Northrop Grumman (NOC) 10-Q 26 Jul 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2017	Jul. 21, 2017
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	2,017
Document Period End Date	Jun. 30, 2017
Document Fiscal Period Focus	Q2
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		174,094,301

Condensed Consolidated Statemen

Condensed Consolidated Statements of Earnings and Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Sales
Product	$ 3,916	$ 3,560	$ 7,750	$ 7,038
Service	2,459	2,440	4,892	4,918
Total sales	6,375	6,000	12,642	11,956
Operating costs and expenses
Product	2,958	2,621	5,829	5,232
Service	1,896	1,962	3,783	3,912
General and administrative expenses	666	620	1,343	1,276
Operating income	855	797	1,687	1,536
Other (expense) income
Interest expense	(76)	(74)	(151)	(150)
Other, net	28	7	44	20
Earnings before income taxes	807	730	1,580	1,406
Federal and foreign income tax expense	255	213	388	333
Net earnings	$ 552	$ 517	$ 1,192	$ 1,073
Basic earnings per share
Basic earnings per share	$ 3.16	$ 2.87	$ 6.82	$ 5.94
Weighted-average common shares outstanding, in millions	174.5	180.1	174.7	180.7
Diluted earnings per share
Diluted earnings per share	$ 3.15	$ 2.85	$ 6.78	$ 5.88
Weighted-average diluted shares outstanding, in millions	175.5	181.5	175.8	182.4
Net earnings (from above)	$ 552	$ 517	$ 1,192	$ 1,073
Change in unamortized benefit plan costs, net of tax	102	100	201	201
Change in cumulative translation adjustment	(4)	(9)	0	(13)
Other, net	1	1	3	0
Other comprehensive income, net of tax	99	92	204	188
Comprehensive income	$ 651	$ 609	$ 1,396	$ 1,261

Condensed Consolidated Stateme3

Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 1,383	$ 2,541
Accounts receivable, net	4,280	3,299
Inventoried costs, net	1,039	816
Prepaid expenses and other current assets	162	200
Total current assets	6,864	6,856
Property, plant and equipment, net of accumulated depreciation of $4,965 in 2017 and $4,831 in 2016	3,802	3,588
Goodwill	12,453	12,450
Deferred tax assets	1,385	1,462
Other non-current assets	1,309	1,258
Total assets	25,813	25,614
Liabilities
Trade accounts payable	1,385	1,554
Accrued employee compensation	1,213	1,342
Advance payments and amounts in excess of costs incurred	1,340	1,471
Other current liabilities	2,248	1,263
Total current liabilities	6,186	5,630
Long-term debt, net of current portion of $862 in 2017 and $12 in 2016	6,219	7,058
Pension and other post-retirement benefit plan liabilities	6,666	6,818
Other non-current liabilities	823	849
Total liabilities	19,894	20,355
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: 2017—174,150,501 and 2016—175,068,263	174	175
Paid-in capital	0	0
Retained earnings	11,087	10,630
Accumulated other comprehensive loss	(5,342)	(5,546)
Total shareholders’ equity	5,919	5,259
Total liabilities and shareholders’ equity	$ 25,813	$ 25,614

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Financial Position (Unaudited) (Parentheticals) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accumulated depreciation	$ (4,965)	$ (4,831)
Long-term Debt and Capital Lease Obligations, Current	$ 862	$ 12
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	174,150,501	175,068,263
Common Stock, shares outstanding	174,150,501	175,068,263

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating Activities
Net earnings	$ 1,192	$ 1,073
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	211	209
Stock-based compensation	42	37
Deferred income taxes	(47)	(89)
Changes in assets and liabilities:
Accounts receivable, net	(981)	(647)
Inventoried costs, net	(223)	(170)
Prepaid expenses and other assets	(25)	7
Accounts payable and other liabilities	(310)	(287)
Income taxes payable	90	225
Retiree benefits	165	209
Other, net	(46)	(23)
Net cash provided by operating activities	68	544
Investing activities
Capital expenditures	(433)	(471)
Other, net	7	2
Net cash used in investing activities	(426)	(469)
Financing activities
Common stock repurchases	(367)	(682)
Payments of long-term debt	0	(107)
Cash dividends paid	(341)	(322)
Payments of employee taxes withheld from share-based awards	(91)	(150)
Other, net	(1)	6
Net cash used in financing activities	(800)	(1,255)
Decrease in cash and cash equivalents	(1,158)	(1,180)
Cash and cash equivalents, beginning of year	2,541	2,319
Cash and cash equivalents, end of period	$ 1,383	$ 1,139

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, 2015		$ 181	$ 0	$ 10,661	$ (5,320)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock repurchased		(3)		(686)
Net earnings	$ 1,073			1,073
Dividends declared				(310)
Stock compensation		1		(104)
Other comprehensive income, net of tax	188				188
End of period at Jun. 30, 2016	$ 5,681	179	0	10,634	(5,132)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared per share	$ 1.70
Beginning of year at Dec. 31, 2016	$ 5,259	175	0	10,630	(5,546)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock repurchased		(2)		(351)
Net earnings	1,192			1,192
Dividends declared				(336)
Stock compensation		1		(48)
Other comprehensive income, net of tax	204				204
End of period at Jun. 30, 2017	$ 5,919	$ 174	$ 0	$ 11,087	$ (5,342)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared per share	$ 1.90

