XML 39 R23.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Prior-Period Financial Statements | 3 Months Ended
--- | ---
Apr. 02, 2017
Accounting Changes and Error Corrections [Abstract] |
Prior-Period Financial Statements | PRIOR-PERIOD FINANCIAL STATEMENTS Our prior-period financial statements were restated for the adoption of three ASUs that are discussed below. ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. We adopted ASU 2016-09 in the second quarter of 2016. ASU 2016-09 impacted several aspects of our accounting for share-based payment transactions. The ASU requires that excess tax benefits and tax deficiencies (the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes) be recognized as income tax expense or benefit in the Consolidated Statement of Earnings. Previously, these amounts were recognized directly to shareholders’ equity. While this area of the ASU permits only prospective adoption, because we adopted the standard in the second quarter of 2016, we were required to restate the first-quarter 2016 financial statements to reflect the adoption as of the beginning of the year. In the Consolidated Statement of Cash Flows, the excess tax benefit from equity-based compensation, previously classified as a financing activity, is now classified as an operating activity. Additionally, cash paid when directly withholding shares on an employee’s behalf for tax withholding purposes is classified as a financing activity. These areas were adopted retrospectively. ASC Topic 606. We adopted ASC Topic 606 on January 1, 2017, using the retrospective method. The adoption of ASC Topic 606 had two primary impacts on our Consolidated Financial Statements. The impact of adjustments on profit recorded to date is now recognized in the period identified (cumulative catch-up method), rather than prospectively over the remaining contract term. For our contracts for the manufacture of business-jet aircraft, we now recognize revenue at a single point in time when control is transferred to the customer, generally when the customer accepts the fully outfitted aircraft. Prior to the adoption of ASC Topic 606, we recognized revenue for these contracts at two contractual milestones: when green aircraft were completed and accepted by the customer and when the customer accepted final delivery of the fully outfitted aircraft. The cumulative effect of the adoption was recognized as a decrease to retained earnings of $372 on January 1, 2015. We applied the standard's practical expedient that permits the omission of prior-period information about our remaining performance obligations. No other practical expedients were applied. ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. We adopted ASU 2015-17 on January 1, 2017, using the retrospective method. ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the Consolidated Balance Sheet. The adoption of ASU 2015-17 resulted in reclassifications among accounts on the Consolidated Balance Sheet, but had no other impacts on our results of operations, financial condition or cash flows. The following tables summarize the effects of adopting these accounting standards on our unaudited Consolidated Financial Statements. CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
| Three Months Ended |  | Effect of the Adoption of |  | Three Months Ended
| April 3, 2016 |  | ASU |  | ASC |  | ASU |  | April 3, 2016
(Dollars in millions, except per-share amounts) | As Reported |  | 2016-09 |  | Topic 606 |  | 2015-17 |  | As Adjusted
Revenue: |  |  |  |  |  |  |  |  |
Products | $ | 4,864 |  |  | $ | — |  |  | $ | (282 | ) |  | $ | — |  |  | $ | 4,582 |
Services | 2,860 |  |  | — |  |  | 34 |  |  | — |  |  | 2,894 |
| 7,724 |  |  | — |  |  | (248 | ) |  | — |  |  | 7,476 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |  |
