventories - Costs (Details)
Inventories - Costs (Details) - Work-in-process inventories - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 97.1 | $ 87.7 |
Excess over average costs on long-term contracts | $ 472.1 | $ 438.1 |
Inventories - Components of Inv
Inventories - Components of Inventory (Details 2) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Purchased materials and component parts | $ 334.1 | $ 322.7 |
Work-in-process | 772.1 | 722.7 |
Finished goods | 45.9 | 46.5 |
Inventories | $ 1,152.1 | $ 1,091.9 |
Goodwill and Intangible Asset26
Goodwill and Intangible Assets - By Major Asset Class (Details) - USD ($) $ in Millions | 15 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | $ 337.4 | $ 338 |
Accumulated Amortization | 107.1 | 106.7 |
Net Book Value | 230.3 | 231.3 |
Customer contracts and relationships | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | 131.8 | 129.4 |
Accumulated Amortization | 22.4 | 20.1 |
Net Book Value | $ 109.4 | 109.3 |
Customer contracts and relationships | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 13 years | |
Customer contracts and relationships | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 23 years | |
Acquired technologies | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | $ 148.8 | 150 |
Accumulated Amortization | 65.3 | 65.3 |
Net Book Value | $ 83.5 | 84.7 |
Acquired technologies | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 5 years | |
Acquired technologies | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 34 years | |
Trademarks and patents | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | $ 25.2 | 27.1 |
Accumulated Amortization | 13.7 | 16.3 |
Net Book Value | $ 11.5 | 10.8 |
Trademarks and patents | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 3 years | |
Trademarks and patents | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 20 years | |
Covenants not to compete | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | $ 2.5 | 2.5 |
Accumulated Amortization | 1.2 | 1 |
Net Book Value | $ 1.3 | 1.5 |
Covenants not to compete | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 3 years | |
Covenants not to compete | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 5 years | |
Trade names | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | $ 29.1 | 29 |
Accumulated Amortization | 4.5 | 4 |
Net Book Value | $ 24.6 | $ 25 |
Trade names | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 5 years | |
Trade names | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 20 years |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets - Amortization Expense (Details 2) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense on identifiable intangible assets | $ 4.6 | $ 4.3 |
Expected amortization expenses in year one | 18 | |
Expected amortization expenses in year two | 18 | |
Expected amortization expenses in year three | 18 | |
Expected amortization expenses in year four | 18 | |
Expected amortization expenses in year five | 18 | |
Goodwill increase during period | $ 8.4 |
Related Party Transactions (Det
Related Party Transactions (Details) - KLX Inc [Member] - USD ($) $ in Millions | Dec. 16, 2014 | Mar. 31, 2016 | Mar. 31, 2015 |
Related Party Transaction [Line Items] | |||
Term of transition services maximum | 24 months | ||
Information technology services extension option term | 1 year | ||
Purchases from related party | $ 6.2 | $ 5.1 |
Long-Term Debt - Components (De
Long-Term Debt - Components (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,060.2 | |
Long-term debt, net of current maturities | 2,060.2 | $ 2,034.1 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Outstanding long-term debt | $ 2,064 |
Long-Term Debt - Credit Agreeme
Long-Term Debt - Credit Agreement (Details 2) - USD ($) $ in Millions | Dec. 16, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Principal payments on long-term debt | $ 5.5 | |||
Outstanding letter of credit amount | $ 8.8 | $ 7.7 | ||
London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate | 0.75% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term | 5 years | |||
Revolving credit facility | $ 600 | |||
Amount outstanding | $ 25 | $ 0 | ||
Revolving credit facility agreement | Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate ("LIBOR") plus 200 basis points or prime (as defined therein) plus 100 basis points (2.5% at March 31, 2016). | |||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread percentage | 2.00% | |||
Revolving Credit Facility | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread percentage | 1.00% | |||
Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term | 7 years | |||
Revolving credit facility agreement | Borrowings under the Term Loan Facility bear interest at an annual rate equal to LIBOR plus 325 basis points (LIBOR shall not be less than 75 basis points per annum) or ABR (as defined therein) plus 225 basis points | |||