Basis of Presentation (Unaudite

Basis of Presentation (Unaudited)	6 Months Ended
	Jun. 30, 2017
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 its 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. These 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, 2016 (2016 Annual Report on Form 10-K). 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 These unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “FAS”). 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 U.S. Government for the production of goods, the provision of services, or 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. Contract sales may include estimated amounts not contractually agreed to or yet funded 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. Amounts recognized related to claims and REAs as of June 30, 2017 were not material individually or in aggregate. Net Estimate-At-Completion (EAC) Adjustments - We recognize changes in estimated contract sales or costs and the resulting changes in contract operating margins using the cumulative catch-up method of accounting. This method recognizes, in current period operating margin, the cumulative effect of the changes on current and prior periods as net EAC adjustments; sales and operating margins 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, including an allocation of general and administrative costs, is charged against income in the period the loss is identified. Each loss provision is first offset against costs included in unbilled accounts receivable or inventoried costs; 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 June 30 Six Months Ended June 30 $ in millions, except per share data 2017 2016 2017 2016 Operating Income $ 98 $ 137 $ 213 $ 266 Net Earnings (1) 63 89 138 173 Diluted earnings per share (1) 0.36 0.49 0.78 0.95 (1) Based on statutory tax rates Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: $ in millions June 30, December 31, Unamortized benefit plan costs, net of tax benefit of $3,317 in 2017 and $3,439 in 2016 $ (5,215 ) $ (5,416 ) Cumulative translation adjustment (132 ) (132 ) Net unrealized gain on marketable securities and cash flow hedges, net of tax 5 2 Total accumulated other comprehensive loss $ (5,342 ) $ (5,546 ) Unamortized benefit plan costs consist primarily of net after-tax actuarial losses totaling $5.3 billion and $5.6 billion as of June 30, 2017 and December 31, 2016 , 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 $100 million and $199 million , net of taxes, for the three and six months ended June 30, 2017 , respectively, and were $100 million and $201 million , net of taxes, for the three and six months ended June 30, 2016 , respectively. The reclassifications represent the amortization of net actuarial losses and prior service credits, 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 were not material for the three and six months ended June 30, 2017 and 2016 . Related Party Transactions For all periods presented, the company had no material related party transactions. Accounting Standards Updates On March 10, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-07 Compensation Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . ASU 2017-07 requires employers that sponsor defined benefit pension and/or other post-retirement benefit plans to report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Employers are required to present the other components of net benefit costs in the income statement separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component of net periodic pension cost will be eligible for asset capitalization. We expect adoption of ASU 2017-07 to result in a change in our net FAS/CAS pension adjustment within operating income, which will be offset by a corresponding change in other, net to reflect the impact of presenting the interest cost, expected return on plan assets, and amortization of prior service credit and net actuarial loss components of net periodic benefit costs outside of operating income. We expect to adopt ASU 2017-07 on January 1, 2018 using the retrospective method and do not anticipate a material change to our 2017 net FAS/CAS pension adjustment or other, net when they are recast to reflect the standard. We also do not expect ASU 2017-07 to have a material impact on our consolidated statements of financial position and/or cash flows. 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 and requires disclosure of certain information about leasing arrangements. ASU 2016-02 will be effective January 1, 2019, although early adoption is permitted, and it is to be applied using a modified retrospective approach. We expect to adopt the standard on January 1, 2019. We are reviewing our leases to determine the effect ASU 2016-02 will have on the company’s consolidated financial position, annual results of operations and/or cash flows. We currently expect the right-of-use assets and lease liabilities recognized upon adoption will each approximate our future minimum lease payments, as disclosed in our 2016 Annual Report on Form 10-K. We do not expect ASU 2016-02 to have a material impact on our 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, and 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. On July 9, 2015, the FASB approved a one year deferral of the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. ASU 2014-09 may be applied either retrospectively or through the use of a modified-retrospective method. We expect to adopt the standard on January 1, 2018 and apply it retrospectively to all periods presented. During 2016, we substantially completed our evaluation of ASU 2014-09, including the expected impact on our business processes, systems and controls, and potential differences in the timing and/or method of revenue recognition for our contracts. As a result of our evaluation, we identified changes to and are modifying certain of our accounting policies and practices. We also designed and implemented specific controls over our evaluation of the impact of ASU 2014-09, including our calculation of the cumulative effect of adopting ASU 2014-09. Although we do not expect significant changes to our accounting systems or controls upon adoption of ASU 2014-09, we have modified certain of our current controls to incorporate the revisions we have made to our accounting policies and practices. Based on our evaluation of ASU 2014-09, we currently do not expect it to have a material impact on our results of operations or cash flows in the periods after adoption. Under ASU 2014-09, revenue is recognized as control transfers to the customer. As such, revenue for our contracts will generally be recognized over time using the cost-to-cost method, which is consistent with the revenue recognition model we currently use for the majority of our contracts. For those contracts where we currently recognize revenue as units are delivered, in most cases the accounting for those contracts will change under ASU 2014-09 such that we will recognize revenue as costs are incurred. This change will generally result in an acceleration of revenue as compared with our current revenue recognition method for those contracts. In addition, for certain of our contracts, we expect the number of performance obligations to change under ASU 2014-09, which may alter the timing of revenue and margin recognition. ASU 2014-09 also requires expanded disclosure regarding the nature, timing, and uncertainty of revenue, cash flow and customer contract balances, including how and when we satisfy our performance obligations and the relationship between revenue recognized and changes in contract balances during a reporting period. We have evaluated these disclosure requirements and are incorporating the collection of relevant data into our quarterly processes. During the second quarter of 2017, we completed our assessment of the cumulative effect of adopting ASU 2014-09. Under the retrospective method, we expect to recognize the cumulative effect of adoption as an increase in unbilled accounts receivable, a reduction in inventoried costs and a net increase in retained earnings as of January 1, 2016. During the second quarter of 2017, we also completed our assessment of the impact of adoption on our 2016 results. We currently expect adopting ASU 2014-09 to result in an increase in revenue of approximately $200 million and a decrease in operating income of approximately $70 million for the year ended December 31, 2016. These changes principally reflect the impact of converting contracts to the cost-to-cost method of accounting as well as changes in the number of performance obligations for certain of our contracts. The impact of adopting ASU 2014-09 on our 2016 results of operations may not be indicative of the impact in future years. We will continue our evaluation of ASU 2014-09 (including how it may impact new contracts we receive as well as new or emerging interpretations of the standard) through the date of adoption. Other accounting standards updates effective after June 30, 2017 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.

