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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rockwell Collins, Inc. (delisted) | NYSE:COL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 141.04 | 0 | 01:00:00 |
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Delaware
|
52-2314475
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(State or other jurisdiction
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(I.R.S. Employer
|
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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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.
|
Condensed Consolidated Financial Statements
|
|
June 30,
2018 |
|
September 30,
2017 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
621
|
|
|
$
|
703
|
|
Receivables, net
|
1,811
|
|
|
1,426
|
|
||
Inventories, net
|
2,641
|
|
|
2,451
|
|
||
Business held for sale
|
66
|
|
|
—
|
|
||
Other current assets
|
258
|
|
|
180
|
|
||
Total current assets
|
5,397
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|
|
4,760
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|
||
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|
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|
||||
Property, Net
|
1,402
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|
|
1,398
|
|
||
Goodwill
|
9,103
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|
|
9,158
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|
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Customer Relationship Intangible Assets
|
1,358
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|
|
1,525
|
|
||
Other Intangible Assets
|
553
|
|
|
604
|
|
||
Deferred Income Tax Asset
|
22
|
|
|
21
|
|
||
Other Assets
|
524
|
|
|
531
|
|
||
TOTAL ASSETS
|
$
|
18,359
|
|
|
$
|
17,997
|
|
LIABILITIES AND EQUITY
|
|
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|
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|
||
Current Liabilities:
|
|
|
|
|
|
||
Short-term debt
|
$
|
864
|
|
|
$
|
479
|
|
Accounts payable
|
832
|
|
|
927
|
|
||
Compensation and benefits
|
353
|
|
|
385
|
|
||
Advance payments from customers
|
325
|
|
|
361
|
|
||
Accrued customer incentives
|
274
|
|
|
287
|
|
||
Product warranty costs
|
192
|
|
|
186
|
|
||
Other current liabilities
|
434
|
|
|
444
|
|
||
Total current liabilities
|
3,274
|
|
|
3,069
|
|
||
|
|
|
|
||||
Long-term Debt, Net
|
6,317
|
|
|
6,676
|
|
||
Retirement Benefits
|
1,046
|
|
|
1,208
|
|
||
Deferred Income Tax Liability
|
277
|
|
|
331
|
|
||
Other Liabilities
|
647
|
|
|
663
|
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||
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|
||||
Equity:
|
|
|
|
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|
||
Common stock ($0.01 par value; shares authorized: 1,000; shares issued: June 30, 2018, 175.0; September 30, 2017, 175.0)
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
4,589
|
|
|
4,559
|
|
||
Retained earnings
|
4,468
|
|
|
3,838
|
|
||
Accumulated other comprehensive loss
|
(1,576
|
)
|
|
(1,575
|
)
|
||
Common stock in treasury, at cost (shares held: June 30, 2018, 10.7; September 30, 2017, 12.1)
|
(692
|
)
|
|
(781
|
)
|
||
Total shareowners’ equity
|
6,791
|
|
|
6,043
|
|
||
Noncontrolling interest
|
7
|
|
|
7
|
|
||
Total equity
|
6,798
|
|
|
6,050
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
18,359
|
|
|
$
|
17,997
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales:
|
|
|
|
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|
|
|
||||||||
Product sales
|
$
|
1,941
|
|
|
$
|
1,836
|
|
|
$
|
5,644
|
|
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$
|
3,935
|
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Service sales
|
267
|
|
|
258
|
|
|
755
|
|
|
694
|
|
||||
Total sales
|
2,208
|
|
|
2,094
|
|
|
6,399
|
|
|
4,629
|
|
||||
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||||||||
Costs, expenses and other:
|
|
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||||||||
Product cost of sales
|
1,448
|
|
|
1,352
|
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4,184
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|
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2,799
|
|
||||
Service cost of sales
|
177
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172
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|
|
502
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|
|
471
|
|
||||
Selling, general and administrative expenses
|
212
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|
|
213
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|
610
|
|
|
514
|
|
||||
Transaction and integration costs
|
29
|
|
|
64
|
|
|
91
|
|
|
80
|
|
||||
Interest expense
|
66
|
|
|
77
|
|
|
196
|
|
|
122
|
|
||||
Other income, net
|
7
|
|
|
(5
|
)
|
|
(16
|
)
|
|
(14
|
)
|
||||
Total costs, expenses and other
|
1,939
|
|
|
1,873
|
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|
5,567
|
|
|
3,972
|
|
||||
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||||||||
Income before income taxes
|
269
|
|
|
221
|
|
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832
|
|
|
657
|
|
||||
Income tax (benefit) expense
|
(6
|
)
|
|
42
|
|
|
40
|
|
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165
|
|
||||
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||||||||
Net income
|
$
|
275
|
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$
|
179
|
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$
|
792
|
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$
|
492
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||||||||
Earnings per share:
|
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||||||||
Basic earnings per share
|
$
|
1.67
|
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$
|
1.13
|
|
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$
|
4.83
|
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$
|
3.52
|
|
Diluted earnings per share
|
$
|
1.66
|
|
|
$
|
1.12
|
|
|
$
|
4.78
|
|
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$
|
3.48
|
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|
|
|
|
|
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|
|
||||||||
Weighted average common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
164.3
|
|
|
158.2
|
|
|
163.9
|
|
|
139.8
