Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 21, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NORTHROP GRUMMAN CORP /DE/ | |
Entity Central Index Key | 1,133,421 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 176,261,947 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings and Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Sales | ||||
Product | $ 3,721 | $ 3,615 | $ 10,759 | $ 10,553 |
Service | 2,434 | 2,364 | 7,352 | 7,279 |
Total sales | 6,155 | 5,979 | 18,111 | 17,832 |
Operating costs and expenses | ||||
Product | 2,760 | 2,633 | 7,992 | 7,743 |
Service | 1,907 | 1,889 | 5,819 | 5,763 |
General and administrative expenses | 662 | 663 | 1,938 | 1,939 |
Operating income | 826 | 794 | 2,362 | 2,387 |
Other (expense) income | ||||
Interest expense | (74) | (75) | (224) | (226) |
Other, net | 17 | 10 | 37 | 8 |
Earnings before income taxes | 769 | 729 | 2,175 | 2,169 |
Federal and foreign income tax expense | 167 | 213 | 500 | 638 |
Net earnings | $ 602 | $ 516 | $ 1,675 | $ 1,531 |
Basic earnings per share | ||||
Basic earnings per share | $ 3.38 | $ 2.78 | $ 9.32 | $ 7.98 |
Weighted-average common shares outstanding, in millions | 178.1 | 185.8 | 179.8 | 191.8 |
Diluted earnings per share | ||||
Diluted earnings per share | $ 3.35 | $ 2.75 | $ 9.23 | $ 7.89 |
Weighted-average diluted shares outstanding, in millions | 179.6 | 187.9 | 181.5 | 194 |
Net earnings (from above) | $ 602 | $ 516 | $ 1,675 | $ 1,531 |
Change in unamortized benefit plan costs, net of tax | 101 | 96 | 302 | 288 |
Change in cumulative translation adjustment | (6) | (15) | (19) | (31) |
Other, net | (1) | 1 | (1) | 0 |
Other comprehensive income, net of tax | 94 | 82 | 282 | 257 |
Comprehensive income | $ 696 | $ 598 | $ 1,957 | $ 1,788 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 1,103 | $ 2,319 |
Accounts receivable, net | 3,659 | 2,841 |
Inventoried costs, net | 797 | 807 |
Prepaid expenses and other current assets | 212 | 367 |
Total current assets | 5,771 | 6,334 |
Property, plant and equipment, net of accumulated depreciation of $4,945 in 2016 and $4,849 in 2015 | 3,334 | 3,064 |
Goodwill | 12,464 | 12,460 |
Deferred tax assets | 1,239 | 1,409 |
Other non-current assets | 1,292 | 1,157 |
Total assets | 24,100 | 24,424 |
Liabilities | ||
Trade accounts payable | 1,325 | 1,282 |
Accrued employee compensation | 1,257 | 1,195 |
Advance payments and amounts in excess of costs incurred | 1,306 | 1,537 |
Other current liabilities | 1,218 | 1,443 |
Total current liabilities | 5,106 | 5,457 |
Long-term debt, net of current portion | 6,387 | 6,386 |
Pension and other post-retirement benefit plan liabilities | 6,009 | 6,172 |
Other non-current liabilities | 831 | 887 |
Total liabilities | 18,333 | 18,902 |
Commitments and contingencies | ||
Shareholders’ equity | ||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2016—176,784,423 and 2015—181,303,083 | 177 | 181 |
Paid-in capital | 0 | 0 |
Retained earnings | 10,628 | 10,661 |
Accumulated other comprehensive loss | (5,038) | (5,320) |
Total shareholders’ equity | 5,767 | 5,522 |
Total liabilities and shareholders’ equity | $ 24,100 | $ 24,424 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Financial Position (Unaudited) (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ (4,945) | $ (4,849) |
Preferred Stock, par value | $ 1 | $ 1 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 1 | $ 1 |
Common Stock, shares authorized | 800,000,000 | 800,000,000 |
Common Stock, shares issued | 176,784,423 | 181,303,083 |
Common Stock, shares outstanding | 176,784,423 | 181,303,083 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Activities | ||
Net earnings | $ 1,675 | $ 1,531 |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation and amortization | 322 | 329 |
Stock-based compensation | 61 | 70 |
Excess tax benefits from stock-based compensation | 0 | (111) |
Deferred income taxes | (13) | 165 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (830) | (463) |
Inventoried costs, net | 14 | (130) |
Prepaid expenses and other assets | (144) | 27 |
Accounts payable and other liabilities | (292) | (958) |
Income taxes payable | 218 | 403 |
Retiree benefits | 318 | (318) |
Other, net | (47) | (16) |
Net cash provided by operating activities | 1,282 | 529 |
Investing activities | ||
Capital expenditures | (608) | (334) |
Other, net | 3 | 36 |
Net cash used in investing activities | (605) | (298) |
Financing activities | ||
Common stock repurchases | (1,149) | (2,864) |
Net proceeds from issuance of long-term debt | 0 | 600 |
Repayments of long-term debt | (107) | 0 |
Cash dividends paid | (482) | (458) |
Payments of employees taxes withheld from share-based awards | (152) | (183) |
Other, net | (3) | 103 |
Net cash used in financing activities | (1,893) | (2,802) |
Decrease in cash and cash equivalents | (1,216) | (2,571) |
Cash and cash equivalents, beginning of year | 2,319 | 3,863 |
Cash and cash equivalents, end of period | $ 1,103 | $ 1,292 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common stock | Paid-in capital | Retained earnings | Accumulated other comprehensive loss |
Beginning of year at Dec. 31, 2014 | $ 199 | $ 0 | $ 12,392 | $ (5,356) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock repurchased | (18) | (2,872) | |||
Net earnings | $ 1,531 | 1,531 | |||
Dividends declared | (447) | ||||
Stock compensation | 2 | 9 | |||
Other comprehensive income, net of tax | 257 | 257 | |||
End of period at Sep. 30, 2015 | $ 5,697 | 183 | 0 | 10,613 | (5,099) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cash dividends declared per share | $ 2.30 | ||||
Beginning of year at Dec. 31, 2015 | $ 5,522 | 181 | 0 | 10,661 | (5,320) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock repurchased | (6) | (1,154) | |||
Net earnings | 1,675 | 1,675 | |||
Dividends declared | (472) | ||||
Stock compensation | 2 | (82) | |||
Other comprehensive income, net of tax | 282 | 282 | |||
End of period at Sep. 30, 2016 | $ 5,767 | $ 177 | $ 0 | $ 10,628 | $ (5,038) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cash dividends declared per share | $ 2.60 |
Basis of Presentation (Unaudite
Basis of Presentation (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Principles of Consolidation and Reporting These unaudited condensed consolidated financial statements include the accounts of Northrop Grumman Corporation and subsidiaries (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”). Material intercompany accounts, transactions and profits are eliminated in consolidation. Investments in equity securities and joint ventures where the company has significant influence, but not control, are accounted for using the equity method. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. These financial statements include adjustments of a normal recurring nature considered necessary by management for a fair presentation of the company’s unaudited condensed consolidated financial position, results of operations and cash flows. The results reported in these unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the information contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2015 (2015 Annual Report on Form 10-K) and the Form 8-K that we filed with the SEC on April 27, 2016, which recasts the disclosures in certain portions of the 2015 Annual Report on Form 10-K to reflect changes in the company’s organizational structure and reportable segments. The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30 and third quarter as ending on September 30. It is the company’s long-standing practice to establish actual interim closing dates using a “fiscal” calendar, in which we close our books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. This practice is only used at interim periods within a reporting year. Accounting Estimates The accompanying unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation thereof requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Revenue Recognition The majority of our sales are derived from long-term contracts with the United States (U.S.) Government for the production of goods, the provision of services, or in some cases, a combination of both. In accounting for these contracts, we utilize either the cost-to-cost method or the units-of-delivery method of percentage-of-completion accounting, with cost-to-cost being the predominant method. The company estimates profit on contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit either as costs are incurred (cost-to-cost) or as units are delivered (units-of-delivery). The company classifies sales as product or service depending upon the predominant attributes of the contract. Net Estimate-At-Completion (EAC) Adjustments - We recognize changes in estimated contract sales, costs or profits using the cumulative catch-up method of accounting. This method recognizes, in the current period, the cumulative effect of the changes on current and prior periods as net EAC adjustments; sales and profit in future periods of contract performance are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss will result from the performance of a contract, the entire amount of the estimable future loss is charged against income in the period the loss is identified. Loss provisions are first offset against costs included in unbilled accounts receivable or inventoried costs, and any remaining amounts are reflected in current liabilities. Significant