Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 20, 2018 | |
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 | 2,018 | |
Document Period End Date | Jun. 30, 2018 | |
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 | 174,123,419 |
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, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Sales | ||||
Product | $ 4,790 | $ 4,037 | $ 9,079 | $ 8,034 |
Service | 2,329 | 2,436 | 4,775 | 4,849 |
Total sales | 7,119 | 6,473 | 13,854 | 12,883 |
Operating costs and expenses | ||||
Product | 3,694 | 3,037 | 6,959 | 6,020 |
Service | 1,863 | 1,877 | 3,768 | 3,744 |
General and administrative expenses | 739 | 686 | 1,450 | 1,384 |
Operating income | 823 | 873 | 1,677 | 1,735 |
Other (expense) income | ||||
Interest expense | (144) | (76) | (287) | (151) |
Net FAS (non-service) Pension Benefit (Expense) | 125 | (17) | 245 | (35) |
Other, net | 45 | 32 | 85 | 51 |
Earnings before income taxes | 849 | 812 | 1,720 | 1,600 |
Federal and foreign income tax expense | 160 | 257 | 292 | 395 |
Net earnings | $ 689 | $ 555 | $ 1,428 | $ 1,205 |
Basic earnings per share | ||||
Basic earnings per share | $ 3.95 | $ 3.18 | $ 8.19 | $ 6.90 |
Weighted-average common shares outstanding, in millions | 174.5 | 174.5 | 174.4 | 174.7 |
Diluted earnings per share | ||||
Diluted earnings per share | $ 3.93 | $ 3.16 | $ 8.14 | $ 6.85 |
Weighted-average diluted shares outstanding, in millions | 175.4 | 175.5 | 175.4 | 175.8 |
Net earnings (from above) | $ 689 | $ 555 | $ 1,428 | $ 1,205 |
Change in unamortized benefit plan costs, net of tax | 86 | 102 | 172 | 201 |
Change in cumulative translation adjustment | 0 | (4) | (2) | 0 |
Other, net | (3) | 1 | (4) | 3 |
Other comprehensive income, net of tax | 83 | 99 | 166 | 204 |
Comprehensive income | $ 772 | $ 654 | $ 1,594 | $ 1,409 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||||
Cash and cash equivalents | $ 1,539 | $ 11,225 | $ 1,383 | $ 2,541 |
Accounts receivable, net | 1,815 | 1,054 | ||
Unbilled receivables, net | 5,272 | 3,465 | ||
Inventoried costs, net | 690 | 398 | ||
Prepaid expenses and other current assets | 406 | 445 | ||
Total current assets | 9,722 | 16,587 | ||
Property, plant and equipment, net of accumulated depreciation of $5,187 for 2018 and $5,066 for 2017 | 5,864 | 4,225 | ||
Goodwill | 18,747 | 12,455 | ||
Intangible Assets, net | 1,329 | 52 | ||
Deferred tax assets | 179 | 447 | ||
Other non-current assets | 1,537 | 1,362 | ||
Total assets | 37,378 | 35,128 | ||
Liabilities | ||||
Trade accounts payable | 1,824 | 1,661 | ||
Accrued employee compensation | 1,451 | 1,382 | ||
Advance payments and amounts in excess of costs incurred | 1,711 | 1,761 | ||
Other current liabilities | 2,847 | 2,288 | ||
Total current liabilities | 7,833 | 7,092 | ||
Long-term debt, net of current portion of $744 for 2018 and $867 for 2017 | 14,387 | 14,399 | ||
Pension and other post-retirement benefit plan liabilities | 5,755 | 5,511 | ||
Other non-current liabilities | 1,176 | 994 | ||
Total liabilities | 29,151 | 27,996 | ||
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: 2018—174,254,250 and 2017—174,085,619 | 174 | 174 | ||
Paid-in capital | 0 | 44 | ||
Retained earnings | 13,669 | 11,632 | ||
Accumulated other comprehensive loss | (5,616) | (4,718) | ||
Total shareholders’ equity | 8,227 | 7,132 | $ 6,036 | |
Total liabilities and shareholders’ equity | $ 37,378 | $ 35,128 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Financial Position (Unaudited) (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ (5,187) | $ (5,066) |
Long-term Debt, Current Maturities | $ 744 | $ 867 |
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 | 174,254,250 | 174,085,619 |
Common Stock, shares outstanding | 174,254,250 | 174,085,619 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities | ||
Net earnings | $ 1,428 | $ 1,205 |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 281 | 213 |
Stock-based compensation | 53 | 42 |
Deferred income taxes | (17) | (39) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (145) | (509) |
Unbilled receivables, net | (570) | (793) |
Inventoried costs, net | (73) | (54) |
Prepaid expenses and other assets | 57 | (34) |
Accounts payable and other liabilities | (422) | (172) |
Income taxes payable | 186 | 90 |
Retiree benefits | (127) | 165 |
Other, net | (13) | (46) |
Net cash provided by operating activities | 638 | 68 |
Investing activities | ||
Acquisition of Orbital ATK, net of cash acquired | (7,657) | 0 |
Capital expenditures | (504) | (433) |
Other, net | 2 | 7 |
Net cash used in investing activities | (8,159) | (426) |
Financing activities | ||
Payments of long-term debt | (1,550) | 0 |
Payments to credit facilities | (314) | 0 |
Net borrowings on commercial paper | 249 | 0 |
Common stock repurchases | (41) | (367) |
Cash dividends paid | (407) | (341) |
Payments of employee taxes withheld from share-based awards | (80) | (91) |
Other, net | (22) | (1) |
Net cash used in financing activities | (2,165) | (800) |
Decrease in cash and cash equivalents | (9,686) | (1,158) |
Cash and cash equivalents, beginning of year | 11,225 | 2,541 |
Cash and cash equivalents, end of period | $ 1,539 | $ 1,383 |
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, 2016 | $ 175 | $ 0 | $ 10,734 | $ (5,546) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Impact from adoption of ASU 2018-02 and ASU 2016-01 | 0 | 0 | |||
Common stock repurchased | (2) | 0 | (351) | ||
Net earnings | $ 1,205 | 1,205 | |||
Dividends declared | (336) | ||||
Stock compensation | 1 | 0 | (48) | ||
Other comprehensive income, net of tax | 204 | 204 | |||
End of period at Jun. 30, 2017 | $ 6,036 | 174 | 0 | 11,204 | (5,342) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cash dividends declared per share | $ 1.90 | ||||
Beginning of year at Dec. 31, 2017 | $ 7,132 | 174 | 44 | 11,632 | (4,718) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Impact from adoption of ASU 2018-02 and ASU 2016-01 | 1,064 | (1,064) | |||
Common stock repurchased | 0 | (34) | (15) | ||
Net earnings | 1,428 | 1,428 | |||
Dividends declared | (405) | ||||
Stock compensation | 0 | (10) | (35) | ||
Other comprehensive income, net of tax | 166 | 166 | |||
End of period at Jun. 30, 2018 | $ 8,227 | $ 174 | $ 0 | $ 13,669 | $ (5,616) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cash dividends declared per share | $ 2.30 |
Basis of Presentation (Unaudite
Basis of Presentation (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
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 (the “financial statements”) include the accounts of Northrop Grumman Corporation and its subsidiaries and joint ventures or other investments for which we consolidate the financial results (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. On June 6, 2018 (the “Merger date”), the company completed its previously announced acquisition of Orbital ATK, Inc. (“Orbital ATK”) (the “Merger”) . On the Merger date, Orbital ATK became a wholly-owned subsidiary of the company and its name was changed to Northrop Grumman Innovation Systems, Inc., which we established as a new, fourth business sector (“Innovation Systems”) . The operating results of Innovation Systems subsequent to the Merger date have been included in the company's consolidated results of operations. See N ote 2 to the financial statements for further information regarding the acquisition of Orbital ATK. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”) and in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. The 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 financial statements are not necessarily indicative of results that may be expected for the entire year. These 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, 2017 (2017 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. Similarly, Innovation Systems uses a “fiscal” calendar by closing its books on a Sunday near these quarter-end dates and will continue this practice until its business processes are aligned with the company’s. The Friday and Sunday closing dates noted herein are both labeled as June 30, consistent with our calendar convention described above. This practice is only used at interim periods within a reporting year. As previously announced, effective January 1, 2018, we adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers , and 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 , using the full retrospective method. The adoption of these standards are reflected in the amounts and disclosures set forth in this Form 10-Q and the effect of these standards on the company’s unaudited condensed consolidated statements of earnings and comprehensive income for the three and six months ended June 30, 2017 and unaudited condensed consolidated statement of financial position as of December 31, 2017 is reflected in Note 12 . Accounting Estimates Preparation of the financial statements 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. The company classifies sales as product or service based on the predominant attributes of each contract. Under ASC Topic 606, the company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. In most cases, goods and services provided under the company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the company provides multiple distinct goods or services to a customer, most commonly when a contract covers multiple phases of the product lifecycle (development, production, maintenance and/or support). In those cases, the company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using the cost plus a reasonable margin approach of ASC Topic 606. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not within the scope of ASC Topic 606. Likewise, our accounting for costs to obtain or fulfill a contract was not significantly impacted by the adoption of ASC Topic 606 as these costs are not material. A contract modification exists when the parties to a contract approve a change in the scope or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the company’s contract modifications are for goods or services that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative estimate-at-completion (EAC) adjustment. The company recognizes revenue as control is transferred to the customer, either over time or at a point in time. In general, our U.S. government contracts contain termination for convenience clauses that generally entitle the customer to goods produced and/or in-process. Similarly, our non-U.S. government contracts generally contain contractual termination clauses or entitle the company to payment for work performed to date for goods and services that do not have an alternative use. As control is effectively transferred as we perform on our contracts and we are typically entitled to cost plus a reasonable margin for work in process if the contract is terminated for convenience, we generally recognize revenue over time on a cost-to-cost basis (cost incurred relative to total cost estimated at completion) as the company believes this represents the most appropriate measurement towards satisfaction of its performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e. typically upon delivery). Contract Estimates Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total revenue and cost at completion. Contract sales may include estimates of variable consideration, including cost or performance incentives (such as award and incentive fees), contract claims and requests for equitable adjustment (REAs). Variable consideration is included in total estimated sales to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We estimate variable consideration at the most likely amount to which we expect to be entitled. We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis. Cumulative EAC adjustments represent the cumulative effect of the changes on current and prior periods; sales and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss is expected to result on an individual performance obligation, the entire amount of the estimable future loss, including an allocation of general and administrative (G&A) 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 other current liabilities. Significant EAC adjustments on a single contract could have a material effect on the company’s financial statements. When such adjustments occur, we generally disclose the nature, underlying conditions and financial impact of the adjustments. During the three months ended June 30, 2018 , the company recognized $69 million of favorable EAC adjustments on multiple restricted programs at Aerospace Systems. 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 2018 2017 2018 2017 Operating Income $ 143 $ 102 $ 259 $ 243 Net Earnings (1) 113 66 205 158 Diluted earnings per share (1) 0.64 0.38 1.17 0.90 (1) Based on statutory tax rates in effect for each period presented. Revenue recognized from performance obligations satisfied in previous reporting periods was $156 million and $289 million for the three and six months ended June 30, 2018 , respectively, and $101 million and $246 million for the three and six months ended June 30, 2017 , respectively. Backlog Backlog represents the future sales we expect to recognize on firm orders received by the company and is equivalent to the company’s remaining performance obligations at the end of each period. It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog. Unexercised contract options and indefinite delivery indefinite quantity (IDIQ) contracts are not included in backlog until the time the option or IDIQ task order is exercised or awarded. Company backlog as of June 30, 2018 was $52.2 billion and includes $8.7 billion of Innovation Systems backlog (approximately $500 million of legacy Orbital ATK backlog related to contracts with legacy Northrop Grumman sectors was eliminated in connection with the Merger). We expect to recognize approximately 50 percent and 75 percent of our June 30, 2018 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. Contract Assets and Liabilities For each of the company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Fixed-price contracts are typically billed to the customer either using progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract assets consist of unbilled receivables, primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Unbilled receivables are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-cycle nature of many of our contracts. Accumulated contract costs in unbilled receivables include direct production costs, factory and engineering overhead, production tooling costs, and allowable G&A. Unbilled receivables also include certain estimates of variable consideration described above. These contract assets are not considered a significant financing component of the company’s contracts as the payment terms are intended to protect the customer in the event the company does not perform on its obligations under the contract. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to the satisfaction of the company’s obligations on the contract. These amounts are recorded as contract liabilities until such obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. Net contract assets (liabilities) are as follows: $ in millions June 30, December 31, $ Change % Change Unbilled receivables, net $ 5,272 $ 3,465 $ 1,807 52 % Advance payments and amounts in excess of costs incurred (1,711 ) (1,761 ) 50 (3 )% Net contract assets (liabilities) $ 3,561 $ 1,704 $ 1,857 109 % The amount of revenue recognized for the three and six months ended June 30, 2018 that was included in the December 31, 2017 contract liability balance was $364 million and $1.1 billion , respectively. The amount of revenue recognized for the three and six months ended June 30, 2017 that was included in the December 31, 2016 contract liability balance was $272 million and $850 million , respectively. The change in the balances of the company’s contract assets and liabilities primarily results from timing differences between company performance and customer payments. The increase in net contract assets during the six months ended June 30, 2018 , is principally due to the addition of $1.1 billion of net contract assets from Innovation Systems and higher sales on restricted programs at Aerospace Systems. Disaggregation of Revenue See Note 11 for information regarding the company’s sales by customer type, contract type and geographic region for each of our segments. We believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Other Purchased Intangible Assets Purchased intangible asset balances are included in the identifiable assets of their assigned business segment. Beginning in 2018, the company includes the amortization of purchased intangible assets in unallocated corporate expense within operating income as such amortization is no longer considered part of management’s evaluation of segment operating performance. The company’s customer-related intangible assets are amortized over their respective useful lives typically based on the pattern in which the future economic benefits of the intangible assets are expected to be consumed. Other purchased intangible assets are generally amortized on a straight-line basis over their estimated useful lives. 