|
|
||||
Diluted
|
165.9
|
|
|
159.9
|
|
|
165.7
|
|
|
141.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends per share
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.99
|
|
|
$
|
0.99
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
275
|
|
|
$
|
179
|
|
|
$
|
792
|
|
|
$
|
492
|
|
Unrealized foreign currency translation and other adjustments
|
(109
|
)
|
|
50
|
|
|
(48
|
)
|
|
41
|
|
||||
Pension and other retirement benefits adjustments (net of taxes for the three and nine months ended June 30, 2018 of $5 and $18, respectively; net of taxes for the three and nine months ended June 30, 2017 of $9 and $27, respectively)
|
20
|
|
|
15
|
|
|
49
|
|
|
47
|
|
||||
Foreign currency cash flow hedge adjustments (net of taxes for the three and nine months ended June 30, 2018 of $0 and $(1), respectively; net of taxes for the three and nine months ended June 30, 2017 of $0 and $1, respectively)
|
(1
|
)
|
|
2
|
|
|
(2
|
)
|
|
4
|
|
||||
Comprehensive income
|
$
|
185
|
|
|
$
|
246
|
|
|
$
|
791
|
|
|
$
|
584
|
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
792
|
|
|
$
|
492
|
|
Adjustments to arrive at cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
153
|
|
|
118
|
|
||
Amortization of intangible assets, pre-production engineering costs and other
|
284
|
|
|
132
|
|
||
Amortization of acquired contract liability
|
(100
|
)
|
|
(42
|
)
|
||
Amortization of inventory fair value adjustment
|
—
|
|
|
44
|
|
||
Non-cash impairment charges and settlement of a contract matter
|
31
|
|
|
—
|
|
||
Stock-based compensation expense
|
27
|
|
|
21
|
|
||
Compensation and benefits paid in common stock
|
43
|
|
|
48
|
|
||
Deferred income taxes
|
(60
|
)
|
|
18
|
|
||
Pension plan contributions
|
(77
|
)
|
|
(66
|
)
|
||
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments:
|
|
|
|
||||
Receivables
|
(393
|
)
|
|
(60
|
)
|
||
Production inventory
|
(216
|
)
|
|
(88
|
)
|
||
Pre-production engineering costs
|
(65
|
)
|
|
(108
|
)
|
||
Accounts payable
|
(76
|
)
|
|
21
|
|
||
Compensation and benefits
|
(31
|
)
|
|
(19
|
)
|
||
Advance payments from customers
|
(35
|
)
|
|
1
|
|
||
Accrued customer incentives
|
(12
|
)
|
|
(17
|
)
|
||
Product warranty costs
|
6
|
|
|
(4
|
)
|
||
Income taxes
|
(7
|
)
|
|
(56
|
)
|
||
Other assets and liabilities
|
(68
|
)
|
|
(19
|
)
|
||
Cash Provided by Operating Activities
|
196
|
|
|
416
|
|
||
Investing Activities:
|
|
|
|
||||
Property additions
|
(190
|
)
|
|
(165
|
)
|
||
Acquisition of business, net of cash acquired
|
—
|
|
|
(3,429
|
)
|
||
Other investing activities
|
4
|
|
|
(5
|
)
|
||
Cash (Used for) Investing Activities
|
(186
|
)
|
|
(3,599
|
)
|
||
Financing Activities:
|
|
|
|
||||
Repayment of long-term debt, including current portion
|
(351
|
)
|
|
(338
|
)
|
||
Repayment of acquired long-term debt
|
—
|
|
|
(2,119
|
)
|
||
Purchases of treasury stock
(1)
|
(11
|
)
|
|
(46
|
)
|
||
Cash dividends
|
(162
|
)
|
|
(140
|
)
|
||
Increase in long-term borrowings
|
—
|
|
|
6,099
|
|
||
Increase (decrease) in short-term commercial paper borrowings, net
|
385
|
|
|
(78
|
)
|
||
Proceeds from the exercise of stock options
|
60
|
|
|
41
|
|
||
Other financing activities
|
(4
|
)
|
|
(4
|
)
|
||
Cash Provided by (Used for) Financing Activities
|
(83
|
)
|
|
3,415
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(9
|
)
|
|
6
|
|
||
Net Change in Cash and Cash Equivalents
|
(82
|
)
|
|
238
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
703
|
|
|
340
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
621
|
|
|
$
|
578
|
|
(1)
Includes net settlement of employee tax withholding upon vesting of share-based payment awards.
|
|
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, 2017
|
162.9
|
|
|
$
|
2
|
|
|
$
|
4,559
|
|
|
$
|
3,838
|
|
|
$
|
(1,575
|
)
|
|
$
|
(781
|
)
|
|
$
|
7
|
|
|
$
|
6,050
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
792
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
792
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(162
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(162
|
)
|
|||||||
Shares issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options
|
1.0
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
60
|
|
|||||||
Vesting of performance shares and restricted stock units
|
0.1
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Employee savings plan
|
0.3
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
43
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||||
Balance at June 30, 2018
|
164.3
|
|
|
$
|
2
|
|
|
$
|
4,589
|
|
|
$
|
4,468
|
|
|
$
|
(1,576
|
)
|
|
$
|
(692
|
)
|
|
$
|
7
|
|
|
$
|
6,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
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
|
|
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
|
485
|
|
|
Inventories, net
(1)
|
542
|
|
|
Other current assets
|
45
|
|
|
Property, net
|
271
|
|
|
Intangible Assets
|
1,586
|
|
|
Other Assets
|
53
|
|
|
Total Identifiable Assets Acquired
|
3,086
|
|
|
|
|
||
Accounts payable
|
(231
|
)
|
|
Compensation and benefits
|
(75
|
)
|
|
Advance payments from customers
|
(62
|
)
|
|
Accrued customer incentives
|
(48
|
)
|
|
Product warranty costs
|
(117
|
)
|
|
Other current liabilities
(2)
|
(366
|
)
|
|
Long-term Debt, Net
|
(2,119
|
)
|
|
Retirement Benefits
|
(12
|
)
|
|
Deferred Income Tax Liability
|
(287
|
)
|
|
Other Liabilities
(2)
|
(433
|
)
|
|
Total Liabilities Assumed
|
(3,750
|
)
|
|
Net Identifiable Assets Acquired, excluding Goodwill
|
(664
|
)
|
|
Goodwill
|
7,200
|
|
|
Net Assets Acquired
|
$
|
6,536
|
|
|
Weighted Average Life (in years)
|
|
Fair Value
(in millions)
|
||
Developed technology
|
9
|
|
$
|
435
|
|
Seating customer relationships
|
6
|
|
860
|
|
|
Other customer relationships
|
8
|
|
291
|
|
|
Total
|
7
|
|
$
|
1,586
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Transaction and integration costs
|
|
$
|
23
|
|
|
$
|
64
|
|
|
$
|
64
|
|
|
$
|
80
|
|
Bridge facility fees (included in Interest expense)
|
|
—
|
|
|
18
|
|
|
—
|
|
|
29
|
|
||||
Total Transaction, integration and financing costs
|
|
$
|
23
|
|
|
$
|
82
|
|
|
$
|
64
|
|
|
$
|
109
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in millions, except per share amounts)
|
(as Reported)
|
|
(Pro forma)
|
|
(as Reported)
|
|
(Pro forma)
|
