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Delaware
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52-2314475
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(State or other jurisdiction
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(I.R.S. Employer
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of incorporation or organization)
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Identification No.)
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400 Collins Road NE
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Cedar Rapids, Iowa
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52498
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page No.
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PART I
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Condensed Consolidated Financial Statements
|
|
June 30,
2017 |
|
September 30,
2016 |
||||
ASSETS
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|
||||
Current Assets:
|
|
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|
||||
Cash and cash equivalents
|
$
|
578
|
|
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$
|
340
|
|
Receivables, net
|
1,644
|
|
|
1,094
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|
||
Inventories, net
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2,506
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|
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1,939
|
|
||
Other current assets
|
167
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|
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117
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|
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Total current assets
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4,895
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|
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3,490
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||||
Property
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1,328
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|
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1,035
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|
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Goodwill
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8,602
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|
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1,919
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|
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Customer Relationship Intangible Assets
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2,092
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|
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467
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|
||
Other Intangible Assets
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905
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|
|
200
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|
||
Deferred Income Tax Asset
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29
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|
|
219
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|
||
Other Assets
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500
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|
|
369
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|
||
TOTAL ASSETS
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$
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18,351
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|
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$
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7,699
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LIABILITIES AND EQUITY
|
|
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Current Liabilities:
|
|
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|
||
Short-term debt
|
$
|
511
|
|
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$
|
740
|
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Accounts payable
|
787
|
|
|
527
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|
||
Compensation and benefits
|
325
|
|
|
269
|
|
||
Advance payments from customers
|
349
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|
|
283
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|
||
Accrued customer incentives
|
278
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|
|
246
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|
||
Product warranty costs
|
202
|
|
|
87
|
|
||
Other current liabilities
|
422
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|
|
194
|
|
||
Total current liabilities
|
2,874
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|
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2,346
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||||
Long-term Debt, Net
|
7,268
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|
|
1,374
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|
||
Retirement Benefits
|
1,523
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|
|
1,660
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Deferred Income Tax Liability
|
417
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1
|
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Other Liabilities
|
660
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234
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||||
Equity:
|
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Common stock ($0.01 par value; shares authorized: 1,000; shares issued: June 30, 2017, 175.0; September 30, 2016, 143.8)
|
2
|
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|
1
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||
Additional paid-in capital
|
4,542
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|
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1,506
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Retained earnings
|
3,679
|
|
|
3,327
|
|
||
Accumulated other comprehensive loss
|
(1,806
|
)
|
|
(1,898
|
)
|
||
Common stock in treasury, at cost (shares held: June 30, 2017, 12.6; September 30, 2016, 13.6)
|
(814
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)
|
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(858
|
)
|
||
Total shareowners’ equity
|
5,603
|
|
|
2,078
|
|
||
Noncontrolling interest
|
6
|
|
|
6
|
|
||
Total equity
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5,609
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|
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2,084
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||
TOTAL LIABILITIES AND EQUITY
|
$
|
18,351
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|
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$
|
7,699
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Three Months Ended
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Nine Months Ended
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||||||||||||
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June 30
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June 30
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||||||||||||
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2017
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2016
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2017
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2016
|
||||||||
Sales:
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||||||||
Product sales
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$
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1,836
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$
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1,129
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$
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3,935
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$
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3,198
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Service sales
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258
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205
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|
694
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616
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|
||||
Total sales
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2,094
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1,334
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4,629
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3,814
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||||
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||||||||
Costs, expenses and other:
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Product cost of sales
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1,352
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|
772
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2,799
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2,223
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|
||||
Service cost of sales
|
172
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143
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471
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435
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|
||||
Selling, general and administrative expenses
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213
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158
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514
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481
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||||
Transaction and integration costs
|
64
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|
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—
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80
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|
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—
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|
||||
Interest expense
|
77
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|
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16
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122
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48
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|
||||
Other income, net
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(5
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)
|
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(2
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)
|
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(14
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)
|
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(12
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)
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||||
Total costs, expenses and other
|
1,873
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|
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1,087
|
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3,972
|
|
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3,175
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||||
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||||||||
Income from continuing operations before income taxes
|
221
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247
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657
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639
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Income tax expense
|
42
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33
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165
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|
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120
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||||
Income from continuing operations
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179
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214
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492
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519
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Income from discontinued operations, net of taxes
|
—
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—
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—
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1
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||||||||
Net income
|
$
|
179
|
|
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$
|
214
|
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$
|
492
|
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$
|
520
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||||||||
Earnings per share:
|
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|
||||||||
Basic
|
|
|
|
|
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|
||||||||
Continuing operations
|
$
|
1.13
|
|
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$
|
1.65
|
|
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$
|
3.52
|
|
|
$
|
3.97
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Basic earnings per share
|
$
|
1.13
|
|
|
$
|
1.65
|
|
|
$
|
3.52
|
|
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$
|
3.98
|
|
|
|
|
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|
||||||||
Diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.12
|
|
|
$
|
1.63
|
|
|
$
|
3.48
|
|
|
$
|
3.92
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Diluted earnings per share
|
$
|
1.12
|
|
|
$
|
1.63
|
|
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$
|
3.48
|
|
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$
|
3.93
|
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||||||||
Weighted average common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
158.2
|
|
|
130.0
|
|
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139.8
|
|
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130.7
|
|
||||
Diluted
|
159.9
|
|
|
131.5
|
|
|
141.4
|
|
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132.3
|
|
||||
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|
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||||||||
Cash dividends per share
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.99
|
|
|
$
|
0.99
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
179
|
|
|
$
|
214
|
|
|
$
|
492
|
|
|
$
|
520
|
|
Unrealized foreign currency translation and other adjustments
|
50
|
|
|
(16
|
)
|
|
41
|
|
|
(16
|
)
|
||||
Pension and other retirement benefits adjustments (net of taxes for the three and nine months ended June 30, 2017 of $9 and $27, respectively; net of taxes for the three and nine months ended June 30, 2016 of $7 and $23, respectively)
|
15
|
|
|
14
|
|
|
47
|
|
|
40
|
|
||||
Foreign currency cash flow hedge adjustments (net of taxes for the three and nine months ended June 30, 2017 of $0 and $1, respectively; net of taxes for the three and nine months ended June 30, 2016 of $1 and $2, respectively)
|
2
|
|
|
—
|
|
|
4
|
|
|
3
|
|
||||
Comprehensive income
|
$
|
246
|
|
|
$
|
212
|
|
|
$
|
584
|
|
|
$
|
547
|
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
|
2017
|
|
2016
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
492
|
|
|
$
|
520
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
1
|
|
||
Income from continuing operations
|
492
|
|
|
519
|
|
||
Adjustments to arrive at cash provided by operating activities:
|
|
|
|
||||
Non-cash restructuring charges
|
—
|
|
|
6
|
|
||
Depreciation
|
118
|
|
|
107
|
|
||
Amortization of intangible assets, pre-production engineering costs and other
|
132
|
|
|
84
|
|
||
Amortization of acquired contract liability
|
(42
|
)
|
|
—
|
|
||
Amortization of inventory fair value adjustment
|
44
|
|
|
—
|
|
||
Stock-based compensation expense
|
21
|
|
|
21
|
|
||
Compensation and benefits paid in common stock
|
48
|
|
|
41
|
|
||
Deferred income taxes
|
18
|
|
|
39
|
|
||
Pension plan contributions
|
(66
|
)
|
|
(66
|
)
|
||
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments:
|
|
|
|
||||
Receivables
|
(60
|
)
|
|
(163
|
)
|
||
Production inventory
|
(88
|
)
|
|
(73
|
)
|
||
Pre-production engineering costs
|
(108
|
)
|
|
(141
|
)
|
||
Accounts payable
|
21
|
|
|
3
|
|
||
Compensation and benefits
|
(19
|
)
|
|
(15
|
)
|
||
Advance payments from customers
|
1
|
|
|
(102
|
)
|
||
Accrued customer incentives
|
(17
|
)
|
|
13
|
|
||
Product warranty costs
|
(4
|
)
|
|
(6
|
)
|
||
Income taxes
|
(56
|
)
|
|
3
|
|
||
Other assets and liabilities
|
(19
|
)
|
|
(47
|
)
|
||
Cash Provided by Operating Activities from Continuing Operations
|
416
|
|
|
223
|
|
||
Investing Activities:
|
|
|
|
||||
Property additions
|
(165
|
)
|
|
(133
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(3,429
|
)
|
|
(17
|
)
|
||
Other investing activities
|
(5
|
)
|
|
(1
|
)
|
||
Cash (Used for) Investing Activities from Continuing Operations
|
(3,599
|
)
|
|
(151
|
)
|
||
Financing Activities:
|
|
|
|
||||
Repayment of current portion of long-term debt
|
(338
|
)
|
|
—
|
|
||
Repayment of acquired long-term debt
|
(2,119
|
)
|
|
—
|
|
||
Purchases of treasury stock
|
(46
|
)
|
|
(261
|
)
|
||
Cash dividends
|
(140
|
)
|
|
(129
|
)
|
||
Increase in long-term borrowings
|
6,099
|
|
|
—
|
|
||
Increase (decrease) in short-term commercial paper borrowings, net
|
(78
|
)
|
|
364
|
|
||
Proceeds from the exercise of stock options
|
41
|
|
|
15
|
|
||
Other financing activities
|
(4
|
)
|
|
(2
|
)
|
||
Cash Provided by (Used for) Financing Activities from Continuing Operations
|
3,415
|
|
|
(13
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
6
|
|
|
(4
|
)
|
||
Cash Provided by Discontinued Operations
|
—
|
|
|
—
|
|
||
Net Change in Cash and Cash Equivalents
|
238
|
|
|
55
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
340
|
|
|
252
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
578
|
|
|
$
|
307
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Shares Outstanding
|
|
Par Value
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||||
Balance at September 30, 2016
|
130.2
|
|
|
$
|
1
|
|
|
$
|
1,506
|
|
|
$
|
3,327
|
|
|
$
|
(1,898
|
)
|
|
$
|
(858
|
)
|
|
$
|
6
|
|
|
$
|
2,084
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
492
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|||||||
Shares issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options
|
0.7
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
41
|
|
|||||||
Vesting of performance shares and restricted stock units
|
0.2
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(5
|
)
|
|||||||
Employee stock purchase plan
|
0.1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
7
|
|
|||||||
Employee savings plan
|
0.4
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
41
|
|
|||||||
B/E Aerospace business acquisition
|
31.2
|
|
|
1
|
|
|
3,014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,015
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||||
Treasury share repurchases
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
|||||||
Balance at June 30, 2017
|
162.4
|
|
|
$
|
2
|
|
|
$
|
4,542
|
|
|
$
|
3,679
|
|
|
$
|
(1,806
|
)
|
|
$
|
(814
|
)
|
|
$
|
6
|
|
|
$
|
5,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2015
|
131.9
|
|
|
$
|
2
|
|
|
$
|
1,519
|
|
|
$
|
5,124
|
|
|
$
|
(1,699
|
)
|
|
$
|
(3,071
|
)
|
|
$
|
5
|
|
|
$
|
1,880
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
520
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|||||||
Shares issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options
|
0.3
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
15
|
|
|||||||
Vesting of performance shares and restricted stock units
|
0.1
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
(7
|
)
|
|||||||
Employee stock purchase plan
|
0.1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
8
|
|
|||||||
Employee savings plan
|
0.4
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
33
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||||
Treasury share repurchases
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
—
|
|
|
(255
|
)
|
|||||||
Treasury share retirements
(1)
|
—
|
|
|
(1
|
)
|
|
(44
|
)
|
|
(2,353
|
)
|
|
—
|
|
|
2,398
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||||
Balance at June 30, 2016
|
129.9
|
|
|
$
|
1
|
|
|
$
|
1,495
|
|
|
$
|
3,162
|
|
|
$
|
(1,672
|
)
|
|
$
|
(878
|
)
|
|
$
|
6
|
|
|
$
|
2,114
|
|
1.
|
Business Description and Basis of Presentation
|
2.
|
Recently Issued Accounting Standards
|
3.
