will be required until 2021.
We plan to fund these contributions and manage the timing of cash flows in 2018 using a mix of cash on hand and commercial paper.
While we do not anticipate a need to do so, our capital structure and resources would allow us to issue new debt if circumstances change.
Cash received from customers, either from the payment of invoices for work performed or for advances in excess of costs incurred, is our primary source of cash.
We generally do not begin work on contracts until funding is appropriated by the customer.
However, we may determine to fund customer programs ourselves pending government appropriations and are doing so with increased frequency.
If we incur costs in excess of funds obligated on the contract, we may be at risk for reimbursement of the excess costs.
Billing timetables and payment terms on our contracts vary based on a number of factors, including the contract type.
We generally bill and collect cash more frequently under cost-reimbursable and time-and-materials contracts, which together represents approximately 37% of the sales we recorded in 2017, as we are authorized to bill as the costs are incurred or work is performed.
A number of our fixed-price contracts may provide for performance-based payments, which allow us to bill and collect cash as we perform on the contract.
The amount of performance-based payments and the related milestones are encompassed in the negotiation of each contract.
The timing of such payments may differ from our incurrence of costs related to our contract performance, thereby affecting our cash flows.
The U. S.  Government has indicated that it would consider progress payments as the baseline for negotiating payment terms on fixed-price contracts, rather than performance-based payments.
In contrast to negotiated performance-based payment terms, progress payment provisions correspond to a percentage of the amount of costs incurred during the performance of the contract.
While the total amount of cash collected on a contract is the same, performance-based payments have had a more favorable impact on the timing of our cash flows.
In addition, our cash flows may be affected if the U. S.  Government decides to withhold payments on our billings.
While the impact of withholding payments delays the receipt of cash, the cumulative amount of cash collected during the life of the contract will not vary.
The majority of our capital expenditures for 2017 and those planned for 2018 are for equipment, facilities infrastructure and information technology.
Expenditures for equipment and facilities infrastructure are generally incurred to support new and existing programs across all of our business segments.
For example, we have projects underway in our Aeronautics business segment for facilities and equipment to support higher production of the F-35 combat aircraft, and we have projects underway to modernize certain of our facilities.
We also incur capital expenditures for information technology to support programs and general enterprise information technology infrastructure, inclusive of costs for the development or purchase of internal-use software.
The followingtable provides a summary of our cash flowinformation followed by a discussion ofthe key elements (in millions):
## Table 0 ##
Operating Activities 2017 compared to 2016 Net cash provided by operating activities increased $1.3 billion in 2017 compared to 2016 primarily due to a decrease in cash used for working capital, a reduction in cash paid for income taxes and a reduction in cash paid for severance.
The change in working capital is defined as receivables and inventories less accounts payable and customer advances and amounts in excess of costs incurred.
The change in working capital was largely driven by timing of cash receipts for accounts receivable (primarily PAC-3, THAAD, LANTIRN?
and SNIPER?, and Sikorsky helicopter programs) and lower inventory.
We made net income tax
require us to produce a substantial number of similar items without a significant level of development, we currently record revenue and profit using the percentage-of-completion units-of-delivery method as the basis for measuring progress on the contract.
For example, we use this method in Aeronautics for the C-130J and C-5 programs; in MFC for tactical missile programs (e. g. , Hellfire, JASSM), PAC-3 programs and fire control programs (e. g. , LANTIRN?
and SNIPER?
); in RMS for Black Hawk and Seahawk helicopter programs; and in Space for commercial satellite programs.
For contracts to provide services to the U. S.  Government, revenue is generally recorded using the percentage-of-completion cost-to-cost method.
Under ASC 606, revenue will be recognized as the customer obtains control of the goods and services promised in the contract (i. e. , performance obligations).
Given the nature of our products and terms and conditions in our contracts, in particular those with the U. S.  Government (including foreign military sales (FMS) contracts), the customer obtains control as we perform work under the contract.
Therefore, we expect to recognize revenue over time for substantially all of our contracts using a method similar to our current percentage-of-completion cost-to-cost method.
Accordingly, adoption of ASC 606 will primarily impact our contracts where revenue is currently recognized using the percentage-of-completion units-of-delivery method.
As a result, we anticipate recognizing revenue for these contracts earlier in the performance period as we incur costs, as opposed to when units are delivered.
We may also have more performance obligations in our contracts under ASC 606, which may impact the timing of recording sales and operating profit, including those where sales recognition is deferred pending the incurrence of costs.
During the third quarter of 2017, we completed our preliminary assessment of the cumulative effect of adopting ASC 606 on our December 31, 2015 balance sheet using the full retrospective transition method.