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 $1,940 for 2018 and $3,056 for 2017 $ (5,474 ) $ (4,586 ) Cumulative translation adjustment (138 ) (136 ) Other, net (4 ) 4 Total accumulated other comprehensive loss $ (5,616 ) $ (4,718 ) Unamortized benefit plan costs as of June 30, 2018 reflect a reclassification from accumulated other comprehensive loss to retained earnings of $1.1 billion of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “2017 Tax Act”). This reclassification resulted from the company’s early adoption of ASU 2018-02 on January 1, 2018. See “Accounting Standards Updates” below for more information. Unamortized benefit plan costs consist primarily of net after-tax actuarial losses totaling $5.6 billion and $4.7 billion as of June 30, 2018 and December 31, 2017 , respectively. Net actuarial gains or losses are redetermined 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 $86 million and $172 million , net of taxes, for the three and six months ended June 30, 2018 , respectively, and were $100 million and $199 million , net of taxes, for the three and six months ended June 30, 2017 , 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 9 for further information. Reclassifications from accumulated other comprehensive loss to net earnings relating to cumulative translation adjustments and effective cash flow hedges were not material for the three and six months ended June 30, 2018 and 2017 . Related Party Transactions The company had no material related party transactions in any period presented. Accounting Standards Updates On February 14, 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . ASU 2018-02 allows companies to reclassify stranded tax effects resulting from the 2017 Tax Act from accumulated other comprehensive income to retained earnings. As described above, the company elected to early adopt ASU 2018-02 on January 1, 2018, which resulted in a reclassification of $1.1 billion of stranded tax effects, principally related to our unamortized benefit plan costs, from accumulated other comprehensive loss to retained earnings. This reclassification included $73 million of other income tax effects related to a reduction in the federal benefit associated with state taxes. Adoption of ASU 2018-02 did not have a material impact on the company’s results of operations and/or cash flows. On March 10, 2017, the FASB issued 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 is eligible for asset capitalization. We adopted ASU 2017-07 on January 1, 2018 using the retrospective method. See Note 12 for information regarding the effect of adopting ASU 2017-07 on our unaudited condensed consolidated statement of earnings and comprehensive income for the three and six months ended June 30, 2017. Adoption of ASU 2017-07 did not 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 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 may be adopted using a modified retrospective transition method that applies the new lease requirements at the beginning of the earliest period presented in the financial statements. The FASB has proposed a change that would allow a company to elect an optional transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of adoption. We expect to adopt the standard on January 1, 2019 using the proposed optional transition method if finalized in its current form. As a result of the Merger, we are currently reevaluating the expected impact of ASU 2016-02 on the company’s consolidated financial position and financial statement disclosures. We do not expect ASU 2016-02 to have a material impact on our annual results of operations and/or cash flows. On January 5, 2016, the FASB issued ASU No. 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 requires equity investments that are not accounted for under the equity method of accounting or that do not result in consolidation of the investee to be measured at fair value with changes recognized in net earnings. ASU 2016-01 also eliminates the available-for-sale classification for equity investments that recognized changes in fair value as a component of other comprehensive income. We adopted ASU 2016-01 on January 1, 2018 using the modified retrospective method, which resulted in a $4 million (net of tax) cumulative-effect adjustment from accumulated other comprehensive loss to retained earnings. Adoption of ASU 2016-01 did not have a material impact on our results of operations and/or cash flows. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . Topic 606 supersedes previous 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. The primary impact of the adoption of ASC Topic 606 was that, in most cases, the accounting for those contracts where we previously recognized revenue as units were delivered changed under ASC Topic 606 such that we now recognize revenue as costs are incurred. In addition, for certain of our contracts, there is a change in the number of performance obligations under ASC Topic 606, which has altered the timing of revenue and margin recognition. We adopted ASC Topic 606 on January 1, 2018 using the full retrospective method. We applied the transition practical expedient related to remaining performance obligations for reporting periods presented before the date of initial application. No other practical expedients were applied. The cumulative effect of adopting ASC Topic 606 was a $148 million increase to retained earnings at January 1, 2016. See Note 12 for information regarding the effect of adopting ASC Topic 606 on our unaudited condensed consolidated statement of earnings and comprehensive income for the three and six months ended June 30, 2017 and unaudited condensed consolidated statement of financial position as of December 31, 2017. Other accounting standards updates adopted and/or issued, but not effective until after June 30, 2018, 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. |
Business Acquisition (Unaudited
Business Acquisition (Unaudited) Business Acquisition (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | ACQUISITION OF ORBITAL ATK On June 6, 2018 , the company completed its previously announced acquisition of Orbital ATK, a global leader in aerospace and defense technologies, by acquiring all of the outstanding shares of Orbital ATK for a purchase price of $7.7 billion in cash. On the Merger date, Orbital ATK became a wholly-owned subsidiary of the company and its name was changed to Northrop Grumman Innovation Systems, Inc. We established Innovation Systems as a new, fourth business sector , whose main products include launch vehicles and related propulsion systems; missile products, subsystems and defense electronics; precision weapons, armament systems and ammunition; satellites and associated space components and services; and advanced aerospace structures. The acquisition was financed with proceeds from the company’s debt financing completed in October 2017 and cash on hand. We believe this acquisition will enable us to broaden our capabilities and offerings, provide additional innovative solutions to meet our customers’ emerging requirements, create value for shareholders and provide expanded opportunities for our combined employees. The operating results of Innovation Systems subsequent to the Merger date have been included in the company's consolidated results of operations. Innovation Systems recognized sales of $400 million , operating income of $39 million and net earnings of $30 million for the three and six months ended June 30, 2018. The company recognized $23 million and $29 million of acquisition-related costs that were expensed as incurred during the three and six months ended June 30, 2018, respectively. These costs are included in Product and Service cost in the unaudited condensed consolidated statement of earnings and comprehensive income. Preliminary Purchase Price Allocation The acquisition was accounted for as a purchase business combination. As such, the company recorded the assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the fair value of assets acquired and liabilities assumed recorded as goodwill. T he company has completed a preliminary analysis to determine those fair values, and the amounts recorded as of June 30, 2018 reflect management’s initial assessment of fair value as of the Merger date. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. In some cases, the company used discounted cash flow analyses, which were based on our best estimate of future sales, earnings and cash flows after considering such factors as general market conditions, customer budgets, existing firm and future orders, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results. The company expects substantially to finalize its purchase price allocation by the end of 2018 after we have further analyzed and assessed a number of the factors used in establishing the fair values of assets acquired and liabilities assumed as of the Merger date including, but not limited to, contractual and operational factors underlying the customer-related intangible assets and property, plant and equipment; details surrounding tax matters; and assumptions underlying certain existing or potential reserves, such as those for legal and environmental matters. The final fair value determination could result in material adjustments to the values presented in the preliminary purchase price allocation table below. The Merger date fair value of the consideration transferred totaled $7.7 billion in cash, which was comprised of the following: ($ in millions, except per share amounts) Purchase price Shares of Orbital ATK common stock outstanding as of the Merger date 57,562,152 Cash consideration per share of Orbital ATK common stock $ 134.50 Total purchase price $ 7,742 The following preliminary purchase price allocation table presents the company’s initial estimate of the fair values of assets acquired and liabilities assumed at the Merger date: ($ in millions) As of June 6, 2018 Cash and cash equivalents $ 85 Accounts receivable, net 616 Unbilled receivables, net 1,237 Inventoried costs, net 220 Other current assets 193 Property, plant and equipment 1,500 Goodwill 6,295 Intangible assets 1,305 Deferred tax assets (230 ) Other non-current assets 131 Total assets acquired 11,352 Trade accounts payable (397 ) Accrued employee compensation (158 ) Advance payments and amounts in excess of costs incurred (222 ) Below market contracts (1) (155 ) Other current liabilities (298 ) Long-term debt (1,687 ) Pension and other post-retirement benefit plan liabilities (557 ) Other non-current liabilities (136 ) Total liabilities assumed (3,610 ) Total purchase price $ 7,742 (1) Included in Other current liabilities. Below market contracts represent liabilities on certain acquired programs where the expected costs at completion exceed the expected sales under contract. We measured these liabilities based on the estimated price to transfer the obligations to a market participant at the Merger date plus a reasonable profit margin. These liabilities will be reduced as the company incurs costs to complete its performance obligations on the underlying programs. This reduction will be included in sales and is estimated as follows: $52 million in 2018, $70 million in 2019, $32 million in 2020 and $1 million in 2021. The following table presents a preliminary summary of purchased intangible assets and their related estimated useful lives: Fair Value (in millions) Estimated Useful Life in Years Customer contracts $ 1,040 9 Commercial customer relationships 265 13 Total customer-related intangible assets $ 1,305 The preliminary purchase price allocation resulted in the recognition of $6.3 billion of goodwill, a majority of which was allocated to the Innovation Systems sector (refer to Note 5 ). The goodwill recognized is attributable to expected revenue synergies generated by the integration of Aerospace Systems, Mission Systems and Technology Services products and technologies with those of legacy Orbital ATK, synergies resulting from the consolidation or elimination of certain costs, and intangible assets that do not qualify for separate recognition, such as the assembled workforce of Orbital ATK. None of the goodwill is expected to be deductible for tax purposes. Supplemental Pro Forma Information The following table presents unaudited pro forma financial information as if Orbital ATK had been included in our results as of January 1, 2017: Three Months Ended June 30 Six Months Ended June 30 ($ in millions, except per share amounts) 2018 2017 2018 2017 Sales $ 8,078 $ 7,555 $ 16,078 $ 15,039 Net earnings 791 572 1,615 1,225 Basic earnings per share 4.53 3.28 9.26 7.01 Diluted earnings per share 4.51 3.26 9.21 6.97 The unaudited supplemental pro forma financial data has been calculated after applying our accounting policies and adjusting the historical results of Orbital ATK with pro forma adjustments, net of tax, that assume the acquisition occurred on January 1, 2017. Significant pro forma adjustments include the following: 1. The impact of the adoption of ASC Topic 606 on Orbital ATK’s historical sales of $2 million and $21 million , and cost of sales of $2 million and $9 million , for the three and six months ended June 30, 2017. 2. The elimination of intercompany sales and costs of sales between the company and Orbital ATK of $33 million and $80 million for the three and six months ended June 30, 2018 and $35 million and $65 million for the three and six months ended June 30, 2017. 3. The elimination of nonrecurring transaction costs incurred by the company and Orbital ATK in connection with the Merger of $64 million and $71 million for the three and six months ended June 30, 2018. 4. The recognition of additional depreciation expense, net of removal of historical depreciation expense, of $7 million for the three and six months ended June 30, 2018, and $8 million and $10 million for the three and six months ended June 30, 2017, respectively, related to the step-up in fair value of acquired property, plant and equipment. 5. Additional interest expense related to the debt issued to finance the Merger, including amortization of the debt issuance costs associated with the newly issued debt, of $66 million and $133 million for the three and six months ended June 30, 2017. Interest expense and amortization of debt issuance costs have been included in the company's historical financial statements since the date of issuance (October 12, 2017). 6. The recognition of additional amortization expense, net of removal of historical amortization expense, of $34 million and $92 million for the three and six months ended June 30, 2018, respectively, and $65 million and $130 million for the three and six months ended June 30, 2017, respectively, related to the fair value of acquired intangible assets. 7. The elimination of Orbital ATK's historical amortization of net actuarial losses and prior service credits and impact of the revised pension and other post-retirement net periodic benefit cost as determined under the company’s plan assumptions of $20 million and $51 million for the three and six months ended June 30, 2018 and $29 million and $54 million for the three and six months ended June 30, 2017. The unaudited pro forma financial information does not reflect the potential realization of revenue synergies or cost savings, nor does it reflect other costs relating to the integration of the two companies. This pro forma financial information should not be considered indicative of the results that would have actually occurred if the acquisition had been consummated on January 1, 2017, nor are they indicative of future results. |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
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 primarily include the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 0.9 million shares and 1.0 million shares for the three and six months ended June 30, 2018 , respectively. 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. Share Repurchases On September 16, 2015, the company’s board of directors authorized a 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. As of June 30, 2018 , repurchases under the 2015 Repurchase Program totaled $1.7 billion ; $2.3 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 2018 2017 September 16, 2015 $ 4,000 7.6 $ 224.82 0.2 1.5 (1) Includes commissions paid. Dividends on Common Stock In May 2018, the company increased the quarterly common stock dividend 9 percent to $1.20 per share from the previous amount of $1.10 per share. In January 2018, the company increased the quarterly common stock dividend 10 percent to $1.10 per share from the previous amount of $1.00 per share. 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. |
Income Taxes (Unaudited)
