Financial highlights

The following selected financial data should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of our form 10-K. The Statement of Operations, Statement of Financial Position and other data have been derived from our audited financial statements. Certain prior period information has been reclassified to conform to the current year presentation and to reflect the results of the divested Rollmet business as a discontinued operation.

Years Ended September 30
(dollars in millions, except per share amounts)
 
2012(a) 
 
2011(b) 
 
2010(c) 
 
2009(d) 
 
2008(e) 
Statement of Operations Data:
Sales
$
4,726    
$
4,806    
$
4,631   
$
4,428   
$
4,734   
Cost of sales
3,324    
3,427    
3,353   
3,118   
3,308   
Selling, general and administrative expenses
543    
533    
476   
457   
484   
Income from continuing operations
609    
615    
557   
589   
673   
Income from discontinued operations, net of taxes
—     
19    
4   
5   
5   
Net income
609    
634    
561   
594   
678   
Net income as a percent of sales
12.9% 
13.2% 
12.1%
13.4%
14.3%
Diluted earnings per share from continuing operations
 
4.15    
 
3.94    
 
3.50   
 
3.70   
 
4.13   
Statement of Financial Position Data:
Working capital(f)
$
1,347    
$
1,394    
$
1,237   
$
1,003   
$
598   
Property
773    
754    
707   
719   
680   
Goodwill and intangible assets
1,071     
1,088     
1,072    
964    
807    
Total assets
5,314    
5,389    
5,064   
4,645   
4,144   
Short-term debt
—     
—     
24   
—     
287   
Long-term debt
779    
528    
525   
532   
228   
Shareowners' equity
 
1,259
 
1,523    
 
1,482   
 
1,292   
 
1,408   
Other Data:
Capital expenditures
$
138    
$
152    
$
109   
$
153   
$
171   
Depreciation and amortization
174    
159    
167   
151   
138   
Dividends per share
 
1.08    
 
0.96    
 
0.96   
 
0.96   
 
0.80   
Stock Price:
High
$
61.46    
$
67.29    
$
68.04   
$
51.37   
$
76.00   
Low
 
46.37    
 
43.82    
 
47.19   
 
27.67   
 
43.26   

(a) Net income includes $38 million of net restructuring and asset impairment charges ($58 million before income taxes), primarily related to employee severance costs and certain customer bankruptcy charges. Approximately $38 million of the pre-tax charge was recorded in cost of sales, $25 million was included within selling, general and administrative expenses, and $5 million was classified as a gain within Other income. Net income also includes a $19 million income tax benefit related to the favorable resolution of certain tax matters in 2012.

(b) Income from discontinued operations includes a $17 million gain ($27 million before income taxes) resulting from the sale of the Rollmet business. In addition, income from continuing operations includes $17 million of restructuring and asset impairment charges ($27 million before income taxes), primarily related to real estate lease and contract termination charges, asset impairment charges and employee severance costs. $26 million of the pre-tax restructuring and asset impairment charge was recorded in cost of sales and the remaining $1 million was included in selling, general and administrative expenses. Net income also includes a $16 million income tax benefit related to the retroactive reinstatement of the previously expired Federal Research and Development Tax Credit.

(c) Includes a $20 million income tax benefit related to the favorable resolution of certain tax matters in 2010.

(d) Includes $21 million of restructuring and asset impairment charges, primarily related to reductions in workforce and decisions to implement certain facility rationalization actions ($14 million after taxes). Of the total restructuring and asset impairment charge, $19 million was recorded in cost of sales and the remaining $2 million was included in selling, general and administrative expenses.

(e) Includes a $22 million income tax benefit related to the favorable resolution of certain tax matters.

(f) Working capital consists of all current assets and liabilities, including cash and short-term debt.

Sales(a)
($ in millions)

Earnings
per Share

Cash Provided by
Operating Activities
($ in millions)

Return on Invested
Capital(a)(b)

(a) Certain prior period information has been reclassified to conform to the current year presentation and to reflect the results of the divested Rollmet business as a discontinued operation.

(b) The Company calculates return on invested capital (ROIC) as net income from continuing operations excluding after-tax interest expense, divided by the average of invested capital at the beginning and end of the fiscal year. Invested capital is calculated as the sum of total shareowners' equity (excluding defined benefit accounting adjustments impacting accumulated other comprehensive loss) and total debt, less cash and cash equivalents.

(c) The cumulative total return table and adjacent line graph compare the cumulative total shareowner return on the Company's Common Stock against the cumulative total return of the S&P 500 – Aerospace and Defense Index (Peer Group) and the S&P 500 – Composite Stock Index (S&P 500) for the five-year period ended September 28, 2012, in each case a fixed investment of $100 at the respective closing prices on September 28, 2007, and reinvestment of all cash dividends.

Safe Harbor Statement:

This Annual Report contains statements, including certain projections and business trends, that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to those detailed herein, in our Form 10-K and from time to time in our other Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof.