Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2019shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | GENERAL DYNAMICS CORPORATION |
Entity Central Index Key | 0000040533 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 288,871,990 |
Trading Symbol | GD |
Consolidated Statement of Earni
Consolidated Statement of Earnings (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenue: | ||
Revenue | $ 9,261 | $ 7,535 |
Operating costs and expenses: | ||
Cost of sales | (7,633) | (5,990) |
General and administrative (G&A) | (614) | (537) |
Operating costs and expenses, total | (8,247) | (6,527) |
Operating earnings | 1,014 | 1,008 |
Interest, net | (117) | (27) |
Other, net | 18 | (21) |
Earnings before income tax | 915 | 960 |
Provision for income tax, net | (170) | (161) |
Net earnings | $ 745 | $ 799 |
Earnings per share | ||
Basic (in dollars per share) | $ 2.59 | $ 2.70 |
Diluted (in dollars per share) | $ 2.56 | $ 2.65 |
Products | ||
Revenue: | ||
Revenue | $ 5,251 | $ 4,576 |
Operating costs and expenses: | ||
Cost of sales | (4,235) | (3,546) |
Services | ||
Revenue: | ||
Revenue | 4,010 | 2,959 |
Operating costs and expenses: | ||
Cost of sales | $ (3,398) | $ (2,444) |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 745 | $ 799 |
Gains (losses) on cash flow hedges | 17 | (3) |
Foreign currency translation adjustments | 31 | 1 |
Change in retirement plans’ funded status | 63 | 84 |
Other comprehensive income, pretax | 111 | 82 |
Provision for income tax, net | (16) | (15) |
Other comprehensive income, net of tax | 95 | 67 |
Comprehensive income | $ 840 | $ 866 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash and equivalents | $ 673 | $ 963 | |
Accounts receivable | 3,718 | 3,759 | |
Unbilled receivables | 7,367 | 6,576 | |
Inventories | 6,185 | 5,977 | |
Other current assets | 924 | 914 | |
Total current assets | 18,867 | 18,189 | |
Noncurrent assets: | |||
Property, plant and equipment, net | 4,054 | 3,978 | |
Intangible assets, net | 2,518 | 2,585 | |
Goodwill | [1] | 19,668 | 19,594 |
Other assets | 2,359 | 1,062 | |
Total noncurrent assets | 28,599 | 27,219 | |
Total assets | 47,466 | 45,408 | |
Current liabilities: | |||
Short-term debt and current portion of long-term debt | 2,097 | 973 | |
Accounts payable | 3,008 | 3,179 | |
Customer advances and deposits | 6,695 | 7,270 | |
Other current liabilities | 3,582 | 3,317 | |
Total current liabilities | 15,382 | 14,739 | |
Noncurrent liabilities: | |||
Long-term debt | 11,451 | 11,444 | |
Other liabilities | 8,399 | 7,493 | |
Commitments and contingencies | |||
Total noncurrent liabilities | 19,850 | 18,937 | |
Shareholders’ equity: | |||
Common stock | 482 | 482 | |
Surplus | 2,937 | 2,946 | |
Retained earnings | 29,781 | 29,326 | |
Treasury stock | (17,283) | (17,244) | |
Accumulated other comprehensive loss | (3,683) | (3,778) | |
Total shareholders’ equity | 12,234 | 11,732 | |
Total liabilities and shareholders’ equity | $ 47,466 | $ 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 | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | ||
Cash flows from operating activities - continuing operations: | |||
Net earnings | $ 745 | $ 799 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation of property, plant and equipment | 114 | 89 | |
Amortization of intangible and finance lease right-of-use assets | 91 | 20 | |
Equity-based compensation expense | 40 | 29 | |
Deferred income tax provision | (10) | 4 | |
(Increase) decrease in assets, net of effects of business acquisitions: | |||
Accounts receivable | 49 | (150) | |
Unbilled receivables | (873) | (608) | |
Inventories | (210) | (236) | |
Increase (decrease) in liabilities, net of effects of business acquisitions: | |||
Accounts payable | (167) | (358) | |
Customer advances and deposits | (623) | (149) | |
Other, net | 49 | 64 | |
Net cash used by operating activities | [1] | (795) | (496) |
Cash flows from investing activities: | |||
Capital expenditures | (181) | (104) | |
Other, net | (6) | (1) | |
Net cash used by investing activities | (187) | (105) | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 1,010 | 2,494 | |
Dividends paid | (268) | (250) | |
Purchases of common stock | (133) | (267) | |
Other, net | 88 | (25) | |
Net cash provided by financing activities | 697 | 1,952 | |
Net cash used by discontinued operations | (5) | (2) | |
Net (decrease) increase in cash and equivalents | (290) | 1,349 | |
Cash and equivalents at beginning of period | 963 | 2,983 | |
Cash and equivalents at end of period | 673 | 4,332 | |
Supplemental cash flow information: | |||
Income tax (payments) refunds, net | (37) | 4 | |
Interest payments | $ (48) | $ (21) | |
[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 | 799 | 799 | |||||
Cash dividends declared | (276) | (276) | |||||
Equity-based awards | 6 | (52) | 58 | ||||
Shares purchased | (257) | (257) | |||||
Other comprehensive income | 67 | 67 | |||||
Ending balance at Apr. 01, 2018 | 11,774 | 482 | 2,820 | 27,605 | (15,742) | (3,391) | |
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 | 745 | 745 | |||||
Cash dividends declared | (290) | (290) | |||||
Equity-based awards | 38 | (9) | 47 | ||||
Shares purchased | (86) | (86) | |||||
Other comprehensive income | 95 | 95 | |||||
Ending balance at Mar. 31, 2019 | $ 12,234 | $ 482 | $ 2,937 | $ 29,781 | $ (17,283) | $ (3,683) | |
[1] | Reflects the cumulative effect 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 | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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-month period ended March 31, 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-month periods ended March 31, 2019 , and April 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 or cash flows. For a discussion of other accounting standards that have been issued by the FASB but are not yet effective, refer to the Accounting Standards Updates section in our Annual Report on Form 10-K for the year ended December 31, 2018. These standards are not expected to have a material impact on our results of operations or cash flows. |
Acquisitions and Divestitures,
Acquisitions and Divestitures, Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 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. Purchase Price and Fair Value of Net Assets Acquired. The cash purchase price totaled $9.7 billion and consisted of the following: CSRA shares outstanding (in millions) 165.4 Cash consideration per CSRA share $ 41.25 Cash paid to purchase outstanding CSRA shares $ 6,825 Cash paid to extinguish CSRA debt 2,846 Cash settlement of outstanding CSRA stock options and restricted stock units 78 Total purchase price $ 9,749 The following table summarizes the allocation of the 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 420 Other current assets 303 Property, plant and equipment, net 326 Intangible assets, net 2,066 Goodwill 7,931 Other noncurrent assets 369 Total assets $ 11,615 Account payable $ (135 ) Customer advances and deposits (151 ) Current lease obligation (51 ) Other current liabilities (434 ) Noncurrent lease obligation (207 ) Noncurrent deferred tax liability (356 ) Other noncurrent liabilities (532 ) Total liabilities $ (1,866 ) Net assets acquired $ 9,749 During the quarter, we obtained additional information that resulted in adjustments to the estimated fair values that were not material. We have valued $2.1 billion of acquired intangible assets, which consists of acquired backlog and probable follow-on work and associated customer relationships (contract and program intangible assets), with a weighted-average life of 17 years. The intangible assets are being amortized using an accelerated method, which approximates the pattern of how the economic benefit is expected to be used. Under this method, approximately 50% of the aggregate value of the intangible assets will be amortized within six years of the acquisition date. Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired, and is attributable primarily to expected synergies, economies of scale and the assembled workforce of CSRA. Approximately $490 of this goodwill is deductible for income tax purposes over its remaining tax life. Other Acquisitions and Divestitures In the first three months of 2019 , we completed the acquisition of a business in each of our Aerospace and Missions Systems segments . 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. As the purchase prices of these acquisitions were not material for the three-month periods ended March 31, 2019 , and April 1, 2018 , they are included in other investing activities, net, in the unaudited Consolidated Statement of Cash Flows. 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. We did no t have any divestitures in the first three months of 2019 . 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. As the proceeds from the sale of the commercial health products business were not material for the three-month period ended April 1, 2018, they 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 (b) 3 (1 ) 72 6 — 80 Other (c) (20 ) 9 1 4 — (6 ) March 31, 2019 (a) $ 2,796 $ 2,641 $ 9,695 $ 4,239 $ 297 $ 19,668 (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. 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 March 31, 2019 December 31, 2018 Contract and program intangible assets (b) $ 3,771 $ (1,589 ) $ 2,182 $ 3,771 $ (1,531 ) $ 2,240 Trade names and trademarks 463 (180 ) 283 469 (177 ) 292 Technology and software 171 (120 ) 51 165 (116 ) 49 Other intangible assets 159 (157 ) 2 159 (155 ) 4 Total intangible assets $ 4,564 $ (2,046 ) $ 2,518 $ 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 $20 for the three-month periods ended March 31, 2019 , and April 1, 2018 . |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition [Abstract] | |