|
Acquisitions, Goodwill and Intangible Assets
|
(in millions)
|
April 13, 2017
|
||
Cash and cash equivalents
|
$
|
104
|
|
Receivables, net
|
496
|
|
|
Inventories, net
(1)
|
556
|
|
|
Other current assets
|
56
|
|
|
Property
|
253
|
|
|
Intangible Assets
|
2,381
|
|
|
Other Assets
|
59
|
|
|
Total Identifiable Assets Acquired
|
3,905
|
|
|
|
|
||
Accounts payable
|
(251
|
)
|
|
Compensation and benefits
|
(75
|
)
|
|
Advance payments from customers
|
(62
|
)
|
|
Accrued customer incentives
|
(48
|
)
|
|
Product warranty costs
|
(117
|
)
|
|
Other current liabilities
(2)
|
(361
|
)
|
|
Long-term Debt, Net
|
(2,119
|
)
|
|
Retirement Benefits
|
(12
|
)
|
|
Deferred Income Tax Liability
|
(521
|
)
|
|
Other Liabilities
(2)
|
(448
|
)
|
|
Total Liabilities Assumed
|
(4,014
|
)
|
|
Net Identifiable Assets Acquired, excluding Goodwill
|
(109
|
)
|
|
Goodwill
|
6,645
|
|
|
Net Assets Acquired
|
$
|
6,536
|
|
|
Weighted Average Life (in years)
|
|
Fair Value
(in millions)
|
||
Developed technology
|
12
|
|
$
|
723
|
|
Airline customer relationships
|
10
|
|
1,450
|
|
|
OEM customer relationships
|
13
|
|
208
|
|
|
Total
|
11
|
|
$
|
2,381
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Transaction and integration costs
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
Interest expense
|
|
18
|
|
|
—
|
|
|
29
|
|
|
—
|
|
||||
Total Transaction, integration and financing costs
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
109
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Pro forma sales
|
$
|
2,219
|
|
|
$
|
2,087
|
|
|
$
|
6,182
|
|
|
$
|
5,943
|
|
Pro forma net income attributable to common shareowners from continuing operations
|
247
|
|
|
263
|
|
|
636
|
|
|
466
|
|
||||
Pro forma basic earnings per share from continuing operations
|
1.53
|
|
|
1.63
|
|
|
3.93
|
|
|
2.88
|
|
||||
Pro forma diluted earnings per share from continuing operations
|
1.52
|
|
|
1.62
|
|
|
3.89
|
|
|
2.85
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Increases/ (decreases) to pro forma net income:
|
|
|
|
|
|
|
|
||||||||
Net reduction to depreciation resulting from fixed asset adjustments
(1)
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
11
|
|
|
$
|
16
|
|
Advisory, legal and accounting service fees
(2)
|
123
|
|
|
—
|
|
|
156
|
|
|
(123
|
)
|
||||
Amortization of acquired B/E Aerospace intangible assets, net
(3)
|
(6
|
)
|
|
(36
|
)
|
|
(79
|
)
|
|
(109
|
)
|
||||
Interest expense incurred on acquisition financing, net
(4)
|
8
|
|
|
(16
|
)
|
|
(17
|
)
|
|
(49
|
)
|
||||
Long-term contract program adjustments
(5)
|
(6
|
)
|
|
(21
|
)
|
|
(59
|
)
|
|
(104
|
)
|
||||
Acquired contract liability amortization
(6)
|
3
|
|
|
30
|
|
|
62
|
|
|
109
|
|
||||
Inventory fair value adjustment amortization
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
||||
Compensation adjustments
(8)
|
—
|
|
|
4
|
|
|
6
|
|
|
10
|
|
(in millions)
|
Interior Systems
|
|
Commercial
Systems
|
|
Government
Systems
|
|
Information Management Services
|
|
Total
|
||||||||||
Balance at September 30, 2016
|
$
|
—
|
|
|
$
|
326
|
|
|
$
|
503
|
|
|
$
|
1,090
|
|
|
$
|
1,919
|
|
B/E Aerospace acquisition
|
6,645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,645
|
|
|||||
Pulse.aero acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||
Foreign currency translation adjustments
|
24
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
26
|
|
|||||
Balance at June 30, 2017
|
$
|
6,669
|
|
|
$
|
326
|
|
|
$
|
504
|
|
|
$
|
1,103
|
|
|
$
|
8,602
|
|
|
June 30, 2017
|
|
September 30, 2016
|
||||||||||||||||||||
(in millions)
|
Gross
|
|
Accum
Amort
|
|
Net
|
|
Gross
|
|
Accum
Amort
|
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technology and patents
|
$
|
1,092
|
|
|
$
|
(242
|
)
|
|
$
|
850
|
|
|
$
|
354
|
|
|
$
|
(216
|
)
|
|
$
|
138
|
|
Backlog
|
6
|
|
|
(4
|
)
|
|
2
|
|
|
6
|
|
|
(3
|
)
|
|
3
|
|
||||||
Customer relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Acquired
|
2,001
|
|
|
(156
|
)
|
|
1,845
|
|
|
340
|
|
|
(106
|
)
|
|
234
|
|
||||||
Up-front sales incentives
|
336
|
|
|
(89
|
)
|
|
247
|
|
|
313
|
|
|
(80
|
)
|
|
233
|
|
||||||
License agreements
|
15
|
|
|
(10
|
)
|
|
5
|
|
|
14
|
|
|
(10
|
)
|
|
4
|
|
||||||
Trademarks and tradenames
|
15
|
|
|
(14
|
)
|
|
1
|
|
|
15
|
|
|
(14
|
)
|
|
1
|
|
||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and tradenames
|
47
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||||
In process research and development
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Intangible assets
|
$
|
3,512
|
|
|
$
|
(515
|
)
|
|
$
|
2,997
|
|
|
$
|
1,096
|
|
|
$
|
(429
|
)
|
|
$
|
667
|
|
(in millions)
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||
Anticipated amortization expense for up-front sales incentives
|
$
|
13
|
|
|
$
|
19
|
|
|
$
|
25
|
|
|
$
|
28
|
|
|
$
|
28
|
|
|
$
|
143
|
|
Anticipated amortization expense for all other intangible assets
|
143
|
|
|
262
|
|
|
259
|
|
|
257
|
|
|
257
|
|
|
1,602
|
|
||||||
Total
|
$
|
156
|
|
|
$
|
281
|
|
|
$
|
284
|
|
|
$
|
285
|
|
|
$
|
285
|
|
|
$
|
1,745
|
|
4.
|
Discontinued Operations and Divestitures
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Income tax (expense) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
5.
|
Receivables, Net
|
(in millions)
|
June 30,
2017 |
|
September 30,
2016 |
||||
Billed
|
$
|
1,211
|
|
|
$
|
748
|
|
Unbilled
|
485
|
|
|
439
|
|
||
Less progress payments
|
(44
|
)
|
|
(87
|
)
|
||
Total
|
1,652
|
|
|
1,100
|
|
||
Less allowance for doubtful accounts
|
(8
|
)
|
|
(6
|
)
|
||
Receivables, net
|
$
|
1,644
|
|
|
$
|
1,094
|
|
6.
|
Inventories, Net
|
(in millions)
|
June 30,
2017 |
|
September 30,
2016 |
||||
Finished goods
|
$
|
306
|
|
|
$
|
210
|
|
Work in process
|
340
|
|
|
236
|
|
||
Raw materials, parts and supplies
|
702
|
|
|
354
|
|
||
Less progress payments
|
(10
|
)
|
|
(1
|
)
|
||
Total
|
1,338
|
|
|
799
|
|
||
Pre-production engineering costs
|
1,168
|
|
|
1,140
|
|
||
Inventories, net
|
$
|
2,506
|
|
|
$
|
1,939
|
|
(in millions)
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||
Anticipated amortization expense for pre-production engineering costs
|
$
|
59
|
|
|
$
|
99
|
|
|
$
|
137
|
|
|
$
|
157
|
|
|
$
|
148
|
|
|
$
|
611
|
|
7.
|
Property
|
(in millions)
|
June 30,
2017 |
|
September 30, 2016
|
||||
Land
|
$
|
20
|
|
|
$
|
15
|
|
Buildings and improvements
|
569
|
|
|
468
|
|
||
Machinery and equipment
|
1,359
|
|
|
1,218
|
|
||
Information systems software and hardware
|
496
|
|
|
435
|
|
||
Furniture and fixtures
|
85
|
|
|
74
|
|
||
Capital leases
|
58
|
|
|
58
|
|
||
Construction in progress
|
229
|
|
|
183
|
|
||
Total
|
2,816
|
|
|
2,451
|
|
||
Less accumulated depreciation
|
(1,488
|
)
|
|
(1,416
|
)
|
||
Property
|
$
|
1,328
|
|
|
$
|
1,035
|
|
8.
|
Other Assets
|
(in millions)
|
June 30,
2017 |
|
September 30,
2016 |
||||
Long-term receivables
|
$
|
199
|
|
|
$
|
146
|
|
Investments in equity affiliates
|
7
|
|
|
10
|
|
||
Exchange and rental assets (net of accumulated depreciation of $105 at June 30, 2017 and $101 at September 30, 2016)
|
71
|
|
|
68
|
|
||
Other
|
223
|
|
|
145
|
|
||
Other Assets
|
$
|
500
|
|
|
$
|
369
|
|
9.
|
Debt
|
(in millions, except weighted average amounts)
|
June 30,
2017 |
|
September 30,
2016 |
||||
Short-term commercial paper borrowings outstanding
(1)
|
$
|
362
|
|
|
$
|
440
|
|
Current portion of long-term debt
|
149
|
|
|
300
|
|
||
Short-term debt
|
$
|
511
|
|
|
$
|
740
|
|
Weighted average interest rate of commercial paper borrowings
|
1.43
|
%
|
|
0.79
|
%
|
||
Weighted average maturity period of commercial paper borrowings (days)
|
12
|
|
|
15
|
|
(in millions, except interest rate figures)
|
Interest Rate
|
|
June 30,
2017 |
|
September 30,
2016 |
||||
Fixed-rate notes due:
|
|
|
|
|
|
||||
July 2019
|
1.95%
|
|
$
|
300
|
|
|
$
|
—
|
|
July 2019
|
5.25%
|
|
300
|
|
|
300
|
|
||
November 2021
|
3.10%
|
|
250
|
|
|
250
|
|
||
March 2022
|
2.80%
|
|
1,100
|
|
|
—
|
|
||
December 2023
|
3.70%
|
|
400
|
|
|
400
|
|
||
March 2024
|
3.20%
|
|
950
|
|
|
—
|
|
||
March 2027
|
3.50%
|
|
1,300
|
|
|
—
|
|
||
December 2043
|
4.80%
|
|
400
|
|
|
400
|
|
||
April 2047
|
4.35%
|
|
1,000
|
|
|
—
|
|
||
Variable-rate term loan due:
|
|
|
|
|
|
||||
April 2020
|
1 month LIBOR + 1.25%
(1)
|
|
1,462
|
|
|
—
|
|
||
Variable-rate note due:
|
|
|
|
|
|
||||
December 2016
|
3 month LIBOR + 0.35%
|
|
—
|
|
|
300
|
|
||
Fair value swap adjustment (see Notes 14 and 15)
|
|
|
15
|
|
|
35
|
|
||
Total
|
|
|
7,477
|
|
|
1,685
|
|
||
Less unamortized debt issuance costs and discounts
|
|
|
60
|
|
|
11
|
|
||
Less current portion of long-term debt
|
|
|
149
|
|
|
300
|
|
||
Long-term Debt, Net
|
|
|
$
|
7,268
|
|
|
$
|
1,374
|
|
(1)
The Company has the option to elect a one, two, three or six-month LIBOR interest rate and has elected the one-month rate during the third quarter of 2017. The one-month LIBOR rate at June 30, 2017 was approximately 1.13 percent.
|
10.
|
Retirement Benefits
|
|
Pension Benefits
|
|
Other Retirement Benefits
|
||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
28
|
|
|
32
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(61
|
)
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
||||||
Prior service credit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net actuarial loss
|
23
|
|
|
20
|
|
|
2
|
|
|
2
|
|
||||
Net benefit expense (income)
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
3
|
|
|
$
|
3
|
|
|
Pension Benefits
|
|
Other Retirement Benefits
|
||||||||||||
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
83
|
|
|
95
|
|
|
4
|
|
|
4
|
|
||||
Expected return on plan assets
|
(181
|
)
|
|
(179
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net actuarial loss
|
69
|
|
|
59
|
|
|
6
|
|
|
6
|
|
||||
Net benefit expense (income)
|
$
|
(19
|
)
|
|
$
|
(18
|
)
|
|
$
|
10
|
|
|
$
|
10
|
|
11.
|
Stock-Based Compensation and Earnings Per Share
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Stock-based compensation expense included in:
|
|
|
|
|
|
|
|
||||||||
Product cost of sales
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Selling, general and administrative expenses
|
6
|
|
|
5
|
|
|
15
|
|
|
15
|
|
||||
Total
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
21
|
|
|
$
|
21
|
|
Income tax benefit
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
Options
|
|
Performance Shares
|
|
Restricted Stock Units
|
||||||||||||
(shares in thousands)
|
Number Issued
|
Weighted Average Fair Value
|
|
Number Issued
|
Weighted Average Fair Value
|
|
Number Issued
|
Weighted Average Fair Value
|
|||||||||
Nine months ended June 30, 2017
|
667.2
|
|
$
|
17.26
|
|
|
129.0
|
|
$
|
87.38
|
|
|
224.2
|
|
$
|
91.94
|
|
Nine months ended June 30, 2016
|
641.5
|
|
$
|
17.75
|
|
|
131.0
|
|
$
|
85.13
|
|
|
70.4
|
|
$
|
85.91
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
179
|
|
|
$
|
214
|
|
|
$
|
492
|
|
|
$
|
519
|
|
Income from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net income
|
$
|
179
|
|
|
$
|
214
|
|
|
$
|
492
|
|
|
$
|
520
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share – weighted average common shares
|
158.2
|
|
|
130.0
|
|
|
139.8
|
|
|
130.7
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
1.1
|
|
|
1.0
|
|
|
1.1
|
|
|
1.1
|
|
||||
Performance shares, restricted stock and restricted stock units
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
||||
Dilutive potential common shares
|
1.7
|
|
|
1.5
|
|
|
1.6
|
|
|
1.6
|
|
||||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion
|
159.9
|
|
|
131.5
|
|
|
141.4
|
|
|
132.3
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.13
|
|
|
$
|
1.65
|
|
|
$
|
3.52
|
|
|
$
|
3.97
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Basic earnings per share
|
$
|
1.13
|
|
|
$
|
1.65
|
|
|
$
|
3.52
|
|
|
$
|
3.98
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.12
|
|
|
$
|
1.63
|
|
|
$
|
3.48
|
|
|
$
|
3.92
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Diluted earnings per share
|
$
|
1.12
|
|
|
$
|
1.63
|
|
|
$
|
3.48
|
|
|
$
|
3.93
|
|
12.
|
Accumulated Other Comprehensive Loss
|
|
Foreign Exchange Translation Adjustment
|
|
Pension and Other Postretirement Adjustments
(1)
|
|
Change in the Fair Value of Effective Cash Flow Hedges
|
|
Total
|
||||||||
Balance at March 31, 2017
|
$
|
(85
|
)
|
|
$
|
(1,786
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1,873
|
)
|
Other comprehensive income before reclassifications
|
50
|
|
|
—
|
|
|
2
|
|
|
52
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
Net current period other comprehensive income
|
50
|
|
|
15
|
|
|
2
|
|
|
67
|
|
||||
Balance at June 30, 2017
|
$
|
(35
|
)
|
|
$
|
(1,771
|
)
|
|
$
|
—
|
|
|
$
|
(1,806
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2016
|
$
|
(76
|
)
|
|
$
|
(1,818
|
)
|
|
$
|
(4
|
)
|
|
$
|
(1,898
|
)
|
Other comprehensive income before reclassifications
|
41
|
|
|
—
|
|
|
2
|
|
|
43
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
47
|
|
|
2
|
|
|
49
|
|
||||
Net current period other comprehensive income
|
41
|
|
|
47
|
|
|
4
|
|
|
92
|
|
||||
Balance at June 30, 2017
|
$
|
(35
|
)
|
|
$
|
(1,771
|
)
|
|
$
|
—
|
|
|
$
|
(1,806
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at March 31, 2016
|
$
|
(56
|
)
|
|
$
|
(1,611
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1,670
|
)
|
Other comprehensive loss before reclassifications
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Net current period other comprehensive income (loss)
|
(16
|
)
|
|
14
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance at June 30, 2016
|
$
|
(72
|
)
|
|
$
|
(1,597
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1,672
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2015
|
$
|
(56
|
)
|
|
$
|
(1,637
|
)
|
|
$
|
(6
|
)
|
|
$
|
(1,699
|
)
|
Other comprehensive loss before reclassifications
|
(16
|
)
|
|
—
|
|
|
(1
|
)
|
|
(17
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
40
|
|
|
4
|
|
|
44
|
|
||||
Net current period other comprehensive income (loss)
|
(16
|
)
|
|
40
|
|
|
3
|
|
|
27
|
|
||||
Balance at June 30, 2016
|
$
|
(72
|
)
|
|
$
|
(1,597
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1,672
|
)
|
13.
