2018 Q2 Form 10-Q Financial Statement

#000113342118000038 Filed on July 25, 2018

View on sec.gov

Income Statement

Concept 2018 Q2 2017 Q2
Revenue $7.119B $6.473B
YoY Change 9.98% 7.88%
Cost Of Revenue $1.863B $1.877B
YoY Change -0.75% -4.33%
Gross Profit $5.256B $4.596B
YoY Change 14.36% 13.82%
Gross Profit Margin 73.83% 71.0%
Selling, General & Admin $739.0M $686.0M
YoY Change 7.73% 10.65%
% of Gross Profit 14.06% 14.93%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $159.0M $107.0M
YoY Change 48.6% 0.94%
% of Gross Profit 3.03% 2.33%
Operating Expenses $739.0M $686.0M
YoY Change 7.73% 10.65%
Operating Profit $817.0M $864.0M
YoY Change -5.44% 8.41%
Interest Expense -$144.0M -$76.00M
YoY Change 89.47% 2.7%
% of Operating Profit -17.63% -8.8%
Other Income/Expense, Net $45.00M $32.00M
YoY Change 40.63% 357.14%
Pretax Income $976.0M $812.0M
YoY Change 20.2% 11.23%
Income Tax $187.0M $257.0M
% Of Pretax Income 19.16% 31.65%
Net Earnings $789.0M $677.0M
YoY Change 16.54% 30.95%
Net Earnings / Revenue 11.08% 10.46%
Basic Earnings Per Share $4.52 $3.88
Diluted Earnings Per Share $4.50 $3.86
COMMON SHARES
Basic Shares Outstanding 174.5M shares 174.5M shares
Diluted Shares Outstanding 175.4M shares 175.5M shares

Balance Sheet

Concept 2018 Q2 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.903B $1.383B
YoY Change 37.6% 21.42%
Cash & Equivalents $1.539B $1.383B
Short-Term Investments $364.0M
Other Short-Term Assets $406.0M $162.0M
YoY Change 150.62% -12.9%
Inventory $690.0M $1.039B
Prepaid Expenses
Receivables $1.815B $4.280B
Other Receivables $0.00 $0.00
Total Short-Term Assets $9.722B $6.864B
YoY Change 41.64% 18.73%
LONG-TERM ASSETS
Property, Plant & Equipment $5.864B $3.802B
YoY Change 54.23% 15.25%
Goodwill $18.75B $12.45B
YoY Change 50.54% -0.08%
Intangibles $1.329B
YoY Change
Long-Term Investments
YoY Change
Other Assets $1.537B $1.309B
YoY Change 17.42% 12.55%
Total Long-Term Assets $27.66B $18.95B
YoY Change 45.95% 3.55%
TOTAL ASSETS
Total Short-Term Assets $9.722B $6.864B
Total Long-Term Assets $27.66B $18.95B
Total Assets $37.38B $25.81B
YoY Change 44.8% 7.19%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.824B $1.385B
YoY Change 31.7% 8.88%
Accrued Expenses $1.606B $1.213B
YoY Change 32.4% 9.08%
Deferred Revenue
YoY Change
Short-Term Debt $249.0M $0.00
YoY Change
Long-Term Debt Due $744.0M $862.0M
YoY Change -13.69%
Total Short-Term Liabilities $7.833B $6.186B
YoY Change 26.62% 21.32%
LONG-TERM LIABILITIES
Long-Term Debt $14.39B $6.219B
YoY Change 131.34% -2.63%
Other Long-Term Liabilities $1.176B $823.0M
YoY Change 42.89% -3.52%
Total Long-Term Liabilities $1.176B $823.0M
YoY Change 42.89% -3.52%
TOTAL LIABILITIES
Total Short-Term Liabilities $7.833B $6.186B
Total Long-Term Liabilities $1.176B $823.0M
Total Liabilities $29.15B $19.89B
YoY Change 46.53% 8.12%
SHAREHOLDERS EQUITY
Retained Earnings $13.67B $11.09B
YoY Change 23.29% 4.26%
Common Stock $174.0M $174.0M
YoY Change 0.0% -2.79%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $8.226B $6.036B
YoY Change
Total Liabilities & Shareholders Equity $37.38B $25.81B
YoY Change 44.8% 7.19%