EAC adjustments on a single contract could have a material effect on the company’s unaudited condensed consolidated financial position or results of operations. When such adjustments occur, we generally disclose the nature, underlying conditions and financial impact of the adjustments. No discrete event or adjustment to an individual contract was material to the accompanying unaudited condensed consolidated financial statements. The following table presents the effect of aggregate net EAC adjustments: Three Months Ended September 30 Nine Months Ended September 30 $ in millions, except per share data 2016 2015 2016 2015 Operating Income $ 121 $ 112 $ 387 $ 461 Net Earnings (1) 79 73 252 300 Diluted earnings per share (1) 0.44 0.39 1.39 1.55 (1) Based on statutory tax rates Contract sales may include estimated amounts not contractually agreed to by the customer, including cost or performance incentives (such as award and incentive fees), un-priced change orders, contract claims and requests for equitable adjustment (REAs). Further, as contracts are performed, change orders can be a regular occurrence and may be un-priced until negotiated with the customer. Un-priced change orders, contract claims (including change orders unapproved as to both scope and price) and REAs are included in estimated contract sales when management believes it is probable the un-priced change order, claim and/or REA will result in additional contract revenue and the amount can be reliably estimated based on the facts and circumstances known to us at the time. During July 2016, the company entered into a contract modification with the U.S. government on an Aerospace Systems program, which resolved most of the REAs disclosed in our 2015 Annual Report on Form 10-K. Amounts recognized related to claims and REAs as of September 30, 2016 were not material individually or in aggregate. As of September 30, 2016 , the company does not have any contract terminations in process that we anticipate will have a material effect on our unaudited condensed consolidated financial position, or our annual results of operations and/or cash flows. Related Party Transactions For all periods presented, the company had no material related party transactions. Accounting Standards Updates On March 30, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The company adopted ASU 2016-09 during the first quarter of 2016. Among other things, ASU 2016-09 requires that entities recognize excess tax benefits and deficiencies related to employee share-based payment transactions as income tax expense or benefit. ASU 2016-09 also eliminates the requirement to reclassify excess tax benefits and deficiencies from operating activities to financing activities in the statement of cash flows. As a result of adoption, the company recognized a $1 million and $85 million tax benefit during the three and nine months ended September 30, 2016 , respectively. Adoption also resulted in an $85 million increase in operating cash flows and a corresponding $85 million reduction in financing cash flows for the nine months ended September 30, 2016 . On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . ASU 2016-02 supersedes existing lease guidance, including Accounting Standards Codification (ASC) 840 - Leases . Among other things, ASU 2016-02 requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease. ASU 2016-02 will be effective January 1, 2019, although early adoption is permitted, and it must be applied using a modified retrospective approach. We are currently evaluating the timing of adoption as well as the effect ASU 2016-02 will have on the company’s consolidated financial position, annual results of operations and/or cash flows. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . ASU 2014-09 supersedes existing revenue recognition guidance, including ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts. ASU 2014-09 outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP. Among other things, it requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time. These concepts, as well as other aspects of ASU 2014-09, may change the method and/or timing of revenue recognition for certain of our contracts. We expect to adopt ASU 2014-09 in 2018 and apply it retrospectively to all periods presented. Our evaluation of the effect ASU 2014-09 will have on the company’s consolidated financial position, annual results of operations and/or cash flows is expected to be complete by the end of 2016. Other accounting standards updates effective after September 30, 2016 are not expected to have a material effect on the company’s unaudited condensed consolidated financial position, annual results of operations and/or cash flows. Reclassifications The company adopted ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , during the first quarter of 2016. As a result, we now present capitalized debt issuance costs as a reduction in the carrying amount of long-term debt. This change resulted in a reclassification of $30 million of other non-current assets reported in our 2015 consolidated statement of financial position to long-term debt, which reduced our previously reported total assets and total liabilities as of December 31, 2015. Shareholders’ Equity The company records the difference between the cost of shares repurchased and their par value as well as tax withholding in excess of related stock compensation expense as a reduction of paid-in capital to the extent available and then as a reduction of retained earnings. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: $ in millions September 30, December 31, Unamortized benefit plan costs, net of tax benefit of $3,166 as of September 30, 2016 and $3,350 as of December 31, 2015 $ (4,939 ) $ (5,241 ) Cumulative translation adjustment (101 ) (82 ) Net unrealized gain on marketable securities and cash flow hedges, net of tax 2 3 Total accumulated other comprehensive loss $ (5,038 ) $ (5,320 ) Unamortized benefit plan costs consist primarily of net after-tax actuarial losses totaling $5.1 billion and $5.5 billion as of September 30, 2016 and December 31, 2015 , respectively. Net actuarial gains or losses are re-determined annually or upon remeasurement events and principally arise from changes in the interest rate used to discount our benefit obligations and differences between expected and actual returns on plan assets. Reclassifications from accumulated other comprehensive loss to net earnings related to the amortization of benefit plan costs were $101 million and $302 million , net of taxes, for the three and nine months ended September 30, 2016 , respectively, and were $96 million and $288 million , net of taxes, for the three and nine months ended September 30, 2015 , respectively. The reclassifications represent the amortization of net actuarial losses and prior service credits for the company’s retirement benefit plans, and are included in the computation of net periodic pension cost. See Note 8 for further information. Reclassifications from accumulated other comprehensive loss to net earnings, relating to cumulative translation adjustments, marketable securities and effective cash flow hedges for the three and nine months ended September 30, 2016 and 2015 , respectively, were not material. |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK | EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK Basic Earnings Per Share We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. Diluted Earnings Per Share Diluted earnings per share includes the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 1.5 million shares and 1.7 million shares for the three and nine months ended September 30, 2016 , respectively. The dilutive effect of these securities totaled 2.1 million shares and 2.2 million shares for the three and nine months ended September 30, 2015 , respectively. Share Repurchases On May 15, 2013, the company’s board of directors authorized a share repurchase program of up to $4.0 billion of the company’s common stock (2013 Repurchase Program). Repurchases under the 2013 Repurchase Program commenced in September 2013 and were completed in March 2015. On December 4, 2014, the company’s board of directors authorized a new share repurchase program of up to $3.0 billion of the company’s common stock (2014 Repurchase Program). Repurchases under the 2014 Repurchase Program commenced in March 2015 and were completed in March 2016. On September 16, 2015, the company’s board of directors authorized a new share repurchase program of up to $4.0 billion of the company’s common stock (2015 Repurchase Program). Repurchases under the 2015 Repurchase Program commenced in March 2016 upon completion of the company’s 2014 Repurchase Program. As of September 30, 2016 , repurchases under the 2015 Repurchase Program totaled $0.9 billion ; $3.1 billion remained under this share repurchase authorization. By its terms, the 2015 Repurchase Program is set to expire when we have used all authorized funds for repurchases. Share repurchases take place from time to time, subject to market conditions and management’s discretion, in the open market or in privately negotiated transactions. The company retires its common stock upon repurchase and, in the periods presented, has not made any purchases of common stock other than in connection with these publicly announced repurchase programs. The table below summarizes the company’s share repurchases to date under the authorizations described above: Shares Repurchased Repurchase Program Amount Total Average (1) Date Completed Nine Months Ended September 30 2016 2015 May 15, 2013 $ 4,000 32.8 $ 121.97 March 2015 — 2.7 December 4, 2014 $ 3,000 18.0 $ 166.70 March 2016 1.4 15.0 September 16, 2015 $ 4,000 4.2 $ 213.46 4.2 — (1) Includes commissions paid. Dividends on Common Stock In May 2016, the company increased the quarterly common stock dividend 13 percent to $0.90 per share from the previous amount of $0.80 per share. In May 2015, the company increased the quarterly common stock dividend 14 percent to $0.80 per share from the previous amount of $0.70 per share. |