Aggregate principal amount | $ 2,200 | |||
Term Loan Facility | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread percentage | 3.25% | |||
Term Loan Facility | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread percentage | 2.25% | |||
Debt, interest rate | 4.00% | |||
Covenant Requirement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest coverage ratio | 300.00% | |||
Covenant Requirement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Total leverage ratio | 450.00% |
Commitments, Contingencies an31
Commitments, Contingencies and Off-Balance Arrangements (Details) $ in Millions | Mar. 31, 2016USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Operating lease, future minimum lease payments | $ 178 |
Accounting for Stock-Based Co32
Accounting for Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of discounted closing price for Employee Stock Purchase Plan | 85.00% | |
Long Term Incentive Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation | $ 7.9 | $ 6.3 |
Unrecognized compensation cost | $ 71.7 |
Segment Reporting - Revenues an
Segment Reporting - Revenues and Operating Earnings by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 716.7 | $ 690 |
Operating earnings | 129.4 | 125.7 |
Interest expense, net | 23.1 | 24.3 |
Earnings before income taxes | 106.3 | 101.4 |
Commercial Aircraft | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 557 | 526.1 |
Operating earnings | 104.7 | 98.4 |
Business Jet | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 159.7 | 163.9 |
Operating earnings | $ 24.7 | $ 27.3 |
Segment Reporting - Capital Exp
Segment Reporting - Capital Expenditures by Reportable Segment (Details 2) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | $ 17.6 | $ 25.3 |
Commercial Aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | 15.1 | 23.2 |
Business Jet | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | $ 2.5 | $ 2.1 |
Segment Reporting - Goodwill an
Segment Reporting - Goodwill and Total Assets by Reportable Segment (Details 3) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | ||
Goodwill | $ 821.6 | $ 813.2 |
Total assets | 3,219.1 | 3,140.9 |
Commercial Aircraft | ||
Goodwill [Line Items] | ||
Goodwill | 374.8 | 372.6 |
Total assets | 2,194.3 | 2,120.5 |
Business Jet | ||
Goodwill [Line Items] | ||
Goodwill | 446.8 | 440.6 |
Total assets | $ 1,024.8 | $ 1,020.4 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details 4) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 3,219.1 | $ 3,140.9 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 273.2 | $ 322.2 |
Net Earnings Per Common Share -
Net Earnings Per Common Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities excluded from determination of diluted earnings per common share | 0.3 | 0.7 |
Net Earnings Per Common Share38
Net Earnings Per Common Share - Computations of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net earnings | $ 82.6 | $ 77.6 |
Weighted average common shares - basic | 101.1 | 104.5 |
Effect of restricted shares issued | 0.3 | 0.4 |
Diluted weighted average common shares | 101.4 | 104.9 |
Net earnings per share from continuing operatings - basic (in dollars per share) | $ 0.82 | $ 0.74 |
Net earnings per share - basic (in dollars per share) | 0.82 | 0.74 |
Net earnings per share from continuing operations - diluted | 0.81 | 0.74 |
Diluted net earnings per share (in dollars per share) | $ 0.81 | $ 0.74 |
Accounting for Uncertainty in39
Accounting for Uncertainty in Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Liability for unrecognized tax benefits that would affect effective tax rate, if recognized | $ 89 | $ 90.1 | |
Number of tax years the company is currently open to audit by tax authorities | 9 years | ||
Liability for unrecognized tax benefits for interest and penalties | $ 2.9 | $ 2.3 |
Restructuring and Other Charg40
Restructuring and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Restructuring and Other Charges. [Line items] | ||
Restructuring Charges | $ 49 | |
Liability balance and activity related charges: | ||
Balance at Beginning of the period | $ 11.4 | |
Disposals and Other Noncash charges | (1) | |
Cash Paid | (3.1) | |
Balance at End of the period | 7.3 | 11.4 |
Facility Consolidations | ||
Liability balance and activity related charges: | ||
Balance at Beginning of the period | 9.2 | |
Disposals and Other Noncash charges | (0.5) | |
Cash Paid | (2.6) | |
Balance at End of the period | 6.1 | 9.2 |
Other Employee Severance | ||
Liability balance and activity related charges: | ||
Balance at Beginning of the period | 2.2 | |
Disposals and Other Noncash charges | (0.5) | |
Cash Paid | (0.5) | |
Balance at End of the period | $ 1.2 | $ 2.2 |