Revenue | REVENUE The majority of our revenue is derived from long-term contracts and programs that can span several years. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. 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 in ASC Topic 606. 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% and 73% of our revenue for the three-month periods ended March 31, 2019 , and April 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% and 27% of our revenue for the three-month periods ended March 31, 2019 , and April 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 March 31, 2019 , we had $69.2 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 65% 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. 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 March 31, 2019 April 1, 2018 Revenue $ 96 $ 115 Operating earnings 68 97 Diluted earnings per share $ 0.18 $ 0.25 No adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three-month periods ended March 31, 2019 , or April 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 March 31, 2019 April 1, 2018 Aircraft manufacturing and completions $ 1,691 $ 1,366 Aircraft services 507 451 Pre-owned aircraft 42 8 Total Aerospace 2,240 1,825 Military vehicles 1,134 956 Weapons systems, armament and munitions 401 383 Engineering and other services 101 101 Total Combat Systems 1,636 1,440 Information technology services 2,169 1,138 Total Information Technology 2,169 1,138 C4ISR* solutions 1,158 1,098 Total Mission Systems 1,158 1,098 Nuclear-powered submarines 1,377 1,296 Surface ships 446 483 Repair and other services 235 255 Total Marine Systems 2,058 2,034 Total revenue $ 9,261 $ 7,535 * Command, control, communications, computers, intelligence, surveillance and reconnaissance. Revenue by contract type was as follows: Three Months Ended March 31, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue Fixed-price $ 2,040 $ 1,416 $ 921 $ 651 $ 1,416 $ 6,444 Cost-reimbursement — 211 841 463 640 2,155 Time-and-materials 200 9 407 44 2 662 Total revenue 2,240 1,636 2,169 1,158 2,058 9,261 Three Months Ended April 1, 2018 Fixed-price $ 1,668 $ 1,253 $ 387 $ 620 $ 1,305 $ 5,233 Cost-reimbursement — 179 577 440 728 1,924 Time-and-materials 157 8 174 38 1 378 Total revenue 1,825 1,440 1,138 1,098 2,034 7,535 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 March 31, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue U.S. government: Department of Defense (DoD) $ 123 $ 793 $ 950 $ 784 $ 1,975 $ 4,625 Non-DoD — 3 1,166 135 — 1,304 Foreign Military Sales (FMS) 15 79 5 9 44 152 Total U.S. government 138 875 2,121 928 2,019 6,081 U.S. commercial 1,329 50 40 35 36 1,490 Non-U.S. government 59 701 8 166 2 936 Non-U.S. commercial 714 10 — 29 1 754 Total revenue 2,240 1,636 2,169 1,158 2,058 9,261 Three Months Ended April 1, 2018 U.S. government: DoD $ 41 $ 607 $ 433 $ 742 $ 1,950 $ 3,773 Non-DoD — 1 637 118 — 756 FMS 16 69 8 7 29 129 Total U.S. government 57 677 1,078 867 1,979 4,658 U.S. commercial 842 58 40 27 53 1,020 Non-U.S. government 10 697 20 172 2 901 Non-U.S. commercial 916 8 — 32 — 956 Total revenue $ 1,825 $ 1,440 $ 1,138 $ 1,098 $ 2,034 $ 7,535 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 three-month period ended March 31, 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 as further discussed in Note G. Revenue recognized for the three-month periods ended March 31, 2019 , and April 1, 2018 , that was included in the contract liability balance at the beginning of each year was $1.7 billion and $1.5 billion , respectively. This revenue represented primarily the sale of business-jet aircraft. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 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 March 31, 2019 April 1, 2018 Basic weighted average shares outstanding 287,917 296,399 Dilutive effect of stock options and restricted stock/RSUs* 2,974 4,705 Diluted weighted average shares outstanding 290,891 301,104 * 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 3,975 and 517 for the three-month periods ended March 31, 2019 , and April 1, 2018 , respectively. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 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 March 31, 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 March 31, 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) March 31, 2019 Measured at fair value: Marketable securities held in trust: Cash and equivalents $ 6 $ 6 $ — $ 6 $ — Available-for-sale debt securities 143 143 — 143 — Equity securities 50 50 50 — — Other investments 4 4 — — 4 Cash flow hedges (61 ) (61 ) — (61 ) — Measured at amortized cost: Short- and long-term debt principal (13,646 ) (13,704 ) — (13,704 ) — 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 | 3 Months Ended |
Mar. 31, 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: March 31, 2019 December 31, 2018 Deferred tax asset $ 39 $ 38 Deferred tax liability (544 ) (577 ) Net deferred tax liability $ (505 ) $ (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 March 31, 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 March 31, 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 | 3 Months Ended |
Mar. 31, 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: March 31, 2019 December 31, 2018 Unbilled revenue $ 30,497 $ 27,908 Advances and progress billings (23,130 ) (21,332 ) Net unbilled receivables $ 7,367 $ 6,576 The increase in net unbilled receivables during the three-month period ended March 31, 2019 , was due primarily to an international wheeled armored vehicle contract in our Combat Systems segment. At March 31, 2019 the net unbilled receivable related to this contract was $2.2 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 | 3 Months Ended |
Mar. 31, 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: March 31, 2019 December 31, 2018 Work in process $ 4,510 $ 4,357 Raw materials 1,535 1,504 Finished goods 45 33 Pre-owned aircraft 95 83 Total inventories $ 6,185 $ 5,977 The increase in total inventories during the three-month period ended March 31, 2019 , was due primarily to the ramp-up in production of the new G600 aircraft in our Aerospace segment, for which we are anticipating FAA type certification and entry into service in 2019. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Debt consisted of the following: March 31, 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 2.516% 1,865 850 Other Various 281 168 Total debt principal 13,646 12,518 Less unamortized debt issuance costs and discounts 98 101 Total debt 13,548 12,417 Less current portion 2,097 973 Long-term debt $ 11,451 $ 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 March 31, 2019 , we had $1.9 billion of commercial paper outstanding with a dollar-weighted average interest rate of 2.516% . We have $5 billion in committed bank credit facilities for general corporate purposes and working capital needs and to support our commercial paper issuances. 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 March 31, 2019 . |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES A summary of significant other liabilities by balance sheet caption follows: March 31, 2019 December 31, 2018 Salaries and wages $ 811 $ 952 Retirement benefits 267 272 Operating lease liabilities 255 — Workers’ compensation 248 244 Fair value of cash flow hedges 102 141 Other (a) 1,899 1,708 Total other current liabilities $ 3,582 $ 3,317 Retirement benefits $ 4,334 $ 4,422 Operating lease liabilities 1,129 — Customer deposits on commercial contracts 678 726 Deferred income taxes 544 577 Other (b) 1,714 1,768 Total other liabilities $ 8,399 $ 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 | 3 Months Ended |
Mar. 31, 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 three -month period ended March 31, 2019 , we repurchased 0.5 million of our outstanding shares for $86 . On March 31, 2019 , 7 million shares remained authorized by our board of directors for repurchase, approximately 2% of our total shares outstanding. We repurchased 1.2 million shares for $257 in the three -month period ended April 1, 2018 . Dividends per Share. Our board of directors declared dividends of $1.02 and $0.93 per share for the three-month periods ended March 31, 2019 and April 1, 2018 , respectively. We paid cash dividends of $268 and $250 for the three-month periods ended March 31, 2019 , and April 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 17 — 31 63 111 Provision for income tax, net (2 ) — — (14 ) (16 ) Other comprehensive income, net of tax 15 — 31 49 95 March 31, 2019 $ (56 ) $ — $ 133 $ (3,760 ) $ (3,683 ) December 31, 2017 $ (94 ) $ 19 $ 402 $ (3,147 ) $ (2,820 ) Cumulative effect adjustments* (4 ) (19 ) — (615 ) (638 ) Other comprehensive income, pretax (3 ) — 1 84 82 Provision for income tax, net 1 — — (16 ) (15 ) Other comprehensive income, net of tax (2 ) — 1 68 67 April 1, 2018 $ (100 ) $ — $ 403 $ (3,694 ) $ (3,391 ) * Reflects the cumulative effect 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 $68 and $95 for the three-month periods ended March 31, 2019 , and April 1, 2018 , respectively. This was offset partially by pretax amortization of prior service credit of $5 and $12 for the three-month periods ended March 31, 2019 , and April 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 | 3 Months Ended |
Mar. 31, 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 March 31, 2019 , we held $673 in cash and equivalents, 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 March 31, 2019 , and December 31, 2018 , these marketable securities totaled $199 and $202 , respectively, and were reflected at fair value on the unaudited 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 $4.6 billion and $5.8 billion on March 31, 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-month periods ended March 31, 2019 , and April 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-month periods ended March 31, 2019 , and April 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 March 31, 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-month periods ended March 31, 2019 , or April 1, 2018 . In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material for the three -month periods ended March 31, 2019 , and April 1, 2018 . |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 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 March 31, 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 March 31, 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 three-month periods ended March 31, 2019 , and April 1, 2018 , were as follows: Three Months Ended March 31, 2019 April 1, 2018 Beginning balance $ 480 $ 467 Warranty expense 27 29 Payments (24 ) (25 ) Adjustments (1 ) (3 ) Ending balance $ 482 $ 468 |
Leases
Leases | 3 Months Ended |
