2018 Q4 Form 10-Q Financial Statement

#000088572518000045 Filed on October 29, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $2.561B $2.393B $2.216B
YoY Change 6.35% 7.99% 5.73%
Cost Of Revenue $733.0M $672.0M $637.0M
YoY Change 7.48% 5.49% 7.24%
Gross Profit $1.828B $1.720B $1.585B
YoY Change 5.91% 8.52% 4.9%
Gross Profit Margin 71.38% 71.88% 71.53%
Selling, General & Admin $946.0M $870.0M $800.0M
YoY Change 7.26% 8.75% 3.63%
% of Gross Profit 51.75% 50.58% 50.47%
Research & Development $288.0M $289.0M $254.0M
YoY Change 9.51% 13.78% 9.48%
% of Gross Profit 15.75% 16.8% 16.03%
Depreciation & Amortization $162.0M $74.00M $71.00M
YoY Change 14.89% 4.23% 5.97%
% of Gross Profit 8.86% 4.3% 4.48%
Operating Expenses $1.387B $1.333B $1.208B
YoY Change 8.02% 10.35% 3.87%
Operating Profit $441.0M $388.0M $377.0M
YoY Change -0.23% 2.92% 8.33%
Interest Expense -$17.00M $58.00M $57.00M
YoY Change -80.46% 1.75% -1.72%
% of Operating Profit -3.85% 14.95% 15.12%
Other Income/Expense, Net -$6.000M $68.00M -$68.00M
YoY Change 50.0% -200.0% -25.27%
Pretax Income $296.0M $456.0M $309.0M
YoY Change 30.4% 47.57% 20.23%
Income Tax -$32.00M $24.00M $26.00M
% Of Pretax Income -10.81% 5.26% 8.41%
Net Earnings $386.0M $432.0M $283.0M
YoY Change -162.87% 52.65% 24.12%
Net Earnings / Revenue 15.07% 18.05% 12.77%
Basic Earnings Per Share $0.31 $0.21
Diluted Earnings Per Share $274.5K $0.31 $0.20
COMMON SHARES
Basic Shares Outstanding 1.384B shares 1.383B shares 1.372B shares
Diluted Shares Outstanding 1.404B shares 1.394B shares

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $146.0M $168.0M $210.0M
YoY Change -22.34% -20.0% -11.39%
Cash & Equivalents $146.0M $168.0M $210.0M
Short-Term Investments
Other Short-Term Assets $921.0M $1.089B $124.0M
YoY Change -8.63% 778.23% -77.9%
Inventory $1.166B $1.134B $1.077B
Prepaid Expenses
Receivables $1.608B $1.580B $1.470B
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $4.003B $3.971B $3.478B
YoY Change 4.74% 14.17% 9.34%
LONG-TERM ASSETS
Property, Plant & Equipment $1.782B $1.730B $1.678B
YoY Change 5.01% 3.1% 11.87%
Goodwill $7.911B $7.588B $6.882B
YoY Change 13.05% 10.26% 5.91%
Intangibles $6.372B $6.297B $5.783B
YoY Change 9.17% 8.89% -0.94%
Long-Term Investments $303.0M $291.0M $204.0M
YoY Change 44.98% 42.65% -20.0%
Other Assets $845.0M $794.0M $815.0M
YoY Change 22.82% -2.58% 19.85%
Total Long-Term Assets $17.00B $16.41B $15.16B
YoY Change 11.67% 8.25% 4.42%
TOTAL ASSETS
Total Short-Term Assets $4.003B $3.971B $3.478B
Total Long-Term Assets $17.00B $16.41B $15.16B
Total Assets $21.00B $20.38B $18.64B
YoY Change 10.28% 9.35% 5.31%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $349.0M $453.0M $371.0M
YoY Change -34.15% 22.1% 24.5%
Accrued Expenses $2.246B $2.469B $2.551B
YoY Change -8.55% -3.21% 21.53%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $2.253B $1.820B $1.266B
YoY Change 25.1% 43.76%
Total Short-Term Liabilities $5.260B $5.082B $4.828B
YoY Change -6.97% 5.26% 60.08%
LONG-TERM LIABILITIES
Long-Term Debt $4.803B $4.806B $4.416B
YoY Change 25.9% 8.83% -14.6%
Other Long-Term Liabilities $1.882B $1.774B $1.738B
YoY Change -20.59% 2.07% -42.11%
Total Long-Term Liabilities $1.882B $1.774B $1.738B
YoY Change -20.59% 2.07% -42.11%
TOTAL LIABILITIES
Total Short-Term Liabilities $5.260B $5.082B $4.828B
Total Long-Term Liabilities $1.882B $1.774B $1.738B
Total Liabilities $7.142B $6.856B $6.566B
YoY Change -10.99% 4.42% 9.11%
SHAREHOLDERS EQUITY
Retained Earnings -$6.953B -$7.339B -$7.785B
YoY Change -17.13% -5.73% -10.58%
Common Stock $17.36B $17.32B $17.14B
YoY Change 1.08% 1.04% 0.81%
Preferred Stock
YoY Change
Treasury Stock (at cost) $1.717B $1.717B $1.717B
YoY Change 0.0% 0.0% 0.0%
Treasury Stock Shares 247.6M shares 247.6M shares 247.6M shares
Shareholders Equity $8.726B $8.289B $7.588B
YoY Change
Total Liabilities & Shareholders Equity $21.00B $20.38B $18.64B
YoY Change 10.28% 9.35% 5.31%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $386.0M $432.0M $283.0M
YoY Change -162.87% 52.65% 24.12%
Depreciation, Depletion And Amortization $162.0M $74.00M $71.00M
YoY Change 14.89% 4.23% 5.97%
Cash From Operating Activities $18.00M $501.0M $453.0M
YoY Change -97.37% 10.6% -1561.29%
INVESTING ACTIVITIES
Capital Expenditures -$130.0M -$112.0M -$102.0M
YoY Change 7.44% 9.8% 43.66%
Acquisitions
YoY Change
Other Investing Activities -$465.0M -$550.0M $0.00
YoY Change 176.79% -100.0%
Cash From Investing Activities -$595.0M -$662.0M -$102.0M
YoY Change 105.88% 549.02% -50.24%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 425.0M 151.0M -139.0M
YoY Change -725.0% -208.63% -508.82%
NET CHANGE
Cash From Operating Activities 18.00M 501.0M 453.0M
Cash From Investing Activities -595.0M -662.0M -102.0M
Cash From Financing Activities 425.0M 151.0M -139.0M
Net Change In Cash -152.0M -10.00M 212.0M
YoY Change -146.48% -104.72% -204.95%
FREE CASH FLOW
Cash From Operating Activities $18.00M $501.0M $453.0M
Capital Expenditures -$130.0M -$112.0M -$102.0M
Free Cash Flow $148.0M $613.0M $555.0M
YoY Change -81.61% 10.45% 1287.5%

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CY2018Q3 us-gaap Cash And Cash Equivalents At Carrying Value
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us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Excluding Exchange Rate Effect
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CY2017Q4 us-gaap Commitments And Contingencies
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CY2018Q3 us-gaap Commitments And Contingencies
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CY2018Q3 us-gaap Common Stock Shares Authorized
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us-gaap Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest
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us-gaap Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest
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us-gaap Contract With Customer Liability Revenue Recognized
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CY2017Q4 us-gaap Debt Instrument Fair Value
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us-gaap Depreciation
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CY2018Q3 us-gaap Depreciation
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us-gaap Depreciation
