| Condensed Consolidating Financial Statements |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The fixed-rate notes described in Note H are fully and unconditionally guaranteed on an unsecured, joint and several basis by certain of our 100-percent-owned subsidiaries (the guarantors). The following condensed consolidating financial statements illustrate the composition of the parent, the guarantors on a combined basis (each guarantor together with its majority-owned subsidiaries) and all other subsidiaries on a combined basis. CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED)
| | | | | | | | | | | | | | | | | Three Months Ended July 3, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | Revenue | $ | — |
| $ | 6,693 |
| $ | 972 |
| $ | — |
| $ | 7,665 |
| Cost of sales | (2 | ) | 5,360 |
| 751 |
| — |
| 6,109 |
| G&A | 9 |
| 403 |
| 74 |
| — |
| 486 |
| Operating earnings | (7 | ) | 930 |
| 147 |
| — |
| 1,070 |
| Interest, net | (23 | ) | — |
| — |
| — |
| (23 | ) | Other, net | 1 |
| — |
| — |
| — |
| 1 |
| Earnings before income tax | (29 | ) | 930 |
| 147 |
| — |
| 1,048 |
| Provision for income tax, net | (39 | ) | 300 |
| 29 |
| — |
| 290 |
| Equity in net earnings of subsidiaries | 748 |
| — |
| — |
| (748 | ) | — |
| Net earnings | $ | 758 |
| $ | 630 |
| $ | 118 |
| $ | (748 | ) | $ | 758 |
| Comprehensive income | $ | 734 |
| $ | 624 |
| $ | 70 |
| $ | (694 | ) | $ | 734 |
| Three Months Ended July 5, 2015 | | | | | | Revenue | $ | — |
| $ | 6,883 |
| $ | 999 |
| $ | — |
| $ | 7,882 |
| Cost of sales | (4 | ) | 5,574 |
| 764 |
| — |
| 6,334 |
| G&A | 12 |
| 381 |
| 74 |
| — |
| 467 |
| Operating earnings | (8 | ) | 928 |
| 161 |
| — |
| 1,081 |
| Interest, net | (20 | ) | (2 | ) | 2 |
| — |
| (20 | ) | Earnings before income tax | (28 | ) | 926 |
| 163 |
| — |
| 1,061 |
| Provision for income tax, net | (16 | ) | 298 |
| 27 |
| — |
| 309 |
| Equity in net earnings of subsidiaries | 764 |
| — |
| — |
| (764 | ) | — |
| Net earnings | $ | 752 |
| $ | 628 |
| $ | 136 |
| $ | (764 | ) | $ | 752 |
| Comprehensive income | $ | 876 |
| $ | 631 |
| $ | 198 |
| $ | (829 | ) | $ | 876 |
|
CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED) | | | | | | | | | | | | | | | | | Six Months Ended July 3, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | Revenue | $ | — |
| $ | 13,509 |
| $ | 1,880 |
| $ | — |
| $ | 15,389 |
| Cost of sales | 2 |
| 10,870 |
| 1,448 |
| — |
| 12,320 |
| G&A | 20 |
| 781 |
| 145 |
| — |
| 946 |
| Operating earnings | (22 | ) | 1,858 |
| 287 |
| — |
| 2,123 |
| Interest, net | (46 | ) | — |
| 1 |
| — |
| (45 | ) | Other, net | 10 |
| 1 |
| — |
| — |
| 11 |
| Earnings before income tax | (58 | ) | 1,859 |
| 288 |
| — |
| 2,089 |
| Provision for income tax, net | (51 | ) | 597 |
| 55 |
| — |
| 601 |
| Discontinued operations | (13 | ) | — |
| — |
| — |
| (13 | ) | Equity in net earnings of subsidiaries | 1,495 |
| — |
| — |
| (1,495 | ) | — |
| Net earnings | $ | 1,475 |