||||||||
Sales
|
$
|
2,208
|
|
|
$
|
2,219
|
|
|
$
|
6,399
|
|
|
$
|
6,182
|
|
Net income attributable to common shareowners
|
275
|
|
|
277
|
|
|
792
|
|
|
664
|
|
||||
Basic earnings per share
|
1.67
|
|
|
1.71
|
|
|
4.83
|
|
|
4.10
|
|
||||
Diluted earnings per share
|
1.66
|
|
|
1.70
|
|
|
4.78
|
|
|
4.06
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Increases / (decreases) to pro forma net income:
|
|
|
|
|
|
|
|
||||||||
Net reduction to depreciation resulting from fixed asset adjustments
(1)
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Advisory, legal and accounting service fees
(2)
|
—
|
|
|
123
|
|
|
—
|
|
|
156
|
|
||||
Amortization of acquired B/E Aerospace intangible assets, net
(3)
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(83
|
)
|
||||
Interest expense incurred on acquisition financing, net
(4)
|
—
|
|
|
8
|
|
|
—
|
|
|
(17
|
)
|
||||
Long-term contract program adjustments
(5)
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(59
|
)
|
||||
Acquired contract liability amortization
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
||||
Inventory fair value adjustment amortization
(7)
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Compensation adjustments
(8)
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
(in millions)
|
Interior Systems
|
|
Commercial
Systems
|
|
Government
Systems
|
|
Information Management Services
|
|
Total
|
||||||||||
Balance at September 30, 2017
|
$
|
7,223
|
|
|
$
|
325
|
|
|
$
|
506
|
|
|
$
|
1,104
|
|
|
$
|
9,158
|
|
B/E Aerospace acquisition adjustments
|
(370
|
)
|
|
—
|
|
|
385
|
|
|
—
|
|
|
15
|
|
|||||
Reclassification of business to held for sale (see Note 4)
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|||||
Foreign currency translation adjustments
|
(9
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Balance at June 30, 2018
|
$
|
6,785
|
|
|
$
|
325
|
|
|
$
|
889
|
|
|
$
|
1,104
|
|
|
$
|
9,103
|
|
|
June 30, 2018
|
|
September 30, 2017
|
||||||||||||||||||||
(in millions)
|
Gross
|
|
Accum
Amort
|
|
Net
|
|
Gross
|
|
Accum
Amort
|
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technology and patents
|
$
|
805
|
|
|
$
|
(306
|
)
|
|
$
|
499
|
|
|
$
|
806
|
|
|
$
|
(256
|
)
|
|
$
|
550
|
|
Backlog
|
6
|
|
|
(5
|
)
|
|
1
|
|
|
6
|
|
|
(5
|
)
|
|
1
|
|
||||||
Customer relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Acquired
|
1,489
|
|
|
(363
|
)
|
|
1,126
|
|
|
1,495
|
|
|
(213
|
)
|
|
1,282
|
|
||||||
Up-front sales incentives
|
341
|
|
|
(109
|
)
|
|
232
|
|
|
336
|
|
|
(93
|
)
|
|
243
|
|
||||||
License agreements
|
16
|
|
|
(11
|
)
|
|
5
|
|
|
15
|
|
|
(10
|
)
|
|
5
|
|
||||||
Trademarks and tradenames
|
15
|
|
|
(14
|
)
|
|
1
|
|
|
15
|
|
|
(14
|
)
|
|
1
|
|
||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and tradenames
|
47
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||||
Intangible assets
|
$
|
2,719
|
|
|
$
|
(808
|
)
|
|
$
|
1,911
|
|
|
$
|
2,720
|
|
|
$
|
(591
|
)
|
|
$
|
2,129
|
|
(in millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||
Anticipated amortization expense for up-front sales incentives
|
$
|
20
|
|
|
$
|
23
|
|
|
$
|
25
|
|
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
129
|
|
Anticipated amortization expense for all other intangible assets
|
267
|
|
|
265
|
|
|
264
|
|
|
263
|
|
|
260
|
|
|
513
|
|
||||||
Total
|
$
|
287
|
|
|
$
|
288
|
|
|
$
|
289
|
|
|
$
|
289
|
|
|
$
|
286
|
|
|
$
|
642
|
|
4.
|
Business Held for Sale
|
5.
|
Receivables, Net
|
(in millions)
|
June 30,
2018 |
|
September 30,
2017 |
||||
Billed
|
$
|
1,305
|
|
|
$
|
1,055
|
|
Unbilled
|
621
|
|
|
461
|
|
||
Less progress payments
|
(99
|
)
|
|
(78
|
)
|
||
Total
|
1,827
|
|
|
1,438
|
|
||
Less allowance for doubtful accounts
|
(16
|
)
|
|
(12
|
)
|
||
Receivables, net
|
$
|
1,811
|
|
|
$
|
1,426
|
|
6.
|
Inventories, Net
|
(in millions)
|
June 30,
2018 |
|
September 30,
2017 |
||||
Finished goods
|
$
|
293
|
|
|
$
|
259
|
|
Work in process
|
376
|
|
|
347
|
|
||
Raw materials, parts and supplies
|
819
|
|
|
677
|
|
||
Less progress payments
|
(19
|
)
|
|
(7
|
)
|
||
Total
|
1,469
|
|
|
1,276
|
|
||
Pre-production engineering costs
|
1,172
|
|
|
1,175
|
|
||
Inventories, net
|
$
|
2,641
|
|
|
$
|
2,451
|
|
(in millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||
Anticipated amortization expense for pre-production engineering costs
|
$
|
91
|
|
|
$
|
138
|
|
|
$
|
147
|
|
|
$
|
142
|
|
|
$
|
134
|
|
|
$
|
581
|
|
7.
|
Other Assets
|
(in millions)
|
June 30,
2018 |
|
September 30,
2017 |
||||
Long-term receivables
|
$
|
206
|
|
|
$
|
211
|
|
Investments in equity affiliates
|
6
|
|
|
7
|
|
||
Exchange and rental assets (net of accumulated depreciation of $111 at June 30, 2018 and $106 at September 30, 2017)
|
71
|
|
|
71
|
|
||
Other
|
241
|
|
|
242
|
|
||
Other Assets
|
$
|
524
|
|
|
$
|
531
|
|
8.
|
Debt
|
(in millions, except weighted average amounts)
|
June 30,
2018 |
|
September 30,
2017 |
||||
Short-term commercial paper borrowings outstanding
(1)
|
$
|
715
|
|
|
$
|
330
|
|
Current portion of long-term debt
|
149
|
|
|
149
|
|
||
Short-term debt
|
$
|
864
|
|
|
$
|
479
|
|
Weighted average annualized interest rate of commercial paper borrowings
|
2.36
|
%
|
|
1.45
|
%
|
||
Weighted average maturity period of commercial paper borrowings (days)
|
13
|
|
|
18
|
|
(in millions, except interest rate figures)
|
Interest Rate
|
|
June 30,
2018 |
|
September 30,
2017 |
||||
Fixed-rate notes due:
|
|
|
|
|
|
||||
July 2019
|
1.95%
|
|
$
|
300
|
|
|
$
|
300
|
|
July 2019
|
5.25%
|
|
300
|
|
|
300
|
|
||
November 2021
|
3.10%
|
|
250
|
|
|
250
|
|
||
March 2022
|
2.80%
|
|
1,100
|
|
|
1,100
|
|
||
December 2023
|
3.70%
|
|
400
|
|
|
400
|
|
||
March 2024
|
3.20%
|
|
950
|
|
|
950
|
|
||
March 2027
|
3.50%
|
|
1,300
|
|
|
1,300
|
|
||
December 2043
|
4.80%
|
|
400
|
|
|
400
|
|
||
April 2047
|
4.35%
|
|
1,000
|
|
|
1,000
|
|
||
Variable-rate term loan due:
|
|
|
|
|
|
||||
April 2020
|
1 month LIBOR + 1.25%
(1)
|
|
519
|
|
|
870
|
|
||
Fair value swap adjustment (see Notes 13 and 14)
|
|
|
(1
|
)
|
|
14
|
|
||
Total
|
|
|
6,518
|
|
|
6,884
|
|
||
Less unamortized debt issuance costs and discounts
|
|
|
52
|
|
|
59
|
|
||
Less current portion of long-term debt
|
|
|
149
|
|
|
149
|
|
||
Long-term Debt, Net
|
|
|
$
|
6,317
|
|
|
$
|
6,676
|
|
9.
