Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 25, 2014 | Jun. 28, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'XLS | ' | ' |
Entity Registrant Name | 'Exelis Inc. | ' | ' |
Entity Central Index Key | '0001524471 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 189,517,028 | ' |
Entity Public Float | ' | ' | $2.60 |
CONSOLIDATED_AND_COMBINED_STAT
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Product revenue | $2,136 | $2,487 | $2,817 |
Service revenue | 2,680 | 3,035 | 3,022 |
Total revenue | 4,816 | 5,522 | 5,839 |
Costs of product revenue | 1,517 | 1,726 | 1,933 |
Costs of service revenue | 2,231 | 2,633 | 2,683 |
Selling, general and administrative expenses | 455 | 516 | 566 |
Research and development expenses | 54 | 67 | 99 |
Restructuring and asset impairment charges | 83 | 19 | 23 |
Operating income | 476 | 561 | 535 |
Interest expense, net | 37 | 37 | 10 |
Other expense (income), net | 2 | 3 | -12 |
Income from continuing operations before income tax expense | 437 | 521 | 537 |
Income tax expense | 156 | 191 | 211 |
Net income | $281 | $330 | $326 |
Basic | ' | ' | ' |
Net income (in dollars per share) | $1.49 | $1.76 | $1.75 |
Diluted | ' | ' | ' |
Net income (in dollars per share) | $1.46 | $1.75 | $1.75 |
Weighted average common shares outstanding - basic (in shares) | 188.5 | 187.4 | 186.2 |
Weighted average common shares outstanding - diluted (in shares) | 192 | 188.6 | 186.7 |
Cash dividends declared per common share (in dollars per shares) | $0.41 | $0.41 | $0.10 |
CONSOLIDATED_AND_COMBINED_STAT1
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $281 | $330 | $326 |
Other comprehensive income (loss), net of tax | ' | ' | ' |
Net foreign currency translation adjustments | 1 | 8 | 1 |
Defined Benefit Plans | ' | ' | ' |
Net actuarial gain (loss) arising during the year | 343 | -230 | -29 |
Prior service credit (cost) arising during the year | -1 | 1 | -1 |
Amortization of net actuarial loss | 59 | 52 | 22 |
Amortization of prior service cost (credit) included in net periodic benefit cost | 1 | 0 | 1 |
Investment securities | ' | ' | ' |
Unrealized holding loss arising during the year | 0 | 0 | -1 |
Reclassification adjustments for gain realized in net income | 0 | 0 | -8 |
Other comprehensive income (loss), net of tax | 403 | -169 | -15 |
Total comprehensive income | $684 | $161 | $311 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $469 | $292 |
Receivables, net | 939 | 995 |
Inventories, net | 246 | 283 |
Deferred tax asset | 16 | 85 |
Other current assets | 70 | 58 |
Total current assets | 1,740 | 1,713 |
Plant, property and equipment, net | 498 | 512 |
Goodwill | 2,184 | 2,180 |
Other intangible assets, net | 167 | 184 |
Deferred tax asset | 216 | 556 |
Other non-current assets | 79 | 67 |
Total non-current assets | 3,144 | 3,499 |
Total assets | 4,884 | 5,212 |
Current liabilities | ' | ' |
Accounts payable | 367 | 444 |
Advance payments and billings in excess of costs | 301 | 322 |
Compensation and other employee benefits | 216 | 246 |
Other accrued liabilities | 160 | 203 |
Total current liabilities | 1,044 | 1,215 |
Defined benefit plans | 1,407 | 2,203 |
Long-term debt | 649 | 649 |
Deferred tax liability | 2 | 1 |
Other non-current liabilities | 130 | 128 |
Total non-current liabilities | 2,188 | 2,981 |
Total liabilities | 3,232 | 4,196 |
Commitments and contingencies (Note 18) | ' | ' |
Shareholders’ equity | ' | ' |
Common stock | 2 | 2 |
Additional paid-in capital | 2,623 | 2,575 |
Treasury stock | -16 | 0 |
Retained earnings | 475 | 274 |
Accumulated other comprehensive loss | -1,432 | -1,835 |
Total shareholders’ equity | 1,652 | 1,016 |
Total liabilities and shareholders’ equity | $4,884 | $5,212 |
CONSOLIDATED_AND_COMBINED_STAT2
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating activities | ' | ' | ' |
Net income | $281 | $330 | $326 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 110 | 130 | 133 |
Stock-based compensation | 32 | 24 | 18 |
Restructuring and asset impairment charges | 83 | 19 | 23 |
Payments for restructuring | -58 | -20 | -19 |
Defined benefit plans expense | 87 | 43 | 46 |
Defined benefit plans payments | -206 | -290 | -87 |
Change in assets and liabilities | ' | ' | ' |
Change in receivables | 52 | 41 | -106 |
Change in inventories | 39 | 56 | -99 |
Change in other assets | -20 | -11 | -27 |
Change in accounts payable | -77 | -2 | 122 |
Change in advance payments and billings in excess of costs | -21 | -58 | -49 |
Change in deferred taxes | 130 | 112 | 64 |
Change in other liabilities | -123 | 9 | -13 |
Other, net | -1 | -2 | -2 |
Net cash provided by operating activities | 310 | 385 | 334 |
Investing activities | ' | ' | ' |
Capital expenditures | -78 | -119 | -95 |
Proceeds from the sale of assets | 9 | 2 | 14 |
Acquisitions, net of cash acquired | -16 | -43 | 0 |
Other, net | 2 | 1 | -4 |
Net cash used in investing activities | -83 | -159 | -85 |
Financing activities | ' | ' | ' |
Short-term borrowing under credit facility | 0 | 0 | 240 |
Repayments under credit facility | 0 | 0 | -240 |
Proceeds from the issuance of debt, net | 0 | 0 | 649 |
Payment of debt issuance costs | 0 | 0 | -6 |
Dividends paid | -58 | -77 | -19 |
Common stock repurchased | -16 | 0 | 0 |
Proceeds from the exercise of stock options | 23 | 19 | 0 |
Transfers to parent, net | 0 | 0 | -775 |
Other, net | 0 | 1 | 4 |
Net cash used in financing activities | -51 | -57 | -147 |
Exchange rate effects on cash and cash equivalents | 1 | 7 | -4 |
Net change in cash and cash equivalents | 177 | 176 | 98 |
Cash and cash equivalents – beginning of year | 292 | 116 | ' |
Cash and cash equivalents – end of year | 469 | 292 | 116 |
Cash paid during the year for | ' | ' | ' |
Income taxes (net of refunds received) | 97 | 28 | 86 |
Interest | $34 | $37 | $0 |
CONSOLIDATED_AND_COMBINED_STAT3
CONSOLIDATED AND COMBINED STATEMENTS OF SHAREHOLDERS' AND PARENT COMPANY EQUITY (USD $) | Total | Common stock | Common stock | Additional paid-in capital | Additional paid-in capital | Treasury stock | Retained earnings | Parent company investment | Parent company investment | Accumulated other comprehensive Loss | Accumulated other comprehensive Loss |
In Millions, unless otherwise specified | Spinoff | Spinoff | Spinoff | Spinoff | |||||||
Beginning balance at Dec. 31, 2010 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for the ITT Spin-off (in shares) | ' | ' | 184.6 | ' | ' | ' | ' | ' | ' | ' | ' |
Employee stock awards and stock options (in shares) | ' | 0.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchased | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of parent company investment to additional paid-in capital | ' | ' | ' | ' | $2,519 | ' | ' | ' | ($2,519) | ' | ' |
Issuance of common stock in connection with the ITT Spin-off | ' | ' | 2 | ' | -2 | ' | ' | ' | ' | ' | ' |
Tax adjustments attributable to the ITT Spin-off, net | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Defined benefit plans tax reclassification attributable to the ITT Spin-off | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | 0 |
Employee stock awards and stock options | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' |
Common Stock repurchased | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Net income | 326 | ' | ' | ' | ' | ' | 0 | 284 | ' | ' | ' |
Cash dividends declared on common stock | ' | ' | ' | ' | ' | ' | -19 | ' | ' | ' | ' |
Net transfer to parent | ' | ' | ' | ' | ' | ' | ' | ' | -428 | ' | ' |
Conversion of parent company equity to cumulative translation adjustment | ' | ' | ' | ' | ' | ' | ' | ' | -15 | ' | 15 |
Other comprehensive income (loss), net of tax | -15 | ' | ' | ' | ' | ' | ' | ' | ' | -15 | ' |
Transfer of defined benefit plans from ITT in connection with the ITT Spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,587 |
Net change | ' | 2 | ' | 2,523 | ' | 0 | 23 | -2,678 | ' | -1,587 | ' |
Ending balance at Dec. 31, 2011 | 893 | 2 | ' | 2,523 | ' | 0 | 23 | 0 | ' | -1,655 | ' |
Ending balance (in shares) at Dec. 31, 2011 | ' | 184.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance at Oct. 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | 42 | ' | ' | ' | ' |
Ending balance at Dec. 31, 2011 | 893 | 2 | ' | 2,523 | ' | 0 | 23 | 0 | ' | -1,655 | ' |
Beginning balance (in shares) at Dec. 31, 2011 | ' | 184.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for the ITT Spin-off (in shares) | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Employee stock awards and stock options (in shares) | ' | 2.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchased | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of parent company investment to additional paid-in capital | ' | ' | ' | ' | 0 | ' | ' | ' | 0 | ' | ' |
Issuance of common stock in connection with the ITT Spin-off | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' |
Tax adjustments attributable to the ITT Spin-off, net | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' |
Defined benefit plans tax reclassification attributable to the ITT Spin-off | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | -11 |
Employee stock awards and stock options | ' | ' | ' | 16 | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | 22 | ' | ' | ' | ' | ' | ' | ' |
Common Stock repurchased | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Net income | 330 | ' | ' | ' | ' | ' | 330 | ' | ' | ' | ' |
Cash dividends declared on common stock | ' | ' | ' | ' | ' | ' | -79 | ' | ' | ' | ' |
Net transfer to parent | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' |
Conversion of parent company equity to cumulative translation adjustment | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 |
Other comprehensive income (loss), net of tax | -169 | ' | ' | ' | ' | ' | ' | ' | ' | -169 | ' |
Transfer of defined benefit plans from ITT in connection with the ITT Spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Net change | ' | 0 | ' | 52 | ' | 0 | 251 | 0 | ' | -180 | ' |
Ending balance at Dec. 31, 2012 | 1,016 | 2 | ' | 2,575 | ' | 0 | 274 | 0 | ' | -1,835 | ' |
Ending balance (in shares) at Dec. 31, 2012 | 187.6 | 187.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for the ITT Spin-off (in shares) | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Employee stock awards and stock options (in shares) | ' | 2.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchased | -1 | -1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of parent company investment to additional paid-in capital | ' | ' | ' | ' | 0 | ' | ' | ' | 0 | ' | ' |
Issuance of common stock in connection with the ITT Spin-off | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' |
Tax adjustments attributable to the ITT Spin-off, net | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Defined benefit plans tax reclassification attributable to the ITT Spin-off | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | 0 |
Employee stock awards and stock options | ' | ' | ' | 22 | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | 26 | ' | ' | ' | ' | ' | ' | ' |
Common Stock repurchased | -16 | ' | ' | ' | ' | -16 | ' | ' | ' | ' | ' |
Net income | 281 | ' | ' | ' | ' | ' | 281 | ' | ' | ' | ' |
Cash dividends declared on common stock | ' | ' | ' | ' | ' | ' | -80 | ' | ' | ' | ' |
Net transfer to parent | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' |
Conversion of parent company equity to cumulative translation adjustment | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 |
Other comprehensive income (loss), net of tax | 403 | ' | ' | ' | ' | ' | ' | ' | ' | 403 | ' |
Transfer of defined benefit plans from ITT in connection with the ITT Spin-off | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Net change | ' | 0 | ' | 48 | ' | -16 | 201 | 0 | ' | 403 | ' |
Ending balance at Dec. 31, 2013 | $1,652 | $2 | ' | $2,623 | ' | ($16) | $475 | ' | ' | ($1,432) | ' |
Ending balance (in shares) at Dec. 31, 2013 | 189.4 | 189.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||
Description of Business and Summary of Significant Accounting Policies | ' | |||
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Our business | ||||
Exelis Inc. (“Exelis” or the “Company”) is a diversified aerospace, defense, information and services company that leverages a 50-year legacy of deep customer knowledge and technical expertise to deliver affordable mission-critical solutions in the areas of imaging and analysis, electronic warfare, air traffic solutions, positioning and navigation, communications and information systems, logistics, and technical services to military, government and commercial customers in the United States and globally. We are focused on strategic growth in the areas of: critical networks; intelligence, surveillance, reconnaissance (ISR) and analytics; electronic warfare; and composite aerostructures. The Company's customers include the U.S. Department of Defense (DoD) and its prime contractors, U.S. Government intelligence agencies, the National Aeronautics and Space Administration (NASA), the Federal Aviation Administration (FAA), allied foreign governments and domestic and foreign commercial customers. As a prime contractor, subcontractor, or preferred supplier, Exelis participates in many high priority defense and civil government programs in the United States and internationally. Exelis conducts most of its business with the U.S. Government, principally the DoD. Exelis Inc. was incorporated in Indiana on May 4, 2011. | ||||
References in these notes to “Exelis”, “we,” “us,” “our,” “the Company” and “our Company” refer to Exelis Inc. and its subsidiaries, unless the context otherwise requires. | ||||
We operate in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Our C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems; and composite aerostructures, for government and commercial customers around the world. Our Information and Technical Services segment provides a broad range of service solutions, including: systems integration; network design and development; air traffic management; cyber; intelligence; operations; sustainment; advanced engineering; logistics; and space launch and range-support, for a wide variety of U.S. military and U.S. Government customers. | ||||
Separation from ITT Corporation | ||||
Exelis, formerly ITT Corporation's ("ITT") Defense & Information Solutions segment, became an independent, publicly traded company on October 31, 2011, when ITT completed the spin-off (the “ITT Spin-off”) of Exelis. The ITT Spin-off was completed pursuant to the Distribution Agreement, dated as of October 25, 2011, among ITT, Exelis and Xylem Inc. On October 31, 2011, ITT also completed its spin-off of Xylem Inc., which includes ITT’s water-related businesses. | ||||
Our Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission (SEC) on October 6, 2011. On October 31, 2011 (the “Distribution Date”), the common stock of Exelis was distributed, on a pro rata basis, to ITT’s shareholders of record as of the close of business on October 17, 2011 (the “Record Date”), and each of the shareholders of ITT received one share of Exelis common stock for every one share of common stock of ITT held on the Record Date, resulting in the distribution of 184.6 shares of our common stock to ITT shareholders. After the Distribution Date, ITT did not beneficially own any shares of Exelis common stock. Our common stock began trading “regular-way” under the symbol “XLS” on the New York Stock Exchange on November 1, 2011. | ||||
References in these notes to “ITT” or “parent” refers to ITT Corporation and its consolidated subsidiaries (other than Exelis), unless the context otherwise requires. | ||||
Basis of Presentation and principles of consolidation and combination | ||||
The Consolidated and Combined Financial Statements reflect the consolidated operations of Exelis as a separate stand-alone entity beginning on October 31, 2011. Periods presented prior to the ITT Spin-off have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of ITT. The Consolidated and Combined Financial Statements reflect our financial position, results of operations and cash flows as we were historically managed, in conformity with accounting principles generally accepted in the United States of America (GAAP). | ||||
All significant intercompany transactions between our businesses have been eliminated. Prior to October 31, 2011, all significant intercompany transactions between us and ITT have been included in these financial statements and were considered to be effectively settled for cash in these financial statements at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions is reflected in the Consolidated and Combined Statements of Cash Flows as "Transfers to parent, net", a financing activity, and in the Consolidated and Combined Statements of Shareholders’ Equity as “Parent company investment.” | ||||
Prior to October 31, 2011, our Consolidated and Combined Financial Statements include expenses of ITT allocated to us for certain functions provided by ITT, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, insurance and stock-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods allocated. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company. Actual costs that may have been incurred if we had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Following our separation from ITT, we have performed these functions using our own resources, purchased services or services provided by ITT under temporary transition services agreements or other commercial agreements. ITT interest expense was not allocated to us prior to the ITT Spin-off as we were not the legal obligor of the debt and the ITT borrowings were not directly attributable to our business. | ||||
ITT used a centralized approach to cash management and financing of its operations, excluding debt where we are the legal obligor. Prior to October 31, 2011, the majority of our cash was transferred to ITT daily and ITT funded our operating and investing activities as needed. Cash transfers to and from ITT’s cash management accounts are reflected in the Consolidated and Combined Statements of Cash Flows as “Transfers to Parent, net.” | ||||
We have evaluated all material events occurring subsequent to the financial statement date for recognition or disclosure through the date this Annual Report on Form 10-K was filed. | ||||
Principles of consolidation | ||||
Exelis consolidates companies in which it has a controlling financial interest or when Exelis is considered the primary beneficiary of a variable interest entity. We account for investments in companies over which we have the ability to exercise significant influence, but do not hold a controlling interest under the equity method, and we record our proportionate share of income or losses in the Consolidated and Combined Statements of Operations. The results of companies acquired or disposed of during the fiscal year are included in the Consolidated and Combined Financial Statements from the effective date of acquisition or up to the date of disposal. | ||||
Parent Company Investment | ||||
Parent company investment in the Consolidated and Combined Statements of Shareholders’ Equity represents ITT’s historical investment in us in excess of our accumulated net income after taxes and the net effect of the transactions with and allocations from ITT. | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, revenue recognition, income taxes, contingency accruals and valuation allowances, fair value measurements, impairment of goodwill and other intangible assets, postretirement obligations and certain contingent liabilities. Actual results could differ from these estimates. | ||||
Business Combinations | ||||
Exelis allocates the purchase price of its acquisitions to the tangible and intangible assets acquired, liabilities assumed, and non-controlling interests acquired based on their estimated fair value at the acquisition date. The excess of the acquisition price over those estimated fair values is recorded as goodwill. Changes to the acquisition date fair values prior to the expiration of the measurement period, a period generally not to exceed 12 months from date of acquisition, are recorded as an adjustment to the acquired assets, including goodwill. Changes to the acquisition date fair values after expiration of the measurement period are recorded in income. Acquisition-related expenses and restructuring charges are recognized separately from the business combination and are expensed as incurred. | ||||
Revenue Recognition | ||||
As a defense contractor engaging in long-term contracts, the majority of our revenue is derived from long-term construction-type and production-type sales contracts and services provided to the federal government for which revenue is recognized under the percentage-of-completion method based on units of delivery, percentage of costs incurred to total costs, or the completion of scheduled performance milestones. For units of delivery, revenues and profits are recognized based upon the ratio of actual units delivered to estimated total units to be delivered under the contract. Under the cost-to-total cost method, revenue is recognized based upon the ratio of costs incurred to estimated total costs at completion of the contract. Revenue is recognized under the milestone method based upon accomplishing a clear deliverable output of contract performance with value to the customer. Revenues and profits on time-and-material type contracts are recognized based on billable rates times direct labor hours incurred plus material and other reimbursable costs incurred. The completed contract method is utilized when reasonable and reliable cost estimates for a project cannot be made. Amounts invoiced to customers in excess of revenue recognized are recorded as deferred revenue, until the revenue recognition criteria are satisfied. Revenue that is earned and recognized in excess of amounts invoiced is recorded as a component of receivables, net. | ||||