Income Taxes (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Three Months Ended June 30 Six Months Ended June 30 $ in millions 2018 2017 2018 2017 Federal and foreign income tax expense $ 160 $ 257 $ 292 $ 395 Effective income tax rate 18.8 % 31.7 % 17.0 % 24.7 % Current Quarter The company’s effective tax rate of 18.8 percent for the three months ended June 30, 2018 was lower as compared with the same period in 2017 principally due to the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent as a result of the 2017 Tax Act. In addition, the company’s effective tax rate for the three months ended June 30, 2018 was lower than the statutory tax rate principally due to $22 million of tax benefits associated with research credits. Year to Date The company’s effective tax rate of 17.0 percent for the six months ended June 30, 2018 was lower as compared with the same period in 2017 principally due to the reduction of the U.S. corporate income tax rate described above. Both periods reflect comparable tax benefits associated with research credits. In addition, the company’s effective tax rate for the six months ended June 30, 2018 includes $26 million of excess tax benefits related to employee share-based compensation. The company’s effective tax rate for the six months ended June 30, 2017 included $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 $31 million of tax benefits associated with domestic manufacturing deductions. In December 2017, the 2017 Tax Act was enacted. The 2017 Tax Act includes a number of changes to previous U.S. tax laws that impact the company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The company recognized the income tax effects of the 2017 Tax Act in the financial statements included in its 2017 Annual Report on Form 10-K in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes , in the reporting period in which the 2017 Tax Act was signed into law. During the six months ended June 30, 2018 , the company did not recognize any changes to the provisional amounts recorded in its 2017 Annual Report on Form 10-K in connection with the 2017 Tax Act as the company is continuing to collect the information necessary to complete those calculations. We expect to finalize our analysis in the second half of the year as we complete our federal and state tax returns. In connection with the Merger, the company has initially recognized an increase in unrecognized tax benefits of approximately $150 million for matters associated with Innovation Systems, principally related to federal and state research credits. In addition, in the second quarter of 2018, we increased our unrecognized tax benefits related to our methods of accounting associated with the 2017 Tax Act by approximately $50 million and it is reasonably possible that within the next twelve months those unrecognized tax benefits may increase by up to an additional $100 million . We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. The Northrop Grumman 2014-2015 federal tax returns and refund claims related to its 2007-2011 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 examination of the 2014-2015 tax years, which may result in reductions of our unrecognized tax benefits up to $115 million and income tax expense up to $30 million . In addition, Innovation Systems federal tax returns for the year ended March 31, 2015 and nine-month transition period ended December 31, 2015 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 examination of these periods, which may result in reductions of our unrecognized tax benefits up to $35 million and income tax expense up to $30 million . |
Goodwill and Other Purchased In
Goodwill and Other Purchased Intangible Assets (Unaudited) Goodwill and Other Purchased Intangible Assets (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS Goodwill As discussed in Note 2 , Innovation Systems was established as a new, fourth business sector of the company. The Merger resulted in the recognition of $6.3 billion of goodwill, a majority of which was allocated to the Innovation Systems sector. A portion of this goodwill was allocated to the company’s other sectors based on expected revenue synergies generated by the integration of their products and technologies with those of Innovation Systems. The amount of goodwill recognized and allocated to the sectors is subject to change, pending the final determination of the fair value of assets acquired and liabilities assumed in connection with the Merger (see Note 2 ). Changes in the carrying amounts of goodwill were as follows: $ in millions Aerospace Systems Innovation Systems Mission Systems Technology Services Total Balance as of December 31, 2017 $ 3,742 $ — $ 6,696 $ 2,017 $ 12,455 Acquisition of Orbital ATK 418 5,329 469 79 6,295 Other (1) — — (1 ) (2 ) (3 ) Balance as of June 30, 2018 $ 4,160 $ 5,329 $ 7,164 $ 2,094 $ 18,747 (1) Other consists primarily of adjustments for foreign currency translation. Accumulated goodwill impairment losses at June 30, 2018 and December 31, 2017 , totaled $570 million at the Aerospace Systems segment. Purchased Intangible Assets Net customer-related and other intangible assets, including the preliminary fair value of purchased intangible assets acquired in the Merger, are as follows: June 30, December 31, 2017 $ in millions Gross customer-related and other intangible assets $ 3,138 $ 1,833 Less accumulated amortization (1,809 ) (1,781 ) Net customer-related and other intangible assets $ 1,329 $ 52 Amortization expense for the three and six months ended June 30, 2018 was $24 million and $28 million , respectively, and was $3 million and $7 million for the three and six months ended June 30, 2017 , respectively. The company’s customer-related intangible assets are amortized over their respective useful lives based on the pattern in which the future economic benefits of the intangible assets are expected to be consumed. Other purchased intangible assets are amortized on a straight-line basis. The company’s purchased intangible assets are being amortized over an aggregate weighted-average period of 12 years. As of June 30, 2018 , the expected future amortization of purchased intangibles for each of the next five years is as follows: $ in millions 2018 (remainder of year) $ 162 2019 284 2020 232 2021 150 2022 105 The company’s expected future amortization expense is subject to change, pending the final determination of the fair value of intangible assets acquired in the Merger (see Note 2 ). |
Fair Value of Financial Instrum
Fair Value of Financial Instruments (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
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 to partially fund non-qualified employee benefit plans. A portion of these securities are held in common/collective trust funds and are measured at fair value using net asset value (NAV) per share as a practical expedient; and therefore are not required to be categorized in the fair value hierarchy table below. Marketable 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 commodity forward contracts and foreign currency forward contracts. As a result of the Merger, the company assumed commodity forward contracts, which Innovation Systems periodically uses to hedge forecasted purchases of certain commodities. The contracts generally establish a fixed price for the underlying commodity and are designated and qualify as effective cash flow hedges of such commodity purchases. Commodity derivatives are valued based on prices of future exchanges and recently reported transactions in the marketplace. For 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 the company records at fair value on a recurring basis identified by the level of inputs used to determine fair value: June 30, 2018 December 31, 2017 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities $ 350 $ — $ 350 $ 352 $ 1 $ 353 Marketable securities valued using NAV — — 14 — — — Total marketable securities 350 — 364 352 1 353 Derivatives — (5 ) (5 ) — — — At June 30, 2018 , the company had commodity forward contracts outstanding that hedge forecasted commodity purchases of 17 million pounds of copper and 6 million pounds of zinc. Gains or losses on the commodity forward contracts are recognized in cost of sales as the performance obligations on related contracts are satisfied. The notional value of the company’s foreign currency forward contracts at June 30, 2018 and December 31, 2017 was $114 million and $89 million , respectively. The portion of notional value designated as a cash flow hedge at June 30, 2018 and December 31, 2017 was $4 million and $8 million , respectively. The derivative fair values and related unrealized gains/losses at June 30, 2018 and December 31, 2017 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, 2018 . The carrying value of cash and cash equivalents and commercial paper approximates fair value. Long-term Debt The estimated fair value of long-term debt was $15.1 billion and $16.0 billion as of June 30, 2018 and December 31, 2017 , 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 $15.1 billion and $15.3 billion as of June 30, 2018 and December 31, 2017 , respectively. The current portion of long-term debt is recorded in other current liabilities in the unaudited condensed consolidated statements of financial position. In connection with the Merger, the company assumed $1.7 billion of long-term debt, of which $700 million remained outstanding as of June 30, 2018 (refer to Note 2). This long-term debt was comprised of $300 million in 5.25 percent senior notes with a maturity date of 2021 (the “2021 Notes”) and $400 million in 5.50 percent senior notes with a maturity date of 2023 (the “2023 Notes”). Subsequent Event On July 19, 2018, the company fully redeemed the 2021 and 2023 Notes. |
Investigations, Claims and Liti
Investigations, Claims and Litigation (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
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. On February 16, 2018, both the company and the United States filed motions to dismiss many of the claims and counterclaims in whole or in part. The United States also filed a motion seeking to amend its answer and counterclaim, including to reduce its counterclaim to approximately $193 million , which the court granted on June 11, 2018. 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 $29 million as of June 30, 2018 ), 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 $23 million as of June 30, 2018 ) in damages. In October 2013, ECT asserted an additional damage claim of R$22 million (the equivalent of approximately $6 million as of June 30, 2018 ). 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 $36 million as of June 30, 2018 ), 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 previously identified and disclosed to the U.S. government various issues relating primarily to time-charging practices of some employees working on a particular program with remote deployments. The Department of Justice is continuing to investigate this matter, the company is cooperating, and the parties are in discussions. Depending upon the ultimate outcome of this matter, the company could be subject to damages, civil and criminal fines, penalties or other sanctions, and suspension or debarment actions; however, we cannot at this point predict the outcome. We are engaged in remediation activities relating to environmental conditions allegedly resulting from historic operations at the former United States Navy and Grumman facilities in Bethpage, New York. For over 20 years, we have worked closely with the United States Navy, the United States Environmental Protection Agency, the New York State Department of Environmental Conservation, the New York State Department of Health and other federal, state and local governmental authorities, to address legacy environmental conditions in Bethpage. We have incurred, and expect to continue to incur, as included in Note 8 , substantial remediation costs related to these environmental conditions. The remediation standards or requirements to which we are subject may change and costs may increase materially. The State of New York has notified us that it intends to seek to impose additional remedial requirements and, among other things, is evaluating natural resource damages. In addition, we are and may become a party to various legal proceedings and disputes related to remediation and/or alleged environmental impacts in Bethpage, including with federal and state entities, local municipalities and water districts, insurance carriers and class action plaintiffs. These Bethpage matters could result in additional costs, fines, penalties, sanctions, compensatory or other damages (including natural resource damages), determinations on allocation, allowability and coverage, and non-monetary relief. We cannot at this time predict or reasonably estimate the potential cumulative outcomes or ranges of possible liability of these aggregate Bethpage matters. On August 12, 2016, a putative class action complaint, naming Orbital ATK and two of its then-officers as defendants, Steven Knurr, et al. v. Orbital ATK, Inc., No. 16-cv-01031 (TSE-MSN), was filed in the United States District Court for the Eastern District of Virginia. The complaint asserts claims on behalf of purchasers of Orbital ATK securities for violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, allegedly arising out of false and misleading statements and the failure to disclose that: (i) Orbital ATK lacked effective control over financial reporting; and (ii) as a result, it failed to record an anticipated loss on a long-term contract with the U.S. Army to manufacture and supply small caliber ammunition at the U.S. Army's Lake City Army Ammunition Plant. On April 24, 2017 and October 10, 2017, the plaintiffs filed amended complaints naming additional defendants and asserting claims for alleged violations of additional sections of the Exchange Act and alleged false and misleading statements in Orbital ATK’s Form S-4 filed in connection with the Orbital-ATK Merger. The complaint seeks damages, reasonable costs and expenses at trial, including counsel and expert fees, and such other relief as deemed appropriate by the Court. Although the ultimate outcome of this matter, including any possible loss, cannot be predicted or reasonably estimated at this time, the company intends vigorously to defend the matter. The SEC is investigating Orbital ATK’s historical accounting practices relating to the restatement of Orbital’s unaudited condensed consolidated financial statements for the quarterly periods ended July 5, 2015 and October 4, 2015 described in the Transition Report on Form 10-K for the nine-month period ending December 31, 2015 previously filed on March 15, 2016. The SEC is also investigating matters relating to a voluntary disclosure Orbital ATK made concerning the restatement described in Orbital ATK’s Form 10-K/A for the nine-month period ending December 31, 2015 filed on February 24, 2017. Although the ultimate outcome of these matters, including any possible loss, cannot be predicted or reasonably estimated at this time, the company intends to continue to cooperate with the SEC. The company is a party to various other investigations, lawsuits, claims, enforcement actions 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, the company does not believe that the outcome of any of these other matters 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, 2018 , or its annual results of operations and/or cash flows. |
Commitments and Contingencies (
Commitments and Contingencies (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
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 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 that the outcome of any such matters would not have a material adverse effect on its unaudited condensed consolidated financial position as of June 30, 2018 , 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, 2018 and December 31, 2017 : $ in millions Range of Reasonably Possible Future Costs (1) Accrued Costs (2) Deferred Costs (3) June 30, 2018 $453 - $836 $ 463 $ 236 December 31, 2017 405 - 792 410 207 (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, 2018 , $155 million is recorded in other current liabilities and $308 million is recorded in other non-current liabilities. (3) As of June 30, 2018 , $79 million is deferred in prepaid expenses and other current assets and $157 million is deferred in other non-current assets. These amounts are evaluated for recoverability on a routine basis. As a result of the Merger, we assumed certain environmental remediation liabilities that are included in the accrued costs above, along with the related deferred costs expected to be recoverable on U.S. government contracts. 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, except with respect to Bethpage, we do not anticipate that 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, 2018 , or its annual results of operations and/or cash flows. With respect to Bethpage, as described in Note 7 , we cannot at this time estimate the range of reasonably possible additional future costs that could result from potential changes to remediation standards or requirements to which we are subject. 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, 2018 , there were $395 million of stand-by letters of credit and guarantees and $211 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, 2018 , 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, 2018 was $81 million and $173 million , respectively, and was $65 million and $154 million for the three and six months ended June 30, 2017 , 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 $159 million as of June 30, 2018 ) (the “2016 Credit Agreement”). The company exercised the first option to extend the maturity to December 2019. The 2016 Credit Agreement is guaranteed by the company. At June 30, 2018 , there was £90 million (the equivalent of approximately $119 million ) 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, 2018 , there was no balance outstanding under this facility. At June 30, 2018 , the company was in compliance with all covenants under its credit agreements. Commercial Paper In May 2018, the company commenced a commercial paper program that serves as a source of short-term financing. Under this program, the company may issue up to $750 million of unsecured commercial paper notes. The commercial paper notes outstanding have original maturities of 90 days or less from the date of issuance. At June 30, 2018 , there were $249 million of outstanding short-term commercial paper borrowings at a weighted-average interest rate of 2.46 percent . |
Retirement Benefits (Unaudited)