Cashflow Statement

Concept 2018 Q2 2017 Q2
OPERATING ACTIVITIES
Net Income $789.0M $677.0M
YoY Change 16.54% 30.95%
Depreciation, Depletion And Amortization $159.0M $107.0M
YoY Change 48.6% 0.94%
Cash From Operating Activities $875.0M $507.0M
YoY Change 72.58% -16.06%
INVESTING ACTIVITIES
Capital Expenditures -$199.0M -$217.0M
YoY Change -8.29% 25.43%
Acquisitions
YoY Change
Other Investing Activities -$7.653B $5.000M
YoY Change -153160.0% 150.0%
Cash From Investing Activities -$7.852B -$212.0M
YoY Change 3603.77% 23.98%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -1.853B -315.0M
YoY Change 488.25% -44.83%
NET CHANGE
Cash From Operating Activities 875.0M 507.0M
Cash From Investing Activities -7.852B -212.0M
Cash From Financing Activities -1.853B -315.0M
Net Change In Cash -8.830B -20.00M
YoY Change 44050.0% -85.51%
FREE CASH FLOW
Cash From Operating Activities $875.0M $507.0M
Capital Expenditures -$199.0M -$217.0M
Free Cash Flow $1.074B $724.0M
YoY Change 48.34% -6.82%