During the performance of long-term sales contracts, estimated final contract prices and costs are reviewed periodically and revisions are made as required and recorded in income in the period in which they are determined. Additionally, the fees under certain contracts may be increased or decreased in accordance with cost or performance incentive provisions which measure actual performance against established targets or other criteria. Such incentive fee awards or penalties are included in revenue when there is sufficient information to reasonably assess anticipated contract performance. Amounts representing contract change orders, claims, requests for equitable adjustment, or limitations in funding on contracts are recorded only if it is probable the claim will result in additional contract revenue and the amounts can be reliably estimated. Provisions for estimated losses on uncompleted long-term sales contracts are made in the period in which such losses are determined and are recorded as a component of costs of revenue. Contract revenue and cost estimates are reviewed and reassessed periodically. Changes in these estimates could result in recognition of cumulative catch-up adjustments to the contract’s inception to date revenue, cost of revenue and profit in the period in which such changes are made, based on a contract’s percent complete. Changes in revenue and cost estimates could also result in a forward loss or an adjustment to a forward loss. For the years ended December 31, 2013, 2012 and 2011, net favorable cumulative catch-up adjustments related to prior periods increased operating income by approximately $107, $65 and $143, respectively, and diluted earnings per share by approximately $0.36, $0.22 and $0.46, respectively. | ||||
To a lesser extent, we enter into contracts that are not associated with the design, development, manufacture, or modification of complex aerospace or electronic equipment and related services, and for services to non-federal government customers. For such contracts, we recognize revenue at the time title and risks and rewards of ownership pass, which is generally when products are shipped or as services are performed if there is persuasive evidence of an arrangement, the price is fixed or determinable and collectability is reasonably assured. For agreements that contain multiple deliverables, we allocate revenue across all identified units of accounting based on relative fair values and then recognize revenue when the appropriate revenue recognition criteria for the individual deliverables have been satisfied. | ||||
Research and Development | ||||
Expenditures for Company-sponsored research and development projects are expensed as incurred. Costs we incur under customer-sponsored research and development programs pursuant to contracts are included in total revenue and cost of revenue. | ||||
Restructuring | ||||
We periodically initiate management approved restructuring activities to achieve cost savings through reduced operational redundancies and to strategically position ourselves in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance, infrastructure charges to vacate facilities or consolidate operations, contract termination costs and other related charges. For involuntary separation plans, a liability is recognized when it is probable and reasonably estimable. For voluntary separation plans, a liability is recognized when the employee irrevocably accepts the voluntary termination. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change or if the employees are required to render services beyond a minimum retention period, the fair value of the severance or benefit payouts is recognized ratably over the future service period. | ||||
Income Taxes | ||||
We determine the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. | ||||
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. | ||||
We provide for U.S. deferred taxes on the excess of financial reporting basis over the U.S. tax basis for our foreign earnings, when we do not plan to reinvest such earnings indefinitely outside the United States. | ||||
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Consolidated and Combined Financial Statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | ||||
Prior to October 31, 2011, our income taxes as presented were calculated on a separate tax return basis and may not be reflective of the results that would have occurred on a standalone basis. Our operations were included in ITT’s U.S. federal and state tax returns or non-U.S. jurisdictions tax returns prior to the ITT Spin-off. Subsequent to the ITT Spin-off, we file our own consolidated income tax returns and we maintain taxes payable to and from federal and state taxing authorities. | ||||
Foreign Currency Translation | ||||
The financial statements of consolidated and combined international businesses, for which the functional currency is not the U.S. dollar, are translated into U.S. dollars. Balance sheet accounts are translated at the exchange rate in effect at the end of each period; income statement accounts are translated at the average rates of exchange prevailing during the period. Gains and losses on foreign currency translations are reflected in accumulated other comprehensive loss. Net gains or losses from foreign currency transactions are reported in Selling, General and Administrative (“SG&A”) expenses and have historically been immaterial. | ||||
Cash and Cash Equivalents | ||||
Exelis considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | ||||
Accounts Receivable | ||||
Accounts receivable include amounts billed and currently due from customers, unbilled costs and accrued profits primarily related to revenue on long-term sales contracts that have been recognized for accounting purposes but not yet billed to customers, certain estimated contract change amounts, claims or requests for equitable adjustment in negotiation that are probable of recovery, and amounts retained by the customer pending contract completion. We maintain an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance is based upon an assessment of customer credit-worthiness, historical payment experience and the age of outstanding receivables. | ||||
Inventories | ||||
Inventories are stated at cost (first-in, first-out or average cost), but not in excess of realizable value. A write down for excess or inactive inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns, future sales expectations and salvage value. | ||||
Inventoried costs related to long-term sales contracts are stated at the actual production cost, including overhead and other related non-recurring costs incurred to date reduced by amounts identified with revenue recognized on units delivered or progress completed. Inventoried costs relating to long-term sales contracts and programs are reduced by charging any amounts in excess of estimated realizable value to costs of revenue. | ||||
Plant, Property and Equipment | ||||
Plant, property and equipment, net, are stated at cost less accumulated depreciation. Major improvements are capitalized at cost while expenditures for maintenance, repairs and minor improvements are expensed. For asset sales or retirements, the assets and related accumulated depreciation or amortization are eliminated from the accounts and any resulting gain or loss is reflected in income. | ||||
Depreciation is generally computed using either an accelerated or straight-line method and is based on estimated useful lives as follows: | ||||
Years | ||||
Buildings and improvements | 5 | - | 40 | |
Machinery and equipment | 2 | - | 15 | |
Furniture, fixtures and office equipment | 3 | - | 7 | |
Operating Leases | ||||
Many of the Company’s real property lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For incentives for tenant improvements, the Company records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records minimum rental expenses on a straight-line basis over the term of the lease. Leasehold improvements are amortized over the lesser of the remaining life of the lease or the estimated useful life of the improvement. | ||||
Capitalized Internal Use Software | ||||
Exelis capitalizes certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. Exelis amortizes capitalized internal use software costs using the straight-line method over the estimated useful life of the software, generally from 3 to 7 years. | ||||
Long-Lived Asset Impairment | ||||
Long-lived assets, including other intangible assets with finite lives, are tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. We assess the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. | ||||
Goodwill and Other Intangible Assets | ||||
Goodwill represents purchase consideration paid in a business combination that exceeds the values assigned to the net assets of acquired businesses. Other intangible assets include customer and distributor relationships, proprietary technology, trademarks and patents. Our other intangible assets have a finite life and are generally amortized on a straight-line basis, unless the pattern of usage of the benefits indicates an alternate method is more representative of the usage of the asset, over their estimated economic useful life, which generally range from 10-25 years. Other intangible assets are tested for impairment if indicators of impairment are identified. | ||||
Goodwill is not amortized, but instead is tested for impairment annually (or more frequently if impairment indicators arise, such as changes to the reporting unit structure, significant adverse changes in the business climate or an adverse action or assessment by a regulator). Goodwill has been assigned to our reporting units for purposes of impairment testing. We conduct our annual impairment testing on the first day of the fourth fiscal quarter. The impairment test is a two-step test. In the first step, the estimated fair value of each reporting unit is compared to the carrying value of the net assets assigned to that reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the second step of the impairment test is not performed. If the carrying value of the reporting unit exceeds its estimated fair value, then the second step of the impairment test is performed in order to measure the impairment loss to be recorded. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference. We estimate the fair value of our reporting units using an income approach. Under the income approach, we estimate fair value based on the present value of estimated future cash flows. | ||||
Postretirement Benefit Plans | ||||
Plans that are sponsored by the Company and plans received on October 31, 2011 in connection with the ITT Spin-off are accounted for as defined benefit pension and other postretirement defined benefit plans (collectively referred to as “defined benefit plans”). Accordingly, the funded or unfunded position of each defined benefit plan is recorded on our Consolidated Balance Sheets. Actuarial gains and losses and prior service costs or credits that have not yet been recognized through income are recorded in accumulated other comprehensive loss within equity, net of taxes, until they are amortized as a component of net periodic benefit cost. The determination of benefit obligations and the recognition of expenses related to defined benefit plans are dependent on various assumptions. The major assumptions primarily relate to discount rates, long-term expected rates of return on plan assets, rate of future compensation increases, mortality, termination, health care inflation trend rates and other factors. Management develops each assumption using relevant company experience in conjunction with market-related data. Actuarial assumptions are reviewed annually with third-party consultants and adjusted as necessary. For the recognition of net periodic benefit cost, the calculation of the long-term expected return on plan assets is generally derived using a market-related value of plan assets based on yearly average asset values at the measurement date over the last five years. Actual results that differ from our assumptions are accumulated and amortized over the estimated future life or service period of the participants. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date. | ||||
Prior to October 31, 2011, certain of our U.S. and U.K. salaried employees participated in defined benefit pension and other postretirement defined benefit plans (the “Shared Plans”) sponsored by ITT which included participants of other ITT subsidiaries. We accounted for such Shared Plans under a multiemployer benefit approach. Accordingly, we did not record an asset or liability to recognize the funded status of the Shared Plans. We recognized a liability only for any required contributions to the Shared Plans that were accrued and unpaid at the balance sheet date. The related pension and other postretirement expenses were allocated to us based primarily on pensionable compensation of active participants and are reported in SG&A expenses. | ||||
Stock-Based Compensation | ||||
We recognize stock-based compensation expense primarily within SG&A expenses based on the grant date fair values, net of estimated forfeitures, for all share-based awards granted over the requisite service periods of the awards, which is generally equivalent to the vesting term. | ||||
Prior to October 31, 2011, all of our stock-based compensation expense was attributable to our participation in ITT long-term incentive plans. Expense recognized prior to October 31, 2011 was based on awards attributable to those plans. | ||||
Fair Value Measurements | ||||
We determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, a fair value hierarchy is applied which categorizes and prioritizes the inputs used to estimate fair value into three levels. The fair value hierarchy is based on maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. Classification within the fair value hierarchy is based on the lowest level input that is significant to the fair value measurement. There are three levels of the fair value hierarchy. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices (in non-active markets or in active markets for similar assets or liabilities), inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the assets or liabilities. | ||||
In certain instances, fair value is estimated using quoted market prices obtained from external pricing services. In obtaining such data from the pricing service, the Company has evaluated the methodologies used to develop the estimate of fair value in order to assess whether such valuations are representative of fair value, including net asset value (NAV). Additionally, in certain circumstances, the NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value. | ||||
Commitments and Contingencies | ||||
We record accruals for commitments and loss contingencies when they are probable of occurrence and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. We review these accruals quarterly and adjust the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information. | ||||
Accruals for environmental matters are recorded on a site by site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies available to us. Our estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. These accruals are adjusted quarterly as assessment and remediation efforts progress or as additional technical or legal information become available. Actual costs to be incurred at identified sites in future periods may vary from the estimates, given inherent uncertainties in evaluating environmental exposures. Accruals for environmental liabilities generally exclude claims for recoveries from insurance companies or other third parties and are reported in other non-current liabilities at undiscounted amounts. | ||||
Earnings Per Share | ||||
We compute earnings per common share on the basis of the weighted average number of common shares, and, where dilutive, common share equivalents, outstanding during the indicated periods. | ||||
Concentrations of Credit Risk | ||||
The U.S. Government accounted for 83% and 85% of receivables, net at December 31, 2013 and 2012, respectively. | ||||
Derivative Financial Instruments | ||||
Our operations give rise to exposure to market risks from changes in foreign exchange rates. We may use derivative financial instruments to reduce the impact of changes in foreign exchange rates on our operating results. We do not hold or issue derivative financial instruments for trading or other speculative purposes. The effect of our derivative instruments on our Consolidated and Combined Financial Statements is immaterial for all periods presented. | ||||
Reclassifications | ||||
Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recent Accounting Pronouncements | ' |
RECENT ACCOUNTING PRONOUNCEMENTS | |
Recently Adopted Pronouncements | |
In February 2013, the Financial Accounting Standards Board (FASB) issued guidance intended to update the disclosure requirements for accumulated other comprehensive income (AOCI). This guidance does not change the current requirements for reporting net income or other comprehensive income in the financial statements. The updated guidance requires an entity to disclose additional information about changes in AOCI balances by component and significant amounts reclassified out of AOCI by component. This guidance is effective prospectively for reporting periods beginning after December 15, 2012. We adopted this guidance on January 1, 2013 and have provided the additional required disclosures in the notes to these financial statements. | |
Pronouncements Not Yet Adopted | |
New pronouncements issued but not effective until after December 31, 2013 are not expected to have a material impact on our financial position, results of operations or cash flows. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2013 | |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
ACQUISITIONS | |
During 2013, the Company acquired C4i Pty. Ltd. for an aggregate purchase price of approximately $16, net of cash acquired. The operating results of this business are reported in the Information and Technical Services segment from the date of acquisition. The assets, liabilities and results of operations for the acquired business were not material to the Company. | |
During 2012, the Company acquired Applied Kilovolts Group Holdings, Limited and Space Computer Corporation for an aggregate purchase price of approximately $43, net of cash acquired. The operating results of these businesses are reported in the C4ISR Electronics and systems segment from the dates of acquisition. The assets, liabilities and results of operations for each of the business acquired were not material to the Company. We did not engage in any significant acquisitions during 2011. |
Restructuring_and_Asset_Impair
Restructuring and Asset Impairment Charges | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||
Restructuring and Asset Impairment Charges | ' | |||||||||
RESTRUCTURING AND ASSET IMPAIRMENT CHARGES | ||||||||||
We have initiated various restructuring activities throughout the business during the past three years. The restructuring activities focus on various aspects of operations, including closing and consolidating certain facilities and manufacturing operations, rationalizing headcount, and aligning operations in the most strategic and cost-efficient structure. | ||||||||||
During the first quarter of 2013, we initiated an action to reduce the size of our workforce and consolidate our facilities footprint to align our cost structure more closely to customer and market conditions. Through voluntary and involuntary employee reductions, we eliminated approximately 1,168 positions related to this action, which included factory workers, administrative personnel and management employees. The charges incurred under this action primarily related to employee severance, and to a lesser extent, lease cancellation and other costs associated with the consolidation of certain facilities. This action was substantially completed by December 31, 2013, and we do not expect to incur significant additional charges related to this action in future periods. We did not have any individually significant restructuring activities in 2012 or 2011. | ||||||||||
The components of restructuring and asset impairment charges are summarized in the table below. | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
By components | ||||||||||
Severance charges | $ | 61 | $ | 9 | $ | 18 | ||||
Other restructuring charges | 20 | 5 | 7 | |||||||
Reversal of restructuring accruals | (2 | ) | (2 | ) | (2 | ) | ||||
Total restructuring charges | 79 | 12 | 23 | |||||||
Asset impairment charges | 4 | 7 | — | |||||||
Restructuring and asset impairment charges | $ | 83 | $ | 19 | $ | 23 | ||||
By segment | ||||||||||
C4ISR Electronics and Systems | $ | 68 | $ | 17 | $ | 23 | ||||