Retirement Benefits (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS | 9 . 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 2018 2017 2018 2017 2018 2017 2018 2017 Components of net periodic benefit cost Service cost $ 100 $ 97 $ 5 $ 6 $ 199 $ 194 $ 10 $ 11 Interest cost 300 312 19 21 590 625 38 42 Expected return on plan assets (544 ) (472 ) (24 ) (23 ) (1,073 ) (943 ) (49 ) (45 ) Amortization of: Prior service credit (14 ) (14 ) (6 ) (6 ) (29 ) (29 ) (11 ) (11 ) Net loss from previous years 133 191 — 4 267 382 — 7 Net periodic benefit cost $ (25 ) $ 114 $ (6 ) $ 2 $ (46 ) $ 229 $ (12 ) $ 4 Changes in Presentation As discussed in Note 1, we adopted ASU 2017-07 on January 1, 2018 using the retrospective method, which changed the financial statement presentation of service costs and the other components of net periodic benefit cost. The service cost component continues to be included in operating income; however, the other components are now presented in Net FAS (non-service) pension benefit (expense) in the unaudited condensed consolidated statements of earnings and comprehensive income . In addition, interest on service cost and plan administrative expenses which, in some cases, have historically been included in service cost are now consistently presented in the interest cost and amortization of net actuarial loss components, respectively. As a result, the company reclassified interest on service cost of $4 million and $8 million and plan administrative expenses of $13 million and $26 million from service cost to the interest cost and amortization of net actuarial loss components, respectively, for its pension plans in the three and six months ended June 30, 2017, respectively, to conform to the current year presentation. For the company’s medical and life benefit plans, plan administrative expenses of $1 million and $2 million were reclassified from service cost to the amortization of net actuarial loss component for the three and six months ended June 30, 2017, respectively, to conform to the current year presentation. This change in presentation had no impact on net periodic benefit cost. 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 2018 2017 2018 2017 Defined benefit pension plans $ 23 $ 28 $ 45 $ 51 Medical and life benefit plans 11 13 22 24 Defined contribution plans 88 77 192 176 |
Stock Compensation Plans and Ot
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 RSRs granted 0.1 0.1 RPSRs granted 0.2 0.3 Grant date aggregate fair value $ 114 $ 91 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 2018 2017 Minimum aggregate payout amount $ 36 $ 35 Maximum aggregate payout amount 205 198 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. |
Segment Information (Unaudited)
Segment Information (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The company is aligned in four operating sectors, which also comprise our reportable segments: Aerospace Systems, Innovation 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 2018 2017 2018 2017 Sales Aerospace Systems $ 3,337 $ 3,003 $ 6,617 $ 5,987 Innovation Systems 400 — 400 — Mission Systems 2,874 2,859 5,757 5,659 Technology Services 1,048 1,162 2,192 2,352 Intersegment eliminations (540 ) (551 ) (1,112 ) (1,115 ) Total sales 7,119 6,473 13,854 12,883 Operating income Aerospace Systems 357 320 698 643 Innovation Systems 39 — 39 — Mission Systems 352 384 723 743 Technology Services 95 125 217 254 Intersegment eliminations (64 ) (70 ) (136 ) (140 ) Total segment operating income 779 759 1,541 1,500 Net FAS (service)/CAS pension adjustment 137 154 264 308 Unallocated corporate expense (92 ) (39 ) (126 ) (71 ) Other (1 ) (1 ) (2 ) (2 ) Total operating income $ 823 $ 873 $ 1,677 $ 1,735 Net FAS (Service)/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 (service)/CAS pension adjustment reflects the difference between CAS pension expense included as cost in segment operating income and the service cost component of FAS expense included in total operating income. The non-service cost components of FAS expense, which include interest cost, expected return on plan assets, and amortization of prior service credit and net actuarial loss, are presented in Net FAS (non-service) pension benefit (expense) in the unaudited condensed consolidated statements of earnings and comprehensive income as a result of our adoption of ASU 2017-07 discussed in Note 1. Unallocated Corporate Expense Unallocated corporate expense includes the portion of corporate costs not considered allowable or allocable under applicable CAS or FAR, and therefore not allocated to the segments, such as a portion of management and administration, legal, environmental, compensation, retiree benefits and other corporate unallowable costs. Unallocated corporate expense also includes costs not considered part of management’s evaluation of segment operating performance, such as amortization of purchased intangible assets. Disaggregation of Revenue Sales by Customer Type Three Months Ended June 30 Six Months Ended June 30 2018 2017 2018 2017 $ in millions $ % (3) $ % (3) $ % (3) $ % (3) Aerospace Systems U.S. Government (1) $ 2,799 84 % $ 2,616 87 % $ 5,707 86 % $ 5,169 86 % International (2) 449 13 % 272 9 % 720 11 % 581 10 % Other Customers 38 1 % 40 1 % 80 1 % 78 1 % Intersegment sales 51 2 % 75 3 % 110 2 % 159 3 % Aerospace Systems sales 3,337 100 % 3,003 100 % 6,617 100 % 5,987 100 % Innovation Systems U.S. Government (1) 265 66 % — — 265 66 % — — International (2) 92 23 % — — 92 23 % — — Other Customers 30 8 % — — 30 8 % — — Intersegment sales 13 3 % — — 13 3 % — — Innovation Systems sales 400 100 % — — 400 100 % — — Mission Systems U.S. Government (1) 2,155 75 % 2,227 78 % 4,345 76 % 4,413 78 % International (2) 391 14 % 353 12 % 770 13 % 707 12 % Other Customers 34 1 % 33 1 % 64 1 % 54 1 % Intersegment sales 294 10 % 246 9 % 578 10 % 485 9 % Mission Systems sales 2,874 100 % 2,859 100 % 5,757 100 % 5,659 100 % Technology Services U.S. Government (1) 597 57 % 672 58 % 1,199 54 % 1,308 56 % International (2) 193 18 % 168 14 % 413 19 % 377 16 % Other Customers 76 7 % 92 8 % 169 8 % 196 8 % Intersegment sales 182 18 % 230 20 % 411 19 % 471 20 % Technology Services sales 1,048 100 % 1,162 100 % 2,192 100 % 2,352 100 % Total U.S. Government (1) 5,816 82 % 5,515 85 % 11,516 83 % 10,890 84 % International (2) 1,125 16 % 793 12 % 1,995 15 % 1,665 13 % Other Customers 178 2 % 165 3 % 343 2 % 328 3 % Total Sales $ 7,119 100 % $ 6,473 100 % $ 13,854 100 % $ 12,883 100 % (1) Sales to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. Each of the company's segments derives substantial revenue from the U.S. government. (2) International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. government, direct sales with governments outside the U.S. and commercial sales with customers outside the U.S. (3) Percentages calculated based on total segment sales. Sales by Contract Type Three Months Ended June 30 Six Months Ended June 30 2018 2017 2018 2017 $ in millions $ % (1) $ % (1) $ % (1) $ % (1) Aerospace Systems Cost-type $ 1,934 59 % $ 1,840 63 % $ 3,836 59 % $ 3,667 63 % Fixed-price 1,352 41 % 1,088 37 % 2,671 41 % 2,161 37 % Intersegment sales 51 75 110 159 Aerospace System sales 3,337 3,003 6,617 5,987 Innovation Systems Cost-type 99 26 % — — 99 26 % — — Fixed-price 288 74 % — — 288 74 % — — Intersegment sales 13 — 13 — Innovation System sales 400 — 400 — Mission Systems Cost-type 1,207 47 % 1,353 52 % 2,486 48 % 2,669 52 % Fixed-price 1,373 53 % 1,260 48 % 2,693 52 % 2,505 48 % Intersegment sales 294 246 578 485 Mission System sales 2,874 2,859 5,757 5,659 Technology Services Cost-type 385 44 % 404 43 % 822 46 % 849 45 % Fixed-price 481 56 % 528 57 % 959 54 % 1,032 55 % Intersegment sales 182 230 411 471 Technology Services sales 1,048 1,162 2,192 2,352 Total Cost-type 3,625 51 % 3,597 56 % 7,243 52 % 7,185 56 % Fixed-price 3,494 49 % 2,876 44 % 6,611 48 % 5,698 44 % Total Sales $ 7,119 $ 6,473 $ 13,854 $ 12,883 (1) Percentages calculated based on external customer sales. Sales by Geographic Region Three Months Ended June 30 Six Months Ended June 30 2018 2017 2018 2017 $ in millions $ % (2) $ % (2) $ % (2) $ % (2) Aerospace Systems United States $ 2,837 86 % $ 2,656 91 % $ 5,787 89 % $ 5,247 90 % Asia/Pacific 249 8 % 157 5 % 378 6 % 345 6 % All other (1) 200 6 % 115 4 % 342 5 % 236 4 % Intersegment sales 51 75 110 159 Aerospace Systems sales 3,337 3,003 6,617 5,987 Innovation Systems United States 296 77 % — — 296 77 % — — Asia/Pacific 24 6 % — — 24 6 % — — All other (1) 67 17 % — — 67 17 % — — Intersegment sales 13 — 13 — Innovation Systems sales 400 — 400 — Mission Systems United States 2,193 85 % 2,261 86 % 4,413 85 % 4,468 86 % Asia/Pacific 160 6 % 155 6 % 313 6 % 309 6 % All other (1) 227 9 % 197 8 % 453 9 % 397 8 % Intersegment sales 294 246 578 485 Mission Systems sales 2,874 2,859 5,757 5,659 Technology Services United States 673 78 % 764 82 % 1,368 77 % 1,505 80 % Asia/Pacific 36 4 % 28 3 % 68 4 % 74 4 % All other (1) 157 18 % 140 15 % 345 19 % 302 16 % Intersegment sales 182 230 411 471 Technology Services sales 1,048 1,162 2,192 2,352 Total United States 5,999 84 % 5,681 88 % 11,864 85 % 11,220 87 % Asia/Pacific 469 7 % 340 5 % 783 6 % 728 6 % All other (1) 651 9 % 452 7 % 1,207 9 % 935 7 % Total Sales $ 7,119 100 % $ 6,473 100 % $ 13,854 100 % $ 12,883 100 % (1) All other principally comprised of Europe and Middle East. (2) Percentages calculated based on external customer sales. |
Recast 2017 Financial Informati
Recast 2017 Financial Information (Unaudited) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes and Error Corrections [Text Block] | RECAST 2017 FINANCIAL INFORMATION Our prior period financial statements were recast for the retrospective adoption of ASC Topic 606 and ASU 2017-07 as described in Note 1. The following tables summarize the effects of adopting these accounting standards on our unaudited condensed consolidated statement of earnings and comprehensive income for the three and six months ended June 30, 2017 and unaudited condensed consolidated statement of financial position as of December 31, 2017. The adoption of ASC Topic 606 did not have a material impact on our unaudited condensed consolidated statements of cash flows and changes in shareholders’ equity for the six months ended June 30, 2017. CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended June 30, 2017 As Reported Effect of the Adoption of As Adjusted $ in millions, except per share amounts ASC Topic 606 ASU 2017-07 Sales Product $ 3,916 $ 121 $ — $ 4,037 Service 2,459 (23 ) — 2,436 Total sales 6,375 98 — 6,473 Operating costs and expenses Product 2,958 87 (8 ) 3,037 Service 1,896 (14 ) (5 ) 1,877 General and administrative expenses 666 20 — 686 Operating income 855 5 13 873 Other (expense) income Interest expense (76 ) — — (76 ) Net FAS (non-service) pension benefit (expense) — — (17 ) (17 ) Other, net 28 — 4 32 Earnings before income taxes 807 5 — 812 Federal and foreign income tax expense 255 2 — 257 Net earnings 552 3 — 555 Basic earnings per share $ 3.16 $ 0.02 $ — $ 3.18 Weighted-average common shares outstanding, in millions 174.5 — — 174.5 Diluted earnings per share $ 3.15 $ 0.01 $ — $ 3.16 Weighted-average diluted shares outstanding, in millions 175.5 — — 175.5 Net earnings (from above) $ 552 $ 3 $ — $ 555 Other comprehensive income Change in unamortized benefit plan costs, net of tax 102 — — 102 Change in cumulative translation adjustment (4 ) — — (4 ) Other, net 1 — — 1 Other comprehensive income, net of tax 99 — — 99 Comprehensive income $ 651 $ 3 $ — $ 654 CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited) Six Months Ended June 30, 2017 As Reported Effect of the Adoption of As Adjusted $ in millions, except per share amounts ASC Topic 606 ASU 2017-07 Sales Product $ 7,750 $ 284 $ — $ 8,034 Service 4,892 (43 ) — 4,849 Total sales 12,642 241 — 12,883 Operating costs and expenses Product 5,829 208 (17 ) 6,020 Service 3,783 (28 ) (11 ) 3,744 General and administrative expenses 1,343 41 — 1,384 Operating income 1,687 20 28 1,735 Other (expense) income Interest expense (151 ) — — (151 ) Net FAS (non-service) pension benefit (expense) — — (35 ) (35 ) Other, net 44 — 7 51 Earnings before income taxes 1,580 20 — 1,600 Federal and foreign income tax expense 388 7 — 395 Net earnings 1,192 13 — 1,205 Basic earnings per share $ 6.82 $ 0.08 $ — $ 6.90 Weighted-average common shares outstanding, in millions 174.7 — — 174.7 Diluted earnings per share $ 6.78 $ 0.07 $ — $ 6.85 Weighted-average diluted shares outstanding, in millions 175.8 — — 175.8 Net earnings (from above) $ 1,192 $ 13 $ — $ 1,205 Other comprehensive income Change in unamortized benefit plan costs, net of tax 201 — — 201 Change in cumulative translation adjustment — — — — Other, net 3 — — 3 Other comprehensive income, net of tax 204 — — 204 Comprehensive income $ 1,396 $ 13 $ — $ 1,409 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited) December 31, 2017 As Reported Effect of the Adoption of As Adjusted $ in millions ASC Topic 606 ASU 2017-07 Assets Cash and cash equivalents $ 11,225 $ — $ — $ 11,225 Accounts receivable, net 829 225 — 1,054 Unbilled receivables, net 3,147 318 — 3,465 Inventoried costs, net 780 (382 ) — 398 Prepaid expenses and other current assets 368 77 — 445 Total current assets 16,349 238 — 16,587 Property, plant and equipment, net of accumulated depreciation of $5,066 for 2017 4,225 — — 4,225 Goodwill 12,455 — — 12,455 Deferred tax assets 475 (28 ) — 447 Intangible assets, net 52 — — 52 Other non-current assets 1,361 1 — 1,362 Total assets $ 34,917 $ 211 $ — $ 35,128 Liabilities Trade accounts payable $ 1,661 $ — $ — $ 1,661 Accrued employee compensation 1,382 — — 1,382 Advance payments and amounts in excess of costs incurred 1,617 144 — 1,761 Other current liabilities 2,305 (17 ) — 2,288 Total current liabilities 6,965 127 — 7,092 Long-term debt, net of current portion of $867 for 2017 14,399 — — 14,399 Pension and other post-retirement benefit plan liabilities 5,511 — — 5,511 Other non-current liabilities 994 — — 994 Total liabilities 27,869 127 — 27,996 Commitments and contingencies (Note 8) Shareholders’ equity Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding — — — — Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2017—174,085,619 174 — — 174 Paid-in capital 44 — — 44 Retained earnings 11,548 84 — 11,632 Accumulated other comprehensive loss (4,718 ) — — (4,718 ) Total shareholders’ equity 7,048 84 — 7,132 Total liabilities and shareholders’ equity $ 34,917 $ 211 $ — $ 35,128 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | These unaudited condensed consolidated financial statements (the “financial statements”) include the accounts of Northrop Grumman Corporation and its subsidiaries and joint ventures or other investments for which we consolidate the financial results (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 financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”) and in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. The 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 financial statements are not necessarily indicative of results that may be expected for the entire year. These 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, 2017 (2017 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. Similarly, Innovation Systems uses a “fiscal” calendar by closing its books on a Sunday near these quarter-end dates and will continue this practice until its business processes are aligned with the company’s. The Friday and Sunday closing dates noted herein are both labeled as June 30, consistent with our calendar convention described above. This practice is only used at interim periods within a reporting year. |