Facts In Submission

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156000000 USD
us-gaap Contract With Customer Performance Obligation Satisfied In Previous Period
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CY2017Q2 us-gaap Cost Of Goods Sold
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3037000000 USD
us-gaap Cost Of Goods Sold
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6020000000 USD
CY2018Q2 us-gaap Cost Of Goods Sold
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3694000000 USD
us-gaap Cost Of Goods Sold
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6959000000 USD
CY2017Q2 us-gaap Cost Of Services
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1877000000 USD
us-gaap Cost Of Services
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3744000000 USD
CY2018Q2 us-gaap Cost Of Services
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1863000000 USD
us-gaap Cost Of Services
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3768000000 USD
CY2017Q4 us-gaap Customer Advances Current
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1761000000 USD
CY2018Q2 us-gaap Customer Advances Current
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1711000000 USD
CY2017Q4 us-gaap Debt And Capital Lease Obligations
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15300000000 USD
CY2018Q2 us-gaap Debt And Capital Lease Obligations
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15100000000 USD
us-gaap Debt Instrument Covenant Compliance
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the company was in compliance with all covenants under its credit agreements.
us-gaap Debt Instrument Term
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P90D
CY2018Q2 us-gaap Decrease In Unrecognized Tax Benefits Is Reasonably Possible
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115000000 USD
us-gaap Deferred Income Taxes And Tax Credits
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us-gaap Deferred Income Taxes And Tax Credits
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CY2018Q2 us-gaap Deferred Tax Assets Liabilities Net Noncurrent
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179000000 USD
CY2017Q4 us-gaap Defined Benefit Plan Accumulated Other Comprehensive Income Net Gains Losses After Tax
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CY2018Q2 us-gaap Defined Benefit Plan Accumulated Other Comprehensive Income Net Gains Losses After Tax
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CY2017Q2 us-gaap Defined Contribution Plan Employer Discretionary Contribution Amount
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77000000 USD
us-gaap Defined Contribution Plan Employer Discretionary Contribution Amount
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176000000 USD
CY2018Q2 us-gaap Defined Contribution Plan Employer Discretionary Contribution Amount
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88000000 USD
us-gaap Defined Contribution Plan Employer Discretionary Contribution Amount
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192000000 USD
us-gaap Depreciation Depletion And Amortization
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213000000 USD
us-gaap Depreciation Depletion And Amortization
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281000000 USD
CY2017Q2 us-gaap Earnings Per Share Basic
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3.18
us-gaap Earnings Per Share Basic
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6.90
CY2018Q2 us-gaap Earnings Per Share Basic
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3.95
us-gaap Earnings Per Share Basic
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8.19
CY2017Q2 us-gaap Earnings Per Share Diluted
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3.16
us-gaap Earnings Per Share Diluted
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6.85
CY2018Q2 us-gaap Earnings Per Share Diluted
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3.93
us-gaap Earnings Per Share Diluted
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8.14
CY2017Q2 us-gaap Effective Income Tax Rate Continuing Operations
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0.317
us-gaap Effective Income Tax Rate Continuing Operations
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0.247
CY2018Q2 us-gaap Effective Income Tax Rate Continuing Operations
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0.188
us-gaap Effective Income Tax Rate Continuing Operations
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0.170
CY2017 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.21
CY2017Q4 us-gaap Employee Related Liabilities Current
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CY2018Q2 us-gaap Employee Related Liabilities Current
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1451000000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
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1781000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Accumulated Amortization
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1809000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Amortization Expense Remainder Of Fiscal Year
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162000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Amortization Expense Year Five
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105000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Amortization Expense Year Four
FiniteLivedIntangibleAssetsAmortizationExpenseYearFour
150000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Amortization Expense Year Three
FiniteLivedIntangibleAssetsAmortizationExpenseYearThree
232000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Amortization Expense Year Two
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284000000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Gross
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1833000000 USD
CY2018Q2 us-gaap Finite Lived Intangible Assets Gross
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3138000000 USD
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52000000 USD
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686000000 USD
us-gaap General And Administrative Expense
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CY2018Q2 us-gaap General And Administrative Expense
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739000000 USD
us-gaap General And Administrative Expense
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1450000000 USD
CY2017Q4 us-gaap Goodwill
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CY2018Q2 us-gaap Goodwill
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us-gaap Goodwill Acquired During Period
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CY2017Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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812000000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
1600000000 USD
CY2018Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
849000000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
1720000000 USD
CY2017Q2 us-gaap Income Tax Expense Benefit
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257000000 USD
us-gaap Income Tax Expense Benefit
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395000000 USD
CY2018Q2 us-gaap Income Tax Expense Benefit
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160000000 USD
us-gaap Income Tax Expense Benefit
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292000000 USD
us-gaap Income Tax Reconciliation Deductions Qualified Production Activities