|
Retirement Benefits
|
|
Pension Benefits
|
|
Other Retirement Benefits
|
||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
30
|
|
|
28
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(61
|
)
|
|
(61
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
||||||
Prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Net actuarial loss
|
20
|
|
|
23
|
|
|
1
|
|
|
2
|
|
||||
Net benefit expense (income)
|
$
|
(8
|
)
|
|
$
|
(6
|
)
|
|
$
|
3
|
|
|
$
|
3
|
|
|
Pension Benefits
|
|
Other Retirement Benefits
|
||||||||||||
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
90
|
|
|
83
|
|
|
4
|
|
|
4
|
|
||||
Expected return on plan assets
|
(182
|
)
|
|
(181
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Net actuarial loss
|
61
|
|
|
69
|
|
|
5
|
|
|
6
|
|
||||
Net benefit expense (income)
|
$
|
(22
|
)
|
|
$
|
(19
|
)
|
|
$
|
10
|
|
|
$
|
10
|
|
10.
|
Stock-Based Compensation and Earnings Per Share
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Stock-based compensation expense included in:
|
|
|
|
|
|
|
|
||||||||
Product cost of sales
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
6
|
|
Selling, general and administrative expenses
|
6
|
|
|
6
|
|
|
19
|
|
|
15
|
|
||||
Total
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
27
|
|
|
$
|
21
|
|
Income tax benefit
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
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, 2018
|
—
|
|
|
$
|
—
|
|
|
142.2
|
|
|
$
|
138.66
|
|
|
263.9
|
|
|
$
|
133.57
|
|
Nine months ended June 30, 2017
|
667.2
|
|
|
$
|
17.26
|
|
|
129.0
|
|
|
$
|
87.38
|
|
|
224.2
|
|
|
$
|
91.94
|
|
|
|
2017 Grants
|
|
Risk-free interest rate
|
|
1.0% - 2.7%
|
|
Expected dividend yield
|
|
1.3% - 1.5%
|
|
Expected volatility
|
|
19.0
|
%
|
Expected life
|
|
7 years
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
275
|
|
|
$
|
179
|
|
|
$
|
792
|
|
|
$
|
492
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share – weighted average common shares
|
164.3
|
|
|
158.2
|
|
|
163.9
|
|
|
139.8
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
0.9
|
|
|
1.1
|
|
|
1.2
|
|
|
1.1
|
|
||||
Performance shares, restricted stock and restricted stock units
|
0.7
|
|
|
0.6
|
|
|
0.6
|
|
|
0.5
|
|
||||
Dilutive potential common shares
|
1.6
|
|
|
1.7
|
|
|
1.8
|
|
|
1.6
|
|
||||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion
|
165.9
|
|
|
159.9
|
|
|
165.7
|
|
|
141.4
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
1.67
|
|
|
$
|
1.13
|
|
|
$
|
4.83
|
|
|
$
|
3.52
|
|
Diluted
|
$
|
1.66
|
|
|
$
|
1.12
|
|
|
$
|
4.78
|
|
|
$
|
3.48
|
|
11.
|
Accumulated Other Comprehensive Loss
|
(in millions)
|
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, 2018
|
$
|
62
|
|
|
$
|
(1,546
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1,486
|
)
|
Other comprehensive income (loss) before reclassifications
|
(109
|
)
|
|
3
|
|
|
(1
|
)
|
|
(107
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Net current period other comprehensive income (loss)
|
(109
|
)
|
|
20
|
|
|
(1
|
)
|
|
(90
|
)
|
||||
Balance at June 30, 2018
|
$
|
(47
|
)
|
|
$
|
(1,526
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1,576
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2017
|
$
|
1
|
|
|
$
|
(1,575
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,575
|
)
|
Other comprehensive income (loss) before reclassifications
|
(48
|
)
|
|
1
|
|
|
(1
|
)
|
|
(48
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
48
|
|
|
(1
|
)
|
|
47
|
|
||||
Net current period other comprehensive income (loss)
|
(48
|
)
|
|
49
|
|
|
(2
|
)
|
|
(1
|
)
|
||||
Balance at June 30, 2018
|
$
|
(47
|
)
|
|
$
|
(1,526
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1,576
|
)
|
|
|
|
|
|
|
|
|
||||||||
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
|
)
|
12.
|
Income Taxes
|
13.
|
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, 2018
|
|
September 30, 2017
|
||||
(in millions)
|
Fair Value
Hierarchy
|
|
Fair Value
Asset (Liability)
|
|
Fair Value
Asset (Liability)
|
||||
Deferred compensation plan investments
|
Level 1
|
|
$
|
66
|
|
|
$
|
63
|
|
Deferred compensation plan investments
|
Level 2
|
|
27
|
|
|
24
|
|
||
Interest rate swap assets
|
Level 2
|
|
1
|
|
|
14
|
|
||
Interest rate swap liabilities
|
Level 2
|
|
(2
|
)
|
|
—
|
|
||
Foreign currency forward exchange contract assets
|
Level 2
|
|
5
|
|
|
8
|
|
||
Foreign currency forward exchange contract liabilities
|
Level 2
|
|
(11
|
)
|
|
(7
|
)
|
||
Acquisition-related contingent consideration
|
Level 3
|
|
(15
|
)
|
|
(17
|
)
|
|
Asset (Liability)
|
||||||||||||||
|
June 30, 2018
|
|
September 30, 2017
|
||||||||||||
(in millions)
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Cash and cash equivalents
|
$
|
621
|
|
|
$
|
621
|
|
|
$
|
703
|
|
|
$
|
703
|
|
Short-term debt
|
(864
|
)
|
|
(864
|
)
|
|
(479
|
)
|
|
(479
|
)
|
||||
Long-term debt
|
(6,318
|
)
|
|
(6,207
|
)
|
|
(6,662
|
)
|
|
(6,898
|
)
|
14.
|
Derivative Financial Instruments
|
|
|
|
Asset Derivatives
|
||||||
(in millions)
|
Classification
|
|
June 30,
2018 |
|
September 30, 2017
|
||||
Foreign currency forward exchange contracts
|
Other current assets
|
|
$
|
5
|
|
|
$
|
8
|
|
Interest rate swaps
|
Other assets
|
|
1
|
|
|
14
|
|
||
Total
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
|
|
Liability Derivatives
|
||||||
(in millions)
|
Classification
|
|
June 30,
2018 |
|
September 30, 2017
|
||||
Foreign currency forward exchange contracts
|
Other current liabilities
|
|
$
|
11
|
|
|
$
|
7
|
|
Interest rate swaps
|
Other liabilities
|
|
2
|
|
|
—
|
|
||
Total
|
|
|
$
|
13
|
|
|
$
|
7
|
|
|
|
|
Amount of Gain (Loss)
|
|
Amount of Gain (Loss)
|
||||||||||||
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
Location of Gain (Loss)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Interest expense
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
6
|
|
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts:
|
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) recognized in AOCL (effective portion, before deferred tax impact)
|
AOCL
|
|
(2
|
)
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
||||
Amount of gain (loss) reclassified from AOCL into income
|
Cost of sales
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(3
|
)
|
||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts
|
Cost of sales
|
|
(26
|
)
|
|
—
|
|
|
(15
|
)
|
|
(1
|
)
|
||||
Foreign currency forward exchange contracts
|
Transaction and integration costs
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
15.
