Delaware
|
|
13-1673581
|
State or other jurisdiction of incorporation or organization
|
|
I.R.S. employer identification no.
|
|
|
|
2941 Fairview Park Drive, Suite 100
Falls Church, Virginia
|
|
22042-4513
|
Address of principal executive offices
|
|
Zip code
|
|
|
|
PART I -
|
PAGE
|
|
Item 1 -
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2 -
|
||
Item 3 -
|
||
Item 4 -
|
||
|
||
PART II -
|
||
Item 1 -
|
||
Item 1A -
|
||
Item 2 -
|
||
Item 6 -
|
||
|
|
Three Months Ended
|
||||||
(Dollars in millions, except per-share amounts)
|
July 2, 2017
|
|
July 3, 2016
|
||||
Revenue:
|
|
|
|
||||
Products
|
$
|
4,654
|
|
|
$
|
4,943
|
|
Services
|
3,021
|
|
|
2,831
|
|
||
|
7,675
|
|
|
7,774
|
|
||
Operating costs and expenses:
|
|
|
|
||||
Products
|
3,582
|
|
|
3,889
|
|
||
Services
|
2,532
|
|
|
2,373
|
|
||
General and administrative (G&A)
|
505
|
|
|
485
|
|
||
|
6,619
|
|
|
6,747
|
|
||
Operating earnings
|
1,056
|
|
|
1,027
|
|
||
Interest, net
|
(24
|
)
|
|
(23
|
)
|
||
Other, net
|
—
|
|
|
1
|
|
||
Earnings before income tax
|
1,032
|
|
|
1,005
|
|
||
Provision for income tax, net
|
283
|
|
|
291
|
|
||
Net earnings
|
$
|
749
|
|
|
$
|
714
|
|
|
|
|
|
||||
Earnings per share
|
|
|
|
||||
Basic
|
$
|
2.50
|
|
|
$
|
2.35
|
|
Diluted
|
$
|
2.45
|
|
|
$
|
2.30
|
|
|
Six Months Ended
|
||||||
(Dollars in millions, except per-share amounts)
|
July 2, 2017
|
|
July 3, 2016
|
||||
Revenue:
|
|
|
|
||||
Products
|
$
|
9,121
|
|
|
$
|
9,525
|
|
Services
|
5,995
|
|
|
5,725
|
|
||
|
15,116
|
|
|
15,250
|
|
||
Operating costs and expenses:
|
|
|
|
||||
Products
|
7,018
|
|
|
7,524
|
|
||
Services
|
5,021
|
|
|
4,829
|
|
||
G&A
|
986
|
|
|
946
|
|
||
|
13,025
|
|
|
13,299
|
|
||
Operating earnings
|
2,091
|
|
|
1,951
|
|
||
Interest, net
|
(49
|
)
|
|
(45
|
)
|
||
Other, net
|
—
|
|
|
11
|
|
||
Earnings from continuing operations before income tax
|
2,042
|
|
|
1,917
|
|
||
Provision for income tax, net
|
530
|
|
|
549
|
|
||
Earnings from continuing operations
|
1,512
|
|
|
1,368
|
|
||
Discontinued operations
|
—
|
|
|
(13
|
)
|
||
Net earnings
|
$
|
1,512
|
|
|
$
|
1,355
|
|
|
|
|
|
||||
Earnings per share
|
|
|
|
||||
Basic:
|
|
|
|
||||
Continuing operations
|
$
|
5.03
|
|
|
$
|
4.47
|
|
Discontinued operations
|
—
|
|
|
(0.04
|
)
|
||
Net earnings
|
$
|
5.03
|
|
|
$
|
4.43
|
|
Diluted:
|
|
|
|
||||
Continuing operations
|
$
|
4.94
|
|
|
$
|
4.39
|
|
Discontinued operations
|
—
|
|
|
(0.04
|
)
|
||
Net earnings
|
$
|
4.94
|
|
|
$
|
4.35
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
(Dollars in millions)
|
July 2, 2017
|
|
July 3, 2016
|
July 2, 2017
|
|
July 3, 2016
|
||||||||
Net earnings
|
$
|
749
|
|
|
$
|
714
|
|
$
|
1,512
|
|
|
$
|
1,355
|
|
Gains (losses) on cash flow hedges
|
135
|
|
|
(24
|
)
|
148
|
|
|
158
|
|
||||
Unrealized gains (losses) on securities
|
2
|
|
|
5
|
|
7
|
|
|
(4
|
)
|
||||
Foreign currency translation adjustments
|
199
|
|
|
(53
|
)
|
281
|
|
|
127
|
|
||||
Change in retirement plans’ funded status
|
63
|
|
|
66
|
|
132
|
|
|
126
|
|
||||
Other comprehensive income (loss), pretax
|
399
|
|
|
(6
|
)
|
568
|
|
|
407
|
|
||||
Provision for income tax, net
|
59
|
|
|
15
|
|
103
|
|
|
84
|
|
||||
Other comprehensive income (loss), net of tax
|
340
|
|
|
(21
|
)
|
465
|
|
|
323
|
|
||||
Comprehensive income
|
$
|
1,089
|
|
|
$
|
693
|
|
$
|
1,977
|
|
|
$
|
1,678
|
|
(Dollars in millions)
|
July 2, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
1,856
|
|
|
$
|
2,334
|
|
Accounts receivable
|
3,690
|
|
|
3,399
|
|
||
Unbilled receivables
|
5,045
|
|
|
4,212
|
|
||
Inventories
|
5,839
|
|
|
5,817
|
|
||
Other current assets
|
696
|
|
|
772
|
|
||
Total current assets
|
17,126
|
|
|
16,534
|
|
||
Noncurrent assets:
|
|
|
|
||||
Property, plant and equipment, net
|
3,424
|
|
|
3,477
|
|
||
Intangible assets, net
|
685
|
|
|
678
|
|
||
Goodwill
|
11,679
|
|
|
11,445
|
|
||
Other assets
|
879
|
|
|
1,038
|
|
||
Total noncurrent assets
|
16,667
|
|
|
16,638
|
|
||
Total assets
|
$
|
33,793
|
|
|
$
|
33,172
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt and current portion of long-term debt
|
$
|
989
|
|
|
$
|
900
|
|
Accounts payable
|
2,620
|
|
|
2,538
|
|
||
Customer advances and deposits
|
6,822
|
|
|
6,827
|
|
||
Other current liabilities
|
3,072
|
|
|
3,185
|
|
||
Total current liabilities
|
13,503
|
|
|
13,450
|
|
||
Noncurrent liabilities:
|
|
|
|
||||
Long-term debt
|
2,989
|
|
|
2,988
|
|
||
Other liabilities
|
6,349
|
|
|
6,433
|
|
||
Commitments and contingencies (see Note M)
|
|
|
|
|
|
||
Total noncurrent liabilities
|
9,338
|
|
|
9,421
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common stock
|
482
|
|
|
482
|
|
||
Surplus
|
2,796
|
|
|
2,819
|
|
||
Retained earnings
|
25,546
|
|
|
24,543
|
|
||
Treasury stock
|
(14,950
|
)
|
|
(14,156
|
)
|
||
Accumulated other comprehensive loss
|
(2,922
|
)
|
|
(3,387
|
)
|
||
Total shareholders’ equity
|
10,952
|
|
|
10,301
|
|
||
Total liabilities and shareholders
’
equity
|
$
|
33,793
|
|
|
$
|
33,172
|
|
|
Six Months Ended
|
||||||
(Dollars in millions)
|
July 2, 2017
|
|
July 3, 2016
|
||||
Cash flows from operating activities - continuing operations:
|
|
|
|
||||
Net earnings
|
$
|
1,512
|
|
|
$
|
1,355
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation of property, plant and equipment
|
182
|
|
|
181
|
|
||
Amortization of intangible assets
|
38
|
|
|
50
|
|
||
Equity-based compensation expense
|
49
|
|
|
51
|
|
||
Deferred income tax provision
|
93
|
|
|
10
|
|
||
Discontinued operations
|
—
|
|
|
13
|
|
||
(Increase) decrease in assets, net of effects of business acquisitions:
|
|
|
|
||||
Accounts receivable
|
(291
|
)
|
|
(38
|
)
|
||
Unbilled receivables
|
(815
|
)
|
|
(523
|
)
|
||
Inventories
|
(14
|
)
|
|
(84
|
)
|
||