Accounting Estimates | Preparation of the financial statements 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. The company classifies sales as product or service based on the predominant attributes of each contract. Under ASC Topic 606, the company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. In most cases, goods and services provided under the company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the company provides multiple distinct goods or services to a customer, most commonly when a contract covers multiple phases of the product lifecycle (development, production, maintenance and/or support). In those cases, the company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using the cost plus a reasonable margin approach of ASC Topic 606. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not within the scope of ASC Topic 606. Likewise, our accounting for costs to obtain or fulfill a contract was not significantly impacted by the adoption of ASC Topic 606 as these costs are not material. A contract modification exists when the parties to a contract approve a change in the scope or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the company’s contract modifications are for goods or services that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative estimate-at-completion (EAC) adjustment. The company recognizes revenue as control is transferred to the customer, either over time or at a point in time. In general, our U.S. government contracts contain termination for convenience clauses that generally entitle the customer to goods produced and/or in-process. Similarly, our non-U.S. government contracts generally contain contractual termination clauses or entitle the company to payment for work performed to date for goods and services that do not have an alternative use. As control is effectively transferred as we perform on our contracts and we are typically entitled to cost plus a reasonable margin for work in process if the contract is terminated for convenience, we generally recognize revenue over time on a cost-to-cost basis (cost incurred relative to total cost estimated at completion) as the company believes this represents the most appropriate measurement towards satisfaction of its performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e. typically upon delivery). Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total revenue and cost at completion. Contract sales may include estimates of variable consideration, including cost or performance incentives (such as award and incentive fees), contract claims and requests for equitable adjustment (REAs). Variable consideration is included in total estimated sales to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We estimate variable consideration at the most likely amount to which we expect to be entitled. We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis. Cumulative EAC adjustments represent the cumulative effect of the changes on current and prior periods; sales and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss is expected to result on an individual performance obligation, the entire amount of the estimable future loss, including an allocation of general and administrative (G&A) 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 other current liabilities. Significant EAC adjustments on a single contract could have a material effect on the company’s financial statements. For each of the company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Fixed-price contracts are typically billed to the customer either using progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract assets consist of unbilled receivables, primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Unbilled receivables are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-cycle nature of many of our contracts. Accumulated contract costs in unbilled receivables include direct production costs, factory and engineering overhead, production tooling costs, and allowable G&A. Unbilled receivables also include certain estimates of variable consideration described above. These contract assets are not considered a significant financing component of the company’s contracts as the payment terms are intended to protect the customer in the event the company does not perform on its obligations under the contract. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to the satisfaction of the company’s obligations on the contract. These amounts are recorded as contract liabilities until such obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. |
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 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 may be adopted using a modified retrospective transition method that applies the new lease requirements at the beginning of the earliest period presented in the financial statements. The FASB has proposed a change that would allow a company to elect an optional transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of adoption. We expect to adopt the standard on January 1, 2019 using the proposed optional transition method if finalized in its current form. As a result of the Merger, we are currently reevaluating the expected impact of ASU 2016-02 on the company’s consolidated financial position and financial statement disclosures. We do not expect ASU 2016-02 to have a material impact on our annual results of operations and/or cash flows. |
Pension and Other Postretirement Plans | Net actuarial gains or losses are redetermined 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 | Diluted earnings per share primarily include the dilutive effect of awards granted to employees under stock-based compensation plans. We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. |
Investments in Marketable Securities | The company holds a portfolio of marketable securities consisting of securities to partially fund non-qualified employee benefit plans. A portion of these securities are held in common/collective trust funds and are measured at fair value using net asset value (NAV) per share as a practical expedient; and therefore are not required to be categorized in the fair value hierarchy table |
Derivative Financial Instruments and Hedging Activities | Commodity derivatives are valued based on prices of future exchanges and recently reported transactions in the marketplace. For 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. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Purchased intangible asset balances are included in the identifiable assets of their assigned business segment. Beginning in 2018, the company includes the amortization of purchased intangible assets in unallocated corporate expense within operating income as such amortization is no longer considered part of management’s evaluation of segment operating performance. The company’s customer-related intangible assets are amortized over their respective useful lives based on the pattern in which the future economic benefits of the intangible assets are expected to be consumed. Other purchased intangible assets are amortized on a straight-line basis. The company’s purchased intangible assets are being amortized over an aggregate weighted-average period of 12 years. |
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 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. |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | On January 5, 2016, the FASB issued ASU No. 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 requires equity investments that are not accounted for under the equity method of accounting or that do not result in consolidation of the investee to be measured at fair value with changes recognized in net earnings. ASU 2016-01 also eliminates the available-for-sale classification for equity investments that recognized changes in fair value as a component of other comprehensive income. We adopted ASU 2016-01 on January 1, 2018 using the modified retrospective method, which resulted in a $4 million (net of tax) cumulative-effect adjustment from accumulated other comprehensive loss to retained earnings. Adoption of ASU 2016-01 did not have a material impact on our results of operations and/or cash flows. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . Topic 606 supersedes previous 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. The primary impact of the adoption of ASC Topic 606 was that, in most cases, the accounting for those contracts where we previously recognized revenue as units were delivered changed under ASC Topic 606 such that we now recognize revenue as costs are incurred. In addition, for certain of our contracts, there is a change in the number of performance obligations under ASC Topic 606, which has altered the timing of revenue and margin recognition. We adopted ASC Topic 606 on January 1, 2018 using the full retrospective method. We applied the transition practical expedient related to remaining performance obligations for reporting periods presented before the date of initial application. No other practical expedients were applied. The cumulative effect of adopting ASC Topic 606 was a $148 million increase to retained earnings at January 1, 2016. See Note 12 for information regarding the effect of adopting ASC Topic 606 on our unaudited condensed consolidated statement of earnings and comprehensive income for the three and six months ended June 30, 2017 and unaudited condensed consolidated statement of financial position as of December 31, 2017. On February 14, 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . ASU 2018-02 allows companies to reclassify stranded tax effects resulting from the 2017 Tax Act from accumulated other comprehensive income to retained earnings. As described above, the company elected to early adopt ASU 2018-02 on January 1, 2018, which resulted in a reclassification of $1.1 billion of stranded tax effects, principally related to our unamortized benefit plan costs, from accumulated other comprehensive loss to retained earnings. This reclassification included $73 million of other income tax effects related to a reduction in the federal benefit associated with state taxes. Adoption of ASU 2018-02 did not have a material impact on the company’s results of operations and/or cash flows. On March 10, 2017, the FASB issued 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 is eligible for asset capitalization. We adopted ASU 2017-07 on January 1, 2018 using the retrospective method. See Note 12 for information regarding the effect of adopting ASU 2017-07 on our unaudited condensed consolidated statement of earnings and comprehensive income for the three and six months ended June 30, 2017. Adoption of ASU 2017-07 did not have a material impact on our consolidated statements of financial position and/or cash flows. |
Basis of Presentation (Unaudi20
Basis of Presentation (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 2018 2017 Operating Income $ 143 $ 102 $ 259 $ 243 Net Earnings (1) 113 66 205 158 Diluted earnings per share (1) 0.64 0.38 1.17 0.90 (1) Based on statutory tax rates in effect for each period presented. |
Contract with Customer, Asset and Liability [Table Text Block] | Net contract assets (liabilities) are as follows: $ in millions June 30, December 31, $ Change % Change Unbilled receivables, net $ 5,272 $ 3,465 $ 1,807 52 % Advance payments and amounts in excess of costs incurred (1,711 ) (1,761 ) 50 (3 )% Net contract assets (liabilities) $ 3,561 $ 1,704 $ 1,857 109 % |
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 $1,940 for 2018 and $3,056 for 2017 $ (5,474 ) $ (4,586 ) Cumulative translation adjustment (138 ) (136 ) Other, net (4 ) 4 Total accumulated other comprehensive loss $ (5,616 ) $ (4,718 ) |
Business Acquisition (Unaudit21
Business Acquisition (Unaudited) Business Acquisition (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The Merger date fair value of the consideration transferred totaled $7.7 billion in cash, which was comprised of the following: ($ in millions, except per share amounts) Purchase price Shares of Orbital ATK common stock outstanding as of the Merger date 57,562,152 Cash consideration per share of Orbital ATK common stock $ 134.50 Total purchase price $ 7,742 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following preliminary purchase price allocation table presents the company’s initial estimate of the fair values of assets acquired and liabilities assumed at the Merger date: ($ in millions) As of June 6, 2018 Cash and cash equivalents $ 85 Accounts receivable, net 616 Unbilled receivables, net 1,237 Inventoried costs, net 220 Other current assets 193 Property, plant and equipment 1,500 Goodwill 6,295 Intangible assets 1,305 Deferred tax assets (230 ) Other non-current assets 131 Total assets acquired 11,352 Trade accounts payable (397 ) Accrued employee compensation (158 ) Advance payments and amounts in excess of costs incurred (222 ) Below market contracts (1) (155 ) Other current liabilities (298 ) Long-term debt (1,687 ) Pension and other post-retirement benefit plan liabilities (557 ) Other non-current liabilities (136 ) Total liabilities assumed (3,610 ) Total purchase price $ 7,742 (1) Included in Other current liabilities. |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | The following table presents a preliminary summary of purchased intangible assets and their related estimated useful lives: Fair Value (in millions) Estimated Useful Life in Years Customer contracts $ 1,040 9 Commercial customer relationships 265 13 Total customer-related intangible assets $ 1,305 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table presents unaudited pro forma financial information as if Orbital ATK had been included in our results as of January 1, 2017: Three Months Ended June 30 Six Months Ended June 30 ($ in millions, except per share amounts) 2018 2017 2018 2017 Sales $ 8,078 $ 7,555 $ 16,078 $ 15,039 Net earnings 791 572 1,615 1,225 Basic earnings per share 4.53 3.28 9.26 7.01 Diluted earnings per share 4.51 3.26 9.21 6.97 |
Earnings Per Share, Share Rep22
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 September 16, 2015 $ 4,000 7.6 $ 224.82 0.2 1.5 (1) Includes commissions paid. |
Income Taxes (Unaudited) (Table
Income Taxes (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 2018 2017 Federal and foreign income tax expense $ 160 $ 257 $ 292 $ 395 Effective income tax rate 18.8 % 31.7 % 17.0 % 24.7 % |
Goodwill and Other Purchased 24
Goodwill and Other Purchased Intangible Assets (Unaudited) Goodwill and Other Purchased Intangible Assets (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amounts of goodwill were as follows: $ in millions Aerospace Systems Innovation Systems Mission Systems Technology Services Total Balance as of December 31, 2017 $ 3,742 $ — $ 6,696 $ 2,017 $ 12,455 Acquisition of Orbital ATK 418 5,329 469 79 6,295 Other (1) — — (1 ) (2 ) (3 ) Balance as of June 30, 2018 $ 4,160 $ 5,329 $ 7,164 $ 2,094 $ 18,747 (1) Other consists primarily of adjustments for foreign currency translation. |
Schedule of Purchased Intangible Assets | Net customer-related and other intangible assets, including the preliminary fair value of purchased intangible assets acquired in the Merger, are as follows: June 30, December 31, 2017 $ in millions Gross customer-related and other intangible assets $ 3,138 $ 1,833 Less accumulated amortization (1,809 ) (1,781 ) Net customer-related and other intangible assets $ 1,329 $ 52 |
Expected Future Amortization of Purchased Intangibles | As of June 30, 2018 , the expected future amortization of purchased intangibles for each of the next five years is as follows: $ in millions 2018 (remainder of year) $ 162 2019 284 2020 232 2021 150 2022 105 |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 the company records at fair value on a recurring basis identified by the level of inputs used to determine fair value: June 30, 2018 December 31, 2017 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities $ 350 $ — $ 350 $ 352 $ 1 $ 353 Marketable securities valued using NAV — — 14 — — — Total marketable securities 350 — 364 352 1 353 Derivatives — (5 ) (5 ) — — — |
Commitments and Contingencies26
Commitments and Contingencies (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 and December 31, 2017 : $ in millions Range of Reasonably Possible Future Costs (1) Accrued Costs (2) Deferred Costs (3) June 30, 2018 $453 - $836 $ 463 $ 236 December 31, 2017 405 - 792 410 207 (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, 2018 , $155 million is recorded in other current liabilities and $308 million is recorded in other non-current liabilities. (3) As of June 30, 2018 , $79 million is deferred in prepaid expenses and other current assets and $157 million is deferred in other non-current assets. These amounts are evaluated for recoverability on a routine basis. |
Retirement Benefits (Unaudite27
Retirement Benefits (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [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 2018 2017 2018 2017 2018 2017 2018 2017 Components of net periodic benefit cost Service cost $ 100 $ 97 $ 5 $ 6 $ 199 $ 194 $ 10 $ 11 Interest cost 300 312 19 21 590 625 38 42 Expected return on plan assets (544 ) (472 ) (24 ) (23 ) (1,073 ) (943 ) (49 ) (45 ) Amortization of: Prior service credit (14 ) (14 ) (6 ) (6 ) (29 ) (29 ) (11 ) (11 ) Net loss from previous years 133 191 — 4 267 382 — 7 Net periodic benefit cost $ (25 ) $ 114 $ (6 ) $ 2 $ (46 ) $ 229 $ (12 ) $ 4 |
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 2018 2017 2018 2017 Defined benefit pension plans $ 23 $ 28 $ 45 $ 51 Medical and life benefit plans 11 13 22 24 Defined contribution plans 88 77 192 176 |
Stock Compensation Plans and 28
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 RSRs granted 0.1 0.1 RPSRs granted 0.2 0.3 Grant date aggregate fair value $ 114 $ 91 |
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 2018 2017 Minimum aggregate payout amount $ 36 $ 35 Maximum aggregate payout amount 205 198 |
Segment Information (Unaudite29
Segment Information (Unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 2018 2017 Sales Aerospace Systems $ 3,337 $ 3,003 $ 6,617 $ 5,987 Innovation Systems 400 — 400 — Mission Systems 2,874 2,859 5,757 5,659 Technology Services 1,048 1,162 2,192 2,352 Intersegment eliminations (540 ) (551 ) (1,112 ) (1,115 ) Total sales 7,119 6,473 13,854 12,883 Operating income Aerospace Systems 357 320 698 643 Innovation Systems 39 — 39 — Mission Systems 352 384 723 743 Technology Services 95 125 217 254 Intersegment eliminations (64 ) (70 ) (136 ) (140 ) Total segment operating income 779 759 1,541 1,500 Net FAS (service)/CAS pension adjustment 137 154 264 308 Unallocated corporate expense (92 ) (39 ) (126 ) (71 ) Other (1 ) (1 ) (2 ) (2 ) Total operating income $ 823 $ 873 $ 1,677 $ 1,735 |