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CY2018Q3 us-gaap Derivative Assets
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CY2017Q4 us-gaap Derivative Liabilities
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CY2018Q3 us-gaap Derivative Liabilities
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CY2017Q3 us-gaap Earnings Per Share Basic
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us-gaap Earnings Per Share Basic
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us-gaap Earnings Per Share Basic
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us-gaap Earnings Per Share Diluted
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us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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CY2017Q4 us-gaap Employee Related Liabilities Current
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CY2018Q3 us-gaap Equity Method Investment Difference Between Carrying Amount And Underlying Equity
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190000000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
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CY2018Q3 us-gaap Finite Lived Intangible Assets Accumulated Amortization
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CY2017Q4 us-gaap Goodwill
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us-gaap Goodwill Acquired During Period
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us-gaap Goodwill Translation And Purchase Accounting Adjustments
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CY2017Q3 us-gaap Gross Profit
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us-gaap Gross Profit
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CY2018Q3 us-gaap Gross Profit
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us-gaap Gross Profit
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us-gaap Impairment Of Intangible Assets Excluding Goodwill
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CY2018Q3 us-gaap Impairment Of Intangible Assets Excluding Goodwill
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0 USD
us-gaap Impairment Of Intangible Assets Excluding Goodwill
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35000000 USD
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us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2018Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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456000000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2017Q3 us-gaap Income Tax Expense Benefit
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us-gaap Income Tax Expense Benefit
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CY2018Q3 us-gaap Income Tax Expense Benefit
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us-gaap Income Tax Expense Benefit
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CY2017Q3 us-gaap Interest Expense
InterestExpense
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us-gaap Interest Expense
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CY2018Q3 us-gaap Interest Expense
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58000000 USD
us-gaap Interest Expense
InterestExpense
177000000 USD
CY2017Q4 us-gaap Inventory Finished Goods Net Of Reserves
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CY2017Q4 us-gaap Inventory Net
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CY2018Q3 us-gaap Inventory Net
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CY2017Q4 us-gaap Inventory Raw Materials Net Of Reserves
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CY2018Q3 us-gaap Inventory Raw Materials Net Of Reserves
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CY2017Q4 us-gaap Inventory Work In Process Net Of Reserves
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110000000 USD
CY2018Q3 us-gaap Inventory Work In Process Net Of Reserves
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103000000 USD
CY2017Q4 us-gaap Investments
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CY2018Q3 us-gaap Investments
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CY2017Q4 us-gaap Land
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CY2018Q3 us-gaap Land
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CY2017Q4 us-gaap Liabilities And Stockholders Equity
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CY2018Q3 us-gaap Liabilities And Stockholders Equity
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CY2018Q3 us-gaap Liabilities Current
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CY2017Q4 us-gaap Litigation Reserve Current
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CY2018Q3 us-gaap Litigation Reserve Current
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CY2017Q4 us-gaap Litigation Reserve Noncurrent
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CY2017Q3 us-gaap Litigation Settlement Expense
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us-gaap Litigation Settlement Expense
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CY2018Q3 us-gaap Litigation Settlement Expense
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18000000 USD
us-gaap Litigation Settlement Expense
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18000000 USD
CY2017Q4 us-gaap Long Term Debt And Capital Lease Obligations
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CY2018Q3 us-gaap Long Term Debt And Capital Lease Obligations
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CY2017Q4 us-gaap Loss Contingency Accrual At Carrying Value
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CY2018Q3 us-gaap Loss Contingency Accrual At Carrying Value
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Operating Activities
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us-gaap Nonoperating Income Expense
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CY2018Q3 us-gaap Nonoperating Income Expense
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us-gaap Nonoperating Income Expense
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us-gaap Number Of Reportable Segments
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us-gaap Operating Expenses