Increase (decrease) in liabilities, net of effects of business acquisitions:
|
|
|
|
||||
Accounts payable
|
82
|
|
|
157
|
|
||
Customer advances and deposits
|
(29
|
)
|
|
(455
|
)
|
||
Other, net
|
203
|
|
|
156
|
|
||
Net cash provided by operating activities
|
1,010
|
|
|
873
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(153
|
)
|
|
(134
|
)
|
||
Other, net
|
(42
|
)
|
|
(51
|
)
|
||
Net cash used by investing activities
|
(195
|
)
|
|
(185
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Purchases of common stock
|
(901
|
)
|
|
(1,189
|
)
|
||
Dividends paid
|
(483
|
)
|
|
(447
|
)
|
||
Other, net
|
108
|
|
|
96
|
|
||
Net cash used by financing activities
|
(1,276
|
)
|
|
(1,540
|
)
|
||
Net cash used by discontinued operations
|
(17
|
)
|
|
(34
|
)
|
||
Net decrease in cash and equivalents
|
(478
|
)
|
|
(886
|
)
|
||
Cash and equivalents at beginning of period
|
2,334
|
|
|
2,785
|
|
||
Cash and equivalents at end of period
|
$
|
1,856
|
|
|
$
|
1,899
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash payments for:
|
|
|
|
||||
Income taxes
|
$
|
328
|
|
|
$
|
460
|
|
Interest
|
$
|
46
|
|
|
$
|
42
|
|
|
Common Stock
|
|
Retained
|
|
Treasury
|
|
Accumulated
Other
Comprehensive
|
|
Total
Shareholders’
|
||||||||||||||
(Dollars in millions)
|
Par
|
|
Surplus
|
|
Earnings
|
|
Stock
|
|
Loss
|
|
Equity
|
||||||||||||
December 31, 2016
|
$
|
482
|
|
|
$
|
2,819
|
|
|
$
|
24,543
|
|
|
$
|
(14,156
|
)
|
|
$
|
(3,387
|
)
|
|
$
|
10,301
|
|
Cumulative-effect adjustment (see Note A)
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
1,512
|
|
|
—
|
|
|
—
|
|
|
1,512
|
|
||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
(506
|
)
|
|
—
|
|
|
—
|
|
|
(506
|
)
|
||||||
Equity-based awards
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
99
|
|
|
—
|
|
|
76
|
|
||||||
Shares purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(893
|
)
|
|
—
|
|
|
(893
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
465
|
|
|
465
|
|
||||||
July 2, 2017
|
$
|
482
|
|
|
$
|
2,796
|
|
|
$
|
25,546
|
|
|
$
|
(14,950
|
)
|
|
$
|
(2,922
|
)
|
|
$
|
10,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 31, 2015
|
$
|
482
|
|
|
$
|
2,730
|
|
|
$
|
22,903
|
|
|
$
|
(12,392
|
)
|
|
$
|
(3,283
|
)
|
|
$
|
10,440
|
|
Net earnings
|
—
|
|
|
—
|
|
|
1,355
|
|
|
—
|
|
|
—
|
|
|
1,355
|
|
||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
(466
|
)
|
|
—
|
|
|
—
|
|
|
(466
|
)
|
||||||
Equity-based awards
|
—
|
|
|
26
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
116
|
|
||||||
Shares purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,189
|
)
|
|
—
|
|
|
(1,189
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
323
|
|
|
323
|
|
||||||
July 3, 2016
|
$
|
482
|
|
|
$
|
2,756
|
|
|
$
|
23,792
|
|
|
$
|
(13,491
|
)
|
|
$
|
(2,960
|
)
|
|
$
|
10,579
|
|
•
|
Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
|
•
|
Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers
|
•
|
ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
July 2, 2017
|
|
July 3, 2016
|
July 2, 2017
|
|
July 3, 2016
|
||||||||
Revenue
|
$
|
90
|
|
|
$
|
55
|
|
$
|
162
|
|
|
$
|
123
|
|
Operating earnings
|
121
|
|
|
59
|
|
171
|
|
|
117
|
|
||||
Diluted earnings per share
|
$
|
0.26
|
|
|
$
|
0.12
|
|
$
|
0.36
|
|
|
$
|
0.24
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
July 2, 2017
|
|
July 3, 2016
|
July 2, 2017
|
|
July 3, 2016
|
||||||||
Aircraft manufacturing, outfitting and completions
|
$
|
1,600
|
|
|
$
|
1,842
|
|
$
|
3,229
|
|
|
$
|
3,218
|
|
Aircraft services
|
445
|
|
|
404
|
|
880
|
|
|
805
|
|
||||
Pre-owned aircraft
|
33
|
|
|
38
|
|
43
|
|
|
42
|
|
||||
Total Aerospace
|
2,078
|
|
|
2,284
|
|
4,152
|
|
|
4,065
|
|
||||
Wheeled combat vehicles
|
566
|
|
|
545
|
|
1,126
|
|
|
1,108
|
|
||||
Weapons systems, armament and munitions
|
409
|
|
|
355
|
|
755
|
|
|
696
|
|
||||
Tanks and tracked vehicles
|
278
|
|
|
238
|
|
525
|
|
|
430
|
|
||||
Engineering and other services
|
161
|
|
|
159
|
|
295
|
|
|
308
|
|
||||
Total Combat Systems
|
1,414
|
|
|
1,297
|
|
2,701
|
|
|
2,542
|
|
||||
C4ISR* solutions
|
1,052
|
|
|
1,119
|
|
2,140
|
|
|
2,305
|
|
||||
Information technology (IT) services
|
1,052
|
|
|
1,096
|
|
2,110
|
|
|
2,238
|
|
||||
Total Information Systems and Technology
|
2,104
|
|
|
2,215
|
|
4,250
|
|
|
4,543
|
|
||||
Nuclear-powered submarines
|
1,342
|
|
|
1,278
|
|
2,546
|
|
|
2,665
|
|
||||
Surface combatants
|
254
|
|
|
282
|
|
501
|
|
|
555
|
|
||||
Auxiliary and commercial ships
|
155
|
|
|
152
|
|
298
|
|
|
301
|
|
||||
Repair and other services
|
328
|
|
|
266
|
|
668
|
|
|
579
|
|
||||
Total Marine Systems
|
2,079
|
|
|
1,978
|
|
4,013
|
|
|
4,100
|
|
||||
Total revenue
|
$
|
7,675
|
|
|
$
|
7,774
|
|
$
|
15,116
|
|
|
$
|
15,250
|
|
Three Months Ended July 2, 2017
|
Aerospace
|
|
Combat Systems
|
|
Information Systems and Technology
|
|
Marine Systems
|
|
Total
Revenue
|
||||||||||
Fixed-price
|
$
|
1,913
|
|
|
$
|
1,207
|
|
|
$
|
892
|
|
|
$
|
1,253
|
|
|
$
|
5,265
|
|
Cost-reimbursement
|
—
|
|
|
196
|
|
|
1,018
|
|
|
824
|
|
|
2,038
|
|
|||||
Time-and-materials
|
165
|
|
|
11
|
|
|
194
|
|
|
2
|
|
|
372
|
|
|||||
Total revenue
|
$
|
2,078
|
|
|
$
|
1,414
|
|
|
$
|
2,104
|
|
|
$
|
2,079
|
|
|
$
|
7,675
|
|
Three Months Ended July 3, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
$
|
2,133
|
|
|
$
|
1,081
|
|
|
$
|
1,010
|
|
|
$
|
1,223
|
|
|
$
|
5,447
|
|
Cost-reimbursement
|
—
|
|
|
207
|
|
|
994
|
|
|
752
|
|
|
1,953
|
|
|||||
Time-and-materials
|
151
|
|
|
9
|
|
|
211
|
|
|
3
|
|
|
374
|
|
|||||
Total revenue
|
$
|
2,284
|
|
|
$
|
1,297
|
|
|
$
|
2,215
|
|
|
$
|
1,978
|
|
|
$
|
7,774
|
|
Six Months Ended July 2, 2017
|
Aerospace
|
|
Combat Systems
|
|
Information Systems and Technology
|
|
Marine Systems
|
|
Total
Revenue