Information and Technical Services | 15 | 2 | — | |||||||
Restructuring and asset impairment charges | $ | 83 | $ | 19 | $ | 23 | ||||
The following table displays a roll-forward and the details, by type and segment, of the restructuring accruals balance, presented on our Consolidated Balance Sheets within other accrued liabilities. | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
Balance at January 1, | $ | 9 | $ | 17 | ||||||
Charges for plans initiated during the year | 79 | 10 | ||||||||
Charges for plans initiated in prior years | 2 | 4 | ||||||||
Cash payments | (58 | ) | (20 | ) | ||||||
Reversal of accruals and other | (6 | ) | (2 | ) | ||||||
Balance at December 31, | $ | 26 | $ | 9 | ||||||
By accrual type | ||||||||||
Severance accrual | $ | 12 | $ | 5 | ||||||
Facility carrying and other cost accruals | 14 | 4 | ||||||||
By segment | ||||||||||
C4ISR Electronics and Systems | $ | 20 | $ | 6 | ||||||
Information and Technical Services | 6 | 3 | ||||||||
The following table displays a roll-forward of the number of employee reductions associated with all restructuring activities: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
Planned reductions at January 1, | 46 | 722 | ||||||||
Additional planned reductions | 1,168 | 344 | ||||||||
Actual reductions | (1,212 | ) | (1,020 | ) | ||||||
Planned reductions at December 31, | 2 | 46 | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||
Income Taxes | ' | |||||||||
INCOME TAXES | ||||||||||
The source of pre-tax income and the components of income tax expense are as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
Income components | ||||||||||
United States | $ | 431 | $ | 495 | $ | 515 | ||||
Foreign | 6 | 26 | 22 | |||||||
Total pre-tax income from continuing operations | $ | 437 | $ | 521 | $ | 537 | ||||
Income tax expense components | ||||||||||
Current income tax provision | ||||||||||
United States – federal | $ | 73 | $ | 13 | $ | 73 | ||||
United States – state and local | 6 | 4 | 10 | |||||||
Foreign | 2 | 5 | 7 | |||||||
Total current income tax provision | 81 | 22 | 90 | |||||||
Deferred income tax provision | ||||||||||
United States – federal | 47 | 146 | 115 | |||||||
United States – state and local | 29 | 23 | 5 | |||||||
Foreign | (1 | ) | — | 1 | ||||||
Total deferred income tax provision | 75 | 169 | 121 | |||||||
Total income tax expense | $ | 156 | $ | 191 | $ | 211 | ||||
Effective income tax rate | 35.7 | % | 36.7 | % | 39.3 | % | ||||
A reconciliation of the tax provision at the U.S. statutory rate to the effective income tax rate as reported is as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
Tax provision at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||
Foreign tax rate differential | (0.2 | ) | (0.1 | ) | 0.1 | |||||
Foreign earnings not permanently reinvested, net of U.S. tax credit | 0.2 | 0.4 | 3 | |||||||
State and local income tax, net of federal benefit | 5 | 3.2 | 2.9 | |||||||
Research credit | (1.4 | ) | — | (1.0 | ) | |||||
Domestic manufacturing deduction | (1.8 | ) | (1.1 | ) | (1.2 | ) | ||||
Other | (1.1 | ) | (0.7 | ) | 0.5 | |||||
Effective income tax rate | 35.7 | % | 36.7 | % | 39.3 | % | ||||
Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted tax rates for the year in which we expect the differences will reverse. Deferred tax assets and liabilities include the following: | ||||||||||
December 31, | ||||||||||
2013 | 2012 | |||||||||
Deferred Tax Assets | ||||||||||
Employee benefits | $ | 569 | $ | 902 | ||||||
Accrued expenses | 37 | 111 | ||||||||
Loss carryforwards | 3 | 5 | ||||||||
Inventory | 55 | 27 | ||||||||
Advance payments | 14 | 20 | ||||||||
Credit carryforwards | 5 | 6 | ||||||||
Other | 6 | 5 | ||||||||
Subtotal | 689 | 1,076 | ||||||||
Valuation allowance | (3 | ) | (2 | ) | ||||||
Total deferred tax assets | $ | 686 | $ | 1,074 | ||||||
Deferred Tax Liabilities | ||||||||||
Goodwill and other intangible assets | $ | 278 | $ | 259 | ||||||
Plant, property and equipment | 77 | 68 | ||||||||
Unbilled receivables | 83 | 89 | ||||||||
Foreign subsidiaries | 18 | 16 | ||||||||
Other | — | 2 | ||||||||
Total deferred tax liabilities | $ | 456 | $ | 434 | ||||||
Deferred taxes in the Consolidated Balance Sheets consist of the following: | ||||||||||
December 31, | ||||||||||
2013 | 2012 | |||||||||
Current assets | $ | 16 | $ | 85 | ||||||
Non-current assets | 216 | 556 | ||||||||
Non-current liabilities | (2 | ) | (1 | ) | ||||||
Net deferred tax assets | $ | 230 | $ | 640 | ||||||
Our tax attributes available to reduce future taxable income begin to expire as follows: | ||||||||||
Attribute | Amount | First Year of Expiration | ||||||||
State net operating losses | $ | 3 | December 31, 2016 | |||||||
State tax credits | 5 | December 31, 2019 | ||||||||
As of December 31, 2013, the tax exposure on foreign earnings that we plan to indefinitely reinvest overseas is not significant, because we do not plan to reinvest most of our foreign earnings indefinitely outside the United States. For the year ended December 31, 2011 and in connection with the Spin-off, we recorded $16 of income tax expense and $13 of deferred tax liability for the excess of the financial reporting basis over the tax basis for our foreign earnings when we initially determined that we did not plan to reinvest such earnings indefinitely outside the United States. | ||||||||||
As of December 31, 2013 and 2012, there were valuation allowances of $3 and $2, respectively, to reduce deferred tax assets related to certain foreign net operating losses as these losses are not expected to be utilized in the future. | ||||||||||
Shareholders’ equity at December 31, 2013 and 2012 reflects excess tax benefits related to stock-based compensation of approximately $3 and $2, respectively. | ||||||||||
Uncertain Tax Positions | ||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
Unrecognized tax benefits at January 1, | $ | 56 | $ | — | $ | 38 | ||||
Additions for | ||||||||||
Current year tax positions | — | — | 2 | |||||||
Prior year tax positions | — | 56 | — | |||||||
Reductions for | ||||||||||
Indemnification | — | — | (21 | ) | ||||||
Prior year tax positions | (56 | ) | — | (19 | ) | |||||
Statute of limitations | — | — | — | |||||||
Unrecognized tax benefits at December 31, | $ | — | $ | 56 | $ | — | ||||
As of December 31, 2013, 2012 and 2011, there were no unrecognized tax benefits that, if recognized, would affect the effective income tax rate. | ||||||||||
Unrecognized tax benefits as of 2012 were primarily related to the timing of certain income and deductions. The unrecognized tax benefits reversed in 2013 due to the acceptance of previously filed accounting method changes, which did not impact income tax expense. | ||||||||||
The following table summarizes the Company's earliest open tax years by major jurisdiction: | ||||||||||
Jurisdiction | Earliest Open Year | |||||||||
United States | 2009 | |||||||||
United Kingdom | 2010 | |||||||||
Under the Tax Matters Agreement entered into between Exelis and ITT due to the ITT Spin-off, ITT agreed to assume liability up to a certain amount for U.S. federal, state or local income taxes that are determined on a consolidated, combined, unitary or similar basis for each taxable period in which Exelis was included in such tax returns and Exelis remains responsible for other foreign and state income taxes. As a result of the indemnification, at Spin-off, Exelis reversed the recorded liability (including accrued interest) to ITT related to these tax positions in the amount of $21, with an offsetting adjustment to parent company equity. With respect to future federal, state, and foreign income tax audits of pre ITT Spin-off tax returns (other than separate returns of Exelis or Xylem Inc.), Exelis, ITT, and Xylem Inc. have generally agreed to share in any unfavorable federal tax audit liabilities over a specified threshold of $27. ITT is responsible for liabilities below the threshold and has paid $12 against the threshold through December 31, 2013. ITT's earliest open tax years that remain subject to examination for the major jurisdictions of the United States and United Kingdom are 2009 and 2010, respectively. | ||||||||||
We classify interest relating to tax matters as a component of interest expense and tax penalties as a component of income tax expense in our Consolidated and Combined Statements of Operations. During 2013, 2012, and 2011, we recognized no interest expense related to tax matters, and (tax penalties reversals) / tax penalties of $(9), $9, and $0, respectively. As of December 31, 2013 and 2012, we had $0 and $9, respectively, accrued for tax penalties. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Earnings Per Share [Abstract] | ' | ||||||
Earnings Per Share | ' | ||||||
EARNINGS PER SHARE | |||||||
The following table sets forth the reconciliation of basic and diluted weighted average shares outstanding for our earnings per share calculations: | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | 2011 | |||||
Weighted average common shares outstanding | 188.4 | 186.5 | 184.6 | ||||
Add: Weighted average restricted stock awards outstanding (a) | 0.1 | 0.9 | 1.6 | ||||
Basic weighted average common shares outstanding | 188.5 | 187.4 | 186.2 | ||||
Add: Dilutive impact of stock options | 1.6 | 0.5 | 0.4 | ||||
Add: Dilutive impact of restricted stock units | 1.9 | 0.7 | 0.1 | ||||
Diluted weighted average common shares outstanding | 192 | 188.6 | 186.7 | ||||
(a) | Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share. | ||||||
The table below provides a summary of securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the period presented. | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | 2011 | |||||
Anti-dilutive stock options | 0.1 | 9.5 | 7.8 | ||||
Anti-dilutive restricted stock units | — | — | 0.9 | ||||
Receivables_Net
Receivables, Net | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Receivables [Abstract] | ' | ||||||
Receivables, Net | ' | ||||||
RECEIVABLES, NET | |||||||
Receivables, net were comprised of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Billed receivables | $ | 395 | $ | 429 | |||
Unbilled contract receivables | 537 | 562 | |||||
Other | 11 | 7 | |||||
Receivables, gross | 943 | 998 | |||||
Allowance for doubtful accounts | (4 | ) | (3 | ) | |||
Receivables, net | $ | 939 | $ | 995 | |||
Total billed receivables due from the U.S. Government, either directly or as subcontractor with the U.S. Government, were $314 and $340 at December 31, 2013 and 2012, respectively. Because the Company’s billed receivables are primarily with the U.S. Government, the Company does not have a material credit risk exposure. | |||||||
Unbilled contract receivables represent revenue recognized on long-term sales contracts in excess of amounts billed as of the balance sheet date. We expect to bill and collect substantially all of the December 31, 2013 unbilled contract receivables during the next twelve months as scheduled billing milestones are completed or units are delivered. |
Inventories_Net
Inventories, Net | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Inventory Disclosure [Abstract] | ' | ||||||
Inventories, Net | ' | ||||||
INVENTORIES, NET | |||||||
Inventories, net were comprised of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Production costs of contracts in process | $ | 217 | $ | 253 | |||
Less progress payments | (27 | ) | (22 | ) | |||
Production costs of contracts in process, net | 190 | 231 | |||||
Product inventory | 56 | 52 | |||||
Inventories, net | $ | 246 | $ | 283 | |||
Plant_Property_and_Equipment_N
Plant, Property and Equipment, Net | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Property, Plant and Equipment [Abstract] | ' | ||||||
Plant, Property and Equipment, Net | ' | ||||||
PLANT, PROPERTY AND EQUIPMENT, NET | |||||||
Plant, property and equipment, net consisted of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Land and improvements | $ | 22 | $ | 22 | |||
Buildings and improvements | 376 | 377 | |||||
Machinery and equipment | 673 | 627 | |||||
Furniture, fixtures and office equipment | 86 | 91 | |||||
Construction in progress | 59 | 76 | |||||
Plant, property and equipment, gross | 1,216 | 1,193 | |||||
Less accumulated depreciation | (718 | ) | (681 | ) | |||
Plant, property and equipment, net | $ | 498 | $ | 512 | |||
Capitalized software, net, which is included in other non-current assets, was $28 and $25 at December 31, 2013 and 2012, respectively. Depreciation and amortization expense of plant, property and equipment and capitalized software was $83, $91 and $84 in 2013, 2012 and 2011, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets, Net | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Goodwill and Other Intangible Assets, Net | ' | |||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Changes in the carrying amount of goodwill by business segment were as follows: | ||||||||||||||||||||
C4ISR Electronics | Information and | Total | ||||||||||||||||||
and Systems | Technical Services | |||||||||||||||||||
Balance at January 1, 2012 | $ | 1,777 | $ | 377 | $ | 2,154 | ||||||||||||||
Acquisitions | 26 | — | 26 | |||||||||||||||||
Balance at December 31, 2012 | $ | 1,803 | $ | 377 | $ | 2,180 | ||||||||||||||
Acquisitions | 2 | 7 | 9 | |||||||||||||||||
Sales | (5 | ) | — | (5 | ) | |||||||||||||||
Balance at December 31, 2013 | $ | 1,800 | $ | 384 | $ | 2,184 | ||||||||||||||
During 2013, the Company completed one acquisition, resulting in an increase to goodwill of $7 and other intangible assets of $7. During 2012, the Company completed two acquisitions, resulting in an increase to goodwill of $26 and other intangible assets of $13, and an increase to goodwill of $2 for purchase price adjustments in 2013. | ||||||||||||||||||||
Based on the results of our annual impairment tests, we determined that no impairment of goodwill existed as of the measurement date in 2013 or 2012. However, future goodwill impairment tests could result in a charge to income. | ||||||||||||||||||||
Other Intangible Assets, Net | ||||||||||||||||||||
Information regarding our other intangible assets was as follows: | ||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||
Carrying | Amortization | Intangibles | Carrying | Amortization | Intangibles | |||||||||||||||
Amount | Amount | |||||||||||||||||||
Customer and distributor relationships | $ | 525 | $ | (371 | ) | $ | 154 | $ | 524 | $ | (348 | ) | $ | 176 | ||||||
Proprietary technology | 30 | (22 | ) | 8 | 25 | (18 | ) | 7 | ||||||||||||
Trademarks, patents and other | 9 | (4 | ) | 5 | 5 | (4 | ) | 1 | ||||||||||||
Total other intangible assets | $ | 564 | $ | (397 | ) | $ | 167 | $ | 554 | $ | (370 | ) | $ | 184 | ||||||
Customer and distributor relationships, proprietary technology, and trademarks, patents and other are amortized over weighted average lives of approximately 14 years, 8 years and 11 years, respectively. Amortization expense related to other intangible assets for 2013, 2012 and 2011 was $27, $39 and $49, respectively. | ||||||||||||||||||||
Estimated amortization expense for each of the five succeeding years and thereafter is as follows: | ||||||||||||||||||||
2014 | $ | 24 | ||||||||||||||||||
2015 | 21 | |||||||||||||||||||
2016 | 19 | |||||||||||||||||||
2017 | 17 | |||||||||||||||||||
2018 | 14 | |||||||||||||||||||
2019 and thereafter | 72 | |||||||||||||||||||
Total | $ | 167 | ||||||||||||||||||
Leases_and_Rentals
Leases and Rentals | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Leases [Abstract] | ' | |||
Leases and Rentals | ' | |||
LEASES AND RENTALS | ||||
Exelis leases certain offices, manufacturing buildings, land, machinery, automobiles, computers and other equipment primarily under operating leases. Our operating leases expire at various dates through 2023 and may include renewal and payment escalation clauses. Exelis often pays maintenance, insurance and tax expense related to leased assets. Rental expenses under our operating leases were $77, $80 and $76 for 2013, 2012 and 2011, respectively, net of immaterial amounts of sublease rental income. The following is a schedule, by years, of future minimum lease payments required under operating leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2013. | ||||
Operating leases | ||||
2014 | $ | 60 | ||
2015 | 50 | |||
2016 | 42 | |||
2017 | 35 | |||
2018 | 30 | |||
2019 and thereafter | 52 | |||
Total future minimum lease payments | $ | 269 | ||
Debt
Debt | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||
Debt | ' | |||||||||||||||
DEBT | ||||||||||||||||
Debt consisted of the following: | ||||||||||||||||
December 31, | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Long-term debt | $ | 650 | $ | 650 | ||||||||||||
Unamortized debt discounts | (1 | ) | (1 | ) | ||||||||||||
Total long-term debt | $ | 649 | $ | 649 | ||||||||||||
The following table provides a summary of interest rates, carrying values and estimated fair values of outstanding long-term debt: | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Interest rate | Carrying | Fair | Carrying | Fair | ||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt | ||||||||||||||||
Senior notes due 2016 | 4.25 | % | $ | 250 | $ | 263 | $ | 250 | $ | 262 | ||||||
Senior notes due 2021 | 5.55 | % | 400 | 404 | 400 | 437 | ||||||||||
Total | $ | 650 | $ | 667 | $ | 650 | $ | 699 | ||||||||
The fair value of our notes was determined using prices in secondary markets for identical and similar securities (Level 2 inputs) obtained from external pricing sources. | ||||||||||||||||
Commercial Paper | ||||||||||||||||
The Company’s commercial paper program generally enables the Company to borrow short-term funds at competitive rates. The commercial paper program is fully supported by available borrowing capacity under our Credit Facility. As of December 31, 2013 and 2012, there was no commercial paper outstanding under our commercial paper program. | ||||||||||||||||
Credit Facility | ||||||||||||||||
The Company has a competitive advance and revolving credit facility agreement (“Credit Facility”) with a consortium of lenders, which is available for working capital, capital expenditures and other general corporate purposes. The Credit Facility provides for a four year maturity, expiring on October 25, 2015, with a one year extension option upon satisfaction of certain conditions, and comprises an aggregate principal amount of up to $600 of revolving loans, competitive advances and letters of credit with a face amount up to $100. Borrowings under the Credit Facility bear interest at rates based, at our option, on a Eurodollar rate or an alternate base rate, as defined in the Credit Facility. We are permitted, subject to certain conditions, to request that lenders increase the commitments under the facility by up to $200 for a maximum aggregate principal amount of $800. We pay certain customary and recurring fees with respect to the Credit Facility, including fees on the commitments of the lenders. As of December 31, 2013 and 2012, there were no borrowings or letters of credit outstanding under the Credit Facility. | ||||||||||||||||
The Credit Facility contains customary affirmative and negative covenants that, among other things, limit or restrict our ability to: incur additional debt or issue guarantees of indebtedness; create liens; enter into certain sale and lease-back transactions; merge or consolidate with another person; sell, transfer, lease or otherwise dispose of assets; liquidate or dissolve; and enter into restrictive covenants. Additionally, the Credit Facility requires us not to permit the ratio of combined total indebtedness to combined EBITDA (leverage ratio) to exceed 3.50 to 1.00 at any time. | ||||||||||||||||
The Credit Facility contains customary events of default, including nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty when made; violation of a covenant; cross-default to material indebtedness; bankruptcy events; material judgments; certain ERISA events and change in control. | ||||||||||||||||
Senior Notes | ||||||||||||||||
The Company has outstanding long-term debt consisting of $250 aggregate principal amount of 4.25% senior notes due October 1, 2016 and $400 aggregate principal amount of 5.55% senior notes due October 1, 2021 (together the “Notes”). The Notes are subject to the terms of an indenture with Union Bank, N.A., as trustee (the “Indenture”). The associated debt issuance costs of $6 and debt discount of $1 are amortized over the life of the Notes. Accrued interest payable on the Notes, included in other accrued liabilities, was $8 and $8 at December 31, 2013 and 2012, respectively, and is payable on April 1 and October 1 of each year. | ||||||||||||||||
The Notes were issued in a private placement arrangement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended, on September 20, 2011 in connection with the ITT Spin-off. In 2012, the Notes were registered with the SEC and exchanged for new registered Notes as required under the terms of the registration rights agreement. | ||||||||||||||||
The Indenture includes covenants that restrict our ability to, subject to exceptions, incur indebtedness secured by liens or engage in sale and leaseback transactions. The Indenture also provides for customary events of default, including, but not limited to, (i) failure to pay interest for 30 days, (ii) failure to pay principal when due, (iii) failure to perform any other covenant in the Indenture for 90 days after receipt of notice from the trustee or from holders of 25% of the outstanding principal amount and (iv) certain events of bankruptcy, insolvency or reorganization of the Company. | ||||||||||||||||