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us-gaap Operating Income Loss
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CY2018Q3 us-gaap Other Accrued Liabilities Noncurrent
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CY2018Q3 us-gaap Other Assets Noncurrent
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25000000 USD
us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Gain Loss Arising During Period Net Of Tax
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us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Gain Loss Arising During Period Net Of Tax
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CY2017Q3 us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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3000000 USD
CY2018Q3 us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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0 USD
us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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CY2017Q3 us-gaap Other Comprehensive Income Loss Before Reclassifications Net Of Tax
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us-gaap Other Comprehensive Income Loss Before Reclassifications Net Of Tax
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us-gaap Other Comprehensive Income Loss Before Reclassifications Net Of Tax
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CY2017Q3 us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss After Reclassification And Tax
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us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss After Reclassification And Tax
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CY2018Q3 us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss After Reclassification And Tax
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47000000 USD
us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss After Reclassification And Tax
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125000000 USD
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us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Before Reclassification After Tax
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45000000 USD
us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Before Reclassification After Tax
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105000000 USD
us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Before Reclassification And Tax
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us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Before Reclassification Tax
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32000000 USD
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9000000 USD
us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Reclassification After Tax
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44000000 USD
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us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Reclassification After Tax
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us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Reclassification Before Tax
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us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Reclassification Tax
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CY2017Q3 us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Net Of Tax
OtherComprehensiveIncomeLossNetOfTax
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us-gaap Other Comprehensive Income Loss Net Of Tax
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CY2017Q3 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Before Reclassification Adjustments Net Of Tax
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0 USD
us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Before Reclassification Adjustments Net Of Tax
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2000000 USD
CY2018Q3 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Before Reclassification Adjustments Net Of Tax
OtherComprehensiveIncomeLossPensionAndOtherPostretirementBenefitPlansAdjustmentBeforeReclassificationAdjustmentsNetOfTax
0 USD
us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Before Reclassification Adjustments Net Of Tax
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0 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
OtherComprehensiveIncomeLossPensionAndOtherPostretirementBenefitPlansAdjustmentNetOfTax
0 USD
us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
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CY2018Q3 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
OtherComprehensiveIncomeLossPensionAndOtherPostretirementBenefitPlansAdjustmentNetOfTax
0 USD
us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
OtherComprehensiveIncomeLossPensionAndOtherPostretirementBenefitPlansAdjustmentNetOfTax
0 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIForWritedownOfSecuritiesNetOfTax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIForWritedownOfSecuritiesNetOfTax
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CY2018Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIForWritedownOfSecuritiesNetOfTax
0 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Net Of Tax
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CY2017Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
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0 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansNetOfTax
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CY2018Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansNetOfTax
0 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansNetOfTax
0 USD
CY2017Q3 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
0 USD
us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
0 USD
CY2018Q3 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
0 USD
us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
0 USD
CY2017Q4 us-gaap Other Liabilities Current