|
Guarantees and Indemnifications
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Balance at beginning of year
|
$
|
186
|
|
|
$
|
87
|
|
Warranty costs incurred
|
(67
|
)
|
|
(39
|
)
|
||
Product warranty accrual
|
79
|
|
|
43
|
|
||
Changes in estimates for prior years
|
(6
|
)
|
|
(6
|
)
|
||
Increase from acquisitions
|
—
|
|
|
117
|
|
||
Balance at June 30
|
$
|
192
|
|
|
$
|
202
|
|
16.
|
Environmental Matters
|
17.
|
Legal Matters
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Interior Systems
|
$
|
659
|
|
|
$
|
647
|
|
|
$
|
2,016
|
|
|
$
|
647
|
|
Commercial Systems
|
669
|
|
|
658
|
|
|
1,921
|
|
|
1,801
|
|
||||
Government Systems
|
684
|
|
|
606
|
|
|
1,911
|
|
|
1,646
|
|
||||
Information Management Services
|
196
|
|
|
183
|
|
|
551
|
|
|
535
|
|
||||
Total sales
|
$
|
2,208
|
|
|
$
|
2,094
|
|
|
$
|
6,399
|
|
|
$
|
4,629
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating earnings:
|
|
|
|
|
|
|
|
|
|
||||||
Interior Systems
|
$
|
106
|
|
|
$
|
72
|
|
|
$
|
305
|
|
|
$
|
72
|
|
Commercial Systems
|
148
|
|
|
144
|
|
|
438
|
|
|
401
|
|
||||
Government Systems
|
130
|
|
|
131
|
|
|
370
|
|
|
341
|
|
||||
Information Management Services
|
37
|
|
|
39
|
|
|
107
|
|
|
105
|
|
||||
Total segment operating earnings
|
421
|
|
|
386
|
|
|
1,220
|
|
|
919
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
(1)
|
(66
|
)
|
|
(77
|
)
|
|
(196
|
)
|
|
(122
|
)
|
||||
Stock-based compensation
|
(8
|
)
|
|
(8
|
)
|
|
(27
|
)
|
|
(21
|
)
|
||||
General corporate, net
|
(18
|
)
|
|
(16
|
)
|
|
(43
|
)
|
|
(39
|
)
|
||||
Impairment charges and settlement of a contract matter
(2)
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
||||
Transaction and integration costs
(1)
|
(29
|
)
|
|
(64
|
)
|
|
(91
|
)
|
|
(80
|
)
|
||||
Income before income taxes
|
269
|
|
|
221
|
|
|
832
|
|
|
657
|
|
||||
Income tax benefit (expense)
|
6
|
|
|
(42
|
)
|
|
(40
|
)
|
|
(165
|
)
|
||||
Net income
|
$
|
275
|
|
|
$
|
179
|
|
|
$
|
792
|
|
|
$
|
492
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interior Systems sales categories:
|
|
|
|
|
|
|
|
||||||||
Interior products and services
|
$
|
366
|
|
|
$
|
352
|
|
|
$
|
1,092
|
|
|
$
|
352
|
|
Aircraft seating
|
293
|
|
|
295
|
|
|
924
|
|
|
295
|
|
||||
Interior Systems sales
|
659
|
|
|
647
|
|
|
2,016
|
|
|
647
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Commercial Systems sales categories:
|
|
|
|
|
|
|
|
|
|||||||
Air transport aviation electronics
|
403
|
|
|
405
|
|
|
1,165
|
|
|
1,098
|
|
||||
Business and regional aviation electronics
|
266
|
|
|
253
|
|
|
756
|
|
|
703
|
|
||||
Commercial Systems sales
|
669
|
|
|
658
|
|
|
1,921
|
|
|
1,801
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Government Systems sales categories:
|
|
|
|
|
|
|
|
||||||||
Avionics
|
395
|
|
|
342
|
|
|
1,087
|
|
|
1,028
|
|
||||
Communication and navigation
|
289
|
|
|
264
|
|
|
824
|
|
|
618
|
|
||||
Government Systems sales
|
684
|
|
|
606
|
|
|
1,911
|
|
|
1,646
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Information Management Services sales
|
196
|
|
|
183
|
|
|
551
|
|
|
535
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total sales
|
$
|
2,208
|
|
|
$
|
2,094
|
|
|
$
|
6,399
|
|
|
$
|
4,629
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
OVERVIEW AND OUTLOOK
|
RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total sales
|
$
|
2,208
|
|
|
$
|
2,094
|
|
|
$
|
6,399
|
|
|
$
|
4,629
|
|
Percent increase
|
5
|
%
|
|
|
|
38
|
%
|
|
|
•
|
a $107 million decrease in Interior Systems pro forma sales discussed in the Interior Systems sales section below
|
•
|
partially offset by a $20 million increase in thermal and electronic systems sales in Government Systems, primarily due to higher deliveries of cooling equipment
|
•
|
a $78 million decrease in Interior Systems pro forma sales discussed in the Interior Systems sales section below
|
•
|
partially offset by a $55 million increase in thermal and electronic systems sales in Government Systems, primarily due to higher deliveries of cooling equipment
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total cost of sales
|
$
|
1,625
|
|
|
$
|
1,524
|
|
|
$
|
4,686
|
|
|
$
|
3,270
|
|
Percent of total sales
|
73.6
|
%
|
|
72.8
|
%
|
|
73.2
|
%
|
|
70.6
|
%
|
•
|
$76 million of inorganic cost of sales from the recently acquired B/E Aerospace business
|
•
|
a $25 million increase from the organic sales increase, which was unfavorably impacted by sales mix
|
•
|
a $22 million increase due to an impairment charge associated with the settlement of a contract matter
|
•
|
a $16 million increase in company-funded R&D, as detailed in the Research and Development expense section below
|
•
|
a $5 million increase in amortization of pre-production engineering costs
|
•
|
partially offset by the absence of $44 million of inventory fair value adjustment amortization recorded in the prior year related to the acquisition of B/E Aerospace
|
•
|
$1.272 billion of inorganic cost of sales from the recently acquired B/E Aerospace business
|
•
|
a $93 million increase from higher organic sales
|
•
|
a $49 million organic increase in company-funded R&D, as detailed in the Research and Development expense section below
|
•
|
a $22 million increase due to an impairment charge associated with the settlement of a contract matter
|
•
|
an $18 million increase in amortization of pre-production engineering costs
|
•
|
partially offset by the absence of $44 million of inventory fair value adjustment amortization recorded in the prior year related to the acquisition of B/E Aerospace
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Customer-funded:
|
|
|
|
|
|
|
|
||||||||
Interior Systems
|
$
|
32
|
|
|
$
|
15
|
|
|
$
|
85
|
|
|
$
|
15
|
|
Commercial Systems
|
69
|
|
|
68
|
|
|
190
|
|
|
199
|
|
||||
Government Systems
|
122
|
|
|
103
|
|
|
359
|
|
|
316
|
|
||||
Information Management Services
|
2
|
|
|
3
|
|
|
5
|
|
|
7
|
|
||||
Total customer-funded
|
225
|
|
|
189
|
|
|
639
|
|
|
537
|
|
||||
Company-funded:
|
|
|
|
|
|
|
|
||||||||
Interior Systems
|
48
|
|
|
55
|
|
|
158
|
|
|
55
|
|
||||
Commercial Systems
|
54
|
|
|
37
|
|
|
142
|
|
|
94
|
|
||||
Government Systems
|
24
|
|
|
18
|
|
|
66
|
|
|
54
|
|
||||
Information Management Services
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total company-funded
|
126
|
|
|
110
|
|
|
366
|
|
|
203
|
|
||||
Total R&D expense
|
$
|
351
|
|
|
$
|
299
|
|
|
$
|
1,005
|
|
|
$
|
740
|
|
Percent of total sales
|
15.9
|
%
|
|
14.3
|
%
|
|
15.7
|
%
|
|
16.0
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Selling, general and administrative expenses
|
$
|
212
|
|
|
$
|
213
|
|
|
$
|
610
|
|
|
$
|
514
|
|
Percent of total sales
|