The Notes shall be redeemable as a whole or in part, at the Company’s option at any time and from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of such Notes or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate plus 50 basis points, plus in each case accrued and unpaid interest to the date of redemption. If a change of control triggering event occurs, as defined in the Indenture, we will be required to make an offer to purchase the Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. | ||||||||||||||||
In connection with the ITT Spin-off, the Company used the net proceeds for the issuance of the Notes and borrowings under the Credit Facility to fund an $884 dividend to ITT (“ITT Dividend”). Under the Credit Facility, we borrowed $240 on October 28, 2011, which was repaid prior to December 31, 2011, to fund the remaining ITT Dividend not covered by the net proceeds from the Notes. The ITT Dividend payment is included in transfers to parent, net, for the year ended December 31, 2011 in our Consolidated and Combined Statements of Cash Flows. |
Postretirement_Benefit_Plans
Postretirement Benefit Plans | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||||||||||||||||
Postretirement Benefit Plans | ' | |||||||||||||||||||||||||||||
POSTRETIREMENT BENEFIT PLANS | ||||||||||||||||||||||||||||||
Defined Contribution Plans | ||||||||||||||||||||||||||||||
The Company sponsors numerous defined contribution savings plans, which allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. Several of the plans require us to match a percentage of the employee contributions up to certain limits and make base contributions, generally totaling between 2.0% to 7.5% of employee eligible pay. Matching contributions and base contributions charged to expense were $39, $42 and $35 for 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||||||||
The Exelis Stock Fund investment option in our Salaried Investment and Savings Plan is considered an Employee Stock Ownership Plan (ESOP). On December 31, 2013, approximately 6.1 shares of Exelis common stock were held in the Exelis Stock Fund. Participants in the Exelis Stock Fund may receive dividends in cash or may reinvest such dividends into the Exelis Stock Fund. | ||||||||||||||||||||||||||||||
The sponsorship of the Salaried Investment and Savings Plan, our largest defined contribution plan, was transferred from ITT to Exelis at the ITT Spin-off and Exelis became the new sponsor of the plan. All assets related to ITT and Xylem Inc. active employees in the Salaried Investment and Savings Plan were transferred to the ITT and Xylem Inc. plans as of December 14, 2011. | ||||||||||||||||||||||||||||||
Defined Benefit Plans | ||||||||||||||||||||||||||||||
Company employees participate in numerous defined benefit pension plans and benefits for most employees under the terms of these plans are based on the employee’s years of service and compensation. We fund these plans as required by statutory regulations and through discretionary contributions. Some Company employees also participate in other postretirement defined benefit plans such as health care and life insurance plans. | ||||||||||||||||||||||||||||||
The U.S. Salaried Retirement Plan (U.S. SRP) is our largest defined benefit plan with assets valued at $3,930 and a projected benefit obligation of $4,923 as of December 31, 2013. Employees hired after September 30, 2011 were not eligible to accrue benefits in the U.S. SRP after December 31, 2011. In 2011 eligible employees were given a choice, effective January 1, 2012, to continue to accrue future benefits under the U.S. SRP or become eligible to receive enhanced employer contributions under the defined contribution plan, the Salaried Investment and Savings Plan ("Retirement Choice"). The U.S. SRP benefit obligations reported as of the December 31, 2011 measurement date, and subsequently, reflect the Retirement Choice made by the plan’s eligible population. Effective January 1, 2012, the Company changed its policy for the U.S. SRP from amortizing the net actuarial losses over the average remaining service period of plan participants to amortizing the net actuarial losses over the average expected remaining life of plan participants, since it was determined that as a result of changes from Retirement Choice and the ITT Spin-off almost all of the plan participants in the U.S. SRP now have frozen benefits. Effective December 31, 2016, all future benefit accruals under the U.S. SRP will be frozen and all eligible employees who elected to continue to accrue future benefits in the U.S. SRP with their Retirement Choice and are still accruing future benefits at that date will be eligible to participate in the Salaried Investment and Savings Plan starting January 1, 2017. The U.S. SRP benefit obligation was remeasured as of May 31, 2013 to reflect the May 2013 plan amendment that froze all future benefit accruals. | ||||||||||||||||||||||||||||||
In connection with the ITT Spin-off, on October 31, 2011, ITT transferred to the Company certain defined benefit pension and other postretirement defined benefit plans (“Transferred Plans”), most significantly the ITT Salaried Retirement Plan (now referred to as the U.S. SRP). As a result of this action, we assumed all liabilities and assets associated with the Transferred Plans and became the plans’ sponsor. The benefits for all current and former ITT and Xylem Inc. employees participating in the U.S. SRP were frozen at ITT Spin-off. | ||||||||||||||||||||||||||||||
Balance Sheet Information | ||||||||||||||||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets for defined benefit pension plans and other postretirement defined benefit plans (collectively, “defined benefit plans”) reflect the funded status of the plans. The following table provides a summary of the funded status of our defined benefit plans and the presentation of such balances within our Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Fair value of plan assets | $ | 4,288 | $ | 281 | $ | 4,569 | $ | 4,109 | $ | 270 | $ | 4,379 | ||||||||||||||||||
Projected benefit obligation | (5,522 | ) | (480 | ) | (6,002 | ) | (6,086 | ) | (525 | ) | (6,611 | ) | ||||||||||||||||||
Funded status | $ | (1,234 | ) | $ | (199 | ) | $ | (1,433 | ) | $ | (1,977 | ) | $ | (255 | ) | $ | (2,232 | ) | ||||||||||||
Amounts reported within | ||||||||||||||||||||||||||||||
Other non-current assets | $ | 6 | $ | — | $ | 6 | $ | 1 | $ | — | $ | 1 | ||||||||||||||||||
Accrued liabilities | (14 | ) | (18 | ) | (32 | ) | (13 | ) | (17 | ) | (30 | ) | ||||||||||||||||||
Non-current liabilities | $ | (1,226 | ) | $ | (181 | ) | $ | (1,407 | ) | $ | (1,965 | ) | $ | (238 | ) | $ | (2,203 | ) | ||||||||||||
A portion of our projected benefit obligation includes amounts that have not yet been recognized as expense in our results of operations. Such amounts are recorded within accumulated other comprehensive loss until they are amortized as a component of net periodic benefit cost. The following table provides a summary of amounts recorded within accumulated other comprehensive loss. | ||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Net actuarial loss | $ | 2,304 | $ | 69 | $ | 2,373 | $ | 2,924 | $ | 128 | $ | 3,052 | ||||||||||||||||||
Prior service cost (credit) | 10 | (1 | ) | 9 | 10 | (1 | ) | 9 | ||||||||||||||||||||||
Total | $ | 2,314 | $ | 68 | $ | 2,382 | $ | 2,934 | $ | 127 | $ | 3,061 | ||||||||||||||||||
The following table provides a roll-forward of the projected benefit obligations for our defined benefit plans: | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||||||||
Benefit obligation at January 1, | $ | 6,086 | $ | 525 | $ | 6,611 | $ | 5,705 | $ | 526 | $ | 6,231 | ||||||||||||||||||
Service cost | 70 | 2 | 72 | 75 | 2 | 77 | ||||||||||||||||||||||||
Interest cost | 241 | 19 | 260 | 265 | 22 | 287 | ||||||||||||||||||||||||
Actuarial loss (gain) | (414 | ) | (43 | ) | (457 | ) | 430 | 1 | 431 | |||||||||||||||||||||
Benefits paid | (445 | ) | (23 | ) | (468 | ) | (372 | ) | (26 | ) | (398 | ) | ||||||||||||||||||
Expenses paid | (17 | ) | — | (17 | ) | (17 | ) | — | (17 | ) | ||||||||||||||||||||
Other | 1 | — | 1 | — | — | — | ||||||||||||||||||||||||
Benefit obligation at December 31, | $ | 5,522 | $ | 480 | $ | 6,002 | $ | 6,086 | $ | 525 | $ | 6,611 | ||||||||||||||||||
The following table provides a roll-forward of the plans assets and the ending funded status for our defined benefit plans: | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||||||
Plan assets at January 1, | $ | 4,109 | $ | 270 | $ | 4,379 | $ | 3,780 | $ | 259 | $ | 4,039 | ||||||||||||||||||
Actual return on plan assets | 442 | 33 | 475 | 438 | 31 | 469 | ||||||||||||||||||||||||
Employer contributions | 186 | — | 186 | 266 | — | 266 | ||||||||||||||||||||||||
Benefits paid | (432 | ) | (22 | ) | (454 | ) | (359 | ) | (20 | ) | (379 | ) | ||||||||||||||||||
Expenses paid | (17 | ) | — | (17 | ) | (16 | ) | — | (16 | ) | ||||||||||||||||||||
Plan assets at December 31, | $ | 4,288 | $ | 281 | $ | 4,569 | $ | 4,109 | $ | 270 | $ | 4,379 | ||||||||||||||||||
Funded status at end of year | $ | (1,234 | ) | $ | (199 | ) | $ | (1,433 | ) | $ | (1,977 | ) | $ | (255 | ) | $ | (2,232 | ) | ||||||||||||
The accumulated benefit obligation for all defined benefit pension plans was $5,485 and $5,925 at December 31, 2013 and 2012, respectively. The following table provides information for defined benefit pension plans with an accumulated benefit obligation in excess of plan assets. | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Projected benefit obligation | $ | 5,482 | $ | 6,043 | ||||||||||||||||||||||||||
Accumulated benefit obligation | 5,445 | 5,882 | ||||||||||||||||||||||||||||
Fair value of plan assets | 4,242 | 4,065 | ||||||||||||||||||||||||||||
Income Statement Information | ||||||||||||||||||||||||||||||
The following table provides the components of net periodic benefit cost and other amounts recognized in other comprehensive income for 2013, 2012 and 2011, as they pertain to our defined benefit plans. Net periodic benefit cost includes the costs for the Transferred Plans beginning on October 31, 2011. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | Pension | Other | Total | ||||||||||||||||||||||
Benefits | Benefits | Benefits | ||||||||||||||||||||||||||||
Net periodic benefit cost | ||||||||||||||||||||||||||||||
Service cost | $ | 70 | $ | 2 | $ | 72 | $ | 75 | $ | 2 | $ | 77 | $ | 22 | $ | 1 | $ | 23 | ||||||||||||
Interest cost | 241 | 19 | 260 | 265 | 22 | 287 | 63 | 8 | 71 | |||||||||||||||||||||
Expected return on plan assets | (341 | ) | (21 | ) | (362 | ) | (386 | ) | (22 | ) | (408 | ) | (85 | ) | (4 | ) | (89 | ) | ||||||||||||
Amortization of net actuarial loss | 106 | 10 | 116 | 76 | 10 | 86 | 34 | 2 | 36 | |||||||||||||||||||||
Amortization of prior service cost (credit) | 1 | — | 1 | 2 | (2 | ) | — | 2 | (1 | ) | 1 | |||||||||||||||||||
Net periodic benefit cost | 77 | 10 | 87 | 32 | 10 | 42 | 36 | 6 | 42 | |||||||||||||||||||||
Effect of curtailments (1) | — | — | — | 1 | — | 1 | 4 | — | 4 | |||||||||||||||||||||
Total net periodic benefit cost (2) | $ | 77 | $ | 10 | $ | 87 | $ | 33 | $ | 10 | $ | 43 | $ | 40 | $ | 6 | $ | 46 | ||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||||||||||||||||||||||||||||
Net actuarial loss (gain) | $ | (514 | ) | $ | (49 | ) | $ | (563 | ) | $ | 379 | $ | (9 | ) | $ | 370 | $ | 57 | $ | (10 | ) | $ | 47 | |||||||
Prior service cost (credit) | 1 | — | 1 | (1 | ) | — | (1 | ) | — | 2 | 2 | |||||||||||||||||||
Amortization of net actuarial loss | (106 | ) | (10 | ) | (116 | ) | (76 | ) | (10 | ) | (86 | ) | (34 | ) | (2 | ) | (36 | ) | ||||||||||||
Amortization of prior service (cost) credit | (1 | ) | — | (1 | ) | (2 | ) | 2 | — | (2 | ) | 1 | (1 | ) | ||||||||||||||||
Total change recognized in other comprehensive income | (620 | ) | (59 | ) | (679 | ) | 300 | (17 | ) | 283 | 21 | (9 | ) | 12 | ||||||||||||||||
Total impact from net periodic benefit cost and changes in other comprehensive income | $ | (543 | ) | $ | (49 | ) | $ | (592 | ) | $ | 333 | $ | (7 | ) | $ | 326 | $ | 61 | $ | (3 | ) | $ | 58 | |||||||
-1 | Curtailments recorded during the years ended December 31, 2012 and 2011 were due to reduction in force related to the Night Vision Hourly Pension Plan, and Retirement Choice and headcount reductions from certain restructuring activities, respectively. | |||||||||||||||||||||||||||||
-2 | Net period benefit cost recorded during the year ended December 31, 2011 includes $34 of cost for the Transferred Plans from October 31, 2011 to December 31, 2011. | |||||||||||||||||||||||||||||
The following table provides the estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2014. | ||||||||||||||||||||||||||||||
Pension | Other | Total | ||||||||||||||||||||||||||||
Benefits | ||||||||||||||||||||||||||||||
Net actuarial loss | $ | 86 | $ | 4 | $ | 90 | ||||||||||||||||||||||||
Prior service cost | 2 | — | 2 | |||||||||||||||||||||||||||
Total | $ | 88 | $ | 4 | $ | 92 | ||||||||||||||||||||||||
Defined Benefit Plan Assumptions | ||||||||||||||||||||||||||||||
The determination of the assumptions related to defined benefit plans are based on the provisions of the applicable accounting pronouncements, the review of various market data and discussion with our actuaries. Management develops each assumption using relevant company experience in conjunction with market-related data. Assumptions are reviewed annually and adjusted as necessary. | ||||||||||||||||||||||||||||||
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to our defined benefit pension plans. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Obligation assumptions | ||||||||||||||||||||||||||||||
Discount rate | 4.71 | % | 4.09 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 2.75 | % | 3.25 | % | ||||||||||||||||||||||||||
Cost assumptions (1) | ||||||||||||||||||||||||||||||
Discount rate | 4.28 | % | 4.75 | % | ||||||||||||||||||||||||||
Expected return on plan assets | 8.5 | % | 9 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 2.75 | % | 3.75 | % | ||||||||||||||||||||||||||
-1 | Cost assumptions for the current year are based on the prior year-end obligation assumptions, except for defined benefit pension plans remeasured as of May 31, 2013. | |||||||||||||||||||||||||||||
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to other postretirement benefit plans. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Obligation assumptions | ||||||||||||||||||||||||||||||
Discount rate | 4.45 | % | 3.76 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 2.75 | % | 3.25 | % | ||||||||||||||||||||||||||
Cost assumptions (1) | ||||||||||||||||||||||||||||||
Discount rate | 3.76 | % | 4.5 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 3.25 | % | 3.75 | % | ||||||||||||||||||||||||||
-1 | Cost assumptions for the current year are based on the prior year-end obligation assumptions. | |||||||||||||||||||||||||||||
The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plans invests, the weight of each asset class in the target mix, the correlations among asset classes and their expected volatilities. Our expected rate of return on plan assets is estimated by evaluating both historical returns and estimates of future returns. Specifically, the determination of the expected long-term rate of return takes into consideration: (1) the plan’s actual historical annual return on assets, net of fees, over the past 15, 20 and 25 year time periods, (2) independent estimates of future long-term asset class returns, weighted by the plan’s strategic target asset allocation and (3) historical broad market returns over long-term timeframes weighted by the plan’s strategic target asset allocation. Based on this approach, the estimate of the long-term annual rate of return on assets is 8.25% for 2014, compared to 8.50% in 2013, and 9.00% in 2012 and 2011. | ||||||||||||||||||||||||||||||
The table below provides the actual rate of return generated on plan assets during each of the years presented, as they compare to the expected long-term rate of return utilized in calculating the net periodic benefit cost. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||
Expected long-term rate of return on plan assets | 8.5 | % | 9 | % | 9 | % | ||||||||||||||||||||||||
Actual rate of return on plan assets | 11.14 | % | 10.96 | % | (1.20 | )% | ||||||||||||||||||||||||
Health care plan assumptions | ||||||||||||||||||||||||||||||
The assumed rate of future increases in the per capita cost of health care (the health care trend rate) is 7.4% for 2014, decreasing ratably to 5.0% in 2022. Increasing or decreasing the health care trend rates by one percent per year would not have a material effect on the benefit obligation or the aggregate annual service and interest cost components. To the extent that actual experience differs from these assumptions, the effect will be amortized over the average future service period of the covered active employees. | ||||||||||||||||||||||||||||||
Investment Policy | ||||||||||||||||||||||||||||||
The investment strategy for managing defined benefit plan assets is to seek an optimal rate of return relative to an appropriate level of risk. The Company manages substantially all defined benefit plan assets on a commingled basis in a master investment trust. With respect to the master investment trust, Exelis allows itself broad discretion to invest tactically to respond to changing market conditions, while staying reasonably within the asset allocation ranges prescribed by its investment guidelines. Under certain circumstances, Exelis has the authority to temporarily waive the investment guidelines when determining the actual asset allocation ranges. In making these asset allocation decisions, Exelis takes into account recent and expected returns and volatility of returns for each asset class, the expected correlation of returns among the different investments, as well as anticipated funding and cash flows. To enhance returns and mitigate risk, Exelis diversifies its investments by strategy, asset class, geography and sector and engages a large number of managers to gain broad exposure to the markets, while historically generating excess-of-market returns and mitigating manager-concentration risk. | ||||||||||||||||||||||||||||||
The following table provides the strategic target asset allocation ranges by asset category. | ||||||||||||||||||||||||||||||
Target Asset Allocation | ||||||||||||||||||||||||||||||
Range | ||||||||||||||||||||||||||||||
Domestic equity | 25 | % | - | 75% | ||||||||||||||||||||||||||
International equity | 10 | % | - | 45% | ||||||||||||||||||||||||||
Private equity | 10 | % | - | 30% | ||||||||||||||||||||||||||
Fixed income investments | 0 | % | - | 60% | ||||||||||||||||||||||||||
Hedge funds | 10 | % | - | 40% | ||||||||||||||||||||||||||
Cash and cash equivalents | 0 | % | - | 30% | ||||||||||||||||||||||||||
Fair Value of Plan Assets | ||||||||||||||||||||||||||||||
The following is a description of the valuation techniques and inputs used to measure fair value for major categories of investments. | ||||||||||||||||||||||||||||||
• | Domestic and international equity, which include common and preferred shares, domestic listed and foreign listed equity securities, open-ended and closed-ended mutual funds and exchange traded funds, are generally valued at the closing price reported on the major market on which the individual securities are traded at the measurement date. | |||||||||||||||||||||||||||||
• | Private equity funds, which include buy-out, mezzanine, venture capital, distressed asset, commodities, real estate and venture capital, are typically limited partnership investment structures. Private equity valuations are based on the valuation of the underlying investments, which include inputs such as cost, operating results, discounted future cash flows and market-based comparable data. Private equity funds generally have liquidity restrictions that extend up to twelve years and have future unfunded commitments totaling $268 at December 31, 2013. | |||||||||||||||||||||||||||||
• | Fixed income investments, which include U.S. Government securities and corporate bonds, are generally valued using pricing models that use verifiable, observable market data such as interest rates, benchmark yield, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. | |||||||||||||||||||||||||||||
• | Hedge funds, which include equity long/short, event driven, fixed income arbitrage and global macro, are typically limited partnership investment structures. Limited partnership interests in hedge funds are primarily valued using a market approach based on net asset value (NAV) calculated by the funds and are not publicly available. Hedge funds that permit redemption on a quarterly or more frequent basis with 90 or fewer days notice are generally classified within Level 2 of the fair value hierarchy. All other hedge funds are classified as Level 3. | |||||||||||||||||||||||||||||
• | Other is primarily comprised of a hybrid international debt and equity fund valued at NAV and guaranteed insurance contracts valued at book value, which approximates fair value, calculated using the prior year balance adjusted for investment returns and changes in cash flows. | |||||||||||||||||||||||||||||