Segment Information (Unaudited)
Segment Information (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The company is aligned in three operating sectors, which also comprise our reportable segments: Aerospace Systems, Mission Systems and Technology Services. Effective January 1, 2016, the company streamlined our sectors from four to three to better align our business with the evolving needs of our customers and enhance innovation across the company. Mission Systems and Technology Services were created by merging elements of our former Electronic Systems, Information Systems and Technical Services sectors. The new Mission Systems sector is composed of the majority of our former Electronic Systems sector and the businesses from our former Information Systems sector focused on the development of new capabilities for our military and intelligence customers. The new Technology Services sector was formed by combining the services portfolio in the former Information Systems sector with the former Technical Services sector. Among other operations that were realigned, the military and civil space hardware business in Azusa, California, previously reporting to the Electronic Systems sector, moved to the Aerospace Systems sector, and the electronic attack business, previously in the Aerospace Systems sector, moved to the Mission Systems sector. The following table presents sales and operating income by segment: Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2016 2015 2016 2015 Sales Aerospace Systems $ 2,782 $ 2,544 $ 7,956 $ 7,540 Mission Systems 2,698 2,723 8,081 8,062 Technology Services 1,190 1,193 3,617 3,698 Intersegment eliminations (515 ) (481 ) (1,543 ) (1,468 ) Total sales 6,155 5,979 18,111 17,832 Operating income Aerospace Systems 311 298 909 929 Mission Systems 351 355 1,055 1,047 Technology Services 130 128 387 389 Intersegment eliminations (61 ) (55 ) (188 ) (162 ) Total segment operating income 731 726 2,163 2,203 Reconciliation to total operating income: Net FAS/CAS pension adjustment 91 97 234 261 Unallocated corporate expenses 5 (29 ) (31 ) (76 ) Other (1 ) — (4 ) (1 ) Total operating income $ 826 $ 794 $ 2,362 $ 2,387 Net FAS/CAS Pension Adjustment For financial statement purposes, we account for our employee pension plans in accordance with GAAP under FAS (GAAP Financial Accounting Standards). However, the cost of these plans is charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS) that govern such plans. The net FAS/CAS pension adjustment reflects the difference between CAS pension expense included as cost in segment operating income and FAS expense determined in accordance with GAAP. The decrease in net FAS/CAS pension adjustment for the three and nine months ended September 30, 2016 , as compared to the same periods in 2015 , is primarily due to lower than expected asset returns during 2015, partially offset by the increase in our FAS discount rate assumption as of December 31, 2015 and the continued phase-in of the effects of CAS harmonization. Unallocated Corporate Expenses Unallocated corporate expenses include the portion of corporate expenses not considered allowable or allocable under applicable CAS or the FAR, and therefore not allocated to the segments. Such costs consist of a portion of management and administration, legal, environmental, compensation costs, retiree benefits and corporate unallowable costs. Current Quarter Unallocated corporate expenses decreased for the three months ended September 30, 2016 , as compared with the same period in 2015 , principally due to a $30 million benefit recognized for state tax refunds claimed on our prior year tax returns and a $25 million benefit recognized for estimated prior year overhead claim recoveries, partially offset by an increase in provisions for environmental remediation. Year to Date Unallocated corporate expenses decreased for the nine months ended September 30, 2016 , as compared with the same period in 2015 , principally due to the current quarter items discussed above. Further, unallocated corporate expenses in the prior year period were impacted by higher deferred state taxes resulting from a $500 million discretionary pension contribution made in the first quarter of 2015. |
Income Taxes (Unaudited)
Income Taxes (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2016 2015 2016 2015 Federal and foreign income tax expense $ 167 $ 213 $ 500 $ 638 Effective income tax rate 21.7 % 29.2 % 23.0 % 29.4 % Current Quarter The company’s effective tax rate for the three months ended September 30, 2016 was lower than the comparable 2015 period primarily due to a $42 million benefit recognized in connection with resolution of the Internal Revenue Service (IRS) examination of the company’s 2007-2011 tax returns as well as the extension of the research tax credit . Year to Date The company’s effective tax rate for the nine months ended September 30, 2016 was lower than the comparable 2015 period primarily due to $85 million of excess tax benefits related to employee share-based payment transactions recognized in 2016 resulting from the adoption of ASU No. 2016-09 described in Note 1 and a $42 million benefit recognized in connection with resolution of the IRS examination of the company’s 2007-2011 tax returns . We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Our 2012-2013 federal tax returns are currently under IRS examination. The company believes it is reasonably possible that within the next twelve months we may resolve certain tax matters related to the years under examination, which may result in reductions of our unrecognized tax benefits up to $70 million and income tax expense up to $40 million . Undistributed Foreign Earnings As of September 30, 2016, the company has accumulated undistributed earnings generated by its foreign subsidiaries of approximately $430 million . We are currently evaluating options to repatriate a majority of these earnings due, in part, to recent changes in foreign exchange rates, which have improved the tax efficiency of any such repatriation. No provision has been made for deferred taxes on these earnings as we currently expect this potential repatriation would generate a net tax benefit resulting from foreign tax credits in excess of U.S. income taxes due on these earnings. We intend to permanently reinvest the remaining undistributed earnings as well as future earnings from our foreign subsidiaries to fund our international operations. In addition, we expect U.S. cash generation will continue to be sufficient to meet our future U.S. cash needs. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The following table presents comparative carrying value and fair value information for our financial assets and liabilities: September 30, 2016 December 31, 2015 $ in millions Carrying Value Fair Value Carrying Value Fair Value Financial Assets (Liabilities) Marketable securities Trading $ 318 $ 318 $ 303 $ 303 Available-for-sale 5 5 7 7 Derivatives 2 2 5 5 Long-term debt, including current portion $ (6,390 ) $ (7,337 ) $ (6,496 ) $ (6,907 ) There were no transfers of financial instruments between the three levels of the fair value hierarchy during the nine months ended September 30, 2016 . The carrying value of cash and cash equivalents approximates fair value. Investments in Marketable Securities The company holds a portfolio of marketable securities consisting of securities to partially fund non-qualified employee benefit plans. These assets are recorded at fair value on a recurring basis and substantially all of these instruments are valued using Level 1 inputs. As of September 30, 2016 and December 31, 2015 , marketable securities of $323 million and $310 million , respectively, were included in other non-current assets in the unaudited condensed consolidated statements of financial position. Derivative Financial Instruments and Hedging Activities The company’s derivative portfolio consists primarily of foreign currency forward contracts. The notional value of the company’s derivative portfolio at September 30, 2016 and December 31, 2015 , was $126 million and $141 million , respectively. The portion of the notional value designated as cash flow hedges at September 30, 2016 and December 31, 2015 , was $2 million and $10 million , respectively. Substantially all of these instruments are valued using Level 2 inputs. Where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value and uses the applicable London Interbank Offered Rate (LIBOR) swap rates. The derivative fair values and related unrealized gains/losses at September 30, 2016 and December 31, 2015 , were not material. Long-term Debt The fair value of long-term debt is calculated using Level 2 inputs based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements. Unsecured Senior Notes In February 2015, the company issued $600 million of unsecured senior notes due April 15, 2045 with a fixed interest rate of 3.85 percent . We used the net proceeds from this offering for general corporate purposes, including the funding of a $500 million voluntary contribution to our pension plans in the first quarter of 2015 and most of a debt repayment of $107 million in the first quarter of 2016. |