Products | 3,784 |  |  | — |  |  | (149 | ) |  | — |  |  | 3,635 |
Services | 2,427 |  |  | — |  |  | 29 |  |  | — |  |  | 2,456 |
G&A | 460 |  |  | — |  |  | 1 |  |  | — |  |  | 461 |
| 6,671 |  |  | — |  |  | (119 | ) |  | — |  |  | 6,552 |
Operating earnings | 1,053 |  |  | — |  |  | (129 | ) |  | — |  |  | 924 |
Interest, net | (22 | ) |  | — |  |  | — |  |  | — |  |  | (22 | )
Other, net | 10 |  |  | — |  |  | — |  |  | — |  |  | 10 |
Earnings from continuing operations before income tax | 1,041 |  |  | — |  |  | (129 | ) |  | — |  |  | 912 |
Provision for income tax, net | 311 |  |  | (15 | ) |  | (38 | ) |  | — |  |  | 258 |
Earnings from continuing operations | 730 |  |  | 15 |  |  | (91 | ) |  | — |  |  | 654 |
Discontinued operations | (13 | ) |  | — |  |  | — |  |  | — |  |  | (13 | )
Net earnings | $ | 717 |  |  | $ | 15 |  |  | $ | (91 | ) |  | $ | — |  |  | $ | 641 |
Earnings per share |  |  |  |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  |
Continuing operations | $ | 2.37 |  |  | $ | 0.05 |  |  | $ | (0.30 | ) |  | $ | — |  |  | $ | 2.12 |
Discontinued operations | (0.04 | ) |  | — |  |  | — |  |  | — |  |  | (0.04 | )
Net earnings | $ | 2.33 |  |  | $ | 0.05 |  |  | $ | (0.30 | ) |  | $ | — |  |  | $ | 2.08 |
Diluted: |  |  |  |  |  |  |  |  |  |
Continuing operations | $ | 2.34 |  |  | $ | 0.03 |  |  | $ | (0.29 | ) |  | $ | — |  |  | $ | 2.08 |
Discontinued operations | (0.04 | ) |  | — |  |  | — |  |  | — |  |  | (0.04 | )
Net earnings | $ | 2.30 |  |  | $ | 0.03 |  |  | $ | (0.29 | ) |  | $ | — |  |  | $ | 2.04 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
| Three Months Ended |  | Effect of the Adoption of |  | Three Months Ended
| April 3, 2016 |  | ASU |  | ASC |  | ASU |  | April 3, 2016
(Dollars in millions) | As Reported |  | 2016-09 |  | Topic 606 |  | 2015-17 |  | As Adjusted
Net earnings | $ | 717 |  |  | $ | 15 |  |  | $ | (91 | ) |  | $ | — |  |  | $ | 641 |
Gains on cash flow hedges | 182 |  |  | — |  |  | — |  |  | — |  |  | 182 |
Unrealized losses on securities | (9 | ) |  | — |  |  | — |  |  | — |  |  | (9 | )
Foreign currency translation adjustments | 181 |  |  | — |  |  | (1 | ) |  | — |  |  | 180 |
Change in retirement plans’ funded status | 60 |  |  | — |  |  | — |  |  | — |  |  | 60 |
Other comprehensive income, pretax | 414 |  |  | — |  |  | (1 | ) |  | — |  |  | 413 |
Provision for income tax, net | 69 |  |  | — |  |  | — |  |  | — |  |  | 69 |
Other comprehensive income, net of tax | 345 |  |  | — |  |  | (1 | ) |  | — |  |  | 344 |
Comprehensive income | $ | 1,062 |  |  | $ | 15 |  |  | $ | (92 | ) |  | $ | — |  |  | $ | 985 |
CONSOLIDATED BALANCE SHEET (UNAUDITED)
|  |  | Effect of the Adoption of |  |
| December 31, 2016 |  | ASU |  | ASC |  | ASU |  | December 31, 2016
(Dollars in millions) | As Reported |  | 2016-09 |  | Topic 606 |  | 2015-17* |  | As Adjusted
ASSETS |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |
Cash and equivalents | $ | 2,334 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,334 |
Accounts receivable | 3,611 |  |  | — |  |  | (212 | ) |  | — |  |  | 3,399 |
Unbilled receivables | 5,282 |  |  | — |  |  | (1,070 | ) |  | — |  |  | 4,212 |
Inventories | 3,523 |  |  | — |  |  | 2,294 |  |  | — |  |  | 5,817 |
Other current assets | 697 |  |  | — |  |  | 90 |  |  | (15 | ) |  | 772 |
Total current assets | 15,447 |  |  | — |  |  | 1,102 |  |  | (15 | ) |  | 16,534 |
Noncurrent assets: |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment, net | 3,467 |  |  | — |  |  | 10 |  |  | — |  |  | 3,477 |
Intangible assets, net | 678 |  |  | — |  |  | — |  |  | — |  |  | 678 |
Goodwill | 11,445 |  |  | — |  |  | — |  |  | — |  |  | 11,445 |
Other assets | 1,835 |  |  | — |  |  | — |  |  | (797 | ) |  | 1,038 |