Mar. 31, 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 a 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 March 31, 2019 Finance lease cost Amortization of right-of-use assets $ 21 Interest on lease liabilities 7 Operating lease cost 86 Short-term lease cost 13 Sublease income (4 ) Total lease costs, net $ 123 Additional information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 88 Operating cash flows from finance leases 7 Financing cash flows from finance leases 16 Right-of-use assets obtained in exchange for lease liabilities Operating leases 40 Finance leases 6 Weighted-average remaining lease term Operating leases 11.0 years Finance leases 5.6 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 our Consolidated Balance Sheet on March 31, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 233 $ 67 2020 253 81 2021 208 74 2022 161 74 2023 122 29 Thereafter 722 66 Total future lease payments 1,699 391 Less imputed interest 315 81 Present value of future lease payments 1,384 310 Less current portion of lease liabilities 255 66 Long-term lease liabilities $ 1,129 $ 244 ROU assets $ 1,315 $ 357 Lease liabilities are included on our Consolidated Balance Sheet in current and noncurrent other liabilities, while ROU assets are included in noncurrent other assets. As of March 31, 2019 , we have additional future payments on leases that have 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 a 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 March 31, 2019 Finance lease cost Amortization of right-of-use assets $ 21 Interest on lease liabilities 7 Operating lease cost 86 Short-term lease cost 13 Sublease income (4 ) Total lease costs, net $ 123 Additional information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 88 Operating cash flows from finance leases 7 Financing cash flows from finance leases 16 Right-of-use assets obtained in exchange for lease liabilities Operating leases 40 Finance leases 6 Weighted-average remaining lease term Operating leases 11.0 years Finance leases 5.6 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 our Consolidated Balance Sheet on March 31, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 233 $ 67 2020 253 81 2021 208 74 2022 161 74 2023 122 29 Thereafter 722 66 Total future lease payments 1,699 391 Less imputed interest 315 81 Present value of future lease payments 1,384 310 Less current portion of lease liabilities 255 66 Long-term lease liabilities $ 1,129 $ 244 ROU assets $ 1,315 $ 357 Lease liabilities are included on our Consolidated Balance Sheet in current and noncurrent other liabilities, while ROU assets are included in noncurrent other assets. As of March 31, 2019 , we have additional future payments on leases that have 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 | 3 Months Ended |
Mar. 31, 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-month periods ended March 31, 2019 , and April 1, 2018 , consisted of the following: Pension Benefits Other Post-retirement Benefits Three Months Ended March 31, 2019 April 1, 2018 March 31, 2019 April 1, 2018 Service cost $ 28 $ 46 $ 2 $ 3 Interest cost 150 114 9 8 Expected return on plan assets (228 ) (179 ) (9 ) (9 ) Recognized net actuarial loss (gain) 70 96 (2 ) (1 ) Amortization of prior service credit (4 ) (11 ) (1 ) (1 ) Net periodic benefit cost (credit) $ 16 $ 66 $ (1 ) $ — Beginning in 2019, we decreased the expected long-term rates of return on assets in our primary U.S. other post-retirement benefit plans by 100 basis points, following an assessment of the historical and expected long-term returns of our various asset classes. 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 | 3 Months Ended |
Mar. 31, 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 March 31, 2019 April 1, 2018 March 31, 2019 April 1, 2018 Aerospace $ 2,240 $ 1,825 $ 328 $ 346 Combat Systems 1,636 1,440 206 224 Information Technology 2,169 1,138 156 101 Mission Systems 1,158 1,098 148 146 Marine Systems 2,058 2,034 180 184 Corporate — — (4 ) 7 Total $ 9,261 $ 7,535 $ 1,014 $ 1,008 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 | 3 Months Ended |
Mar. 31, 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 March 31, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Revenue $ — $ 6,945 $ 2,316 $ — $ 9,261 Cost of sales 18 (5,726 ) (1,925 ) — (7,633 ) G&A (22 ) (419 ) (173 ) — (614 ) Operating earnings (4 ) 800 218 — 1,014 Interest, net (107 ) — (10 ) — (117 ) Other, net (8 ) 4 22 — 18 Earnings before income tax (119 ) 804 230 — 915 Provision for income tax, net 31 (155 ) (46 ) — (170 ) Equity in net earnings of subsidiaries 833 — — (833 ) — Net earnings $ 745 $ 649 $ 184 $ (833 ) $ 745 Comprehensive income $ 840 $ 652 $ 237 $ (889 ) $ 840 Three Months Ended April 1, 2018 Revenue $ — $ 6,484 $ 1,051 $ — $ 7,535 Cost of sales 19 (5,202 ) (807 ) — (5,990 ) G&A (13 ) (436 ) (88 ) — (537 ) Operating earnings 6 846 156 — 1,008 Interest, net (26 ) — (1 ) — (27 ) Other, net (24 ) 1 2 — (21 ) Earnings before income tax (44 ) 847 157 — 960 Provision for income tax, net 42 (165 ) (38 ) — (161 ) Equity in net earnings of subsidiaries 801 — — (801 ) — Net earnings $ 799 $ 682 $ 119 $ (801 ) $ 799 Comprehensive income $ 866 $ 685 $ 137 $ (822 ) $ 866 CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED) March 31, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated ASSETS Current assets: Cash and equivalents $ 329 $ — $ 344 $ — $ 673 Accounts receivable — 1,253 2,465 — 3,718 Unbilled receivables — 2,985 4,382 — 7,367 Inventories — 6,067 118 — 6,185 Other current assets (43 ) 445 522 — 924 Total current assets 286 10,750 7,831 — 18,867 Noncurrent assets: Property, plant and equipment (PP&E) 288 7,263 1,594 — 9,145 Accumulated depreciation of PP&E (85 ) (4,138 ) (868 ) — (5,091 ) Intangible assets, net — 241 2,277 — 2,518 Goodwill — 8,036 11,632 — 19,668 Other assets 207 1,052 1,100 — 2,359 Net investment in subsidiaries 27,050 — — (27,050 ) — Total noncurrent assets 27,460 12,454 15,735 (27,050 ) 28,599 Total assets $ 27,746 $ 23,204 $ 23,566 $ (27,050 ) $ 47,466 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 1,863 $ — $ 234 $ — $ 2,097 Customer advances and deposits — 4,245 2,450 — 6,695 Other current liabilities 691 4,000 1,899 — 6,590 Total current liabilities 2,554 8,245 4,583 — 15,382 Noncurrent liabilities: Long-term debt 11,405 39 7 — 11,451 Other liabilities 1,553 4,656 2,190 — 8,399 Total noncurrent liabilities 12,958 4,695 2,197 — 19,850 Total shareholders’ equity 12,234 10,264 16,786 (27,050 ) 12,234 Total liabilities and shareholders’ equity $ 27,746 $ 23,204 $ 23,566 $ (27,050 ) $ 47,466 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: Property, plant and equipment (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) Three Months Ended March 31, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Net cash (used) provided by operating activities* $ 59 $ (167 ) $ (687 ) $ — $ (795 ) Cash flows from investing activities: Capital expenditures (20 ) (106 ) (55 ) — (181 ) Other, net 5 1 (12 ) — (6 ) Net cash used by investing activities (15 ) (105 ) (67 ) — (187 ) Cash flows from financing activities: Proceeds from commercial paper, net 1,010 — — — 1,010 Dividends paid (268 ) — — — (268 ) Purchases of common stock (133 ) — — — (133 ) Other, net (5 ) — 93 — 88 Net cash provided by financing activities 604 — 93 — 697 Net cash used by discontinued operations (5 ) — — — (5 ) Cash sweep/funding by parent (774 ) 272 502 — — Net decrease in cash and equivalents (131 ) — (159 ) — (290 ) Cash and equivalents at beginning of period 460 — 503 — 963 Cash and equivalents at end of period $ 329 $ — $ 344 $ — $ 673 Three Months Ended April 1, 2018 Net cash (used) provided by operating activities* $ 80 $ 105 $ (681 ) $ — $ (496 ) Cash flows from investing activities: Capital expenditures (7 ) (86 ) (11 ) — (104 ) Other, net 1 (2 ) — — (1 ) Net cash used by investing activities (6 ) (88 ) (11 ) — (105 ) Cash flows from financing activities: Proceeds from commercial paper, net 2,494 — — — 2,494 Purchases of common stock (267 ) — — — (267 ) Dividends paid (250 ) — — — (250 ) Other, net (25 ) — — — (25 ) Net cash provided by financing activities 1,952 — — — 1,952 Net cash used by discontinued operations (2 ) — — — (2 ) Cash sweep/funding by parent (167 ) (17 ) 184 — — Net increase in cash and equivalents 1,857 — (508 ) — 1,349 Cash and equivalents at beginning of period 1,930 — 1,053 — 2,983 Cash and equivalents at end of period $ 3,787 $ — $ 545 $ — $ 4,332 * Continuing operations only. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 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-month period ended March 31, 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-month periods ended March 31, 2019 , and April 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 or cash flows. For a discussion of other accounting standards that have been issued by the FASB but are not yet effective, refer to the Accounting Standards Updates section in our Annual Report on Form 10-K for the year ended December 31, 2018. These standards are not expected to have a material impact on our results of operations or cash flows. |
Revenue Recognition | 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. 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. The majority of our revenue is derived from long-term contracts and programs that can span several years. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. 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 in ASC Topic 606. 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% and 73% of our revenue for the three-month periods ended March 31, 2019 , and April 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% and 27% of our revenue for the three-month periods ended March 31, 2019 , and April 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 March 31, 2019 , we had $69.2 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 65% 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. 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. |
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 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. 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 March 31, 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 March 31, 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 | 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. Hedging Activities. We had notional forward exchange and interest rate swap contracts outstanding of $4.6 billion and $5.8 billion on March 31, 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. 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-month periods ended March 31, 2019 , or April 1, 2018 . In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material for the three -month periods ended March 31, 2019 , and April 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 a 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 | 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. We provide defined-contribution benefits to eligible employees, as well as some remaining defined-benefit pension and other post-retirement benefits. |