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31000000 USD
us-gaap Income Tax Reconciliation Other Adjustments
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47000000 USD
us-gaap Income Tax Reconciliation Other Adjustments
IncomeTaxReconciliationOtherAdjustments
26000000 USD
CY2018Q2 us-gaap Income Tax Reconciliation Tax Credits Research
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22000000 USD
us-gaap Income Tax Reconciliation Tax Settlements
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42000000 USD
us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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-172000000 USD
us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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us-gaap Increase Decrease In Accounts Receivable
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509000000 USD
us-gaap Increase Decrease In Accounts Receivable
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145000000 USD
us-gaap Increase Decrease In Accrued Income Taxes Payable
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90000000 USD
us-gaap Increase Decrease In Accrued Income Taxes Payable
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186000000 USD
us-gaap Increase Decrease In Inventories
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54000000 USD
us-gaap Increase Decrease In Inventories
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73000000 USD
us-gaap Increase Decrease In Pension And Postretirement Obligations
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165000000 USD
us-gaap Increase Decrease In Pension And Postretirement Obligations
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us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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34000000 USD
us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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us-gaap Increase Decrease In Unbilled Receivables
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793000000 USD
us-gaap Increase Decrease In Unbilled Receivables
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570000000 USD
CY2017Q2 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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1000000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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1100000 shares
CY2018Q2 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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900000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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1000000 shares
CY2017Q4 us-gaap Intangible Assets Net Excluding Goodwill
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CY2017Q2 us-gaap Interest And Debt Expense
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76000000 USD
us-gaap Interest And Debt Expense
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151000000 USD
CY2018Q2 us-gaap Interest And Debt Expense
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144000000 USD
us-gaap Interest And Debt Expense
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287000000 USD
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398000000 USD
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690000000 USD
CY2017Q2 us-gaap Lease And Rental Expense
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65000000 USD
us-gaap Lease And Rental Expense
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154000000 USD
CY2018Q2 us-gaap Lease And Rental Expense
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81000000 USD
us-gaap Lease And Rental Expense
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173000000 USD
CY2017Q4 us-gaap Liabilities
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CY2017Q4 us-gaap Liabilities And Stockholders Equity
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CY2018Q2 us-gaap Liabilities
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CY2018Q2 us-gaap Liabilities And Stockholders Equity
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CY2018Q2 us-gaap Liabilities Current
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CY2017Q4 us-gaap Long Term Debt Fair Value
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16000000000 USD
CY2018Q2 us-gaap Long Term Debt Fair Value
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15100000000 USD
CY2017Q4 us-gaap Marketable Securities
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CY2018Q2 us-gaap Marketable Securities
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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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68000000 USD
us-gaap Net Cash Provided By Used In Operating Activities
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638000000 USD
CY2017Q2 us-gaap Net Income Loss
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us-gaap Net Income Loss
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CY2018Q2 us-gaap Net Income Loss
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us-gaap Net Income Loss
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us-gaap Number Of Reportable Segments
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CY2017Q2 us-gaap Operating Income Loss
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873000000 USD
us-gaap Operating Income Loss
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1735000000 USD
CY2018Q2 us-gaap Operating Income Loss
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us-gaap Operating Income Loss
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CY2018Q2 us-gaap Other Assets Current
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CY2017Q2 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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0 USD
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0 USD
us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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CY2017Q2 us-gaap Other Comprehensive Income Loss Net Of Tax
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99000000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax
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us-gaap Other Comprehensive Income Loss Net Of Tax
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166000000 USD
CY2017Q2 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
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CY2018Q2 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
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-86000000 USD
us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment Net Of Tax
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CY2017Q2 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
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100000000 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
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199000000 USD
CY2018Q2 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
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86000000 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans Net Of Tax
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172000000 USD
CY2017Q4 us-gaap Other Liabilities Current
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CY2018Q2 us-gaap Other Liabilities Current
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us-gaap Other Noncash Income Expense
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us-gaap Other Noncash Income Expense