The adoption resulted in a decrease in inventories, an increase in billed receivables, contract assets (i. e. , unbilled receivables) and contract liabilities (i. e. , customer advances and amounts in excess of costs incurred) to primarily reflect the impact of converting contracts currently applying the units-of-delivery method to the cost-to-cost method for recognizing revenue and profits.
We expect the net impact of these reclassifications to increase both our current assets and current liabilities by approximately 2%.
In addition, we have completed our preliminary assessment of adopting ASC 606 on our 2017 and 2016 operating results, and have presented selected recast, unaudited financial data in the following table (in millions, except per share data).
The impact of adopting ASC 606 on our 2017 and 2016 operating results may not be indicative of the adoption impacts in future periods or of our operating performance.
## Table 1 ##
(a) Operating profit includes an increase of $846 million in 2017 and $471 million in 2016 for the expected impact of adoptingASU No.2017-07, Compensation-Retirement Benefits (Topic 715) on January 1, 2018 as discussed below.
Total net cash provided by operating activities and net cash used by investing and financing activities on our consolidated statements of cash flows were not impacted by the adoption of ASC 606.
Compensation-Retirement Benefits In March 2017, the FASB issuedASU No.2017-07,Compensation-Retirement Benefits (Topic 715), which changes the income statement presentation of certain components of net periodic benefit cost related to defined benefit pension and other postretirement benefit plans.
Currently, we record all components of net periodic benefit costs in operating profit as part of cost of sales.
Under ASU No.2017-07, we will be required to record only the service cost component of net periodic benefit cost in operating profit and the non-service cost components of net periodic benefit cost (i. e. , interest cost, expected return on plan assets, amortization
Sikorsky became a wholly-owned subsidiary of ours.
Sikorsky is a global company primarily engaged in the research, design, development, manufacture and support of military and commercial helicopters.
Sikorsky’s products include military helicopters such as the Black Hawk, Seahawk, CH-53K, H-92; and commercial helicopters such as the S-76 and S-92.
The acquisition enables us to extend our core business into the military and commercial rotary wing markets, allowing us to strengthen our position in the aerospace and defenseindustry.
Further,this acquisition will expand our presencein commercial andinternationalmarkets.
Sikorsky has been aligned under our RMS business segment.
To fund the $9.0 billion acquisition price, we utilized $6.0 billion of proceeds borrowed under a temporary 364-day revolving credit facility (the 364-day Facility), $2.0 billion of cash on hand and $1.0 billion from the issuance of commercial paper.
In the fourth quarter of 2015, we repaid all outstanding borrowings under the 364-day Facility with the proceeds from the issuance of $7.0 billion of fixed interest-rate long-term notes in a public offering (the November 2015 Notes).
In the fourth quarter of 2015, we also repaid the $1.0 billion in commercial paper borrowings.
Allocation of Purchase Price to Assets Acquired and Liabilities Assumed We accounted for the acquisition of Sikorsky as a business combination, which requires us to record the assets acquired and liabilities assumed at fair value.
The amount by which the purchase price exceeds the fair value of the net assets acquired is recorded as goodwill.
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, including the refinements described in the previous paragraph (in millions):
## Table 2 ##
(a) Recorded in other noncurrent liabilities on our consolidated balance sheets.
Intangible assets related to customer programs were recognized for each major helicopter and aftermarket program and represent the aggregate value associated with the customer relationships, contracts, technology and tradenames underlying the associated program.
These intangible assets will be amortized on a straight-line basis over a weighted-average useful life of approximately 15 years.
The useful life is based on a period of expected cash flows used to measure the fair value of each of the intangible assets.
Customer contractual obligations represent liabilities on certain development programs where the expected costs exceed the expected sales under contract.
We measured these liabilities based on the price to transfer the obligation to a market participant at the measurement date, assuming that the liability will remain outstanding in the marketplace.
Based on the estimated net cash outflows of the developmental programs plus a reasonable contracting profit margin required to transfer the contracts to market participants, we recorded assumed liabilities of $507 million.
These liabilities will be liquidated in accordance with the underlying
The net periodic benefit cost recognized each year included the following (in millions):
## Table 3 ##
(a) Total net periodic benefit cost associated with our qualified defined benefit plans represents pension expense calculated in accordance with GAAP (FAS pension expense).
We are required to calculate pension expense in accordance with both GAAP and CAS rules, each of which results in a different calculated amount of pension expense.
The CAS pension cost is recovered through the pricing of our products and services on U. S.  Government contracts and, therefore, is recognized in net sales and cost of sales for products and services.
We include the difference between FAS pension expense and CAS pension cost, referred to as the FAS/CAS pension adjustment, as a component of other unallocated, net on our consolidated statements of earnings.