Investigations, Claims and Liti
Investigations, Claims and Litigation (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Text Block Supplement [Abstract] | |
INVESTIGATIONS, CLAIMS AND LITIGATION | INVESTIGATIONS, CLAIMS AND LITIGATION Litigation On May 4, 2012, the company commenced an action, Northrop Grumman Systems Corp. v. United States , in the U.S. Court of Federal Claims. This lawsuit relates to an approximately $875 million firm fixed price contract awarded to the company in 2007 by the U.S. Postal Service (USPS) for the construction and delivery of flats sequencing systems (FSS) as part of the postal automation program. The FSS have been delivered. The company’s lawsuit is based on various theories of liability. The complaint seeks approximately $63 million for unpaid portions of the contract price, and approximately $115 million based on the company’s assertions that, through various acts and omissions over the life of the contract, the USPS adversely affected the cost and schedule of performance and materially altered the company’s obligations under the contract. The United States responded to the company’s complaint with an answer, denying most of the company’s claims and counterclaims, seeking approximately $410 million , less certain amounts outstanding under the contract. The principal counterclaim alleges that the company delayed its performance and caused damages to the USPS because USPS did not realize certain costs savings as early as it had expected. On April 2, 2013, the U.S. Department of Justice informed the company of a False Claims Act complaint relating to the FSS contract that was filed under seal by a relator in June 2011 in the U.S. District Court for the Eastern District of Virginia. On June 3, 2013, the United States filed a Notice informing the Court that the United States had decided not to intervene in this case. The relator alleged that the company violated the False Claims Act in a number of ways with respect to the FSS contract, alleged damage to the USPS in an amount of at least approximately $179 million annually, alleged that he was improperly discharged in retaliation, and sought an unspecified partial refund of the contract purchase price, penalties, attorney’s fees and other costs of suit. The relator later voluntarily dismissed his retaliation claim and reasserted it in a separate arbitration, which he also ultimately voluntarily dismissed. On September 5, 2014, the court granted the company’s motion for summary judgment and ordered the relator’s False Claims Act case be dismissed with prejudice. On December 19, 2014, the company filed a motion for partial summary judgment asking the court to dismiss the principal counterclaim referenced above. On June 29, 2015, the Court heard argument and denied that motion without prejudice to filing a later motion to dismiss. Although the ultimate outcome of these matters (“the FSS matters,” collectively), including any possible loss, cannot be predicted or estimated at this time, the company intends vigorously to pursue and defend the FSS matters. On August 8, 2013, the company received a court-appointed expert’s report in litigation pending in the Second Federal Court of the Federal District in Brazil brought by the Brazilian Post and Telegraph Corporation (ECT), a Brazilian state-owned entity, against Solystic SAS (Solystic), a French subsidiary of the company, and two of its consortium partners. In this suit, commenced on December 17, 2004, and relatively inactive for some period of time, ECT alleges the consortium breached its contract with ECT and seeks damages of approximately R$111 million (the equivalent of approximately $34 million as of September 30, 2016 ), plus interest, inflation adjustments and attorneys’ fees, as authorized by Brazilian law, which amounts could be significant over time. The original suit sought R$89 million (the equivalent of approximately $28 million as of September 30, 2016 ) in damages. In October 2013, ECT asserted an additional damage claim of R$22 million (the equivalent of approximately $7 million as of September 30, 2016 ). In its counterclaim, Solystic alleges ECT breached the contract by wrongfully refusing to accept the equipment Solystic had designed and built and seeks damages of approximately €31 million (the equivalent of approximately $35 million as of September 30, 2016 ), plus interest, inflation adjustments and attorneys’ fees, as authorized by Brazilian law. The Brazilian court retained an expert to consider certain issues pending before it. On August 8, 2013 and September 10, 2014, the company received reports from the expert, which contain some recommended findings relating to liability and the damages calculations put forth by ECT. Some of the expert’s recommended findings were favorable to the company and others were favorable to ECT. In November 2014, the parties submitted comments on the expert’s most recent report. On June 16, 2015, the court published a decision denying the parties’ request to present oral testimony. At some future point, the court is expected to issue a decision on the parties’ claims and counterclaims that could accept or reject, in whole or in part, the expert’s recommended findings. The company is one of several defendants in litigation brought by the Orange County Water District in Orange County Superior Court in California on December 17, 2004, for alleged contribution to volatile organic chemical contamination of the County’s shallow groundwater. The lawsuit includes counts against the defendants for violation of the Orange County Water District Act, the California Super Fund Act, negligence, nuisance, trespass and declaratory relief. Among other things, the lawsuit seeks unspecified damages for the cost of remediation, payment of attorney fees and costs, and punitive damages. Trial on the statutory claims (those based on the Orange County Water District Act, the California Super Fund Act and declaratory relief) concluded on September 25, 2012. On October 29, 2013, the court issued its decision in favor of the defendants on the statutory claims. On May 9, 2014, the court granted defendants’ dispositive motions on the remaining tort causes of action. Notice of entry of judgment was filed on July 1, 2014. The Orange County Water District filed a notice of appeal on August 28, 2014. The parties have submitted their briefs to the court. The company is a party to various investigations, lawsuits, claims and other legal proceedings, including government investigations and claims, that arise in the ordinary course of our business. The nature of legal proceedings is such that we cannot assure the outcome of any particular matter. However, based on information available to the company to date, and other than with respect to the FSS matters discussed separately above, the company does not believe that the outcome of any matter pending against the company is likely to have a material adverse effect on the company’s unaudited condensed consolidated financial position as of September 30, 2016 , or its annual results of operations or cash flows. |
Commitments and Contingencies (
Commitments and Contingencies (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Guarantees of Certain Performance Obligations The company’s subsidiaries enter into joint ventures, teaming and other business arrangements (collectively, Business Arrangements) to support our products and services. The company generally strives to limit its exposure under these arrangements to its subsidiary’s investment in the Business Arrangements or to the extent of such subsidiary’s obligations under the applicable contract. In some cases, however, the company may be required to guarantee performance by the Business Arrangements and, in such cases, the company generally strives to obtain cross-indemnification from the other members of the Business Arrangements. At September 30, 2016 , the company is not aware of any existing event of default that would require it to satisfy any of these guarantees. U.S. Government Cost Claims From time to time, the company is advised of claims by the U.S. Government concerning certain potential disallowed costs, plus, at times, penalties and interest. When such findings are presented, the company and the U.S. Government representatives engage in discussions to enable the company to evaluate the merits of these claims, as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the company’s estimated exposure for matters raised by the U.S. Government. Such provisions are reviewed periodically using the most recent information available. The company believes it has adequately reserved for disputed amounts that are probable and estimable, and the outcome of any such matters would not have a material adverse effect on its unaudited condensed consolidated financial position as of September 30, 2016 , or its annual results of operations and/or cash flows. Environmental Matters The table