|
Income Taxes
|
14.
|
Fair Value Measurements
|
Level 1 -
|
quoted prices (unadjusted) in active markets for identical assets or liabilities
|
Level 2 -
|
quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument
|
Level 3 -
|
unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value
|
|
|
|
June 30, 2017
|
|
September 30, 2016
|
||||
(in millions)
|
Fair Value
Hierarchy
|
|
Fair Value
Asset (Liability)
|
|
Fair Value
Asset (Liability)
|
||||
Deferred compensation plan investments
|
Level 1
|
|
$
|
60
|
|
|
$
|
55
|
|
Deferred compensation plan investments
|
Level 2
|
|
23
|
|
|
—
|
|
||
Interest rate swap assets
|
Level 2
|
|
15
|
|
|
35
|
|
||
Foreign currency forward exchange contract assets
|
Level 2
|
|
9
|
|
|
11
|
|
||
Foreign currency forward exchange contract liabilities
|
Level 2
|
|
(6
|
)
|
|
(13
|
)
|
||
Contingent consideration for ICG acquisition
|
Level 3
|
|
(14
|
)
|
|
(13
|
)
|
||
Contingent consideration for Pulse.aero acquisition
|
Level 3
|
|
(3
|
)
|
|
—
|
|
|
Asset (Liability)
|
||||||||||||||
|
June 30, 2017
|
|
September 30, 2016
|
||||||||||||
(in millions)
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Cash and cash equivalents
|
$
|
578
|
|
|
$
|
578
|
|
|
$
|
340
|
|
|
$
|
340
|
|
Short-term debt
|
(511
|
)
|
|
(511
|
)
|
|
(740
|
)
|
|
(740
|
)
|
||||
Long-term debt
|
(7,253
|
)
|
|
(7,478
|
)
|
|
(1,339
|
)
|
|
(1,508
|
)
|
15.
|
Derivative Financial Instruments
|
|
|
|
Asset Derivatives
|
||||||
(in millions)
|
Classification
|
|
June 30,
2017 |
|
September 30, 2016
|
||||
Foreign currency forward exchange contracts
|
Other current assets
|
|
$
|
9
|
|
|
$
|
11
|
|
Interest rate swaps
|
Other assets
|
|
15
|
|
|
35
|
|
||
Total
|
|
|
$
|
24
|
|
|
$
|
46
|
|
|
|
|
Liability Derivatives
|
||||||
(in millions)
|
Classification
|
|
June 30,
2017 |
|
September 30, 2016
|
||||
Foreign currency forward exchange contracts
|
Other current liabilities
|
|
$
|
6
|
|
|
$
|
13
|
|
|
|
|
Amount of Gain (Loss)
|
|
Amount of Gain (Loss)
|
||||||||||||
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
Location of Gain (Loss)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Interest expense
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
8
|
|
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts:
|
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact)
|
AOCL
|
|
2
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
||||
Amount of loss reclassified from AOCL into income
|
Cost of sales
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts
|
Cost of sales
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
16.
|
Guarantees and Indemnifications
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
$
|
87
|
|
|
$
|
89
|
|
Warranty costs incurred
|
(39
|
)
|
|
(32
|
)
|
||
Product warranty accrual
|
43
|
|
|
29
|
|
||
Changes in estimates for prior years
|
(6
|
)
|
|
(3
|
)
|
||
Increase from acquisitions
|
117
|
|
|
—
|
|
||
Balance at June 30, 2017
|
$
|
202
|
|
|
$
|
83
|
|
17.
|
Contractual Obligations and Other Commitments
|
|
|
Payments by Period
|
||||||||||||||||||||||||||
(in millions)
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Non-cancelable operating leases
|
|
$
|
74
|
|
|
$
|
81
|
|
|
$
|
66
|
|
|
$
|
50
|
|
|
$
|
39
|
|
|
$
|
197
|
|
|
$
|
507
|
|
Purchase contracts
|
|
38
|
|
|
35
|
|
|
30
|
|
|
27
|
|
|
24
|
|
|
47
|
|
|
201
|
|
|||||||
Long-term debt
|
|
375
|
|
|
150
|
|
|
750
|
|
|
1,125
|
|
|
—
|
|
|
5,400
|
|
|
7,800
|
|
|||||||
Interest on long-term debt
|
|
120
|
|
|
253
|
|
|
254
|
|
|
213
|
|
|
192
|
|
|
1,926
|
|
|
2,958
|
|
|||||||
Total
|
|
$
|
607
|
|
|
$
|
519
|
|
|
$
|
1,100
|
|
|
$
|
1,415
|
|
|
$
|
255
|
|
|
$
|
7,570
|
|
|
$
|
11,466
|
|
18.
|
Environmental Matters
|
19.
|
Legal Matters
|
20.
|
Restructuring and Asset Impairment Charges
|
(in millions)
|
Cost of Sales
|
|
Selling, General and Administrative Expenses
|
|
Total
|
||||||
Employee separation costs
|
$
|
31
|
|
|
$
|
8
|
|
|
$
|
39
|
|
Asset impairment charges
|
2
|
|
|
4
|
|
|
6
|
|
|||
Restructuring and asset impairment charges
|
$
|
33
|
|
|
$
|
12
|
|
|
$
|
45
|
|
21.
|
Business Segment Information
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Interior Systems
|
$
|
695
|
|
|
$
|
—
|
|
|
$
|
695
|
|
|
$
|
—
|
|
Commercial Systems
|
658
|
|
|
612
|
|
|
1,801
|
|
|
1,785
|
|
||||
Government Systems
|
558
|
|
|
555
|
|
|
1,598
|
|
|
1,544
|
|
||||
Information Management Services
|
183
|
|
|
167
|
|
|
535
|
|
|
485
|
|
||||
Total sales
|
$
|
2,094
|
|
|
$
|
1,334
|
|
|
$
|
4,629
|
|
|
$
|
3,814
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating earnings:
|
|
|
|
|
|
|
|
|
|
||||||
Interior Systems
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
Commercial Systems
|
144
|
|
|
141
|
|
|
401
|
|
|
401
|
|
||||
Government Systems
|
123
|
|
|
115
|
|
|
333
|
|
|
309
|
|
||||
Information Management Services
|
39
|
|
|
26
|
|
|
105
|
|
|
79
|
|
||||
Total segment operating earnings
|
386
|
|
|
282
|
|
|
919
|
|
|
789
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
(1)
|
(77
|
)
|
|
(16
|
)
|
|
(122
|
)
|
|
(48
|
)
|
||||
Stock-based compensation
|
(8
|
)
|
|
(6
|
)
|
|
(21
|
)
|
|
(21
|
)
|
||||
General corporate, net
|
(16
|
)
|
|
(13
|
)
|
|
(39
|
)
|
|
(36
|
)
|
||||
Transaction and integration costs
(1)
|
(64
|
)
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
||||
Restructuring and asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
||||
Income from continuing operations before income taxes
|
221
|
|
|
247
|
|
|
657
|
|
|
639
|
|
||||
Income tax expense
|
(42
|
)
|
|
(33
|
)
|
|
(165
|
)
|
|
(120
|
)
|
||||
Income from continuing operations
|
$
|
179
|
|
|
$
|
214
|
|
|
$
|
492
|
|
|
$
|
519
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interior Systems sales categories:
|
|
|
|
|
|
|
|
||||||||
Interior products and services
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
400
|
|
|
$
|
—
|
|
Aircraft seating
|
295
|
|
|
—
|
|
|
295
|
|
|
—
|
|
||||
Interior Systems sales
|
695
|
|
|
—
|
|
|
695
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Commercial Systems sales categories:
|
|
|
|
|
|
|
|
|
|||||||
Air transport aviation electronics
|
405
|
|
|
370
|
|
|
1,098
|
|
|
1,052
|
|
||||
Business and regional aviation electronics
|
253
|
|
|
242
|
|
|
703
|
|
|
733
|
|
||||
Commercial Systems sales
|
658
|
|
|
612
|
|
|
1,801
|
|
|
1,785
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Government Systems sales categories:
|
|
|
|
|
|
|
|
||||||||
Avionics
|
342
|
|
|
376
|
|
|
1,028
|
|
|
1,026
|
|
||||
Communication and navigation
|
216
|
|
|
179
|
|
|
570
|
|
|
518
|
|
||||
Government Systems sales
|
558
|
|
|
555
|
|
|
1,598
|
|
|
1,544
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Information Management Services sales
|
183
|
|
|
167
|
|
|
535
|
|
|
485
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total sales
|
$
|
2,094
|
|
|
$
|
1,334
|
|
|
$
|
4,629
|
|
|
$
|
3,814
|
|
(in millions)
|
June 30, 2017
|
|
September 30, 2016
|
||||
Identifiable assets:
|
|
|
|
||||
Interior Systems
|
$
|
10,346
|
|
|
$
|
—
|
|
Commercial Systems
|
3,272
|
|
|
3,050
|
|
||
Government Systems
|
2,097
|
|
|
2,052
|
|
||
Information Management Services
|
1,903
|
|
|
1,906
|
|
||
Corporate
|
733
|
|
|
691
|
|
||
Total identifiable assets
|
$
|
18,351
|
|
|
$
|
7,699
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
OVERVIEW AND OUTLOOK
|
•
|
total sales of about $6.8 billion (From $6.7 billion to $6.8 billion)
|
•
|
total segment operating margins of 19.0 percent to 20.0 percent
(1)
|
•
|
earnings per share of $4.85 to $5.05 (From $4.50 to $4.70)
(2)
|
•
|
adjusted earnings per share of $5.95 to $6.15
(2)
|
•
|
cash provided by operating activities of $900 million to $1.0 billion, which includes an expected $50 million net increase in pre-production engineering costs included in inventory
|
•
|
capital expenditures of about $250 million
|
•
|
total research and development investment of about $1.1 billion (From $1.05 billion to $1.15 billion)
(3)
|
•
|
full year income tax rate of 24 percent to 25 percent (From 27 percent to 28 percent)
(4)
|
|
|
Year Ending
|
||||||
|
|
September 30, 2017 (estimated)
|
||||||
(dollars in millions, impact to forecasted net income; except per share amounts)
|
|
Low End of Guidance Range
|
|
High End of Guidance Range
|
||||
Forecasted net income (GAAP)
|
|
$
|
710
|
|
|
$
|
740
|
|
Estimated B/E Aerospace acquisition-related expenses
|
|
~90
|
||||||
Estimated amortization of acquisition-related intangible assets
|
|
~100
|
||||||
Estimated amortization of acquired contract liability
|
|
~(80)
|
||||||
Estimated amortization of inventory fair value adjustment
|
|
~55
|
||||||
Forecasted adjusted net income (non-GAAP)
|
|
$
|
875
|
|
|
$
|
905
|
|
|
|
|
|
|
||||
Forecasted earnings per share (GAAP)
|
|
$
|
4.85
|
|
|
$
|
5.05
|
|
Estimated B/E Aerospace acquisition-related expenses
|
|
~0.60
|
||||||
Estimated amortization of acquisition-related intangible assets
|
|
~0.70
|
||||||
Estimated amortization of acquired contract liability
|
|
~(0.55)
|
||||||
Estimated amortization of inventory fair value adjustment
|
|
~0.35
|
||||||
Forecasted adjusted earnings per share (non-GAAP)
|
|
$
|
5.95
|
|
|
$
|
6.15
|
|
RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total sales
|
$
|
2,094
|
|
|
$
|
1,334
|
|
|
$
|
4,629
|
|
|
$
|
3,814
|
|
Percent increase
|
57
|
%
|
|
|
|
21
|
%
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total cost of sales
|
$
|
1,524
|
|
|
$
|
915
|
|
|
$
|
3,270
|
|
|
$
|
2,658
|
|
Percent of total sales
|
72.8
|
%
|
|
68.6
|
%
|
|
70.6
|
%
|
|
69.7
|
%
|
•
|
$564 million of cost of sales from the recently acquired B/E Aerospace business
|
•
|
a $37 million increase from higher organic sales, which was favorably impacted by benefits from cost savings initiatives
|
•
|
a $7 million combined increase in employee incentive compensation costs in Commercial Systems and Government Systems
|
•
|
$564 million of cost of sales from the recently acquired B/E Aerospace business
|
•
|
an $86 million increase from higher organic sales, which was unfavorably impacted by sales mix
|
•
|
partially offset by $33 million of asset and restructuring charges recorded in the nine months ended June 30, 2016
|
•
|
further offset by benefits from cost savings initiatives and a $7 million combined decrease in company-funded R&D expense in Commercial Systems, Government Systems and Information Management Services, as detailed in the Research and Development Expense section below
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Customer-funded:
|
|
|
|
|
|
|
|
||||||||
Interior Systems
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
Commercial Systems
|
68
|
|
|
58
|
|
|
199
|
|
|
166
|
|
||||
Government Systems
|
103
|
|
|
98
|
|
|
316
|
|
|
284
|
|
||||
Information Management Services
|
3
|
|
|
2
|
|
|
7
|
|
|
6
|
|
||||
Total customer-funded
|
189
|
|
|
158
|
|
|
537
|
|
|
456
|
|
||||
Company-funded:
|
|
|
|
|
|
|
|
||||||||
Interior Systems
|
56
|
|
|
—
|
|
|
56
|
|
|
—
|
|
||||
Commercial Systems
|
37
|
|
|
36
|
|
|
94
|
|
|
97
|
|
||||
Government Systems
|
17
|
|
|
20
|
|
|
53
|
|
|
56
|
|
||||
Information Management Services
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total company-funded
|
110
|
|
|
56
|
|
|
203
|
|
|
154
|
|
||||
Total R&D expense
|
$
|
299
|
|
|
$
|
214
|
|
|
$
|
740
|
|
|
$
|
610
|
|
Percent of total sales
|
14.3
|
%
|
|
16.0
|
%
|
|
16.0
|
%
|
|
16.0
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Selling, general and administrative expenses
|
$
|
213
|
|
|
$
|
158
|
|
|
$
|
514
|
|
|
$
|
481
|
|
Percent of total sales
|
10.2
|
%
|
|
11.8
|
%
|
|
11.1
|
%
|
|
12.6
|
%
|
•
|
$53 million of SG&A costs from the recently acquired B/E Aerospace business
|
•
|
partially offset by $12 million of restructuring and asset impairment charges recorded in the three months ended December 31, 2015 and the benefits of cost savings initiatives
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest expense
|
$
|
77
|
|
|
$
|
16
|
|
|
$
|
122
|
|
|
$
|
48
|
|
•
|
$44 million of incremental interest on the new debt issued to fund the B/E Aerospace acquisition
|
•
|
$18 million of fees incurred during the three months ended June 30, 2017 associated with the bridge credit agreement entered into in December 2016 pursuant to the acquisition of B/E Aerospace
|
•
|
$44 million of incremental interest on the new debt issued to fund the B/E Aerospace acquisition
|
•
|
$29 million of fees incurred during the nine months ended June 30, 2017 associated with the bridge credit agreement entered into in December 2016 pursuant to the acquisition of B/E Aerospace
|
•
|
higher interest rates on commercial paper for the nine months ended June 30, 2017 compared to the same period in the prior year
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income from continuing operations
|
$
|
179
|
|
|
$
|
214
|
|
|
$
|
492
|
|
|
$
|
519
|
|
Percent of sales
|
8.5
|
%
|
|
16.0
|
%
|
|
10.6
|
%
|
|
13.6
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net income
|
$
|
179
|
|
|
$
|
214
|
|
|
$
|
492
|
|
|
$
|
520
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share from continuing operations
|
$
|
1.12
|
|
|
$
|
1.63
|
|
|
$
|
3.48
|
|
|
$
|
3.92
|
|
Diluted earnings per share from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Diluted earnings per share
|
$
|
1.12
|
|
|
$
|
1.63
|
|
|
$
|
3.48
|
|
|
$
|
3.93
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average diluted common shares
|
159.9
|
|
|
131.5
|
|
|
141.4
|
|
|
132.3
|
|
•
|
$82 million of pre-tax transaction, integration and financing costs associated with the acquisition of B/E Aerospace
|
•
|
$44 million of incremental interest expense on the new debt issued principally to fund the B/E Aerospace acquisition
|
•
|
a $9 million increase in income tax expense primarily due to a $41 million valuation allowance release that occurred in the three months ended June 30, 2016, partially offset by an income tax benefit due to a lower estimated annual effective tax rate, which applies to year-to-date earnings
|
•
|
partially offset by an $80 million increase in operating earnings from the recently acquired Interior Systems business, a $13 million increase in Information Management Services operating earnings, an $8 million increase in Government Systems operating earnings and a $3 million increase in Commercial Systems operating earnings
|
•
|
$109 million of pre-tax transaction, integration and financing costs associated with the acquisition of B/E Aerospace
|
•
|
a $45 million increase in income tax expense primarily due to the retroactive benefit from the reinstatement of the Federal R&D Tax Credit and a $41 million valuation allowance release that occurred in the nine months ended June 30, 2016, partially offset by an income tax benefit due to a lower estimated annual effective tax rate, which applies to year-to-date earnings
|
•
|
$44 million of incremental interest expense on the new debt issued to fund the B/E Aerospace acquisition
|
•
|
partially offset by an $80 million increase in operating earnings from the recently acquired Interior Systems business, a $26 million increase in Information Management Services operating earnings and a $24 million increase in Government Systems operating earnings
|
•
|