|
||||||||||
Fixed-price
|
$
|
3,815
|
|
|
$
|
2,280
|
|
|
$
|
1,822
|
|
|
$
|
2,383
|
|
|
$
|
10,300
|
|
Cost-reimbursement
|
—
|
|
|
403
|
|
|
2,028
|
|
|
1,625
|
|
|
4,056
|
|
|||||
Time-and-materials
|
337
|
|
|
18
|
|
|
400
|
|
|
5
|
|
|
760
|
|
|||||
Total revenue
|
$
|
4,152
|
|
|
$
|
2,701
|
|
|
$
|
4,250
|
|
|
$
|
4,013
|
|
|
$
|
15,116
|
|
Six Months Ended July 3, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
$
|
3,774
|
|
|
$
|
2,105
|
|
|
$
|
2,087
|
|
|
$
|
2,544
|
|
|
$
|
10,510
|
|
Cost-reimbursement
|
—
|
|
|
423
|
|
|
2,043
|
|
|
1,552
|
|
|
4,018
|
|
|||||
Time-and-materials
|
291
|
|
|
14
|
|
|
413
|
|
|
4
|
|
|
722
|
|
|||||
Total revenue
|
$
|
4,065
|
|
|
$
|
2,542
|
|
|
$
|
4,543
|
|
|
$
|
4,100
|
|
|
$
|
15,250
|
|
Three Months Ended July 2, 2017
|
Aerospace
|
|
Combat Systems
|
|
Information Systems and Technology
|
|
Marine Systems
|
|
Total
Revenue
|
||||||||||
U.S. government:
|
|
|
|
|
|
|
|
|
|
||||||||||
Department of Defense (DoD)
|
$
|
32
|
|
|
$
|
636
|
|
|
$
|
1,137
|
|
|
$
|
2,016
|
|
|
$
|
3,821
|
|
Non-DoD
|
—
|
|
|
25
|
|
|
663
|
|
|
—
|
|
|
688
|
|
|||||
Foreign Military Sales (FMS)
|
9
|
|
|
83
|
|
|
21
|
|
|
40
|
|
|
153
|
|
|||||
Total U.S. government
|
41
|
|
|
744
|
|
|
1,821
|
|
|
2,056
|
|
|
4,662
|
|
|||||
U.S. commercial
|
877
|
|
|
42
|
|
|
94
|
|
|
17
|
|
|
1,030
|
|
|||||
Non-U.S. government
|
64
|
|
|
594
|
|
|
155
|
|
|
4
|
|
|
817
|
|
|||||
Non-U.S. commercial
|
1,096
|
|
|
34
|
|
|
34
|
|
|
2
|
|
|
1,166
|
|
|||||
Total revenue
|
$
|
2,078
|
|
|
$
|
1,414
|
|
|
$
|
2,104
|
|
|
$
|
2,079
|
|
|
$
|
7,675
|
|
Three Months Ended July 3, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government:
|
|
|
|
|
|
|
|
|
|
||||||||||
DoD
|
$
|
64
|
|
|
$
|
499
|
|
|
$
|
1,198
|
|
|
$
|
1,840
|
|
|
$
|
3,601
|
|
Non-DoD
|
—
|
|
|
25
|
|
|
676
|
|
|
1
|
|
|
702
|
|
|||||
FMS
|
45
|
|
|
80
|
|
|
12
|
|
|
39
|
|
|
176
|
|
|||||
Total U.S. government
|
109
|
|
|
604
|
|
|
1,886
|
|
|
1,880
|
|
|
4,479
|
|
|||||
U.S. commercial
|
940
|
|
|
64
|
|
|
98
|
|
|
92
|
|
|
1,194
|
|
|||||
Non-U.S. government
|
238
|
|
|
603
|
|
|
181
|
|
|
6
|
|
|
1,028
|
|
|||||
Non-U.S. commercial
|
997
|
|
|
26
|
|
|
50
|
|
|
—
|
|
|
1,073
|
|
|||||
Total revenue
|
$
|
2,284
|
|
|
$
|
1,297
|
|
|
$
|
2,215
|
|
|
$
|
1,978
|
|
|
$
|
7,774
|
|
Six Months Ended July 2, 2017
|
Aerospace
|
|
Combat Systems
|
|
Information Systems and Technology
|
|
Marine Systems
|
|
Total
Revenue
|
||||||||||
U.S. government:
|
|
|
|
|
|
|
|
|
|
||||||||||
DoD
|
$
|
72
|
|
|
$
|
1,223
|
|
|
$
|
2,312
|
|
|
$
|
3,853
|
|
|
$
|
7,460
|
|
Non-DoD
|
—
|
|
|
49
|
|
|
1,328
|
|
|
—
|
|
|
1,377
|
|
|||||
FMS
|
18
|
|
|
191
|
|
|
33
|
|
|
98
|
|
|
340
|
|
|||||
Total U.S. government
|
90
|
|
|
1,463
|
|
|
3,673
|
|
|
3,951
|
|
|
9,177
|
|
|||||
U.S. commercial
|
1,813
|
|
|
103
|
|
|
183
|
|
|
50
|
|
|
2,149
|
|
|||||
Non-U.S. government
|
69
|
|
|
1,096
|
|
|
331
|
|
|
8
|
|
|
1,504
|
|
|||||
Non-U.S. commercial
|
2,180
|
|
|
39
|
|
|
63
|
|
|
4
|
|
|
2,286
|
|
|||||
Total revenue
|
$
|
4,152
|
|
|
$
|
2,701
|
|
|
$
|
4,250
|
|
|
$
|
4,013
|
|
|
$
|
15,116
|
|
Six Months Ended July 3, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government:
|
|
|
|
|
|
|
|
|
|
||||||||||
DoD
|
$
|
110
|
|
|
$
|
1,013
|
|
|
$
|
2,504
|
|
|
$
|
3,832
|
|
|
$
|
7,459
|
|
Non-DoD
|
—
|
|
|
45
|
|
|
1,394
|
|
|
3
|
|
|
1,442
|
|
|||||
FMS
|
90
|
|
|
155
|
|
|
24
|
|
|
76
|
|
|
345
|
|
|||||
Total U.S. government
|
200
|
|
|
1,213
|
|
|
3,922
|
|
|
3,911
|
|
|
9,246
|
|
|||||
U.S. commercial
|
1,913
|
|
|
119
|
|
|
185
|
|
|
177
|
|
|
2,394
|
|
|||||
Non-U.S. government
|
315
|
|
|
1,150
|
|
|
341
|
|
|
12
|
|
|
1,818
|
|
|||||
Non-U.S. commercial
|
1,637
|
|
|
60
|
|
|
95
|
|
|
—
|
|
|
1,792
|
|
|||||
Total revenue
|
$
|
4,065
|
|
|
$
|
2,542
|
|
|
$
|
4,543
|
|
|
$
|
4,100
|
|
|
$
|
15,250
|
|
|
Aerospace
|
|
Combat Systems
|
|
Information Systems and Technology
|
|
Marine Systems
|
|
Total
Goodwill
|
||||||||||
December 31, 2016 (a)
|
$
|
2,537
|
|
|
$
|
2,598
|
|
|
$
|
6,013
|
|
|
$
|
297
|
|
|
$
|
11,445
|
|
Acquisitions (b)
|
32
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
61
|
|
|||||
Other (c)
|
113
|
|
|
47
|
|
|
13
|
|
|
—
|
|
|
173
|
|
|||||
July 2, 2017 (a)
|
$
|
2,682
|
|
|
$
|
2,645
|
|
|
$
|
6,055
|
|
|
$
|
297
|
|
|
$
|
11,679
|
|
|
Gross Carrying Amount (a)
|
Accumulated Amortization
|
Net Carrying Amount
|
|
Gross Carrying Amount (a)
|
Accumulated Amortization
|
Net Carrying Amount
|
||||||||||||
|
July 2, 2017
|
|
December 31, 2016
|
||||||||||||||||
Contract and program intangible assets (b)
|
$
|
1,628
|
|
$
|
(1,287
|
)
|
$
|
341
|
|
|
$
|
1,633
|
|
$
|
(1,281
|
)
|
$
|
352
|
|
Trade names and trademarks
|
475
|
|
(157
|
)
|
318
|
|
|
446
|
|
(139
|
)
|
307
|
|
||||||
Technology and software
|
129
|
|
(104
|
)
|
25
|
|
|
121
|
|
(102
|
)
|
19
|
|
||||||
Other intangible assets
|
155
|
|
(154
|
)
|
1
|
|
|
154
|
|
(154
|
)
|
—
|
|
||||||
Total intangible assets
|
$
|
2,387
|
|
$
|
(1,702
|
)
|
$
|
685
|
|
|
$
|
2,354
|
|
$
|
(1,676
|
)
|
$
|
678
|
|
(a)
|
Change in gross carrying amounts consists primarily of adjustments for foreign currency translation and acquired intangible assets.
|
(b)
|
Consists of acquired backlog and probable follow-on work and associated customer relationships.
|
|
Three Months Ended
|
Six Months Ended
|
||||||
|
July 2, 2017
|
July 3, 2016
|
July 2, 2017
|
July 3, 2016
|
||||
Basic weighted average shares
outstanding
|
299,790
|
|
304,470
|
|
300,780
|
|
306,199
|
|
Dilutive effect of stock options and restricted stock/RSUs*
|
5,560
|
|
5,738
|
|
5,560
|
|
5,610
|
|
Diluted weighted average shares outstanding
|
305,350
|
|
310,208
|
|
306,340
|
|
311,809
|
|
•
|
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.