below summarizes management’s estimate of the range of reasonably possible future costs for environmental remediation, the amount accrued within that range, and the deferred costs expected to be recoverable through overhead charges on U.S. Government contracts as of September 30, 2016 and December 31, 2015 : $ in millions Range of Reasonably Possible Future Costs (1) Accrued Costs (2) Deferred Costs (3) September 30, 2016 $389 - $796 $ 394 $ 196 December 31, 2015 353 - 812 370 186 (1) The range of reasonably possible future costs does not take into consideration amounts expected to be recoverable through overhead charges on U.S. Government contracts. (2) As of September 30, 2016 , $115 million is recorded in other current liabilities and $279 million is recorded in other non-current liabilities. (3) As of September 30, 2016 , $63 million is deferred in inventoried costs and $133 million is deferred in other non-current assets. These amounts are evaluated for recoverability on a routine basis. Although management cannot predict whether new information gained as our environmental remediation projects progress, or as changes in facts and circumstances occur, will materially affect the estimated liability accrued, we do not anticipate future remediation expenditures associated with our currently identified projects will have a material adverse effect on the company’s unaudited condensed consolidated financial position as of September 30, 2016 , or its annual results of operations and/or cash flows. Financial Arrangements In the ordinary course of business, the company uses standby letters of credit and guarantees issued by commercial banks and surety bonds issued principally by insurance companies to guarantee the performance on certain obligations. At September 30, 2016 , there were $286 million of stand-by letters of credit and guarantees and $170 million of surety bonds outstanding. Indemnifications The company has retained certain environmental, income tax and other potential liabilities in connection with certain of its divestitures. The settlement of these liabilities is not expected to have a material adverse effect on the company’s unaudited condensed consolidated financial position as of September 30, 2016 , or its annual results of operations and/or cash flows. Operating Leases Rental expense for operating leases for the three and nine months ended September 30, 2016 was $69 million and $228 million , respectively, and was $75 million and $232 million for the three and nine months ended September 30, 2015 , respectively. These amounts are net of immaterial amounts of sublease rental income. Credit Facility The company maintains an unsecured credit facility in an aggregate principal amount of $1.6 billion (the “Credit Agreement”) that matures in July 2020. At September 30, 2016 , the company was in compliance with the covenants under the Credit Agreement and there was no balance outstanding. |
Retirement Benefits (Unaudited)
Retirement Benefits (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT BENEFITS | RETIREMENT BENEFITS The cost to the company of its retirement plans is shown in the following table: Three Months Ended September 30 Nine Months Ended September 30 Pension Medical and Pension Medical and $ in millions 2016 2015 2016 2015 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ 112 $ 121 $ 8 $ 8 $ 335 $ 363 $ 23 $ 26 Interest cost 321 306 24 24 963 918 71 71 Expected return on plan assets (464 ) (494 ) (21 ) (22 ) (1,390 ) (1,481 ) (64 ) (67 ) Amortization of: Prior service credit (15 ) (15 ) (6 ) (7 ) (45 ) (45 ) (17 ) (21 ) Net loss from previous years 179 170 3 6 536 511 11 20 Net periodic benefit cost $ 133 $ 88 $ 8 $ 9 $ 399 $ 266 $ 24 $ 29 Employer Contributions The company sponsors defined benefit pension and post-retirement plans, as well as defined contribution plans. We fund our defined benefit pension plans annually in a manner consistent with the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006. Additionally, in the first quarter of 2015, we made a voluntary pension contribution of $500 million . Contributions made by the company to its retirement plans are as follows: Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2016 2015 2016 2015 Defined benefit pension plans $ 14 $ 20 $ 61 $ 564 Medical and life benefit plans 17 19 46 44 Defined contribution plans 83 77 241 227 |
Stock Compensation Plans and Ot
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS | STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS Stock Awards The following table presents the number of restricted stock rights (RSRs) and restricted performance stock rights (RPSRs) granted to employees under the company's long-term incentive stock plan and the grant date aggregate fair value of those stock awards for the periods presented: Nine Months Ended September 30 in millions 2016 2015 RSRs granted 0.2 0.2 RPSRs granted 0.3 0.4 Grant date aggregate fair value $ 88 $ 89 RSRs typically vest on the third anniversary of the grant date, while RPSRs generally vest and pay out based on the achievement of financial metrics for the three -year period beginning January 1 of the year of grant. Cash Awards The following table presents the minimum and maximum aggregate payout amounts related to cash units (CUs) and cash performance units (CPUs) granted to employees in the periods presented: Nine Months Ended September 30 $ in millions 2016 2015 Minimum aggregate payout amount $ 35 $ 36 Maximum aggregate payout amount 194 192 CUs typically vest and settle in cash on the third anniversary of the grant date, while CPUs generally vest and pay out in cash based on the achievement of financial metrics for a three -year period beginning January 1 of the year of grant. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation and Reporting These unaudited condensed consolidated financial statements include the accounts of Northrop Grumman Corporation and subsidiaries (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”). Material intercompany accounts, transactions and profits are eliminated in consolidation. Investments in equity securities and joint ventures where the company has significant influence, but not control, are accounted for using the equity method. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements are prepared in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. These financial statements include adjustments of a normal recurring nature considered necessary by management for a fair presentation of the company’s unaudited condensed consolidated financial position, results of operations and cash flows. The results reported in these unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the information contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2015 (2015 Annual Report on Form 10-K) and the Form 8-K that we filed with the SEC on April 27, 2016, which recasts the disclosures in certain portions of the 2015 Annual Report on Form 10-K to reflect changes in the company’s organizational structure and reportable segments. |
Fiscal Period Policy | The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30 and third quarter as ending on September 30. It is the company’s long-standing practice to establish actual interim closing dates using a “fiscal” calendar, in which we close our books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. This practice is only used at interim periods within a reporting year. |
Accounting Estimates | Accounting Estimates The accompanying unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation thereof requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Revenue Recognition | Contract sales may include estimated amounts not contractually agreed to by the customer, including cost or performance incentives (such as award and incentive fees), un-priced change orders, contract claims and requests for equitable adjustment (REAs). Further, as contracts are performed, change orders can be a regular occurrence and may be un-priced until negotiated with the customer. Un-priced change orders, contract claims (including change orders unapproved as to both scope and price) and REAs are included in estimated contract sales when management believes it is probable the un-priced change order, claim and/or REA will result in additional contract revenue and the amount can be reliably estimated based on the facts and circumstances known to us at the time. The majority of our sales are derived from long-term contracts with the United States (U.S.) Government for the production of goods, the provision of services, or in some cases, a combination of both. In accounting for these contracts, we utilize either the cost-to-cost method or the units-of-delivery method of percentage-of-completion accounting, with cost-to-cost being the predominant method. The company estimates profit on contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit either as costs are incurred (cost-to-cost) or as units are delivered (units-of-delivery). The company classifies sales as product or service depending upon the predominant attributes of the contract. Net Estimate-At-Completion (EAC) Adjustments - We recognize changes in estimated contract sales, costs or profits using the cumulative catch-up method of accounting. This method recognizes, in the current period, the cumulative effect of the changes on current and prior periods as net EAC adjustments; sales and profit in future periods of contract performance are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss will result from the performance of a contract, the entire amount of the estimable future loss is charged against income in the period the loss is identified. Loss provisions are first offset against costs included in unbilled accounts receivable or inventoried costs, and any remaining amounts are reflected in current liabilities. Significant EAC adjustments on a single contract could have a material effect on the company’s unaudited condensed consolidated financial position or results of operations. When such adjustments occur, we generally disclose the nature, underlying conditions and financial impact of the adjustments. |