Revenue by Major Customers by Reporting Segments | Sales by Customer Type Three Months Ended June 30 Six Months Ended June 30 2018 2017 2018 2017 $ in millions $ % (3) $ % (3) $ % (3) $ % (3) Aerospace Systems U.S. Government (1) $ 2,799 84 % $ 2,616 87 % $ 5,707 86 % $ 5,169 86 % International (2) 449 13 % 272 9 % 720 11 % 581 10 % Other Customers 38 1 % 40 1 % 80 1 % 78 1 % Intersegment sales 51 2 % 75 3 % 110 2 % 159 3 % Aerospace Systems sales 3,337 100 % 3,003 100 % 6,617 100 % 5,987 100 % Innovation Systems U.S. Government (1) 265 66 % — — 265 66 % — — International (2) 92 23 % — — 92 23 % — — Other Customers 30 8 % — — 30 8 % — — Intersegment sales 13 3 % — — 13 3 % — — Innovation Systems sales 400 100 % — — 400 100 % — — Mission Systems U.S. Government (1) 2,155 75 % 2,227 78 % 4,345 76 % 4,413 78 % International (2) 391 14 % 353 12 % 770 13 % 707 12 % Other Customers 34 1 % 33 1 % 64 1 % 54 1 % Intersegment sales 294 10 % 246 9 % 578 10 % 485 9 % Mission Systems sales 2,874 100 % 2,859 100 % 5,757 100 % 5,659 100 % Technology Services U.S. Government (1) 597 57 % 672 58 % 1,199 54 % 1,308 56 % International (2) 193 18 % 168 14 % 413 19 % 377 16 % Other Customers 76 7 % 92 8 % 169 8 % 196 8 % Intersegment sales 182 18 % 230 20 % 411 19 % 471 20 % Technology Services sales 1,048 100 % 1,162 100 % 2,192 100 % 2,352 100 % Total U.S. Government (1) 5,816 82 % 5,515 85 % 11,516 83 % 10,890 84 % International (2) 1,125 16 % 793 12 % 1,995 15 % 1,665 13 % Other Customers 178 2 % 165 3 % 343 2 % 328 3 % Total Sales $ 7,119 100 % $ 6,473 100 % $ 13,854 100 % $ 12,883 100 % (1) Sales to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. Each of the company's segments derives substantial revenue from the U.S. government. (2) International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. government, direct sales with governments outside the U.S. and commercial sales with customers outside the U.S. (3) Percentages calculated based on total segment sales. |
Revenue from External Customers by Contract Type | Sales by Contract Type Three Months Ended June 30 Six Months Ended June 30 2018 2017 2018 2017 $ in millions $ % (1) $ % (1) $ % (1) $ % (1) Aerospace Systems Cost-type $ 1,934 59 % $ 1,840 63 % $ 3,836 59 % $ 3,667 63 % Fixed-price 1,352 41 % 1,088 37 % 2,671 41 % 2,161 37 % Intersegment sales 51 75 110 159 Aerospace System sales 3,337 3,003 6,617 5,987 Innovation Systems Cost-type 99 26 % — — 99 26 % — — Fixed-price 288 74 % — — 288 74 % — — Intersegment sales 13 — 13 — Innovation System sales 400 — 400 — Mission Systems Cost-type 1,207 47 % 1,353 52 % 2,486 48 % 2,669 52 % Fixed-price 1,373 53 % 1,260 48 % 2,693 52 % 2,505 48 % Intersegment sales 294 246 578 485 Mission System sales 2,874 2,859 5,757 5,659 Technology Services Cost-type 385 44 % 404 43 % 822 46 % 849 45 % Fixed-price 481 56 % 528 57 % 959 54 % 1,032 55 % Intersegment sales 182 230 411 471 Technology Services sales 1,048 1,162 2,192 2,352 Total Cost-type 3,625 51 % 3,597 56 % 7,243 52 % 7,185 56 % Fixed-price 3,494 49 % 2,876 44 % 6,611 48 % 5,698 44 % Total Sales $ 7,119 $ 6,473 $ 13,854 $ 12,883 (1) Percentages calculated based on external customer sales. |
Revenue from External Customers by Geographic Areas | Sales by Geographic Region Three Months Ended June 30 Six Months Ended June 30 2018 2017 2018 2017 $ in millions $ % (2) $ % (2) $ % (2) $ % (2) Aerospace Systems United States $ 2,837 86 % $ 2,656 91 % $ 5,787 89 % $ 5,247 90 % Asia/Pacific 249 8 % 157 5 % 378 6 % 345 6 % All other (1) 200 6 % 115 4 % 342 5 % 236 4 % Intersegment sales 51 75 110 159 Aerospace Systems sales 3,337 3,003 6,617 5,987 Innovation Systems United States 296 77 % — — 296 77 % — — Asia/Pacific 24 6 % — — 24 6 % — — All other (1) 67 17 % — — 67 17 % — — Intersegment sales 13 — 13 — Innovation Systems sales 400 — 400 — Mission Systems United States 2,193 85 % 2,261 86 % 4,413 85 % 4,468 86 % Asia/Pacific 160 6 % 155 6 % 313 6 % 309 6 % All other (1) 227 9 % 197 8 % 453 9 % 397 8 % Intersegment sales 294 246 578 485 Mission Systems sales 2,874 2,859 5,757 5,659 Technology Services United States 673 78 % 764 82 % 1,368 77 % 1,505 80 % Asia/Pacific 36 4 % 28 3 % 68 4 % 74 4 % All other (1) 157 18 % 140 15 % 345 19 % 302 16 % Intersegment sales 182 230 411 471 Technology Services sales 1,048 1,162 2,192 2,352 Total United States 5,999 84 % 5,681 88 % 11,864 85 % 11,220 87 % Asia/Pacific 469 7 % 340 5 % 783 6 % 728 6 % All other (1) 651 9 % 452 7 % 1,207 9 % 935 7 % Total Sales $ 7,119 100 % $ 6,473 100 % $ 13,854 100 % $ 12,883 100 % (1) All other principally comprised of Europe and Middle East. (2) Percentages calculated based on external customer sales. |
Recast 2017 Financial Informa30
Recast 2017 Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended June 30, 2017 As Reported Effect of the Adoption of As Adjusted $ in millions, except per share amounts ASC Topic 606 ASU 2017-07 Sales Product $ 3,916 $ 121 $ — $ 4,037 Service 2,459 (23 ) — 2,436 Total sales 6,375 98 — 6,473 Operating costs and expenses Product 2,958 87 (8 ) 3,037 Service 1,896 (14 ) (5 ) 1,877 General and administrative expenses 666 20 — 686 Operating income 855 5 13 873 Other (expense) income Interest expense (76 ) — — (76 ) Net FAS (non-service) pension benefit (expense) — — (17 ) (17 ) Other, net 28 — 4 32 Earnings before income taxes 807 5 — 812 Federal and foreign income tax expense 255 2 — 257 Net earnings 552 3 — 555 Basic earnings per share $ 3.16 $ 0.02 $ — $ 3.18 Weighted-average common shares outstanding, in millions 174.5 — — 174.5 Diluted earnings per share $ 3.15 $ 0.01 $ — $ 3.16 Weighted-average diluted shares outstanding, in millions 175.5 — — 175.5 Net earnings (from above) $ 552 $ 3 $ — $ 555 Other comprehensive income Change in unamortized benefit plan costs, net of tax 102 — — 102 Change in cumulative translation adjustment (4 ) — — (4 ) Other, net 1 — — 1 Other comprehensive income, net of tax 99 — — 99 Comprehensive income $ 651 $ 3 $ — $ 654 CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited) Six Months Ended June 30, 2017 As Reported Effect of the Adoption of As Adjusted $ in millions, except per share amounts ASC Topic 606 ASU 2017-07 Sales Product $ 7,750 $ 284 $ — $ 8,034 Service 4,892 (43 ) — 4,849 Total sales 12,642 241 — 12,883 Operating costs and expenses Product 5,829 208 (17 ) 6,020 Service 3,783 (28 ) (11 ) 3,744 General and administrative expenses 1,343 41 — 1,384 Operating income 1,687 20 28 1,735 Other (expense) income Interest expense (151 ) — — (151 ) Net FAS (non-service) pension benefit (expense) — — (35 ) (35 ) Other, net 44 — 7 51 Earnings before income taxes 1,580 20 — 1,600 Federal and foreign income tax expense 388 7 — 395 Net earnings 1,192 13 — 1,205 Basic earnings per share $ 6.82 $ 0.08 $ — $ 6.90 Weighted-average common shares outstanding, in millions 174.7 — — 174.7 Diluted earnings per share $ 6.78 $ 0.07 $ — $ 6.85 Weighted-average diluted shares outstanding, in millions 175.8 — — 175.8 Net earnings (from above) $ 1,192 $ 13 $ — $ 1,205 Other comprehensive income Change in unamortized benefit plan costs, net of tax 201 — — 201 Change in cumulative translation adjustment — — — — Other, net 3 — — 3 Other comprehensive income, net of tax 204 — — 204 Comprehensive income $ 1,396 $ 13 $ — $ 1,409 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited) December 31, 2017 As Reported Effect of the Adoption of As Adjusted $ in millions ASC Topic 606 ASU 2017-07 Assets Cash and cash equivalents $ 11,225 $ — $ — $ 11,225 Accounts receivable, net 829 225 — 1,054 Unbilled receivables, net 3,147 318 — 3,465 Inventoried costs, net 780 (382 ) — 398 Prepaid expenses and other current assets 368 77 — 445 Total current assets 16,349 238 — 16,587 Property, plant and equipment, net of accumulated depreciation of $5,066 for 2017 4,225 — — 4,225 Goodwill 12,455 — — 12,455 Deferred tax assets 475 (28 ) — 447 Intangible assets, net 52 — — 52 Other non-current assets 1,361 1 — 1,362 Total assets $ 34,917 $ 211 $ — $ 35,128 Liabilities Trade accounts payable $ 1,661 $ — $ — $ 1,661 Accrued employee compensation 1,382 — — 1,382 Advance payments and amounts in excess of costs incurred 1,617 144 — 1,761 Other current liabilities 2,305 (17 ) — 2,288 Total current liabilities 6,965 127 — 7,092 Long-term debt, net of current portion of $867 for 2017 14,399 — — 14,399 Pension and other post-retirement benefit plan liabilities 5,511 — — 5,511 Other non-current liabilities 994 — — 994 Total liabilities 27,869 127 — 27,996 Commitments and contingencies (Note 8) Shareholders’ equity Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding — — — — Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2017—174,085,619 174 — — 174 Paid-in capital 44 — — 44 Retained earnings 11,548 84 — 11,632 Accumulated other comprehensive loss (4,718 ) — — (4,718 ) Total shareholders’ equity 7,048 84 — 7,132 Total liabilities and shareholders’ equity $ 34,917 $ 211 $ — $ 35,128 |
Basis of Presentation (Unaudi31
Basis of Presentation (Unaudited) (Details 1) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Change in Accounting Estimate [Line Items] | ||||
Contract with Customer, Performance Obligation Satisfied in Previous Period | $ 156 | $ 101 | $ 289 | $ 246 |
Operating income | 823 | 873 | 1,677 | 1,735 |
Net earnings | $ 689 | $ 555 | $ 1,428 | $ 1,205 |
Earnings Per Share, Diluted | $ 3.93 | $ 3.16 | $ 8.14 | $ 6.85 |
Contracts Accounted for under Percentage of Completion [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Operating income | $ 143 | $ 102 | $ 259 | $ 243 |
Net earnings | $ 113 | $ 66 | $ 205 | $ 158 |
Earnings Per Share, Diluted | $ 0.64 | $ 0.38 | $ 1.17 | $ 0.90 |
Aerospace Systems [Member] | Contracts Accounted for under Percentage of Completion [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Operating income | $ 69 |
Basis of Presentation (Unaudi32
Basis of Presentation (Unaudited) (Details 2) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation | $ 52,200 |
Innovation Systems Remaining Performance Obligations | 8,700 |
Intercompany backlog eliminated at acquisition | $ 500 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | We expect to recognize approximately 50 percent and 75 percent of our June 30, 2018 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. |
Basis of Presentation (Unaudi33
Basis of Presentation (Unaudited) (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Change in Contract with Customer, Asset and Liability [Abstract] | |||||
Unbilled receivables, net | $ 5,272 | $ 5,272 | $ 3,465 | ||
Amount of increase (decrease) in Unbilled Receivables | $ 1,807 | ||||
Percent increase (decrease) in Unbilled Receivables | 52.00% | ||||
Advance payments and amounts in excess of costs incurred | (1,711) | $ (1,711) | (1,761) | ||
Amount of decrease (increase) in Customer Advances | $ 50 | ||||
Percent decrease (increase) in Customer Advances | (3.00%) | ||||
Net contract assets (liabilities) | 3,561 | $ 3,561 | $ 1,704 | ||
Amount of increase (decrease) in net contract assets (liabilities) | $ 1,857 | ||||
Percent increase (decrease) in net contract assets (liabilities) | 109.00% | ||||
Innovation Systems net contract assets | 1,100 | $ 1,100 | |||
Change in Contract with Customer, Liability [Abstract] | |||||
Contract with Customer, Liability, Revenue Recognized | $ 364 | $ 272 | $ 1,100 | $ 850 |
Basis of Presentation (Unaudi34
Basis of Presentation (Unaudited) (Details 4) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Pro Forma Adjustments, Additional depreciation expense, net of removal of historical depreciation | $ (7) | $ (8) | $ (7) | $ (10) | |||
Unamortized benefit plan costs, net of tax benefit of $1,940 for 2018 and $3,056 for 2017 | 5,474 | 5,474 | $ 4,586 | ||||
Accumulated Other Comprehensive Loss | |||||||
Cumulative translation adjustment | (138) | (138) | (136) | ||||
Other, net | (4) | (4) | 4 | ||||
Total accumulated other comprehensive loss | (5,616) | (5,616) | (4,718) | ||||
Unamortized benefit plan costs - Tax Benefit (expense) | 1,940 | 1,940 | 3,056 | ||||
Unamortized benefit plan costs, net actuarial losses, after-tax | 5,600 | 5,600 | 4,700 | ||||
Unamortized benefit plan costs, reclassified from other comprehensive income to net earnings | $ 86 | $ 100 | $ 172 | $ 199 | |||
Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | $ 1,100 | ||||||
Tax Cuts and Job Act, Income Tax Expense (Benefit) | 73 | ||||||
Restatement Adjustment [Member] | Accounting Standards Update 2016-01 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | $ 4 | ||||||
Restatement Adjustment [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | $ 148 | ||||||
Accumulated Other Comprehensive Loss | |||||||
Total accumulated other comprehensive loss | $ 0 |
Business Acquisition (Unaudit35
Business Acquisition (Unaudited) (Details 1) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Revenue, Net | $ 7,119 | $ 6,473 | $ 13,854 | $ 12,883 |
Operating income | 823 | 873 | 1,677 | 1,735 |
Net earnings | 689 | 555 | 1,428 | 1,205 |
Business Combination, Acquisition Related Costs | 23 | 29 | ||
Operating Segments [Member] | ||||
Business Acquisition [Line Items] | ||||
Operating income | 779 | 759 | 1,541 | 1,500 |
Operating Segments [Member] | Innovation Systems [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenue, Net | 400 | 0 | 400 | 0 |
Operating income | 39 | $ 0 | 39 | $ 0 |
Net earnings | $ 30 | $ 30 |
Business Acquisition (Unaudit36
Business Acquisition (Unaudited) (Details 2) - USD ($) $ / shares in Units, $ in Millions | Jun. 06, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 18,747 | $ 12,455 | |
Shares of Orbital ATK common stock outstanding as of the Merger date | 57,562,152 | ||
Cash consideration per share of Orbital ATK common stock | $ 134.50 | ||
Total purchase price | $ 7,742 | ||
Orbital ATK [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 85 | ||
Accounts receivable, net | 616 | ||
Unbilled receivables, net | 1,237 | ||
Inventoried costs, net | 220 | ||
Other current assets | 193 | ||
Property, plant, and equipment | 1,500 | ||
Goodwill | 6,295 | ||
Intangible assets | 1,305 | ||
Deferred tax assets | (230) | ||
Other non-current assets | 131 | ||
Total assets acquired | 11,352 | ||
Trade accounts payable | (397) | ||
Accrued employee compensation | (158) | ||
Advance payments and amounts in excess of costs incurred | (222) | ||
Below market contracts | (155) | ||
Other current liabilities | (298) | ||
Long-term debt | (1,687) | ||
Pension and other post-retirement benefit plan liabilities | (557) | ||
Other non-current liabilities | (136) | ||
Total liabilities assumed | (3,610) | ||
Total purchase price | $ 7,742 |
Business Acquisition (Unaudit37
Business Acquisition (Unaudited) (Details 3) - USD ($) $ in Millions | Jun. 06, 2018 | Jun. 30, 2018 |
Business Acquisition [Line Items] | ||
Business Combination, Below Market Contracts, reduction in sales for 2018 | $ 52 | |
Business Combination, Below Market Contracts, reduction in sales for 2019 | 70 | |
Business Combination, Below Market Contracts, reduction in sales for 2020 | 32 | |
Business Combination, Below Market Contracts, reduction in sales for 2021 | 1 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | |
Orbital ATK [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 1,305 | |
Customer Contracts [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,040 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | |
Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 265 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years |
Business Acquisition (Unaudit38
Business Acquisition (Unaudited) (Details 4) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Pro forma sales | $ 8,078 | $ 7,555 | $ 16,078 | $ 15,039 |
Pro forma net earnings | $ 791 | $ 572 | $ 1,615 | $ 1,225 |
Pro forma basic earnings per share | $ 4.53 | $ 3.28 | $ 9.26 | $ 7.01 |
Pro forma diluted earnings per share | $ 4.51 | $ 3.26 | $ 9.21 | $ 6.97 |
Pro Forma Adjustments, Orbital ATK ASC606 Sales adjustment | $ 2 | $ 21 | ||
Pro Forma Adjustments, Orbital ATK ASC606 Cost of Sales adjustment | (2) | (9) | ||
Pro Forma Adjustments, Orbital ATK intercompany sales elimination | $ (33) | (35) | $ (80) | (65) |
Pro Forma Adjustments, Orbital ATK intercompany cost of sales elimination | 33 | 35 | 80 | 65 |
Pro Forma Adjustments, Elimination of nonrecurring transaction costs | 64 | 71 | ||
Pro Forma Adjustments, Additional depreciation expense, net of removal of historical depreciation | (7) | (8) | (7) | (10) |
Pro Forma Adjustments, Additional interest expense due to debt issued to finance merger | (66) | (133) | ||
Pro Forma Adjustments, Additional amortization expense, net of removal of historical amortization expense | (34) | (65) | (92) | (130) |
Pro Forma Adjustments, Elimination of Orbital ATK’s amortization on net actuarial losses and prior service costs and pension/post-retirement costs | $ 20 | $ 29 | $ 51 | $ 54 |
Earnings Per Share, Share Rep39
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Details 1) - September 2015 Share Repurchase Program Original Authorization - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended | 27 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Sep. 16, 2015 | |
Share Repurchase [Line Items] | ||||
Amount Authorized | $ 4,000 | |||
Shares Retired | 7.6 | |||
Average Cost Per Share | $ 224.82 | |||
Shares Repurchased | 0.2 | 1.5 | ||
Share Repurchases - Notes to Table | ||||
Shares repurchased amount | $ 1,700 | |||
Amount remaining under authorization for share repurchases | $ 2,300 | $ 2,300 |
Earnings Per Share, Share Rep40
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 | |||||
Jun. 30, 2018 | Jan. 31, 2018 | May 31, 2017 | May 31, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||
Dilutive effect of of stock awards and options granted to employees under stock-based compensation plans | 0.9 | 1 | 1 | 1.1 | ||||
Common stock dividends per share, declared (in dollars per share) | $ 1.20 | $ 1.10 | $ 1 | $ 0.90 | $ 2.30 | $ 1.90 | ||
Increase in quarterly common stock dividend (percent) | 9.00% | 10.00% | 11.00% |
Income Taxes (Unaudited) (Detai
Income Taxes (Unaudited) (Details 1) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2019 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||
Federal and foreign income tax expense | $ 160 | $ 257 | $ 292 | $ 395 | |||
Effective income tax rate | 18.80% | 31.70% | 17.00% | 24.70% | |||
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | |||||