Earnings Per Share, Share Repur

Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited)	6 Months Ended
	Jun. 30, 2017
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 include the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 1.0 million and 1.1 million shares for the three and six months ended June 30, 2017 , respectively. The dilutive effect of these securities totaled 1.4 million and 1.7 million shares for the three and six months ended June 30, 2016 , respectively. Share Repurchases On December 4, 2014, the company’s board of directors authorized a share repurchase program of up to $3.0 billion of the company’s common stock (the “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 (the “2015 Repurchase Program”). Repurchases under the 2015 Repurchase Program commenced in March 2016 upon completion of the company’s 2014 Repurchase Program. As of June 30, 2017 , repurchases under the 2015 Repurchase Program totaled $1.6 billion ; $2.4 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 Six Months Ended June 30 2017 2016 December 4, 2014 $ 3,000 18.0 $ 166.70 March 2016 — 1.4 September 16, 2015 $ 4,000 7.3 $ 222.50 1.5 2.0 (1) Includes commissions paid. Dividends on Common Stock In May 2017, the company increased the quarterly common stock dividend 11 percent to $1.00 per share from the previous amount of $0.90 per share. 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.

Segment Information (Unaudited)

Segment Information (Unaudited)	6 Months Ended
	Jun. 30, 2017
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. The following table presents sales and operating income by segment: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2017 2016 2017 2016 Sales Aerospace Systems $ 2,970 $ 2,600 $ 5,868 $ 5,174 Mission Systems 2,781 2,690 5,520 5,383 Technology Services 1,175 1,213 2,369 2,427 Intersegment eliminations (551 ) (503 ) (1,115 ) (1,028 ) Total sales 6,375 6,000 12,642 11,956 Operating income Aerospace Systems 315 312 627 598 Mission Systems 374 351 727 704 Technology Services 134 131 265 257 Intersegment eliminations (70 ) (63 ) (140 ) (127 ) Total segment operating income 753 731 1,479 1,432 Net FAS/CAS pension adjustment 137 69 273 143 Unallocated corporate expenses (34 ) (3 ) (63 ) (36 ) Other (1 ) — (2 ) (3 ) Total operating income $ 855 $ 797 $ 1,687 $ 1,536 Net FAS/CAS Pension Adjustment For financial statement purposes, we account for our employee pension plans in accordance with FAS. 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). The net FAS/CAS pension adjustment reflects the difference between CAS pension expense included as cost in segment operating income and FAS expense included in total operating income. 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, retiree benefits and corporate unallowable costs.

Income Taxes (Unaudited)

Income Taxes (Unaudited)	6 Months Ended
	Jun. 30, 2017
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Three Months Ended June 30 Six Months Ended June 30 $ in millions 2017 2016 2017 2016 Federal and foreign income tax expense $ 255 $ 213 $ 388 $ 333 Effective income tax rate 31.6 % 29.2 % 24.6 % 23.7 % Current Quarter The company’s effective tax rate of 31.6 percent for the three months ended June 30, 2017 was higher as compared with the same period in 2016, principally due to an increase through the second quarter of 2017 in the proportion of research and development expenditures incurred for contracts that do not qualify for purposes of the research and development tax credit and higher prior year base expenditures used to calculate the research credit. Year to Date The company’s effective tax rate of 24.6 percent for the six months ended June 30, 2017 was higher as compared with the same period in 2016 . The company’s effective tax rate for the six months ended June 30, 2017 includes $47 million of excess tax benefits related to employee share-based compensation, a $42 million benefit recognized in connection with the Congressional Joint Committee on Taxation’s approval of the Internal Revenue Service (IRS) examination of the company’s 2012-2013 tax returns and a $22 million benefit recognized for additional research credits claimed on our prior year tax returns. The company’s effective tax rate of 23.7 percent for the six months ended June 30, 2016 included $84 million of excess tax benefits related to employee share-based compensation. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Our 2014-2015 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 matters related to the years under examination, which may result in reductions of our unrecognized tax benefits up to $110 million and income tax expense up to $30 million .

