2018 Q1 Form 10-Q Financial Statement

#000092222418000038 Filed on May 03, 2018

View on sec.gov

Income Statement

Concept 2018 Q1 2017 Q1
Revenue $2.126B $1.951B
YoY Change 8.97% -2.98%
Cost Of Revenue $241.0M $215.0M
YoY Change 12.09% -7.73%
Gross Profit $1.885B $1.736B
YoY Change 8.58% -2.36%
Gross Profit Margin 88.66% 88.98%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $269.0M $242.0M
YoY Change 11.16% 5.68%
% of Gross Profit 14.27% 13.94%
Operating Expenses $1.034B $940.0M
YoY Change 10.0% -1.57%
Operating Profit $851.0M $758.0M
YoY Change 12.27% -7.9%
Interest Expense $239.0M $217.0M
YoY Change 10.14% -3.13%
% of Operating Profit 28.08% 28.63%
Other Income/Expense, Net -$43.00M -$9.000M
YoY Change 377.78% -114.75%
Pretax Income $569.0M $532.0M
YoY Change 6.95% -19.39%
Income Tax $117.0M $129.0M
% Of Pretax Income 20.56% 24.25%
Net Earnings $452.0M $403.0M
YoY Change 12.16% -16.22%
Net Earnings / Revenue 21.26% 20.66%
Basic Earnings Per Share $0.65 $0.59
Diluted Earnings Per Share $0.65 $0.59
COMMON SHARES
Basic Shares Outstanding 694.5M shares 680.9M shares
Diluted Shares Outstanding 695.3M shares 683.1M shares

Balance Sheet

Concept 2018 Q1 2017 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $629.0M $409.0M
YoY Change 53.79% -49.75%
Cash & Equivalents $629.0M $409.0M
Short-Term Investments
Other Short-Term Assets $49.00M $51.00M
YoY Change -3.92% 34.21%
Inventory $279.0M $312.0M
Prepaid Expenses $139.0M $173.0M
Receivables $760.0M $702.0M
Other Receivables $89.00M $58.00M
Total Short-Term Assets $2.490B $2.227B
YoY Change 11.81% -17.91%
LONG-TERM ASSETS
Property, Plant & Equipment $33.74B $30.41B
YoY Change 10.95% 1.93%
Goodwill $3.302B $3.050B
YoY Change 8.26% -8.57%
Intangibles $703.0M $644.0M
YoY Change 9.16% -3.45%
Long-Term Investments
YoY Change
Other Assets $140.0M $151.0M
YoY Change -7.28% -5.63%
Total Long-Term Assets $6.162B $6.400B
YoY Change -3.72% 3.83%
TOTAL ASSETS
Total Short-Term Assets $2.490B $2.227B
Total Long-Term Assets $6.162B $6.400B
Total Assets $42.39B $39.03B
YoY Change 8.59% 0.84%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $836.0M $700.0M
YoY Change 19.43% -0.99%
Accrued Expenses $323.0M $299.0M
YoY Change 8.03% -5.08%
Deferred Revenue
YoY Change
Short-Term Debt $1.457B $1.666B
YoY Change -12.55% 31.7%
Long-Term Debt Due $250.0M $417.0M
YoY Change -40.05% -14.02%
Total Short-Term Liabilities $4.238B $4.256B
YoY Change -0.42% 4.67%
LONG-TERM LIABILITIES
Long-Term Debt $20.21B $17.96B
YoY Change 12.56% -0.64%
Other Long-Term Liabilities $441.0M $422.0M
YoY Change 4.5% -11.72%
Total Long-Term Liabilities $6.760B $6.711B
YoY Change 0.73% -1.41%
TOTAL LIABILITIES
Total Short-Term Liabilities $4.238B $4.256B
Total Long-Term Liabilities $6.760B $6.711B
Total Liabilities $11.00B $10.97B
YoY Change 0.28% 0.86%
SHAREHOLDERS EQUITY
Retained Earnings $4.037B $3.962B
YoY Change 1.89% 24.4%
Common Stock $10.42B $9.924B
YoY Change 4.98% 1.93%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $11.18B $10.11B
YoY Change
Total Liabilities & Shareholders Equity $42.39B $39.03B
YoY Change 8.59% 0.84%