| $ | 1,262 |
| $ | 233 |
| $ | (1,495 | ) | $ | 1,475 |
| Comprehensive income | $ | 1,796 |
| $ | 1,257 |
| $ | 499 |
| $ | (1,756 | ) | $ | 1,796 |
| Six Months Ended July 5, 2015 | | | | | | Revenue | $ | — |
| $ | 13,651 |
| $ | 2,015 |
| $ | — |
| $ | 15,666 |
| Cost of sales | (3 | ) | 11,036 |
| 1,555 |
| — |
| 12,588 |
| G&A | 24 |
| 797 |
| 149 |
| — |
| 970 |
| Operating earnings | (21 | ) | 1,818 |
| 311 |
| — |
| 2,108 |
| Interest, net | (43 | ) | (1 | ) | 3 |
| — |
| (41 | ) | Other, net | 1 |
| 2 |
| — |
| — |
| 3 |
| Earnings before income tax | (63 | ) | 1,819 |
| 314 |
| — |
| 2,070 |
| Provision for income tax, net | (41 | ) | 588 |
| 55 |
| — |
| 602 |
| Equity in net earnings of subsidiaries | 1,490 |
| — |
| — |
| (1,490 | ) | — |
| Net earnings | $ | 1,468 |
| $ | 1,231 |
| $ | 259 |
| $ | (1,490 | ) | $ | 1,468 |
| Comprehensive income | $ | 1,308 |
| $ | 1,237 |
| $ | (26 | ) | $ | (1,211 | ) | $ | 1,308 |
|
CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
| | | | | | | | | | | | | | | | | July 3, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ASSETS | | | | | | Current assets: | | | | | | Cash and equivalents | $ | 1,011 |
| $ | — |
| $ | 888 |
| $ | — |
| $ | 1,899 |
| Accounts receivable | — |
| 1,248 |
| 2,291 |
| — |
| 3,539 |
| Contracts in process | 409 |
| 3,109 |
| 1,478 |
| — |
| 4,996 |
| Inventories | | | | | | Work in process | — |
| 2,066 |
| 13 |
| — |
| 2,079 |
| Raw materials | — |
| 1,298 |
| 37 |
| — |
| 1,335 |
| Finished goods | — |
| 21 |
| 5 |
| — |
| 26 |
| Pre-owned aircraft | — |
| 80 |
| — |
| — |
| 80 |
| Other current assets | 44 |
| 196 |
| 192 |
| — |
| 432 |
| Total current assets | 1,464 |
| 8,018 |
| 4,904 |
| — |
| 14,386 |
| Noncurrent assets: | | | | | | Property, plant and equipment (PP&E) | 193 |
| 6,420 |
| 1,158 |
| — |
| 7,771 |
| Accumulated depreciation of PP&E | (63 | ) | (3,546 | ) | (722 | ) | — |
| (4,331 | ) | Intangible assets | — |
| 1,447 |
| 929 |
| — |
| 2,376 |
| Accumulated amortization of intangible assets | — |
| (1,159 | ) | (484 | ) | — |
| (1,643 | ) | Goodwill | — |
| 8,046 |
| 3,526 |
| — |
| 11,572 |
| Other assets | 1,236 |
| 239 |
| 163 |
| — |
| 1,638 |
| Investment in subsidiaries | 41,865 |
| — |
| — |
| (41,865 | ) | — |
| Total noncurrent assets | 43,231 |
| 11,447 |
| 4,570 |
| (41,865 | ) | 17,383 |
| Total assets | $ | 44,695 |
| $ | 19,465 |
| $ | 9,474 |
| $ | (41,865 | ) | $ | 31,769 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | Current liabilities: | | | | | | Short-term debt | $ | 500 |
| $ | 1 |
| $ | 36 |
| $ | — |
| $ | 537 |
| Customer advances and deposits | — |
| 2,748 |
| 2,617 |
| — |
| 5,365 |
| Other current liabilities | 1,377 |
| 3,468 |
| 1,388 |
| — |
| 6,233 |
| Total current liabilities | 1,877 |
| 6,217 |
| 4,041 |
| — |
| 12,135 |
| Noncurrent liabilities: | | | | | | Long-term debt | 2,876 |
| 23 |
| — |
| — |
| 2,899 |
| Other liabilities | 3,276 |
| 1,952 |
| 512 |
| — |
| 5,740 |