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">NOTE N &#8211; NEW ACCOUNTING PRONOUNCEMENTS</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Periodically, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our </font><font style="font-family:inherit;font-size:10pt;">unaudited condensed consolidated financial statements</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Standards to be Implemented</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">ASC Update No. 2016-02</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued ASC Update No. 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases </font><font style="font-family:inherit;font-size:10pt;">(Topic 842)</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">.</font><font style="font-family:inherit;font-size:10pt;"> The purpose of Update No. 2016-02 is to increase the transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet, including those previously classified as operating leases under current U.S. GAAP, and disclosing key information about leasing arrangements. Topic 842, as amended, is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We currently plan to adopt the standard using the transition method provided by ASC Update No. 2018-11, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases</font><font style="font-family:inherit;font-size:10pt;"> (Topic 842): </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Targeted Improvements</font><font style="font-family:inherit;font-size:10pt;">. Under this method, we plan to initially apply the new leasing rules on January 1, 2019, and recognize the cumulative effect of initially applying the standard as an adjustment to our opening balance of retained earnings, rather than at the earliest comparative period presented in the financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We have reached conclusions on several policy elections available under Topic 842 that we plan to apply on January 1, 2019. Upon transition, we will apply the package of practical expedients and will not reassess whether any expired or existing contracts are or contain leases, the classification of any expired or existing leases, and initial direct costs for any existing leases. We will apply the transition package of practical expedients described above to our entire lease portfolio at January 1, 2019. Furthermore, we have elected not to separate lease and non-lease components for the majority of our leases. Instead, for these applicable classes of underlying assets, we will account for each separate lease component, and the non-lease components associated with that lease component, as a single lease component.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">While we are still in the process of determining the effect that the new standard will have on our financial position and results of operations, we expect to recognize additional assets and corresponding liabilities on our consolidated balance sheets, as a result of our operating lease portfolio as it exists at the date we adopt the new standard on January 1, 2019. Please refer to </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note F - Lease and Other Purchase Obligations</font><font style="font-family:inherit;font-size:10pt;"> in our most recent Annual Report on Form 10-K for information regarding our most current lease activity. Additionally, we are in the process of implementing a new lease administration and lease accounting system, and updating our controls and procedures for maintaining and accounting for our lease portfolio under the new standard.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">ASC Update No. 2016-13</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued ASC Update No. 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Financial Instruments &#8211; Credit Losses </font><font style="font-family:inherit;font-size:10pt;">(Topic 326)</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">: Measurement of Credit Losses on Financial Instruments</font><font style="font-family:inherit;font-size:10pt;">. The purpose of Update No. 2016-13 is to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. Update No. 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018. We are in the process of determining the effect that the adoption will have on our financial position and results of operations.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">ASC Update No. 2018-09</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In July 2018, the FASB issued ASC Update No. 2018-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Codification Improvements</font><font style="font-family:inherit;font-size:10pt;">. The purpose of Update No. 2018-09 is to clarify, correct errors in or make minor improvements to the Codification. The amendments make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in Update No. 2018-09 do not require transition guidance and are effective upon issuance. However, many of the amendments in Update No. 2018-09 do have transition guidance with an effective date of annual periods beginning after December 15, 2018. We are in the process of determining the effect that the adoption will have on our financial position and results of operations.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">ASC Update No. 2018-15</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, the FASB issued ASC Update No. 2018-15, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Intangibles &#8211; Goodwill and Other &#8211; Internal-Use Software (Subtopic 350-40)</font><font style="font-family:inherit;font-size:10pt;">:</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> Customer&#8217;s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract</font><font style="font-family:inherit;font-size:10pt;">. The purpose of Update No. 2018-15 is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Update No. 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period. We are in the process of determining the effect that the adoption will have on our financial position and results of operations.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">No other new accounting pronouncements, issued or effective, in the period had or are expected to have a material impact on our </font><font style="font-family:inherit;font-size:10pt;">unaudited condensed consolidated financial statements</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div>

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