9.6
|
%
|
|
10.2
|
%
|
|
9.5
|
%
|
|
11.1
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest expense
|
$
|
66
|
|
|
$
|
77
|
|
|
$
|
196
|
|
|
$
|
122
|
|
•
|
the absence of $18 million of bridge facility fees incurred in the prior year related to the B/E Aerospace acquisition
|
•
|
partially offset by incremental interest on the debt issued to fund the B/E Aerospace acquisition
|
•
|
incremental interest on the debt issued to fund the B/E Aerospace acquisition
|
•
|
partially offset by the absence of $29 million of bridge facility fees incurred in the prior year related to the
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
275
|
|
|
$
|
179
|
|
|
$
|
792
|
|
|
$
|
492
|
|
Percent of sales
|
12.5
|
%
|
|
8.5
|
%
|
|
12.4
|
%
|
|
10.6
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
$
|
1.66
|
|
|
$
|
1.12
|
|
|
$
|
4.78
|
|
|
$
|
3.48
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average diluted common shares
|
165.9
|
|
|
159.9
|
|
|
165.7
|
|
|
141.4
|
|
•
|
a $48 million decrease in tax expense as detailed in the Income Taxes section below
|
•
|
a $35 million decrease in pre-tax transaction and integration costs associated with the acquisition of B/E Aerospace and the pending acquisition of Rockwell Collins by UTC
|
•
|
a $34 million increase in Interior Systems operating earnings and a $4 million increase in Commercial Systems operating earnings, net of a $2 million decrease in Information Management Services operating earnings and a $1 million decrease in Government Systems operating earnings
|
•
|
an $11 million decrease in interest expense, primarily due to the absence of $18 million of bridge facility fees incurred in the prior year related to the B/E Aerospace acquisition
|
•
|
partially offset by $31 million of pre-tax impairment charges, including $22 million recorded in Cost of sales due to settlement of a contract matter and $9 million recorded in Other income, net due to the planned sale of our engineered components business
|
•
|
a $233 million increase in Interior Systems operating earnings, a $37 million increase in Commercial Systems operating earnings, a $29 million increase in Government Systems operating earnings and a $2 million increase in Information Management Services operating earnings
|
•
|
a $125 million decrease in income tax expense as detailed in the Income Taxes section below
|
•
|
partially offset by a $74 million increase in interest expense, primarily due to the debt issued to fund the B/E Aerospace acquisition
|
•
|
also offset by $31 million of pre-tax impairment charges, including $22 million recorded in Cost of sales due to settlement of a contract matter and $9 million recorded in Other income, net due to the planned sale of our engineered components business
|
•
|
further offset by an $11 million increase in pre-tax transaction and integration costs associated with the acquisition of B/E Aerospace and the pending acquisition of Rockwell Collins by UTC
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interior products and services
|
$
|
366
|
|
|
$
|
352
|
|
|
$
|
1,092
|
|
|
$
|
352
|
|
Aircraft seating
|
293
|
|
|
295
|
|
|
924
|
|
|
295
|
|
||||
Total
|
$
|
659
|
|
|
$
|
647
|
|
|
$
|
2,016
|
|
|
$
|
647
|
|
Percent increase
|
2
|
%
|
|
|
|
212
|
%
|
|
|
•
|
a $55 million inorganic revenue increase due to the timing of the April 13, 2017, B/E Aerospace acquisition
|
•
|
partially offset by $41 million in other net decreases to revenue, primarily due to timing of original equipment galley deliveries and the absence of oxygen equipment retrofit deliveries in the prior year
|
•
|
$32 million in net organic decreases to revenue, primarily due to timing of linefit seating deliveries
|
•
|
partially offset by a $30 million inorganic revenue increase due the timing of the April 13, 2017, B/E Aerospace acquisition
|
•
|
a $68 million decrease in aircraft seating sales, primarily due to the timing of linefit seating deliveries
|
•
|
a $39 million decrease in interior products and services sales, primarily due to timing of original equipment galley deliveries and the absence of oxygen equipment retrofit deliveries in the prior year
|
•
|
a $90 million decrease in aircraft seating sales, primarily due to softening of the super first class seating market and the timing of other new seating equipment deliveries
|
•
|
partially offset by a $12 million increase in interior products and services sales, primarily due to increased original equipment deliveries of advanced lavatories, cabins and galley inserts
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment operating earnings
|
$
|
106
|
|
|
$
|
72
|
|
|
$
|
305
|
|
|
$
|
72
|
|
Percent of sales
|
16.1
|
%
|
|
11.1
|
%
|
|
15.1
|
%
|
|
11.1
|
%
|
•
|
the absence of $44 million of inventory fair value adjustment amortization recorded in the prior year
|
•
|
the $85 million inorganic revenue increase discussed in the Interior Systems sales section above, which resulted in a $69 million increase in cost and incremental earnings of $16 million, or 19 percent of the higher sales volume
|
•
|
partially offset by the $73 million organic revenue decrease discussed in the Interior Systems sales section above, which resulted in an $60 million decrease in cost and decreased earnings of $13 million, or 18 percent of the lower sales volume. The margins on the sales decrease were unfavorably impacted by a $19 million increase to certain product quality reserves and favorably impacted by foreign exchange rates and cost synergies
|
•
|
also offset by an $11 million increase in intangible asset amortization expense
|
•
|
further offset by a $2 million increase in amortization of pre-production engineering costs
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Air transport aviation electronics:
|
|
|
|
|
|
|
|
||||||||
Original equipment
|
$
|
262
|
|
|
$
|
245
|
|
|
$
|
710
|
|
|
$
|
669
|
|
Aftermarket
|
138
|
|
|
155
|
|
|
444
|
|
|
414
|
|
||||
Wide-body in-flight entertainment (IFE)
|
3
|
|
|
5
|
|
|
11
|
|
|
15
|
|
||||
Total air transport aviation electronics
|
403
|
|
|
405
|
|
|
1,165
|
|
|
1,098
|
|
||||
Business and regional aviation electronics:
|
|
|
|
|
|
|
|
|
|
||||||
Original equipment
|
131
|
|
|
129
|
|
|
377
|
|
|
360
|
|
||||
Aftermarket
|
135
|
|
|
124
|
|
|
379
|
|
|
343
|
|
||||
Total business and regional aviation electronics
|
266
|
|
|
253
|
|
|
756
|
|
|
703
|
|
||||
Total
|
$
|
669
|
|
|
$
|
658
|
|
|
$
|
1,921
|
|
|
$
|
1,801
|
|
Percent increase
|
2
|
%
|
|
|
|
7
|
%
|
|
|
•
|
original equipment sales
increased
$17 million
, or
7 percent
, primarily due to higher narrow-body production rates, partially offset by lower legacy wide-body production rates
|
•