Fair Value of Financial Instrum

Fair Value of Financial Instruments (Unaudited)	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	FAIR VALUE OF FINANCIAL INSTRUMENTS The company holds a portfolio of marketable securities consisting of securities that are classified as either trading or available-for-sale to partially fund non-qualified employee benefit plans. These securities are included in other non-current assets in the unaudited condensed consolidated statements of financial position. The company's derivative portfolio consists primarily of foreign currency forward contracts. 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 following table presents the financial assets and liabilities we record at fair value on a recurring basis identified by the level of inputs used to determine fair value: June 30, 2017 December 31, 2016 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities Trading $ 327 $ 1 $ 328 $ 321 $ 2 $ 323 Available-for-sale 12 — 12 7 — 7 Derivatives — 5 5 — 8 8 The notional value of the company’s derivative portfolio at June 30, 2017 and December 31, 2016 , was $150 million and $147 million , respectively. The portion of the notional value designated as cash flow hedges at June 30, 2017 was $13 million . At December 31, 2016 , no portion of the notional value was designated as a cash flow hedge. The derivative fair values and related unrealized gains/losses at June 30, 2017 and December 31, 2016 , were not material. There were no transfers of financial instruments between the three levels of the fair value hierarchy during the six months ended June 30, 2017 . The carrying value of cash and cash equivalents approximates fair value. Long-term Debt The estimated fair value of long-term debt was $7.8 billion and $7.6 billion as of June 30, 2017 and December 31, 2016 , respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements. The carrying value of long-term debt was $7.1 billion as of June 30, 2017 and December 31, 2016 . The current portion of long-term debt is recorded in Other current liabilities in the unaudited condensed consolidated statements of financial position.

Investigations, Claims and Liti

Investigations, Claims and Litigation (Unaudited)	6 Months Ended
	Jun. 30, 2017
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 reasonably 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 June 30, 2017 ), 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 $27 million as of June 30, 2017 ) in damages. In October 2013, ECT asserted an additional damage claim of R$22 million (the equivalent of approximately $7 million as of June 30, 2017 ). 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 June 30, 2017 ), 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 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 June 30, 2017 , or its annual results of operations and/or cash flows.

Commitments and Contingencies (

Commitments and Contingencies (Unaudited)	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES 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 such potential disallowed costs. 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 reasonably estimable, and the outcome of any such matters would not have a material adverse effect on its unaudited condensed consolidated financial position as of June 30, 2017 , 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 June 30, 2017 and December 31, 2016 : $ in millions Range of Reasonably Possible Future Costs (1) Accrued Costs (2) Deferred Costs (3) June 30, 2017 $389 - $782 $ 393 $ 202 December 31, 2016 379 - 774 385 195 (1) Estimated remediation costs are not discounted to present value. 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 June 30, 2017 , $124 million is recorded in other current liabilities and $269 million is recorded in other non-current liabilities. (3) As of June 30, 2017 , $73 million is deferred in inventoried costs and $129 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 June 30, 2017 , 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 June 30, 2017 , there were $202 million of stand-by letters of credit and guarantees and $198 million of surety bonds outstanding. Indemnifications The company has provided indemnification for 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 June 30, 2017 , or its annual results of operations and/or cash flows. Operating Leases Rental expense for operating leases for the three and six months ended June 30, 2017 was $65 million and $154 million , respectively, and was $68 million and $159 million for the three and six months ended June 30, 2016 , respectively. These amounts are net of immaterial amounts of sublease rental income. Credit Facilities In December 2016, a subsidiary of the company entered into a two-year credit facility, with two additional one-year option periods, in an aggregate principal amount of £120 million (the equivalent of approximately $152 million as of June 30, 2017 ) (the “2016 Credit Agreement”). The 2016 Credit Agreement is guaranteed by the company. At June 30, 2017 , there was £110 million (the equivalent of approximately $139 million as of June 30, 2017 ) outstanding under this facility, which bears interest at a rate of LIBOR plus 1.10 percent . All of the borrowings outstanding under this facility mature less than one year from the date of issuance, but may be renewed under the terms of the facility. Based on our intent and ability to refinance the obligations on a long-term basis, substantially all of the borrowings are classified as non-current. The company also maintains a five-year unsecured credit facility in an aggregate principal amount of $1.6 billion that matures in July 2020. At June 30, 2017 , there was no balance outstanding under this facility. At June 30, 2017 , the company was in compliance with all covenants under its credit agreements.

Retirement Benefits (Unaudited)

Retirement Benefits (Unaudited)	6 Months Ended
	Jun. 30, 2017
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 June 30 Six Months Ended June 30 Pension Medical and Pension Medical and $ in millions 2017 2016 2017 2016 2017 2016 2017 2016 Components of net periodic benefit cost Service cost $ 114 $ 111 $ 7 $ 7 $ 228 $ 223 $ 13 $ 15 Interest cost 308 321 21 23 617 642 42 47 Expected return on plan assets (472 ) (463 ) (23 ) (22 ) (943 ) (926 ) (45 ) (43 ) Amortization of: Prior service credit (14 ) (15 ) (6 ) (5 ) (29 ) (30 ) (11 ) (11 ) Net loss from previous years 178 179 3 5 356 357 5 8 Net periodic benefit cost $ 114 $ 133 $ 2 $ 8 $ 229 $ 266 $ 4 $ 16 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, including making voluntary contributions from time to time. Contributions made by the company to its retirement plans are as follows: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2017 2016 2017 2016 Defined benefit pension plans $ 28 $ 20 $ 51 $ 47 Medical and life benefit plans 13 18 24 29 Defined contribution plans 77 71 176 158