also offset by the absence of $45 million of pre-tax restructuring and asset impairment charges recorded in the nine months ended June 30, 2016
|
•
|
commercial aircraft seats, including an extensive line of super first class, first class, business class, economy class and regional aircraft seats
|
•
|
a full line of aircraft food and beverage preparation and storage equipment, including coffee and espresso makers, water boilers, beverage containers, refrigerators, freezers, chillers and a line of microwave, high efficiency convection and steam ovens
|
•
|
modular lavatory systems, wastewater management systems and galley systems
|
•
|
both chemical and gaseous aircraft oxygen storage, distribution and delivery systems, protective breathing equipment and a broad range of lighting products
|
•
|
business jet and general aviation interior products, including an extensive line of executive aircraft and helicopter seats, direct and indirect overhead lighting systems, exterior lighting systems, passenger and crew oxygen systems, air valve systems and high-end aircraft monuments
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interior products and services
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
400
|
|
|
$
|
—
|
|
Aircraft seating
|
295
|
|
|
—
|
|
|
295
|
|
|
—
|
|
||||
Total
|
$
|
695
|
|
|
$
|
—
|
|
|
$
|
695
|
|
|
$
|
—
|
|
•
|
a $65 million increase in interior products and services sales, primarily due to increased original equipment deliveries of Airbus A350 galleys, Boeing 737 advanced lavatories and oxygen systems across multiple platforms
|
•
|
a $2 million increase in aircraft seating as higher deliveries of new economy, business class and business jet seats more than offset declines in super first class deliveries
|
•
|
a $177 million increase in interior products and services sales, primarily due to increased original equipment deliveries of Airbus A350 galleys, Boeing 737 advanced lavatories and oxygen systems across multiple platforms. In addition, favorable timing of cooling equipment deliveries offset reduced spares sales in the Middle East
|
•
|
partially offset by a $58 million reduction in aircraft seating driven by lower super first class deliveries to European and Middle East airlines as well as lower deliveries to business jet original equipment manufacturers
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment operating earnings
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
Percent of sales
|
11.5
|
%
|
|
—
|
%
|
|
11.5
|
%
|
|
—
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Air transport aviation electronics:
|
|
|
|
|
|
|
|
||||||||
Original equipment
|
$
|
245
|
|
|
$
|
234
|
|
|
$
|
669
|
|
|
$
|
631
|
|
Aftermarket
|
155
|
|
|
127
|
|
|
414
|
|
|
391
|
|
||||
Wide-body in-flight entertainment (IFE)
|
5
|
|
|
9
|
|
|
15
|
|
|
30
|
|
||||
Total air transport aviation electronics
|
405
|
|
|
370
|
|
|
1,098
|
|
|
1,052
|
|
||||
Business and regional aviation electronics:
|
|
|
|
|
|
|
|
|
|
||||||
Original equipment
|
129
|
|
|
133
|
|
|
360
|
|
|
402
|
|
||||
Aftermarket
|
124
|
|
|
109
|
|
|
343
|
|
|
331
|
|
||||
Total business and regional aviation electronics
|
253
|
|
|
242
|
|
|
703
|
|
|
733
|
|
||||
Total
|
$
|
658
|
|
|
$
|
612
|
|
|
$
|
1,801
|
|
|
$
|
1,785
|
|
Percent increase
|
8
|
%
|
|
|
|
1
|
%
|
|
|
•
|
original equipment sales
increased
$11 million
, or
5 percent
, primarily due to higher Airbus A350 and Boeing 737 production rates, partially offset by lower legacy wide-body production rates
|
•
|
aftermarket sales
increased
$28 million
, or
22 percent
, primarily due to higher used aircraft equipment sales of $24 million, higher regulatory mandate upgrade activity and higher spares provisioning, partially offset by lower retrofit and service and support sales
|
•
|
wide-body IFE sales
decreased
$4 million
, or
44 percent
, as airlines decommissioned their legacy IFE systems
|
•
|
original equipment sales
decreased
$4 million
, or
3 percent
, primarily due to lower business aircraft OEM production rates, partially offset by higher Bombardier CSeries production rates and Global 7000/8000 equipment deliveries in support of entry into service
|
•
|
aftermarket sales
increased
$15 million
, or
14 percent
, primarily due to higher flight deck retrofit and regulatory mandate upgrade activity, partially offset by lower simulation hardware sales
|
•
|
original equipment sales
increased
$38 million
, or
6 percent
, primarily due to higher Airbus A350 production rates, increased customer-funded development program revenues and higher Boeing 737 production rates, partially offset by lower wide-body production rates
|
•
|
aftermarket sales
increased
$23 million
, or
6 percent
, primarily due to higher used aircraft equipment sales and higher regulatory mandate upgrade activity, partially offset by lower retrofit and service and support sales
|
•
|
wide-body IFE sales
decreased
$15 million
, or
50 percent
, as airlines decommissioned their legacy IFE systems
|
•
|
original equipment sales
decreased
$42 million
, or
10 percent
, primarily due to lower business aircraft OEM production rates, partially offset by higher product deliveries for the Bombardier CSeries program and higher customer-funded development program revenues
|
•
|
aftermarket sales
increased
$12 million
, or
4 percent
, primarily due to higher flight deck retrofit activity
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment operating earnings
|
$
|
144
|
|
|
$
|
141
|
|
|
$
|
401
|
|
|
$
|
401
|
|
Percent of sales
|
21.9
|
%
|
|
23.0
|
%
|
|
22.3
|
%
|
|
22.5
|
%
|
•
|
operating earnings were positively impacted by a $46 million increase in sales volume discussed in the Commercial Systems sales section above, however, the benefits were tempered by sales mix as lower margin used aircraft equipment sales increased and higher margin business jet OEM sales decreased
|
•
|
partially offset by a $4 million increase in amortization of pre-production engineering costs and a $3 million increase in employee incentive compensation costs
|
•
|
the benefits of a $16 million increase in sales were mostly offset by sales mix, as lower margin customer-funded development revenues and used aircraft equipment sales increased and higher margin business jet OEM sales decreased
|
•
|
SG&A costs decreased, primarily due to cost savings initiatives
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Avionics
|
$
|
342
|
|
|
$
|
376
|
|
|
$
|
1,028
|
|
|
$
|
1,026
|
|
Communication and navigation
|
216
|
|
|
179
|
|
|
570
|
|
|
518
|
|
||||
Total
|
$
|
558
|
|
|
$
|
555
|
|
|
$
|
1,598
|
|
|
$
|
1,544
|
|
Percent increase
|
1
|
%
|
|
|
|
3
|
%
|
|
|
•
|
a $15 million decrease from lower fixed wing sales, primarily due to lower deliveries for various fighter platforms as a result of production issues and the wind-down of legacy tanker hardware deliveries, partially offset by higher development program sales
|
•
|
$19 million in other net decreases to revenue, primarily due to lower sales on various rotary wing platforms
|
•
|
a $17 million increase from higher legacy communication sales
|
•
|
an $11 million increase due to higher deliveries of GPS-related products
|
•
|
$9 million in other net increases to revenue, primarily due to higher test and training range sales
|
•
|
a $24 million increase from higher simulation and training sales
|
•
|
partially offset by $10 million in lower fixed wing sales, primarily due to the wind-down of legacy tanker hardware deliveries and lower deliveries for various fighter platforms as a result of production issues, net of higher development program sales
|
•
|
in addition, $12 million in other net decreases to revenue, primarily driven by lower deliveries on various rotary wing platforms
|
•
|
a $19 million increase from higher data links sales
|
•
|
a $14 million increase from higher deliveries of GPS-related products
|
•
|
$19 million in other net increases to revenue, primarily due to higher test and training range sales and higher legacy communication sales
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment operating earnings
|
$
|
123
|
|
|
$
|
115
|
|
|
$
|
333
|
|
|
$
|
309
|
|
Percent of sales
|
22.0
|
%
|
|
20.7
|
%
|
|
20.8
|
%
|
|
20.0
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sales
|
$
|
183
|
|
|
$
|
167
|
|
|
$
|
535
|
|
|
$
|
485
|
|
Percent increase
|
10
|
%
|
|
|
|
10
|
%
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment operating earnings
|
$
|
39
|
|
|
$
|
26
|
|
|
$
|
105
|
|
|
$
|
79
|
|
Percent of sales
|
21.3
|
%
|
|
15.6
|
%
|
|
19.6
|
%
|
|
16.3
|
%
|
•
|
a $16 million increase in sales volume discussed in Information Management Services sales section above, which resulted in a $7 million increase in cost and an increase in earnings of $9 million, or 56 percent of the higher sales volume. The margins on the sales increase were favorably impacted by benefits from cost savings initiatives
|
•
|
operating earnings were positively impacted by the favorable resolution of certain prior year claims associated with international business jet support services
|
•
|
a $50 million increase in sales volume discussed in the Information Managements Services sales section above, which resulted in a $27 million increase in cost and an increase in earnings of $23 million, or 46 percent of the higher sales volume. The margins on the sales increase were favorably impacted by benefits from cost savings initiatives
|
•
|
operating earnings were positively impacted by the favorable resolution of certain prior year claims associated with international business jet support services
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
General corporate, net
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
39
|
|
|
$
|
36
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Pension benefits
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
(19
|
)
|
|
$
|
(18
|
)
|
Other retirement benefits
|
3
|
|
|
3
|
|
|
10
|
|
|
10
|
|
||||
Net benefit (income)
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
$
|
(9
|
)
|
|
$
|
(8
|
)
|
FINANCIAL CONDITION AND LIQUIDITY
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Cash provided by operating activities from continuing operations
|
$
|
416
|
|
|
$
|
223
|
|
•
|
higher cash receipts from customers, which increased by $1.035 billion to $4.579 billion in the nine months ended
June 30, 2017
compared to $3.544 billion in the nine months ended June 30, 2016, primarily due to cash receipts of the recently acquired B/E Aerospace business. The increase in cash receipts from customers was more than the sales volume increase of $815 million due to the timing of sales relative to the collection of receivables from customers
|
•
|
the above item was partially offset by higher payments for production inventory and other operating costs, which increased $654 million to $3.694 billion for the nine months ended June 30, 2017, compared to $3.040 billion during the nine months ended June 30, 2016, primarily due to cash payments of the recently acquired B/E Aerospace business
|
•
|
also offset by cash payments for income taxes, which increased $126 million to $202 million during the nine months ended
June 30, 2017
, compared to $76 million during the same period in the prior year. The increase in cash used for income tax payments was primarily from the retroactive reinstatement of the Federal R&D tax credit as a result of the Protecting Americans from Tax Hikes Act in the three months ended December 31, 2015, as well as pre-tax income associated with the recently acquired B/E Aerospace business
|
•
|
further offset by payments for transaction costs associated with the B/E Aerospace acquisition of $80 million during the nine months ended
June 30, 2017
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Cash (used for) investing activities from continuing operations
|
$
|
(3,599
|
)
|
|
$
|
(151
|
)
|
•
|
$3.417 billion in cash consideration paid, net of cash acquired, related to the April 2017 acquisition of B/E Aerospace
|
•
|
a $32 million increase in cash payments for property additions for the nine months ended
June 30, 2017
, compared to the same period in the prior year
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Cash provided by (used for) financing activities from continuing operations
|
$
|
3,415
|
|
|
$
|
(13
|
)
|
•
|
$3.980 billion related to financing of the April 2017 B/E Aerospace acquisition. $6.099 billion in net proceeds from the issuance of long-term debt were principally used to repay $2.119 billion of assumed B/E Aerospace debt, finance the cash portion of the B/E Aerospace purchase price, pay related transaction fees and expenses and repay approximately $300 million of the Company's outstanding commercial paper borrowings
|
•
|
a decrease in cash repurchases of common stock of $215 million to $46 million during the nine months ended
June 30, 2017
, compared to $261 million repurchased during the same period in the prior year
|
•
|
partially offset by a $442 million decrease in the net proceeds from short-term commercial paper borrowings and repayment of $338 million of long-term debt
|
(in millions)
|
June 30,
2017 |
|
September 30,
2016 |
||||
Cash and cash equivalents
|
$
|
578
|
|
|
$
|
340
|
|
|
|
|
|
||||
Short-term debt
|
(511
|
)
|
|
(740
|
)
|
||
Long-term debt, net
|
(7,268
|
)
|
|
(1,374
|
)
|
||
Total debt
|
$
|
(7,779
|
)
|
|
$
|
(2,114
|
)
|
Total equity
|
$
|
5,609
|
|
|
$
|
2,084
|
|
Debt to total capitalization
(1)
|
58
|
%
|
|
50
|
%
|
Credit Rating Agency
|
|
Short-Term Rating
|
|
Long-Term Rating
|
|
Outlook
|
Fitch Ratings
|
|
F2
|
|
BBB
|
|
Stable
|
Moody’s Investors Service
|
|
P-2
|
|
Baa2
|
|
Stable
|
Standard & Poor’s
|
|
A-2
|
|
BBB
|
|
Stable
|
|
|
Payments by Period
|
||||||||||||||||||
(in millions)
|
|
Total
|
|
2017
|
|
2018 - 2019
|
|
2020 - 2021
|
|
Thereafter
|
||||||||||
Long-term debt
|
|
$
|
7,800
|
|
|
$
|
375
|
|
|
$
|
900
|
|
|
$
|
1,125
|
|
|
$
|
5,400
|
|
Interest on long-term debt
|
|
2,958
|
|
|
120
|
|
|
507
|
|
|
405
|
|
|
1,926
|
|
|||||
Non-cancelable operating leases
|
|
507
|
|
|
74
|
|
|
147
|
|
|
89
|
|
|
197
|
|
|||||
Non-cancelable capital leases, including interest
|
|
76
|
|
|
6
|
|
|
11
|
|
|
11
|
|
|
48
|
|
|||||
Purchase obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase orders
|
|
1,841
|
|
|
1,490
|
|
|
286
|
|
|
58
|
|
|
7
|
|
|||||
Purchase contracts
|
|
201
|
|
|
38
|
|
|
65
|
|
|
51
|
|
|
47
|
|
|||||
Total
|
|
$
|
13,383
|
|
|
$
|
2,103
|
|
|
$
|
1,916
|
|
|
$
|
1,739
|
|
|
$
|
7,625
|
|
ENVIRONMENTAL
|
CRITICAL ACCOUNTING POLICIES
|
CAUTIONARY STATEMENT
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
|
|
June 30, 2017
|
||||||||
(in millions)
|
|
Interest Rate
|
|
Carrying Value
|
|
Fair Value
|
||||
$1,000 Notes due 2047
|
|
4.35%
|
|
$
|
1,000
|
|
|
$
|
1,043
|
|
$400 Notes due 2043
|
|
4.80%
|
|
400
|
|
|
442
|
|
||
$1,300 Notes due 2027
|
|
3.50%
|
|
1,300
|
|
|
1,319
|
|
||
$950 Notes due 2024
|
|
3.20%
|
|
950
|
|
|
960
|
|
||
$400 Notes due 2023
|
|
3.70%
|
|
400
|
|
|
417
|
|
||
$1,100 Notes due 2022
|
|
2.80%
|
|
1,100
|
|
|
1,109
|
|
||
$250 Notes due 2021
|
|
3.10%
|
|
250
|
|
|
256
|
|
||
$1,500 Term Loan due 2020
|
|
1 month LIBOR + 1.25%
|
|
1,462
|
|
|
1,462
|
|
||
$300 Notes due 2019
|
|
5.25%
|
|
300
|
|
|
319
|
|
||
$300 Notes due 2019
|
|
1.95%
|
|
300
|
|
|
300
|
|
Item 4.