|
aftermarket sales
decreased
$17 million
, or
11 percent
, primarily due to lower used aircraft equipment sales of $21 million, partially offset by higher service and support activity and higher regulatory mandate upgrade activity
|
•
|
wide-body IFE sales decreased $2 million, or 40 percent, as airlines decommissioned their legacy IFE systems
|
•
|
original equipment sales
increased
$2 million
, or
2 percent
, primarily due to higher business jet equipment deliveries, partially offset by timing of lower regional jet deliveries and lower customer-funded development program revenues
|
•
|
aftermarket sales
increased
$11 million
, or
9 percent
, primarily due to higher service and support, regulatory mandate upgrade and flight deck retrofit activity
|
•
|
original equipment sales
increased
$41 million
, or
6 percent
, primarily due to higher Boeing 737, Airbus A320 and A350 production rates, partially offset by lower legacy wide-body production rates
|
•
|
aftermarket sales
increased
$30 million
, or
7 percent
, primarily due to higher spares provisioning, service and support activity and regulatory mandate upgrade activity
|
•
|
wide-body IFE sales
decreased
$4 million
, or
27 percent
, as airlines decommissioned their legacy IFE systems
|
•
|
original equipment sales
increased
$17 million
, or
5 percent
, primarily due to higher business jet equipment deliveries, partially offset by lower customer-funded development program revenues
|
•
|
aftermarket sales
increased
$36 million
, or
10 percent
, primarily due to higher service and support, flight deck retrofit and regulatory mandate upgrades activity
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment operating earnings
|
$
|
148
|
|
|
$
|
144
|
|
|
$
|
438
|
|
|
$
|
401
|
|
Percent of sales
|
22.1
|
%
|
|
21.9
|
%
|
|
22.8
|
%
|
|
22.3
|
%
|
•
|
operating earnings were positively impacted by the $11 million increase in sales volume discussed in the Commercial Systems sales section above. The margins on the sales increase were favorably impacted by sales mix as higher margin equipment sales increased and lower margin customer-funded development revenues and used aircraft equipment sales decreased
|
•
|
partially offset by a $17 million increase in company-funded R&D expense
|
•
|
also offset by a $2 million increase in amortization of pre-production engineering costs
|
•
|
the $120 million increase in sales volume discussed in the Commercial Systems sales section above, which resulted in a $23 million increase in cost and incremental earnings of $97 million, or 81 percent of the higher sales volume. The margins on the sales increase were favorably impacted by sales mix as higher margin equipment and aftermarket sales increased and lower margin customer-funded development revenues decreased
|
•
|
partially offset by a $48 million increase in company-funded R&D expense
|
•
|
also offset by a $12 million increase in amortization of pre-production engineering costs
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Avionics
|
$
|
395
|
|
|
$
|
342
|
|
|
$
|
1,087
|
|
|
$
|
1,028
|
|
Communication and navigation
|
289
|
|
|
264
|
|
|
824
|
|
|
618
|
|
||||
Total
|
$
|
684
|
|
|
$
|
606
|
|
|
$
|
1,911
|
|
|
$
|
1,646
|
|
Percent increase
|
13
|
%
|
|
|
|
16
|
%
|
|
|
•
|
a $32 million increase from higher fixed wing sales, primarily due to higher development program sales and higher deliveries for various fighter platforms
|
•
|
$21 million in other net increases to revenue, primarily due to higher simulation and training sales
|
•
|
a $26 million increase from higher thermal and electronic systems sales, including a $5 million inorganic revenue increase due the timing of the April 13, 2017, B/E Aerospace acquisition
|
•
|
partially offset by $1 million in other net decreases to revenue, primarily due to lower legacy communication sales, offset by higher test and training range sales and higher deliveries of GPS-related products
|
•
|
a $161 million increase from higher thermal and electronic systems sales, including a $140 million inorganic revenue increase due the timing of the April 13, 2017, B/E Aerospace acquisition
|
•
|
$45 million in other net increases to revenue, primarily due to higher test and training range sales and higher deliveries of GPS-related products
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment operating earnings
|
$
|
130
|
|
|
$
|
131
|
|
|
$
|
370
|
|
|
$
|
341
|
|
Percent of sales
|
19.0
|
%
|
|
21.6
|
%
|
|
19.4
|
%
|
|
20.7
|
%
|
•
|
a $6 million increase in company-funded R&D expense
|
•
|
partially offset by the $78 million increase in sales volume discussed in the Government Systems sales section above, which resulted in a $73 million increase in cost and incremental earnings of $5 million, or 6 percent of the higher sales volume. The margins on the sales increase were unfavorably impacted by sales mix as lower margin customer-funded development revenues and B/E Aerospace thermal and electronic systems sales increased and higher margin product sales decreased
|
•
|
the $265 million increase in sales volume discussed in the Government Systems sales section above, which resulted in a $224 million increase in cost and incremental earnings of $41 million, or 15 percent of the higher sales volume. The margins on the sales increase were unfavorably impacted by sales mix as lower margin customer-funded development revenues and B/E Aerospace thermal and electronic systems sales increased and higher margin product sales decreased
|
•
|
partially offset by an $8 million increase in company-funded R&D expense
|
•
|
also offset by a $4 million increase in amortization of pre-production engineering costs
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales
|
$
|
196
|
|
|
$
|
183
|
|
|
$
|
551
|
|
|
$
|
535
|
|
Percent increase
|
7
|
%
|
|
|
|
3
|
%
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment operating earnings
|
$
|
37
|
|
|
$
|
39
|
|
|
$
|
107
|
|
|
$
|
105
|
|
Percent of sales
|
18.9
|
%
|
|
21.3
|
%
|
|
19.4
|
%
|
|
19.6
|
%
|
•
|
the absence of favorable resolution of certain international business jet support services claims in the prior year
|
•
|
an increase in the allowance for doubtful accounts related to specific customer collection risks
|
•
|
partially offset by a $13 million increase in sales volume discussed in the Information Management Services sales section above, which resulted in a $10 million increase in cost and an increase in earnings of $3 million, or 23 percent of the higher sales volume. The 23 percent margin on the sales increase was unfavorably impacted by lower margin equipment related sales
|
•
|
favorable resolution of certain claims associated with a divested business
