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RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 6 Months Ended
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Jun. 24, 2018
Accounting Changes and Error Corrections [Abstract] |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table summarizes the effects of adopting ASC 606 on our consolidated balance sheet as of December 31, 2017 (ASU 2017-07 had no impact on our consolidated balance sheet) (unaudited; in millions, except par value):
|  |  | Adjustments for |
|  | Historical |  | ASC 606 |  | Adjusted
Assets |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 2,861 |  |  |  | $ | — |  |  |  | $ | 2,861 |  |
Receivables, net |  | 8,603 |  |  |  | (6,338 | ) |  |  | 2,265 |  |
Contract assets |  | — |  |  |  | 7,992 |  |  |  | 7,992 |  |
Inventories |  | 4,487 |  |  |  | (1,609 | ) |  |  | 2,878 |  |
Other current assets |  | 1,510 |  |  |  | (1 | ) |  |  | 1,509 |  |
Total current assets |  | 17,461 |  |  |  | 44 |  |  |  | 17,505 |  |
Property, plant and equipment, net |  | 5,775 |  |  |  | — |  |  |  | 5,775 |  |
Goodwill |  | 10,807 |  |  |  | — |  |  |  | 10,807 |  |
Intangible assets, net |  | 3,797 |  |  |  | — |  |  |  | 3,797 |  |
Deferred income taxes |  | 3,111 |  |  |  | 45 |  |  |  | 3,156 |  |
Other noncurrent assets |  | 5,570 |  |  |  | 10 |  |  |  | 5,580 |  |
Total assets |  | $ | 46,521 |  |  |  | $ | 99 |  |  |  | $ | 46,620 |  |
Liabilities and equity |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 1,467 |  |  |  | $ | — |  |  |  | $ | 1,467 |  |
Contract liabilities (a) |  | 6,752 |  |  |  | 276 |  |  |  | 7,028 |  |
Salaries, benefits and payroll taxes |  | 1,785 |  |  |  | — |  |  |  | 1,785 |  |
Current maturities of long-term debt |  | 750 |  |  |  | — |  |  |  | 750 |  |
Other current liabilities |  | 1,883 |  |  |  | — |  |  |  | 1,883 |  |
Total current liabilities |  | 12,637 |  |  |  | 276 |  |  |  | 12,913 |  |
Long-term debt, net |  | 13,513 |  |  |  | — |  |  |  | 13,513 |  |
Accrued pension liabilities |  | 15,703 |  |  |  | — |  |  |  | 15,703 |  |
Other postretirement benefit liabilities |  | 719 |  |  |  | — |  |  |  | 719 |  |
Other noncurrent liabilities |  | 4,558 |  |  |  | (10 | ) |  |  | 4,548 |  |
Total liabilities |  | 47,130 |  |  |  | 266 |  |  |  | 47,396 |  |
Stockholders’ equity |  |  |  |  |  |  |  |  |
Common stock, $1 par value per share |  | 284 |  |  |  | — |  |  |  | 284 |  |
Additional paid-in capital |  | — |  |  |  | — |  |  |  | — |  |
Retained earnings |  | 11,573 |  |  |  | (168 | ) |  |  | 11,405 |  |
Accumulated other comprehensive loss |  | (12,540 | ) |  |  | 1 |  |  |  | (12,539 | ) |
Total stockholders’ deficit |  | (683 | ) |  |  | (167 | ) |  |  | (850 | ) |
Noncontrolling interests in subsidiary |  | 74 |  |  |  | — |  |  |  | 74 |  |
Total deficit |  | (609 | ) |  |  | (167 | ) |  |  | (776 | ) |
Total liabilities and equity |  | $ | 46,521 |  |  |  | $ | 99 |  |  |  | $ | 46,620 |  |
(a) | Formerly referred to as customer advances and amounts in excess of costs incurred.
The following table summarizes the effects of adopting ASC 606 on certain components within our net cash provided by operating activities for the six months ended June 25, 2017 (ASC 606 had no impact on total operating cash flows or cash flows from investing and financing activities) (unaudited; in millions):
|  |  | Adjustments for |
|  | Historical |  | ASC 606 |  | Adjusted
Operating activities |  |  |  |  |  |  |  |  |
Net earnings |  | $ | 1,705 |  |  |  | $ | 39 |  |  |  | $ | 1,744 |  |
Adjustments to reconcile net earnings to net cash provided by operating activities |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | 581 |  |  |  | — |  |  |  | 581 |  |
Stock-based compensation |  | 101 |  |  |  | — |  |  |  | 101 |  |
Changes in assets and liabilities |  |  |  |  |  |  |  |  |
Receivables, net |  | (560 | ) |  |  | (59 | ) |  |  | (619 | ) |
Contract assets |  | — |  |  |  | (170 | ) |  |  | (170 | ) |
Inventories |  | (271 | ) |  |  | 233 |  |  |  | (38 | ) |
Accounts payable |  | 940 |  |  |  | — |  |  |  | 940 |  |
Contract liabilities (a) |  | (316 | ) |  |  | (72 | ) |  |  | (388 | ) |
Postretirement benefit plans |  | 685 |  |  |  | — |  |  |  | 685 |  |
Income taxes |  | 3 |  |  |  | — |  |  |  | 3 |  |
Other, net |  | 342 |  |  |  | 29 |  |  |  | 371 |  |
Net cash provided by operating activities |  | $ | 3,210 |  |  |  | $ | — |  |  |  | $ | 3,210 |  |
(a) | Formerly referred to as customer advances and amounts in excess of costs incurred.