Total noncurrent assets | 17,425 |  |  | — |  |  | 10 |  |  | (797 | ) |  | 16,638 |
Total assets | $ | 32,872 |  |  | $ | — |  |  | $ | 1,112 |  |  | $ | (812 | ) |  | $ | 33,172 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |
Short-term debt and current portion of long-term debt | $ | 900 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 900 |
Accounts payable | 2,538 |  |  | — |  |  | — |  |  | — |  |  | 2,538 |
Customer advances and deposits | 4,939 |  |  | — |  |  | 1,888 |  |  | — |  |  | 6,827 |
Other current liabilities | 4,469 |  |  | — |  |  | (361 | ) |  | (923 | ) |  | 3,185 |
Total current liabilities | 12,846 |  |  | — |  |  | 1,527 |  |  | (923 | ) |  | 13,450 |
Noncurrent liabilities: |  |  |  |  |  |  |  |  |  |  |
Long-term debt | 2,988 |  |  | — |  |  | — |  |  | — |  |  | 2,988 |
Other liabilities | 6,062 |  |  | — |  |  | 260 |  |  | 111 |  |  | 6,433 |
Commitments and contingencies (see Note M) |  |  |  |  |  |  |  |  |  |  |
Total noncurrent liabilities | 9,050 |  |  | — |  |  | 260 |  |  | 111 |  |  | 9,421 |
Shareholders’ equity: |  |  |  |  |  |  |  |  |  |  |
Common stock | 482 |  |  | — |  |  | — |  |  | — |  |  | 482 |
Surplus | 2,819 |  |  | — |  |  | — |  |  | — |  |  | 2,819 |
Retained earnings | 25,227 |  |  | — |  |  | (684 | ) |  | — |  |  | 24,543 |
Treasury stock | (14,156 | ) |  | — |  |  | — |  |  | — |  |  | (14,156 | )
Accumulated other comprehensive loss | (3,396 | ) |  | — |  |  | 9 |  |  | — |  |  | (3,387 | )
Total shareholders’ equity | 10,976 |  |  | — |  |  | (675 | ) |  | — |  |  | 10,301 |
Total liabilities and shareholders’ equity | $ | 32,872 |  |  | $ | — |  |  | $ | 1,112 |  |  | $ | (812 | ) |  | $ | 33,172 |
* The effect of the adoption of ASU 2015-17 includes the reclassification of current deferred tax assets and liabilities of $10 and $335, respectively, which are included as effects of adopting ASC Topic 606. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
| Three Months Ended |  | Effect of the Adoption of |  | Three Months Ended
| April 3, 2016 |  | ASU |  | ASC |  | ASU |  | April 3, 2016
(Dollars in millions) | As Reported |  | 2016-09 |  | Topic 606 |  | 2015-17 |  | As Adjusted
Cash flows from operating activities - continuing operations: |  |  |  |  |  |  |  |  |
Net earnings | $ | 717 |  |  | $ | 15 |  |  | $ | (91 | ) |  | $ | — |  |  | $ | 641 |
Adjustments to reconcile net earnings to net cash provided by operating activities: |  |  |  |  |  |  |  |  |
Depreciation of property, plant and equipment | 90 |  |  | — |  |  | (1 | ) |  | — |  |  | 89 |
Amortization of intangible assets | 27 |  |  | — |  |  | — |  |  | — |  |  | 27 |
Equity-based compensation expense | 27 |  |  | — |  |  | — |  |  | — |  |  | 27 |
Excess tax benefit from equity-based compensation | (15 | ) |  | 15 |  |  | — |  |  | — |  |  | — |
Deferred income tax provision | 20 |  |  | — |  |  | (38 | ) |  | — |  |  | (18 | )
Discontinued operations | 13 |  |  | — |  |  | — |  |  | — |  |  | 13 |
(Increase) decrease in assets, net of effects of business acquisitions: |  |  |  |  |  |  |  |  |
Accounts receivable | (195 | ) |  | — |  |  | (15 | ) |  | — |  |  | (210 | )
Unbilled receivables | (337 | ) |  | — |  |  | 61 |  |  | — |  |  | (276 | )
Inventories | (133 | ) |  | — |  |  | (88 | ) |  | — |  |  | (221 | )
Increase (decrease) in liabilities, net of effects of business acquisitions: |  |  |  |  |  |  |  |  |
Accounts payable | 179 |  |  | — |  |  | — |  |  | — |  |  | 179 |
Customer advances and deposits | (209 | ) |  | — |  |  | 191 |  |  | — |  |  | (18 | )
Income taxes payable | 268 |  |  | (15 | ) |  | — |  |  | — |  |  | 253 |
Other current liabilities | (70 | ) |  | 26 |  |  | (8 | ) |  | — |  |  | (52 | )