|
Controls and Procedures.
|
•
|
the diversion of management's attention from ongoing business concerns and performance shortfalls at one or both of the companies as a result of the devotion of management's attention to the merger
|
•
|
managing a larger combined company
|
•
|
maintaining employee morale and retaining key management and other employees
|
•
|
the possibility of faulty assumptions underlying expectations regarding the integration process
|
•
|
retaining existing business and operational relationships and attracting new business and operational relationships
|
•
|
consolidating corporate and administrative infrastructures and eliminating duplicative operations
|
•
|
coordinating geographically separate organizations
|
•
|
unanticipated issues in integrating information technology, communications and other systems
|
•
|
unforeseen expenses or delays associated with the merger.
|
•
|
consolidating with or merging into any other corporation or conveying or transferring all or substantially all its properties and assets
|
•
|
incurring secured debt
|
•
|
entering into sale and leaseback transactions
|
•
|
designating subsidiaries as restricted or unrestricted
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||
April 1, 2017 through April 30, 2017
|
|
200,000
|
|
|
$
|
105.12
|
|
|
200,000
|
|
|
$
|
104
|
million
|
May 1, 2017 through May 31, 2017
|
|
180,000
|
|
|
103.42
|
|
|
180,000
|
|
|
85
|
million
|
||
June 1, 2017 through June 30, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
285
|
million
|
||
Total/Average
|
|
380,000
|
|
|
$
|
104.32
|
|
|
380,000
|
|
|
|
|
|
|
|
|
|
ROCKWELL COLLINS, INC.
|
|
|
|
By
|
/s/ Tatum J. Buse
|
|
|
|
Tatum J. Buse Vice President, Finance and Controller Principal Accounting Officer and an Authorized Officer
|
|
Directors
|
|
2017
|
2018
|
2019
|
FINAL
|
EBIT MARGIN
|
45
th
Percentile
|
55
th
Percentile
|
62
nd
Percentile
|
|
EPS GROWTH
|
65
|
60
|
58
|
|
ROA
|
60
|
50
|
55
|
|
ROIC
|
70
|
80
|
85
|
|
Average Annual Ranking
|
60
|
61.25
|
65.0
|
|
Cumulative Average Annual Ranking
|
|
|
|
62.08
|
Final Performance Award
|
|
|
|
148.33
*
X 50,000 =
74,167 Performance-Based RSUs earned and vested
|
/s/ Laura A. Patterson
|
Laura A. Patterson Vice President, Rewards & Labor Strategy
Rockwell Collins
|
1.
|
DEATH BENEFIT.
|
2.
|
CONDITIONS.
In order to fund its cash payment obligation under this Agreement, the Corporation may elect, in its absolute discretion, to purchase a life insurance policy. The Executive agrees that in the event the Corporation elects to do so, then the Corporation may insure the life of the Executive and the Executive agrees to cooperate with the Corporation and insurance carrier in order to facilitate the purchase of such insurance. The Executive further agrees that if the Corporation elects to purchase such a life insurance policy, then the Corporation or a Trust (as described in Section 3 of this Agreement) shall be the owner and the beneficiary of that policy.
|
3.
|
ESTABLISHMENT OF TRUST.
The Corporation may establish a Death Benefit Only Trust (the “
Trust
”). If established, all benefits payable under this Agreement to the Beneficiary shall be paid directly by the Corporation from the Trust. To the extent that such benefits are not paid from the Trust, the benefits shall be paid from the general assets of the Corporation. The Trust, if established, shall be an irrevocable grantor trust which conforms to the terms of the model trust as described in IRS revenue procedure 92-64, I.R.B. 1992-33 except an independent individual third party may be designated as trustee. The assets of the Trust are subject to the claims of the
|
4.
|
EMPLOYMENT RIGHTS.
This Agreement shall not be deemed to create a contract of employment between the Corporation and the Executive and shall create no right in the Executive to continue in the Corporation’s employ for any specific period of time, or to create any other rights in the Executive or obligations on the part of the Corporation, except as are set forth in this Agreement.
|
5.
|
EXECUTIVE RIGHT TO ASSETS.
|
A.
|
The rights of the Executive, the Beneficiary, or any other person claiming through the Executive under this Agreement, shall be solely those of an unsecured general creditor of the Corporation. The Executive, the Beneficiary, or any other person claiming through the Executive, shall have the right to receive those payments specified under this Agreement only from the Corporation, and has no right to look to any specific or special property separate from the Corporation for payments.
|
B.
|
The Executive agrees that he, the Beneficiary, or any other person claiming through the Executive shall have no right or beneficial ownership interest whatsoever in any general asset used or acquired by the Corporation in connection with the liabilities it has assumed under this Agreement. Such assets shall not be deemed to be held under any trust for the benefit of the Executive or the Beneficiary, nor shall any such general assets be considered security for the performance of the obligations of the Corporation. Any such assets shall remain general, unpledged, and unrestricted assets of the Corporation.
|
C.
|
The Executive also understands and agrees that his participation in the acquisition of any such general asset for the Corporation shall not constitute a representation to the Executive, the Beneficiary, or any person claiming through the Executive that any of them has a special or beneficial interest in such general asset.
|
6.
|
INDEPENDENCE OF BENEFITS.
|
7.
|
ASSIGNABILITY.
|
8.
|
AMENDMENT.
|
9.
|
LAW GOVERNING.
|
CORPORATION:
|
B/E AEROSPACE, INC.,
|
||
|
|
a Delaware corporation
|
|
ATTEST:
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan M. Patch
|
By:
|
/s/ Eric J. Wesch
|
Name:
|
Ryan M. Patch
|
Name:
|
Eric J. Wesch
|
Title:
|
Secretary
|
Title:
|
Vice President & Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE:
|
/s/ Werner Lieberherr
|
||
|
|
WERNER LIEBERHERR
|
1.
|
DEATH BENEFIT.
|
2.
|
CONDITIONS.
In order to fund its cash payment obligation under this Agreement, the Corporation may elect, in its absolute discretion, to purchase a life insurance policy. The Executive agrees that in the event the Corporation elects to do so, then the Corporation may insure the life of the Executive and the Executive agrees to cooperate with the Corporation and insurance carrier in order to facilitate the purchase of such insurance. The Executive further agrees that if the Corporation elects to purchase such a life insurance policy, then the Corporation or a Trust (as described in Section 3 of this Agreement) shall be the owner and the beneficiary of that policy.
|
3.
|
ESTABLISHMENT OF TRUST.
The Corporation may establish a Death Benefit Only Trust (the “
Trust
”). If established, all benefits payable under this Agreement to the Beneficiary shall be paid directly by the Corporation from the Trust. To the extent that such benefits are not paid from the Trust, the benefits shall be paid from the general assets of the Corporation. The Trust, if established, shall be an irrevocable grantor trust which conforms to the terms of the model trust as described in IRS revenue procedure 92-64, I.R.B. 1992-33 except an independent individual third party may be designated as trustee. The assets of the Trust are subject to the claims of the Corporation’s creditors in the event of the Corporation’s insolvency, as defined therein. Except as provided under the Trust, the Corporation shall not be obligated to set aside, earmark or escrow any funds or other assets to satisfy its obligations under this Agreement, and neither the Executive nor the Beneficiary shall have any property interest in any specific assets of the Corporation other than the unsecured right to receive payments from the Corporation, as provided in this Agreement.
|
4.
|
EMPLOYMENT RIGHTS.
This Agreement shall not be deemed to create a contract of employment between the Corporation and the Executive and shall create no right in the Executive to continue in the Corporation’s employ for any specific period of time, or to create any other rights in the Executive or obligations on the part of the Corporation, except as are set forth in this Agreement.
|
5.
|
EXECUTIVE RIGHT TO ASSETS.
|
A.
|
The rights of the Executive, the Beneficiary, or any other person claiming through the Executive under this Agreement, shall be solely those of an unsecured general creditor of the Corporation. The Executive, the Beneficiary, or any other person claiming through the Executive, shall have the right to receive those payments specified under this Agreement only from the Corporation, and has no right to look to any specific or special property separate from the Corporation for payments.
|
B.
|
The Executive agrees that he, the Beneficiary, or any other person claiming through the Executive shall have no right or beneficial ownership interest whatsoever in any general asset used or acquired by the Corporation in connection with the liabilities it has assumed under this Agreement. Such assets shall not be deemed to be held under any trust for the benefit of the Executive or the Beneficiary, nor shall any such general assets be considered security for the performance of the obligations of the Corporation. Any such assets shall remain general, unpledged, and unrestricted assets of the Corporation.
|
C.
|
The Executive also understands and agrees that his participation in the acquisition of any such general asset for the Corporation shall not constitute a representation to the Executive, the Beneficiary, or any person claiming through the Executive that any of them has a special or beneficial interest in such general asset.
|
6.
|
INDEPENDENCE OF BENEFITS.
|
7.
|
ASSIGNABILITY.
|
8.
|
AMENDMENT.
|
9.
|
LAW GOVERNING.
|
CORPORATION:
|
B/E AEROSPACE, INC.,
|
||
|
|
a Delaware corporation
|
|
ATTEST:
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan M. Patch
|
By:
|
/s/ Eric J. Wesch
|
Name:
|
Ryan M. Patch
|
Name:
|
Eric J. Wesch
|
Title:
|
Secretary
|
Title:
|
Vice President & Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE:
|
/s/ Werner Lieberherr
|
||
|
|
WERNER LIEBERHERR
|
1.010
|
Account
means one of the accounts established for the purpose of measuring and determining a Participant’s interest in this Plan, such accounts being the Participant’s Salary Deferral Account, Company Match Account, Incentive Compensation Deferral Account, and Performance Award Account.
|
1.020
|
Account Balance
means, with respect to each Participant, an account in the records of the Company equal to the sum of the Participant’s:
|
(a)
|
Salary Deferral Account balance;
|
(b)
|
Company Match Account balance;
|
(c)
|
Incentive Compensation Deferral Account balance; and
|
(d)
|
Performance Award Account balance.
|
1.030
|
Affiliate
means:
|
(a)
|
any corporation incorporated under the laws of one of the United States of America of which the Company owns, directly or indirectly, eighty percent (80%) or more of the combined voting power of all classes of stock or eighty percent (80%) or more of the total value of the shares of all classes of stock (all within the meaning of Code Section 1563);
|
(b)
|
any partnership or other business entity organized under such laws, of which the Company owns, directly or indirectly, eighty percent (80%) or more of the voting power or eighty
|
(c)
|
any other company deemed to be an Affiliate by the Company’s Board of Directors.
|
1.040
|
Annual Company Match Amount
for any Plan Year means the amount determined in accordance with Section 3.030.