Stock Compensation Plans and Ot

Stock Compensation Plans and Other Compensation Arrangements (Unaudited)	6 Months Ended
	Jun. 30, 2017
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: Six Months Ended June 30 in millions 2017 2016 RSRs granted 0.1 0.2 RPSRs granted 0.3 0.3 Grant date aggregate fair value $ 91 $ 88 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 over a three -year period. 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: Six Months Ended June 30 $ in millions 2017 2016 Minimum aggregate payout amount $ 35 $ 34 Maximum aggregate payout amount 198 193 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 over a three -year period.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	These unaudited condensed consolidated financial statements include the accounts of Northrop Grumman Corporation and its 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	These 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, 2016 (2016 Annual Report on Form 10-K).
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	These unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “FAS”). 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 U.S. Government for the production of goods, the provision of services, or 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. Contract sales may include estimated amounts not contractually agreed to or yet funded 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. Net Estimate-At-Completion (EAC) Adjustments - We recognize changes in estimated contract sales or costs and the resulting changes in contract operating margins using the cumulative catch-up method of accounting. This method recognizes, in current period operating margin, the cumulative effect of the changes on current and prior periods as net EAC adjustments; sales and operating margins 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, including an allocation of general and administrative costs, is charged against income in the period the loss is identified. Each loss provision is first offset against costs included in unbilled accounts receivable or inventoried costs; 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 March 10, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-07 Compensation Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . ASU 2017-07 requires employers that sponsor defined benefit pension and/or other post-retirement benefit plans to report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Employers are required to present the other components of net benefit costs in the income statement separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component of net periodic pension cost will be eligible for asset capitalization. We expect adoption of ASU 2017-07 to result in a change in our net FAS/CAS pension adjustment within operating income, which will be offset by a corresponding change in other, net to reflect the impact of presenting the interest cost, expected return on plan assets, and amortization of prior service credit and net actuarial loss components of net periodic benefit costs outside of operating income. We expect to adopt ASU 2017-07 on January 1, 2018 using the retrospective method and do not anticipate a material change to our 2017 net FAS/CAS pension adjustment or other, net when they are recast to reflect the standard. 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 and requires disclosure of certain information about leasing arrangements. ASU 2016-02 will be effective January 1, 2019, although early adoption is permitted, and it is to be applied using a modified retrospective approach. We expect to adopt the standard on January 1, 2019. We are reviewing our leases to determine the effect ASU 2016-02 will have on the company’s consolidated financial position, annual results of operations and/or cash flows. We currently expect the right-of-use assets and lease liabilities recognized upon adoption will each approximate our future minimum lease payments, as disclosed in our 2016 Annual Report on Form 10-K. We do not expect ASU 2016-02 to have a material impact on our 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, and 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. On July 9, 2015, the FASB approved a one year deferral of the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. ASU 2014-09 may be applied either retrospectively or through the use of a modified-retrospective method. We expect to adopt the standard on January 1, 2018 and apply it retrospectively to all periods presented. During 2016, we substantially completed our evaluation of ASU 2014-09, including the expected impact on our business processes, systems and controls, and potential differences in the timing and/or method of revenue recognition for our contracts. As a result of our evaluation, we identified changes to and are modifying certain of our accounting policies and practices. We also designed and implemented specific controls over our evaluation of the impact of ASU 2014-09, including our calculation of the cumulative effect of adopting ASU 2014-09. Although we do not expect significant changes to our accounting systems or controls upon adoption of ASU 2014-09, we have modified certain of our current controls to incorporate the revisions we have made to our accounting policies and practices. Based on our evaluation of ASU 2014-09, we currently do not expect it to have a material impact on our results of operations or cash flows in the periods after adoption. Under ASU 2014-09, revenue is recognized as control transfers to the customer. As such, revenue for our contracts will generally be recognized over time using the cost-to-cost method, which is consistent with the revenue recognition model we currently use for the majority of our contracts. For those contracts where we currently recognize revenue as units are delivered, in most cases the accounting for those contracts will change under ASU 2014-09 such that we will recognize revenue as costs are incurred. This change will generally result in an acceleration of revenue as compared with our current revenue recognition method for those contracts. In addition, for certain of our contracts, we expect the number of performance obligations to change under ASU 2014-09, which may alter the timing of revenue and margin recognition. ASU 2014-09 also requires expanded disclosure regarding the nature, timing, and uncertainty of revenue, cash flow and customer contract balances, including how and when we satisfy our performance obligations and the relationship between revenue recognized and changes in contract balances during a reporting period. We have evaluated these disclosure requirements and are incorporating the collection of relevant data into our quarterly processes. During the second quarter of 2017, we completed our assessment of the cumulative effect of adopting ASU 2014-09. Under the retrospective method, we expect to recognize the cumulative effect of adoption as an increase in unbilled accounts receivable, a reduction in inventoried costs and a net increase in retained earnings as of January 1, 2016. During the second quarter of 2017, we also completed our assessment of the impact of adoption on our 2016 results. We currently expect adopting ASU 2014-09 to result in an increase in revenue of approximately $200 million and a decrease in operating income of approximately $70 million for the year ended December 31, 2016. These changes principally reflect the impact of converting contracts to the cost-to-cost method of accounting as well as changes in the number of performance obligations for certain of our contracts. The impact of adopting ASU 2014-09 on our 2016 results of operations may not be indicative of the impact in future years. We will continue our evaluation of ASU 2014-09 (including how it may impact new contracts we receive as well as new or emerging interpretations of the standard) through the date of adoption.
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 include the dilutive effect of awards granted to employees under stock-based compensation plans.
Investments in Marketable Securities	The company holds a portfolio of marketable securities consisting of securities that are classified as either trading or available-for-sale to partially fund non-qualified employee benefit plans
Derivative Financial Instruments and Hedging Activities	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	We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements.
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 such potential disallowed costs. Such provisions are reviewed periodically using the most recent information available.
Environmental Matters	These amounts are evaluated for recoverability on a routine basis.