| Total noncurrent liabilities | 6,152 |
| 1,975 |
| 512 |
| — |
| 8,639 |
| Intercompany | 25,671 |
| (24,364 | ) | (1,307 | ) | — |
| — |
| Shareholders' equity: | | | | | | Common stock | 482 |
| 6 |
| 2,354 |
| (2,360 | ) | 482 |
| Other shareholders' equity | 10,513 |
| 35,631 |
| 3,874 |
| (39,505 | ) | 10,513 |
| Total shareholders' equity | 10,995 |
| 35,637 |
| 6,228 |
| (41,865 | ) | 10,995 |
| Total liabilities and shareholders' equity | $ | 44,695 |
| $ | 19,465 |
| $ | 9,474 |
| $ | (41,865 | ) | $ | 31,769 |
|
CONDENSED CONSOLIDATING BALANCE SHEET
| | | | | | | | | | | | | | | | | December 31, 2015 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | ASSETS | | | | | | Current assets: | | | | | | Cash and equivalents | $ | 1,732 |
| $ | — |
| $ | 1,053 |
| $ | — |
| $ | 2,785 |
| Accounts receivable | — |
| 1,181 |
| 2,265 |
| — |
| 3,446 |
| Contracts in process | 514 |
| 2,795 |
| 1,048 |
| — |
| 4,357 |
| Inventories | | | | | | Work in process | — |
| 1,882 |
| 7 |
| — |
| 1,889 |
| Raw materials | — |
| 1,344 |
| 32 |
| — |
| 1,376 |
| Finished goods | — |
| 23 |
| 5 |
| — |
| 28 |
| Pre-owned aircraft | — |
| 73 |
| — |
| — |
| 73 |
| Other current assets | 140 |
| 213 |
| 264 |
| — |
| 617 |
| Total current assets | 2,386 |
| 7,511 |
| 4,674 |
| — |
| 14,571 |
| Noncurrent assets: | | | | | | PP&E | 189 |
| 6,386 |
| 1,101 |
| — |
| 7,676 |
| Accumulated depreciation of PP&E | (59 | ) | (3,462 | ) | (689 | ) | — |
| (4,210 | ) | Intangible assets | — |
| 1,445 |
| 909 |
| — |
| 2,354 |
| Accumulated amortization of intangible assets | — |
| (1,122 | ) | (469 | ) | — |
| (1,591 | ) | Goodwill | — |
| 8,040 |
| 3,403 |
| — |
| 11,443 |
| Other assets | 1,379 |
| 207 |
| 168 |
| — |
| 1,754 |
| Investment in subsidiaries | 40,062 |
| — |
| — |
| (40,062 | ) | — |
| Total noncurrent assets | 41,571 |
| 11,494 |
| 4,423 |
| (40,062 | ) | 17,426 |
| Total assets | $ | 43,957 |
| $ | 19,005 |
| $ | 9,097 |
| $ | (40,062 | ) | $ | 31,997 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | Current liabilities: | | | | | | Short-term debt | $ | 500 |
| $ | 1 |
| $ | — |
| $ | — |
| $ | 501 |
| Customer advances and deposits | — |
| 3,038 |
| 2,636 |
| — |
| 5,674 |
| Other current liabilities | 1,331 |
| 3,309 |
| 1,630 |
| — |
| 6,270 |
| Total current liabilities | 1,831 |
| 6,348 |
| 4,266 |
| — |
| 12,445 |
| Noncurrent liabilities: | | | | | | Long-term debt | 2,874 |
| 24 |
| — |
| — |
| 2,898 |
| Other liabilities | 3,417 |
| 2,021 |
| 478 |
| — |
| 5,916 |
| Total noncurrent liabilities | 6,291 |
| 2,045 |
| 478 |
| — |
| 8,814 |
| Intercompany | 25,097 |
| (23,816 | ) | (1,281 | ) | — |
| — |
| Shareholders' equity: | | | | | | Common stock | 482 |
| 6 |
| 2,354 |
| (2,360 | ) | 482 |
| Other shareholders' equity | 10,256 |
| 34,422 |
| 3,280 |
| (37,702 | ) | 10,256 |
| Total shareholders' equity | 10,738 |
| 34,428 |
| 5,634 |
| (40,062 | ) | 10,738 |
| Total liabilities and shareholders' equity | $ | 43,957 |
