FY2021 10-K Document - FINAL 11 15 21 - Flipbook - Page 29
Table of Contents
In 2021, we recorded $2 million of impairment charges in our Space and Defense Controls segment as we exited
certain product and contract arrangements. Additionally, we incurred $4 million of portfolio refinement and other
charges in Industrial Systems and Space and Defense Controls. In 2020, we incurred impairment and restructuring
expenses related to the impact that the COVID-19 pandemic had on our business. Throughout 2020, we incurred $38
million of long-lived asset impairments, $23 million of inventory write-downs and $11 million of restructuring expense.
Of the total expense, the charges consist of $29 million of non-cash charges for the impairment of property, plant and
equipment, $23 million of non-cash inventory reserves, $10 million for severance and $9 million of non-cash charges
for the impairment of intangible assets.
In the fourth quarter of 2020, we purchased a single premium non-participating group annuity contract for our retirees
who are receiving benefits of our U.S. defined benefit plan, which were then transferred to an insurance company. As
a result of this transaction, we incurred a $121 million non-cash pension settlement charge as we accelerated
unrecognized losses held in equity into our earnings.
Other expense in 2021 included a $6 million pension curtailment gain associated with the termination of a foreign
pension plan, partially offset by $2 million of losses on the sale of non-core businesses within our Industrial Systems
and Aircraft Controls segments. Other expense in 2020 included $15 million of non-service pension expense, as well
as a $4 million call premium, as we redeemed our $300 million aggregate principal 5.25% senior notes.
In 2021, the effective tax rate increased when compared to 2020. In 2021, we revalued our deferred tax liabilities due
to an increase in the U.K. tax rate that will become effective in 2023. During 2020, the effective tax rate was low due
to foreign tax credit utilization associated with a prior year tax return filing, the pension settlement in the fourth quarter
and due to the lower earnings before income tax.
The change in twelve-month backlog at October 2, 2021 as compared with the twelve-month backlog at October 3,
2020 was driven by increases across all markets. Backlog increased in Aircraft Controls due to the timing of
commercial aircraft orders, F-35 and additional military development programs. Backlog also increased in Space and
Defense Controls driven by increases in space satellite programs and higher orders for defense control products. The
Industrial Systems backlog increased due to recovering demand for core industrial and industrial components
products.
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