Other, net | 57 |  |  | — |  |  | (11 | ) |  | — |  |  | 46 |
Net cash provided by operating activities | 439 |  |  | 41 |  |  | — |  |  | — |  |  | 480 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |
Capital expenditures | (65 | ) |  | — |  |  | — |  |  | — |  |  | (65 | )
Other, net | (53 | ) |  | — |  |  | — |  |  | — |  |  | (53 | )
Net cash used by investing activities | (118 | ) |  | — |  |  | — |  |  | — |  |  | (118 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |
Purchases of common stock | (1,026 | ) |  | — |  |  | — |  |  | — |  |  | (1,026 | )
Dividends paid | (215 | ) |  | — |  |  | — |  |  | — |  |  | (215 | )
Other, net | 48 |  |  | (41 | ) |  | — |  |  | — |  |  | 7 |
Net cash used by financing activities | (1,193 | ) |  | (41 | ) |  | — |  |  | — |  |  | (1,234 | )
Net cash used by discontinued operations | (6 | ) |  | — |  |  | — |  |  | — |  |  | (6 | )
Net decrease in cash and equivalents | (878 | ) |  | — |  |  | — |  |  | — |  |  | (878 | )
Cash and equivalents at beginning of period | 2,785 |  |  | — |  |  | — |  |  | — |  |  | 2,785 |
Cash and equivalents at end of period | $ | 1,907 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,907 |
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)
| Common Stock |  | Retained |  | Treasury |  | Accumulated Other Comprehensive |  | Total Shareholders’
(Dollars in millions) | Par |  | Surplus |  | Earnings |  | Stock |  | Loss |  | Equity
December 31, 2015 - as reported | $ | 482 |  |  | $ | 2,730 |  |  | $ | 23,204 |  |  | $ | (12,392 | ) |  | $ | (3,286 | ) |  | $ | 10,738 |
Cumulative-effect adjustment of ASC Topic 606 on January 1, 2016 | — |  |  | — |  |  | (301 | ) |  | — |  |  | 3 |  |  | (298 | )
December 31, 2015 - as adjusted | 482 |  |  | 2,730 |  |  | 22,903 |  |  | (12,392 | ) |  | (3,283 | ) |  | 10,440 |
First quarter 2016 - as reported | — |  |  | 10 |  |  | 483 |  |  | (994 | ) |  | 345 |  |  | (156 | )
Effect of the adoption of ASU 2016-09 | — |  |  | (15 | ) |  | 15 |  |  | — |  |  | — |  |  | — |
Effect of the adoption of ASC Topic 606 | — |  |  | — |  |  | (91 | ) |  | — |  |  | (1 | ) |  | (92 | )
Effect of the adoption of ASU 2015-17 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
April 3, 2016 - as adjusted | $ | 482 |  |  | $ | 2,725 |  |  | $ | 23,310 |  |  | $ | (13,386 | ) |  | $ | (2,939 | ) |  | $ | 10,192 |

X
- References No definition available. + Details
Name: | us-gaap_AccountingChangesAndErrorCorrectionsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Change in Accounting Principle -URI http://asc.fasb.org/extlink&oid=6507316 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Direct Effects of a Change in Accounting Principle -URI http://asc.fasb.org/extlink&oid=66092750 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22583-107794 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Indirect Effects of a Change in Accounting Principle -URI http://asc.fasb.org/extlink&oid=6515603 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22580-107794 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.10-01.(b)(6)) -URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Accounting Change -URI http://asc.fasb.org/extlink&oid=6503790 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22499-107794 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Retrospective Application -URI http://asc.fasb.org/extlink&oid=6523989 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section 45 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=68064558&loc=d3e765-108305 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section 45 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68064558&loc=d3e725-108305 + Details
Name: | us-gaap_NewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration