Aerospace Employees’ Retirement ... Aerospace Employees’ Retirement Plan Employer ID No.: 95-2102389

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  • Aerospace Employees’ Retirement Plan Employer ID No.: 95-2102389 Plan No.: 001

    Financial Statements as of and for the Years Ended September 30, 2018 and 2017, Supplemental Schedules as of and for the Year Ended September 30, 2018, and Independent Auditor’s Report

  • AEROSPACE EMPLOYEES’ RETIREMENT PLAN

    TABLE OF CONTENTS

    Page

    INDEPENDENT AUDITOR’S REPORT 1–2

    FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of September 30, 2018 and 2017 3 Statements of Changes in Net Assets Available for Benefits for the Years Ended September 30, 2018 and 2017 4 Statements of Accumulated Plan Benefits as of September 30, 2018 and 2017 5 Statements of Changes in Accumulated Plan Benefits for the Years Ended September 30, 2018 and 2017 6 Notes to Financial Statements as of and for the Years Ended September 30, 2018 and 2017 7–13

    SUPPLEMENTAL SCHEDULES: 14 Form 5500, Schedule H, Part IV, Line 4i—Schedule of Assets (Held at End of Year) as of September 30, 2018 15–33 Form 5500, Schedule H, Part IV, Line 4j—Schedule of Reportable Transactions for the Year Ended September 30, 2018 34

    NOTE: All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

  • Crowe LLP Independent Member Crowe Global

    - 1 -

    INDEPENDENT AUDITOR’S REPORT To the Plan Administrator of the Aerospace Employees’ Retirement Plan Report on the Financial Statements We were engaged to audit the accompanying financial statements of Aerospace Employees' Retirement Plan, which comprise the statements of net assets available for benefits and statements of accumulated plan benefits as of September 30, 2018 and 2017, and the related statements of changes in net assets available for benefits and statements of changes in accumulated plan benefits for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on conducting the audits in accordance with auditing standards generally accepted in the United States of America. Because of the matter described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Basis for Disclaimer of Opinion As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, the plan administrator instructed us not to perform, and we did not perform, any auditing procedures with respect to the information summarized in Note 7, which was certified by The Northern Trust Company, except for comparing such information with the related information included in the financial statements. We have been informed by the plan administrator that The Northern Trust Company holds the Plan's investment assets and executes investment transactions. The plan administrator has obtained certification from The Northern Trust Company as of September 30, 2018 and 2017, and for the years then ended that the information provided to the plan administrator by The Northern Trust Company is complete and accurate.

  • - 2 -

    Disclaimer of Opinion Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on these financial statements. Other Matter The supplemental Schedule H, Part IV, Line 4i- Schedule of Assets (Held at End of Year) and Schedule H, Part IV, Line 4j-Schedule of Reportable Transactions as of and for the year ended September 30, 2018 are required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and are presented for purposes of additional analysis and are not a required part of the financial statements. Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we do not express an opinion on the supplemental schedules. Report on Form and Content in Compliance with DOL Rules and Regulations The form and content of the information included in the financial statements and supplemental schedules, other than that derived from the information certified by The Northern Trust Company, have been audited by us in accordance with auditing standards generally accepted in the United States of America and, in our opinion, are presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Crowe LLP South Bend, Indiana June 12, 2019

  • - 3 -

    AEROSPACE EMPLOYEES’ RETIREMENT PLAN

    STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF SEPTEMBER 30, 2018 AND 2017 (In thousands)

    2018 2017

    ASSETS: Investments—at fair value (Notes 2, 7, and 8): Short-term investments 41,557$ 41,690$ Common stock 57,191 59,061 Publicly traded mutual funds 426,958 455,722 Corporate bonds 166,183 170,504 Commingled trust funds 1,193,673 1,173,159 Government and agency securities 168,727 161,020 Real estate fund 87,371 84,038

    Total investments—at fair value 2,141,660 2,145,194

    Receivables: Contributions—employer 32,024 33,008 Contributions—employee 2 2 Interest and dividends 3,504 3,238 Securities sold 2,442 8,092

    Total receivables 37,972 44,340

    Total assets 2,179,632 2,189,534

    LIABILITIES: Accrued fund managers’ fees 544 572 Securities purchased 9,221 11,272

    Total liabilities 9,765 11,844

    NET ASSETS AVAILABLE FOR BENEFITS 2,169,867$ 2,177,690$

    See notes to financial statements.

  • - 4 -

    AEROSPACE EMPLOYEES’ RETIREMENT PLAN

    STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017 (In thousands)

    2018 2017

    INVESTMENT INCOME (Notes 2 and 7): Net appreciation in fair value of investments 57,692$ 179,620$ Interest and dividends 36,950 40,399 Investment expenses (8,698) (8,483)

    Net investment income 85,944 211,536

    CONTRIBUTIONS (Notes 4 and 6): Participant contributions 75 88 Employer contributions 56,690 45,533

    Total contributions 56,765 45,621

    DEDUCTIONS—Benefit payments (Note 2) 150,532 141,260

    (DECREASE) INCREASE IN NET ASSETS (7,823) 115,897

    NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 2,177,690 2,061,793

    End of year 2,169,867$ 2,177,690$

    See notes to financial statements.

  • - 5 -

    AEROSPACE EMPLOYEES’ RETIREMENT PLAN

    STATEMENTS OF ACCUMULATED PLAN BENEFITS AS OF SEPTEMBER 30, 2018 AND 2017 (In thousands)

    2018 2017

    ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS—Including benefits arising from accumulated optional employee contributions of $19,087 and $17,687 as of September 30, 2018 and 2017, respectively (Note 3): Vested benefits: Participants currently receiving payments 1,417,301$ 1,378,612$ Other participants 880,106 879,479

    Total vested benefits 2,297,407 2,258,091

    Nonvested benefits 7,158 12,245

    TOTAL ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS 2,304,565$ 2,270,336$

    See notes to financial statements.

  • - 6 -

    AEROSPACE EMPLOYEES’ RETIREMENT PLAN

    STATEMENTS OF CHANGES IN ACCUMULATED PLAN BENEFITS FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017 (In thousands)

    2018 2017

    ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS—Beginning of year 2,270,336$ 2,191,769$

    INCREASE (DECREASE) DURING THE YEAR ATTRIBUTABLE TO: Benefits accumulated 55,565 34,983 Increase for interest due to the decrease in the discount period 147,744 142,780 Benefits paid (150,532) (141,260) Change in variable unit values (6,468) 74,265 Change in actuarial assumptions (12,080) (32,201)

    Net increase 34,229 78,567

    ACTUARIAL PRESENT VALUE OF AC

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