Basis of Presentation (Unaudi17

Basis of Presentation (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30 Six Months Ended June 30 $ in millions, except per share data 2017 2016 2017 2016 Operating Income $ 98 $ 137 $ 213 $ 266 Net Earnings (1) 63 89 138 173 Diluted earnings per share (1) 0.36 0.49 0.78 0.95 (1) Based on statutory tax rates
Accumulated Other Comprehensive Loss	The components of accumulated other comprehensive loss are as follows: $ in millions June 30, December 31, Unamortized benefit plan costs, net of tax benefit of $3,317 in 2017 and $3,439 in 2016 $ (5,215 ) $ (5,416 ) Cumulative translation adjustment (132 ) (132 ) Net unrealized gain on marketable securities and cash flow hedges, net of tax 5 2 Total accumulated other comprehensive loss $ (5,342 ) $ (5,546 )

Earnings Per Share, Share Rep18

Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
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 Six Months Ended June 30 2017 2016 December 4, 2014 $ 3,000 18.0 $ 166.70 March 2016 — 1.4 September 16, 2015 $ 4,000 7.3 $ 222.50 1.5 2.0 (1) Includes commissions paid.

Segment Information (Unaudite19

Segment Information (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
Segment Reporting [Abstract]
Sales and operating income by segment	The following table presents sales and operating income by segment: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2017 2016 2017 2016 Sales Aerospace Systems $ 2,970 $ 2,600 $ 5,868 $ 5,174 Mission Systems 2,781 2,690 5,520 5,383 Technology Services 1,175 1,213 2,369 2,427 Intersegment eliminations (551 ) (503 ) (1,115 ) (1,028 ) Total sales 6,375 6,000 12,642 11,956 Operating income Aerospace Systems 315 312 627 598 Mission Systems 374 351 727 704 Technology Services 134 131 265 257 Intersegment eliminations (70 ) (63 ) (140 ) (127 ) Total segment operating income 753 731 1,479 1,432 Net FAS/CAS pension adjustment 137 69 273 143 Unallocated corporate expenses (34 ) (3 ) (63 ) (36 ) Other (1 ) — (2 ) (3 ) Total operating income $ 855 $ 797 $ 1,687 $ 1,536

Income Taxes (Unaudited) (Table

Income Taxes (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Schedule of Income Tax Expense and Effective Income Tax Rates	Three Months Ended June 30 Six Months Ended June 30 $ in millions 2017 2016 2017 2016 Federal and foreign income tax expense $ 255 $ 213 $ 388 $ 333 Effective income tax rate 31.6 % 29.2 % 24.6 % 23.7 %

Fair Value of Financial Instr21

Fair Value of Financial Instruments (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Fair value information of assets and liabilities measured at fair value on a recurring basis	The following table presents the financial assets and liabilities we record at fair value on a recurring basis identified by the level of inputs used to determine fair value: June 30, 2017 December 31, 2016 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities Trading $ 327 $ 1 $ 328 $ 321 $ 2 $ 323 Available-for-sale 12 — 12 7 — 7 Derivatives — 5 5 — 8 8

Commitments and Contingencies22

Commitments and Contingencies (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 and December 31, 2016 : $ in millions Range of Reasonably Possible Future Costs (1) Accrued Costs (2) Deferred Costs (3) June 30, 2017 $389 - $782 $ 393 $ 202 December 31, 2016 379 - 774 385 195 (1) Estimated remediation costs are not discounted to present value. 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 June 30, 2017 , $124 million is recorded in other current liabilities and $269 million is recorded in other non-current liabilities. (3) As of June 30, 2017 , $73 million is deferred in inventoried costs and $129 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)	6 Months Ended
	Jun. 30, 2017
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 June 30 Six Months Ended June 30 Pension Medical and Pension Medical and $ in millions 2017 2016 2017 2016 2017 2016 2017 2016 Components of net periodic benefit cost Service cost $ 114 $ 111 $ 7 $ 7 $ 228 $ 223 $ 13 $ 15 Interest cost 308 321 21 23 617 642 42 47 Expected return on plan assets (472 ) (463 ) (23 ) (22 ) (943 ) (926 ) (45 ) (43 ) Amortization of: Prior service credit (14 ) (15 ) (6 ) (5 ) (29 ) (30 ) (11 ) (11 ) Net loss from previous years 178 179 3 5 356 357 5 8 Net periodic benefit cost $ 114 $ 133 $ 2 $ 8 $ 229 $ 266 $ 4 $ 16
Employer contributions to retirement plans	Contributions made by the company to its retirement plans are as follows: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2017 2016 2017 2016 Defined benefit pension plans $ 28 $ 20 $ 51 $ 47 Medical and life benefit plans 13 18 24 29 Defined contribution plans 77 71 176 158

