Condensed Consolidating Financial Statements

9 Months Ended

Sep. 29, 2019

Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The fixed- and floating-rate notes described in Note I are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of our 100%-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 STATEMENT OF EARNINGS (UNAUDITED)

Three Months Ended September 29, 2019	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenue	$	—		$	7,660		$	2,101		$	—		$	9,761
Cost of sales	36			(6,257		)	(1,752		)	—			(7,973		)
G&A	(17		)	(415		)	(140		)	—			(572		)
Operating earnings	19			988			209			—			1,216
Interest, net	(105		)	(1		)	(8		)	—			(114		)
Other, net	(6		)	1			(7		)	—			(12		)
Earnings before income tax	(92		)	988			194			—			1,090
Provision for income tax, net	32			(168		)	(41		)	—			(177		)
Equity in net earnings of subsidiaries	973			—			—			(973		)	—
Net earnings	$	913		$	820		$	153		$	(973	)	$	913
Comprehensive income	$	858		$	813		$	53		$	(866	)	$	858
Three Months Ended September 30, 2018
Revenue	$	—		$	6,811		$	2,283		$	—		$	9,094
Cost of sales	26			(5,518		)	(1,915		)	—			(7,407		)
G&A	(15		)	(393		)	(144		)	—			(552		)
Operating earnings	11			900			224			—			1,135
Interest, net	(105		)	(2		)	(7		)	—			(114		)
Other, net	4			2			(4		)	—			2
Earnings before income tax	(90		)	900			213			—			1,023
Provision for income tax, net	8			(132		)	(35		)	—			(159		)
Discontinued operations, net of tax	(13		)	—			—			—			(13		)
Equity in net earnings of subsidiaries	946			—			—			(946		)	—
Net earnings	$	851		$	768		$	178		$	(946	)	$	851
Comprehensive income	$	1,048		$	769		$	307		$	(1,076	)	$	1,048

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (UNAUDITED)

Nine Months Ended September 29, 2019	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenue	$	—		$	22,042		$	6,535		$	—		$	28,577
Cost of sales	75			(18,094		)	(5,456		)	—			(23,475		)
G&A	(58		)	(1,262		)	(462		)	—			(1,782		)
Operating earnings	17			2,686			617			—			3,320
Interest, net	(322		)	—			(28		)	—			(350		)
Other, net	17			4			(3		)	—			18
Earnings before income tax	(288		)	2,690			586			—			2,988
Provision for income tax, net	94			(495		)	(123		)	—			(524		)
Equity in net earnings of subsidiaries	2,658			—			—			(2,658		)	—
Net earnings	$	2,464		$	2,195		$	463		$	(2,658	)	$	2,464
Comprehensive income	$	2,711		$	2,182		$	576		$	(2,758	)	$	2,711
Nine Months Ended September 30, 2018
Revenue	$	—		$	20,088		$	5,727		$	—		$	25,815
Cost of sales	54			(16,195		)	(4,742		)	—			(20,883		)
G&A	(73		)	(1,247		)	(381		)	—			(1,701		)
Operating earnings	(19		)	2,646			604			—			3,231
Interest, net	(225		)	(1		)	(18		)	—			(244		)
Other, net	(38		)	6			(2		)	—			(34		)
Earnings before income tax	(282		)	2,651			584			—			2,953
Provision for income tax, net	89			(475		)	(118		)	—			(504		)
Discontinued operations, net of tax	(13		)	—			—			—			(13		)
Equity in net earnings of subsidiaries	2,642			—			—			(2,642		)	—
Net earnings	$	2,436		$	2,176		$	466		$	(2,642	)	$	2,436
Comprehensive income	$	2,533		$	2,154		$	386		$	(2,540	)	$	2,533

CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)

September 29, 2019	Parent*			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	412		$	—		$	562		—			$	974
Accounts receivable	—			1,083			2,406			—			3,489
Unbilled receivables	—			3,268			4,809			—			8,077
Inventories	—			6,419			154			—			6,573
Other current assets	(404		)	920			522			—			1,038
Total current assets	8			11,690			8,453			—			20,151
Noncurrent assets:
Property, plant and equipment (PP&E)	341			7,486			1,630			—			9,457
Accumulated depreciation of PP&E	(88		)	(4,238		)	(914		)	—			(5,240		)
Intangible assets, net	—			219			2,157			—			2,376
Goodwill	—			7,960			11,657			—			19,617
Other assets	196			1,158			1,073			—			2,427
Net investment in subsidiaries	30,594			—			—			(30,594		)	—
Total noncurrent assets	31,043			12,585			15,603			(30,594		)	28,637
Total assets	$	31,051		$	24,275		$	24,056		$	(30,594	)	$	48,788
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	4,294		$	—		$	367		$	—		$	4,661
Customer advances and deposits	—			3,965			2,889			—			6,854
Other current liabilities	677			4,116			1,919			—			6,712
Total current liabilities	4,971			8,081			5,175			—			18,227
Noncurrent liabilities:
Long-term debt	8,923			52			14			—			8,989
Other liabilities	3,644			2,659			1,756			—			8,059
Total noncurrent liabilities	12,567			2,711			1,770			—			17,048
Total shareholders’ equity	13,513			13,483			17,111			(30,594		)	13,513
Total liabilities and shareholders’ equity	$	31,051		$	24,275		$	24,056		$	(30,594	)	$	48,788

*

Includes the funded status of the company’s primary domestic qualified defined-benefit pension plans as the Parent has the ultimate obligation for the plans.