• | Cash and cash equivalents are primarily comprised of short-term money market funds valued at cost, which approximates fair value, or valued at quoted market prices of identical instruments. | |||||||||||||||||||||||||||||
The following table provides the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level. | ||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Asset category | ||||||||||||||||||||||||||||||
Domestic equity | ||||||||||||||||||||||||||||||
Large cap | $ | 733 | $ | 562 | $ | 171 | $ | — | $ | 419 | $ | 419 | $ | — | $ | — | ||||||||||||||
Mid cap | 532 | 487 | 45 | — | 450 | 415 | 35 | — | ||||||||||||||||||||||
Small/Micro cap | 109 | 51 | 58 | — | 87 | 44 | 43 | — | ||||||||||||||||||||||
International equity | 461 | 346 | 115 | — | 430 | 313 | 117 | — | ||||||||||||||||||||||
Private equity | ||||||||||||||||||||||||||||||
Buyout funds | 841 | — | — | 841 | 878 | — | — | 878 | ||||||||||||||||||||||
Mezzanine funds | 41 | — | — | 41 | 43 | — | — | 43 | ||||||||||||||||||||||
Venture capital funds | 101 | — | — | 101 | 89 | — | — | 89 | ||||||||||||||||||||||
Distressed asset investments | 197 | — | — | 197 | 238 | — | — | 238 | ||||||||||||||||||||||
Commodities and Real Estate | 60 | — | — | 60 | 63 | — | — | 63 | ||||||||||||||||||||||
Fixed income investments | ||||||||||||||||||||||||||||||
U.S. Government securities | 421 | — | 421 | — | 531 | — | 531 | — | ||||||||||||||||||||||
Corporate bonds | 52 | — | 52 | — | 50 | — | 50 | — | ||||||||||||||||||||||
Hedge funds | 730 | — | 73 | 657 | 794 | — | 274 | 520 | ||||||||||||||||||||||
Other | 83 | — | 71 | 12 | 78 | — | 69 | 9 | ||||||||||||||||||||||
Cash and cash equivalents | 208 | 18 | 190 | — | 196 | 20 | 176 | — | ||||||||||||||||||||||
Total | $ | 4,569 | $ | 1,464 | $ | 1,196 | $ | 1,909 | $ | 4,346 | $ | 1,211 | $ | 1,295 | $ | 1,840 | ||||||||||||||
Receivables (payables), net | — | 33 | ||||||||||||||||||||||||||||
Total fair value of plan assets | $ | 4,569 | $ | 4,379 | ||||||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending defined benefit plan asset balances that use significant unobservable inputs (Level 3) to measure fair value. | ||||||||||||||||||||||||||||||
Private | Hedge | Other | Total | |||||||||||||||||||||||||||
Equity | Funds | |||||||||||||||||||||||||||||
Level 3 balance — December 31, 2011 | $ | 1,340 | $ | 652 | $ | 8 | $ | 2,000 | ||||||||||||||||||||||
Realized gains (losses), net | 80 | (6 | ) | — | 74 | |||||||||||||||||||||||||
Unrealized gains (losses), net | 8 | (1 | ) | 1 | 8 | |||||||||||||||||||||||||
Purchases (sales), net | (158 | ) | (128 | ) | — | (286 | ) | |||||||||||||||||||||||
Transfers in (out), net | 41 | 3 | — | 44 | ||||||||||||||||||||||||||
Level 3 balance — December 31, 2012 | 1,311 | 520 | 9 | 1,840 | ||||||||||||||||||||||||||
Realized gains (losses), net | 97 | — | 1 | 98 | ||||||||||||||||||||||||||
Unrealized gains (losses), net | 46 | 26 | 2 | 74 | ||||||||||||||||||||||||||
Purchases (sales), net | (214 | ) | 8 | — | (206 | ) | ||||||||||||||||||||||||
Transfers in (out), net | — | 103 | — | 103 | ||||||||||||||||||||||||||
Level 3 balance — December 31, 2013 | $ | 1,240 | $ | 657 | $ | 12 | $ | 1,909 | ||||||||||||||||||||||
Contributions | ||||||||||||||||||||||||||||||
Funding requirements under Internal Revenue Service (IRS) rules are a major consideration in making contributions to our postretirement benefit plans. With respect to qualified pension plans, we intend to contribute annually not less than the minimum required by applicable law and regulations. We made total contributions of $186, $266 and $87 to all of our qualified defined benefit pension plans during 2013, 2012 and 2011, respectively. In 2013 and 2011, total contributions included $40 and $50, respectively, of voluntary contributions to the U.S. SRP. We currently anticipate making total contributions to our qualified defined benefit pension plans in the range of $185 to $200 during 2014. | ||||||||||||||||||||||||||||||
Estimated Future Benefit Payments | ||||||||||||||||||||||||||||||
The following table provides the projected timing of payments for benefits earned to date and the expectation that certain future service will be earned by current active employees for our defined benefit plans. | ||||||||||||||||||||||||||||||
Pension | Other | Total | ||||||||||||||||||||||||||||
Benefits | ||||||||||||||||||||||||||||||
2014 | $ | 369 | $ | 41 | $ | 410 | ||||||||||||||||||||||||
2015 | 370 | 40 | 410 | |||||||||||||||||||||||||||
2016 | 372 | 40 | 412 | |||||||||||||||||||||||||||
2017 | 373 | 39 | 412 | |||||||||||||||||||||||||||
2018 | 374 | 38 | 412 | |||||||||||||||||||||||||||
2019 — 2023 | 1,871 | 178 | 2,049 | |||||||||||||||||||||||||||
ITT Pension and Other Postretirement Plans | ||||||||||||||||||||||||||||||
During 2011, the Company recorded expense of $79 for its allocation of defined benefit pension plan and other postretirement defined benefit plan costs from ITT related to the Shared Plans. The allocation of expense for the Shared Plans ended with the ITT Spin-off and Exelis received most of the Shared Plans as part of the Transferred Plans. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||||
STOCK-BASED COMPENSATION | ||||||||||||||||||||
The Company maintains an equity incentive plan (the “2011 Omnibus Incentive Plan” or the “Plan”) to govern awards granted to Exelis employees and directors, including awards of non-qualified stock options (NQOs), restricted stock units (RSUs), total shareholder return (TSR) awards, and other awards. As of December 31, 2013, there were 21.2 awards granted under the Plan with 18.8 shares remaining available for future awards. The Company issues new shares to satisfy equity-based awards. We account for NQOs and RSUs as equity-based compensation awards. TSR awards are cash settled and accounted for as liability-based compensation awards. | ||||||||||||||||||||
Disclosures prior to October 31, 2011 represent our portion of the plans maintained by ITT in which our employees and directors participated. On October, 31, 2011, ITT converted or adjusted outstanding NQOs, RSUs and restricted stock to replacement awards denominated in Exelis common shares. TSR awards were settled in cash or converted to RSUs. The manner of conversion for each award reflected a mechanism intended to preserve the intrinsic value of each award, and generally on terms which were in all material respects identical to the terms of the awards it replaced. The fair value of the converted Exelis stock awards immediately following the ITT Spin-off was higher than the fair value of such awards immediately prior to the ITT Spin-off. As a result, we incurred incremental compensation expense of approximately $2.3, which was recognized immediately. | ||||||||||||||||||||
The following table provides the impact of stock-based compensation in our Consolidated and Combined Statement of Operations: | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Compensation costs for equity-based awards | $ | 26 | $ | 22 | $ | 18 | ||||||||||||||
Compensation costs for liability-based awards | 6 | 2 | — | |||||||||||||||||
Total compensation costs, pre-tax | $ | 32 | $ | 24 | $ | 18 | ||||||||||||||
Future tax benefit | $ | 11 | $ | 10 | $ | 7 | ||||||||||||||
At December 31, 2013, total unrecognized compensation cost related to equity-based awards and liability-based awards were $18 and $4, respectively, which are expected to be recognized ratably over a weighted-average period of 1.8 years and 1.6 years, respectively. | ||||||||||||||||||||
Non-Qualified Stock Options | ||||||||||||||||||||
NQOs generally vest in one-third increments over three years following the date of grant and are exercisable for periods up to seven or ten-years from the date of grant at a price equal to the fair market value of common stock at the date of grant, except for awards that were outstanding on October 31, 2011 and were revalued as a result of the ITT Spin-off. Options granted between 2004 and 2009 were awarded with a term of seven years. Options granted prior to 2004 and after 2009 were awarded with a term of ten years. The NQOs outstanding at ITT Spin-off retained the vesting schedule of the original ITT NQOs awards. | ||||||||||||||||||||
A summary of the status of our NQOs as of December 31, 2013, 2012 and 2011 and changes during the years then ended is presented below. The activity presented for 2011 prior to the ITT Spin-off represents the stock options held by Exelis employees under the ITT long-term incentive award program. | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Stock Options | Shares | Weighted- | Shares | Weighted- | Shares | Weighted- | ||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||
Price Per Share | Price Per Share | Price Per Share | ||||||||||||||||||
Outstanding at January 1, | 11.36 | $ | 11.06 | 10.59 | $ | 10.65 | 1.82 | $ | 41.41 | |||||||||||
Granted | — | — | — | — | 0.2 | 57.69 | ||||||||||||||
Exercised | — | — | — | — | (0.46 | ) | 39.08 | |||||||||||||
Forfeited, canceled or expired | — | — | — | — | (0.03 | ) | 48.08 | |||||||||||||
Outstanding at ITT Spin-off | — | — | — | — | 1.53 | 45.97 | ||||||||||||||
Conversion related to the ITT Spin-off (a) | — | — | — | — | 5.16 | — | ||||||||||||||
Post ITT Spin-off activities | ||||||||||||||||||||
Granted | 2.89 | 11.11 | 3.05 | 11.19 | 3.98 | 10.95 | ||||||||||||||
Exercised | (2.21 | ) | 10.53 | (2.10 | ) | 9.14 | (0.08 | ) | 5.74 | |||||||||||
Forfeited, canceled or expired | (0.58 | ) | 11.98 | (0.18 | ) | 11.52 | — | — | ||||||||||||
Outstanding at December 31, | 11.46 | $ | 11.13 | 11.36 | $ | 11.06 | 10.59 | $ | 10.65 | |||||||||||
Options exercisable at December 31, | 4.95 | $ | 11.02 | 4.49 | $ | 10.59 | 4.42 | $ | 9.89 | |||||||||||
(a) | The weighted average grant date fair value of the stock options converted is equal to the weighted average grant date fair value of such stock options prior to the ITT Spin-off, reduced by the ITT Spin-off conversion adjustment. Included in the conversion related to the ITT Spin-off are awards related to employees who transferred among ITT, Xylem Inc. and Exelis as a result of the ITT Spin-off. | |||||||||||||||||||
The intrinsic value of options exercised (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) during 2013, 2012 and 2011 was $12, $4 and $9, respectively. | ||||||||||||||||||||
The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2013: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Range of Exercise Prices Per Share | Number | Weighted- | Weighted- | Aggregate | Number | Weighted- | Weighted- | Aggregate | ||||||||||||
Average | Average | Intrinsic | Average | Average | Intrinsic | |||||||||||||||
Remaining | Exercise | Value | Remaining | Exercise | Value | |||||||||||||||
Contractual | Price Per Share | Contractual | Price Per Share | |||||||||||||||||
Life | Life | |||||||||||||||||||
(in Years) | (In Years) | |||||||||||||||||||
$7.52 - $12.03 | 9.97 | 7.7 | $ | 10.88 | $ | 82 | 3.83 | 6.4 | $ | 10.54 | $ | 33 | ||||||||
$12.12 - $15.12 | 1.49 | 5.7 | 12.79 | 9 | 1.12 | 5.2 | 12.7 | 7 | ||||||||||||
Total | 11.46 | 7.5 | $ | 11.13 | $ | 91 | 4.95 | 6.1 | $ | 11.02 | $ | 40 | ||||||||
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on Exelis’ closing stock price of $19.06 per share on December 31, 2013, which would have been received by the option holders had all option holders exercised their options as of that date. There were no exercisable options “out-of-the money” as of December 31, 2013. | ||||||||||||||||||||
As of December 31, 2013, the total number of stock options expected to vest (including those that have already vested) was 11.4. These stock options have a weighted-average exercise price of $11.13 per share, an aggregate intrinsic value of $90 and a weighted average remaining contractual life of 7.5 years. | ||||||||||||||||||||
The fair value of stock options are determined on the date of grant utilizing a Black-Scholes valuation model. The fair value of the stock options granted prior to the ITT Spin-off under the ITT long-term incentive award program were valued by ITT utilizing a binomial lattice pricing valuation model. The Black-Scholes model was utilized subsequent to the ITT Spin-off because the significant amount of detailed historical exercise behavior data required to develop appropriate assumptions required by a binomial lattice model did not exist specific to Exelis due to the ITT Spin-off. | ||||||||||||||||||||
The following assumptions were utilized in deriving the fair value for NQOs granted from October 31, 2011 to December 31, 2013 under the Black-Scholes model, and prior to October 31, 2011 under the lattice model. | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Dividend yield | 3.72 | % | 3.69 | % | 3.77 | % | ||||||||||||||
Expected volatility | 27 | % | 27.1 | % | 27.1 | % | ||||||||||||||
Expected life (in years) | 7 | 7 | 7 | |||||||||||||||||
Risk-free rates | 1.4 | % | 1.41 | % | 1.51 | % | ||||||||||||||
Weighted-average grant date fair value per share | $ | 1.93 | $ | 1.96 | $ | 1.92 | ||||||||||||||
Black-Scholes: Dividend yield is based on the announced dividend as of the grant date annualized and divided by the grant date stock price. Volatility is based on daily average volatility of our peer group companies over 7 years, which is consistent with the expected term. Peer group companies were selected from companies within the aerospace and defense industry that most closely match our business, including size, diversification, and customer base. The expected term of the stock option represents the estimated period of time until exercise and is based on the vesting period of the award and the estimated exercise patterns of employees. The risk-free rate is based on the United States Treasury stripped coupon rates with maturities corresponding to the expected term of 7 years, measured as of the grant date. | ||||||||||||||||||||
Restricted Stock and Restricted Stock Units | ||||||||||||||||||||
The fair value of restricted stock and RSUs are determined based on the closing price of Exelis common stock on the date of grant. Under the Plan, restricted stock and RSUs typically vest three years from the date of grant. Holders of restricted stock have the right to receive dividends and vote the shares. RSUs accrue dividends; however, the dividends are forfeited if the RSUs do not vest. RSUs have no voting rights. If an employee leaves the Company prior to vesting, whether through resignation or termination for cause, the restricted stock or RSUs are forfeited. If an employee retires or is terminated other than for cause, all or a pro rata portion of the restricted stock or RSUs may vest. The restricted stock and RSUs outstanding at ITT Spin-off retained the vesting schedule of the original ITT awards. | ||||||||||||||||||||
The table below provides a roll-forward of outstanding restricted stock and RSUs for each of the previous three years ended. The activity presented for 2011 prior to the ITT Spin-off represents the restricted stock and RSUs held by Exelis employees under the ITT long-term incentive award program. | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Restricted Stock and Restricted Stock Units | Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||
Average | Average | Average | ||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||
Fair Value Per Share | Fair Value Per Share | Fair Value Per Share | ||||||||||||||||||
Outstanding at January 1, | 3.56 | $ | 11.67 | 3.51 | $ | 10.93 | 0.51 | $ | 45.17 | |||||||||||
Granted | — | — | — | — | 0.18 | 57.52 | ||||||||||||||
Vested | — | — | — | — | (0.13 | ) | 50.18 | |||||||||||||
Forfeited and canceled | — | — | — | — | — | — | ||||||||||||||
Outstanding at ITT Spin-off | — | — | — | — | 0.56 | 47.49 | ||||||||||||||
Conversion related to the ITT Spin-off (a) | — | — | — | — | 1.93 | — | ||||||||||||||
Post ITT Spin-off activities | ||||||||||||||||||||
Granted | 1.14 | 11.18 | 1.25 | 11.16 | 1.02 | 10.95 | ||||||||||||||
Vested | (1.02 | ) | 11.83 | (1.01 | ) | 8.44 | — | — | ||||||||||||
Forfeited and canceled | (0.20 | ) | 11.35 | (0.19 | ) | 11.94 | — | — | ||||||||||||
Outstanding at December 31, | 3.48 | $ | 11.48 | 3.56 | $ | 11.67 | 3.51 | $ | 10.93 | |||||||||||
(a) | The weighted average grant date fair value of the restricted stock and RSUs converted is equal to the weighted average grant date fair value of such restricted stock and RSUs prior to the ITT Spin-off, reduced by the ITT Spin-off conversion adjustment. Included in the conversion related to the ITT Spin-off are awards related to employees who transferred among ITT, Xylem Inc. and Exelis as a result of the ITT Spin-off. | |||||||||||||||||||
Total Shareholder Return Awards | ||||||||||||||||||||
TSR awards provide performance-based cash award incentives to our key employees. For the years ended December 31, 2013 and 2012, we granted TSR awards with an aggregate target value of $4 and $4, respectively, that are cash settled at the end of a three-year performance period. The fair value of TSR awards is measured quarterly based on the Company’s performance relative to the performance of a concentrated group of our peer companies and the S&P 1500 Aerospace and Defense index. Depending on the Company’s performance during the three-year performance period, payment can range from 0% to 200% of the target value. | ||||||||||||||||||||
In connection with the ITT Spin-off, outstanding TSR awards were either settled in cash for the uncompleted performance period for the 2009 TSR awards for $0.1, or replaced with 0.3 RSUs with weighted-average grant date fair value of $10.95 per share for the remaining performance period for the 2010 and 2011 TSR awards. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
Shareholders' Equity | ' |
SHAREHOLDERS’ EQUITY | |
Authorized capital was comprised of 750 shares of common stock ($0.01 par value per share) and 50 shares of preferred stock (no par value per share) on December 31, 2013 and 2012. There were 190.4 and 188.3 shares of common stock issued at December 31, 2013 and 2012, respectively, and 189.4 and 187.6 shares of common stock outstanding at December 31, 2013 and 2012, respectively. No preferred stock was issued and outstanding at December 31, 2013 and 2012. | |
We issue shares of our common stock in connection with our 2011 Omnibus Incentive Plan. At December 31, 2013, 40.0 shares of common stock were reserved for issuance in connection with this Plan and we had a remaining balance of 18.8 shares of common stock available for future grants under this Plan. | |
We have a share repurchase program, which was approved by the Board of Directors on December 11, 2012, for the repurchase of our outstanding common stock, from time-to-time, up to an authorized amount of $100. Under the program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulation. The share repurchase program expires on December 31, 2015. During the year ended December 31, 2013, we repurchased a total of 1.0 shares of our common stock under our share repurchase program for $16, and had remaining authorization of $84 for future share repurchases. We account for shares repurchased as treasury stock under the cost method. | |
On October 9, 2013, the Board of Directors declared a cash dividend of $0.10 per share, payable on January 2, 2014 to shareholders of record on November 15, 2013. In both 2013 and 2012, we declared four quarterly dividends totaling $80 and $79, respectively, or $0.41 per share, and in 2011, subsequent to the ITT Spin-off, we declared dividends totaling $19 or $0.10 per share. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Equity [Abstract] | ' | ||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | |||||||||||
The following table presents changes in accumulated other comprehensive loss, net of tax, by component, included in stockholders’ equity: | |||||||||||
Net Foreign Currency | Unamortized Defined | Accumulated | |||||||||
Translation | Benefit | Other | |||||||||
Adjustments | Plan Costs | Comprehensive | |||||||||
Loss | |||||||||||
Balance at December 31, 2011 | $ | 7 | $ | (1,662 | ) | $ | (1,655 | ) | |||
Net foreign currency translation adjustments | 8 | — | 8 | ||||||||
Net actuarial loss arising during the year | — | (230 | ) | (230 | ) | ||||||
Prior service credit arising during the year | — | 1 | 1 | ||||||||
Other comprehensive income (loss) before reclassifications | 8 | (229 | ) | (221 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Amortization of net actuarial loss | — | 52 | (a) | 52 | |||||||
Other comprehensive income (loss), net of tax | 8 | (177 | ) | (169 | ) | ||||||
Defined benefit plans tax reclassification related to ITT Spin-off | — | (11 | ) | (11 | ) | ||||||
Balance at December 31, 2012 | $ | 15 | $ | (1,850 | ) | $ | (1,835 | ) | |||
Net foreign currency translation adjustments | 1 | — | 1 | ||||||||
Net actuarial gain arising during the year | — | 343 | 343 | ||||||||
Prior service cost arising during the year | — | (1 | ) | (1 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 1 | 342 | 343 | ||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Amortization of net actuarial loss | — | 59 | (a) | 59 | |||||||
Amortization of prior service cost | — | 1 | (a) | 1 | |||||||
Other comprehensive income (loss), net of tax | 1 | 402 | 403 | ||||||||