|
1.050
|
Annual Deferral Amount
means that portion of a Participant’s Base Annual Salary which a Participant elects to have deferred, in accordance with Article III, for any one Plan Year. In the event of a Participant’s Retirement, Disability, death or a Separation from Service prior to the end of a Plan Year, such year’s Annual Deferral Amount will be the actual amount withheld prior to such event.
|
1.060
|
Annual Installment Method
means a benefit payment method involving a series of annual installment payments over the number of years selected by the Participant in accordance with this Plan, which will be calculated in the manner set forth in this Section. The Account Balance of the Participant will be determined as of the close of business on the last business day of the calendar year. The annual installment will be calculated by multiplying this balance by a fraction, the numerator of which is one (1), and the denominator of which is the remaining number of annual payments due the Participant. (By way of example, if a Participant were to elect a 10-year payment under the Annual Installment Method, the first payment would be one-tenth (1/10) of the Account Balance, calculated as described in this definition. The following year, the payment would be one-ninth (1/9) of the Account Balance, calculated as described in this definition.) Each annual installment will be paid within the first sixty (60) days of the calendar year following the applicable year.
|
1.070
|
Base Annual Salary
means the Employee’s annualized salary rate for services performed by such Employee on behalf of the Company or an Affiliate, whether or not paid to him in such calendar year or included on the Federal Income Tax Form W‑2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock options, stock appreciation rights, restricted stock, restricted stock units, relocation expenses, incentive payments, Performance Awards, non-monetary awards, directors fees and other fees, automobile and other allowances (whether or not such allowances are included in the Employee’s gross income) paid to a Participant for employment services rendered. Base Annual Salary will be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non‑qualified plans of the Company or any Affiliate and will be calculated to include amounts not otherwise included in the Participant’s gross income under Code Section 125, 129, 223, 402(e)(3), 402(h), 403(b) or similar provision, pursuant to plans established by the Company or an Affiliate; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Participant.
|
1.080
|
Beneficiary
means one or more persons, trusts, estates or other entities, designated in accordance with Article XI who or which are entitled to receive benefits under this Plan upon the death of a Participant.
|
1.090
|
Beneficiary Designation Form
means the written or electronic form established from time to time by the Committee or its delegate that a Participant completes, signs and returns to the Committee or its delegate, in order to designate one or more Beneficiaries.
|
1.100
|
Board of Directors
means the Company’s Board of Directors.
|
1.110
|
Change of Control
means any of the following:
|
(a)
|
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by the Company, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (z) any acquisition pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (c) of this Section 1.110; or
|
(b)
|
Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to that date whose election, or nomination for election by the Company’s shareowners, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; or
|
(c)
|
Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another entity (a “Company Transaction”), in each case, unless, following such Company Transaction, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Company Transaction beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Company Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Company Transaction of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any employee benefit plan (or related trust) of the Company or of such corporation resulting from such Company Transaction) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Company Transaction or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Company Transaction and (3) at least a majority of the members of the board of
|
(d)
|
Approval by the Company’s shareowners of a complete liquidation or dissolution of the Company.
|
1.120
|
Code
means the Internal Revenue Code of 1986, as from time to time amended.
|
1.130
|
Committee
means the Compensation Committee of the Board of Directors.
|
1.140
|
Company
means Rockwell Collins, Inc., a Delaware corporation.
|
1.150
|
Company Match Account
means:
|
(a)
|
the sum of all of a Participant’s Annual Company Match Amounts,
|
(b)
|
adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b), as such provisions relate to such Company Match Account, and
|
(c)
|
reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Company Match Account.
|
1.160
|
Deduction Limitation
means the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided, this limitation will be applied to all distributions that are “subject to the Deduction Limitation” under this Plan. If the Company determines in good faith prior to a Change of Control that it is reasonably anticipated that any compensation paid to a Participant for a taxable year of the Company would not be deductible by the Company solely by reason of the limitation under Code Section 162(m), then, to the extent deemed necessary by the Company to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change of Control is deductible, the Company may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation will continue to be credited/debited with additional amounts in accordance with Section 4.020(b), even if such amount is being paid out in installments. The amounts so deferred and amounts credited thereon will be distributed to the Participant or his Beneficiary (in the event of the Participant’s death) at the earlier of (a) the earliest possible date in the calendar year, as determined in good faith by the Company, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Company during which the distribution is made will not be limited by Section 162(m), or (b) the Participant’s Separation from Service or Retirement. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation will not apply to any distributions made after a Change of Control.
|
1.170
|
Deferral Election
means a written or electronic election made pursuant to Article III by a Participant to defer receipt of a part of his Base Annual Salary, or to defer receipt of all or a part of his Incentive Compensation or any Performance Award.
|
1.180
|
Deferral Election Form
means the form established from time to time by the Committee or its delegate that a Participant completes, signs and returns to the Committee or its delegate to make a
|
1.190
|
Disability
has the meanings set forth in Section 409A. Specifically, for purposes of this Plan and Section 409A, a Participant will be considered to have incurred a Disability if the Participant is:
|
(a)
|
unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or
|
(b)
|
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident or health plan covering employees of the Company or any Affiliate.
|
1.200
|
Effective Date
means January 1, 2005.
|
1.210
|
Eligible Employee
means:
|
(a)
|
For the Plan Year commencing January 1, 2005, any Employee who is employed in the United States by the Company or any Affiliate whose Base Annual Salary for 2005 is greater than or equal to $110,000.
|
(b)
|
For the Plan Year commencing January 1, 2006, any Employee who is employed in the United States by the Company or any Affiliate whose Base Annual Salary for 2006 is greater than or equal to $120,000.
|
(c)
|
For Plan Years commencing on or after January 1, 2007, any Employee who is employed in the United States by the Company or an Affiliate whose salary band on or after January 1, 2007 is equal to D5, E6, M0, or M5 through M9 before July 23, 2007, or is equal to D5, E6, M0, M1, or M6 through M9 on or after July 23, 2007.
|
(d)
|
For Plan Years commencing on or after January 1, 2014, any Employee who is employed in the United States by the Company or an Affiliate whose salary band is equal to D5, E6, M0, M1, or M6 through M9 prior to May 31, 2014, or is equal to D5, G7, G8, G9, M0, M1, or M6 through M9 on or after May 31, 2014.
|
1.220
|
Employee
means any person who is employed by the Company or by an Affiliate.
|
1.230
|
ERISA
means the Employee Retirement Income Security Act of 1974, as from time to time amended.
|
1.240
|
Exchange Act
means the Securities Exchange Act of 1934, as amended.
|
1.245
|
409A Change of Control
means a “Change of Control Event” as defined in Treasury Regulation Section 1.409A-3(i)(5)(i) and set forth in Treasury Regulation Section 1.409A-3(i)(5)(v)-(vii), applying the default rules and percentages set forth in such Treasury Regulation.
|
1.250
|
Incentive Compensation
means any award payable to a Participant under an annual incentive compensation plan sponsored by the Company or an Affiliate which, but for a Deferral Election under the Plan, would be paid to the Participant and considered to be “wages” for purposes of United States federal income tax withholding, including without limitation any incentive compensation payable pursuant to the Company’s incentive payment plan(s) and annual incentive compensation plan(s) for Senior Executives, and any change of control agreement entered into between the Company and a Participant.
|
1.260
|
Incentive Compensation Deferral
means a deferral by a Participant of part or all of his Incentive Compensation otherwise payable to him with respect to a particular fiscal year of the Company. In the event of a Participant’s Retirement, Disability, death or a Separation from Service prior the completion of the fiscal year for which the Incentive Compensation is payable, such year’s Incentive Compensation Deferral will be zero and any Incentive Compensation payable with respect to such partial fiscal year will be paid at the same time Incentive Compensation is paid to employees who did not elect to make a deferral of Incentive Compensation.
|
1.270
|
Incentive Compensation Deferral Account
means:
|
(a)
|
the sum of all of a Participant’s Incentive Compensation Deferrals,
|
(b)
|
adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b) which are related to such Incentive Compensation Deferral Account, and
|
(c)
|
reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Incentive Compensation Deferral Account.
|
1.280
|
Measurement Funds
means the investment vehicles offered under this Plan which are identified and described in communication materials made available to Participants by the Company.
|
1.290
|
Named Fiduciary
means the Committee, its delegates, the Trustee and, following the occurrence of a Change of Control, the third-party fiduciary described in Section 14.020 of this Plan.
|
1.300
|
Non-Qualified Savings Plan
means the Rockwell Collins 2005 Non-Qualified Retirement Savings Plan, as amended from time to time.
|
1.310
|
Participant
means any Eligible Employee:
|
(a)
|
who is an employee of Rockwell Collins, Inc. (or one of its Affiliates);
|
(b)
|
who elects to participate in the Plan;
|
(c)
|
who completes a Participation Agreement and a Beneficiary Designation Form;
|
(d)
|
whose completed Participation Agreement and Beneficiary Designation Form are accepted by the Committee or its delegate;
|
(e)
|
who commences participation in the Plan; and
|
(f)
|
who has not elected to terminate participation in the Plan.
|
1.320
|
Participation Agreement
means a written or electronic agreement, as may be amended from time to time, which is provided to an Eligible Employee or Participant by the Committee or its delegate. The Participation Agreement bearing the latest date by the Committee or its delegate will supersede all previous such Participation Agreements in their entirety and will govern the Eligible Employee’s or Participant’s entitlement to benefits hereunder. The terms of any such Participation Agreement may be different for a particular Participant.
|
1.325
|
Performance Award
means any Performance Share or Performance Unit awarded under (and as defined in) the Company’s 2001 Long-Term Incentives Plan or 2006 Long-Term Incentives Plan.
|
1.326
|
Performance Award Deferral
means any deferral of a Performance Award made pursuant to and in accordance with the terms of this Plan. In the event of a Participant’s Retirement, Disability, death or a Separation from Service prior to the end of the performance period for which the Performance Award was granted, such Performance Award Deferral will be zero and any Performance Award payable with respect to such partial performance period will be paid at the same time it is paid to employees who did not elect to make a deferral of a Performance Award.
|
1.328
|
Performance Award Account
means:
|
(a)
|
the sum of all of a Participant’s Performance Award Deferrals;
|
(b)
|
adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b), as such provisions relate to such Performance Award Account; and
|
(c)
|
reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Performance Award Account.
|
1.330
|
Plan
means this Amended and Restated Rockwell Collins 2005 Deferred Compensation Plan, which is evidenced by this instrument and by the forms associated with the said instrument, as they may be amended from time to time.
|
1.340
|
Plan Year
means each twelve-month period ending on the last day of December.
|
1.350
|
Pre-Retirement Survivor Benefit
means the benefit set forth in Article VII.
|
1.360
|
Qualified Savings Plan
means the Rockwell Collins Retirement Savings Plan, as amended from time to time.
|
1.370
|
Retirement
,
Retire(s)
or
Retired
means, with respect to an Employee, “separation from service” with the Company and all of its Affiliates, within the meaning of Section 409A, on or after the attainment of age 55, other than for reasons of Disability or death.
|
1.380
|
Retirement Benefit
means the benefit set forth in Article VI.
|
1.390
|
Salary Deferral Account
means:
|
(a)
|
the sum of all of a Participant’s Base Annual Salary deferral amounts,
|
(b)
|
adjusted by amounts credited or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b), as such provisions relate to such Salary Deferral Account, and
|
(c)
|
reduced by any amount debited thereon equal to the amount of all distributions made to the Participant or his Beneficiary pursuant to this Plan which are related to such Salary Deferral Account.
|
1.400
|
Section 409A
means Section 409A of the Code and any regulations or other guidance issued thereunder.
|
1.410
|
Separation from Service
means a “separation from service” from the Company and all of its Affiliates, within the meaning of Section 409A, other than for reasons of Retirement or death.
|
1.420
|
Short-Term In-Service Payout
means the payout set forth in Section 5.010 of the Plan.
|
1.430
|
Specified Employee
has the meaning set forth in Section 409A, as determined each year in accordance with procedures established by the Company.
|
1.440
|
Termination Benefit
means the benefit set forth in Article VIII.
|
1.450
|
Third-Party Administrator
means an independent third party selected by the Trustee and approved by the individual who, immediately prior to a Change of Control, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer immediately prior to the Change of Control (the “Ex-CEO”).
|
1.460
|
Trust
means the master trust established by agreement between the Company and the Trustee, which will be a grantor trust.
|
1.470
|
Trustee
means Wells Fargo Bank N.A., or any successor trustee of the Trust described in Section 1.460 of this Plan.
|
1.480
|
Unforeseeable Financial Emergency
has the meaning set forth in Section 409A. Specifically, for purposes of this Plan and Section 409A, an Unforeseeable Financial Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary or unforeseeable circumstances arising as a result of events beyond the control of the Participant. The requirements of this Section 1.480 are met only if, as determined under Section 409A, the amount distributed with respect to the emergency does not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship may be relieved through reimbursement or compensation by insurance or otherwise by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).
|
1.490
|
Vice President, Rewards & Labor Strategy
means the person employed by the Company with this title or a substantially similar title.
|
2.010
|
Select Group Defined
. Since participation in the Plan is intended to be limited to a select group of management and highly compensated Employees, the Plan is only available to Eligible Employees of the Company and its Affiliates.
|
2.020
|
Commencement of Participation
. As a condition to initial participation in this Plan, each Eligible Employee who wishes to participate in the Plan will be required to complete, execute and return to the Committee or its delegate a written or electronic Deferral Election Form.
|
2.030
|
Termination of Participation and/or Deferrals
. If the Committee or its delegate determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with ERISA Sections 201(2), 301(a)(3) and 401(a)(1), the Committee will have the right, in its sole discretion, to prevent the Participant from making future deferral elections.
|
3.010
|
Base Annual Salary Deferral
. Each Plan Participant will be permitted to make an irrevocable election to defer (such Deferral Election to be made in whole percentages) receipt of an amount equal to one percent (1%) through fifty percent (50%) of his Base Annual Salary.
|
(a)
|
For each Plan Year, a Participant, will be permitted, in his sole discretion, to make an irrevocable election to defer Base Annual Salary for the following Plan Year and must deliver such Deferral Election to the Company or an Affiliate on a new Deferral Election Form before December 31
st
of the Plan Year immediately preceding the Plan Year for which the deferral is intended. If no such Deferral Election Form is timely delivered for a Plan Year, the Annual Deferral Amount will be zero for that Plan Year.