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) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisition Consideration and Fair Value of Net Assets Acquired | The cash purchase price totaled $9.7 billion and consisted of the following: CSRA shares outstanding (in millions) 165.4 Cash consideration per CSRA share $ 41.25 Cash paid to purchase outstanding CSRA shares $ 6,825 Cash paid to extinguish CSRA debt 2,846 Cash settlement of outstanding CSRA stock options and restricted stock units 78 Total purchase price $ 9,749 |
Estimated Fair Value of Assets Acquired and Liabilities Assumed on Acquisition Date | The following table summarizes the allocation of the 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 420 Other current assets 303 Property, plant and equipment, net 326 Intangible assets, net 2,066 Goodwill 7,931 Other noncurrent assets 369 Total assets $ 11,615 Account payable $ (135 ) Customer advances and deposits (151 ) Current lease obligation (51 ) Other current liabilities (434 ) Noncurrent lease obligation (207 ) Noncurrent deferred tax liability (356 ) Other noncurrent liabilities (532 ) Total liabilities $ (1,866 ) Net assets acquired $ 9,749 |
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 (b) 3 (1 ) 72 6 — 80 Other (c) (20 ) 9 1 4 — (6 ) March 31, 2019 (a) $ 2,796 $ 2,641 $ 9,695 $ 4,239 $ 297 $ 19,668 (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. |
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 March 31, 2019 December 31, 2018 Contract and program intangible assets (b) $ 3,771 $ (1,589 ) $ 2,182 $ 3,771 $ (1,531 ) $ 2,240 Trade names and trademarks 463 (180 ) 283 469 (177 ) 292 Technology and software 171 (120 ) 51 165 (116 ) 49 Other intangible assets 159 (157 ) 2 159 (155 ) 4 Total intangible assets $ 4,564 $ (2,046 ) $ 2,518 $ 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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 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 March 31, 2019 April 1, 2018 Revenue $ 96 $ 115 Operating earnings 68 97 Diluted earnings per share $ 0.18 $ 0.25 |
Revenue by Major Product Line | Revenue by major products and services was as follows: Three Months Ended March 31, 2019 April 1, 2018 Aircraft manufacturing and completions $ 1,691 $ 1,366 Aircraft services 507 451 Pre-owned aircraft 42 8 Total Aerospace 2,240 1,825 Military vehicles 1,134 956 Weapons systems, armament and munitions 401 383 Engineering and other services 101 101 Total Combat Systems 1,636 1,440 Information technology services 2,169 1,138 Total Information Technology 2,169 1,138 C4ISR* solutions 1,158 1,098 Total Mission Systems 1,158 1,098 Nuclear-powered submarines 1,377 1,296 Surface ships 446 483 Repair and other services 235 255 Total Marine Systems 2,058 2,034 Total revenue $ 9,261 $ 7,535 * Command, control, communications, computers, intelligence, surveillance and reconnaissance. |
Revenue by Contract Type | Revenue by contract type was as follows: Three Months Ended March 31, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue Fixed-price $ 2,040 $ 1,416 $ 921 $ 651 $ 1,416 $ 6,444 Cost-reimbursement — 211 841 463 640 2,155 Time-and-materials 200 9 407 44 2 662 Total revenue 2,240 1,636 2,169 1,158 2,058 9,261 Three Months Ended April 1, 2018 Fixed-price $ 1,668 $ 1,253 $ 387 $ 620 $ 1,305 $ 5,233 Cost-reimbursement — 179 577 440 728 1,924 Time-and-materials 157 8 174 38 1 378 Total revenue 1,825 1,440 1,138 1,098 2,034 7,535 |
Revenue by Customer | Revenue by customer was as follows: Three Months Ended March 31, 2019 Aerospace Combat Systems Information Technology Mission Systems Marine Systems Total Revenue U.S. government: Department of Defense (DoD) $ 123 $ 793 $ 950 $ 784 $ 1,975 $ 4,625 Non-DoD — 3 1,166 135 — 1,304 Foreign Military Sales (FMS) 15 79 5 9 44 152 Total U.S. government 138 875 2,121 928 2,019 6,081 U.S. commercial 1,329 50 40 35 36 1,490 Non-U.S. government 59 701 8 166 2 936 Non-U.S. commercial 714 10 — 29 1 754 Total revenue 2,240 1,636 2,169 1,158 2,058 9,261 Three Months Ended April 1, 2018 U.S. government: DoD $ 41 $ 607 $ 433 $ 742 $ 1,950 $ 3,773 Non-DoD — 1 637 118 — 756 FMS 16 69 8 7 29 129 Total U.S. government 57 677 1,078 867 1,979 4,658 U.S. commercial 842 58 40 27 53 1,020 Non-U.S. government 10 697 20 172 2 901 Non-U.S. commercial 916 8 — 32 — 956 Total revenue $ 1,825 $ 1,440 $ 1,138 $ 1,098 $ 2,034 $ 7,535 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 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 March 31, 2019 April 1, 2018 Basic weighted average shares outstanding 287,917 296,399 Dilutive effect of stock options and restricted stock/RSUs* 2,974 4,705 Diluted weighted average shares outstanding 290,891 301,104 * 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 3,975 and 517 for the three-month periods ended March 31, 2019 , and April 1, 2018 , respectively. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 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 March 31, 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) March 31, 2019 Measured at fair value: Marketable securities held in trust: Cash and equivalents $ 6 $ 6 $ — $ 6 $ — Available-for-sale debt securities 143 143 — 143 — Equity securities 50 50 50 — — Other investments 4 4 — — 4 Cash flow hedges (61 ) (61 ) — (61 ) — Measured at amortized cost: Short- and long-term debt principal (13,646 ) (13,704 ) — (13,704 ) — 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) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets and Liabilities | Our net deferred tax liability consisted of the following: March 31, 2019 December 31, 2018 Deferred tax asset $ 39 $ 38 Deferred tax liability (544 ) (577 ) Net deferred tax liability $ (505 ) $ (539 ) |
Unbilled Receivables (Tables)
Unbilled Receivables (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Contractors [Abstract] | |
Schedule of Unbilled Receivables | Unbilled receivables consisted of the following: March 31, 2019 December 31, 2018 Unbilled revenue $ 30,497 $ 27,908 Advances and progress billings (23,130 ) (21,332 ) Net unbilled receivables $ 7,367 $ 6,576 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventories | Inventories consisted of the following: March 31, 2019 December 31, 2018 Work in process $ 4,510 $ 4,357 Raw materials 1,535 1,504 Finished goods 45 33 Pre-owned aircraft 95 83 Total inventories $ 6,185 $ 5,977 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | Debt consisted of the following: March 31, 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 2.516% 1,865 850 Other Various 281 168 Total debt principal 13,646 12,518 Less unamortized debt issuance costs and discounts 98 101 Total debt 13,548 12,417 Less current portion 2,097 973 Long-term debt $ 11,451 $ 11,444 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 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: March 31, 2019 December 31, 2018 Salaries and wages $ 811 $ 952 Retirement benefits 267 272 Operating lease liabilities 255 — Workers’ compensation 248 244 Fair value of cash flow hedges 102 141 Other (a) 1,899 1,708 Total other current liabilities $ 3,582 $ 3,317 Retirement benefits $ 4,334 $ 4,422 Operating lease liabilities 1,129 — Customer deposits on commercial contracts 678 726 Deferred income taxes 544 577 Other (b) 1,714 1,768 Total other liabilities $ 8,399 $ 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) | 3 Months Ended |
Mar. 31, 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 17 — 31 63 111 Provision for income tax, net (2 ) — — (14 ) (16 ) Other comprehensive income, net of tax 15 — 31 49 95 March 31, 2019 $ (56 ) $ — $ 133 $ (3,760 ) $ (3,683 ) December 31, 2017 $ (94 ) $ 19 $ 402 $ (3,147 ) $ (2,820 ) Cumulative effect adjustments* (4 ) (19 ) — (615 ) (638 ) Other comprehensive income, pretax (3 ) — 1 84 82 Provision for income tax, net 1 — — (16 ) (15 ) Other comprehensive income, net of tax (2 ) — 1 68 67 April 1, 2018 $ (100 ) $ — $ 403 $ (3,694 ) $ (3,391 ) * Reflects the cumulative effect 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) | 3 Months Ended |
Mar. 31, 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 three-month periods ended March 31, 2019 , and April 1, 2018 , were as follows: Three Months Ended March 31, 2019 April 1, 2018 Beginning balance $ 480 $ 467 Warranty expense 27 29 Payments (24 ) (25 ) Adjustments (1 ) (3 ) Ending balance $ 482 $ 468 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Costs | The components of lease costs were as follows: Three Months Ended March 31, 2019 Finance lease cost Amortization of right-of-use assets $ 21 Interest on lease liabilities 7 Operating lease cost 86 Short-term lease cost 13 Sublease income (4 ) Total lease costs, net $ 123 |
Schedule of Additional Information Related Leases | Additional information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 88 Operating cash flows from finance leases 7 Financing cash flows from finance leases 16 Right-of-use assets obtained in exchange for lease liabilities Operating leases 40 Finance leases 6 Weighted-average remaining lease term Operating leases 11.0 years Finance leases 5.6 years Weighted-average discount rate Operating leases 4 % Finance leases 9 % |
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 our Consolidated Balance Sheet on March 31, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 233 $ 67 2020 253 81 2021 208 74 2022 161 74 2023 122 29 Thereafter 722 66 Total future lease payments 1,699 391 Less imputed interest 315 81 Present value of future lease payments 1,384 310 Less current portion of lease liabilities 255 66 Long-term lease liabilities $ 1,129 $ 244 ROU assets $ 1,315 $ 357 |
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 our Consolidated Balance Sheet on March 31, 2019 : Year Ended December 31 Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 233 $ 67 2020 253 81 2021 208 74 2022 161 74 2023 122 29 Thereafter 722 66 Total future lease payments 1,699 391 Less imputed interest 315 81 Present value of future lease payments 1,384 310 Less current portion of lease liabilities 255 66 Long-term lease liabilities $ 1,129 $ 244 ROU assets $ 1,315 $ 357 |
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) | 3 Months Ended |