Balance at December 31, 2013 | $ | 16 | $ | (1,448 | ) | $ | (1,432 | ) | |||
(a) | The amortization of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost (Note 13). | ||||||||||
Unamortized defined benefit plan costs included in accumulated other comprehensive loss in the Consolidated Balance Sheets were reduced by taxes of $934 and $1,211 as of December 31, 2013 and 2012, respectively. | |||||||||||
The following tables provide a summary of the changes in accumulated other comprehensive loss for the years ended December 31, 2013 and 2012: | |||||||||||
Year Ended December 31, 2013 | |||||||||||
Pretax | Tax | After Tax | |||||||||
Changes in net foreign currency translation adjustments | $ | 1 | $ | — | $ | 1 | |||||
Changes in defined benefit plans | 679 | (277 | ) | 402 | |||||||
Net change in accumulated other comprehensive loss | $ | 680 | $ | (277 | ) | $ | 403 | ||||
Year Ended December 31, 2012 | |||||||||||
Pretax | Tax | After Tax | |||||||||
Changes in net foreign currency translation adjustments | $ | 8 | $ | — | $ | 8 | |||||
Changes in defined benefit plans | (283 | ) | 106 | (177 | ) | ||||||
Defined benefit plans tax reclassification attributable to the ITT Spin-off | — | (11 | ) | (11 | ) | ||||||
Net change in accumulated other comprehensive loss | $ | (275 | ) | $ | 95 | $ | (180 | ) | |||
Related_Party_Transactions_and
Related Party Transactions and Parent Company Equity | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Related Party Transactions [Abstract] | ' | |||
Related Party Transactions and Parent Company Equity | ' | |||
RELATED PARTY TRANSACTIONS AND PARENT COMPANY EQUITY | ||||
The Consolidated and Combined Financial Statements have been prepared on a stand-alone basis. However, prior to October 31, 2011, they were derived from the consolidated financial statements and accounting records of ITT. | ||||
Allocation of General Corporate Expenses | ||||
Prior to October 31, 2011 these Consolidated and Combined Financial Statements included expense allocations for certain functions provided by ITT as well as other ITT employees not solely dedicated to Exelis, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, and share-based compensation. We were allocated $102 of general corporate expenses incurred by ITT for the 10 months ended October 30, 2011, which are included within SG&A expenses in the Consolidated and Combined Statements of Operations. | ||||
Related Party Sales | ||||
Historically, we sold certain inventory to other ITT businesses. Total revenue included in our Consolidated and Combined Statements of Operations for these related party sales totaled $1 for the 10 months ended October 31, 2011. We also purchased inventory from other ITT businesses. We recognized cost of revenues from the inventory purchased from ITT of $2 for the 10 months ended October 31, 2011. The aggregate inventory on hand of purchases from other ITT businesses as of October 31, 2011 was not significant. | ||||
Separation Agreements | ||||
Following the ITT Spin-off, Exelis and ITT began operating independently of each other, and neither has any ownership interest in the other. In order to govern certain ongoing relationships between Exelis and ITT following the ITT Spin-off and to provide mechanisms for an orderly transition, on October 25, 2011, Exelis, ITT, and Xylem Inc. executed the various agreements that govern the ongoing relationships between and among the three companies after the ITT Spin-off and provide for the allocation of employee benefits, income taxes, and certain other liabilities and obligations attributable to periods prior to the ITT Spin-off. The executed agreements include the Distribution Agreement, Benefits and Compensation Matters Agreement, Tax Matters Agreement, several real estate matters agreements, and Master Transition Services Agreement. Certain intercompany work orders and/or informal intercompany commercial arrangements were also converted into third-party contracts based on ITT’s standard terms and conditions. | ||||
The Distribution Agreement provides for certain indemnifications and cross-indemnifications among Exelis, ITT and Xylem Inc. The indemnifications address a variety of subjects, including indemnification by ITT of Exelis in respect of certain asserted and unasserted asbestos or silica liability claims. These indemnifications include claims relating to the presence or alleged presence of asbestos or silica in products manufactured, repaired or sold prior to the Distribution Date, subject to limited exceptions with respect to certain employee claims. These indemnifications also include claims relating to the presence or alleged presence of asbestos or silica in the structure or material of any building or facility, subject to exceptions with respect to employee claims relating to Exelis or Xylem Inc. buildings or facilities. The indemnifications are absolute and indefinite. The indemnification associated with pending and future asbestos and silica claims does not expire. | ||||
For the years ended December 31, 2013 and 2012 and for the period from October 31, 2011 through December 31, 2011, charges incurred for services provided to Exelis by ITT and Xylem Inc. under the separation agreements, net of costs passed through to third parties, were $1, $2 and $1, respectively, and charges related to the these agreements for services provided by Exelis to ITT and Xylem Inc., net of costs passed through to third parties, were $1, $2 and $0.4, respectively. At December 31, 2013 and 2012, total payables due from Exelis to ITT and Xylem Inc. were $9 and $3, respectively, and total receivables due to Exelis from ITT and Xylem Inc. were $7 and $7, respectively. | ||||
Distribution Agreement | ||||
We entered into a Distribution Agreement with ITT and Xylem Inc. which sets forth our agreements with ITT and Xylem Inc. regarding the principal actions needed to be taken in connection with our Spin-off from ITT. It also set forth other agreements that govern certain aspects of our relationship with ITT and Xylem Inc. following the ITT Spin-off including, but not limited to, transfer of assets and assumption of liabilities, indemnification, and release of claims. Pursuant to the terms of the Distribution Agreement, (i) Exelis and ITT effected certain transfers of assets and assumed certain liabilities so that Exelis and ITT retained both the assets of and liabilities associated with their respective businesses, (ii) subject to certain exceptions, all agreements, arrangements, commitments and undertakings, including all intercompany accounts payable or accounts receivable, including intercompany indebtedness were terminated, novated or otherwise satisfied, effective no later than the Distribution Date, and (iii) Exelis and ITT effected a pro rata distribution of our common stock to ITT shareholders. | ||||
Benefits and Compensation Matters Agreement | ||||
We entered into a Benefits and Compensation Matters Agreement with ITT and Xylem Inc. that governs the respective rights, responsibilities and obligations of ITT, Xylem Inc. and us after the ITT Spin-off with respect to transferred employees, defined benefit pension plans, defined contribution pension plans, non-qualified pension plans, employee welfare benefit plans, incentive plans, corporate-owned life insurance, stock options, foreign benefit plans, director plans and collective bargaining agreements. | ||||
Intellectual Property License Agreement | ||||
We entered into a Transitional Trademark License Agreement with ITT pursuant to which ITT grants us the exclusive right to use the ITT name and trademark in our business for a three to five year transitional period until we phase out the use of such trademark in the operation of our business. We also entered into a Technology License Agreement with ITT and Xylem Inc. pursuant to which we have licensed on a non-exclusive basis certain of our intellectual property (excluding trademarks) existing as of the Distribution Date to ITT and Xylem Inc. and their respective affiliates and in turn, both ITT and Xylem Inc. and their respective affiliates granted reciprocal licenses to us, each for use in our respective businesses. | ||||
Tax Matters Agreement | ||||
We entered into a Tax Matters Agreement with ITT and Xylem Inc. that governs the respective rights, responsibilities and obligations of ITT, Xylem Inc. and us after the ITT Spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. Federal, state, local and foreign income taxes, other tax matters and related tax returns. We have joint and several liability with ITT and Xylem Inc. to the IRS for the consolidated U.S. Federal income taxes of the ITT consolidated group relating to the taxable periods in which we were part of that group. However, the Tax Matters Agreement specifies the portion, if any, of this tax liability for which we bear responsibility, and ITT and Xylem Inc. agree to indemnify us against any amounts for which we are not responsible. Though valid as between the parties, the Tax Matters Agreement is not binding on the IRS. | ||||
Real Estate Matters | ||||
We entered into a Master Assignment and Assumption of Lease Agreement pursuant to which ITT assigns lease agreements currently held in the name of ITT or certain of its subsidiaries to the party occupying and operating the relevant leased premises. We entered into a Master Lease Agreement pursuant to which ITT leases certain real estate to or from Exelis that is currently owned by ITT but currently occupied and operated by one or both parties, in each case for a limited term. We entered into a Master Sublease Agreement pursuant to which ITT subleases certain real estate to or from Exelis that is currently leased by ITT, or certain of its subsidiaries, but currently occupied and operated by one or both parties, in each case for a limited term. The real estate matters agreements helped ensure an orderly transition following the ITT Spin-off. | ||||
Master Transition Services Agreement | ||||
We entered into a Master Transition Services Agreement with ITT and Xylem Inc., under which each of ITT and Xylem Inc. or their respective affiliates provided us with certain services, and we provided each of ITT and Xylem Inc. certain services, including information technology, financial, procurement, human resource, benefits support and other specified services from ITT and Xylem Inc. and including information technology, human resources and other specified services to ITT and Xylem Inc. These services were generally provided at costs and were substantially completed by the end of 2013. | ||||
Subcontract Pending Novation | ||||
We entered into a subcontract with ITT pending the U.S. Government’s agreement to novate all of the U.S. Government contracts under which Exelis is obligated to fulfill the remaining terms. As of December 31, 2013, all U.S. Government contracts had been novated. | ||||
Parent Company Equity | ||||
Net transfers (to)/from parent are included within parent company investment on the Consolidated and Combined Statements of Shareholders’ Equity for the period from January 1, 2011 through October 31, 2011. The components of the net transfers (to)/from parent are as follows: | ||||
31-Oct-11 | ||||
Intercompany sales and purchases, net | $ | 2 | ||
Intercompany dividends (1) | (887 | ) | ||
Cash pooling and general financing activities | (149 | ) | ||
Corporate allocations including income taxes | 188 | |||
Accumulated other comprehensive loss transferred in connection with the ITT Spin-off (2) | 1,587 | |||
Net liabilities transferred in connection with the ITT Spin-off | (1,169 | ) | ||
Total net transfers to parent | $ | (428 | ) | |
-1 | Primarily represents the dividend paid to ITT in connection with the ITT Spin-off. | |||
-2 | Transfer of postretirement benefit plans from ITT in connection with the ITT Spin-off. During 2012, we recorded tax adjustments attributable to the ITT Spin-off of $11, which increased the accumulated other comprehensive loss transferred in connection with the ITT Spin-off to $1,598, with an offsetting increase to additional paid-in capital. | |||
The components of net assets and liabilities transferred from ITT in connection with the ITT Spin-off were as follows: | ||||
October 31, 2011 | ||||
Receivables, net | $ | 1 | ||
Plant, property and equipment, net | 7 | |||
Deferred income taxes (1) | 840 | |||
Other assets | 14 | |||
Total assets transferred | $ | 862 | ||
Defined benefit plans | $ | 2,047 | ||
Other liabilities | (16 | ) | ||
Total liabilities transferred | $ | 2,031 | ||
Net liabilities transferred in connection with the ITT Spin-off | $ | 1,169 | ||
-1 | During 2012, we recorded tax adjustments attributable to the ITT Spin-off of $3, which increased deferred income taxes attributable to the ITT Spin-off to $843, with on offsetting increase to additional paid-in capital. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||
Commitments and Contingencies | ' | ||||||
COMMITMENTS AND CONTINGENCIES | |||||||
General | |||||||
From time to time, we are involved in legal proceedings that are incidental to the operation of our businesses. Some of these proceedings seek remedies relating to environmental matters, personal injury claims, employment and pension matters, and commercial or contractual disputes, sometimes related to acquisitions or divestitures. | |||||||
Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including our assessment of the merits of the particular claim, we do not expect that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on our cash flow, results of operations, or financial condition. | |||||||
Environmental | |||||||
In the ordinary course of business, we are subject to federal, state, local, and foreign environmental laws and regulations. We are responsible, or are alleged to be responsible, for ongoing environmental investigation and remediation of multiple sites. These sites are in various stages of investigation and/or remediation and in many of these proceedings our liability is considered de minimis. We have received notification from the U.S. Environmental Protection Agency, and from similar environmental agencies, that a number of sites formerly or currently owned and/or operated by Exelis, and other properties or water supplies that may be or have been impacted from those operations, contain disposed or recycled materials or wastes and require environmental investigation and/or remediation. These sites include instances where we have been identified as a potentially responsible party under federal and state environmental laws and regulations. | |||||||
Accruals for environmental matters are recorded on a site by site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies available to us. Our accrued liabilities for these environmental matters represent the best estimates related to the investigation and remediation of environmental media such as water, soil, soil vapor, air and structures, as well as related legal fees. These estimates, and related accruals, are reviewed quarterly and updated for progress of investigation and remediation efforts and changes in facts and legal circumstances. Liabilities for these environmental expenditures are recorded on an undiscounted basis. | |||||||
It is difficult to estimate the final costs of investigation and remediation due to various factors, including incomplete information regarding particular sites and other potentially responsible parties, uncertainty regarding the extent of investigation or remediation and our share, if any, of liability for such conditions, the selection of alternative remedial approaches, and changes in environmental standards and regulatory requirements. We have estimated and accrued $26 and $27 as of December 31, 2013 and 2012, respectively, for environmental matters. We believe the total amount accrued is appropriate based on existing facts and circumstances. | |||||||
The following table illustrates the range of estimated loss and number of active sites for these environmental matters: | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Low-end range | $ | 23 | $ | 24 | |||
High-end range | $ | 44 | $ | 47 | |||
Number of active environmental investigation and remediation sites | 24 | 22 | |||||
U.S. Government Contracts, Investigations and Claims | |||||||
The Company has U.S. Government contracts that are funded incrementally on a year-to-year basis. Changes in government policies, priorities or funding levels through agency or program budget reductions by the U.S. Congress or executive agencies could have a material adverse effect on the Company’s cash flow, financial condition or results of operations. Furthermore, contracts with the U.S. Government may be terminated or suspended by the U.S. Government at any time, with or without cause. Such contract suspensions or terminations could result in un-reimbursable expenses or charges or otherwise adversely affect the Company’s cash flow, financial condition or results of operations. | |||||||
Departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory or treble damages. U.S. Government regulations provide that certain findings against a contractor may lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges for a company or an operating division or subdivision. Suspension or debarment could have a material adverse effect on the Company because of its reliance on U.S. Government contracts. | |||||||
U.S. Government agencies, including the Defense Contract Audit Agency (DCAA) and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. Accordingly, costs billed or billable to the U.S. Government customers are subject to potential adjustment upon audit by such agencies. They also review the adequacy of the contractor’s compliance with government standards for its accounting and management internal control systems, including: control environment and accounting systems, general information technology systems, budget and planning systems, purchasing systems, material management systems, compensation systems, labor systems, indirect and other direct costs systems, billing systems and estimating systems. Audits currently underway include the Company’s control environment and accounting, billing, and indirect and other direct cost systems, as well as reviews of the Company’s compliance with certain U.S. Government Cost Accounting Standards. | |||||||
From time to time, U.S. Government customers advise the Company of claims and penalties concerning certain potential disallowed costs. When such findings are presented, Exelis and the U.S. Government representatives engage in discussions to enable Exelis to evaluate the merits of these claims as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the expected exposure to the matters raised by the U.S. Government representatives and such provisions are reviewed on a quarterly basis for sufficiency based on the most recent information available. | |||||||
Indemnifications | |||||||
As part of the ITT Spin-off, Exelis, ITT and Xylem Inc. indemnify one another with respect to such parties’ assumed or retained liabilities under the Distribution Agreement and breaches of the Distribution Agreement or related ITT Spin-off agreements. Exelis expects ITT and Xylem Inc. to fully perform under the terms of the Distribution Agreement and therefore we have not recorded a liability for matters for which we are indemnified. In addition, we are not aware of any claims or other circumstances that would give rise to material payments to ITT or Xylem Inc. under the indemnity that we provide to them. | |||||||
Letters of Credit | |||||||
In the ordinary course of business, we use standby letters of credit, guarantees issued by commercial banks and surety bonds issued by insurance companies, as well as self-guarantees, principally to guarantee our performance on certain contracts and to support our self-insured workers’ compensation plans. At December 31, 2013, there was an aggregate of approximately $102 in surety bonds, guarantees and stand-by letters of credit outstanding. | |||||||
Rabbi Trust | |||||||
The Company maintains a grantor trust (“Rabbi Trust”) for the purpose of assisting the Company with the payment of certain nonqualified deferred compensation obligations in the event of a change in control of the Company. The Company is obligated to contribute an amount equal to 110 percent of the Company’s obligations under eight nonqualified deferred compensation plans at the time of an “Acceleration Event,” as defined in such plans and the Rabbi Trust. |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||||||||||||
Segment Information | ' | |||||||||||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||||||||||||
The Company’s segments are reported on the same basis used internally for evaluating performance and for allocating resources. We operate in two segments: C4ISR Electronics and Systems, and Information and Technical Services. Assets of the business segments exclude general corporate assets, which principally consist of cash, deferred tax assets, certain plant, property, and equipment, and certain other assets. | ||||||||||||||||||||||||||||||
C4ISR Electronics and Systems | ||||||||||||||||||||||||||||||
This segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems; and composite aerostructures, for government and commercial customers around the world. | ||||||||||||||||||||||||||||||
Information and Technical Services | ||||||||||||||||||||||||||||||