The following tables summarize the effects of adopting ASC 606 and ASU 2017-07 on our consolidated statement of earnings for the quarter and six months ended June 25, 2017 (unaudited; in millions, except per share data):
|  | Quarter Ended
|  |  |  | Adjustments for |  |
|  | Historical |  | ASC 606 |  | ASU 2017-07 |  | Adjusted
Net sales |  |  |  |  |  |  |  |  |  |  |  |
Products |  | $ | 10,828 |  |  |  | $ | (206 | ) |  |  | $ | — |  |  |  | $ | 10,622 |  |
Services |  | 1,857 |  |  |  | 84 |  |  |  | — |  |  |  | 1,941 |  |
Total net sales |  | 12,685 |  |  |  | (122 | ) |  |  | — |  |  |  | 12,563 |  |
Cost of sales |  |  |  |  |  |  |  |  |  |  |  |
Products |  | (9,751 | ) |  |  | 189 |  |  |  | — |  |  |  | (9,562 | ) |
Services |  | (1,658 | ) |  |  | (48 | ) |  |  | — |  |  |  | (1,706 | ) |
Other unallocated, net |  | 149 |  |  |  | — |  |  |  | 212 |  |  |  | 361 |  |
Total cost of sales |  | (11,260 | ) |  |  | 141 |  |  |  | 212 |  |  |  | (10,907 | ) |
Gross profit |  | 1,425 |  |  |  | 19 |  |  |  | 212 |  |  |  | 1,656 |  |
Other income, net |  | 60 |  |  |  | — |  |  |  | — |  |  |  | 60 |  |
Operating profit |  | 1,485 |  |  |  | 19 |  |  |  | 212 |  |  |  | 1,716 |  |
Interest expense |  | (160 | ) |  |  | — |  |  |  | — |  |  |  | (160 | ) |
Other non-operating expense, net |  | (2 | ) |  |  | — |  |  |  | (212 | ) |  |  | (214 | ) |
Earnings before income taxes |  | 1,323 |  |  |  | 19 |  |  |  | — |  |  |  | 1,342 |  |
Income tax expense |  | (381 | ) |  |  | (6 | ) |  |  | — |  |  |  | (387 | ) |
Net earnings |  | $ | 942 |  |  |  | $ | 13 |  |  |  | $ | — |  |  |  | $ | 955 |  |
Earnings per common share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 3.27 |  |  |  | $ | 0.04 |  |  |  | $ | — |  |  |  | $ | 3.31 |  |
Diluted |  | $ | 3.23 |  |  |  | $ | 0.05 |  |  |  | $ | — |  |  |  | $ | 3.28 |  |
Cash dividends paid per common share |  | $ | 1.82 |  |  |  | $ | — |  |  |  | $ | — |  |  |  | $ | 1.82 |  |
|  | Six Months Ended
|  |  |  | Adjustments for |  |
|  | Historical |  | ASC 606 |  | ASU 2017-07 |  | Adjusted
Net sales |  |  |  |  |  |  |  |  |  |  |  |
Products |  | $ | 20,341 |  |  |  | $ | (106 | ) |  |  | $ | — |  |  |  | $ | 20,235 |  |
Services |  | 3,401 |  |  |  | 139 |  |  |  | — |  |  |  | 3,540 |  |
Total net sales |  | 23,742 |  |  |  | 33 |  |  |  | — |  |  |  | 23,775 |  |
Cost of sales |  |  |  |  |  |  |  |  |  |  |  |
Products |  | (18,438 | ) |  |  | 132 |  |  |  | — |  |  |  | (18,306 | ) |
Services |  | (3,034 | ) |  |  | (106 | ) |  |  | — |  |  |  | (3,140 | ) |
Other unallocated, net |  | 308 |  |  |  | — |  |  |  | 425 |  |  |  | 733 |  |
Total cost of sales |  | (21,164 | ) |  |  | 26 |  |  |  | 425 |  |  |  | (20,713 | ) |
Gross profit |  | 2,578 |  |  |  | 59 |  |  |  | 425 |  |  |  | 3,062 |  |
Other expense, net |  | 56 |  |  |  | — |  |  |  | — |  |  |  | 56 |  |
Operating profit |  | 2,634 |  |  |  | 59 |  |  |  | 425 |  |  |  | 3,118 |  |
Interest expense |  | (315 | ) |  |  | — |  |  |  | — |  |  |  | (315 | ) |
Other non-operating expense, net |  | (1 | ) |  |  | — |  |  |  | (425 | ) |  |  | (426 | ) |
Earnings before income taxes |  | 2,318 |  |  |  | 59 |  |  |  | — |  |  |  | 2,377 |  |
Income tax expense |  | (613 | ) |  |  | (20 | ) |  |  | — |  |  |  | (633 | ) |
Net earnings |  | $ | 1,705 |  |  |  | $ | 39 |  |  |  | $ | — |  |  |  | $ | 1,744 |  |
Earnings per common share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 5.90 |  |  |  | $ | 0.13 |  |  |  | $ | — |  |  |  | $ | 6.03 |  |
Diluted |  | $ | 5.84 |  |  |  | $ | 0.13 |  |  |  | $ | — |  |  |  | $ | 5.97 |  |
Cash dividends paid per common share |  | $ | 3.64 |  |  |  | $ | — |  |  |  | $ | — |  |  |  | $ | 3.64 |  |

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