Mar. 31, 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-month periods ended March 31, 2019 , and April 1, 2018 , consisted of the following: Pension Benefits Other Post-retirement Benefits Three Months Ended March 31, 2019 April 1, 2018 March 31, 2019 April 1, 2018 Service cost $ 28 $ 46 $ 2 $ 3 Interest cost 150 114 9 8 Expected return on plan assets (228 ) (179 ) (9 ) (9 ) Recognized net actuarial loss (gain) 70 96 (2 ) (1 ) Amortization of prior service credit (4 ) (11 ) (1 ) (1 ) Net periodic benefit cost (credit) $ 16 $ 66 $ (1 ) $ — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 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 March 31, 2019 April 1, 2018 March 31, 2019 April 1, 2018 Aerospace $ 2,240 $ 1,825 $ 328 $ 346 Combat Systems 1,636 1,440 206 224 Information Technology 2,169 1,138 156 101 Mission Systems 1,158 1,098 148 146 Marine Systems 2,058 2,034 180 184 Corporate — — (4 ) 7 Total $ 9,261 $ 7,535 $ 1,014 $ 1,008 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Consolidating Financial Statements [Abstract] | |
Condensed Consolidating Statement of Earnings (Unaudited) | CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (UNAUDITED) Three Months Ended March 31, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Revenue $ — $ 6,945 $ 2,316 $ — $ 9,261 Cost of sales 18 (5,726 ) (1,925 ) — (7,633 ) G&A (22 ) (419 ) (173 ) — (614 ) Operating earnings (4 ) 800 218 — 1,014 Interest, net (107 ) — (10 ) — (117 ) Other, net (8 ) 4 22 — 18 Earnings before income tax (119 ) 804 230 — 915 Provision for income tax, net 31 (155 ) (46 ) — (170 ) Equity in net earnings of subsidiaries 833 — — (833 ) — Net earnings $ 745 $ 649 $ 184 $ (833 ) $ 745 Comprehensive income $ 840 $ 652 $ 237 $ (889 ) $ 840 Three Months Ended April 1, 2018 Revenue $ — $ 6,484 $ 1,051 $ — $ 7,535 Cost of sales 19 (5,202 ) (807 ) — (5,990 ) G&A (13 ) (436 ) (88 ) — (537 ) Operating earnings 6 846 156 — 1,008 Interest, net (26 ) — (1 ) — (27 ) Other, net (24 ) 1 2 — (21 ) Earnings before income tax (44 ) 847 157 — 960 Provision for income tax, net 42 (165 ) (38 ) — (161 ) Equity in net earnings of subsidiaries 801 — — (801 ) — Net earnings $ 799 $ 682 $ 119 $ (801 ) $ 799 Comprehensive income $ 866 $ 685 $ 137 $ (822 ) $ 866 |
Condensed Consolidating Balance Sheet (Unaudited) | CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED) March 31, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated ASSETS Current assets: Cash and equivalents $ 329 $ — $ 344 $ — $ 673 Accounts receivable — 1,253 2,465 — 3,718 Unbilled receivables — 2,985 4,382 — 7,367 Inventories — 6,067 118 — 6,185 Other current assets (43 ) 445 522 — 924 Total current assets 286 10,750 7,831 — 18,867 Noncurrent assets: Property, plant and equipment (PP&E) 288 7,263 1,594 — 9,145 Accumulated depreciation of PP&E (85 ) (4,138 ) (868 ) — (5,091 ) Intangible assets, net — 241 2,277 — 2,518 Goodwill — 8,036 11,632 — 19,668 Other assets 207 1,052 1,100 — 2,359 Net investment in subsidiaries 27,050 — — (27,050 ) — Total noncurrent assets 27,460 12,454 15,735 (27,050 ) 28,599 Total assets $ 27,746 $ 23,204 $ 23,566 $ (27,050 ) $ 47,466 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 1,863 $ — $ 234 $ — $ 2,097 Customer advances and deposits — 4,245 2,450 — 6,695 Other current liabilities 691 4,000 1,899 — 6,590 Total current liabilities 2,554 8,245 4,583 — 15,382 Noncurrent liabilities: Long-term debt 11,405 39 7 — 11,451 Other liabilities 1,553 4,656 2,190 — 8,399 Total noncurrent liabilities 12,958 4,695 2,197 — 19,850 Total shareholders’ equity 12,234 10,264 16,786 (27,050 ) 12,234 Total liabilities and shareholders’ equity $ 27,746 $ 23,204 $ 23,566 $ (27,050 ) $ 47,466 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: Property, plant and equipment (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) Three Months Ended March 31, 2019 Parent Guarantors on a Combined Basis Other Subsidiaries on a Combined Basis Consolidating Adjustments Total Consolidated Net cash (used) provided by operating activities* $ 59 $ (167 ) $ (687 ) $ — $ (795 ) Cash flows from investing activities: Capital expenditures (20 ) (106 ) (55 ) — (181 ) Other, net 5 1 (12 ) — (6 ) Net cash used by investing activities (15 ) (105 ) (67 ) — (187 ) Cash flows from financing activities: Proceeds from commercial paper, net 1,010 — — — 1,010 Dividends paid (268 ) — — — (268 ) Purchases of common stock (133 ) — — — (133 ) Other, net (5 ) — 93 — 88 Net cash provided by financing activities 604 — 93 — 697 Net cash used by discontinued operations (5 ) — — — (5 ) Cash sweep/funding by parent (774 ) 272 502 — — Net decrease in cash and equivalents (131 ) — (159 ) — (290 ) Cash and equivalents at beginning of period 460 — 503 — 963 Cash and equivalents at end of period $ 329 $ — $ 344 $ — $ 673 Three Months Ended April 1, 2018 Net cash (used) provided by operating activities* $ 80 $ 105 $ (681 ) $ — $ (496 ) Cash flows from investing activities: Capital expenditures (7 ) (86 ) (11 ) — (104 ) Other, net 1 (2 ) — — (1 ) Net cash used by investing activities (6 ) (88 ) (11 ) — (105 ) Cash flows from financing activities: Proceeds from commercial paper, net 2,494 — — — 2,494 Purchases of common stock (267 ) — — — (267 ) Dividends paid (250 ) — — — (250 ) Other, net (25 ) — — — (25 ) Net cash provided by financing activities 1,952 — — — 1,952 Net cash used by discontinued operations (2 ) — — — (2 ) Cash sweep/funding by parent (167 ) (17 ) 184 — — Net increase in cash and equivalents 1,857 — (508 ) — 1,349 Cash and equivalents at beginning of period 1,930 — 1,053 — 2,983 Cash and equivalents at end of period $ 3,787 $ — $ 545 $ — $ 4,332 * Continuing operations only. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements | ||
Length of fiscal quarters, weeks | 91 days | |
Operating lease liability | $ 1,384 | |
Operating lease, right-of-use asset | $ 1,315 | |
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 | Mar. 31, 2019USD ($)business | Apr. 01, 2018USD ($) | Dec. 31, 2018USD ($)business |
Business Acquisition [Line Items] | ||||
Amortization expense | $ 70 | $ 20 | ||
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, gross | $ 400 | |||
Number of businesses acquired | business | 5 | |||
CSRA | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, gross | $ 9,749 | |||
Estimated acquired intangible assets | 2,066 | |||
Goodwill expected to be deductible for tax purposes | 490 | |||
CSRA | Backlog and Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated acquired intangible assets | $ 2,100 | |||
Weighted-average amortization life of acquired intangible assets | 17 years | |||
Percentage of aggregate value of acquired intangible assets to be amortized over 7 years | 50.00% | |||
Estimated period of amortization of 50% of the aggregate value of the intangible assets acquired under accelerated method | 6 years | |||
CSRA | Common Stock | ||||
Business Acquisition [Line Items] | ||||
Percentage of interest acquired | 100.00% | |||
Cash acquisition price (in dollars per share) | $ / shares | $ 41.25 | |||
Aerospace | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | business | 1 | 2 | ||
Mission Systems | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | business | 1 | |||
Information Technology | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Number of businesses sold | business | 0 | 2 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures, Goodwill and Intangible Assets - Consideration and Fair Value of Net Assets Acquired (Details) - CSRA $ / shares in Units, shares in Millions, $ in Millions | Apr. 03, 2018USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Cash consideration per CSRA share (in dollars per share) | $ / shares | $ 41.25 |
Cash paid to purchase outstanding CSRA shares | $ 6,825 |
Cash paid to extinguish CSRA debt | 2,846 |
Cash settlement of outstanding CSRA stock options and restricted stock units | 78 |
Total purchase price | $ 9,749 |
CSRA | |
Business Acquisition [Line Items] | |
CSRA shares outstanding (in millions) (shares) | shares | 165.4 |
Acquisitions and Divestitures_5
Acquisitions and Divestitures, Goodwill and Intangible Assets - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Apr. 03, 2018 | |
Business Acquisition [Line Items] | ||||
Goodwill | [1] | $ 19,668 | $ 19,594 | |
CSRA | ||||
Business Acquisition [Line Items] | ||||
Cash and equivalents | $ 45 | |||
Accounts receivable | 155 | |||
Unbilled receivables | 420 | |||
Other current assets | 303 | |||
Property, plant and equipment, net | 326 | |||
Intangible assets, net | 2,066 | |||
Goodwill | 7,931 | |||
Other noncurrent assets | 369 | |||
Total assets | 11,615 | |||
Account payable | (135) | |||
Customer advances and deposits | (151) | |||
Current capital lease obligation | (51) | |||
Other current liabilities | (434) | |||
Noncurrent capital lease obligation | (207) | |||
Noncurrent deferred tax liability | (356) | |||
Other noncurrent liabilities | (532) | |||
Total liabilities | (1,866) | |||
Net assets acquired | $ 9,749 | |||
[1] | Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. |
Acquisitions and Divestitures_6
Acquisitions and Divestitures, Goodwill and Intangible Assets - Changes In Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | [1] | $ 19,594 | |
Acquisitions | [2] | 80 | |
Other | [3] | (6) | |
Goodwill, end of period | [1] | 19,668 | |
Aerospace | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | [1] | 2,813 | |
Acquisitions | [2] | 3 | |
Other | [3] | (20) | |
Goodwill, end of period | [1] | 2,796 | |
Combat Systems | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | [1] | 2,633 | |
Acquisitions | [2] | (1) | |
Other | [3] | 9 | |
Goodwill, end of period | [1] | 2,641 | |
Information Technology | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | [1] | 9,622 | |
Acquisitions | [2] | 72 | |
Other | [3] | 1 | |
Goodwill, end of period | [1] | 9,695 | |
Accumulated impairment loss | 536 | $ 536 | |
Mission Systems | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | [1] | 4,229 | |
Acquisitions | [2] | 6 | |
Other | [3] | 4 | |
Goodwill, end of period | [1] | 4,239 | |
Accumulated impairment loss | 1,300 | $ 1,300 | |
Marine Systems | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | [1] | 297 | |
Acquisitions | [2] | 0 | |
Other | [3] | 0 | |
Goodwill, end of period | [1] | $ 297 | |
[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 | Mar. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | $ 4,564 | $ 4,564 |
Accumulated Amortization | (2,046) | (1,979) | |
Net Carrying Amount | 2,518 | 2,585 | |