|
(b)
|
Notwithstanding the foregoing, any Participant who first becomes eligible to participate in the Plan (taking into account the aggregation rules set forth in Section 409A) within the first nine months of a Plan Year may, within thirty (30) days after first becoming eligible to participate in the Plan (taking into account the plan aggregation rules set forth in Section 409A), make an irrevocable election to defer Base Annual Salary for the Plan Year commencing as soon as administratively practicable following the Deferral Election.
|
(c)
|
During each Plan Year, the Base Annual Salary Deferral Amount will be withheld from each regularly scheduled Base Annual Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Annual Salary.
|
3.020
|
Incentive Compensation Deferral
. In addition to the Base Annual Salary deferral described in the preceding Section, each Participant will be permitted to irrevocably elect to defer receipt of an amount equal to one percent (1%) through one hundred percent (100%), such Deferral Election to be made in whole percentages, of the amount of any Incentive Compensation which he might be awarded.
|
(a)
|
In general, such Deferral Election will be made on a Deferral Election Form and will apply to Incentive Compensation to which the Participant might be entitled for the fiscal year commencing immediately following such Deferral Election.
|
(b)
|
Except as otherwise permitted by Section 409A, any election made pursuant to this Section 3.020 must be made by the close of the fiscal year immediately preceding the fiscal year to which such Incentive Compensation relates commences. Notwithstanding the foregoing, to the extent permitted under Section 409A, if the Company in its sole discretion determines that the Incentive Compensation (or any portion thereof) meets the requirements for “performance-based compensation” within the meaning of Section 409A, the Committee may permit such election to be made after the start of the fiscal year for which the Incentive Compensation may be payable for the portion that qualifies as performance-based compensation, but any such election must be made at least six months prior to the end of the fiscal year for which the Incentive Compensation may be payable. A
|
(a)
|
In general, such Deferral Election will be made on a Deferral Election Form and will apply to Performance Awards to which the Participant might be granted for the fiscal year commencing immediately following such Deferral Election.
|
(b)
|
Except as otherwise permitted by Section 409A, any election made pursuant to this Section 3.025 must be made by the close of the fiscal year immediately preceding the first fiscal year for which the Performance Award is granted. Notwithstanding the foregoing, to the extent permitted under Section 409A, if the Company in its sole discretion determines that the Performance Award (or any portion thereof) meets the requirements for “performance-based compensation” within the meaning of Section 409A, the Committee may permit such election to be made after the Performance Award is granted for the portion that qualifies as performance-based compensation, but any such election must be made at least six months prior to the end of the performance period to which the Performance Award relates. A Participant will not be permitted to make an election under the preceding sentence unless the Participant is in service with the Company or an Affiliate continually from the later of the beginning of the performance period or the date performance criteria are established through the date of the election, and no such election may be made with respect to compensation that has become readily ascertainable.
|
(a)
|
In the event of a Participant’s Retirement or death, the Participant’s Company Match Account will be credited with the Annual Company Match Amount for the Plan Year in which he retires or dies; and
|
(b)
|
If a Participant is not employed by the Company or an Affiliate as of the last day of a Plan Year for any reason other than the Participant’s Retirement or death, the Annual Company Match for such Plan Year will be zero.
|
(a)
|
A Participant will have a one hundred percent (100%) vested interest in his Account Balance.
|
(b)
|
Notwithstanding anything to the contrary contained in this Plan, in the event of a Change of Control, a Participant’s Account Balance and any other interest of his under this Plan at the time of the occurrence of the Change of Control will remain one hundred percent (100%) vested, if such interest is already 100% vested at that time and, if such interest is
|
4.020
|
Crediting/Debiting of Account Balances
.
In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee or its delegate, in its sole discretion, amounts will be credited or debited to a Participant’s Account Balance in the manner set forth in the provisions of this Section.
|
(a)
|
Allocation to Measurement Funds
. A Participant, in connection with his initial Deferral Election in accordance with Section 3.010 or 3.020 above, will be permitted to also elect to have one or more Measurement Funds used to determine the amounts to be credited to his Account Balance and his election will continue to be in effect thereafter, unless it should be changed in accordance with subsection (c). If it is determined by the Committee or its delegate that an investment election made by a Participant is invalid or defective, the Participant’s election, until duly corrected by him, will be deemed to have been made in favor of the Fidelity Puritan® Fund or such other Measurement Fund as may be designated by the Vice President, Rewards & Labor Strategy from time to time.
|
(b)
|
Crediting or Debiting Method
. The performance (either positive or negative) of each elected Measurement Fund will be determined by the Committee or its delegate, based on the performance of the Measurement Funds themselves. A Participant’s Account Balance will be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant, as determined by the Committee or its delegate in its sole discretion, as though:
|
(1)
|
a Participant’s Account Balance were actually invested in the Measurement Fund(s) selected by the Participant as of the close of business on any business day, at the closing price on that day;
|
(2)
|
the portion of the amount actually deferred during any pay period was invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable on such day, no later than the close of business on the first business day after the day on which such amounts are actually deferred, at the closing price on such date; and
|
(3)
|
any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the applicable percentages, no earlier than one business day prior to the distribution, at the closing price on such date.
|
(c)
|
Transfers among Measurement Funds
. The Participant will be permitted to change, on a daily basis, any previous Measurement Fund election or elections he has made with regard to his Account Balance. The elections and changes to such elections which a Participant makes pursuant to this subsection will be made by means of any method (including any available telephonic or electronic method which is acceptable to the Committee or its delegate at the time the election or change is made by the Participant), and may be made at any time and will be effective as of the New York Stock Exchange closing immediately following the making of that election or change.
|
(d)
|
No Actual Investment
. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance will not be considered or construed in any manner as an actual investment of his Account Balance in any such Measurement Fund. In the event that the Company or the Trustee, in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant will have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance will at all times be a bookkeeping entry only and will not represent any investment made on his behalf by the Company or the Trust. The Participant will at all times remain an unsecured creditor of the Company.
|
(e)
|
Company Reservation of Rights
. Consistent with the preceding sentence, nothing to the contrary in this Plan or any of its forms or communication material, nor in any document associated with the Trust, should be interpreted or understood to provide Participants or their Beneficiaries with any current, direct rights with respect to the assets held by the Trustee in the Trust.
|
(a)
|
Deferral Amounts
. For each Plan Year, the Company or any Affiliate employing the Participant will withhold from that portion of the Participant’s Base Annual Salary, Incentive Compensation, or Performance Award which is being deferred the Participant’s share of FICA and other employment taxes on such deferrals.
|
(b)
|
Annual Company Match Amounts
. For each Plan Year in which Company Match Amount is credited to the Participant, the Company or any Affiliate employing the Participant will withhold the Participant’s share of FICA and other employment taxes on the amount credited to such Company Match Account.
|
(c)
|
Distributions
. The Company or any Affiliate employing the Participant, or the Trustee of the Trust, will withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Company and the trustee of the Trust.
|
5.010
|
Short-Term In-Service Payouts
.
In connection with each election to defer, a Participant may irrevocably elect to receive a future Short-Term In -Service Payout from the Plan with respect to such Salary Deferral Account, Company Match Account, Incentive Compensation Deferral Account, and Performance Award Account. Any such election must be made no later than (i) December 31st of the Plan Year immediately preceding the Plan Year to which the Base Annual Salary deferral relates and (ii) the close of the fiscal year immediately preceding the first fiscal year to which the Incentive Compensation or Performance Award relates; provided, however, that if the Incentive Compensation or Performance Award qualifies as “performance-based compensation” within the meaning of Section 409A, the Committee may permit such election to
|
(a)
|
Subject to the Deduction Limitation, the said Short-Term In-Service Payout will be a lump sum payment in an amount that is equal to the sum of the deferrals and Annual Company Match Amount, as adjusted for amounts credited or debited in the manner provided in Section 4.020 on that amount.
|
(b)
|
Subject to the Deduction Limitation and the other terms and conditions of this Plan, each Short‑Term In-Service Payout elected will be paid out during a sixty (60) day period commencing immediately after the last day of any Plan Year designated by the Participant that is at least three Plan Years after the Plan Year in which the deferral occurred. By way of example, if a three-year Short-Term In-Service Payout is elected for amounts that are deferred in the Plan Year commencing January 1, 2008, the three-year Short-Term In-Service Payout would become payable during a sixty (60) day period commencing January 1, 2012.
|
(c)
|
Should an event occur that triggers a benefit under Article VI, VII, or VIII any deferrals, plus amounts credited or debited thereon, that is subject to a Short-Term In-Service Payout election under this Section will not be paid in accordance with this Section, but will instead be paid in accordance with the other applicable Article.
|
5.020
|
Withdrawal for Unforeseeable Financial Emergencies
.
In the event that any Participant should encounter an Unforeseeable Financial Emergency, such Participant may:
|
(a)
|
petition the Committee or its delegate to suspend any deferrals required to be made on his behalf, and/or
|
(b)
|
petition the Committee or its delegate to permit him to receive a partial or full payout from the Plan. Such a payout will not exceed the lesser of:
|
(1)
|
the Participant’s Account Balance, calculated as if the Participant were receiving a Termination Benefit; and
|
(2)
|
the amount reasonably needed to satisfy the Unforeseeable Financial Emergency.
|
5.030
|
409A Change of Control Payments
. Notwithstanding any other provision of this Plan to the contrary, a Participant may elect to have his interest in and to Accounts hereunder paid in a lump sum, in the event of the occurrence of a 409A Change of Control, subject to the following:
|
(a)
|
To be effective, the election of a Participant pursuant to this Section 5.030 must be made in writing and filed with the Committee or filed electronically on or before the latest of (1) December 31, 2008, (2) December 31st of the calendar year immediately preceding the first Plan Year with respect to which the Participant has deferred Base Annual Salary, Incentive Compensation, Performance Award and/or Annual Company Match Amounts, or (3) the thirtieth day after initial eligibility for the Plan or any similar Company deferred
|
(b)
|
Any lump sum payments which are to be made on account of the occurrence of a 409A Change of Control shall be made within forty-five (45) days following such 409A Change of Control.
|
(c)
|
Notwithstanding the foregoing, if the Participant does not file a timely written or electronic election in accordance with Section 5.030(a) to receive or not receive his or her Accounts under the Plan in a lump sum upon a 409A Change of Control, then such Participant’s Accounts under the Plan will automatically be paid in a lump sum upon a 409A Change of Control.
|
6.010
|
Retirement Benefit
.
Subject to the Deduction Limitation, a Participant who Retires will receive, as a Retirement Benefit, his Account Balance.
|
6.020
|
Payment of Retirement Benefit
.
A Participant, in connection with his commencement of participation in the Plan, may elect to receive the Retirement Benefit in a lump sum or pursuant to an Annual Installment Method of periods of from two (2) through fifteen (15) years. The Participant may change any election he has previously made to a different payout period permitted hereunder, but only one such a change may be made with respect to any single election. Such change will be accomplished by the Participant notifying the Committee or its delegate, but such change will not be valid, unless it has been submitted by the Participant and accepted by the Committee or its delegate (in the Committee’s or delegate’s discretion) in accordance with the rules set forth in Section 10.020. The Participant’s most recent election accepted by the Committee or its delegate shall govern the payout of the Retirement Benefit. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such benefit shall be payable in a lump sum. The lump sum payment shall be made, or installment payments shall commence, within the first sixty (60) days following the Plan Year in which the Participant Retires. Any payment made shall be subject to the Deduction Limitation.
|
6.030
|
Death Prior to Completion of Retirement Benefit
.
If a Participant dies after Retirement distributions commence but before the Retirement Benefit is paid in full, the Participant’s unpaid Retirement Benefit payments shall continue and shall be paid to the Participant’s Beneficiary over the remaining number of years and in the same amounts and form and time of payment as that benefit would have been paid to the Participant had the Participant survived.
|
7.010
|
Pre-Retirement Survivor Benefit
.
Subject to the Deduction Limitation, the Participant’s Beneficiary shall receive a Pre-Retirement Survivor Benefit equal to the Participant’s Account Balance if the Participant dies before he Retires or experiences a Separation from Service.
|
7.020
|
Payment of Pre-Retirement Survivor Benefit
.
Any Pre-Retirement Survivor Benefit payable pursuant to Section 7.010 will be paid in a lump sum within the first sixty days of the calendar year following the year which includes the Participant’s death. Such lump sum payment will be paid to the Participant’s beneficiary as designated on the Beneficiary Designation Form most
|
8.010
|
Separation from Service Benefit
.
Subject to the Deduction Limitation, the Participant will receive a Separation from Service Benefit, which will be equal to the Participant’s Account Balance if a Participant experiences a Separation from Service prior to his Retirement or death.
|
8.020
|
Payment of Separation from Service Benefit
.
The form of payment of a Participant’s Account Balance, if such payment is due to the Participant’s Separation from Service, will in all cases be a lump sum in cash. Payment of such Separation from Service Benefit will be paid within the first sixty (60) days of the calendar year immediately following the Plan Year which includes the Participant’s Separation from Service.
|
9.010
|
Disability Waiver
.
|
(a)
|
Waiver of Deferral
. A Participant who is determined by the Committee or its delegate to be suffering from a Disability will be excused from fulfilling deferrals that would otherwise have been withheld from his Base Annual Salary, Incentive Compensation or Performance Awards after he is determined to have suffered a Disability. During the period of Disability, such Participant will continue to be considered a Participant for all other purposes of this Plan.
|
(b)
|
Return to Work
. If a Participant returns to employment after a Disability ceases, subject to Section 409A, the Participant may continue to defer amounts for the remainder of the Plan Year and for every Plan Year thereafter while he is a Participant in the Plan.
|
10.010
|
Section 409A Generally
. This Plan is intended to comply with Section 409A. Notwithstanding any other provision of this Plan to the contrary, the Company makes no representation that this Plan or any amounts payable or benefits provided under this Plan will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to this Plan.
|
10.020
|
Changes in Elections
.
Notwithstanding any other provision of this Plan to the contrary, once an election is made pursuant to this Plan it shall be irrevocable unless all of the following conditions are met:
|
(a)
|
the election to change the time or form of payment will not become effective until the date that is one year after the date on which the election to make the change is made;
|
(b)
|
except with respect to any payment to be made upon the death of a Participant, the form of payment, as changed, will defer payment for the Plan Year for a minimum of five (5) years later than the date that payment of such Participant’s Account Balances would otherwise have been made under this Plan; and
|
(c)
|
with respect to a payment that is to be made upon a fixed date or schedule of dates, the election to change the form of payment is made no less than twelve (12) months before the
|
10.030
|
Six Month Wait for Specified Employees
.