This segment provides a broad range of service solutions, including: systems integration; network design and development; air traffic management; cyber; intelligence; operations; sustainment; advanced engineering; logistics; and space launch and range-support, for a wide variety of U.S. military and U.S. Government customers. | ||||||||||||||||||||||||||||||
Segment financial results were as follows: | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||
Product | Service | Total | Product | Service | Total | Product | Service | Total | ||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | ||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 2,136 | $ | — | $ | 2,136 | $ | 2,487 | $ | — | $ | 2,487 | $ | 2,817 | $ | — | $ | 2,817 | ||||||||||||
Information and Technical Services | — | 2,680 | 2,680 | — | 3,035 | 3,035 | — | 3,022 | 3,022 | |||||||||||||||||||||
Total | $ | 2,136 | $ | 2,680 | $ | 4,816 | $ | 2,487 | $ | 3,035 | $ | 5,522 | $ | 2,817 | $ | 3,022 | $ | 5,839 | ||||||||||||
Operating Income | Operating Margin | |||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 218 | $ | 350 | $ | 385 | 10.2 | % | 14.1 | % | 13.7 | % | ||||||||||||||||||
Information and Technical Services | 258 | 211 | 150 | 9.6 | % | 7 | % | 5 | % | |||||||||||||||||||||
Total | $ | 476 | $ | 561 | $ | 535 | 9.9 | % | 10.2 | % | 9.2 | % | ||||||||||||||||||
Total Assets | Plant, Property & | |||||||||||||||||||||||||||||
Equipment | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 3,031 | $ | 3,078 | $ | 283 | $ | 314 | ||||||||||||||||||||||
Information and Technical Services | 1,097 | 1,186 | 187 | 181 | ||||||||||||||||||||||||||
Segments total | 4,128 | 4,264 | 470 | 495 | ||||||||||||||||||||||||||
Corporate and Other | 756 | 948 | 28 | 17 | ||||||||||||||||||||||||||
Total | $ | 4,884 | $ | 5,212 | $ | 498 | $ | 512 | ||||||||||||||||||||||
Capital Expenditures | Depreciation & | |||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 28 | $ | 56 | $ | 51 | $ | 81 | $ | 101 | $ | 112 | ||||||||||||||||||
Information and Technical Services | 33 | 44 | 43 | 26 | 23 | 19 | ||||||||||||||||||||||||
Segments total | 61 | 100 | 94 | 107 | 124 | 131 | ||||||||||||||||||||||||
Corporate and Other | 17 | 19 | 1 | 3 | 6 | 2 | ||||||||||||||||||||||||
Total | $ | 78 | $ | 119 | $ | 95 | $ | 110 | $ | 130 | $ | 133 | ||||||||||||||||||
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | ' | |||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||||||||||||
The following table comprises selected financial data for the years ended December 31, 2013 and 2012. | ||||||||||||||||||||||||||
2013 Quarters | 2012 Quarters | |||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | Fourth | |||||||||||||||||||
Total revenue | $ | 1,185 | $ | 1,251 | $ | 1,141 | $ | 1,239 | $ | 1,421 | $ | 1,379 | $ | 1,361 | $ | 1,361 | ||||||||||
Selling, general and administrative expenses | 115 | 122 | 100 | 118 | 133 | 130 | 114 | 139 | ||||||||||||||||||
Net income | 44 | 78 | 80 | 79 | 70 | 86 | 88 | 86 | ||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||
Net income | $ | 0.23 | $ | 0.41 | $ | 0.42 | $ | 0.42 | $ | 0.38 | $ | 0.46 | $ | 0.47 | $ | 0.46 | ||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||
Net income | $ | 0.23 | $ | 0.41 | $ | 0.41 | $ | 0.41 | $ | 0.37 | $ | 0.46 | $ | 0.47 | $ | 0.45 | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Basic | 188.3 | 188.2 | 188.5 | 189 | 186.6 | 187.5 | 187.6 | 187.9 | ||||||||||||||||||
Diluted | 189.8 | 190.5 | 192.8 | 194.2 | 187.5 | 188.5 | 188.7 | 189.5 | ||||||||||||||||||
Spinoff_of_Exelis_Mission_Syst
Spin-off of Exelis Mission Systems | 12 Months Ended |
Dec. 31, 2013 | |
Business Combinations [Abstract] | ' |
SPIN-OFF OF MISSION SYSTEMS | ' |
SPIN-OFF OF MISSION SYSTEMS | |
On December 11, 2013, Exelis announced that its Board of Directors approved a plan to spin-off part its military and government services business ("Mission Systems") through a transaction that is intended to be tax-free to Exelis and its shareholders. The spin-off is subject to final approval of the Company’s Board of Directors. Following completion of the spin-off, Mission Systems will be an independent, publicly traded company. Mission Systems is currently part of the Company’s Information and Technical Services segment and includes the following major program areas: Infrastructure Asset Management; Logistics and Supply Chain Management; and Information Technology and Network Communication Services. Mission Systems will continue to be reported as part of our continuing operations in our financial statements until the spin-off is completed. |
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||
Basis of Presentation and principles of consolidation and combination | ' | |||
Basis of Presentation and principles of consolidation and combination | ||||
The Consolidated and Combined Financial Statements reflect the consolidated operations of Exelis as a separate stand-alone entity beginning on October 31, 2011. Periods presented prior to the ITT Spin-off have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of ITT. The Consolidated and Combined Financial Statements reflect our financial position, results of operations and cash flows as we were historically managed, in conformity with accounting principles generally accepted in the United States of America (GAAP). | ||||
Principles of consolidation | ' | |||
Principles of consolidation | ||||
Exelis consolidates companies in which it has a controlling financial interest or when Exelis is considered the primary beneficiary of a variable interest entity. We account for investments in companies over which we have the ability to exercise significant influence, but do not hold a controlling interest under the equity method, and we record our proportionate share of income or losses in the Consolidated and Combined Statements of Operations. The results of companies acquired or disposed of during the fiscal year are included in the Consolidated and Combined Financial Statements from the effective date of acquisition or up to the date of disposal. | ||||
Use of Estimates | ' | |||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, revenue recognition, income taxes, contingency accruals and valuation allowances, fair value measurements, impairment of goodwill and other intangible assets, postretirement obligations and certain contingent liabilities. Actual results could differ from these estimates. | ||||
Business Combinations | ' | |||
Business Combinations | ||||
Exelis allocates the purchase price of its acquisitions to the tangible and intangible assets acquired, liabilities assumed, and non-controlling interests acquired based on their estimated fair value at the acquisition date. The excess of the acquisition price over those estimated fair values is recorded as goodwill. Changes to the acquisition date fair values prior to the expiration of the measurement period, a period generally not to exceed 12 months from date of acquisition, are recorded as an adjustment to the acquired assets, including goodwill. Changes to the acquisition date fair values after expiration of the measurement period are recorded in income. Acquisition-related expenses and restructuring charges are recognized separately from the business combination and are expensed as incurred. | ||||
Revenue Recognition | ' | |||
Revenue Recognition | ||||
As a defense contractor engaging in long-term contracts, the majority of our revenue is derived from long-term construction-type and production-type sales contracts and services provided to the federal government for which revenue is recognized under the percentage-of-completion method based on units of delivery, percentage of costs incurred to total costs, or the completion of scheduled performance milestones. For units of delivery, revenues and profits are recognized based upon the ratio of actual units delivered to estimated total units to be delivered under the contract. Under the cost-to-total cost method, revenue is recognized based upon the ratio of costs incurred to estimated total costs at completion of the contract. Revenue is recognized under the milestone method based upon accomplishing a clear deliverable output of contract performance with value to the customer. Revenues and profits on time-and-material type contracts are recognized based on billable rates times direct labor hours incurred plus material and other reimbursable costs incurred. The completed contract method is utilized when reasonable and reliable cost estimates for a project cannot be made. Amounts invoiced to customers in excess of revenue recognized are recorded as deferred revenue, until the revenue recognition criteria are satisfied. Revenue that is earned and recognized in excess of amounts invoiced is recorded as a component of receivables, net. | ||||
During the performance of long-term sales contracts, estimated final contract prices and costs are reviewed periodically and revisions are made as required and recorded in income in the period in which they are determined. Additionally, the fees under certain contracts may be increased or decreased in accordance with cost or performance incentive provisions which measure actual performance against established targets or other criteria. Such incentive fee awards or penalties are included in revenue when there is sufficient information to reasonably assess anticipated contract performance. Amounts representing contract change orders, claims, requests for equitable adjustment, or limitations in funding on contracts are recorded only if it is probable the claim will result in additional contract revenue and the amounts can be reliably estimated. Provisions for estimated losses on uncompleted long-term sales contracts are made in the period in which such losses are determined and are recorded as a component of costs of revenue. Contract revenue and cost estimates are reviewed and reassessed periodically. Changes in these estimates could result in recognition of cumulative catch-up adjustments to the contract’s inception to date revenue, cost of revenue and profit in the period in which such changes are made, based on a contract’s percent complete. Changes in revenue and cost estimates could also result in a forward loss or an adjustment to a forward loss. For the years ended December 31, 2013, 2012 and 2011, net favorable cumulative catch-up adjustments related to prior periods increased operating income by approximately $107, $65 and $143, respectively, and diluted earnings per share by approximately $0.36, $0.22 and $0.46, respectively. | ||||
To a lesser extent, we enter into contracts that are not associated with the design, development, manufacture, or modification of complex aerospace or electronic equipment and related services, and for services to non-federal government customers. For such contracts, we recognize revenue at the time title and risks and rewards of ownership pass, which is generally when products are shipped or as services are performed if there is persuasive evidence of an arrangement, the price is fixed or determinable and collectability is reasonably assured. For agreements that contain multiple deliverables, we allocate revenue across all identified units of accounting based on relative fair values and then recognize revenue when the appropriate revenue recognition criteria for the individual deliverables have been satisfied. | ||||
Research and Development | ' | |||
Research and Development | ||||
Expenditures for Company-sponsored research and development projects are expensed as incurred. Costs we incur under customer-sponsored research and development programs pursuant to contracts are included in total revenue and cost of revenue. | ||||
Restructuring | ' | |||
Restructuring | ||||
We periodically initiate management approved restructuring activities to achieve cost savings through reduced operational redundancies and to strategically position ourselves in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance, infrastructure charges to vacate facilities or consolidate operations, contract termination costs and other related charges. For involuntary separation plans, a liability is recognized when it is probable and reasonably estimable. For voluntary separation plans, a liability is recognized when the employee irrevocably accepts the voluntary termination. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change or if the employees are required to render services beyond a minimum retention period, the fair value of the severance or benefit payouts is recognized ratably over the future service period. | ||||
Income Taxes | ' | |||
Income Taxes | ||||
We determine the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. | ||||
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. | ||||
We provide for U.S. deferred taxes on the excess of financial reporting basis over the U.S. tax basis for our foreign earnings, when we do not plan to reinvest such earnings indefinitely outside the United States. | ||||
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Consolidated and Combined Financial Statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | ||||
Prior to October 31, 2011, our income taxes as presented were calculated on a separate tax return basis and may not be reflective of the results that would have occurred on a standalone basis. Our operations were included in ITT’s U.S. federal and state tax returns or non-U.S. jurisdictions tax returns prior to the ITT Spin-off. Subsequent to the ITT Spin-off, we file our own consolidated income tax returns and we maintain taxes payable to and from federal and state taxing authorities. | ||||
Foreign Currency Translation | ' | |||
Foreign Currency Translation | ||||
The financial statements of consolidated and combined international businesses, for which the functional currency is not the U.S. dollar, are translated into U.S. dollars. Balance sheet accounts are translated at the exchange rate in effect at the end of each period; income statement accounts are translated at the average rates of exchange prevailing during the period. Gains and losses on foreign currency translations are reflected in accumulated other comprehensive loss. Net gains or losses from foreign currency transactions are reported in Selling, General and Administrative (“SG&A”) expenses and have historically been immaterial. | ||||
Cash and Cash Equivalents | ' | |||
Cash and Cash Equivalents | ||||
Exelis considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | ||||
Accounts Receivable | ' | |||
Accounts Receivable | ||||
Accounts receivable include amounts billed and currently due from customers, unbilled costs and accrued profits primarily related to revenue on long-term sales contracts that have been recognized for accounting purposes but not yet billed to customers, certain estimated contract change amounts, claims or requests for equitable adjustment in negotiation that are probable of recovery, and amounts retained by the customer pending contract completion. We maintain an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance is based upon an assessment of customer credit-worthiness, historical payment experience and the age of outstanding receivables. | ||||
Inventories | ' | |||
Inventories | ||||
Inventories are stated at cost (first-in, first-out or average cost), but not in excess of realizable value. A write down for excess or inactive inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns, future sales expectations and salvage value. | ||||
Inventoried costs related to long-term sales contracts are stated at the actual production cost, including overhead and other related non-recurring costs incurred to date reduced by amounts identified with revenue recognized on units delivered or progress completed. Inventoried costs relating to long-term sales contracts and programs are reduced by charging any amounts in excess of estimated realizable value to costs of revenue. | ||||
Plant, Property and Equipment | ' | |||
Plant, Property and Equipment | ||||
Plant, property and equipment, net, are stated at cost less accumulated depreciation. Major improvements are capitalized at cost while expenditures for maintenance, repairs and minor improvements are expensed. For asset sales or retirements, the assets and related accumulated depreciation or amortization are eliminated from the accounts and any resulting gain or loss is reflected in income. | ||||
Depreciation is generally computed using either an accelerated or straight-line method and is based on estimated useful lives as follows: | ||||
Years | ||||
Buildings and improvements | 5 | - | 40 | |
Machinery and equipment | 2 | - | 15 | |
Furniture, fixtures and office equipment | 3 | - | 7 | |
Operating Leases | ' | |||
Operating Leases | ||||
Many of the Company’s real property lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For incentives for tenant improvements, the Company records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records minimum rental expenses on a straight-line basis over the term of the lease. Leasehold improvements are amortized over the lesser of the remaining life of the lease or the estimated useful life of the improvement. | ||||
Capitalized Internal Use Software | ' | |||
Capitalized Internal Use Software | ||||
Exelis capitalizes certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. Exelis amortizes capitalized internal use software costs using the straight-line method over the estimated useful life of the software, generally from 3 to 7 years. | ||||
Long-Lived Asset Impairment | ' | |||
Long-Lived Asset Impairment | ||||
Long-lived assets, including other intangible assets with finite lives, are tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. We assess the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. | ||||
Goodwill and Other Intangible Assets | ' | |||
Goodwill and Other Intangible Assets | ||||
Goodwill represents purchase consideration paid in a business combination that exceeds the values assigned to the net assets of acquired businesses. Other intangible assets include customer and distributor relationships, proprietary technology, trademarks and patents. Our other intangible assets have a finite life and are generally amortized on a straight-line basis, unless the pattern of usage of the benefits indicates an alternate method is more representative of the usage of the asset, over their estimated economic useful life, which generally range from 10-25 years. Other intangible assets are tested for impairment if indicators of impairment are identified. | ||||
Goodwill is not amortized, but instead is tested for impairment annually (or more frequently if impairment indicators arise, such as changes to the reporting unit structure, significant adverse changes in the business climate or an adverse action or assessment by a regulator). Goodwill has been assigned to our reporting units for purposes of impairment testing. We conduct our annual impairment testing on the first day of the fourth fiscal quarter. The impairment test is a two-step test. In the first step, the estimated fair value of each reporting unit is compared to the carrying value of the net assets assigned to that reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the second step of the impairment test is not performed. If the carrying value of the reporting unit exceeds its estimated fair value, then the second step of the impairment test is performed in order to measure the impairment loss to be recorded. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference. We estimate the fair value of our reporting units using an income approach. Under the income approach, we estimate fair value based on the present value of estimated future cash flows. | ||||
Postretirement Benefit Plans | ' | |||
Postretirement Benefit Plans | ||||
Plans that are sponsored by the Company and plans received on October 31, 2011 in connection with the ITT Spin-off are accounted for as defined benefit pension and other postretirement defined benefit plans (collectively referred to as “defined benefit plans”). Accordingly, the funded or unfunded position of each defined benefit plan is recorded on our Consolidated Balance Sheets. Actuarial gains and losses and prior service costs or credits that have not yet been recognized through income are recorded in accumulated other comprehensive loss within equity, net of taxes, until they are amortized as a component of net periodic benefit cost. The determination of benefit obligations and the recognition of expenses related to defined benefit plans are dependent on various assumptions. The major assumptions primarily relate to discount rates, long-term expected rates of return on plan assets, rate of future compensation increases, mortality, termination, health care inflation trend rates and other factors. Management develops each assumption using relevant company experience in conjunction with market-related data. Actuarial assumptions are reviewed annually with third-party consultants and adjusted as necessary. For the recognition of net periodic benefit cost, the calculation of the long-term expected return on plan assets is generally derived using a market-related value of plan assets based on yearly average asset values at the measurement date over the last five years. Actual results that differ from our assumptions are accumulated and amortized over the estimated future life or service period of the participants. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date. | ||||