Contract and Program Intangible Assets | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1],[2] | 3,771 | 3,771 |
Accumulated Amortization | [2] | (1,589) | (1,531) |
Net Carrying Amount | [2] | 2,182 | 2,240 |
Trade Names and Trademarks | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 463 | 469 |
Accumulated Amortization | (180) | (177) | |
Net Carrying Amount | 283 | 292 | |
Technology and Software | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 171 | 165 |
Accumulated Amortization | (120) | (116) | |
Net Carrying Amount | 51 | 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 | |
Mar. 31, 2019USD ($)contract | Apr. 01, 2018USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of active contracts | contract | 11 | |
Revenue recognized in contract liability balance | $ | $ 1.7 | $ 1.5 |
Transferred over Time | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, percentage from products and services transferred to customers | 75.00% | 73.00% |
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% | 27.00% |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations to be Recognized as Revenue (Details) - USD ($) $ in Billions | 3 Months Ended | 12 Months Ended |
Mar. 31, 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]: 2019-04-01 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, remaining performance obligations | $ 69.2 | |
Revenue, remaining performance obligation, percentage recognized | 65.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year 9 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 | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 9,261 | $ 7,535 |
Operating earnings | 1,014 | 1,008 |
Accounting Standards Update 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 96 | 115 |
Operating earnings | $ 68 | $ 97 |
Diluted earnings per share | $ 0.18 | $ 0.25 |
Revenue - Revenue by Products a
Revenue - Revenue by Products and Services (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | ||
Revenue [Line Items] | |||
Revenue | $ 9,261 | $ 7,535 | |
Aerospace | |||
Revenue [Line Items] | |||
Revenue | 2,240 | 1,825 | |
Aerospace | Aircraft manufacturing and completions | |||
Revenue [Line Items] | |||
Revenue | 1,691 | 1,366 | |
Aerospace | Aircraft services | |||
Revenue [Line Items] | |||
Revenue | 507 | 451 | |
Aerospace | Pre-owned aircraft | |||
Revenue [Line Items] | |||
Revenue | 42 | 8 | |
Combat Systems | |||
Revenue [Line Items] | |||
Revenue | 1,636 | 1,440 | |
Combat Systems | Military vehicles [Member] | |||
Revenue [Line Items] | |||
Revenue | 1,134 | 956 | |
Combat Systems | Weapons systems, armament and munitions | |||
Revenue [Line Items] | |||
Revenue | 401 | 383 | |
Combat Systems | Engineering and other services | |||
Revenue [Line Items] | |||
Revenue | 101 | 101 | |
Information Technology | |||
Revenue [Line Items] | |||
Revenue | 2,169 | 1,138 | |
Information Technology | Information technology services | |||
Revenue [Line Items] | |||
Revenue | 2,169 | 1,138 | |
Mission Systems | |||
Revenue [Line Items] | |||
Revenue | 1,158 | 1,098 | |
Mission Systems | C4ISR solutions | |||
Revenue [Line Items] | |||
Revenue | [1] | 1,158 | 1,098 |
Marine Systems | |||
Revenue [Line Items] | |||
Revenue | 2,058 | 2,034 | |
Marine Systems | Nuclear-powered submarines | |||
Revenue [Line Items] | |||
Revenue | 1,377 | 1,296 | |
Marine Systems | Surface ships [Member] | |||
Revenue [Line Items] | |||
Revenue | 446 | 483 | |
Marine Systems | Repair and other services | |||
Revenue [Line Items] | |||
Revenue | $ 235 | $ 255 | |
[1] | Command, control, communications, computers, intelligence, surveillance and reconnaissance. |
Revenue - Revenue by Contract T
Revenue - Revenue by Contract Type (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenue [Line Items] | ||
Revenue | $ 9,261 | $ 7,535 |
Aerospace | ||
Revenue [Line Items] | ||
Revenue | 2,240 | 1,825 |
Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1,636 | 1,440 |
Information Technology | ||
Revenue [Line Items] | ||
Revenue | 2,169 | 1,138 |
Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 1,158 | 1,098 |
Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2,058 | 2,034 |
Fixed-price | ||
Revenue [Line Items] | ||
Revenue | 6,444 | 5,233 |
Fixed-price | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 2,040 | 1,668 |
Fixed-price | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1,416 | 1,253 |
Fixed-price | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 921 | 387 |
Fixed-price | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 651 | 620 |
Fixed-price | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 1,416 | 1,305 |
Cost-reimbursement | ||
Revenue [Line Items] | ||
Revenue | 2,155 | 1,924 |
Cost-reimbursement | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 0 | 0 |
Cost-reimbursement | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 211 | 179 |
Cost-reimbursement | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 841 | 577 |
Cost-reimbursement | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 463 | 440 |
Cost-reimbursement | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 640 | 728 |
Time-and-materials | ||
Revenue [Line Items] | ||
Revenue | 662 | 378 |
Time-and-materials | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 200 | 157 |
Time-and-materials | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 9 | 8 |
Time-and-materials | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 407 | 174 |
Time-and-materials | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 44 | 38 |
Time-and-materials | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | $ 2 | $ 1 |
Revenue - Revenue by Customer (
Revenue - Revenue by Customer (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenue [Line Items] | ||
Revenue | $ 9,261 | $ 7,535 |
Aerospace | ||
Revenue [Line Items] | ||
Revenue | 2,240 | 1,825 |
Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 1,636 | 1,440 |
Information Technology | ||
Revenue [Line Items] | ||
Revenue | 2,169 | 1,138 |
Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 1,158 | 1,098 |
Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2,058 | 2,034 |
U.S. Government - Department of Defense | ||
Revenue [Line Items] | ||
Revenue | 4,625 | 3,773 |
U.S. Government - Department of Defense | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 123 | 41 |
U.S. Government - Department of Defense | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 793 | 607 |
U.S. Government - Department of Defense | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 950 | 433 |
U.S. Government - Department of Defense | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 784 | 742 |
U.S. Government - Department of Defense | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 1,975 | 1,950 |
U.S. Government - Non Department of Defense | ||
Revenue [Line Items] | ||
Revenue | 1,304 | 756 |
U.S. Government - Non Department of Defense | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 0 | 0 |
U.S. Government - Non Department of Defense | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 3 | 1 |
U.S. Government - Non Department of Defense | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 1,166 | 637 |
U.S. Government - Non Department of Defense | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 135 | 118 |
U.S. Government - Non Department of Defense | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 0 | 0 |
U.S. Government - Foreign Military Sales | ||
Revenue [Line Items] | ||
Revenue | 152 | 129 |
U.S. Government - Foreign Military Sales | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 15 | 16 |
U.S. Government - Foreign Military Sales | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 79 | 69 |
U.S. Government - Foreign Military Sales | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 5 | 8 |
U.S. Government - Foreign Military Sales | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 9 | 7 |
U.S. Government - Foreign Military Sales | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 44 | 29 |
U.S. Government | ||
Revenue [Line Items] | ||
Revenue | 6,081 | 4,658 |
U.S. Government | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 138 | 57 |
U.S. Government | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 875 | 677 |
U.S. Government | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 2,121 | 1,078 |
U.S. Government | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 928 | 867 |
U.S. Government | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2,019 | 1,979 |
U.S. Commercial | ||
Revenue [Line Items] | ||
Revenue | 1,490 | 1,020 |
U.S. Commercial | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 1,329 | 842 |
U.S. Commercial | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 50 | 58 |
U.S. Commercial | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 40 | 40 |
U.S. Commercial | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 35 | 27 |
U.S. Commercial | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 36 | 53 |
Non-U.S. Government | ||
Revenue [Line Items] | ||
Revenue | 936 | 901 |
Non-U.S. Government | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 59 | 10 |
Non-U.S. Government | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 701 | 697 |
Non-U.S. Government | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 8 | 20 |
Non-U.S. Government | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 166 | 172 |
Non-U.S. Government | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | 2 | 2 |
Non-U.S. Commercial | ||
Revenue [Line Items] | ||
Revenue | 754 | 956 |
Non-U.S. Commercial | Aerospace | ||
Revenue [Line Items] | ||
Revenue | 714 | 916 |
Non-U.S. Commercial | Combat Systems | ||
Revenue [Line Items] | ||
Revenue | 10 | 8 |
Non-U.S. Commercial | Information Technology | ||
Revenue [Line Items] | ||
Revenue | 0 | 0 |
Non-U.S. Commercial | Mission Systems | ||
Revenue [Line Items] | ||
Revenue | 29 | 32 |
Non-U.S. Commercial | Marine Systems | ||
Revenue [Line Items] | ||
Revenue | $ 1 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | ||
Earnings Per Share [Abstract] | |||
Basic weighted average shares outstanding (shares) | 287,917 | 296,399 | |
Dilutive effect of stock options and restricted stock/RSUs (shares) | [1] | 2,974 | 4,705 |
Diluted weighted average shares outstanding (shares) | 290,891 | 301,104 | |