TheFAS/CAS pension adjustment, which was $876 millionin 2017, $902 million in 2016, and $400 million in 2015, effectively adjusts the amount of CAS pension cost in the business segment operating profit so that pension expense recorded on our consolidated statements of earnings is equal to FAS pension expense.
FAS pension expense and CAS pension costs reflect the reclassification for discontinued operations presentation of benefits related to former IS&GS salaried employees.
(b) Net of the reclassification for discontinued operations presentation of pension benefits related to former IS&GS salaried employees ($14 million in 2016 and $24 million in 2015).
The following table provides a reconciliation of benefit obligations, plan assets and unfunded status related to our qualified defined benefit pension plans and our retiree medical and life insurance plans (in millions):
## Table 4 ##
(a) As published by the Society of Actuaries.
(b) Includes special termination benefits of $27 million for qualified pension, and $9 million for retiree medical, recognized in 2016 related to former IS&GS salaried employees.
?
Positive Train Control – In response to a legislative mandate to implement PTC, we expect to spend approximately $450 million during 2013 on developing and deploying PTC.
We currently estimate that PTC, in accordance with implementing rules issued by the Federal Rail Administration (FRA), will cost us approximately $2 billion by the end of the project.
This includes costs for installing the new system along our tracks, upgrading locomotives to work with the new system, and adding digital data communication equipment to integrate the components of the system.  ?
Financial Expectations – We are cautious about the economic environment but if industrial production grows approximately 2% as projected, volume should exceed 2012 levels.
Even with no volume growth, we expect earnings to exceed 2012 earnings, generated by real core pricing gains, on-going network improvements and operational productivity initiatives.
We also expect that a new bonus depreciation program under federal tax laws will positively impact cash flows in 2013.
RESULTS OF OPERATIONS Operating Revenues

<table><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Cash and cash equivalents at beginning of year</td><td>$1,837</td><td>$1,090</td><td>$1,446</td></tr><tr><td>Operating activities</td><td></td><td></td><td></td></tr><tr><td>Net earnings</td><td>2,002</td><td>5,302</td><td>3,605</td></tr><tr><td>Non-cash adjustments</td><td>4,514</td><td>-35</td><td>821</td></tr><tr><td>Changes in working capital</td><td>-431</td><td>-1,042</td><td>-846</td></tr><tr><td>Other, net</td><td>391</td><td>964</td><td>1,521</td></tr><tr><td>Net cash provided by operating activities</td><td>6,476</td><td>5,189</td><td>5,101</td></tr><tr><td>Net cash used for investing activities</td><td>-1,147</td><td>-985</td><td>-9,734</td></tr><tr><td>Net cash (used for) provided by financing activities</td><td>-4,305</td><td>-3,457</td><td>4,277</td></tr><tr><td>Net change in cash and cash equivalents</td><td>1,024</td><td>747</td><td>-356</td></tr><tr><td>Cash and cash equivalents at end of year</td><td>$2,861</td><td>$1,837</td><td>$1,090</td></tr></table>
<table><tr><td></td><td colspan="2">Years Ended December 31,</td></tr><tr><td></td><td>2017</td><td>2016</td></tr><tr><td></td><td colspan="2">(unaudited)</td></tr><tr><td>Net sales</td><td>$49,976</td><td>$47,320</td></tr><tr><td>Operating profit<sup>(a)</sup></td><td>$6,759</td><td>$5,910</td></tr><tr><td>Earnings per common share</td><td></td><td></td></tr><tr><td>Basic</td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$6.63</td><td>$12.28</td></tr><tr><td>Discontinued operations</td><td>0.26</td><td>5.05</td></tr><tr><td>Basic earnings per common share</td><td>$6.89</td><td>$17.33</td></tr><tr><td>Diluted</td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$6.57</td><td>$12.13</td></tr><tr><td>Discontinued operations</td><td>0.25</td><td>4.99</td></tr><tr><td>Diluted earnings per common share</td><td>$6.82</td><td>$17.12</td></tr></table>
