Back to GetFilings.com
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
| |
|
|
| [X]
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended July 4, 2004
OR
| |
|
|
| [ ]
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 1-3671
GENERAL DYNAMICS CORPORATION
(Exact name of registrant as specified in its charter)
| |
|
|
Delaware
|
|
13-1673581 |
State or other jurisdiction of
|
|
I.R.S. Employer |
incorporation or organization
|
|
Identification No. |
|
|
|
|
|
|
2941 Fairview Park Drive |
|
|
Suite 100 |
|
|
Falls Church, Virginia
|
|
22042-4153 |
Address of principal executive offices
|
|
Zip code |
(703) 876-3000
Registrant’s telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes
X No .
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No .
199,920,335 shares of the registrant’s common stock, $1 par value per
share, were outstanding at August 1, 2004.
GENERAL DYNAMICS CORPORATION
INDEX
-2-
GENERAL DYNAMICS CORPORATION
PART I —
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE
SHEET
(Dollars in
millions)
| |
|
|
|
|
|
|
|
|
| |
|
July 4 |
|
|
| |
|
2004 |
|
December 31 |
| ASSETS |
|
(Unaudited) |
|
2003 |
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and equivalents |
|
$ |
1,100 |
|
|
$ |
860 |
|
Accounts receivable |
|
|
1,376 |
|
|
|
1,378 |
|
Contracts in process |
|
|
2,643 |
|
|
|
2,548 |
|
Inventories |
|
|
1,236 |
|
|
|
1,160 |
|
Other current assets |
|
|
514 |
|
|
|
448 |
|
|
Total Current Assets |
|
|
6,869 |
|
|
|
6,394 |
|
|
|
Noncurrent Assets: |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
2,082 |
|
|
|
2,085 |
|
Intangible assets, net |
|
|
978 |
|
|
|
1,030 |
|
Goodwill, net |
|
|
6,157 |
|
|
|
6,083 |
|
Other assets |
|
|
644 |
|
|
|
591 |
|
|
Total Noncurrent Assets |
|
|
9,861 |
|
|
|
9,789 |
|
|
|
|
$ |
16,730 |
|
|
$ |
16,183 |
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt |
|
$ |
519 |
|
|
$ |
747 |
|
Accounts payable |
|
|
1,257 |
|
|
|
1,317 |
|
Other current liabilities |
|
|
3,668 |
|
|
|
3,552 |
|
|
Total Current Liabilities |
|
|
5,444 |
|
|
|
5,616 |
|
|
Noncurrent Liabilities: |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
3,297 |
|
|
|
3,296 |
|
Other liabilities |
|
|
1,531 |
|
|
|
1,350 |
|
Commitments and contingencies (See Note L) |
|
|
|
|
|
|
|
|
|
Total Noncurrent Liabilities |
|
|
4,828 |
|
|
|
4,646 |
|
|
Shareholders’ Equity: |
|
|
|
|
|
|
|
|
Common stock, including surplus |
|
|
940 |
|
|
|
838 |
|
Retained earnings |
|
|
6,632 |
|
|
|
6,206 |
|
Treasury stock |
|
|
(1,240 |
) |
|
|
(1,279 |
) |
Accumulated other comprehensive income |
|
|
126 |
|
|
|
156 |
|
|
Total Shareholders’ Equity |
|
|
6,458 |
|
|
|
5,921 |
|
|
|
|
$ |
16,730 |
|
|
$ |
16,183 |
|
|
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of this statement.
-3-
GENERAL DYNAMICS
CORPORATION
CONSOLIDATED STATEMENT
OF EARNINGS
(UNAUDITED)
(Dollars in millions,
except per share amounts)
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
July 4 |
|
June 29 |
| |
|
2004 |
|
2003 |
|
Net Sales |
|
$ |
4,761 |
|
|
$ |
3,935 |
|
Operating costs and expenses |
|
|
4,267 |
|
|
|
3,557 |
|
|
| |
Operating Earnings |
|
|
494 |
|
|
|
378 |
|
| |
Interest expense, net |
|
|
(39 |
) |
|
|
(19 |
) |
Other (expense) income, net |
|
|
(12 |
) |
|
|
2 |
|
|
| |
Earnings from Continuing Operations
before Income Taxes |
|
|
443 |
|
|
|
361 |
|
| |
Provision for income taxes |
|
|
147 |
|
|
|
119 |
|
| |
|
Earnings from Continuing Operations |
|
$ |
296 |
|
|
$ |
242 |
|
|
| |
Discontinued operations, net of tax |
|
|
4 |
|
|
|
— |
|
| |
|
Net Earnings |
|
$ |
300 |
|
|
$ |
242 |
|
|
Earnings per Share — Basic |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
1.49 |
|
|
$ |
1.23 |
|
Discontinued operations |
|
|
0.02 |
|
|
|
— |
|
|
Net Earnings |
|
$ |
1.51 |
|
|
$ |
1.23 |
|
|
| |
Earnings per Share — Diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
1.47 |
|
|
$ |
1.22 |
|
Discontinued operations |
|
|
0.02 |
|
|
|
— |
|
|
Net Earnings |
|
$ |
1.49 |
|
|
$ |
1.22 |
|
|
| |
Dividends Per Share |
|
$ |
0.36 |
|
|
$ |
0.32 |
|
|
Supplemental Information: |
|
|
|
|
|
|
|
|
General and administrative expenses included in
operating costs and expenses |
|
$ |
280 |
|
|
$ |
258 |
|
|
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of this statement.