Notwithstanding any other provision of this Plan to the contrary, to the extent that any Account payable under the Plan constitute an amount payable upon Separation from Service or Retirement to any Participant under the Plan who is deemed to be a Specified Employee, then such amount will not be paid during the six (6) month period following such Separation from Service or Retirement. If the provisions of this Section 10.030 apply to a Participant who incurs a Separation from Service or Retirement, within the first six (6) months of the calendar year, then such amount will be paid within the first sixty (60) days following the close of the calendar year which includes the Participant’s Separation from Service or Retirement. If the provisions of this Section 10.030 apply to a Participant who incurs a Separation from Service or Retirement within the last six (6) months of the calendar year, then such amount will be paid within the first sixty (60) days after June 30th of the calendar year following the year in which includes the Participant’s Separation from Service or Retirement.
|
11.010
|
Beneficiary
.
Each Participant will have the right, at any time, to designate his Beneficiary or Beneficiaries (both primary and contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.
|
11.020
|
Beneficiary Designation or Change of Designation
.
A Participant will be permitted to designate his Beneficiary by completing and signing a written or electronic Beneficiary Designation Form
,
and returning it to the Committee or its delegate. A Participant will have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the written or electronic Beneficiary Designation Form and the Committee’s or its delegate’s rules and procedures, as in effect from time to time. Upon the acceptance by the Committee or its delegate of a new written or electronic Beneficiary Designation Form, all Beneficiary designations previously filed will be canceled. The Committee or its delegate will be entitled to rely on the last written or electronic Beneficiary Designation Form filed by the Participant and accepted by the Committee or its delegate prior to the Participant’s death.
|
11.030
|
Spousal Consent Required
.
If a Participant names someone other than his spouse as a Beneficiary, a spousal consent, in the written or electronic form designated by the Committee or its delegate, must be signed by that Participant’s spouse and returned to the Committee or its delegate.
|
11.040
|
Acknowledgment
.
No designation or change in designation of a Beneficiary will be effective until received and acknowledged by the Committee or its delegate.
|
11.050
|
Absence of Valid Beneficiary Designation
.
If a Participant fails to designate a Beneficiary as provided in the preceding Sections or, if all designated Beneficia-ries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary will be deemed to be his surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary will be payable to the executor or personal representative of the Participant’s estate.
|
11.060
|
Doubt as to Beneficiary
.
Subject to and in accordance with Section 409A, if the Committee or its delegate has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee or its delegate will have the right, exercisable in its discretion, to withhold such payments until this matter is resolved to the Committee’s or the delegate’s satisfaction.
|
11.070
|
Discharge of Obligations
.
The payment of benefits under the Plan to a Beneficiary will fully and completely discharge the Company and all of its Affiliates and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s participation in this Plan will terminate upon such full payment of benefits.
|
12.010
|
Paid Leave of Absence
.
Subject to Section 409A, if a Participant is authorized by the Company or the Affiliate employing the Participant for any reason to take a company-paid leave of absence, the Participant will continue to be considered to be an Eligible Employee and deferrals will continue to be withheld during such paid leave of absence. Notwithstanding the foregoing, such withholding will cease on the date such paid leave of absence is deemed to be a Separation from Service for purposes of Section 409A.
|
12.020
|
Unpaid Leave of Absence
.
Subject to Section 409A, if a Participant is authorized by the Company or the Affiliate employing the Participant to take an unpaid leave of absence, the Participant will continue to be considered an Eligible Employee and the Participant will not be permitted to make deferrals until the Participant returns to a paid employment status. Upon such return, deferrals will resume for the remaining portion of the Plan Year in which the return occurs, based on the deferral election, if any, made for that Plan Year. If no election was made for that Plan Year, no deferral will be withheld.
|
13.010
|
Termination
.
Although the Company and each Affiliate anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company or any such Affiliate will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to discontinue sponsorship of the Plan and/or to terminate the Plan at any time with respect to any or all of its participating Employees, by action of the Board of Directors. Notwithstanding the foregoing, except as otherwise permitted by Section 409A, in the event of any termination of the Plan, any amounts payable under the Plan shall continue to be paid in accordance with the terms of the Plan in effect on the date of Plan termination.
|
13.020
|
Amendment
.
The Company may, at any time, amend or modify the Plan in whole or in part by action of the Board of Directors; provided, however, that:
|
(a)
|
no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Separation from Service as of the effective date of the amendment or modification or, if the amendment or modification occurs after the date upon which the Participant was eligible to Retire, the Participant had Retired as of the effective date of the amendment or modification;
|
(b)
|
no amendment or modification of this Section 13.020 Plan shall be effective; and
|
(c)
|
the amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification.
|
13.030
|
Effect of Payment
.
The full payment of all applicable benefits hereunder shall completely discharge all obligations to a Participant and his Beneficiaries under this Plan.
|
14.010
|
Committee Duties
.
Except as otherwise provided in this Article, this Plan will be administered by the Committee and its delegates. Members of the Committee may be Participants under this Plan. The Committee will also have the discretion and authority to:
|
(a)
|
make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan, and
|
(b)
|
decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan.
|
14.020
|
Administration Upon Change of Control
.
Notwithstanding any other provision of this Plan to the contrary, upon and after the occurrence of a Change of Control, the Plan will be administered by the Third-Party Administrator. The Third-Party Administrator so selected will have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to, benefit entitlement determinations; provided, however, upon and after the occurrence of a Change of Control, such administrator will have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust.
|
(a)
|
pay all reasonable administrative expenses and fees of the Third-Party Administrator;
|
(b)
|
indemnify the Third-Party Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of such administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the said administrator or its employees or agents; and
|
(c)
|
supply full and timely information to the Third-Party Administrator on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Retirement, Disability, death or Separation from Service of the Participants, and such other pertinent information as the Third-Party Administrator may reasonably require.
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14.030
|
Agents
.
In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company or any Affiliate. The Vice President, Rewards & Labor Strategy will at all times, unless otherwise determined by the Committee, be deemed to be and shall be specifically referred to herein as the Committee’s delegate for all purposes herein.
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14.040
|
Binding Effect of Decisions
.
The decision or action of the Committee or its delegate with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder will be final and conclusive and binding upon all persons having any interest in the Plan.
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14.050
|
Indemnity of Committee
.
The Company and its Affiliates shall indemnify and hold harmless the members of the Committee, any Employee to whom the duties of the Committee may be delegated, and the Committee or its delegate against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, or such Employee.
|
14.060
|
Employer Information
.
To enable the Committee and its delegates to perform their functions, the Company will supply full and timely information to the Committee and delegates on all matters relating to the compensation of its Participants, the date and circum-stances of the Retirement, Disability, death or circumstances of the Retirement, Disability, death or Separation from Service of its Participants, and such other pertinent information as the Committee or its delegate may reasonably require.
|
16.010
|
Presentation of Claim
.
Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee or its delegate a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the
|
16.020
|
Notification of Decision
.
The Committee or its delegate will consider a Claimant’s claim within a reasonable time, and will notify the Claimant in writing:
|
(a)
|
that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or
|
(b)
|
that the Committee or its delegate has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant;
|
(c)
|
the specific reason(s) for the denial of the claim, or any part of it;
|
(1)
|
specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
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(2)
|
a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and
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(3)
|
an explanation of the claim review procedure set forth in Section 16.030 below.
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16.030
|
Review of a Denied Claim
.
Within sixty (60) days after receiving a notice from the Committee or its delegate that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee or its delegate a written request for a review of the denial of the claim. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):
|
(a)
|
may review pertinent documents;
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(b)
|
may submit written comments or other documents; and/or
|
(c)
|
may request a hearing, which the Committee or its delegate, in its sole discretion, may grant.
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16.040
|
Decision on Review
.
The Committee or its delegate will render any decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s or its delegate’s decision must be rendered within one hundred and twenty (120) days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:
|
(a)
|
specific reasons for the decision;
|
(b)
|
specific reference(s) to the pertinent Plan provisions upon which the decision was based; and
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(c)
|
such other matters as the Committee or its delegate deems relevant.
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16.050
|
Legal Action
.
A Claimant’s compliance with the foregoing provisions of this Article XVI is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.
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17.010
|
Establishment of the Trust
.
The Company shall establish the Trust (which may be referred to herein as a “Rabbi Trust”). The Trust shall become irrevocable upon a Change of Control (to the extent not then irrevocable). Notwithstanding any other provision of this Plan to the contrary, the Trust shall not become irrevocable or funded with respect to this Plan upon the occurrence of an event described in Section 1.110(d). After the Trust has become irrevocable with respect to the Plan, except as otherwise provided in Section 12 of the Trust, the Trust shall remain irrevocable with respect to the Plan until all benefits due under the Plan and benefits and account balances due to participants and beneficiaries under any other plan covered by the Trust have been paid in full. Upon establishment of the Trust, the Company shall provide for funding of the Trust in accordance with the terms of the Trust.
|
17.020
|
Interrelationship of the Plan and the Trust
.
The provisions of the Plan and each Participant’s Participation Agreement will govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust will govern the rights of the Company and its Affiliates, Participants and the creditors of the Company and its Affiliates to the assets transferred to the Trust. The Company and each of its Affiliates employing any Participant will at all times remain liable to carry out their obligations under the Plan.
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17.030
|
Distributions From the Trust
.
The Company’s and each of its Affiliate’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution will reduce their obligations under this Plan.
|
(a)
|
be a non-qualified grantor trust which satisfies in all material respects the requirement of Revenue Procedure 92-64, 1992-2 CB 122 (or any successor Revenue Procedure or other applicable authority);
|
(b)
|
become irrevocable upon a Change of Control, to the extent not then irrevocable (other than an event described in Section 1.110(d)); and
|
(c)
|
provide that any successor trustee shall be a bank trust department or other party that may be granted corporate trustee powers under state law.
|
18.010
|
Status of Plan
.
The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Section 201(2), 301(a)(3) and 401(a)(1). The Plan will be administered and interpreted to the extent possible in a manner consistent with that intent.
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18.020
|
Unsecured General Creditor
.
Participants and their Bene-ficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company
|
18.030
|
Company Liability
.
The Company’s or an Affiliate’s liability for the payment of benefits will be defined only by the Plan and the Participant’s specific Participation Agreement. The Company and its Affiliates will have no obliga-tion to a Participant under the Plan, except as expressly provided in the Plan and the Participant’s Participation Agreement.
|
18.040
|
Nonassignability
.
Neither a Participant nor any other person will have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transfer-able. No part of the amounts payable will, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
|
18.050
|
Not a Contract of Employment
.
The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Company or any of its Affiliates and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Company or an Affiliate or to interfere with the right of the Company or an Affiliate to discipline or discharge the Participant at any time.
|
18.060
|
Furnishing Information
. A Participant or his Beneficiary will cooperate with the Committee or its delegate by furnishing any and all information requested by the Committee or its delegate and take such other actions as may be requested in order to facilitate the administra-tion of the Plan and the payments of benefits hereunder.
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18.070
|
Terms
. Whenever any words are used herein in the masculine, they should be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they should be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
|
18.080
|
Captions
. The captions of the articles, sections and paragraphs of this Plan are for convenience only and do not control or affect the meaning or construction of any of its provisions.
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18.090
|
Governing Law
. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the laws of the State of Iowa.
|
18.100
|
Notice
. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:
|
18.110
|
Successors
. The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.
|
18.120
|
Spouse’s Interest
. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant will automatically pass to the Participant and will not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor will such interest pass under the laws of intestate succession.
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18.130
|
Validity
. In case any provision of this Plan should be found to be illegal or invalid for any reason, said illegality or invalidity will not affect the remaining parts hereof, but this Plan should be construed and enforced as if such illegal or invalid provision had never been inserted herein.
|
18.140
|
Minors, Incompetent Persons, etc
. If the Committee or its delegate determines that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee or its delegate may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee or its delegate may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and will be a complete discharge of any liability under the Plan for such payment amount.
|
18.150
|
Qualified Domestic Relations Order
. The Committee or its delegate is authorized to make any payments directed by court order that qualifies as a “qualified domestic relations order” under Section 414(p) in any action in which the Plan or the Committee has been named as a party.
|
(a)
|
In General
. Subject to and in accordance with Section 409A, if, for any reason, all or any portion of a Participant’s benefits under this Plan becomes taxable to the Participant under Section 409A prior to receipt, a Participant may petition the Committee or its delegate before a Change of Control, or the Trustee of the Trust after a Change of Control, for a distribution of that portion of his benefit that has become taxable under Section 409A. Upon the grant of such a petition, which grant should not be unreasonably withheld (and, after a Change of Control, must be granted), the Company or, as applicable, its Affiliate will distribute to the Participant immediately available funds in an amount equal to the taxable portion of his benefit (which amount will not exceed a Participant’s unpaid Account Balance under the Plan). If the petition is granted, the tax liability distribution will be made within 90 days of the date when the Participant’s petition is granted. Such a distribution will affect and reduce the benefits to be paid under this Plan.
|
(b)
|
Trust
. If the Trust terminates in accordance with provisions thereof and benefits are distributed from the Trust to a Participant in accordance therewith, the Participant’s benefits under this Plan will be reduced to the extent of such distributions.
|
18.170
|
Insurance
. The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Company or the trustee of the Trust, as the case may be, will be the sole owner and beneficiary of any such insurance. The Participant will have no interest whatsoever in any such policy or policies, and at the request of the Company will submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to which the Company has applied for insurance.
|
18.180
|
Requirement for Release
. Any payment to any Participant or a Participant’s present, future or former spouse or Beneficiary in accordance with the provisions of this Plan will, to the extent thereof, be in full satisfaction of all claims against the Plan, the Trustee and the Company, and the Trustee may require such Participant or Beneficiary, as a condition precedent to such payment to execute a receipt and release to such effect.
|
1.
|
I have reviewed the quarterly report on Form 10-Q for the quarter ended
June 30, 2017
of Rockwell Collins, Inc.;
|
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 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
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 (or persons performing the equivalent functions):
|
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.
|
Date: July 28, 2017
|
/s/ Robert K. Ortberg
|
|
Robert K. Ortberg
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed the quarterly report on Form 10-Q for the quarter ended
June 30, 2017
of Rockwell Collins, Inc.;
|
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 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
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 (or persons performing the equivalent functions):
|
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.
|
Date: July 28, 2017
|
/s/ Patrick E. Allen
|
|
Patrick E. Allen
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
(1)
|
The Company’s 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.
|
Date: July 28, 2017
|
/s/ Robert K. Ortberg
|
|
Robert K. Ortberg
|
|
Chairman, President and Chief Executive Officer
|
(1)
|
The Company’s 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.
|
Date: July 28, 2017
|
/s/ Patrick E. Allen
|
|
Patrick E. Allen
|
|
Senior Vice President and
|
|
Chief Financial Officer
|