Effective Income Tax Rate Reconciliation, Increase in Research Tax Credits | $ (22) | ||||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ (26) | $ (47) | |||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount | (42) | ||||||
Income Tax Reconciliation, Deduction, Increase in Qualified Production Activity | $ (31) | ||||||
Income Tax Contingency [Line Items] | |||||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 115 | 115 | 115 | ||||
Unrecognized Tax Benefits, Increase Resulting from Acquisition | 150 | ||||||
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | 50 | ||||||
Increase in Unrecognized Tax Benefits resulting from 2017 Tax Act is Reasonably Possible | 100 | 100 | 100 | ||||
Scenario, Forecast [Member] | Maximum [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ (30) | ||||||
Innovation Systems [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 35 | $ 35 | $ 35 | ||||
Innovation Systems [Member] | Scenario, Forecast [Member] | Maximum [Member] | |||||||
Income Tax Contingency [Line Items] | |||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ (30) |
Goodwill and Other Purchased 42
Goodwill and Other Purchased Intangible Assets (Unaudited) Goodwill and Other Purchased Intangible Assets (Unaudited) (Details 1) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Line Items] | |
Beginning Balance | $ 12,455 |
Acquisition of Orbital ATK | 6,295 |
Other | (3) |
Ending Balance | 18,747 |
Aerospace Systems [Member] | |
Goodwill [Line Items] | |
Beginning Balance | 3,742 |
Acquisition of Orbital ATK | 418 |
Other | 0 |
Ending Balance | 4,160 |
Innovation Systems [Member] | |
Goodwill [Line Items] | |
Beginning Balance | 0 |
Acquisition of Orbital ATK | 5,329 |
Other | 0 |
Ending Balance | 5,329 |
Mission Systems [Member] | |
Goodwill [Line Items] | |
Beginning Balance | 6,696 |
Acquisition of Orbital ATK | 469 |
Other | (1) |
Ending Balance | 7,164 |
Technology Services [Member] | |
Goodwill [Line Items] | |
Beginning Balance | 2,017 |
Acquisition of Orbital ATK | 79 |
Other | (2) |
Ending Balance | $ 2,094 |
Goodwill and Other Purchased 43
Goodwill and Other Purchased Intangible Assets (Unaudited) Goodwill and Other Purchased Intangible Assets (Unaudited) (Details 2) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross customer-related and other intangible assets | $ 3,138 | $ 1,833 |
Less accumulated amortization | (1,809) | (1,781) |
Net customer-related and other intangible assets | $ 1,329 | $ 52 |
Goodwill and Other Purchased 44
Goodwill and Other Purchased Intangible Assets (Unaudited) Goodwill and Other Purchased Intangible Assets (Unaudited) (Details 3) $ in Millions | Jun. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 (remainder of year) | $ 162 |
2,019 | 284 |
2,020 | 232 |
2,021 | 150 |
2,022 | $ 105 |
Goodwill and Other Purchased 45
Goodwill and Other Purchased Intangible Assets (Unaudited) Goodwill and Other Purchased Intangible Assets (Unaudited) (Details 4) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Goodwill [Line Items] | |||||
Amortization of Intangible Assets | $ 24 | $ 3 | $ 28 | $ 7 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | ||||
Aerospace Systems [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, Impaired, Accumulated Impairment Loss | $ 570 | $ 570 | $ 570 |
Fair Value of Financial Instr46
Fair Value of Financial Instruments (Unaudited) (Details 1) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | $ 364 | $ 353 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 350 | 352 |
Derivatives | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 0 | 1 |
Derivatives | (5) | 0 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 350 | 353 |
Derivatives | (5) | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 350 | 352 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 0 | 1 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | $ 14 | $ 0 |
Fair Value of Financial Instr47
Fair Value of Financial Instruments (Unaudited) (Details 2) lb in Millions, $ in Millions | 6 Months Ended | |
Jun. 30, 2018USD ($)lb | Dec. 31, 2017USD ($) | |
Copper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Mass | lb | 17 | |
Zinc [Member] [Domain] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Mass | lb | 6 | |
Foreign Exchange Forward [Member] | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative, Notional Amount | $ | $ 114 | $ 89 |
Foreign Exchange Forward [Member] | Cash Flow Hedging [Member] | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative, Notional Amount | $ | $ 4 | $ 8 |
Fair Value of Financial Instr48
Fair Value of Financial Instruments (Unaudited) Fair Value of Financial Instruments (Unaudited) (Details 3) - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 06, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Long-term Debt, Fair Value | $ 15,100 | $ 16,000 | |
Debt and Capital Lease Obligations | 15,100 | $ 15,300 | |
Orbital ATK [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | $ 1,687 | ||
Orbital ATK [Member] | Senior Notes [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | 700 | ||
2021 Maturity [Domain] | Senior Notes [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | $ 300 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | ||
2023 Maturity [Domain] | Senior Notes [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | $ 400 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% |
Investigations, Claims and Li49
Investigations, Claims and Litigation (Unaudited) (Details) € in Millions, R$ in Millions, $ in Millions | 2 Months Ended | 12 Months Ended | 57 Months Ended | 59 Months Ended | 61 Months Ended | |||||
Sep. 30, 2013Defendant | Dec. 31, 2007USD ($) | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Jun. 30, 2018BRL (R$) | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Feb. 16, 2018USD ($) | Dec. 31, 2017USD ($) | May 04, 2012USD ($) | |
Loss Contingencies | ||||||||||
Unbilled receivables, net | $ 5,272 | $ 5,272 | $ 5,272 | $ 3,465 | ||||||
Solystic Matter [Member] | ||||||||||
Loss Contingencies | ||||||||||
Loss Contingency, Damages Sought, Value | R$ 111 | 29 | ||||||||
Counterclaim | € 31 | 36 | ||||||||
Unpaid Portions of Contract Price and Direct Costs Incurred [Member] | United States Postal Service | ||||||||||
Loss Contingencies | ||||||||||
Unbilled receivables, net | $ 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 | 23 | ||||||||
Incremental claim [Member] | Solystic Matter [Member] | ||||||||||
Loss Contingencies | ||||||||||
Loss Contingency, Damages Sought, Value | R$ 22 | 6 | ||||||||
Maximum | United States Postal Service | ||||||||||
Loss Contingencies | ||||||||||
Loss Contingency, Estimate of Possible Loss | $ 410 | $ 410 | $ 410 | |||||||
Updated claim [Member] | United States Postal Service | ||||||||||
Loss Contingencies | ||||||||||
Loss Contingency, Estimate of Possible Loss | $ 193 |
Commitments and Contingencies50
Commitments and Contingencies (Unaudited) (Details) £ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Rate | Jun. 30, 2017USD ($) | Jun. 30, 2018GBP (£)Rate | Jun. 30, 2018USD ($)Rate | Dec. 31, 2017USD ($) | |
Site Contingency [Line Items] | |||||||
Accrual for Environmental Remediation Costs | $ 463,000,000 | $ 410,000,000 | |||||
Recorded Third-Party Environmental Recoveries, Amount | 236,000,000 | 207,000,000 | |||||
Financial Arrangements | |||||||
Standby Unused Letters Of Credit and bank guarantees | 395,000,000 | ||||||
Surety Bond Outstanding | 211,000,000 | ||||||
Operating leases | |||||||
Rental expense for operating leases, net of immaterial amounts of sublease rental income | $ 81,000,000 | $ 65,000,000 | $ 173,000,000 | $ 154,000,000 | |||
Line of Credit Facility [Line Items] | |||||||
Debt Instrument, Covenant Compliance | the company was in compliance with all covenants under its credit agreements. | ||||||
Short Term Debt, Maximum Borrowing Capacity | 750,000,000 | ||||||
Debt Instrument, Term | 90 days | ||||||
Commercial Paper | $ 249,000,000 | ||||||
Short-term Debt, Weighted Average Interest Rate, at Point in Time | Rate | 2.46% | 2.46% | |||||
Two Year Term [Member] [Domain] | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | £ 120 | $ 159,000,000 | |||||
Line of Credit Outstanding | £ 90 | 119,000,000 | |||||
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 | ||||||
Other Current Liabilities [Member] | |||||||
Site Contingency [Line Items] | |||||||
Accrual for Environmental Remediation Costs | 155,000,000 | ||||||
Other Noncurrent Liabilities [Member] | |||||||
Site Contingency [Line Items] | |||||||
Accrual for Environmental Remediation Costs | 308,000,000 | ||||||
Other Current Assets [Member] | |||||||
Site Contingency [Line Items] | |||||||
Recorded Third-Party Environmental Recoveries, Amount | 79,000,000 | ||||||
Other Noncurrent Assets [Member] | |||||||
Site Contingency [Line Items] | |||||||
Recorded Third-Party Environmental Recoveries, Amount | 157,000,000 | ||||||
London Interbank Offered Rate (LIBOR) [Member] | Two Year Term [Member] [Domain] | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of Credit Facility, Interest Rate During Period | Rate | 1.10% | ||||||
Environmental Issue [Member] | Maximum | |||||||
Site Contingency [Line Items] | |||||||
Loss Contingency, Estimate of Possible Loss | 836,000,000 | 792,000,000 | |||||
Environmental Issue [Member] | Minimum | |||||||
Site Contingency [Line Items] | |||||||
Loss Contingency, Estimate of Possible Loss | $ 453,000,000 | $ 405,000,000 |
Retirement Benefits (Unaudite51
Retirement Benefits (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Defined Contribution Plan [Abstract] | ||||
Defined contribution plan, employer contributions | $ 88 | $ 77 | $ 192 | $ 176 |
Pension Benefits | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | 100 | 97 | 199 | 194 |
Interest cost | 300 | 312 | 590 | 625 |
Expected return on plan assets | (544) | (472) | (1,073) | (943) |
Prior service credit | (14) | (14) | (29) | (29) |
Net loss from previous years | 133 | 191 | 267 | 382 |
Net periodic benefit cost | (25) | 114 | (46) | 229 |
Defined benefit plan, contributions by Employer | 23 | 28 | 45 | 51 |
Medical and Life Benefits | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | 5 | 6 | 10 | 11 |
Interest cost | 19 | 21 | 38 | 42 |
Expected return on plan assets | (24) | (23) | (49) | (45) |
Prior service credit | (6) | (6) | (11) | (11) |
Net loss from previous years | 0 | 4 | 0 | 7 |
Net periodic benefit cost | (6) | 2 | (12) | 4 |
Defined benefit plan, contributions by Employer | $ 11 | 13 | $ 22 | 24 |
Defined Benefit Plan, Interest on Service Cost is reclassified to Interest Cost [Member] | Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior Period Reclassification Adjustment | 4 | 8 | ||
Defined Benefit Plan, Administrative Expenses of the Service Cost reclassified to Net Actuarial Loss [Member] | Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior Period Reclassification Adjustment | 13 | 26 | ||
Defined Benefit Plan, Administrative Expenses of the Service Cost reclassified to Net Actuarial Loss [Member] | Medical and Life Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior Period Reclassification Adjustment | $ 1 | $ 2 |
Stock Compensation Plans and 52
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Details) - USD ($) shares in Millions, $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Rights and Restricted Performance Stock Rights Grant Date Aggregate Fair Value | $ 114 | $ 91 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 0.1 | 0.1 |
Vesting period | 3 years | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 0.2 | 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 | $ 36 | $ 35 |
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 | $ 205 | $ 198 |
Segment Information (Unaudite53
Segment Information (Unaudited) (Details 1) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 4 | |||
Sales | $ 7,119 | $ 6,473 | $ 13,854 | $ 12,883 |
Operating income | 823 | 873 | 1,677 | 1,735 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 779 | 759 | 1,541 | 1,500 |
Operating Segments [Member] | Aerospace Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 3,337 | 3,003 | 6,617 | 5,987 |
Operating income | 357 | 320 | 698 | 643 |
Operating Segments [Member] | Innovation Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 400 | 0 | 400 | 0 |
Operating income | 39 | 0 | 39 | 0 |
Operating Segments [Member] | Mission Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,874 | 2,859 | 5,757 | 5,659 |
Operating income | 352 | 384 | 723 | 743 |
Operating Segments [Member] | Technology Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,048 | 1,162 | 2,192 | 2,352 |
Operating income | 95 | 125 | 217 | 254 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 540 | 551 | 1,112 | 1,115 |
Operating income | 64 | 70 | 136 | 140 |
Net FAS (service)/CAS pension adjustment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 137 | 154 | 264 | 308 |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | (92) | (39) | (126) | (71) |
Segment Reconciling Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ (1) | $ (1) | $ (2) | $ (2) |
Segment Information (Unaudite54
Segment Information (Unaudited) (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Major Customer [Line Items] | ||||
Sales | $ 7,119 | $ 6,473 | $ 13,854 | $ 12,883 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
US Government [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 5,816 | $ 5,515 | $ 11,516 | $ 10,890 |
Concentration Risk, Percentage | 82.00% | 85.00% | 83.00% | 84.00% |
US Government [Member] | Aerospace Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 2,799 | $ 2,616 | $ 5,707 | $ 5,169 |
Concentration Risk, Percentage | 84.00% | 87.00% | 86.00% | 86.00% |
US Government [Member] | Innovation Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 265 | $ 0 | $ 265 | $ 0 |
Concentration Risk, Percentage | 66.00% | 0.00% | 66.00% | 0.00% |
US Government [Member] | Mission Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 2,155 | $ 2,227 | $ 4,345 | $ 4,413 |
Concentration Risk, Percentage | 75.00% | 78.00% | 76.00% | 78.00% |
US Government [Member] | Technology Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 597 | $ 672 | $ 1,199 | $ 1,308 |
Concentration Risk, Percentage | 57.00% | 58.00% | 54.00% | 56.00% |
International Customer [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 1,125 | $ 793 | $ 1,995 | $ 1,665 |
Concentration Risk, Percentage | 16.00% | 12.00% | 15.00% | 13.00% |
International Customer [Member] | Aerospace Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 449 | $ 272 | $ 720 | $ 581 |
Concentration Risk, Percentage | 13.00% | 9.00% | 11.00% | 10.00% |
International Customer [Member] | Innovation Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 92 | $ 0 | $ 92 | $ 0 |
Concentration Risk, Percentage | 23.00% | 0.00% | 23.00% | 0.00% |
International Customer [Member] | Mission Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 391 | $ 353 | $ 770 | $ 707 |
Concentration Risk, Percentage | 14.00% | 12.00% | 13.00% | 12.00% |
International Customer [Member] | Technology Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 193 | $ 168 | $ 413 | $ 377 |
Concentration Risk, Percentage | 18.00% | 14.00% | 19.00% | 16.00% |
Other Customers [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 178 | $ 165 | $ 343 | $ 328 |
Concentration Risk, Percentage | 2.00% | 3.00% | 2.00% | 3.00% |
Other Customers [Member] | Aerospace Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 38 | $ 40 | $ 80 | $ 78 |
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | 1.00% |
Other Customers [Member] | Innovation Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 30 | $ 0 | $ 30 | $ 0 |
Concentration Risk, Percentage | 8.00% | 0.00% | 8.00% | 0.00% |
Other Customers [Member] | Mission Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 34 | $ 33 | $ 64 | $ 54 |
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | 1.00% |
Other Customers [Member] | Technology Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 76 | $ 92 | $ 169 | $ 196 |
Concentration Risk, Percentage | 7.00% | 8.00% | 8.00% | 8.00% |
Intersegment Eliminations [Member] | Aerospace Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 51 | $ 75 | $ 110 | $ 159 |
Concentration Risk, Percentage | 2.00% | 3.00% | 2.00% | 3.00% |
Intersegment Eliminations [Member] | Innovation Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 13 | $ 0 | $ 13 | $ 0 |
Concentration Risk, Percentage | 3.00% | 0.00% | 3.00% | 0.00% |
Intersegment Eliminations [Member] | Mission Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 294 | $ 246 | $ 578 | $ 485 |
Concentration Risk, Percentage | 10.00% | 9.00% | 10.00% | 9.00% |
Intersegment Eliminations [Member] | Technology Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 182 | $ 230 | $ 411 | $ 471 |
Concentration Risk, Percentage | 18.00% | 20.00% | 19.00% | 20.00% |
Operating Segments [Member] | Aerospace Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 3,337 | $ 3,003 | $ 6,617 | $ 5,987 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Innovation Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 400 | $ 0 | $ 400 | $ 0 |
Concentration Risk, Percentage | 100.00% | 0.00% | 100.00% | 0.00% |
Operating Segments [Member] | Mission Systems [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 2,874 | $ 2,859 | $ 5,757 | $ 5,659 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Technology Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 1,048 | $ 1,162 | $ 2,192 | $ 2,352 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Segment Information (Unaudite55