-4-
GENERAL DYNAMICS CORPORATION
CONSOLIDATED STATEMENT
OF EARNINGS
(UNAUDITED)
(Dollars in millions,
except per share amounts)
| |
|
|
|
|
|
|
|
|
| |
|
Six Months Ended |
| |
|
July 4 |
|
June 29 |
| |
|
2004 |
|
2003 |
|
Net Sales |
|
$ |
9,521 |
|
|
$ |
7,356 |
|
Operating costs and expenses |
|
|
8,585 |
|
|
|
6,660 |
|
|
| |
|
|
|
|
|
|
|
|
Operating Earnings |
|
|
936 |
|
|
|
696 |
|
| |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(78 |
) |
|
|
(30 |
) |
Other (expense) income, net |
|
|
(12 |
) |
|
|
6 |
|
|
| |
|
|
|
|
|
|
|
|
Earnings from Continuing Operations
before Income Taxes |
|
|
846 |
|
|
|
672 |
|
| |
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
281 |
|
|
|
209 |
|
| |
|
|
|
|
|
|
|
|
|
Earnings from Continuing Operations |
|
$ |
565 |
|
|
$ |
463 |
|
|
| |
|
|
|
|
|
|
|
|
Discontinued operations, net of tax |
|
|
4 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
Net Earnings |
|
$ |
569 |
|
|
$ |
463 |
|
|
| |
|
|
|
|
|
|
|
|
Earnings per Share — Basic |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
2.84 |
|
|
$ |
2.34 |
|
Discontinued operations |
|
|
0.02 |
|
|
|
— |
|
|
Net Earnings |
|
$ |
2.86 |
|
|
$ |
2.34 |
|
|
| |
|
|
|
|
|
|
|
|
Earnings per Share — Diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
2.82 |
|
|
$ |
2.32 |
|
Discontinued operations |
|
|
0.02 |
|
|
|
— |
|
|
Net Earnings |
|
$ |
2.84 |
|
|
$ |
2.32 |
|
|
| |
|
|
|
|
|
|
|
|
Dividends Per Share |
|
$ |
0.72 |
|
|
$ |
0.64 |
|
|
Supplemental Information: |
|
|
|
|
|
|
|
|
General and administrative expenses included inoperating costs and expenses |
|
$ |
578 |
|
|
$ |
494 |
|
|
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of this statement.