Stock Compensation Plans and 24

Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Tables)	6 Months Ended
	Jun. 30, 2017
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: Six Months Ended June 30 in millions 2017 2016 RSRs granted 0.1 0.2 RPSRs granted 0.3 0.3 Grant date aggregate fair value $ 91 $ 88
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: Six Months Ended June 30 $ in millions 2017 2016 Minimum aggregate payout amount $ 35 $ 34 Maximum aggregate payout amount 198 193

Basis of Presentation (Unaudi25

Basis of Presentation (Unaudited) (Details 1) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accumulated Other Comprehensive Loss
Unamortized benefit plan costs, net of tax benefit of $3,317 in 2017 and $3,439 in 2016	$ (5,215)		$ (5,215)		$ (5,416)
Cumulative translation adjustment	(132)		(132)		(132)
Net unrealized gain on marketable securities and cash flow hedges, net of tax	5		5		2
Total accumulated other comprehensive loss	(5,342)		(5,342)		(5,546)
Unamortized benefit plan costs - Tax Benefit (expense)	3,317		3,317		3,439
Unamortized benefit plan costs, net actuarial losses, after-tax	5,300		5,300		5,600
Unamortized benefit plan costs, reclassified from other comprehensive income to net earnings	$ 100	$ 100	$ 199	$ 201
Sales [Member] | Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification					200
Operating Income (Loss) [Member] | Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification					$ 70

Basis of Presentation (Unaudi26

Basis of Presentation (Unaudited) (Details 2) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Change in Accounting Estimate [Line Items]
Operating Income (Loss)	$ 855	$ 797	$ 1,687	$ 1,536
Net earnings	$ 552	$ 517	$ 1,192	$ 1,073
Diluted earnings per share	$ 3.15	$ 2.85	$ 6.78	$ 5.88
Contracts Accounted for under Percentage of Completion [Member]
Change in Accounting Estimate [Line Items]
Operating Income (Loss)	$ 98	$ 137	$ 213	$ 266
Net earnings	$ 63	$ 89	$ 138	$ 173
Diluted earnings per share	$ 0.36	$ 0.49	$ 0.78	$ 0.95

Earnings Per Share, Share Rep27

Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Details 1) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	6 Months Ended		12 Months Ended	15 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Sep. 16, 2015	Dec. 04, 2014
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	0	1.4
September 2015 Share Repurchase Program Original Authorization
Share Repurchase [Line Items]
Amount Authorized					$ 4,000
Shares Retired				7.3
Average Cost Per Share				$ 222.50
Shares Repurchased	1.5	2
Share Repurchases - Notes to Table
Shares repurchased amount				$ 1,600
Amount remaining under authorization for share repurchases	$ 2,400			$ 2,400

Earnings Per Share, Share Rep28

Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Details 2) - $ / shares shares in Millions	1 Months Ended			3 Months Ended		6 Months Ended
	May 31, 2017	May 31, 2016	May 31, 2015	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share, Basic and Diluted [Abstract]
Dilutive effect of of stock awards and options granted to employees under stock-based compensation plans				1	1.4	1.1	1.7
Common stock dividends per share, declared (in dollars per share)	$ 1	$ 0.90	$ 0.80			$ 1.90	$ 1.70
Increase in quarterly common stock dividend (percent)	11.00%	13.00%

Segment Information (Unaudite29

Segment Information (Unaudited) (Details 1) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)segment	Jun. 30, 2016USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			3
Sales	$ 6,375	$ 6,000	$ 12,642	$ 11,956
Operating income	855	797	1,687	1,536
Operating Segments [Member]
Segment Reporting Information [Line Items]
Operating income	753	731	1,479	1,432
Operating Segments [Member] | Aerospace Systems [Member]
Segment Reporting Information [Line Items]
Sales	2,970	2,600	5,868	5,174
Operating income	315	312	627	598
Operating Segments [Member] | Mission Systems [Member]
Segment Reporting Information [Line Items]
Sales	2,781	2,690	5,520	5,383
Operating income	374	351	727	704
Operating Segments [Member] | Technology Services [Member]
Segment Reporting Information [Line Items]
Sales	1,175	1,213	2,369	2,427
Operating income	134	131	265	257
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Sales	551	503	1,115	1,028
Operating income	70	63	140	127
Net FAS/CAS pension adjustment Income (Expense) [Member]
Segment Reporting Information [Line Items]
Operating income	137	69	273	143
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Operating income	(34)	(3)	(63)	(36)
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Operating income	$ (1)	$ 0	$ (2)	$ (3)