| $ | 19,005 |
| $ | 9,097 |
| $ | (40,062 | ) | $ | 31,997 |
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | | | | | | | | | | | | | | | Six Months Ended July 3, 2016 | Parent | Guarantors on a Combined Basis | Other Subsidiaries on a Combined Basis | Consolidating Adjustments | Total Consolidated | Net cash provided by operating activities* | $ | 280 |
| $ | 399 |
| $ | 194 |
| $ | — |
| $ | 873 |
| Cash flows from investing activities: | | | | | | Capital expenditures | (3 | ) | (111 | ) | (20 | ) | — |
| (134 | ) | Other, net | 1 |
| (15 | ) | (37 | ) | — |
| (51 | ) | Net cash used by investing activities | (2 | ) | (126 | ) | (57 | ) | — |
| (185 | ) | Cash flows from financing activities: | | | | | | Purchases of common stock | (1,189 | ) | — |
| — |
| — |
| (1,189 | ) | Dividends paid | (447 | ) | — |
| — |
| — |
| (447 | ) | Proceeds from stock option exercises | 92 |
| — |
| — |
| — |
| 92 |
| Other, net | (31 | ) | (1 | ) | 36 |
| — |
| 4 |
| Net cash used by financing activities | (1,575 | ) | (1 | ) | 36 |
| — |
| (1,540 | ) | Net cash used by discontinued operations | (34 | ) | — |
| — |
| — |
| (34 | ) | Cash sweep/funding by parent | 610 |
| (272 | ) | (338 | ) | — |
| — |
| Net decrease in cash and equivalents | (721 | ) | — |
| (165 | ) | — |
| (886 | ) | Cash and equivalents at beginning of period | 1,732 |
| — |
| 1,053 |
| — |
| 2,785 |
| Cash and equivalents at end of period | $ | 1,011 |
| $ | — |
| $ | 888 |
| $ | — |
| $ | 1,899 |
| Six Months Ended July 5, 2015 | | | | | | Net cash provided by operating activities* | $ | 103 |
| $ | 1,133 |
| $ | 197 |
| $ | — |
| $ | 1,433 |
| Cash flows from investing activities: | | | | | | Maturities of held-to-maturity securities | 500 |
| — |
| — |
| — |
| 500 |
| Proceeds from sales of assets | 162 |
| 97 |
| — |
| — |
| 259 |
| Capital expenditures | (2 | ) | (180 | ) | (8 | ) | — |
| (190 | ) | Other, net | 2 |
| (20 | ) | — |
| — |
| (18 | ) | Net cash provided by investing activities | 662 |
| (103 | ) | (8 | ) | — |
| 551 |
| Cash flows from financing activities: | | | | |
| Purchases of common stock | (1,565 | ) | — |
| — |
| — |
| (1,565 | ) | Repayment of fixed-rate notes | (500 | ) | — |
| — |
| — |
| (500 | ) | Dividends paid | (432 | ) | — |
| — |
| — |
| (432 | ) | Proceeds from stock option exercises | 198 |
| — |
| — |
| — |
| 198 |
| Other, net | (28 | ) | 3 |
| — |
| — |
| (25 | ) | Net cash used by financing activities | (2,327 | ) | 3 |
| — |
| — |
| (2,324 | ) | Net cash used by discontinued operations | (16 | ) | — |
| — |
| — |
| (16 | ) | Cash sweep/funding by parent | 1,338 |
| (1,033 | ) | (305 | ) | — |
| — |
| Net increase in cash and equivalents | (240 | ) | — |
| (116 | ) | — |
| (356 | ) | Cash and equivalents at beginning of period | 2,536 |
| — |
| 1,852 |
| — |
| 4,388 |
| Cash and equivalents at end of period | $ | 2,296 |
| $ | — |
| $ | 1,736 |
| $ | — |
| $ | 4,032 |
|
* Continuing operations only. |