-5-
GENERAL DYNAMICS CORPORATION
CONSOLIDATED STATEMENT
OF CASH FLOWS
(UNAUDITED)
(Dollars in
millions)
| |
|
|
|
|
|
|
|
|
| |
|
Six Months Ended |
| |
|
July 4 |
|
June 29 |
| |
|
2004 |
|
2003 |
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Earnings from Continuing Operations |
|
$ |
565 |
|
|
$ |
463 |
|
Adjustments to reconcile Earnings from Continuing Operations to
net cash provided by operating activities - |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization of property,
plant and equipment |
|
|
115 |
|
|
|
93 |
|
Amortization of intangible assets |
|
|
48 |
|
|
|
20 |
|
Deferred income tax provision |
|
|
228 |
|
|
|
41 |
|
(Increase) decrease in assets, net of effects of business acquisitions - |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
2 |
|
|
|
(8 |
) |
Contracts in process |
|
|
(6 |
) |
|
|
(323 |
) |
Inventories |
|
|
(79 |
) |
|
|
(2 |
) |
Increase (decrease) in liabilities, net of effects of business acquisitions - |
|
|
|
|
|
|
|
|
Billings in excess of costs and estimated profits |
|
|
8 |
|
|
|
163 |
|
Income taxes payable |
|
|
41 |
|
|
|
52 |
|
Accounts payable |
|
|
(73 |
) |
|
|
(10 |
) |
Other current liabilities |
|
|
(79 |
) |
|
|
(30 |
) |
Other, net |
|
|
(64 |
) |
|
|
10 |
|
|
Net Cash Provided by Operating Activities from Continuing Operations |
|
|
706 |
|
|
|
469 |
|
|
Net Cash Used by Discontinued Operations |
|
|
(16 |
) |
|
|
(11 |
) |
|
Net Cash Provided by Operating Activities |
|
|
690 |
|
|
|
458 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Business acquisitions, net of cash acquired |
|
|
(36 |
) |
|
|
(1,128 |
) |
Capital expenditures |
|
|
(118 |
) |
|
|
(67 |
) |
Other, net |
|
|
16 |
|
|
|
7 |
|
|
Net Cash Used by Investing Activities |
|
|
(138 |
) |
|
|
(1,188 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Issuance of fixed-rate notes, net |
|
|
— |
|
|
|
1,996 |
|
Net repayments of commercial paper |
|
|
(182 |
) |
|
|
(364 |
) |
Net repayments of other debt |
|
|
(45 |
) |
|
|
(20 |
) |
Dividends paid |
|
|
(134 |
) |
|
|
(123 |
) |
Purchases of common stock |
|
|
— |
|
|
|
(300 |
) |
Other, net |
|
|
49 |
|
|
|
24 |
|
|
Net Cash (Used) Provided by Financing Activities |
|
|
(312 |
) |
|
|
1,213 |
|
|
Net Increase in Cash and Equivalents |
|
|
240 |
|
|
|
483 |
|
Cash and Equivalents at Beginning of Period |
|
|
860 |
|
|
|
328 |
|
|
Cash and Equivalents at End of Period |
|
$ |
1,100 |
|
|
$ |
811 |
|
|
Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
|
Cash payments for: |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
78 |
|
|
$ |
119 |
|
Interest |
|
$ |
79 |
|
|
$ |
25 |
|
|
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of this statement.
-6-
GENERAL DYNAMICS
CORPORATION
NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions,
except per share amounts)
The term “company” refers to General Dynamics Corporation and all of its
wholly-owned and majority-owned subsidiaries. The unaudited Consolidated
Financial Statements included herein have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
of America (GAAP) have been condensed or omitted pursuant to such rules and
regulations. Operating results for the three- and six-month period ended July
4, 2004, are not necessarily indicative of the results that may be expected for
the year ending December 31, 2004. These unaudited Consolidated Financial
Statements should be read in conjunction with the Consolidated Financial
Statements and notes thereto included in the company’s Annual Report on Form
10-K for the year ended December 31, 2003.
In management’s opinion, the unaudited Consolidated Financial Statements
contain all adjustments, that are of a normal recurring nature, necessary for a
fair statement of the results for the three- and six-month periods ended July
4, 2004, and June 29, 2003. Certain prior-year amounts have been reclassified
to conform to the current-year presentation.
| (B) |
|
Acquisitions, Intangible Assets and Goodwill, Net |
During 2003, the company completed the following acquisitions for a total
cost of approximately $3 billion, which was paid in cash:
Information Systems and Technology
| |
• |
|
Digital System Resources, Inc., (DSR) of Fairfax, Virginia, on
September 10. DSR is a provider of surveillance and combat systems
for submarines and surface ships. |
| |
• |
|
Veridian Corporation (Veridian) of Arlington, Virginia, on
August 11. Veridian provides the Department of Defense, the
Department of Homeland Security and the intelligence community with
network security and enterprise protection; intelligence,
surveillance and reconnaissance systems development and integration;
decision support; information systems development and integration;
chemical, biological and nuclear detection capabilities; network and
enterprise management services; and large-scale systems engineering. |
| |
• |
|
Creative Technology Incorporated (CTI) of Herndon, Virginia, on
March 31. CTI supports the intelligence community and the Department
of Defense by delivering systems and network engineering,
integration, software development and operations and technical
consulting. |
-7-
Combat Systems
| |
• |
|
Steyr Daimler Puch Spezialfahrzeug Aktiengesellschaft & Company
KG (Steyr) of Vienna, Austria, on October 2. Steyr develops and
manufactures armored combat vehicles, including the Pandur family of
wheeled combat vehicles and the Ulan tracked infantry fighting
vehicle. |
| |
• |
|
Intercontinental Manufacturing Company (IMCO) of Garland,
Texas, a division of Datron, Inc., on September 4. IMCO develops and
manufactures aircraft bomb bodies for the U.S. armed services. |
| |
• |
|
General Motors Defense (GM Defense) of London, Ontario, a
business unit of General Motors Corporation, on March 1. GM Defense
manufactures wheeled armored vehicles and turrets. |
The operating results of these businesses are included with those of the
company from their respective closing dates. The purchase prices of these
businesses have been allocated to the estimated fair value of net tangible and
intangible assets acquired, with any excess recorded as goodwill. Certain of
the estimates related to the Steyr acquisition are still preliminary at July 4,
2004. The company is awaiting the completion of the appraisals of assets
acquired and the identification and valuation of intangible assets acquired.