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CY2017Q2 us-gaap Other Nonoperating Income Expense
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us-gaap Other Nonoperating Income Expense
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us-gaap Other Nonoperating Income Expense
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us-gaap Payments For Proceeds From Other Investing Activities
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us-gaap Payments For Proceeds From Other Investing Activities
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us-gaap Payments For Repurchase Of Common Stock
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us-gaap Payments For Repurchase Of Common Stock
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us-gaap Payments Of Dividends Common Stock
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us-gaap Payments Of Dividends Common Stock
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us-gaap Payments Related To Tax Withholding For Share Based Compensation
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us-gaap Payments Related To Tax Withholding For Share Based Compensation
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80000000 USD
us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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us-gaap Payments To Acquire Property Plant And Equipment
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us-gaap Payments To Acquire Property Plant And Equipment
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504000000 USD
CY2017Q4 us-gaap Pension And Other Postretirement Defined Benefit Plans Liabilities Noncurrent
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CY2018Q2 us-gaap Pension And Other Postretirement Defined Benefit Plans Liabilities Noncurrent
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CY2017Q4 us-gaap Preferred Stock Par Or Stated Value Per Share
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1
CY2018Q2 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
1
CY2017Q4 us-gaap Preferred Stock Shares Authorized
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CY2018Q2 us-gaap Preferred Stock Shares Authorized
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CY2017Q4 us-gaap Preferred Stock Shares Issued
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0 shares
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0 shares
CY2017Q4 us-gaap Preferred Stock Value
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us-gaap Proceeds From Payments For Other Financing Activities
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us-gaap Proceeds From Repayments Of Commercial Paper
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0 USD
us-gaap Proceeds From Repayments Of Commercial Paper
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CY2017Q4 us-gaap Property Plant And Equipment Net
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CY2017Q4 us-gaap Recorded Third Party Environmental Recoveries Amount
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207000000 USD
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236000000 USD
us-gaap Repayments Of Lines Of Credit
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0 USD
us-gaap Repayments Of Lines Of Credit
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314000000 USD
us-gaap Repayments Of Long Term Debt
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0 USD
us-gaap Repayments Of Long Term Debt
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1550000000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
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11632000000 USD
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13669000000 USD
CY2018Q2 us-gaap Revenue Remaining Performance Obligation
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52200000000 USD
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Explanation
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We expect to recognize approximately 50 percent and 75 percent of our June 30, 2018 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter.
CY2017Q2 us-gaap Sales Revenue Goods Net
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4037000000 USD
us-gaap Sales Revenue Goods Net
SalesRevenueGoodsNet
8034000000 USD
CY2018Q2 us-gaap Sales Revenue Goods Net
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4790000000 USD
us-gaap Sales Revenue Goods Net
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9079000000 USD
CY2017Q2 us-gaap Sales Revenue Net
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6473000000 USD
us-gaap Sales Revenue Net
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CY2018Q2 us-gaap Sales Revenue Net
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7119000000 USD
us-gaap Sales Revenue Net
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13854000000 USD
CY2017Q2 us-gaap Sales Revenue Services Net
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2436000000 USD
us-gaap Sales Revenue Services Net
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4849000000 USD
CY2018Q2 us-gaap Sales Revenue Services Net
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2329000000 USD
us-gaap Sales Revenue Services Net
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4775000000 USD
us-gaap Share Based Compensation
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us-gaap Share Based Compensation
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53000000 USD
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CY2018Q2 us-gaap Short Term Borrowings
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249000000 USD
CY2018Q2 us-gaap Short Term Debt Weighted Average Interest Rate
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CY2017Q2 us-gaap Stockholders Equity
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CY2017Q4 us-gaap Stockholders Equity
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CY2018Q2 us-gaap Stockholders Equity
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5272000000 USD
CY2018Q2 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
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150000000 USD
CY2018Q2 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
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50000000 USD
CY2017Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
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us-gaap Weighted Average Number Of Diluted Shares Outstanding
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175800000 shares
CY2018Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
175400000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
175400000 shares
CY2017Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
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174500000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
174700000 shares
CY2018Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
174500000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
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174400000 shares