|
|
Carrying
Value
|
|
Fair
Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2) (b)
|
||||||||
Financial Assets (Liabilities) (a)
|
July 2, 2017
|
||||||||||||||
Available-for-sale securities
|
$
|
171
|
|
|
$
|
171
|
|
|
$
|
55
|
|
|
$
|
116
|
|
Cash flow hedges
|
(343
|
)
|
|
(343
|
)
|
|
—
|
|
|
(343
|
)
|
||||
Short- and long-term debt principal
|
(4,011
|
)
|
|
(3,975
|
)
|
|
—
|
|
|
(3,975
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2016
|
||||||||||||||
Available-for-sale securities
|
$
|
177
|
|
|
$
|
177
|
|
|
$
|
59
|
|
|
$
|
118
|
|
Cash flow hedges
|
(477
|
)
|
|
(477
|
)
|
|
—
|
|
|
(477
|
)
|
||||
Short- and long-term debt principal
|
(3,924
|
)
|
|
(3,849
|
)
|
|
—
|
|
|
(3,849
|
)
|
|
July 2, 2017
|
|
December 31, 2016
|
||||
Deferred tax asset
|
$
|
392
|
|
|
$
|
564
|
|
Deferred tax liability
|
(202
|
)
|
|
(183
|
)
|
||
Net deferred tax asset
|
$
|
190
|
|
|
$
|
381
|
|
|
July 2, 2017
|
|
December 31, 2016
|
||||
Unbilled revenue
|
$
|
27,400
|
|
|
$
|
25,543
|
|
Advances and progress billings
|
(22,355
|
)
|
|
(21,331
|
)
|
||
Net unbilled receivables
|
$
|
5,045
|
|
|
$
|
4,212
|
|
|
July 2, 2017
|
|
December 31, 2016
|
||||
Work in process
|
$
|
3,917
|
|
|
$
|
3,643
|
|
Raw materials
|
1,360
|
|
|
1,429
|
|
||
Finished goods
|
27
|
|
|
24
|
|
||
Pre-owned aircraft
|
10
|
|
|
22
|
|
||
Other contract costs
|
525
|
|
|
699
|
|
||
Total inventories
|
$
|
5,839
|
|
|
$
|
5,817
|
|
|
|
July 2, 2017
|
|
December 31, 2016
|
||||
Fixed-rate notes due:
|
Interest rate:
|
|
|
|
||||
November 2017
|
1.000%
|
$
|
900
|
|
|
$
|
900
|
|
July 2021
|
3.875%
|
500
|
|
|
500
|
|
||
November 2022
|
2.250%
|
1,000
|
|
|
1,000
|
|
||
August 2023
|
1.875%
|
500
|
|
|
500
|
|
||
August 2026
|
2.125%
|
500
|
|
|
500
|
|
||
November 2042
|
3.600%
|
500
|
|
|
500
|
|
||
Other
|
Various
|
111
|
|
|
24
|
|
||
Total debt principal
|
|
4,011
|
|
|
3,924
|
|
||
Less unamortized debt issuance costs and discounts
|
|
33
|
|
|
36
|
|
||
Total debt
|
|
3,978
|
|
|
3,888
|
|
||
Less current portion
|
|
989
|
|
|
900
|
|
||
Long-term debt
|
|
$
|
2,989
|
|
|
$
|
2,988
|
|
|
July 2, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Salaries and wages
|
$
|
692
|
|
|
$
|
693
|
|
Fair value of cash flow hedges
|
419
|
|
|
521
|
|
||
Workers’ compensation
|
338
|
|
|
337
|
|
||
Retirement benefits
|
297
|
|
|
303
|
|
||
Other (a)
|
1,326
|
|
|
1,331
|
|
||
Total other current liabilities
|
$
|
3,072
|
|
|
$
|
3,185
|
|
|
|
|
|
||||
Retirement benefits
|
$
|
4,310
|
|
|
$
|
4,393
|
|
Customer deposits on commercial contracts
|
695
|
|
|
719
|
|
||
Deferred income taxes
|
202
|
|
|
183
|
|
||
Other (b)
|
1,142
|
|
|
1,138
|
|
||
Total other liabilities
|
$
|
6,349
|
|
|
$
|
6,433
|
|
|
Losses on Cash Flow Hedges
|
Unrealized Gains on Securities
|
Foreign Currency Translation Adjustments
|
Changes in Retirement Plans’ Funded Status
|
AOCL
|
||||||||||
December 31, 2016
|
$
|
(345
|
)
|
$
|
14
|
|
$
|
69
|
|
$
|
(3,125
|
)
|
$
|
(3,387
|
)
|
Other comprehensive income, pretax
|
148
|
|
7
|
|
281
|
|
132
|
|
568
|
|
|||||
Provision for income tax, net
|
39
|
|
2
|
|
15
|
|
47
|
|
103
|
|
|||||
Other comprehensive income, net of tax
|
109
|
|
5
|
|
266
|
|
85
|
|
465
|
|
|||||
July 2, 2017
|
$
|
(236
|
)
|
$
|
19
|
|
$
|
335
|
|
$
|
(3,040
|
)
|
$
|
(2,922
|
)
|
December 31, 2015
|
$
|
(487
|
)
|
$
|
20
|
|
$
|
181
|
|
$
|
(2,997
|
)
|
$
|
(3,283
|
)
|
Other comprehensive income, pretax
|
158
|
|
(4
|
)
|
127
|
|
126
|
|
407
|
|
|||||
Provision for income tax, net
|
37
|
|
(2
|
)
|
3
|
|
46
|
|
84
|
|
|||||
Other comprehensive income, net of tax
|
121
|
|
(2
|
)
|
124
|
|
80
|
|
323
|
|
|||||
July 3, 2016
|
$
|
(366
|
)
|
$
|
18
|
|
$
|
305
|
|
$
|
(2,917
|
)
|
$
|
(2,960
|
)
|
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
||||
Beginning balance
|
$
|
474
|
|
|
$
|
434
|
|
Warranty expense
|
65
|
|
|
64
|
|
||
Payments
|
(46
|
)
|
|
(42
|
)
|
||
Adjustments
|
(28
|
)
|
|
(12
|
)
|
||
Ending balance
|
$
|
465
|
|
|
$
|
444
|
|
|
Pension Benefits
|
Other Post-retirement Benefits
|
||||||||||||
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
July 2, 2017
|
|
July 3, 2016
|
||||||||
Service cost
|
$
|
42
|
|
|
$
|
44
|
|
$
|
3
|
|
|
$
|
2
|
|
Interest cost
|
113
|
|
|
114
|
|
9
|
|
|
9
|
|
||||
Expected return on plan assets
|
(170
|
)
|
|
(178
|
)
|
(9
|
)
|
|
(8
|
)
|
||||
Recognized net actuarial loss (gain)
|
86
|
|
|
84
|
|
(1
|
)
|
|
(1
|
)
|
||||
Amortization of prior service credit
|
(16
|
)
|
|
(17
|
)
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit cost
|
$
|
55
|
|
|
$
|
47
|
|
$
|
1
|
|
|
$
|
1
|
|
Six Months Ended
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
84
|
|
|
$
|
88
|
|
$
|
6
|
|
|
$
|
5
|
|
Interest cost
|
226
|
|
|
228
|
|
17
|
|
|
17
|
|
||||
Expected return on plan assets
|
(339
|
)
|
|
(356
|
)
|
(17
|
)
|
|
(16
|
)
|
||||
Recognized net actuarial loss (gain)
|
172
|
|
|
168
|
|
(2
|
)
|
|
(2
|
)
|
||||
Amortization of prior service credit
|
(33
|
)
|
|
(34
|
)
|
(2
|
)
|
|
(3
|
)
|
||||
Net periodic benefit cost
|
$
|
110
|
|
|
$
|
94
|
|
$
|
2
|
|
|
$
|
1
|
|
|
Revenue
|
Operating Earnings
|
||||||||||
Three Months Ended
|
July 2, 2017
|
July 3, 2016
|
July 2, 2017
|
July 3, 2016
|
||||||||
Aerospace
|
$
|
2,078
|
|
$
|
2,284
|
|
$
|
425
|
|
$
|
424
|
|
Combat Systems
|
1,414
|
|
1,297
|
|
225
|
|
205
|
|
||||
Information Systems and Technology
|
2,104
|
|
2,215
|
|
240
|
|
234
|
|
||||
Marine Systems
|
2,079
|
|
1,978
|
|
178
|
|
172
|
|
||||
Corporate*
|
—
|
|
—
|
|
(12
|
)
|
(8
|
)
|
||||
Total
|
$
|
7,675
|
|
$
|
7,774
|
|
$
|
1,056
|
|
$
|
1,027
|
|
Six Months Ended
|
|
|
|
|
||||||||
Aerospace
|
$
|
4,152
|
|
$
|
4,065
|
|
$
|
868
|
|
$
|
756
|
|
Combat Systems
|
2,701
|
|
2,542
|
|
430
|
|
392
|
|
||||
Information Systems and Technology
|
4,250
|
|
4,543
|
|
476
|
|
471
|
|
||||
Marine Systems
|
4,013
|
|
4,100
|
|
339
|
|
356
|
|
||||
Corporate*
|
—
|
|
—
|
|
(22
|
)
|
(24
|
)
|
||||
Total
|
$
|
15,116
|
|
$
|
15,250
|
|
$
|
2,091
|
|
$
|
1,951
|
|
Three Months Ended July 2, 2017
|
Parent
|
Guarantors
on a
Combined
Basis
|
Other
Subsidiaries
on a
Combined
Basis
|
Consolidating
Adjustments
|
Total
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
$
|
6,732
|
|
$
|
943
|
|
$
|
—
|
|
$
|
7,675
|
|
Cost of sales
|
—
|
|
5,400
|
|
714
|
|
—
|
|
6,114
|
|
|||||
G&A
|
13
|
|
416
|
|
76
|
|
—
|
|
505
|
|
|||||
Operating earnings
|
(13
|
)
|
916
|
|
153
|
|
—
|
|
1,056
|
|
|||||
Interest, net
|
(23
|
)
|
—
|
|
(1
|
)
|
—
|
|
(24
|
)
|
|||||
Earnings before income tax
|
(36
|
)
|
916
|
|
152
|
|
—
|
|
1,032
|
|
|||||
Provision for income tax, net
|
(26
|
)
|
301
|
|
8
|
|
—
|
|
283
|
|
|||||