Income Taxes (Unaudited) (Detai

Income Taxes (Unaudited) (Details 1) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2018
Income Tax Contingency [Line Items]
Decrease in Unrecognized Tax Benefits is Reasonably Possible	$ 110		$ 110
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount			47	$ 84
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount			22
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount			42
Income Tax Expense (Benefit)	$ 255	$ 213	$ 388	$ 333
Effective income tax rate	31.60%	29.20%	24.60%	23.70%
Maximum | Scenario, Forecast [Member]
Income Tax Contingency [Line Items]
Tax Adjustments, Settlements, and Unusual Provisions					$ (30)

Fair Value of Financial Instr31

Fair Value of Financial Instruments (Unaudited) (Details 1) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	$ 327	$ 321
Available-for-sale securities	12	7
Derivative Assets (Liabilities), at Fair Value, Net	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	1	2
Available-for-sale securities	0	0
Derivative Assets (Liabilities), at Fair Value, Net	5	8
Fair Value, Measurements, Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	328	323
Available-for-sale securities	12	7
Derivative Assets (Liabilities), at Fair Value, Net	$ 5	$ 8

Fair Value of Financial Instr32

Fair Value of Financial Instruments (Unaudited) (Details 2) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt and Capital Lease Obligations	$ 7,100	$ 7,100
Long-term Debt, Fair Value	7,800	7,600
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative, Notional Amount	150	147
Cash Flow Hedging [Member]
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative, Notional Amount	$ 13	$ 0

Investigations, Claims and Li33

Investigations, Claims and Litigation (Unaudited) (Details) € in Millions, BRL in Millions, $ in Millions	2 Months Ended	12 Months Ended	45 Months Ended		46 Months Ended	47 Months Ended
	Sep. 30, 2013Defendant	Dec. 31, 2007USD ($)	Jun. 30, 2017EUR (€)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Jun. 30, 2017BRL	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)	May 04, 2012USD ($)
Loss Contingencies
Receivables, unpaid long-term contracts				$ 4,280			$ 4,280	$ 3,299
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	27
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

Commitments and Contingencies34

Commitments and Contingencies (Unaudited) (Details) £ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017GBP (£)	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Site Contingency [Line Items]
Accrual for Environmental Remediation Costs						$ 393,000,000	$ 385,000,000
Recorded Third-Party Environmental Recoveries, Amount						202,000,000	195,000,000
Financial Arrangements
Standby Unused Letters Of Credit and bank guarantees						202,000,000
Surety Bond Outstanding						198,000,000
Operating leases
Rental expense for operating leases, net of immaterial amounts of sublease rental income	$ 65,000,000	$ 68,000,000	$ 154,000,000	$ 159,000,000
Line of Credit Facility [Line Items]
Debt Instrument, Covenant Compliance			the company was in compliance with all covenants under its credit agreements.
Other Current Liabilities [Member]
Site Contingency [Line Items]
Accrual for Environmental Remediation Costs						124,000,000
Other Noncurrent Liabilities [Member]
Site Contingency [Line Items]
Accrual for Environmental Remediation Costs						269,000,000
Inventoried Costs [Member]
Site Contingency [Line Items]
Recorded Third-Party Environmental Recoveries, Amount						73,000,000
Other Noncurrent Assets [Member]
Site Contingency [Line Items]
Recorded Third-Party Environmental Recoveries, Amount						129,000,000
Two Year Term [Member] [Domain]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity					£ 120	152,000,000
Line of Credit Outstanding					£ 110	139,000,000
Line of Credit Facility, Interest Rate Description			LIBOR plus 1.10 percent
Five Year Term [Member] [Domain]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity						1,600,000,000
Line of Credit Outstanding						0
Environmental Issue [Member] | Maximum
Site Contingency [Line Items]
Loss Contingency, Estimate of Possible Loss						782,000,000	774,000,000
Environmental Issue [Member] | Minimum
Site Contingency [Line Items]
Loss Contingency, Estimate of Possible Loss						$ 389,000,000	$ 379,000,000

Retirement Benefits (Unaudite35

Retirement Benefits (Unaudited) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]
Defined contribution plan, employer contributions	$ 77	$ 71	$ 176	$ 158
Pension Benefits
Components of Net Periodic Benefit Cost
Service cost	114	111	228	223
Interest cost	308	321	617	642
Expected return on plan assets	(472)	(463)	(943)	(926)
Prior service credit	(14)	(15)	(29)	(30)
Net loss from previous years	178	179	356	357
Net periodic benefit cost	114	133	229	266
Defined Benefit Plan, Actual Contributions in Current Fiscal Year [Abstract]
Defined benefit plan, contributions by Employer	28	20	51	47
Medical and Life Benefits
Components of Net Periodic Benefit Cost
Service cost	7	7	13	15
Interest cost	21	23	42	47
Expected return on plan assets	(23)	(22)	(45)	(43)
Prior service credit	(6)	(5)	(11)	(11)
Net loss from previous years	3	5	5	8
Net periodic benefit cost	2	8	4	16
Defined Benefit Plan, Actual Contributions in Current Fiscal Year [Abstract]
Defined benefit plan, contributions by Employer	$ 13	$ 18	$ 24	$ 29

Stock Compensation Plans and 36

Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Details) - USD ($) shares in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Rights and Restricted Performance Stock Rights Grant Date Aggregate Fair Value	$ 91	$ 88
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	0.1	0.2
Vesting period	3 years
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	0.3	0.3
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	$ 34
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	$ 198	$ 193