us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On February 25, 2016, the FASB issued ASU No. 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases (Topic 842)</font><font style="font-family:inherit;font-size:10pt;">. ASU 2016-02 supersedes existing lease guidance, including ASC 840 - </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases</font><font style="font-family:inherit;font-size:10pt;">. Among other things, ASU 2016-02 requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease and requires disclosure of certain information about leasing arrangements. ASU 2016-02 will be effective January 1, 2019, although early adoption is permitted, and may be adopted using a modified retrospective transition method that applies the new lease requirements at the beginning of the earliest period presented in the financial statements. The FASB has proposed a change that would allow a company to elect an optional transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of adoption. We expect to adopt the standard on January 1, 2019 using the proposed optional transition method if finalized in its current form.</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">As a result of the Merger, we are currently reevaluating the expected impact of ASU 2016-02 on the company&#8217;s consolidated financial position and financial statement disclosures. We do not expect ASU 2016-02 to have a material impact on our annual results of operations and/or cash flows.</font></div></div>
us-gaap Fiscal Period
FiscalPeriod
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March&#160;31, second quarter as ending on June&#160;30 and third quarter as ending on September&#160;30. It is the company&#8217;s long-standing practice to establish actual interim closing dates using a &#8220;fiscal&#8221; calendar, in which we close our books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. Similarly, Innovation Systems uses a &#8220;fiscal&#8221; calendar by closing its books on a Sunday near these quarter-end dates and will continue this practice until its business processes are aligned with the company&#8217;s. The Friday and Sunday closing dates noted herein are both labeled as June 30, consistent with our calendar convention described above. This practice is only used at interim periods within a reporting year.</font></div></div>
us-gaap Revenue Recognition Long Term Contracts
RevenueRecognitionLongTermContracts
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The majority of our sales are derived from long-term contracts with the U.S. government for the production of goods, the provision of services, or a combination of both. The company classifies sales as product or service based on the predominant attributes of each contract. </font></div><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under ASC Topic 606, the company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. In most cases, goods and services provided under the company&#8217;s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the company provides multiple distinct goods or services to a customer, most commonly when a contract covers multiple phases of the product lifecycle (development, production, maintenance and/or support). In those cases, the company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using the cost plus a reasonable margin approach of ASC Topic 606. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not within the scope of ASC Topic 606. Likewise, our accounting for costs to obtain or fulfill a contract was not significantly impacted by the adoption of ASC Topic 606 as these costs are not material.</font></div><div style="line-height:120%;padding-bottom:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">A contract modification exists when the parties to a contract approve a change in the scope or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the company&#8217;s contract modifications are for goods or services that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative estimate-at-completion (EAC) adjustment.</font></div><div style="line-height:120%;padding-bottom:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The company recognizes revenue as control is transferred to the customer, either over time or at a point in time. In general, our U.S. government contracts contain termination for convenience clauses that generally entitle the customer to goods produced and/or in-process. Similarly, our non-U.S. government contracts generally contain contractual termination clauses or entitle the company to payment for work performed to date for goods and services that do not have an alternative use. As control is effectively transferred as we perform on our contracts and we are typically entitled to cost plus a reasonable margin for work in process if the contract is terminated for convenience, we generally recognize revenue over time on a cost-to-cost basis (cost incurred relative to total cost estimated at completion) as the company believes this represents the most appropriate measurement towards satisfaction of its performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e. typically upon delivery).</font></div></div><div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total revenue and cost at completion. </font></div><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Contract sales may include estimates of variable consideration, including cost or performance incentives (such as award and incentive fees), contract claims and requests for equitable adjustment (REAs). Variable consideration is included in total estimated sales to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We estimate variable consideration at the most likely amount to which we expect to be entitled.</font></div><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis. Cumulative EAC adjustments represent the cumulative effect of the changes on current and prior periods; sales and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss is expected to result on an individual performance obligation, the entire amount of the estimable future loss, including an allocation of general and administrative (G&amp;A) costs, is charged against income in the period the loss is identified. Each loss provision is first offset against costs included in unbilled accounts receivable or inventoried costs; remaining amounts are reflected in other current liabilities.</font></div><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Significant EAC adjustments on a single contract could have a material effect on the company&#8217;s financial statements.</font></div></div><div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For each of the company&#8217;s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Fixed-price contracts are typically billed to the customer either using progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis.</font></div><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Contract assets consist of unbilled receivables, primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Unbilled receivables are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-cycle nature of many of our contracts. Accumulated contract costs in unbilled receivables include direct production costs, factory and engineering overhead, production tooling costs, and allowable G&amp;A. Unbilled receivables also include certain estimates of variable consideration described above. These contract assets are not considered a significant financing component of the company&#8217;s contracts as the payment terms are intended to protect the customer in the event the company does not perform on its obligations under the contract.</font></div><div style="line-height:120%;padding-bottom:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to the satisfaction of the company&#8217;s obligations on the contract. These amounts are recorded as contract liabilities until such obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Preparation of the financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates.</font></div></div>

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