Equity in net earnings of subsidiaries
|
759
|
|
—
|
|
—
|
|
(759
|
)
|
—
|
|
|||||
Net earnings
|
$
|
749
|
|
$
|
615
|
|
$
|
144
|
|
$
|
(759
|
)
|
$
|
749
|
|
Comprehensive income
|
$
|
1,089
|
|
$
|
642
|
|
$
|
427
|
|
$
|
(1,069
|
)
|
$
|
1,089
|
|
Three Months Ended July 3, 2016
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
—
|
|
$
|
6,808
|
|
$
|
966
|
|
$
|
—
|
|
$
|
7,774
|
|
Cost of sales
|
(2
|
)
|
5,514
|
|
750
|
|
—
|
|
6,262
|
|
|||||
G&A
|
9
|
|
402
|
|
74
|
|
—
|
|
485
|
|
|||||
Operating earnings
|
(7
|
)
|
892
|
|
142
|
|
—
|
|
1,027
|
|
|||||
Interest, net
|
(23
|
)
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
|||||
Other, net
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Earnings before income tax
|
(29
|
)
|
892
|
|
142
|
|
—
|
|
1,005
|
|
|||||
Provision for income tax, net
|
(23
|
)
|
287
|
|
27
|
|
—
|
|
291
|
|
|||||
Equity in net earnings of subsidiaries
|
720
|
|
—
|
|
—
|
|
(720
|
)
|
—
|
|
|||||
Net earnings
|
$
|
714
|
|
$
|
605
|
|
$
|
115
|
|
$
|
(720
|
)
|
$
|
714
|
|
Comprehensive income
|
$
|
693
|
|
$
|
602
|
|
$
|
69
|
|
$
|
(671
|
)
|
$
|
693
|
|
Six Months Ended July 2, 2017
|
Parent
|
Guarantors
on a
Combined
Basis
|
Other
Subsidiaries
on a
Combined
Basis
|
Consolidating
Adjustments
|
Total
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
$
|
13,276
|
|
$
|
1,840
|
|
$
|
—
|
|
$
|
15,116
|
|
Cost of sales
|
(3
|
)
|
10,641
|
|
1,401
|
|
—
|
|
12,039
|
|
|||||
G&A
|
24
|
|
810
|
|
152
|
|
—
|
|
986
|
|
|||||
Operating earnings
|
(21
|
)
|
1,825
|
|
287
|
|
—
|
|
2,091
|
|
|||||
Interest, net
|
(47
|
)
|
—
|
|
(2
|
)
|
—
|
|
(49
|
)
|
|||||
Earnings before income tax
|
(68
|
)
|
1,825
|
|
285
|
|
—
|
|
2,042
|
|
|||||
Provision for income tax, net
|
(93
|
)
|
594
|
|
29
|
|
—
|
|
530
|
|
|||||
Equity in net earnings of subsidiaries
|
1,487
|
|
—
|
|
—
|
|
(1,487
|
)
|
—
|
|
|||||
Net earnings
|
$
|
1,512
|
|
$
|
1,231
|
|
$
|
256
|
|
$
|
(1,487
|
)
|
$
|
1,512
|
|
Comprehensive income
|
$
|
1,977
|
|
$
|
1,259
|
|
$
|
634
|
|
$
|
(1,893
|
)
|
$
|
1,977
|
|
Six Months Ended July 3, 2016
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
—
|
|
$
|
13,407
|
|
$
|
1,843
|
|
$
|
—
|
|
$
|
15,250
|
|
Cost of sales
|
2
|
|
10,905
|
|
1,446
|
|
—
|
|
12,353
|
|
|||||
G&A
|
20
|
|
781
|
|
145
|
|
—
|
|
946
|
|
|||||
Operating earnings
|
(22
|
)
|
1,721
|
|
252
|
|
—
|
|
1,951
|
|
|||||
Interest, net
|
(46
|
)
|
—
|
|
1
|
|
—
|
|
(45
|
)
|
|||||
Other, net
|
10
|
|
1
|
|
—
|
|
—
|
|
11
|
|
|||||
Earnings before income tax
|
(58
|
)
|
1,722
|
|
253
|
|
—
|
|
1,917
|
|
|||||
Provision for income tax, net
|
(51
|
)
|
549
|
|
51
|
|
—
|
|
549
|
|
|||||
Discontinued operations
|
(13
|
)
|
—
|
|
—
|
|
—
|
|
(13
|
)
|
|||||
Equity in net earnings of subsidiaries
|
1,375
|
|
—
|
|
—
|
|
(1,375
|
)
|
—
|
|
|||||
Net earnings
|
$
|
1,355
|
|
$
|
1,173
|
|
$
|
202
|
|
$
|
(1,375
|
)
|
$
|
1,355
|
|
Comprehensive income
|
$
|
1,678
|
|
$
|
1,168
|
|
$
|
469
|
|
$
|
(1,637
|
)
|
$
|
1,678
|
|
Six Months Ended July 2, 2017
|
Parent
|
Guarantors
on a
Combined
Basis
|
Other
Subsidiaries
on a
Combined
Basis
|
Consolidating
Adjustments
|
Total
Consolidated
|
||||||||||
Net cash provided by operating activities*
|
$
|
215
|
|
$
|
846
|
|
$
|
(51
|
)
|
$
|
—
|
|
$
|
1,010
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(6
|
)
|
(114
|
)
|
(33
|
)
|
—
|
|
(153
|
)
|
|||||
Other, net
|
—
|
|
9
|
|
(51
|
)
|
—
|
|
(42
|
)
|
|||||
Net cash used by investing activities
|
(6
|
)
|
(105
|
)
|
(84
|
)
|
—
|
|
(195
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Purchases of common stock
|
(901
|
)
|
—
|
|
—
|
|
—
|
|
(901
|
)
|
|||||
Dividends paid
|
(483
|
)
|
—
|
|
—
|
|
—
|
|
(483
|
)
|
|||||
Other, net
|
21
|
|
(1
|
)
|
88
|
|
—
|
|
108
|
|
|||||
Net cash used by financing activities
|
(1,363
|
)
|
(1
|
)
|
88
|
|
—
|
|
(1,276
|
)
|
|||||
Net cash used by discontinued operations
|
(17
|
)
|
—
|
|
—
|
|
—
|
|
(17
|
)
|
|||||
Cash sweep/funding by parent
|
764
|
|
(740
|
)
|
(24
|
)
|
—
|
|
—
|
|
|||||
Net decrease in cash and equivalents
|
(407
|
)
|
—
|
|
(71
|
)
|
—
|
|
(478
|
)
|
|||||
Cash and equivalents at beginning of period
|
1,254
|
|
—
|
|
1,080
|
|
—
|
|
2,334
|
|
|||||
Cash and equivalents at end of period
|
$
|
847
|
|
$
|
—
|
|
$
|
1,009
|
|
$
|
—
|
|
$
|
1,856
|
|
Six Months Ended July 3, 2016
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities*
|
$
|
280
|
|
$
|
399
|
|
$
|
194
|
|
$
|
—
|
|
$
|
873
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(3
|
)
|
(111
|
)
|
(20
|
)
|
—
|
|
(134
|
)
|
|||||
Other, net
|
1
|
|
(15
|
)
|
(37
|
)
|
—
|
|
(51
|
)
|
|||||
Net cash used by investing activities
|
(2
|
)
|
(126
|
)
|
(57
|
)
|
—
|
|
(185
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Purchases of common stock
|
(1,189
|
)
|
—
|
|
—
|
|
—
|
|
(1,189
|
)
|
|||||
Dividends paid
|
(447
|
)
|
—
|
|
—
|
|
—
|
|
(447
|
)
|
|||||
Other, net
|
61
|
|
(1
|
)
|
36
|
|
—
|
|
96
|
|
|||||
Net cash used by financing activities
|
(1,575
|
)
|
(1
|
)
|
36
|
|
—
|
|
(1,540
|
)
|
|||||
Net cash used by discontinued operations
|
(34
|
)
|
—
|
|
—
|
|
—
|
|
(34
|
)
|
|||||
Cash sweep/funding by parent
|
610
|
|
(272
|
)
|
(338
|
)
|
—
|
|
—
|
|
|||||
Net decrease in cash and equivalents
|
(721
|
)
|
—
|
|
(165
|
)
|
—
|
|
(886
|
)
|
|||||
Cash and equivalents at beginning of period
|
1,732
|
|
—
|
|
1,053
|
|
—
|
|
2,785
|
|
|||||
Cash and equivalents at end of period
|
$
|
1,011
|
|
$
|
—
|
|
$
|
888
|
|
$
|
—
|
|
$
|
1,899
|
|
|
Three Months Ended
|
|
Effect of the Adoption of
|
|
Three Months Ended
|
|||||||||||||||
|
July 3, 2016
|
|
ASU
|
|
ASC
|
|
ASU
|
|
July 3, 2016
|
|||||||||||
(Dollars in millions, except per-share amounts)
|
As Reported
|
|
2016-09
|
|
Topic 606
|
|
2015-17
|
|
As Adjusted
|
|||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Products
|
$
|
4,848
|
|
|
$
|
—
|
|
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
4,943
|
|
|
Services
|
2,817
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
2,831
|
|
||||||
|
7,665
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
7,774
|
|
||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
3,747
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
3,889
|
|
||||||
Services
|
2,362
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
2,373
|
|
||||||
G&A
|
486
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
485
|
|
||||||
|
6,595
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
6,747
|
|
||||||
Operating earnings
|
1,070
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
1,027
|
|
||||||
Interest, net
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||
Other, net