|
•
|
a $16 million increase in sales volume discussed in the Information Management Services sales section above, which resulted in a $12 million increase in cost and an increase in earnings of $4 million, or 25 percent of the higher sales volume. The 25 percent margin on the sales increase was unfavorably impacted by lower margin equipment related sales
|
•
|
partially offset by the absence of favorable resolution of certain international business jet support services claims in the prior year
|
•
|
asset disposition and customer bankruptcy costs and an increase in the allowance for doubtful accounts related to specific customer collection risks
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
General corporate, net
|
$
|
18
|
|
|
$
|
16
|
|
|
$
|
43
|
|
|
$
|
39
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Pension benefits
|
$
|
(8
|
)
|
|
$
|
(6
|
)
|
|
$
|
(22
|
)
|
|
$
|
(19
|
)
|
Other retirement benefits
|
3
|
|
|
3
|
|
|
10
|
|
|
10
|
|
||||
Net benefit (income)
|
$
|
(5
|
)
|
|
$
|
(3
|
)
|
|
$
|
(12
|
)
|
|
$
|
(9
|
)
|
FINANCIAL CONDITION AND LIQUIDITY
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cash provided by operating activities
|
$
|
196
|
|
|
$
|
416
|
|
•
|
higher payments for production inventory and other operating costs, which increased $1.648 billion to $5.421 billion for the nine months ended
June 30, 2018
, compared to $3.773 billion in the nine months ended
June 30, 2017
, primarily due to cash payments of the recently acquired B/E Aerospace business
|
•
|
payments for employee incentive pay increased $61 million, primarily due to the B/E Aerospace acquisition and a higher annual incentive payout percentage compared to the prior year. Incentive pay is expensed in the year incurred and then paid in the first fiscal quarter of the following year. In the nine months ended
June 30, 2018
, $182 million was paid for employee incentive pay costs expensed during 2017. This compares to $121 million paid during the nine months ended
June 30, 2017
for employee incentive pay costs expensed during 2016
|
•
|
higher payments for transaction and integration costs related to the B/E Aerospace acquisition and the proposed acquisition of Rockwell Collins by UTC, which increased $25 million to $105 million for the nine months ended
June 30, 2018
, compared to $80 million in the nine months ended
June 30, 2017
|
•
|
partially offset by higher cash receipts from customers, which increased by $1.404 billion to $5.983 billion in the nine months ended
June 30, 2018
, compared to $4.579 billion in the nine months ended
June 30, 2017
, primarily due to cash receipts of the recently acquired B/E Aerospace business. The increase in cash receipts from customers was less than the sales volume increase of $1.770 billion primarily due to a $216 million decrease in cash generated by sales of accounts receivable under factoring arrangements (see Note 5 of the
Notes to Condensed Consolidated Financial Statements)
|
•
|
also offset by lower cash payments for income taxes, which decreased $97 million to $105 million during the nine months ended
June 30, 2018
, compared to $202 million during the same period in the prior year. The decrease in cash used for income tax payments was primarily due to the additional $387 million discretionary pension contribution made in July 2018, a lower federal tax rate as a result of the Tax Cuts and Jobs Act
and the receipt of certain tax refunds
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cash (used for) investing activities
|
$
|
(186
|
)
|
|
$
|
(3,599
|
)
|
•
|
$3.429 billion of cash payments for acquisitions in the prior year, primarily related to the acquisition of B/E Aerospace
|
•
|
a $25 million increase in cash payments for property additions for the nine months ended
June 30, 2018
, compared to the same period in the prior year, primarily due to the B/E Aerospace acquisition
|
|
Nine Months Ended
|
||||||
|
June 30
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Cash provided by (used for) financing activities
|
$
|
(83
|
)
|
|
$
|
3,415
|
|
•
|
$3.980 billion of prior year financing activities related to 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 a portion of the Company's outstanding commercial paper borrowings
|
•
|
partially offset by a $463 million increase in net proceeds from short-term commercial paper borrowings
|
(in millions)
|
June 30,
2018 |
|
September 30,
2017 |
||||
Cash and cash equivalents
|
$
|
621
|
|
|
$
|
703
|
|
|
|
|
|
||||
Short-term debt
|
(864
|
)
|
|
(479
|
)
|
||
Long-term debt, net
|
(6,317
|
)
|
|
(6,676
|
)
|
||
Total debt
|
$
|
(7,181
|
)
|
|
$
|
(7,155
|
)
|
Total equity
|
$
|
6,798
|
|
|
$
|
6,050
|
|
Debt to total capitalization
(1)
|
51
|
%
|
|
54
|
%
|
Credit Rating Agency
|
|
Short-Term Rating
|
|
Long-Term Rating
|
|
Outlook
|
Fitch Ratings
|
|
F2
|
|
BBB
|
|
Positive
|
Moody’s Investors Service
|
|
P-2
|
|
Baa2
|
|
Stable
|
Standard & Poor’s
|
|
A-2
|
|
BBB
|
|
Positive
|
ENVIRONMENTAL
|
CRITICAL ACCOUNTING POLICIES
|
CAUTIONARY STATEMENT
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
June 30, 2018
|
||||||||
(in millions)
|
|
Interest Rate
|
|
Carrying Value
|
|
Fair Value
|
||||
Fixed-rate notes due:
|
|
|
|
|
|
|
||||
July 2019
|
|
1.95%
|
|
$
|
300
|
|
|
$
|
297
|
|
July 2019
|
|
5.25%
|
|
300
|
|
|
307
|
|
||
November 2021
|
|
3.10%
|
|
250
|
|
|
247
|
|
||
March 2022
|
|
2.80%
|
|
1,100
|
|
|
1,071
|
|
||
December 2023
|
|
3.70%
|
|
400
|
|
|
399
|
|
||
March 2024
|
|
3.20%
|
|
950
|
|
|
914
|
|
||
March 2027
|
|
3.50%
|
|
1,300
|
|
|
1,239
|
|
||
December 2043
|
|
4.80%
|
|
400
|
|
|
408
|
|
||
April 2047
|
|
4.35%
|
|
1,000
|
|
|
955
|
|
||
Variable-rate term loan due:
|
|
|
|
|
|
|
||||
April 2020
|
|
1 month LIBOR + 1.25%
(1)
|
|
519
|
|
|
519
|
|
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, 2018 through April 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
285
|
million
|
May 1, 2018 through May 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
285
|
million
|
||
June 1, 2018 through June 30, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
285
|
million
|
||
Total / Average
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Item 6.
|
|
Exhibits
|
|
|
|
|
|
|
|
(a) Exhibits
|
|
Exhibit
Number
|
|
Description
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document.
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROCKWELL COLLINS, INC.
|
|
|
|
By
|
/s/ Tatum J. Buse
|
|
|
|
Tatum J. Buse Vice President, Finance and Controller Principal Accounting Officer and an Authorized Officer
|
1 Year Rockwell Collins Chart |
1 Month Rockwell Collins Chart |
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