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2018	Parent*			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	460		$	—		$	503		$	—		$	963
Accounts receivable	—			1,171			2,588			—			3,759
Unbilled receivables	—			2,758			3,818			—			6,576
Inventories	—			5,855			122			—			5,977
Other current assets	(251		)	647			518			—			914
Total current assets	209			10,431			7,549			—			18,189
Noncurrent assets:
PP&E	273			7,177			1,522			—			8,972
Accumulated depreciation of PP&E	(83		)	(4,071		)	(840		)	—			(4,994		)
Intangible assets, net	—			251			2,334			—			2,585
Goodwill	—			8,031			11,563			—			19,594
Other assets	195			274			593			—			1,062
Net investment in subsidiaries	27,887			—			—			(27,887		)	—
Total noncurrent assets	28,272			11,662			15,172			(27,887		)	27,219
Total assets	$	28,481		$	22,093		$	22,721		$	(27,887	)	$	45,408
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	850		$	—		$	123		$	—		$	973
Customer advances and deposits	—			4,541			2,729			—			7,270
Other current liabilities	552			3,944			2,000			—			6,496
Total current liabilities	1,402			8,485			4,852			—			14,739
Noncurrent liabilities:
Long-term debt	11,398			39			7			—			11,444
Other liabilities	3,949			2,115			1,429			—			7,493
Total noncurrent liabilities	15,347			2,154			1,436			—			18,937
Total shareholders’ equity	11,732			11,454			16,433			(27,887		)	11,732
Total liabilities and shareholders’ equity	$	28,481		$	22,093		$	22,721		$	(27,887	)	$	45,408

*

Includes the funded status of the company’s primary domestic qualified defined-benefit pension plans as the Parent has the ultimate obligation for the plans.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 29, 2019	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments		Total Consolidated
Net cash provided by operating activities*	$	181		$	679		$	(273	)	$	—	$	587
Cash flows from investing activities:
Capital expenditures	(65		)	(404		)	(137		)	—		(606		)
Other, net	6			21			(25		)	—		2
Net cash used by investing activities	(59		)	(383		)	(162		)	—		(604		)
Cash flows from financing activities:
Proceeds from commercial paper, net	947			—			—			—		947
Dividends paid	(858		)	—			—			—		(858		)
Purchases of common stock	(231		)	—			—			—		(231		)
Other, net	24			(1		)	184			—		207
Net cash provided by financing activities	(118		)	(1		)	184			—		65
Net cash used by discontinued operations	(37		)	—			—			—		(37		)
Cash sweep/funding by parent	(15		)	(295		)	310			—		—
Net increase in cash and equivalents	(48		)	—			59			—		11
Cash and equivalents at beginning of period	460			—			503			—		963
Cash and equivalents at end of period	$	412		$	—		$	562		$	—	$	974
Nine Months Ended September 30, 2018
Net cash provided by operating activities*	$	(204	)	$	1,561		$	(276	)	$	—	$	1,081
Cash flows from investing activities:
Business acquisitions, net of cash acquired	(9,749		)	(74		)	(216		)	—		(10,039		)
Capital expenditures	(36		)	(331		)	(80		)	—		(447		)
Other, net	93			76			—			—		169
Net cash used by investing activities	(9,692		)	(329		)	(296		)	—		(10,317		)
Cash flows from financing activities:
Proceeds from fixed-rate notes	6,461			—			—			—		6,461
Proceeds from commercial paper, net	1,668			—			—			—		1,668
Proceeds from floating-rate notes	1,000			—			—			—		1,000
Dividends paid	(801		)	—			—			—		(801		)
Purchases of common stock	(533		)	—			—			—		(533		)
Repayment of CSRA accounts receivable purchase     agreement	—			—			(450		)	—		(450		)
Other, net	(10		)	—			(58		)	—		(68		)
Net cash provided by financing activities	7,785			—			(508		)	—		7,277
Net cash used by discontinued operations	(14		)	—			—			—		(14		)
Cash sweep/funding by parent	844			(1,232		)	388			—		—
Net decrease in cash and equivalents	(1,281		)	—			(692		)	—		(1,973		)
Cash and equivalents at beginning of period	1,930			—			1,053			—		2,983
Cash and equivalents at end of period	$	649		$	—		$	361		$	—	$	1,010

* Continuing operations only.