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Earnings before income tax
|
1,048
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
1,005
|
|
||||||
Provision for income tax, net
|
290
|
|
|
15
|
|
|
(14
|
)
|
|
—
|
|
|
291
|
|
||||||
Net earnings
|
$
|
758
|
|
|
$
|
(15
|
)
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
$
|
2.49
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
—
|
|
|
$
|
2.35
|
|
|
Diluted
|
$
|
2.44
|
|
—
|
|
$
|
(0.04
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
—
|
|
|
$
|
2.30
|
|
|
Six Months Ended
|
|
Effect of the Adoption of
|
|
Six Months Ended
|
||||||||||||||
|
July 3, 2016
|
|
ASU
|
|
ASC
|
|
ASU
|
|
July 3, 2016
|
||||||||||
(Dollars in millions, except per-share amounts)
|
As Reported
|
|
2016-09
|
|
Topic 606
|
|
2015-17
|
|
As Adjusted
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
$
|
9,712
|
|
|
$
|
—
|
|
|
$
|
(187
|
)
|
|
$
|
—
|
|
|
$
|
9,525
|
|
Services
|
5,677
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
5,725
|
|
|||||
|
15,389
|
|
|
—
|
|
|
(139
|
)
|
|
—
|
|
|
15,250
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
7,530
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
7,524
|
|
|||||
Services
|
4,790
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
4,829
|
|
|||||
G&A
|
946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
946
|
|
|||||
|
13,266
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
13,299
|
|
|||||
Operating earnings
|
2,123
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
1,951
|
|
|||||
Interest, net
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|||||
Other, net
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Earnings from continuing operations
before income tax
|
2,089
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
1,917
|
|
|||||
Provision for income tax, net
|
601
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
549
|
|
|||||
Earnings from continuing operations
|
1,488
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
1,368
|
|
|||||
Discontinued operations
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||
Net earnings
|
$
|
1,475
|
|
|
$
|
—
|
|
|
$
|
(120
|
)
|
|
$
|
—
|
|
|
$
|
1,355
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
4.86
|
|
|
$
|
—
|
|
|
$
|
(0.39
|
)
|
|
$
|
—
|
|
|
$
|
4.47
|
|
Discontinued operations
|
(0.04
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
|||||
Net earnings
|
$
|
4.82
|
|
|
$
|
—
|
|
|
$
|
(0.39
|
)
|
|
$
|
—
|
|
|
$
|
4.43
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
4.77
|
|
|
$
|
—
|
|
|
$
|
(0.38
|
)
|
|
$
|
—
|
|
|
$
|
4.39
|
|
Discontinued operations
|
(0.04
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
|||||
Net earnings
|
$
|
4.73
|
|
|
$
|
—
|
|
|
$
|
(0.38
|
)
|
|
$
|
—
|
|
|
$
|
4.35
|
|
|
Three Months Ended
|
|
Effect of the Adoption of
|
|
Three Months Ended
|
||||||||||||||
|
July 3, 2016
|
|
ASU
|
|
ASC
|
|
ASU
|
|
July 3, 2016
|
||||||||||
(Dollars in millions)
|
As Reported
|
|
2016-09
|
|
Topic 606
|
|
2015-17
|
|
As Adjusted
|
||||||||||
Net earnings
|
$
|
758
|
|
|
$
|
(15
|
)
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
714
|
|
Losses on cash flow hedges
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Unrealized gains on securities
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Foreign currency translation adjustments
|
(56
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(53
|
)
|
|||||
Change in retirement plans’ funded status
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|||||
Other comprehensive loss, pretax
|
(9
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(6
|
)
|
|||||
Provision for income tax, net
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||
Other comprehensive loss, net of tax
|
(24
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(21
|
)
|
|||||
Comprehensive income
|
$
|
734
|
|
|
$
|
(15
|
)
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
693
|
|
|
Six Months Ended
|
|
Effect of the Adoption of
|
|
Six Months Ended
|
||||||||||||||
|
July 3, 2016
|
|
ASU
|
|
ASC
|
|
ASU
|
|
July 3, 2016
|
||||||||||
(Dollars in millions)
|
As Reported
|
|
2016-09
|
|
Topic 606
|
|
2015-17
|
|
As Adjusted
|
||||||||||
Net earnings
|
$
|
1,475
|
|
|
$
|
—
|
|
|
$
|
(120
|
)
|
|
$
|
—
|
|
|
$
|
1,355
|
|
Gains on cash flow hedges
|
158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|||||
Unrealized losses on securities
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Foreign currency translation adjustments
|
125
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
127
|
|
|||||
Change in retirement plans’ funded status
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|||||
Other comprehensive income, pretax
|
405
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
407
|
|
|||||
Provision for income tax, net
|
84
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|||||
Other comprehensive income, net of tax
|
321
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
323
|
|
|||||
Comprehensive income
|
$
|
1,796
|
|
|
$
|
—
|
|
|
$
|
(118
|
)
|
|
$
|
—
|
|
|
$
|
1,678
|
|
|
|
|
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
|
|
|
Six Months
Ended
|
|
Effect of the Adoption of
|
|
Six Months
Ended
|
||||||||||||||
|
July 3, 2016
|
|
ASU
|
|
ASC
|
|
ASU
|
|
July 3, 2016
|
||||||||||
(Dollars in millions)
|
As Reported
|
|
2016-09
|
|
Topic 606
|
|
2015-17
|
|
As Adjusted
|
||||||||||
Cash flows from operating activities -
continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings
|
$
|
1,475
|
|
|
$
|
—
|
|
|
$
|
(120
|
)
|
|
$
|
—
|
|
|
$
|
1,355
|
|
Adjustments to reconcile net earnings to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation of property, plant and equipment
|
182
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
181
|
|
|||||
Amortization of intangible assets
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|||||
Equity-based compensation expense
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Deferred income tax provision
|
62
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
10
|
|
|||||
Discontinued operations
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
(Increase) decrease in assets, net of effects of
business acquisitions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable
|
(83
|
)
|
|
—
|
|
|
45
|
|
|
—
|
|
|
(38
|
)
|
|||||
Unbilled receivables
|
(619
|
)
|
|
—
|
|
|
96
|
|
|
—
|
|
|
(523
|
)
|
|||||
Inventories
|
(150
|
)
|
|
—
|
|
|
66
|
|
|
—
|
|
|
(84
|
)
|
|||||
Increase (decrease) in liabilities, net of effects of
business acquisitions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
157
|
|
|||||
Customer advances and deposits
|
(423
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