Segment Information (Unaudited) (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Contract Type [Line Items] | ||||
Sales | $ 7,119 | $ 6,473 | $ 13,854 | $ 12,883 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Cost-type [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 3,625 | $ 3,597 | $ 7,243 | $ 7,185 |
Concentration Risk, Percentage | 51.00% | 56.00% | 52.00% | 56.00% |
Cost-type [Member] | Aerospace Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 1,934 | $ 1,840 | $ 3,836 | $ 3,667 |
Concentration Risk, Percentage | 59.00% | 63.00% | 59.00% | 63.00% |
Cost-type [Member] | Innovation Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 99 | $ 0 | $ 99 | $ 0 |
Concentration Risk, Percentage | 26.00% | 0.00% | 26.00% | 0.00% |
Cost-type [Member] | Mission Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 1,207 | $ 1,353 | $ 2,486 | $ 2,669 |
Concentration Risk, Percentage | 47.00% | 52.00% | 48.00% | 52.00% |
Cost-type [Member] | Technology Services [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 385 | $ 404 | $ 822 | $ 849 |
Concentration Risk, Percentage | 44.00% | 43.00% | 46.00% | 45.00% |
Fixed-price [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 3,494 | $ 2,876 | $ 6,611 | $ 5,698 |
Concentration Risk, Percentage | 49.00% | 44.00% | 48.00% | 44.00% |
Fixed-price [Member] | Aerospace Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 1,352 | $ 1,088 | $ 2,671 | $ 2,161 |
Concentration Risk, Percentage | 41.00% | 37.00% | 41.00% | 37.00% |
Fixed-price [Member] | Innovation Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 288 | $ 0 | $ 288 | $ 0 |
Concentration Risk, Percentage | 74.00% | 0.00% | 74.00% | 0.00% |
Fixed-price [Member] | Mission Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 1,373 | $ 1,260 | $ 2,693 | $ 2,505 |
Concentration Risk, Percentage | 53.00% | 48.00% | 52.00% | 48.00% |
Fixed-price [Member] | Technology Services [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 481 | $ 528 | $ 959 | $ 1,032 |
Concentration Risk, Percentage | 56.00% | 57.00% | 54.00% | 55.00% |
Intersegment Eliminations [Member] | Aerospace Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 51 | $ 75 | $ 110 | $ 159 |
Intersegment Eliminations [Member] | Innovation Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | 13 | 0 | 13 | 0 |
Intersegment Eliminations [Member] | Mission Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | 294 | 246 | 578 | 485 |
Intersegment Eliminations [Member] | Technology Services [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | 182 | 230 | 411 | 471 |
Operating Segments [Member] | Aerospace Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 3,337 | $ 3,003 | $ 6,617 | $ 5,987 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Innovation Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 400 | $ 0 | $ 400 | $ 0 |
Concentration Risk, Percentage | 100.00% | 0.00% | 100.00% | 0.00% |
Operating Segments [Member] | Mission Systems [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 2,874 | $ 2,859 | $ 5,757 | $ 5,659 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Technology Services [Member] | ||||
Revenue, Contract Type [Line Items] | ||||
Sales | $ 1,048 | $ 1,162 | $ 2,192 | $ 2,352 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Segment Information (Unaudite56
Segment Information (Unaudited) (Details 4) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 7,119 | $ 6,473 | $ 13,854 | $ 12,883 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
United States | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 5,999 | $ 5,681 | $ 11,864 | $ 11,220 |
Concentration Risk, Percentage | 84.00% | 88.00% | 85.00% | 87.00% |
United States | Aerospace Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 2,837 | $ 2,656 | $ 5,787 | $ 5,247 |
Concentration Risk, Percentage | 86.00% | 91.00% | 89.00% | 90.00% |
United States | Innovation Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 296 | $ 0 | $ 296 | $ 0 |
Concentration Risk, Percentage | 77.00% | 0.00% | 77.00% | 0.00% |
United States | Mission Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 2,193 | $ 2,261 | $ 4,413 | $ 4,468 |
Concentration Risk, Percentage | 85.00% | 86.00% | 85.00% | 86.00% |
United States | Technology Services [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 673 | $ 764 | $ 1,368 | $ 1,505 |
Concentration Risk, Percentage | 78.00% | 82.00% | 77.00% | 80.00% |
Asia/Pacific | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 469 | $ 340 | $ 783 | $ 728 |
Concentration Risk, Percentage | 7.00% | 5.00% | 6.00% | 6.00% |
Asia/Pacific | Aerospace Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 249 | $ 157 | $ 378 | $ 345 |
Concentration Risk, Percentage | 8.00% | 5.00% | 6.00% | 6.00% |
Asia/Pacific | Innovation Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 24 | $ 0 | $ 24 | $ 0 |
Concentration Risk, Percentage | 6.00% | 0.00% | 6.00% | 0.00% |
Asia/Pacific | Mission Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 160 | $ 155 | $ 313 | $ 309 |
Concentration Risk, Percentage | 6.00% | 6.00% | 6.00% | 6.00% |
Asia/Pacific | Technology Services [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 36 | $ 28 | $ 68 | $ 74 |
Concentration Risk, Percentage | 4.00% | 3.00% | 4.00% | 4.00% |
All other (principally Europe and Middle East) | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 651 | $ 452 | $ 1,207 | $ 935 |
Concentration Risk, Percentage | 9.00% | 7.00% | 9.00% | 7.00% |
All other (principally Europe and Middle East) | Aerospace Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 200 | $ 115 | $ 342 | $ 236 |
Concentration Risk, Percentage | 6.00% | 4.00% | 5.00% | 4.00% |
All other (principally Europe and Middle East) | Innovation Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 67 | $ 0 | $ 67 | $ 0 |
Concentration Risk, Percentage | 17.00% | 0.00% | 17.00% | 0.00% |
All other (principally Europe and Middle East) | Mission Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 227 | $ 197 | $ 453 | $ 397 |
Concentration Risk, Percentage | 9.00% | 8.00% | 9.00% | 8.00% |
All other (principally Europe and Middle East) | Technology Services [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 157 | $ 140 | $ 345 | $ 302 |
Concentration Risk, Percentage | 18.00% | 15.00% | 19.00% | 16.00% |
Intersegment Eliminations [Member] | Aerospace Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 51 | $ 75 | $ 110 | $ 159 |
Intersegment Eliminations [Member] | Innovation Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | 13 | 0 | 13 | 0 |
Intersegment Eliminations [Member] | Mission Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | 294 | 246 | 578 | 485 |
Intersegment Eliminations [Member] | Technology Services [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | 182 | 230 | 411 | 471 |
Operating Segments [Member] | Aerospace Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 3,337 | $ 3,003 | $ 6,617 | $ 5,987 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Innovation Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 400 | $ 0 | $ 400 | $ 0 |
Concentration Risk, Percentage | 100.00% | 0.00% | 100.00% | 0.00% |
Operating Segments [Member] | Mission Systems [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 2,874 | $ 2,859 | $ 5,757 | $ 5,659 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Technology Services [Member] | ||||
Revenue, Geographic Location [Line Items] | ||||
Sales | $ 1,048 | $ 1,162 | $ 2,192 | $ 2,352 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Recast 2017 Financial Informa57
Recast 2017 Financial Information (Details 1) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Product | $ 4,790 | $ 4,037 | $ 9,079 | $ 8,034 |
Service | 2,329 | 2,436 | 4,775 | 4,849 |
Total sales | 7,119 | 6,473 | 13,854 | 12,883 |
Product | 3,694 | 3,037 | 6,959 | 6,020 |
Service | 1,863 | 1,877 | 3,768 | 3,744 |
General and administrative expenses | 739 | 686 | 1,450 | 1,384 |
Operating income | 823 | 873 | 1,677 | 1,735 |
Interest and Debt Expense | (144) | (76) | (287) | (151) |
Net FAS (non-service) Pension Benefit (Expense) | 125 | (17) | 245 | (35) |
Other, net | 45 | 32 | 85 | 51 |
Earnings before income taxes | 849 | 812 | 1,720 | 1,600 |
Federal and foreign income tax expense | 160 | 257 | 292 | 395 |
Net earnings | $ 689 | $ 555 | $ 1,428 | $ 1,205 |
Earnings Per Share, Basic | $ 3.95 | $ 3.18 | $ 8.19 | $ 6.90 |
Weighted Average Number of Shares Outstanding, Basic | 174.5 | 174.5 | 174.4 | 174.7 |
Earnings Per Share, Diluted | $ 3.93 | $ 3.16 | $ 8.14 | $ 6.85 |
Weighted Average Number of Shares Outstanding, Diluted | 175.4 | 175.5 | 175.4 | 175.8 |
Change in unamortized benefit plan costs, net of tax | $ 86 | $ 102 | $ 172 | $ 201 |
Change in cumulative translation adjustment | 0 | (4) | (2) | 0 |
Other, net | 3 | (1) | 4 | (3) |
Other comprehensive income, net of tax | 83 | 99 | 166 | 204 |
Comprehensive income | $ 772 | 654 | $ 1,594 | 1,409 |
Previously Reported [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Product | 3,916 | 7,750 | ||
Service | 2,459 | 4,892 | ||
Total sales | 6,375 | 12,642 | ||
Product | 2,958 | 5,829 | ||
Service | 1,896 | 3,783 | ||
General and administrative expenses | 666 | 1,343 | ||
Operating income | 855 | 1,687 | ||
Interest and Debt Expense | (76) | (151) | ||
Net FAS (non-service) Pension Benefit (Expense) | 0 | 0 | ||
Other, net | 28 | 44 | ||
Earnings before income taxes | 807 | 1,580 | ||
Federal and foreign income tax expense | 255 | 388 | ||
Net earnings | $ 552 | $ 1,192 | ||
Earnings Per Share, Basic | $ 3.16 | $ 6.82 | ||
Weighted Average Number of Shares Outstanding, Basic | 174.5 | 174.7 | ||
Earnings Per Share, Diluted | $ 3.15 | $ 6.78 | ||
Weighted Average Number of Shares Outstanding, Diluted | 175.5 | 175.8 | ||
Change in unamortized benefit plan costs, net of tax | $ 102 | $ 201 | ||
Change in cumulative translation adjustment | (4) | 0 | ||
Other, net | (1) | (3) | ||
Other comprehensive income, net of tax | 99 | 204 | ||
Comprehensive income | 651 | 1,396 | ||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Product | 121 | 284 | ||
Service | (23) | (43) | ||
Total sales | 98 | 241 | ||
Product | 87 | 208 | ||
Service | (14) | (28) | ||
General and administrative expenses | 20 | 41 | ||
Operating income | 5 | 20 | ||
Interest and Debt Expense | 0 | 0 | ||
Net FAS (non-service) Pension Benefit (Expense) | 0 | 0 | ||
Other, net | 0 | 0 | ||
Earnings before income taxes | 5 | 20 | ||
Federal and foreign income tax expense | 2 | 7 | ||
Net earnings | $ 3 | $ 13 | ||
Earnings Per Share, Basic | $ 0.02 | $ 0.08 | ||
Weighted Average Number of Shares Outstanding, Basic | 0 | 0 | ||
Earnings Per Share, Diluted | $ 0.01 | $ 0.07 | ||
Weighted Average Number of Shares Outstanding, Diluted | 0 | 0 | ||
Change in unamortized benefit plan costs, net of tax | $ 0 | $ 0 | ||
Change in cumulative translation adjustment | 0 | 0 | ||
Other, net | 0 | 0 | ||
Other comprehensive income, net of tax | 0 | 0 | ||
Comprehensive income | 3 | 13 | ||
Accounting Standards Update 2017-07 [Domain] | Restatement Adjustment [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Product | 0 | 0 | ||
Service | 0 | 0 | ||
Total sales | 0 | 0 | ||
Product | (8) | (17) | ||
Service | (5) | (11) | ||
General and administrative expenses | 0 | 0 | ||
Operating income | 13 | 28 | ||
Interest and Debt Expense | 0 | 0 | ||
Net FAS (non-service) Pension Benefit (Expense) | (17) | (35) | ||
Other, net | 4 | 7 | ||
Earnings before income taxes | 0 | 0 | ||
Federal and foreign income tax expense | 0 | 0 | ||
Net earnings | $ 0 | $ 0 | ||
Earnings Per Share, Basic | $ 0 | $ 0 | ||
Weighted Average Number of Shares Outstanding, Basic | 0 | 0 | ||
Earnings Per Share, Diluted | $ 0 | $ 0 | ||
Weighted Average Number of Shares Outstanding, Diluted | 0 | 0 | ||
Change in unamortized benefit plan costs, net of tax | $ 0 | $ 0 | ||
Change in cumulative translation adjustment | 0 | 0 | ||
Other, net | 0 | 0 | ||
Other comprehensive income, net of tax | 0 | 0 | ||
Comprehensive income | $ 0 | $ 0 |
Recast 2017 Financial Informa58
Recast 2017 Financial Information (Details 2) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash and cash equivalents | $ 1,539 | $ 11,225 | $ 1,383 | $ 2,541 |
Accounts receivable, net | 1,815 | 1,054 | ||
Unbilled receivables, net | 5,272 | 3,465 | ||
Inventoried costs, net | 690 | 398 | ||
Prepaid expenses and other current assets | 406 | 445 | ||
Total current assets | 9,722 | 16,587 | ||
Property, plant and equipment, net of accumulated depreciation of $5,066 for 2017 | 5,864 | 4,225 | ||
Goodwill | 18,747 | 12,455 | ||
Deferred tax assets | 179 | 447 | ||
Intangible Assets, net | 1,329 | 52 | ||
Other non-current assets | 1,537 | 1,362 | ||
Total assets | 37,378 | 35,128 | ||
Trade accounts payable | 1,824 | 1,661 | ||
Accrued employee compensation | 1,451 | 1,382 | ||
Advance payments and amounts in excess of costs incurred | 1,711 | 1,761 | ||
Other current liabilities | 2,847 | 2,288 | ||
Total current liabilities | 7,833 | 7,092 | ||
Long-term debt, net of current portion of $867 for 2017 | 14,387 | 14,399 | ||
Pension and other post-retirement benefit plan liabilities | 5,755 | 5,511 | ||
Other non-current liabilities | 1,176 | 994 | ||
Total liabilities | 29,151 | 27,996 | ||
Commitments and Contingencies | ||||
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; issues and outstanding: 2017 - 174,085,619 | 174 | 174 | ||
Paid-in capital | 0 | 44 | ||
Retained earnings | 13,669 | 11,632 | ||
Accumulated other comprehensive loss | (5,616) | (4,718) | ||
Total shareholders’ equity | 8,227 | 7,132 | $ 6,036 | |
Total liabilities and shareholders’ equity | $ 37,378 | 35,128 | ||
Previously Reported [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash and cash equivalents | 11,225 | |||
Accounts receivable, net | 829 | |||
Unbilled receivables, net | 3,147 | |||
Inventoried costs, net | 780 | |||
Prepaid expenses and other current assets | 368 | |||
Total current assets | 16,349 | |||
Property, plant and equipment, net of accumulated depreciation of $5,066 for 2017 | 4,225 | |||
Goodwill | 12,455 | |||
Deferred tax assets | 475 | |||
Intangible Assets, net | 52 | |||
Other non-current assets | 1,361 | |||
Total assets | 34,917 | |||
Trade accounts payable | 1,661 | |||
Accrued employee compensation | 1,382 | |||
Advance payments and amounts in excess of costs incurred | 1,617 | |||
Other current liabilities | 2,305 | |||
Total current liabilities | 6,965 | |||
Long-term debt, net of current portion of $867 for 2017 | 14,399 | |||
Pension and other post-retirement benefit plan liabilities | 5,511 | |||
Other non-current liabilities | 994 | |||
Total liabilities | 27,869 | |||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | |||
Common stock, $1 par value; 800,000,000 shares authorized; issues and outstanding: 2017 - 174,085,619 | 174 | |||
Paid-in capital | 44 | |||
Retained earnings | 11,548 | |||
Accumulated other comprehensive loss | (4,718) | |||
Total shareholders’ equity | 7,048 | |||
Total liabilities and shareholders’ equity | 34,917 | |||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Accounts receivable, net | 225 | |||
Unbilled receivables, net | 318 | |||
Inventoried costs, net | (382) | |||
Prepaid expenses and other current assets | 77 | |||
Total current assets | 238 | |||
Property, plant and equipment, net of accumulated depreciation of $5,066 for 2017 | 0 | |||
Goodwill | 0 | |||
Deferred tax assets | (28) | |||
Intangible Assets, net | 0 | |||
Other non-current assets | 1 | |||
Total assets | 211 | |||
Trade accounts payable | 0 | |||
Accrued employee compensation | 0 | |||
Advance payments and amounts in excess of costs incurred | 144 | |||
Other current liabilities | (17) | |||
Total current liabilities | 127 | |||
Long-term debt, net of current portion of $867 for 2017 | 0 | |||
Pension and other post-retirement benefit plan liabilities | 0 | |||
Other non-current liabilities | 0 | |||
Total liabilities | 127 | |||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | |||
Common stock, $1 par value; 800,000,000 shares authorized; issues and outstanding: 2017 - 174,085,619 | 0 | |||
Paid-in capital | 0 | |||
Retained earnings | 84 | |||
Accumulated other comprehensive loss | 0 | |||
Total shareholders’ equity | 84 | |||
Total liabilities and shareholders’ equity | 211 | |||
Accounting Standards Update 2017-07 [Domain] | Restatement Adjustment [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Accounts receivable, net | 0 | |||
Unbilled receivables, net | 0 | |||
Inventoried costs, net | 0 | |||
Prepaid expenses and other current assets | 0 | |||
Total current assets | 0 | |||
Property, plant and equipment, net of accumulated depreciation of $5,066 for 2017 | 0 | |||
Goodwill | 0 | |||
Deferred tax assets | 0 | |||
Intangible Assets, net | 0 | |||
Other non-current assets | 0 | |||
Total assets | 0 | |||
Trade accounts payable | 0 | |||
Accrued employee compensation | 0 | |||
Advance payments and amounts in excess of costs incurred | 0 | |||
Other current liabilities | 0 | |||
Total current liabilities | 0 | |||
Long-term debt, net of current portion of $867 for 2017 | 0 | |||
Pension and other post-retirement benefit plan liabilities | 0 | |||
Other non-current liabilities | 0 | |||
Total liabilities | 0 | |||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | |||
Common stock, $1 par value; 800,000,000 shares authorized; issues and outstanding: 2017 - 174,085,619 | 0 | |||
Paid-in capital | 0 | |||
Retained earnings | 0 | |||
Accumulated other comprehensive loss | 0 | |||
Total shareholders’ equity | 0 | |||
Total liabilities and shareholders’ equity | $ 0 |