Description of New Accounting Pronouncements Not yet Adopted | On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . ASU 2016-02 supersedes existing lease guidance, including Accounting Standards Codification (ASC) 840 - Leases . Among other things, ASU 2016-02 requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease. ASU 2016-02 will be effective January 1, 2019, although early adoption is permitted, and it must be applied using a modified retrospective approach. We are currently evaluating the timing of adoption as well as the effect ASU 2016-02 will have on the company’s consolidated financial position, annual results of operations and/or cash flows. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . ASU 2014-09 supersedes existing revenue recognition guidance, including ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts. ASU 2014-09 outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP. Among other things, it requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time. These concepts, as well as other aspects of ASU 2014-09, may change the method and/or timing of revenue recognition for certain of our contracts. We expect to adopt ASU 2014-09 in 2018 and apply it retrospectively to all periods presented. Our evaluation of the effect ASU 2014-09 will have on the company’s consolidated financial position, annual results of operations and/or cash flows is expected to be complete by the end of 2016. |
Stockholders' Equity | The company records the difference between the cost of shares repurchased and their par value as well as tax withholding in excess of related stock compensation expense as a reduction of paid-in capital to the extent available and then as a reduction of retained earnings. |
Pension and Other Postretirement Plans | Net actuarial gains or losses are re-determined annually or upon remeasurement events and principally arise from changes in the interest rate used to discount our benefit obligations and differences between expected and actual returns on plan assets. We fund our defined benefit pension plans annually in a manner consistent with the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006. |
Earnings Per Share | We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share includes the dilutive effect of awards granted to employees under stock-based compensation plans. |
Investments in Marketable Securities | Investments in Marketable Securities The company holds a portfolio of marketable securities consisting of securities to partially fund non-qualified employee benefit plans. These assets are recorded at fair value on a recurring basis and substantially all of these instruments are valued using Level 1 inputs. |
Derivative Financial Instruments and Hedging Activities | Substantially all of these instruments are valued using Level 2 inputs. Where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value and uses the applicable London Interbank Offered Rate (LIBOR) swap rates. |
Fair Value of Long-term Debt | The fair value of long-term debt is calculated using Level 2 inputs based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements. |
Guarantees of Certain Performance Obligations | Guarantees of Certain Performance Obligations The company’s subsidiaries enter into joint ventures, teaming and other business arrangements (collectively, Business Arrangements) to support our products and services. The company generally strives to limit its exposure under these arrangements to its subsidiary’s investment in the Business Arrangements or to the extent of such subsidiary’s obligations under the applicable contract. In some cases, however, the company may be required to guarantee performance by the Business Arrangements and, in such cases, the company generally strives to obtain cross-indemnification from the other members of the Business Arrangements. |
U.S. Government Cost Claims | U.S. Government Cost Claims From time to time, the company is advised of claims by the U.S. Government concerning certain potential disallowed costs, plus, at times, penalties and interest. When such findings are presented, the company and the U.S. Government representatives engage in discussions to enable the company to evaluate the merits of these claims, as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the company’s estimated exposure for matters raised by the U.S. Government. Such provisions are reviewed periodically using the most recent information available. |
Environmental Matters | These amounts are evaluated for recoverability on a routine basis. |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | On March 30, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The company adopted ASU 2016-09 during the first quarter of 2016. Among other things, ASU 2016-09 requires that entities recognize excess tax benefits and deficiencies related to employee share-based payment transactions as income tax expense or benefit. ASU 2016-09 also eliminates the requirement to reclassify excess tax benefits and deficiencies from operating activities to financing activities in the statement of cash flows. As a result of adoption, the company recognized a $1 million and $85 million tax benefit during the three and nine months ended September 30, 2016 , respectively. Adoption also resulted in an $85 million increase in operating cash flows and a corresponding $85 million reduction in financing cash flows for the nine months ended September 30, 2016 . The company adopted ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , during the first quarter of 2016. As a result, we now present capitalized debt issuance costs as a reduction in the carrying amount of long-term debt. This change resulted in a reclassification of $30 million of other non-current assets reported in our 2015 consolidated statement of financial position to long-term debt, which reduced our previously reported total assets and total liabilities as of December 31, 2015. |
Basis of Presentation (Unaudi17
Basis of Presentation (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Change in Accounting Estimate [Table Text Block] | The following table presents the effect of aggregate net EAC adjustments: Three Months Ended September 30 Nine Months Ended September 30 $ in millions, except per share data 2016 2015 2016 2015 Operating Income $ 121 $ 112 $ 387 $ 461 Net Earnings (1) 79 73 252 300 Diluted earnings per share (1) 0.44 0.39 1.39 1.55 (1) Based on statutory tax rates |
Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows: $ in millions September 30, December 31, Unamortized benefit plan costs, net of tax benefit of $3,166 as of September 30, 2016 and $3,350 as of December 31, 2015 $ (4,939 ) $ (5,241 ) Cumulative translation adjustment (101 ) (82 ) Net unrealized gain on marketable securities and cash flow hedges, net of tax 2 3 Total accumulated other comprehensive loss $ (5,038 ) $ (5,320 ) |
Earnings Per Share, Share Rep18
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Share Repurchases | The table below summarizes the company’s share repurchases to date under the authorizations described above: Shares Repurchased Repurchase Program Amount Total Average (1) Date Completed Nine Months Ended September 30 2016 2015 May 15, 2013 $ 4,000 32.8 $ 121.97 March 2015 — 2.7 December 4, 2014 $ 3,000 18.0 $ 166.70 March 2016 1.4 15.0 September 16, 2015 $ 4,000 4.2 $ 213.46 4.2 — (1) Includes commissions paid. |
Segment Information (Unaudite19
Segment Information (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Sales and operating income by segment | The following table presents sales and operating income by segment: Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2016 2015 2016 2015 Sales Aerospace Systems $ 2,782 $ 2,544 $ 7,956 $ 7,540 Mission Systems 2,698 2,723 8,081 8,062 Technology Services 1,190 1,193 3,617 3,698 Intersegment eliminations (515 ) (481 ) (1,543 ) (1,468 ) Total sales 6,155 5,979 18,111 17,832 Operating income Aerospace Systems 311 298 909 929 Mission Systems 351 355 1,055 1,047 Technology Services 130 128 387 389 Intersegment eliminations (61 ) (55 ) (188 ) (162 ) Total segment operating income 731 726 2,163 2,203 Reconciliation to total operating income: Net FAS/CAS pension adjustment 91 97 234 261 Unallocated corporate expenses 5 (29 ) (31 ) (76 ) Other (1 ) — (4 ) (1 ) Total operating income $ 826 $ 794 $ 2,362 $ 2,387 |
Income Taxes (Unaudited) (Table
Income Taxes (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense and Effective Income Tax Rates | Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2016 2015 2016 2015 Federal and foreign income tax expense $ 167 $ 213 $ 500 $ 638 Effective income tax rate 21.7 % 29.2 % 23.0 % 29.4 % |