(455
|
)
|
|||||
Other, net
|
158
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
156
|
|
|||||
Net cash provided by operating activities
|
873
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
873
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(134
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(134
|
)
|
|||||
Other, net
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|||||
Net cash used by investing activities
|
(185
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of common stock
|
(1,189
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,189
|
)
|
|||||
Dividends paid
|
(447
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(447
|
)
|
|||||
Other, net
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|||||
Net cash used by financing activities
|
(1,540
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,540
|
)
|
|||||
Net cash used by discontinued operations
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|||||
Net decrease in cash and equivalents
|
(886
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(886
|
)
|
|||||
Cash and equivalents at beginning of period
|
2,785
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,785
|
|
|||||
Cash and equivalents at end of period
|
$
|
1,899
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,899
|
|
|
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
|
|
||||||
Six months ended July 3, 2016 - as
reported
|
—
|
|
|
26
|
|
|
1,009
|
|
|
(1,099
|
)
|
|
321
|
|
|
257
|
|
||||||
Effect of the adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Effect of the adoption of ASC Topic 606
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
2
|
|
|
(118
|
)
|
||||||
Effect of the adoption of ASU 2015-17
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
July 3, 2016 - as adjusted
|
$
|
482
|
|
|
$
|
2,756
|
|
|
$
|
23,792
|
|
|
$
|
(13,491
|
)
|
|
$
|
(2,960
|
)
|
|
$
|
10,579
|
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
7,675
|
|
|
$
|
7,774
|
|
|
$
|
(99
|
)
|
|
(1.3
|
)%
|
Operating costs and expenses
|
6,619
|
|
|
6,747
|
|
|
(128
|
)
|
|
(1.9
|
)%
|
|||
Operating earnings
|
1,056
|
|
|
1,027
|
|
|
29
|
|
|
2.8
|
%
|
|||
Operating margin
|
13.8
|
%
|
|
13.2
|
%
|
|
|
|
|
|||||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
15,116
|
|
|
$
|
15,250
|
|
|
$
|
(134
|
)
|
|
(0.9
|
)%
|
Operating costs and expenses
|
13,025
|
|
|
13,299
|
|
|
(274
|
)
|
|
(2.1
|
)%
|
|||
Operating earnings
|
2,091
|
|
|
1,951
|
|
|
140
|
|
|
7.2
|
%
|
|||
Operating margin
|
13.8
|
%
|
|
12.8
|
%
|
|
|
|
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
2,078
|
|
|
$
|
2,284
|
|
|
$
|
(206
|
)
|
|
(9.0
|
)%
|
Operating earnings
|
425
|
|
|
424
|
|
|
1
|
|
|
0.2
|
%
|
|||
Operating margin
|
20.5
|
%
|
|
18.6
|
%
|
|
|
|
|
|||||
Gulfstream aircraft deliveries (in units)
|
30
|
|
|
36
|
|
(6
|
)
|
|
(16.7
|
)%
|
||||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
4,152
|
|
|
$
|
4,065
|
|
|
$
|
87
|
|
|
2.1
|
%
|
Operating earnings
|
868
|
|
|
756
|
|
|
112
|
|
|
14.8
|
%
|
|||
Operating margin
|
20.9
|
%
|
|
18.6
|
%
|
|
|
|
|
|||||
Gulfstream aircraft deliveries (in units)
|
60
|
|
|
64
|
|
(4
|
)
|
|
(6.3
|
)%
|
|
Second Quarter
|
|
Six Months
|
||||
Aircraft manufacturing, outfitting and completions
|
$
|
(242
|
)
|
|
$
|
11
|
|
Aircraft services
|
41
|
|
|
75
|
|
||
Pre-owned aircraft
|
(5
|
)
|
|
1
|
|
||
Total (decrease) increase
|
$
|
(206
|
)
|
|
$
|
87
|
|
|
Second Quarter
|
|
Six Months
|
||||
Aircraft manufacturing, outfitting and completions
|
$
|
(4
|
)
|
|
$
|
120
|
|
Aircraft services
|
5
|
|
|
(2
|
)
|
||
Pre-owned aircraft
|
2
|
|
|
4
|
|
||
G&A/other expenses
|
(2
|
)
|
|
(10
|
)
|
||
Total increase
|
$
|
1
|
|
|
$
|
112
|
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
1,414
|
|
|
$
|
1,297
|
|
|
$
|
117
|
|
|
9.0
|
%
|
Operating earnings
|
225
|
|
|
205
|
|
|
20
|
|
|
9.8
|
%
|
|||
Operating margin
|
15.9
|
%
|
|
15.8
|
%
|
|
|
|
|
|||||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
2,701
|
|
|
$
|
2,542
|
|
|
$
|
159
|
|
|
6.3
|
%
|
Operating earnings
|
430
|
|
|
392
|
|
|
38
|
|
|
9.7
|
%
|
|||
Operating margin
|
15.9
|
%
|
|
15.4
|
%
|
|
|
|
|
|
Second Quarter
|
|
Six Months
|
||||
U.S. military vehicles
|
$
|
68
|
|
|
$
|
112
|
|
Weapons systems and munitions
|
55
|
|
|
66
|
|
||
International military vehicles
|
(6
|
)
|
|
(19
|
)
|
||
Total increase
|
$
|
117
|
|
|
$
|
159
|
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
2,104
|
|
|
$
|
2,215
|
|
|
$
|
(111
|
)
|
|
(5.0
|
)%
|
Operating earnings
|
240
|
|
|
234
|
|
|
6
|
|
|
2.6
|
%
|
|||
Operating margin
|
11.4
|
%
|
|
10.6
|
%
|
|
|
|
|
|||||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
4,250
|
|
|
$
|
4,543
|
|
|
$
|
(293
|
)
|
|
(6.4
|
)%
|
Operating earnings
|
476
|
|
|
471
|
|
|
5
|
|
|
1.1
|
%
|
|||
Operating margin
|
11.2
|
%
|
|
10.4
|
%
|
|
|
|
|
|
Second Quarter
|
|
Six Months
|
||||
C4ISR solutions
|
$
|
(67
|
)
|
|
$
|
(165
|
)
|
IT services
|
(44
|
)
|
|
(128
|
)
|
||
Total decrease
|
$
|
(111
|
)
|
|
$
|
(293
|
)
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
2,079
|
|
|
$
|
1,978
|
|
|
$
|
101
|
|
|
5.1
|
%
|
Operating earnings
|
178
|
|
|
172
|
|
|
6
|
|
|
3.5
|
%
|
|||
Operating margin
|
8.6
|
%
|
|
8.7
|
%
|
|
|
|
|
|||||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
4,013
|
|
|
$
|
4,100
|
|
|
$
|
(87
|
)
|
|
(2.1
|
)%
|
Operating earnings
|
339
|
|
|
356
|
|
|
(17
|
)
|
|
(4.8
|
)%
|
|||
Operating margin
|
8.4
|
%
|
|
8.7
|
%
|
|
|
|
|
|
Second Quarter
|
|
Six Months
|
||||
U.S. Navy ship engineering, repair and other services
|
$
|
135
|
|
|
$
|
228
|
|
U.S. Navy ship construction
|
39
|
|
|
(191
|
)
|
||
Commercial ship construction
|
(73
|
)
|
|
(124
|
)
|
||
Total increase (decrease)
|
$
|
101
|
|
|
$
|
(87
|
)
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
4,654
|
|
|
$
|
4,943
|
|
|
$
|
(289
|
)
|
|
(5.8
|
)%
|
Operating costs
|
3,582
|
|
|
3,889
|
|
|
(307
|
)
|
|
(7.9
|
)%
|
|||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
9,121
|
|
|
$
|
9,525
|
|
|
$
|
(404
|
)
|
|
(4.2
|
)%
|
Operating costs
|
7,018
|
|
|
7,524
|
|
|
(506
|
)
|
|
(6.7
|
)%
|
|
Second Quarter
|
|
Six Months
|
||||
Aircraft manufacturing, outfitting and completions
|
$
|
(242
|
)
|
|
$
|
11
|
|
C4ISR products
|
(79
|
)
|
|
(157
|
)
|
||
Ship construction
|
(31
|
)
|
|
(316
|
)
|
||
Other, net
|
63
|
|
|
58
|
|
||
Total decrease
|
$
|
(289
|
)
|
|
$
|
(404
|
)
|
Three Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
3,021
|
|
|
$
|
2,831
|
|
|
$
|
190
|
|
|
6.7
|
%
|
Operating costs
|
2,532
|
|
|
2,373
|
|
|
159
|
|
|
6.7
|
%
|
|||
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
|