[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 3,975 and 517 for the three-month periods ended March 31, 2019, and April 1, 2018, respectively. |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Stock Options and Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 3,975 | 517 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Financial assets (liabilities) | ||
Cash and equivalents | $ 6 | $ 29 |
Available-for-sale debt securities | 143 | 121 |
Equity securities | 50 | 52 |
Other investments | 4 | 4 |
Cash flow hedges | (61) | (69) |
Short- and long-term debt principal | (13,704) | (12,346) |
Carrying Value | ||
Financial assets (liabilities) | ||
Cash and equivalents | 6 | 29 |
Available-for-sale debt securities | 143 | 121 |
Equity securities | 50 | 52 |
Other investments | 4 | 4 |
Cash flow hedges | (61) | (69) |
Short- and long-term debt principal | (13,646) | (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 | 6 | 6 |
Available-for-sale debt securities | 143 | 121 |
Equity securities | 0 | 0 |
Other investments | 0 | 0 |
Cash flow hedges | (61) | (69) |
Short- and long-term debt principal | (13,704) | (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 | Mar. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 39 | $ 38 |
Deferred tax liability | (544) | (577) |
Net deferred tax liability | $ (505) | $ (539) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | Mar. 31, 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 | Mar. 31, 2019 | Dec. 31, 2018 |
Contracts In Process [Line Items] | ||
Unbilled revenue | $ 30,497 | $ 27,908 |
Advances and progress billings | (23,130) | (21,332) |
Net unbilled receivables | 7,367 | $ 6,576 |
Combat Systems | ||
Contracts In Process [Line Items] | ||
Net unbilled receivables | $ 2,200 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Work in process | $ 4,510 | $ 4,357 |
Raw materials | 1,535 | 1,504 |
Finished goods | 45 | 33 |
Pre-owned aircraft | 95 | 83 |
Total inventories | $ 6,185 | $ 5,977 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total debt principal | $ 13,646 | $ 12,518 |
Less unamortized debt issuance costs and discounts | 98 | 101 |
Total debt | 13,548 | 12,417 |
Less current portion | 2,097 | 973 |
Long-term debt | 11,451 | 11,444 |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Short term debt | $ 1,865 | 850 |
Weighted average interest rate | 2.516% | |
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 | $ 281 | $ 168 |
Other Interest rate | Various |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Billions | 3 Months Ended |
Mar. 31, 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 | $ 1.9 |
Weighted average interest rate | 2.516% |
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 | Mar. 31, 2019 | Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |||
Salaries and wages | $ 811 | $ 952 | |
Retirement benefits | 267 | 272 | |
Operating lease liabilities | 255 | 0 | |
Workers’ compensation | 248 | 244 | |
Fair value of cash flow hedges | 102 | 141 | |
Other | [1] | 1,899 | 1,708 |
Total other current liabilities | 3,582 | 3,317 | |
Retirement benefits | 4,334 | 4,422 | |
Operating lease liabilities | 1,129 | 0 | |
Customer deposits on commercial contracts | 678 | 726 | |
Deferred income taxes | 544 | 577 | |
Other | [2] | 1,714 | 1,768 |
Total other liabilities | $ 8,399 | $ 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 | ||
Mar. 31, 2019 | Apr. 01, 2018 | Dec. 05, 2018 | |
Equity [Abstract] | |||
Stock repurchase program, number of shares authorized to be repurchased | 10 | ||
Remaining number of shares authorized to be repurchased (shares) | 7 | ||
Stock repurchased during the period (shares) | 0.5 | 1.2 | |
Stock repurchased during the period, value | $ 86 | $ 257 | |
Shares remaining to be repurchased as a percent of total shares outstanding | 2.00% | ||
Dividends declared per share | $ 1.02 | $ 0.93 | |
Dividends paid in cash | $ 268 | $ 250 | |
Recognized net actuarial losses (pretax) | 68 | 95 | |
Amortization of prior service credit (pretax) | $ 5 | $ 12 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | $ (3,778) | $ (2,820) | |
Cumulative effect adjustments | [1] | (638) | |
Other comprehensive income, pretax | 111 | 82 | |
Provision for income tax, net | (16) | (15) | |
Other comprehensive income, net of tax | 95 | 67 | |
Ending Balance | (3,683) | (3,391) | |
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 | 17 | (3) | |
Provision for income tax, net | (2) | 1 | |
Other comprehensive income, net of tax | 15 | (2) | |
Ending Balance | (56) | (100) | |
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 income, 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 | 31 | 1 | |
Provision for income tax, net | 0 | 0 | |
Other comprehensive income, net of tax | 31 | 1 | |
Ending Balance | 133 | 403 | |
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 | 63 | 84 | |
Provision for income tax, net | (14) | (16) | |
Other comprehensive income, net of tax | 49 | 68 | |
Ending Balance | $ (3,760) | $ (3,694) | |
[1] | Reflects the cumulative effect 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 | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional forward foreign exchange contracts outstanding | $ 4,600 | $ 5,800 | ||
Average maturity of foreign currency forward contracts, in years | 2 years | |||
Cash and equivalents | $ 673 | 963 | $ 4,332 | $ 2,983 |
Marketable securities held in trust | $ 199 | $ 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 | 3 Months Ended |
Mar. 31, 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 | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning balance | $ 480 | $ 467 |
Warranty expense | 27 | 29 |
Payments | (24) | (25) |
Adjustments | (1) | (3) |
Ending balance | $ 482 | $ 468 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 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) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Finance lease cost | |
Amortization of right-of-use assets | $ 21 |
Interest on lease liabilities | 7 |
Operating lease cost | 86 |
Short-term lease cost | 13 |
Sublease income | (4) |
Total lease costs, net | $ 123 |
Leases - Additional Informati_2
Leases - Additional Information Related to Leases (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 88 |
Operating cash flows from finance leases | 7 |
Financing cash flows from finance leases | 16 |
Operating leases | 40 |
Finance leases | $ 6 |
Weighted-average remaining lease term, operating leases | 10 years 11 months 22 days |
Weighted-average remaining lease term, finance leases | 5 years 6 months 29 days |
Weighted-average discount rate, operating lease | 4.00% |
Weighted-average discount rate, finance leases | 9.00% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Due Under ASC 842 Guidance (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2019 (excluding the three months ended March 31, 2019) | $ 233 | |
2020 | 253 | |
2021 | 208 | |
2022 | 161 | |
2023 | 122 | |
Thereafter | 722 | |
Total future lease payments | 1,699 | |
Less imputed interest | 315 | |
Present value of future lease payments | 1,384 | |
Less current portion of lease liabilities | 255 | $ 0 |
Long-term lease liabilities | 1,129 | $ 0 |
ROU assets | 1,315 | |
Finance Leases | ||
2019 (excluding the three months ended March 31, 2019) | 67 | |
2020 | 81 | |
2021 | 74 | |
2022 | 74 | |
2023 | 29 | |
Thereafter | 66 | |
Total future lease payments | 391 | |
Less imputed interest | 81 | |
Present value of future lease payments | 310 | |
Less current portion of lease liabilities | 66 | |
Long-term lease liabilities | 244 | |
ROU assets | $ 357 |
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 liability | 64 |
Noncurrent capital lease liability | $ 255 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Mar. 31, 2019 | Apr. 01, 2018 |
Defined Benefit Plan Disclosure [Line Items] | |||
Decrease in expected long-term returns on assets | 1.00% | ||
Pension Plans, Defined Benefit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 28 | $ 46 | |
Interest cost | 150 | 114 | |
Expected return on plan assets | (228) | (179) | |
Recognized net actuarial loss (gain) | 70 | 96 | |
Amortization of prior service credit | (4) | (11) | |
Net periodic benefit cost (credit) | 16 | 66 | |
Other Postretirement Benefit Plans, Defined Benefit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 2 | 3 | |
Interest cost | 9 | 8 | |
Expected return on plan assets | (9) | (9) | |
Recognized net actuarial loss (gain) | (2) | (1) | |
Amortization of prior service credit | (1) | (1) | |
Net periodic benefit cost (credit) | $ (1) | $ 0 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 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 | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 9,261 | $ 7,535 |
Operating earnings | 1,014 | 1,008 |
Aerospace | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,240 | 1,825 |
Combat Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,636 | 1,440 |
Information Technology | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,169 | 1,138 |
Mission Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,158 | 1,098 |
Marine Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,058 | 2,034 |
Operating Segments | Aerospace | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,240 | 1,825 |
Operating earnings | 328 | 346 |
Operating Segments | Combat Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,636 | 1,440 |
Operating earnings | 206 | 224 |
Operating Segments | Information Technology | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,169 | 1,138 |
Operating earnings | 156 | 101 |
Operating Segments | Mission Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,158 | 1,098 |
Operating earnings | 148 | 146 |
Operating Segments | Marine Systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,058 | 2,034 |
Operating earnings | 180 | 184 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Operating earnings | $ (4) | $ 7 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Statements - Additional Information (Details) | 3 Months Ended |
Mar. 31, 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 | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Condensed Financial Statements [Line Items] | ||
Revenue | $ 9,261 | $ 7,535 |
Cost of sales | (7,633) | (5,990) |
G&A | (614) | (537) |
Operating earnings | 1,014 | 1,008 |
Interest, net | (117) | (27) |
Other, net | 18 | (21) |
Earnings before income tax | 915 | 960 |
Provision for income tax, net | (170) | (161) |
Equity in net earnings of subsidiaries | 0 | 0 |
Net earnings | 745 | 799 |
Comprehensive income | 840 | 866 |
Consolidating Adjustments | ||