Fair Value of Financial Instr21
Fair Value of Financial Instruments (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value information of assets and liabilities measured at fair value on a recurring basis | The following table presents comparative carrying value and fair value information for our financial assets and liabilities: September 30, 2016 December 31, 2015 $ in millions Carrying Value Fair Value Carrying Value Fair Value Financial Assets (Liabilities) Marketable securities Trading $ 318 $ 318 $ 303 $ 303 Available-for-sale 5 5 7 7 Derivatives 2 2 5 5 Long-term debt, including current portion $ (6,390 ) $ (7,337 ) $ (6,496 ) $ (6,907 ) |
Commitments and Contingencies22
Commitments and Contingencies (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Environmental Remediation Range of Future Costs [Line Items] | |
Environmental Remediation [Table Text Block] | The table below summarizes management’s estimate of the range of reasonably possible future costs for environmental remediation, the amount accrued within that range, and the deferred costs expected to be recoverable through overhead charges on U.S. Government contracts as of September 30, 2016 and December 31, 2015 : $ in millions Range of Reasonably Possible Future Costs (1) Accrued Costs (2) Deferred Costs (3) September 30, 2016 $389 - $796 $ 394 $ 196 December 31, 2015 353 - 812 370 186 (1) The range of reasonably possible future costs does not take into consideration amounts expected to be recoverable through overhead charges on U.S. Government contracts. (2) As of September 30, 2016 , $115 million is recorded in other current liabilities and $279 million is recorded in other non-current liabilities. (3) As of September 30, 2016 , $63 million is deferred in inventoried costs and $133 million is deferred in other non-current assets. These amounts are evaluated for recoverability on a routine basis. |
Retirement Benefits (Unaudite23
Retirement Benefits (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of net periodic benefit cost | The cost to the company of its retirement plans is shown in the following table: Three Months Ended September 30 Nine Months Ended September 30 Pension Medical and Pension Medical and $ in millions 2016 2015 2016 2015 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ 112 $ 121 $ 8 $ 8 $ 335 $ 363 $ 23 $ 26 Interest cost 321 306 24 24 963 918 71 71 Expected return on plan assets (464 ) (494 ) (21 ) (22 ) (1,390 ) (1,481 ) (64 ) (67 ) Amortization of: Prior service credit (15 ) (15 ) (6 ) (7 ) (45 ) (45 ) (17 ) (21 ) Net loss from previous years 179 170 3 6 536 511 11 20 Net periodic benefit cost $ 133 $ 88 $ 8 $ 9 $ 399 $ 266 $ 24 $ 29 |
Employer contributions to retirement plans | Contributions made by the company to its retirement plans are as follows: Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2016 2015 2016 2015 Defined benefit pension plans $ 14 $ 20 $ 61 $ 564 Medical and life benefit plans 17 19 46 44 Defined contribution plans 83 77 241 227 |
Stock Compensation Plans and 24
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table presents the number of restricted stock rights (RSRs) and restricted performance stock rights (RPSRs) granted to employees under the company's long-term incentive stock plan and the grant date aggregate fair value of those stock awards for the periods presented: Nine Months Ended September 30 in millions 2016 2015 RSRs granted 0.2 0.2 RPSRs granted 0.3 0.4 Grant date aggregate fair value $ 88 $ 89 |
Cash Units and Cash Performance Units Aggregate Payout Amount [Table Text Block] | The following table presents the minimum and maximum aggregate payout amounts related to cash units (CUs) and cash performance units (CPUs) granted to employees in the periods presented: Nine Months Ended September 30 $ in millions 2016 2015 Minimum aggregate payout amount $ 35 $ 36 Maximum aggregate payout amount 194 192 |
Basis of Presentation (Unaudi25
Basis of Presentation (Unaudited) (Details 1) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Loss | |||||
Unamortized benefit plan costs, net of tax benefit of $3,166 as of September 30, 2016 and $3,350 as of December 31, 2015 | $ (4,939) | $ (4,939) | $ (5,241) | ||
Cumulative translation adjustment | (101) | (101) | (82) | ||
Net unrealized gain on marketable securities and cash flow hedges, net of tax | 2 | 2 | 3 | ||
Total accumulated other comprehensive loss | (5,038) | (5,038) | (5,320) | ||
Unamortized benefit plan costs - Tax Benefit (expense) | 3,166 | 3,166 | 3,350 | ||
Unamortized benefit plan costs, net actuarial losses, after-tax | 5,100 | 5,100 | $ 5,500 | ||
Unamortized benefit plan costs, reclassified from other comprehensive income to net earnings | $ 101 | $ 96 | $ 302 | $ 288 |
Basis of Presentation (Unaudi26
Basis of Presentation (Unaudited) (Details 2) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Change in Accounting Estimate [Line Items] | ||||
Operating Income (Loss) | $ 826 | $ 794 | $ 2,362 | $ 2,387 |
Net earnings | $ 602 | $ 516 | $ 1,675 | $ 1,531 |
Diluted earnings per share | $ 3.35 | $ 2.75 | $ 9.23 | $ 7.89 |
Contracts Accounted for under Percentage of Completion [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Operating Income (Loss) | $ 121 | $ 112 | $ 387 | $ 461 |
Net earnings | $ 79 | $ 73 | $ 252 | $ 300 |
Diluted earnings per share | $ 0.44 | $ 0.39 | $ 1.39 | $ 1.55 |
Basis of Presentation (Unaudi27
Basis of Presentation (Unaudited) (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net earnings | $ 602 | $ 516 | $ 1,675 | $ 1,531 |
Net Cash Provided by (Used in) Operating Activities | 1,282 | 529 | ||
Net Cash Provided by (Used in) Financing Activities | (1,893) | $ (2,802) | ||
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net earnings | $ 1 | 85 | ||
Net Cash Provided by (Used in) Operating Activities | 85 | |||
Net Cash Provided by (Used in) Financing Activities | $ (85) |
Basis of Presentation (Unaudi28
Basis of Presentation (Unaudited) (Details 4) - Accounting Standards Update 2015-03 [Member] $ in Millions | Dec. 31, 2015USD ($) |
Long-term Debt [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Debt Issuance Costs, Net | $ 30 |
Other Noncurrent Assets [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Debt Issuance Costs, Net | $ (30) |
Earnings Per Share, Share Rep29
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Details 1) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | 22 Months Ended | 41 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 16, 2015 | Dec. 04, 2014 | May 15, 2013 | |
May 2013 Share Repurchase Program Original Authorization | ||||||||
Share Repurchase [Line Items] | ||||||||
Amount Authorized | $ 4,000 | |||||||
Shares Retired | 32.8 | |||||||
Average Cost Per Share | $ 121.97 | |||||||
Shares Repurchased | 0 | 2.7 | ||||||
December 2014 Share Repurchase Program Original Authorization | ||||||||
Share Repurchase [Line Items] | ||||||||
Amount Authorized | $ 3,000 | |||||||
Shares Retired | 18 | |||||||
Average Cost Per Share | $ 166.70 | |||||||
Shares Repurchased | 1.4 | 15 | ||||||
September 2015 Share Repurchase Program Original Authorization | ||||||||
Share Repurchase [Line Items] | ||||||||
Amount Authorized | $ 4,000 | |||||||
Shares Retired | 4.2 | |||||||
Average Cost Per Share | $ 213.46 | |||||||
Shares Repurchased | 4.2 | 0 | ||||||
Share Repurchases - Notes to Table | ||||||||
Shares repurchased amount | $ 900 | |||||||
Amount remaining under authorization for share repurchases | $ 3,100 | $ 3,100 | $ 3,100 | $ 3,100 |
Earnings Per Share, Share Rep30
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Details 2) - $ / shares shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
May 31, 2016 | May 31, 2015 | May 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share, Basic and Diluted [Abstract] | |||||||
Dilutive effect of of stock awards and options granted to employees under stock-based compensation plans | 1.5 | 2.1 | 1.7 | 2.2 | |||
Common stock dividends per share, declared (in dollars per share) | $ 0.90 | $ 0.80 | $ 0.70 | $ 2.60 | $ 2.30 | ||
Increase in quarterly common stock dividend (percent) | 13.00% | 14.00% |
Segment Information (Unaudite31
Segment Information (Unaudited) (Details 1) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Sales | $ 6,155 | $ 5,979 | $ 18,111 | $ 17,832 |
Operating income | 826 | 794 | 2,362 | 2,387 |
Benefit from claimed state refund | 30 | |||
Benefit from overhead claim recoveries | 25 | |||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 731 | 726 | 2,163 | 2,203 |
Operating Segments [Member] | Aerospace Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,782 | 2,544 | 7,956 | 7,540 |
Operating income | 311 | 298 | 909 | 929 |
Operating Segments [Member] | Mission Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,698 | 2,723 | 8,081 | 8,062 |
Operating income | 351 | 355 | 1,055 | 1,047 |
Operating Segments [Member] | Technology Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,190 | 1,193 | 3,617 | 3,698 |
Operating income | 130 | 128 | 387 | 389 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 515 | 481 | 1,543 | 1,468 |
Operating income | 61 | 55 | 188 | 162 |
Net FAS/CAS pension adjustment Income (Expense) [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 91 | 97 | 234 | 261 |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 5 | (29) | (31) | (76) |