Cashflow Statement

Concept 2018 Q1 2017 Q1
OPERATING ACTIVITIES
Net Income $452.0M $403.0M
YoY Change 12.16% -16.22%
Depreciation, Depletion And Amortization $269.0M $242.0M
YoY Change 11.16% 5.68%
Cash From Operating Activities $566.0M $135.0M
YoY Change 319.26% -75.76%
INVESTING ACTIVITIES
Capital Expenditures $750.0M $677.0M
YoY Change 10.78% 3.2%
Acquisitions
YoY Change
Other Investing Activities $3.000M -$1.000M
YoY Change -400.0% 0.0%
Cash From Investing Activities -$753.0M -$679.0M
YoY Change 10.9% 2.72%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $100.0M $73.00M
YoY Change 36.99% 73.81%
Debt Paid & Issued, Net $0.00
YoY Change -100.0%
Cash From Financing Activities $331.0M $607.0M
YoY Change -45.47% 427.83%
NET CHANGE
Cash From Operating Activities $566.0M $135.0M
Cash From Investing Activities -$753.0M -$679.0M
Cash From Financing Activities $331.0M $607.0M
Net Change In Cash $142.0M $66.00M
YoY Change 115.15% 500.0%
FREE CASH FLOW
Cash From Operating Activities $566.0M $135.0M
Capital Expenditures $750.0M $677.0M
Free Cash Flow -$184.0M -$542.0M
YoY Change -66.05% 447.47%

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">18. New Accounting Guidance Pending Adoption</font><font style="font-family:Arial;font-size:10pt;font-weight:bold;"> </font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">(All Registrants)</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Accounting for Leases</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued accounting guidance for leases. This new guidance requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, the FASB retained a dual model for lessees, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright line tests.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Lessor accounting under the new guidance is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Similar to current practice, lessors will classify leases as operating, direct financing, or sales-type.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The standard is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. One of these practical expedients allows entities to elect to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. In January 2018, the FASB also issued additional guidance that provides for a practical expedient that allows entities to elect to not evaluate land easements as leases that exist or expired before the adoption date and were not previously accounted for as leases under current lease guidance. The Registrants plan to elect these practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance. The Registrants will adopt this guidance effective January 1, 2019.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Accounting for Financial Instrument Credit Losses</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued accounting guidance that requires the use of a current expected credit loss (CECL) model for the measurement of credit losses on financial instruments within the scope of this guidance, which includes accounts receivable. The CECL model requires an entity to measure credit losses using historical information, current information and reasonable and supportable forecasts of future events, rather than the incurred loss impairment model required under current GAAP.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, this guidance will be applied using a modified retrospective approach and is effective for fiscal years beginning after December 15, 2019, and interim periods within those years. All entities may early adopt this guidance in beginning after December 15, 2018, including interim periods within those years.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Improvements to Accounting for Hedging Activities</font><font style="font-family:Arial;font-size:10pt;"> </font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2017, the FASB issued accounting guidance that reduces complexity when applying hedge accounting as well as improves transparency about an entity's risk management activities. This guidance eliminates recognizing hedge ineffectiveness for cash flow and net investment hedges and provides for the ability to perform subsequent effectiveness assessments qualitatively. The guidance also makes certain changes to allowable methodologies such as allowing entities to apply the short-cut method to partial-term fair value hedges of interest rate risk as well as expands the ability to apply the critical terms match method to cash flow hedges of groups of forecasted transactions. The guidance also updates certain recognition and presentation requirements as well as disclosure requirements.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. This standard must be adopted using a modified retrospective approach and provides for certain transition elections that must be made prior to the first effectiveness testing date after adoption.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">(PPL, LKE, LG&amp;E and KU)</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Simplifying the Test for Goodwill Impairment</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued accounting guidance that simplifies the test for goodwill impairment by eliminating the second step of the quantitative test. The second step of the quantitative test requires a calculation of the implied fair value of goodwill, which is determined in the same manner as the amount of goodwill in a business combination. Under this new guidance, an entity will now compare the estimated fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount the carrying amount exceeds the fair value of the reporting unit. </font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, this guidance will be applied prospectively and is effective for annual or any interim goodwill impairment tests for fiscal years beginning after December 15, 2019. All entities may early adopt this guidance for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">(PPL and LKE)</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2018, the FASB issued accounting guidance that gives entities the option to reclassify tax effects stranded within AOCI as a result of the TCJA to retained earnings. The reclassification applies only to those stranded tax effects arising from the TCJA enactment. Certain disclosures related to the stranded tax effects, including a description of the accounting policy for releasing income tax effects from AOCI, are required.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For all entities, this guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:0px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The adoption of this guidance will result in PPL and LKE reclassifying </font><font style="font-family:inherit;font-size:10pt;">$50 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$18 million</font><font style="font-family:inherit;font-size:10pt;"> of deferred tax effects (primarily related to pension and other post-retirement benefits) stranded in AOCI as a result of the TCJA to retained earnings. The Registrants are assessing the period in which they will adopt this guidance.</font></div></div>

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