Condensed Financial Statements [Line Items] | ||
Revenue | 0 | 0 |
Cost of sales | 0 | 0 |
G&A | 0 | 0 |
Operating earnings | 0 | 0 |
Interest, net | 0 | 0 |
Other, net | 0 | 0 |
Earnings before income tax | 0 | 0 |
Provision for income tax, net | 0 | 0 |
Equity in net earnings of subsidiaries | (833) | (801) |
Net earnings | (833) | (801) |
Comprehensive income | (889) | (822) |
Parent Company | ||
Condensed Financial Statements [Line Items] | ||
Revenue | 0 | 0 |
Cost of sales | 18 | 19 |
G&A | (22) | (13) |
Operating earnings | (4) | 6 |
Interest, net | (107) | (26) |
Other, net | (8) | (24) |
Earnings before income tax | (119) | (44) |
Provision for income tax, net | 31 | 42 |
Equity in net earnings of subsidiaries | 833 | 801 |
Net earnings | 745 | 799 |
Comprehensive income | 840 | 866 |
Guarantor Subsidiaries | ||
Condensed Financial Statements [Line Items] | ||
Revenue | 6,945 | 6,484 |
Cost of sales | (5,726) | (5,202) |
G&A | (419) | (436) |
Operating earnings | 800 | 846 |
Interest, net | 0 | 0 |
Other, net | 4 | 1 |
Earnings before income tax | 804 | 847 |
Provision for income tax, net | (155) | (165) |
Equity in net earnings of subsidiaries | 0 | 0 |
Net earnings | 649 | 682 |
Comprehensive income | 652 | 685 |
Non-Guarantor Subsidiaries | ||
Condensed Financial Statements [Line Items] | ||
Revenue | 2,316 | 1,051 |
Cost of sales | (1,925) | (807) |
G&A | (173) | (88) |
Operating earnings | 218 | 156 |
Interest, net | (10) | (1) |
Other, net | 22 | 2 |
Earnings before income tax | 230 | 157 |
Provision for income tax, net | (46) | (38) |
Equity in net earnings of subsidiaries | 0 | 0 |
Net earnings | 184 | 119 |
Comprehensive income | $ 237 | $ 137 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | |
Current assets: | |||||
Cash and equivalents | $ 673 | $ 963 | $ 4,332 | $ 2,983 | |
Accounts receivable | 3,718 | 3,759 | |||
Unbilled receivables | 7,367 | 6,576 | |||
Inventories | 6,185 | 5,977 | |||
Other current assets | 924 | 914 | |||
Total current assets | 18,867 | 18,189 | |||
Noncurrent assets: | |||||
Property, plant and equipment (PP&E) | 9,145 | 8,972 | |||
Accumulated depreciation of PP&E | (5,091) | (4,994) | |||
Intangible assets, net | 2,518 | 2,585 | |||
Goodwill | [1] | 19,668 | 19,594 | ||
Other assets | 2,359 | 1,062 | |||
Net investment in subsidiaries | 0 | 0 | |||
Total noncurrent assets | 28,599 | 27,219 | |||
Total assets | 47,466 | 45,408 | |||
Current liabilities: | |||||
Short-term debt and current portion of long-term debt | 2,097 | 973 | |||
Customer advances and deposits | 6,695 | 7,270 | |||
Other current liabilities | 6,590 | 6,496 | |||
Total current liabilities | 15,382 | 14,739 | |||
Noncurrent liabilities: | |||||
Long-term debt | 11,451 | 11,444 | |||
Other liabilities | 8,399 | 7,493 | |||
Total noncurrent liabilities | 19,850 | 18,937 | |||
Total shareholders’ equity | 12,234 | 11,732 | 11,774 | 11,435 | |
Total liabilities and shareholders’ equity | 47,466 | 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 | (27,050) | (25,313) | |||
Total noncurrent assets | (27,050) | (25,313) | |||
Total assets | (27,050) | (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 | (27,050) | (25,313) | |||
Total liabilities and shareholders’ equity | (27,050) | (25,313) | |||
Parent Company | |||||
Current assets: | |||||
Cash and equivalents | 329 | 460 | 3,787 | 1,930 | |
Accounts receivable | 0 | 0 | |||
Unbilled receivables | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | (43) | (45) | |||
Total current assets | 286 | 415 | |||
Noncurrent assets: | |||||
Property, plant and equipment (PP&E) | 288 | 273 | |||
Accumulated depreciation of PP&E | (85) | (83) | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other assets | 207 | 195 | |||
Net investment in subsidiaries | 27,050 | 25,313 | |||
Total noncurrent assets | 27,460 | 25,698 | |||
Total assets | 27,746 | 26,113 | |||
Current liabilities: | |||||
Short-term debt and current portion of long-term debt | 1,863 | 850 | |||
Customer advances and deposits | 0 | 0 | |||
Other current liabilities | 691 | 552 | |||
Total current liabilities | 2,554 | 1,402 | |||
Noncurrent liabilities: | |||||
Long-term debt | 11,405 | 11,398 | |||
Other liabilities | 1,553 | 1,581 | |||
Total noncurrent liabilities | 12,958 | 12,979 | |||
Total shareholders’ equity | 12,234 | 11,732 | |||
Total liabilities and shareholders’ equity | 27,746 | 26,113 | |||
Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and equivalents | 0 | 0 | 0 | 0 | |
Accounts receivable | 1,253 | 1,171 | |||
Unbilled receivables | 2,985 | 2,758 | |||
Inventories | 6,067 | 5,855 | |||
Other current assets | 445 | 441 | |||
Total current assets | 10,750 | 10,225 | |||
Noncurrent assets: | |||||
Property, plant and equipment (PP&E) | 7,263 | 7,177 | |||
Accumulated depreciation of PP&E | (4,138) | (4,071) | |||
Intangible assets, net | 241 | 251 | |||
Goodwill | 8,036 | 8,031 | |||
Other assets | 1,052 | 274 | |||
Net investment in subsidiaries | 0 | 0 | |||
Total noncurrent assets | 12,454 | 11,662 | |||
Total assets | 23,204 | 21,887 | |||
Current liabilities: | |||||
Short-term debt and current portion of long-term debt | 0 | 0 | |||
Customer advances and deposits | 4,245 | 4,541 | |||
Other current liabilities | 4,000 | 3,944 | |||
Total current liabilities | 8,245 | 8,485 | |||
Noncurrent liabilities: | |||||
Long-term debt | 39 | 39 | |||
Other liabilities | 4,656 | 4,073 | |||
Total noncurrent liabilities | 4,695 | 4,112 | |||
Total shareholders’ equity | 10,264 | 9,290 | |||
Total liabilities and shareholders’ equity | 23,204 | 21,887 | |||
Non-Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and equivalents | 344 | 503 | $ 545 | $ 1,053 | |
Accounts receivable | 2,465 | 2,588 | |||
Unbilled receivables | 4,382 | 3,818 | |||
Inventories | 118 | 122 | |||
Other current assets | 522 | 518 | |||
Total current assets | 7,831 | 7,549 | |||
Noncurrent assets: | |||||
Property, plant and equipment (PP&E) | 1,594 | 1,522 | |||
Accumulated depreciation of PP&E | (868) | (840) | |||
Intangible assets, net | 2,277 | 2,334 | |||
Goodwill | 11,632 | 11,563 | |||
Other assets | 1,100 | 593 | |||
Net investment in subsidiaries | 0 | 0 | |||
Total noncurrent assets | 15,735 | 15,172 | |||
Total assets | 23,566 | 22,721 | |||
Current liabilities: | |||||
Short-term debt and current portion of long-term debt | 234 | 123 | |||
Customer advances and deposits | 2,450 | 2,729 | |||
Other current liabilities | 1,899 | 2,000 | |||
Total current liabilities | 4,583 | 4,852 | |||
Noncurrent liabilities: | |||||
Long-term debt | 7 | 7 | |||
Other liabilities | 2,190 | 1,839 | |||
Total noncurrent liabilities | 2,197 | 1,846 | |||
Total shareholders’ equity | 16,786 | 16,023 | |||
Total liabilities and shareholders’ equity | $ 23,566 | $ 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 | ||
Mar. 31, 2019 | Apr. 01, 2018 | ||
Condensed Financial Statements [Line Items] | |||
Net cash used by operating activities | [1] | $ (795) | $ (496) |
Cash flows from investing activities: | |||
Capital expenditures | (181) | (104) | |
Other, net | (6) | (1) | |
Net cash used by investing activities | (187) | (105) | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 1,010 | 2,494 | |
Dividends paid | (268) | (250) | |
Purchases of common stock | (133) | (267) | |
Other, net | 88 | (25) | |
Net cash provided by financing activities | 697 | 1,952 | |
Net cash used by discontinued operations | (5) | (2) | |
Cash sweep/funding by parent | 0 | 0 | |
Net increase in cash and equivalents | (290) | 1,349 | |
Cash and equivalents at beginning of period | 963 | 2,983 | |
Cash and equivalents at end of period | 673 | 4,332 | |
Consolidating Adjustments | |||
Condensed Financial Statements [Line Items] | |||
Net cash used by operating activities | [1] | 0 | 0 |
Cash flows from investing activities: | |||
Capital expenditures | 0 | 0 | |
Other, net | 0 | 0 | |
Net cash used by investing activities | 0 | 0 | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 0 | 0 | |
Dividends paid | 0 | 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 increase in cash and equivalents | 0 | 0 | |
Cash and equivalents at beginning of period | 0 | 0 | |
Cash and equivalents at end of period | 0 | 0 | |
Parent Company | |||
Condensed Financial Statements [Line Items] | |||
Net cash used by operating activities | [1] | 59 | 80 |
Cash flows from investing activities: | |||
Capital expenditures | (20) | (7) | |
Other, net | 5 | 1 | |
Net cash used by investing activities | (15) | (6) | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 1,010 | 2,494 | |
Dividends paid | (268) | (250) | |
Purchases of common stock | (133) | (267) | |
Other, net | (5) | (25) | |
Net cash provided by financing activities | 604 | 1,952 | |
Net cash used by discontinued operations | (5) | (2) | |
Cash sweep/funding by parent | (774) | (167) | |
Net increase in cash and equivalents | (131) | 1,857 | |
Cash and equivalents at beginning of period | 460 | 1,930 | |
Cash and equivalents at end of period | 329 | 3,787 | |
Guarantor Subsidiaries | |||
Condensed Financial Statements [Line Items] | |||
Net cash used by operating activities | [1] | (167) | 105 |
Cash flows from investing activities: | |||
Capital expenditures | (106) | (86) | |
Other, net | 1 | (2) | |
Net cash used by investing activities | (105) | (88) | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 0 | 0 | |
Dividends paid | 0 | 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 | 272 | (17) | |
Net increase in cash and equivalents | 0 | 0 | |
Cash and equivalents at beginning of period | 0 | 0 | |
Cash and equivalents at end of period | 0 | 0 | |
Non-Guarantor Subsidiaries | |||
Condensed Financial Statements [Line Items] | |||
Net cash used by operating activities | [1] | (687) | (681) |
Cash flows from investing activities: | |||
Capital expenditures | (55) | (11) | |
Other, net | (12) | 0 | |
Net cash used by investing activities | (67) | (11) | |
Cash flows from financing activities: | |||
Proceeds from commercial paper, net | 0 | 0 | |
Dividends paid | 0 | 0 | |
Purchases of common stock | 0 | 0 | |
Other, net | 93 | 0 | |
Net cash provided by financing activities | 93 | 0 | |
Net cash used by discontinued operations | 0 | 0 | |
Cash sweep/funding by parent | 502 | 184 | |
Net increase in cash and equivalents | (159) | (508) | |
Cash and equivalents at beginning of period | 503 | 1,053 | |
Cash and equivalents at end of period | $ 344 | $ 545 | |
[1] | * Continuing operations only |