<table><tr><td>Cash and cash equivalents</td><td>$75</td></tr><tr><td>Receivables, net</td><td>1,924</td></tr><tr><td>Inventories, net</td><td>1,632</td></tr><tr><td>Other current assets</td><td>46</td></tr><tr><td>Property, plant and equipment</td><td>649</td></tr><tr><td>Goodwill</td><td>2,842</td></tr><tr><td>Intangible assets:</td><td></td></tr><tr><td>Customer programs</td><td>3,184</td></tr><tr><td>Trademarks</td><td>887</td></tr><tr><td>Other noncurrent assets</td><td>572</td></tr><tr><td>Deferred income taxes, noncurrent</td><td>256</td></tr><tr><td>Total identifiable assets and goodwill</td><td>12,067</td></tr><tr><td>Accounts payable</td><td>-565</td></tr><tr><td>Customer advances and amounts in excess of costs incurred</td><td>-1,197</td></tr><tr><td>Salaries, benefits, and payroll taxes</td><td>-105</td></tr><tr><td>Other current liabilities</td><td>-430</td></tr><tr><td>Customer contractual obligations<sup>(a)</sup></td><td>-507</td></tr><tr><td>Other noncurrent liabilities</td><td>-185</td></tr><tr><td>Total liabilities assumed</td><td>-2,989</td></tr><tr><td>Total consideration</td><td>$9,078</td></tr></table>
<table><tr><td></td><td colspan="3">Qualified DefinedBenefit Pension Plans<sup>(a)</sup></td><td colspan="3">Retiree Medical andLife Insurance Plans</td></tr><tr><td></td><td>2017</td><td>2016</td><td>2015</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Service cost</td><td>$820</td><td>$827</td><td>$836</td><td>$20</td><td>$24</td><td>$21</td></tr><tr><td>Interest cost</td><td>1,809</td><td>1,861</td><td>1,791</td><td>102</td><td>119</td><td>110</td></tr><tr><td>Expected return on plan assets</td><td>-2,408</td><td>-2,666</td><td>-2,734</td><td>-128</td><td>-138</td><td>-147</td></tr><tr><td>Recognized net actuarial losses</td><td>1,506</td><td>1,359</td><td>1,599</td><td>19</td><td>34</td><td>43</td></tr><tr><td>Amortization of net prior service (credit) cost<sup>(b)</sup></td><td>-355</td><td>-362</td><td>-365</td><td>15</td><td>22</td><td>4</td></tr><tr><td>Total net periodic benefit cost</td><td>$1,372</td><td>$1,019</td><td>$1,127</td><td>$28</td><td>$61</td><td>$31</td></tr></table>
<table><tr><td></td><td colspan="2">Qualified DefinedBenefit Pension Plans</td><td colspan="2">Retiree Medical andLife Insurance Plans</td></tr><tr><td></td><td>2017</td><td>2016</td><td>2017</td><td>2016</td></tr><tr><td>Change in benefit obligation</td><td></td><td></td><td></td><td></td></tr><tr><td>Beginning balance</td><td>$45,064</td><td>$43,702</td><td>$2,649</td><td>$2,883</td></tr><tr><td>Service cost</td><td>820</td><td>827</td><td>20</td><td>24</td></tr><tr><td>Interest cost</td><td>1,809</td><td>1,861</td><td>102</td><td>119</td></tr><tr><td>Benefits paid</td><td>-2,310</td><td>-2,172</td><td>-232</td><td>-222</td></tr><tr><td>Actuarial losses (gains)</td><td>3,377</td><td>1,402</td><td>23</td><td>-135</td></tr><tr><td>Changes in longevity assumptions<sup>(a)</sup></td><td>-352</td><td>-687</td><td>-24</td><td>-53</td></tr><tr><td>Plan amendments and acquisitions<sup>(b)</sup></td><td>278</td><td>110</td><td>—</td><td>-32</td></tr><tr><td>Service cost related to discontinued operations</td><td>—</td><td>21</td><td>—</td><td>—</td></tr><tr><td>Medicare Part D subsidy</td><td>—</td><td>—</td><td>—</td><td>4</td></tr><tr><td>Participants’ contributions</td><td>—</td><td>—</td><td>64</td><td>61</td></tr><tr><td>Ending balance</td><td>$48,686</td><td>$45,064</td><td>$2,602</td><td>$2,649</td></tr><tr><td>Change in plan assets</td><td></td><td></td><td></td><td></td></tr><tr><td>Beginning balance at fair value</td><td>$31,417</td><td>$32,096</td><td>$1,787</td><td>$1,813</td></tr><tr><td>Actual return on plan assets</td><td>3,942</td><td>1,470</td><td>224</td><td>95</td></tr><tr><td>Benefits paid</td><td>-2,310</td><td>-2,172</td><td>-232</td><td>-222</td></tr><tr><td>Company contributions</td><td>46</td><td>23</td><td>40</td><td>36</td></tr><tr><td>Medicare Part D subsidy</td><td>—</td><td>—</td><td>—</td><td>4</td></tr><tr><td>Participants’ contributions</td><td>—</td><td>—</td><td>64</td><td>61</td></tr><tr><td>Ending balance at fair value</td><td>$33,095</td><td>$31,417</td><td>$1,883</td><td>$1,787</td></tr><tr><td>Unfunded status of the plans</td><td>$-15,591</td><td>$-13,647</td><td>$-719</td><td>$-862</td></tr></table>

Question: Does the value of Beginning balance in 2016 greater than that in 2017 for Qualified DefinedBenefit Pension Plans?
Answer: no