The company expects these analyses to be completed during the third quarter of
2004.
In June 2004, the company entered into a definitive agreement to acquire
TriPoint Global Communications Inc., of Newton, North Carolina, a privately
held provider of ground-based satellite and wireless communication equipment
and integration services for video, voice and data applications. The
acquisition is subject to regulatory approval and is expected to close in the
third quarter of 2004.
On July 9, 2004, the company acquired Spectrum Astro, Inc., of Gilbert,
Arizona. Spectrum Astro manufactures and integrates space systems, satellites
and ground-support equipment.
Intangible assets consisted of the following:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
July 4 |
|
December 31 |
| |
|
2004
|
|
2003
|
| |
|
Gross |
|
|
|
|
|
Net |
|
Gross |
|
|
|
|
|
Net |
| |
|
Carrying |
|
Accumulated |
|
Carrying |
|
Carrying |
|
Accumulated |
|
Carrying |
| |
|
Amount |
|
Amortization |
|
Amount |
|
Amount |
|
Amortization |
|
Amount |
|
Amortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract and
program
intangible assets |
|
$ |
989 |
|
|
$ |
(189 |
) |
|
$ |
800 |
|
|
$ |
991 |
|
|
$ |
(157 |
) |
|
$ |
834 |
|
Other intangible assets |
|
|
299 |
|
|
|
(121 |
) |
|
|
178 |
|
|
|
282 |
|
|
|
(105 |
) |
|
|
177 |
|
|
|
|
$ |
1,288 |
|
|
$ |
(310 |
) |
|
$ |
978 |
|
|
$ |
1,273 |
|
|
$ |
(262 |
) |
|
$ |
1,011 |
|
|
Unamortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
19 |
|
|
$ |
— |
|
|
$ |
19 |
|
|
-8-
The company amortizes contract and program intangible assets on a
straight-line basis over periods ranging from 8 to 40 years. Other intangible
assets consist primarily of aircraft product design, customer lists, software
and licenses and are amortized over periods ranging from 5 to 21 years.
Amortization expense was $25 and $48 for the three- and six-month periods
ended July 4, 2004, and $10 and $20 for the three- and six-month periods ended
June 29, 2003. The company expects to record annual amortization expense over
the next five years as follows:
| |
|
|
|
|
|
2005
|
|
$ |
92 |
|
2006
|
|
$ |
91 |
|
2007
|
|
$ |
89 |
|
2008
|
|
$ |
85 |
|
2009
|
|
$ |
82 |
|
|
The changes in the carrying amount of goodwill by business group for the
six months ended July 4, 2004, were as follows:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
December 31 |
|
|
|
|
|
|
|
|
|
July 4 |
| |
|
2003 |
|
Acquisitions(a) |
|
Other(b) |
|
2004 |
|
Information Systems
and Technology |
|
$ |
3,581 |
|
|
$ |
56 |
|
|
$ |
— |
|
|
$ |
3,637 |
|
Combat Systems |
|
|
1,960 |
|
|
|
13 |
|
|
|
5 |
|
|
|
1,978 |
|
Marine Systems |
|
|
193 |
|
|
|
— |
|
|
|
— |
|
|
|
193 |
|
Aerospace |
|
|
348 |
|
|
|
— |
|
|
|
— |
|
|
|
348 |
|
Resources |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
|
$ |
6,083 |
|
|
$ |
69 |
|
|
$ |
5 |
|
|
$ |
6,157 |
|
|
| (a) |
|
Includes adjustments to preliminary assignment of fair value to net assets acquired. |
| (b) |
|
Consists of adjustments for currency translation. |
| (C) |
|
Equity Compensation Plans |
The company accounts for its incentive compensation plans under the
recognition and measurement principles of Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees, and related Interpretations.