Variance
|
|||||||||
Revenue
|
$
|
5,995
|
|
|
$
|
5,725
|
|
|
$
|
270
|
|
|
4.7
|
%
|
Operating costs
|
5,021
|
|
|
4,829
|
|
|
192
|
|
|
4.0
|
%
|
|
Second Quarter
|
|
Six Months
|
||||
Ship engineering, repair and other services
|
$
|
132
|
|
|
$
|
229
|
|
Aircraft services
|
41
|
|
|
75
|
|
||
Other, net
|
17
|
|
|
(34
|
)
|
||
Total increase
|
$
|
190
|
|
|
$
|
270
|
|
|
Funded
|
|
Unfunded
|
|
Total Backlog
|
|
Estimated Potential Contract Value
|
|
Total Estimated Contract Value
|
||||||||||
|
July 2, 2017
|
||||||||||||||||||
Aerospace
|
$
|
12,116
|
|
|
$
|
120
|
|
|
$
|
12,236
|
|
|
$
|
1,911
|
|
|
$
|
14,147
|
|
Combat Systems
|
16,749
|
|
|
281
|
|
|
17,030
|
|
|
4,845
|
|
|
21,875
|
|
|||||
Information Systems
and Technology
|
6,809
|
|
|
2,085
|
|
|
8,894
|
|
|
14,389
|
|
|
23,283
|
|
|||||
Marine Systems
|
16,033
|
|
|
4,374
|
|
|
20,407
|
|
|
3,282
|
|
|
23,689
|
|
|||||
Total
|
$
|
51,707
|
|
|
$
|
6,860
|
|
|
$
|
58,567
|
|
|
$
|
24,427
|
|
|
$
|
82,994
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
April 2, 2017
|
||||||||||||||||||
Aerospace
|
$
|
12,446
|
|
|
$
|
133
|
|
|
$
|
12,579
|
|
|
$
|
1,929
|
|
|
$
|
14,508
|
|
Combat Systems
|
17,058
|
|
|
523
|
|
|
17,581
|
|
|
4,970
|
|
|
22,551
|
|
|||||
Information Systems
and Technology |
6,682
|
|
|
2,038
|
|
|
8,720
|
|
|
13,994
|
|
|
22,714
|
|
|||||
Marine Systems
|
17,071
|
|
|
4,413
|
|
|
21,484
|
|
|
3,756
|
|
|
25,240
|
|
|||||
Total
|
$
|
53,257
|
|
|
$
|
7,107
|
|
|
$
|
60,364
|
|
|
$
|
24,649
|
|
|
$
|
85,013
|
|
•
|
$110 to provide munitions to a customer in the Middle East.
|
•
|
$75 to provide munitions to the U.S. Air Force and U.S. Army.
|
•
|
$45 from the Army in support of the Stryker wheeled combat vehicle program, including the production of vehicles with a 30-millimeter cannon.
|
•
|
$40 to produce gun systems for the F-35 Joint Strike Fighter.
|
•
|
$30 to continue the conversion of M1A2 tanks to the M1A2S configuration for the Kingdom of Saudi Arabia and for engineering and logistics support services for the U.S. Army's Abrams family of vehicles.
|
•
|
$165 from the Centers for Medicare & Medicaid Services for contact center services.
|
•
|
$125 from the Army for ruggedized computing equipment under the
CHS-4 program.
|
•
|
$105 from the U.S. Navy for combat and seaframe control systems on an Independence-variant Littoral Combat Ship (LCS). Options for the systems on three additional ships added $270 to the group's estimated potential contract value.
|
•
|
$60 to provide support for live and virtual operations under the Warfighter Field Operations Customer Support (FOCUS) program.
|
•
|
$50 to provide engineering, manufacturing and development in support of the Navy's Air and Missile Defense Radar (AMDR) program.
|
•
|
$40 from the Navy to provide training and training-related program support services for the Center for Surface Combat Systems (CSCS). This contract has a potential value of approximately $245 over five years.
|
•
|
$40 from the U.S. Coast Guard to provide system sustainment support for the Rescue 21 program.
|
•
|
$35 from the Army to provide continued software support and engineering for the
WIN-T Increment 2 program.
|
•
|
$35 from the U.S. Geological Survey to perform hardware and software upgrades for the Landsat 8 satellite program.
|
•
|
$565 from the Navy for design work on the Columbia-class submarine program and Advanced Nuclear Plant Studies (ANPS) in support of the program.
|
•
|
$110 from the Navy to procure long-lead materials for two Virginia-class submarines under Block V of the program.
|
•
|
$105 from the Navy for maintenance, modernization and repair work on the USS Makin Island, an LHD-class amphibious assault ship.
|
•
|
$55 for initial design and construction work for the second ship in the TAO-205 next-generation fleet oiler program.
|
•
|
$45 from the Navy to provide maintenance, modernization and repair services for submarines located at Naval Submarine Base New London in Connecticut.
|
•
|
$35 from the Navy for on-board repair parts for two Virginia-class submarines under Block IV of the program.
|
Six Months Ended
|
July 2, 2017
|
|
July 3, 2016
|
||||
Net cash provided by operating activities
|
$
|
1,010
|
|
|
$
|
873
|
|
Capital expenditures
|
(153
|
)
|
|
(134
|
)
|
||
Free cash flow from operations
|
$
|
857
|
|
|
$
|
739
|
|
Cash flows as a percentage of earnings from continuing operations:
|
|
|
|
||||
Net cash provided by operating activities
|
67
|
%
|
|
64
|
%
|
||
Free cash flow from operations
|
57
|
%
|
|
54
|
%
|
•
|
general U.S. and international political and economic conditions;
|
•
|
decreases in U.S. government defense spending or changing priorities within the defense budget;
|
•
|
termination or restructuring of government contracts due to unilateral government action;
|
•
|
differences in anticipated and actual program performance, including the ability to perform under long-term, fixed-price contracts within estimated costs, and performance issues with key suppliers and subcontractors;
|
•
|
expected recovery on contract claims and requests for equitable adjustment;
|
•
|
changing customer demand or preferences for business aircraft, including the effects of economic conditions on the business-aircraft market;
|
•
|
potential for changing prices for energy and raw materials; and
|
•
|
the status or outcome of legal and/or regulatory proceedings.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Program
|
|||||
Pursuant to Share Buyback Program
|
|
|
|
|
|||||||||
4/3/17-4/30/17
|
|
855,000
|
|
|
$
|
189.33
|
|
|
855,000
|
|
|
12,653,754
|
|
5/1/17-5/28/17
|
|
808,058
|
|
|
196.22
|
|
|
808,058
|
|
|
11,845,696
|
|
|
5/29/17-7/2/17
|
|
1,080,000
|
|
|
201.16
|
|
|
1,080,000
|
|
|
10,765,696
|
|
|
|
|
2,743,058
|
|
|
$
|
196.02
|
|
|
|
|
|
10.1*
|
10.2*
|
10.3*
|
10.4*
|
10.5*
|
31.1
|
31.2
|
32.1
|
32.2
|
101
|
Interactive Data File**
|
|
GENERAL DYNAMICS CORPORATION
|
|
|
by
|
|
|
|
William A. Moss
|
|
|
Vice President and Controller
|
|
|
(Authorized Officer and Chief Accounting Officer)
|
Dated: July 26, 2017
|
|
|
1)
|
I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
/s/ Phebe N. Novakovic
|
|
Phebe N. Novakovic
|
|
Chairman and Chief Executive Officer
|
1)
|
I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Jason W. Aiken
|
|
Jason W. Aiken
|
|
Senior Vice President and Chief Financial Officer
|
1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Phebe N. Novakovic
|
|
Phebe N. Novakovic
|
|
Chairman and Chief Executive Officer
|
1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Jason W. Aiken
|
|
Jason W. Aiken
|
|
Senior Vice President and Chief Financial Officer
|