Segment Reconciling Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ (1) | $ 0 | $ (4) | $ (1) |
Segment Information (Unaudite32
Segment Information (Unaudited) (Details 2) - Pension Plan [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined Benefit Plan, Contributions by Employer | $ 14 | $ 20 | $ 61 | $ 564 | |
Voluntary Contributions [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined Benefit Plan, Contributions by Employer | $ 500 |
Income Taxes (Unaudited) (Detai
Income Taxes (Unaudited) (Details 1) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2017 | |
Income Tax Contingency [Line Items] | |||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 70 | $ 70 | |||
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount | 42 | ||||
Amount of undistributed earnings generated from foreign subsidiaries | 430 | 430 | |||
Income Tax Expense (Benefit) | $ 167 | $ 213 | $ 500 | $ 638 | |
Effective income tax rate | 21.70% | 29.20% | 23.00% | 29.40% | |
Maximum | Scenario, Forecast [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Tax Adjustments, Settlements, and Unusual Provisions | $ (40) |
Income Taxes (Unaudited) (Det34
Income Taxes (Unaudited) (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net earnings | $ 602 | $ 516 | $ 1,675 | $ 1,531 |
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net earnings | $ 1 | $ 85 |
Fair Value of Financial Instr35
Fair Value of Financial Instruments (Unaudited) (Details 1) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Carrying Value | ||
Marketable Securities | ||
Trading securities | $ 318 | $ 303 |
Available-for-sale securities | 5 | 7 |
Derivative Asset | 2 | 5 |
Long-term debt, including current portion | (6,390) | (6,496) |
Fair Value | ||
Marketable Securities | ||
Trading securities | 318 | 303 |
Available-for-sale securities | 5 | 7 |
Derivative Asset | 2 | 5 |
Long-term debt, including current portion | $ (7,337) | $ (6,907) |
Fair Value of Financial Instr36
Fair Value of Financial Instruments (Unaudited) (Details 2) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2015 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Repayments of Debt | $ 107 | |||
Investments in Marketable Securities [Abstract] | ||||
Marketable Securities, Noncurrent | $ 323 | $ 310 | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Derivative, Notional Amount | 126 | 141 | ||
April 45 Maturity [Domain] | Senior Notes [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt Instrument, Maturity Date | Apr. 15, 2045 | |||
Debt Instrument, Face Amount | $ 600 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | |||
Cash Flow Hedging [Member] | ||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Derivative, Notional Amount | $ 2 | $ 10 |
Fair Value of Financial Instr37
Fair Value of Financial Instruments (Unaudited) (Details 3) - Pension Plan [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined benefit plan, contributions by Employer | $ 14 | $ 20 | $ 61 | $ 564 | |
Voluntary Contributions [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined benefit plan, contributions by Employer | $ 500 |
Investigations, Claims and Li38
Investigations, Claims and Litigation (Unaudited) (Details) € in Millions, BRL in Millions, $ in Millions | 2 Months Ended | 12 Months Ended | 36 Months Ended | 38 Months Ended | 40 Months Ended | ||||
Sep. 30, 2013Defendant | Dec. 31, 2007USD ($) | Sep. 30, 2016EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2016BRL | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | May 04, 2012USD ($) | |
Loss Contingencies | |||||||||
Receivables, unpaid long-term contracts | $ 3,659 | $ 3,659 | $ 3,659 | $ 2,841 | |||||
Solystic Matter [Member] | |||||||||
Loss Contingencies | |||||||||
Loss Contingency, Damages Sought, Value | BRL 111 | 34 | |||||||
Counterclaim | € 31 | 35 | |||||||
Unpaid Portions of Contract Price and Direct Costs Incurred [Member] | United States Postal Service | |||||||||
Loss Contingencies | |||||||||
Receivables, unpaid long-term contracts | $ 63 | ||||||||
Acts and Omissions with Adverse Affects on Performance and Obligations [Member] | United States Postal Service | |||||||||
Loss Contingencies | |||||||||
Gain contingency, unrecorded amount | $ 115 | ||||||||
United States Postal Service | |||||||||
Loss Contingencies | |||||||||
Contract award | $ 875 | ||||||||
United States Postal Service | False Claims Act | Threatened Litigation | |||||||||
Loss Contingencies | |||||||||
Loss Contingency, Damages Sought, Value | 179 | ||||||||
Solystic Matter [Member] | Solystic Matter [Member] | |||||||||
Loss Contingencies | |||||||||
Loss Contingency, Number of Additional Defendants | Defendant | 2 | ||||||||
Initial Claim [Member] | Solystic Matter [Member] | |||||||||
Loss Contingencies | |||||||||
Loss Contingency, Damages Sought, Value | 89 | 28 | |||||||
Incremental claim [Member] | Solystic Matter [Member] | |||||||||
Loss Contingencies | |||||||||
Loss Contingency, Damages Sought, Value | BRL 22 | 7 | |||||||
Maximum | United States Postal Service | |||||||||
Loss Contingencies | |||||||||
Loss Contingency, Estimate of Possible Loss | $ 410 | $ 410 | $ 410 |
Commitments and Contingencies39
Commitments and Contingencies (Unaudited) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jul. 31, 2015 | |
Site Contingency [Line Items] | ||||||
Accrual for Environmental Remediation Costs | $ 394,000,000 | $ 394,000,000 | $ 370,000,000 | |||
Recorded Third-Party Environmental Recoveries, Amount | 196,000,000 | 196,000,000 | 186,000,000 | |||
Financial Arrangements | ||||||
Standby Unused Letters Of Credit and bank guarantees | 286,000,000 | 286,000,000 | ||||
Surety Bond Outstanding | 170,000,000 | 170,000,000 | ||||
Operating leases | ||||||
Rental expense for operating leases, net of immaterial amounts of sublease rental income | 69,000,000 | $ 75,000,000 | $ 228,000,000 | $ 232,000,000 | ||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Covenant Compliance | the company was in compliance with the covenants under the Credit Agreement | |||||
Line of Credit Outstanding | 0 | $ 0 | ||||
Other Current Liabilities [Member] | ||||||
Site Contingency [Line Items] | ||||||
Accrual for Environmental Remediation Costs | 115,000,000 | 115,000,000 | ||||
Other Noncurrent Liabilities [Member] | ||||||
Site Contingency [Line Items] | ||||||
Accrual for Environmental Remediation Costs | 279,000,000 | 279,000,000 | ||||
Inventoried Costs [Member] | ||||||
Site Contingency [Line Items] | ||||||
Recorded Third-Party Environmental Recoveries, Amount | 63,000,000 | 63,000,000 | ||||
Other Noncurrent Assets [Member] | ||||||
Site Contingency [Line Items] | ||||||
Recorded Third-Party Environmental Recoveries, Amount | 133,000,000 | 133,000,000 | ||||
Environmental Issue [Member] | Maximum | ||||||
Site Contingency [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | 796,000,000 | 796,000,000 | 812,000,000 | |||
Environmental Issue [Member] | Minimum | ||||||
Site Contingency [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | $ 389,000,000 | $ 389,000,000 | $ 353,000,000 | |||
Revolving Credit Facility [Member] | Five Year Term [Member] [Domain] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,600,000,000 |
Retirement Benefits (Unaudite40
Retirement Benefits (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||||
Defined contribution plan, employer contributions | $ 83 | $ 77 | $ 241 | $ 227 | |
Pension Benefits | |||||
Components of Net Periodic Benefit Cost | |||||
Service cost | 112 | 121 | 335 | 363 | |
Interest cost | 321 | 306 | 963 | 918 | |
Expected return on plan assets | (464) | (494) | (1,390) | (1,481) | |
Prior service credit | (15) | (15) | (45) | (45) | |
Net loss from previous years | 179 | 170 | 536 | 511 | |
Net periodic benefit cost | 133 | 88 | 399 | 266 | |
Defined Benefit Plan, Expected Contributions in Current Fiscal Year [Abstract] | |||||
Defined benefit plan, contributions by Employer | 14 | 20 | 61 | 564 | |
Medical and Life Benefits | |||||
Components of Net Periodic Benefit Cost | |||||
Service cost | 8 | 8 | 23 | 26 | |
Interest cost | 24 | 24 | 71 | 71 | |
Expected return on plan assets | (21) | (22) | (64) | (67) | |
Prior service credit | (6) | (7) | (17) | (21) | |
Net loss from previous years | 3 | 6 | 11 | 20 | |
Net periodic benefit cost | 8 | 9 | 24 | 29 | |
Defined Benefit Plan, Expected Contributions in Current Fiscal Year [Abstract] | |||||
Defined benefit plan, contributions by Employer | $ 17 | $ 19 | $ 46 | $ 44 | |
Voluntary Contributions [Member] | Pension Benefits | |||||
Defined Benefit Plan, Expected Contributions in Current Fiscal Year [Abstract] | |||||
Defined benefit plan, contributions by Employer | $ 500 |
Stock Compensation Plans and 41
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Details) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Rights and Restricted Performance Stock Rights Grant Date Aggregate Fair Value | $ 88 | $ 89 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 0.2 | 0.2 |
Vesting period | 3 years | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 0.3 | 0.4 |
Vesting period | 3 years | |
Cash Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Cash Performance Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Cash Units and Cash Performance Units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | $ 35 | $ 36 |
Cash Units and Cash Performance Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | $ 194 | $ 192 |