The company measures compensation expense for stock options as the excess, if
any, of the quoted market price of the company’s stock at the measurement date
over the exercise price. The company records stock awards at fair value.
-9-
Had compensation expense for stock options been determined based on the
fair value at the grant dates for awards under the company’s incentive
compensation plans, the company’s net earnings and net earnings per share would
have been reduced to the pro forma amounts indicated as follows:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
| |
|
|
|
|
|
July 4 |
|
June 29 |
|
July 4 |
|
June 29 |
| |
|
|
|
|
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
Net earnings, as reported |
|
$ |
300 |
|
|
$ |
242 |
|
|
$ |
569 |
|
|
$ |
463 |
|
Add: Stock-based compensation expense
included in reported net earnings, net of tax(a) |
|
|
8 |
|
|
|
3 |
|
|
|
16 |
|
|
|
6 |
|
Deduct: Total fair value-based compensation
expense, net of tax |
|
|
(14 |
) |
|
|
(10 |
) |
|
|
(28 |
) |
|
|
(20 |
) |
|
|
|
Pro forma
|
|
$ |
294 |
|
|
$ |
235 |
|
|
$ |
557 |
|
|
$ |
449 |
|
Net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share — basic: |
|
As reported
|
|
$ |
1.51 |
|
|
$ |
1.23 |
|
|
$ |
2.86 |
|
|
$ |
2.34 |
|
|
|
Pro forma
|
|
$ |
1.48 |
|
|
$ |
1.19 |
|
|
$ |
2.80 |
|
|
$ |
2.27 |
|
Net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share — diluted: |
|
As reported
|
|
$ |
1.49 |
|
|
$ |
1.22 |
|
|
$ |
2.84 |
|
|
$ |
2.32 |
|
|
|
Pro forma
|
|
$ |
1.46 |
|
|
$ |
1.18 |
|
|
$ |
2.78 |
|
|
$ |
2.25 |
|
|
| (a) |
|
Represents restricted stock grants under the company’s 1997 Incentive Compensation Plan. |
The weighted average fair value of each stock option included in the
preceding pro forma amounts was estimated using the Black-Scholes option
pricing model and is amortized over the vesting period of the underlying
options.
Comprehensive income consisted of the following:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
|
|
Six Months Ended
|
| |
|
July 4 |
|
June 29 |
|
July 4 |
|
June 29 |
| |
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
Net earnings |
|
$ |
300 |
|
|
$ |
242 |
|
|
$ |
569 |
|
|
$ |
463 |
|
Foreign currency translation
adjustments |
|
|
(58 |
) |
|
|
120 |
|
|
|
(38 |
) |
|
|
123 |
|
Fair value adjustments
on cash flow hedges |
|
|
(2 |
) |
|
|
1 |
|
|
|
8 |
|
|
|
(2 |
) |
Other |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Comprehensive income |
|
$ |
239 |
|
|
$ |
363 |
|
|
$ |
539 |
|
|
$ |
585 |
|
|
-10-
| (E) |
|
Discontinued Operations |
The company exited its undersea fiber-optic cable-laying business in the
fourth quarter of 2002 because of substantial overcapacity in the market and a
lack of contract backlog. The results of this business’s operations had been
included in the Information Systems and Technology group since 1998. In the
second quarter of 2004, the company favorably resolved certain of the
liabilities associated with this business, resulting in an after-tax gain of $4
from discontinued operations.
The summary of operating results from discontinued operations is as
follows:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
|
|
Six Months Ended
|
| |
|
July 4 |
|
June 29 |
|
July 4 |
|
June 29 |
| |
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
Net sales |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Operating expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Operating
earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on disposal |
|
|
6 |
|
|
|
— |
|
|
|
6 |
|
|
|
— |
|
|
Earnings
before income taxes |
|
|
6 |
|
|
|
— |
|
|
|
6 |
|
|
|
— |
|
Provision for
income taxes |
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
Gain from discontinued operations |
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
— |
|
|
Assets and liabilities of discontinued operations are included in other
current assets and other current liabilities, respectively, on the Consolidated
Balance Sheet and consisted of the following:
| |
|
|
|
|
|
|
|
|
| |
|
July 4 |
|
December 31 |
| |
|
2004 |
|
2003 |
|
Current assets |
|
$ |
32 |
|
|
$ |
29 |
|
|
Assets of discontinued operations |
|
$ |
32 |
|
|
$ |
29 |