Prior to October 31, 2011, certain of our U.S. and U.K. salaried employees participated in defined benefit pension and other postretirement defined benefit plans (the “Shared Plans”) sponsored by ITT which included participants of other ITT subsidiaries. We accounted for such Shared Plans under a multiemployer benefit approach. Accordingly, we did not record an asset or liability to recognize the funded status of the Shared Plans. We recognized a liability only for any required contributions to the Shared Plans that were accrued and unpaid at the balance sheet date. The related pension and other postretirement expenses were allocated to us based primarily on pensionable compensation of active participants and are reported in SG&A expenses. | ||||
Stock-Based Compensation | ' | |||
Stock-Based Compensation | ||||
We recognize stock-based compensation expense primarily within SG&A expenses based on the grant date fair values, net of estimated forfeitures, for all share-based awards granted over the requisite service periods of the awards, which is generally equivalent to the vesting term. | ||||
Prior to October 31, 2011, all of our stock-based compensation expense was attributable to our participation in ITT long-term incentive plans. Expense recognized prior to October 31, 2011 was based on awards attributable to those plans. | ||||
Fair Value Measurements | ' | |||
Fair Value Measurements | ||||
We determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, a fair value hierarchy is applied which categorizes and prioritizes the inputs used to estimate fair value into three levels. The fair value hierarchy is based on maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. Classification within the fair value hierarchy is based on the lowest level input that is significant to the fair value measurement. There are three levels of the fair value hierarchy. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices (in non-active markets or in active markets for similar assets or liabilities), inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the assets or liabilities. | ||||
In certain instances, fair value is estimated using quoted market prices obtained from external pricing services. In obtaining such data from the pricing service, the Company has evaluated the methodologies used to develop the estimate of fair value in order to assess whether such valuations are representative of fair value, including net asset value (NAV). Additionally, in certain circumstances, the NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value. | ||||
Commitments and Contingencies | ' | |||
Commitments and Contingencies | ||||
We record accruals for commitments and loss contingencies when they are probable of occurrence and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. We review these accruals quarterly and adjust the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information. | ||||
Accruals for environmental matters are recorded on a site by site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies available to us. Our estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. These accruals are adjusted quarterly as assessment and remediation efforts progress or as additional technical or legal information become available. Actual costs to be incurred at identified sites in future periods may vary from the estimates, given inherent uncertainties in evaluating environmental exposures. Accruals for environmental liabilities generally exclude claims for recoveries from insurance companies or other third parties and are reported in other non-current liabilities at undiscounted amounts. | ||||
Earnings Per Share | ' | |||
Earnings Per Share | ||||
We compute earnings per common share on the basis of the weighted average number of common shares, and, where dilutive, common share equivalents, outstanding during the indicated periods. | ||||
Derivative Financial Instruments | ' | |||
Derivative Financial Instruments | ||||
Our operations give rise to exposure to market risks from changes in foreign exchange rates. We may use derivative financial instruments to reduce the impact of changes in foreign exchange rates on our operating results. We do not hold or issue derivative financial instruments for trading or other speculative purposes. The effect of our derivative instruments on our Consolidated and Combined Financial Statements is immaterial for all periods presented. |
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||
Plant, Property and Equipment Estimated Useful Lives | ' | ||||||
Depreciation is generally computed using either an accelerated or straight-line method and is based on estimated useful lives as follows: | |||||||
Years | |||||||
Buildings and improvements | 5 | - | 40 | ||||
Machinery and equipment | 2 | - | 15 | ||||
Furniture, fixtures and office equipment | 3 | - | 7 | ||||
Plant, property and equipment, net consisted of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Land and improvements | $ | 22 | $ | 22 | |||
Buildings and improvements | 376 | 377 | |||||
Machinery and equipment | 673 | 627 | |||||
Furniture, fixtures and office equipment | 86 | 91 | |||||
Construction in progress | 59 | 76 | |||||
Plant, property and equipment, gross | 1,216 | 1,193 | |||||
Less accumulated depreciation | (718 | ) | (681 | ) | |||
Plant, property and equipment, net | $ | 498 | $ | 512 | |||
Restructuring_and_Asset_Impair1
Restructuring and Asset Impairment Charges (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||
Components of All Restructuring and Assets Impairment Charges | ' | |||||||||
The components of restructuring and asset impairment charges are summarized in the table below. | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
By components | ||||||||||
Severance charges | $ | 61 | $ | 9 | $ | 18 | ||||
Other restructuring charges | 20 | 5 | 7 | |||||||
Reversal of restructuring accruals | (2 | ) | (2 | ) | (2 | ) | ||||
Total restructuring charges | 79 | 12 | 23 | |||||||
Asset impairment charges | 4 | 7 | — | |||||||
Restructuring and asset impairment charges | $ | 83 | $ | 19 | $ | 23 | ||||
By segment | ||||||||||
C4ISR Electronics and Systems | $ | 68 | $ | 17 | $ | 23 | ||||
Information and Technical Services | 15 | 2 | — | |||||||
Restructuring and asset impairment charges | $ | 83 | $ | 19 | $ | 23 | ||||
Schedule of Roll-forward of Restructuring Accruals Presented in Consolidated Balance Sheets | ' | |||||||||
The following table displays a roll-forward and the details, by type and segment, of the restructuring accruals balance, presented on our Consolidated Balance Sheets within other accrued liabilities. | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
Balance at January 1, | $ | 9 | $ | 17 | ||||||
Charges for plans initiated during the year | 79 | 10 | ||||||||
Charges for plans initiated in prior years | 2 | 4 | ||||||||
Cash payments | (58 | ) | (20 | ) | ||||||
Reversal of accruals and other | (6 | ) | (2 | ) | ||||||
Balance at December 31, | $ | 26 | $ | 9 | ||||||
By accrual type | ||||||||||
Severance accrual | $ | 12 | $ | 5 | ||||||
Facility carrying and other cost accruals | 14 | 4 | ||||||||
By segment | ||||||||||
C4ISR Electronics and Systems | $ | 20 | $ | 6 | ||||||
Information and Technical Services | 6 | 3 | ||||||||
Schedule of Roll-forward of Employee Position Eliminations Associated with Restructuring Activities | ' | |||||||||
The following table displays a roll-forward of the number of employee reductions associated with all restructuring activities: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
Planned reductions at January 1, | 46 | 722 | ||||||||
Additional planned reductions | 1,168 | 344 | ||||||||
Actual reductions | (1,212 | ) | (1,020 | ) | ||||||
Planned reductions at December 31, | 2 | 46 | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||
Schedule of Pre-Tax Income and Components of Income Tax Expense | ' | |||||||||
The source of pre-tax income and the components of income tax expense are as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
Income components | ||||||||||
United States | $ | 431 | $ | 495 | $ | 515 | ||||
Foreign | 6 | 26 | 22 | |||||||
Total pre-tax income from continuing operations | $ | 437 | $ | 521 | $ | 537 | ||||
Income tax expense components | ||||||||||
Current income tax provision | ||||||||||
United States – federal | $ | 73 | $ | 13 | $ | 73 | ||||
United States – state and local | 6 | 4 | 10 | |||||||
Foreign | 2 | 5 | 7 | |||||||
Total current income tax provision | 81 | 22 | 90 | |||||||
Deferred income tax provision | ||||||||||
United States – federal | 47 | 146 | 115 | |||||||
United States – state and local | 29 | 23 | 5 | |||||||
Foreign | (1 | ) | — | 1 | ||||||
Total deferred income tax provision | 75 | 169 | 121 | |||||||
Total income tax expense | $ | 156 | $ | 191 | $ | 211 | ||||
Effective income tax rate | 35.7 | % | 36.7 | % | 39.3 | % | ||||
Schedule of Reconciliation of the Tax Provision at the U.S. Statutory Rate to the Effective Income Tax Rate | ' | |||||||||
A reconciliation of the tax provision at the U.S. statutory rate to the effective income tax rate as reported is as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
Tax provision at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||
Foreign tax rate differential | (0.2 | ) | (0.1 | ) | 0.1 | |||||
Foreign earnings not permanently reinvested, net of U.S. tax credit | 0.2 | 0.4 | 3 | |||||||
State and local income tax, net of federal benefit | 5 | 3.2 | 2.9 | |||||||
Research credit | (1.4 | ) | — | (1.0 | ) | |||||
Domestic manufacturing deduction | (1.8 | ) | (1.1 | ) | (1.2 | ) | ||||
Other | (1.1 | ) | (0.7 | ) | 0.5 | |||||
Effective income tax rate | 35.7 | % | 36.7 | % | 39.3 | % | ||||
Schedule of Deferred Tax Assets and Liabilities | ' | |||||||||
Deferred tax assets and liabilities include the following: | ||||||||||
December 31, | ||||||||||
2013 | 2012 | |||||||||
Deferred Tax Assets | ||||||||||
Employee benefits | $ | 569 | $ | 902 | ||||||
Accrued expenses | 37 | 111 | ||||||||
Loss carryforwards | 3 | 5 | ||||||||
Inventory | 55 | 27 | ||||||||
Advance payments | 14 | 20 | ||||||||
Credit carryforwards | 5 | 6 | ||||||||
Other | 6 | 5 | ||||||||
Subtotal | 689 | 1,076 | ||||||||
Valuation allowance | (3 | ) | (2 | ) | ||||||
Total deferred tax assets | $ | 686 | $ | 1,074 | ||||||
Deferred Tax Liabilities | ||||||||||
Goodwill and other intangible assets | $ | 278 | $ | 259 | ||||||
Plant, property and equipment | 77 | 68 | ||||||||
Unbilled receivables | 83 | 89 | ||||||||
Foreign subsidiaries | 18 | 16 | ||||||||
Other | — | 2 | ||||||||
Total deferred tax liabilities | $ | 456 | $ | 434 | ||||||
Deferred taxes in the Consolidated Balance Sheets consist of the following: | ||||||||||
December 31, | ||||||||||
2013 | 2012 | |||||||||
Current assets | $ | 16 | $ | 85 | ||||||
Non-current assets | 216 | 556 | ||||||||
Non-current liabilities | (2 | ) | (1 | ) | ||||||
Net deferred tax assets | $ | 230 | $ | 640 | ||||||
Schedule of Tax Attributes Available To Reduce Future Taxable Income | ' | |||||||||
Our tax attributes available to reduce future taxable income begin to expire as follows: | ||||||||||
Attribute | Amount | First Year of Expiration | ||||||||
State net operating losses | $ | 3 | December 31, 2016 | |||||||
State tax credits | 5 | December 31, 2019 | ||||||||
Unrecognized Tax Benefits Roll-forward | ' | |||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
Unrecognized tax benefits at January 1, | $ | 56 | $ | — | $ | 38 | ||||
Additions for | ||||||||||
Current year tax positions | — | — | 2 | |||||||
Prior year tax positions | — | 56 | — | |||||||
Reductions for | ||||||||||
Indemnification | — | — | (21 | ) | ||||||
Prior year tax positions | (56 | ) | — | (19 | ) | |||||
Statute of limitations | — | — | — | |||||||
Unrecognized tax benefits at December 31, | $ | — | $ | 56 | $ | — | ||||
Summary of Open Tax Years by Major Jurisdiction | ' | |||||||||
The following table summarizes the Company's earliest open tax years by major jurisdiction: | ||||||||||
Jurisdiction | Earliest Open Year | |||||||||
United States | 2009 | |||||||||
United Kingdom | 2010 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Earnings Per Share [Abstract] | ' | ||||||
Schedule of Basic and Diluted Weighted Average Shares Outstanding | ' | ||||||
The following table sets forth the reconciliation of basic and diluted weighted average shares outstanding for our earnings per share calculations: | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | 2011 | |||||
Weighted average common shares outstanding | 188.4 | 186.5 | 184.6 | ||||
Add: Weighted average restricted stock awards outstanding (a) | 0.1 | 0.9 | 1.6 | ||||
Basic weighted average common shares outstanding | 188.5 | 187.4 | 186.2 | ||||
Add: Dilutive impact of stock options | 1.6 | 0.5 | 0.4 | ||||
Add: Dilutive impact of restricted stock units | 1.9 | 0.7 | 0.1 | ||||
Diluted weighted average common shares outstanding | 192 | 188.6 | 186.7 | ||||
(a) | Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share. | ||||||
Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share | ' | ||||||
The table below provides a summary of securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the period presented. | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | 2011 | |||||
Anti-dilutive stock options | 0.1 | 9.5 | 7.8 | ||||
Anti-dilutive restricted stock units | — | — | 0.9 | ||||
Receivables_Net_Tables
Receivables, Net (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Receivables [Abstract] | ' | ||||||
Schedule of Receivables, Net | ' | ||||||
Receivables, net were comprised of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Billed receivables | $ | 395 | $ | 429 | |||
Unbilled contract receivables | 537 | 562 | |||||
Other | 11 | 7 | |||||
Receivables, gross | 943 | 998 | |||||
Allowance for doubtful accounts | (4 | ) | (3 | ) | |||
Receivables, net | $ | 939 | $ | 995 | |||
Inventories_Net_Tables
Inventories, Net (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Inventory Disclosure [Abstract] | ' | ||||||
Schedule of Inventories, Net | ' | ||||||
Inventories, net were comprised of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Production costs of contracts in process | $ | 217 | $ | 253 | |||
Less progress payments | (27 | ) | (22 | ) | |||
Production costs of contracts in process, net | 190 | 231 | |||||
Product inventory | 56 | 52 | |||||
Inventories, net | $ | 246 | $ | 283 | |||
Plant_Property_and_Equipment_N1
Plant, Property and Equipment, Net (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Property, Plant and Equipment [Abstract] | ' | ||||||
Schedule of Plant, Property and Equipment, Net | ' | ||||||
Depreciation is generally computed using either an accelerated or straight-line method and is based on estimated useful lives as follows: | |||||||
Years | |||||||
Buildings and improvements | 5 | - | 40 | ||||
Machinery and equipment | 2 | - | 15 | ||||
Furniture, fixtures and office equipment | 3 | - | 7 | ||||
Plant, property and equipment, net consisted of the following: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Land and improvements | $ | 22 | $ | 22 | |||
Buildings and improvements | 376 | 377 | |||||
Machinery and equipment | 673 | 627 | |||||
Furniture, fixtures and office equipment | 86 | 91 | |||||
Construction in progress | 59 | 76 | |||||
Plant, property and equipment, gross | 1,216 | 1,193 | |||||
Less accumulated depreciation | (718 | ) | (681 | ) | |||
Plant, property and equipment, net | $ | 498 | $ | 512 | |||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets, Net (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Goodwill | ' | |||||||||||||||||||
Changes in the carrying amount of goodwill by business segment were as follows: | ||||||||||||||||||||
C4ISR Electronics | Information and | Total | ||||||||||||||||||
and Systems | Technical Services | |||||||||||||||||||
Balance at January 1, 2012 | $ | 1,777 | $ | 377 | $ | 2,154 | ||||||||||||||
Acquisitions | 26 | — | 26 | |||||||||||||||||
Balance at December 31, 2012 | $ | 1,803 | $ | 377 | $ | 2,180 | ||||||||||||||
Acquisitions | 2 | 7 | 9 | |||||||||||||||||
Sales | (5 | ) | — | (5 | ) | |||||||||||||||
Balance at December 31, 2013 | $ | 1,800 | $ | 384 | $ | 2,184 | ||||||||||||||
Other Intangible Assets, Net | ' | |||||||||||||||||||
Information regarding our other intangible assets was as follows: | ||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||
Carrying | Amortization | Intangibles | Carrying | Amortization | Intangibles | |||||||||||||||
Amount | Amount | |||||||||||||||||||
Customer and distributor relationships | $ | 525 | $ | (371 | ) | $ | 154 | $ | 524 | $ | (348 | ) | $ | 176 | ||||||
Proprietary technology | 30 | (22 | ) | 8 | 25 | (18 | ) | 7 | ||||||||||||
Trademarks, patents and other | 9 | (4 | ) | 5 | 5 | (4 | ) | 1 | ||||||||||||
Total other intangible assets | $ | 564 | $ | (397 | ) | $ | 167 | $ | 554 | $ | (370 | ) | $ | 184 | ||||||
Estimated Amortization Expense | ' | |||||||||||||||||||
Estimated amortization expense for each of the five succeeding years and thereafter is as follows: | ||||||||||||||||||||
2014 | $ | 24 | ||||||||||||||||||
2015 | 21 | |||||||||||||||||||
2016 | 19 | |||||||||||||||||||
2017 | 17 | |||||||||||||||||||
2018 | 14 | |||||||||||||||||||
2019 and thereafter | 72 | |||||||||||||||||||
Total | $ | 167 | ||||||||||||||||||
Leases_and_Rentals_Tables
Leases and Rentals (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Leases [Abstract] | ' | |||
Schedule of Future Minimum Lease Payments Under Operating Leases | ' | |||
The following is a schedule, by years, of future minimum lease payments required under operating leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2013. | ||||
Operating leases | ||||
2014 | $ | 60 | ||
2015 | 50 | |||
2016 | 42 | |||
2017 | 35 | |||
2018 | 30 | |||
2019 and thereafter | 52 | |||
Total future minimum lease payments | $ | 269 | ||
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Debt | ' | |||||||||||||||
Debt consisted of the following: | ||||||||||||||||
December 31, | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Long-term debt | $ | 650 | $ | 650 | ||||||||||||
Unamortized debt discounts | (1 | ) | (1 | ) | ||||||||||||
Total long-term debt | $ | 649 | $ | 649 | ||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Long-Term Debt | ' | |||||||||||||||
The following table provides a summary of interest rates, carrying values and estimated fair values of outstanding long-term debt: | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Interest rate | Carrying | Fair | Carrying | Fair | ||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt | ||||||||||||||||
Senior notes due 2016 | 4.25 | % | $ | 250 | $ | 263 | $ | 250 | $ | 262 | ||||||
Senior notes due 2021 | 5.55 | % | 400 | 404 | 400 | 437 | ||||||||||
Total | $ | 650 | $ | 667 | $ | 650 | $ | 699 | ||||||||
Postretirement_Benefit_Plans_T
Postretirement Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | |||||||||||||||||||||||||||||
Funded Status and Amount Reported in Consolidated Balance Sheets | ' | |||||||||||||||||||||||||||||
The following table provides a summary of the funded status of our defined benefit plans and the presentation of such balances within our Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Fair value of plan assets | $ | 4,288 | $ | 281 | $ | 4,569 | $ | 4,109 | $ | 270 | $ | 4,379 | ||||||||||||||||||
Projected benefit obligation | (5,522 | ) | (480 | ) | (6,002 | ) | (6,086 | ) | (525 | ) | (6,611 | ) | ||||||||||||||||||
Funded status | $ | (1,234 | ) | $ | (199 | ) | $ | (1,433 | ) | $ | (1,977 | ) | $ | (255 | ) | $ | (2,232 | ) | ||||||||||||
Amounts reported within | ||||||||||||||||||||||||||||||
Other non-current assets | $ | 6 | $ | — | $ | 6 | $ | 1 | $ | — | $ | 1 | ||||||||||||||||||
Accrued liabilities | (14 | ) | (18 | ) | (32 | ) | (13 | ) | (17 | ) | (30 | ) | ||||||||||||||||||
Non-current liabilities | $ | (1,226 | ) | $ | (181 | ) | $ | (1,407 | ) | $ | (1,965 | ) | $ | (238 | ) | $ | (2,203 | ) | ||||||||||||
Schedule of Amounts Recognized in Accumulated Other Comprehensive Loss | ' | |||||||||||||||||||||||||||||
The following table provides a summary of amounts recorded within accumulated other comprehensive loss. | ||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Net actuarial loss | $ | 2,304 | $ | 69 | $ | 2,373 | $ | 2,924 | $ | 128 | $ | 3,052 | ||||||||||||||||||
Prior service cost (credit) | 10 | (1 | ) | 9 | 10 | (1 | ) | 9 | ||||||||||||||||||||||
Total | $ | 2,314 | $ | 68 | $ | 2,382 | $ | 2,934 | $ | 127 | $ | 3,061 | ||||||||||||||||||
Roll-forward of Projected Benefit Obligations | ' | |||||||||||||||||||||||||||||
The following table provides a roll-forward of the projected benefit obligations for our defined benefit plans: | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||||||||
Benefit obligation at January 1, | $ | 6,086 | $ | 525 | $ | 6,611 | $ | 5,705 | $ | 526 | $ | 6,231 | ||||||||||||||||||
Service cost | 70 | 2 | 72 | 75 | 2 | 77 | ||||||||||||||||||||||||
Interest cost | 241 | 19 | 260 | 265 | 22 | 287 | ||||||||||||||||||||||||
Actuarial loss (gain) | (414 | ) | (43 | ) | (457 | ) | 430 | 1 | 431 | |||||||||||||||||||||
Benefits paid | (445 | ) | (23 | ) | (468 | ) | (372 | ) | (26 | ) | (398 | ) | ||||||||||||||||||
Expenses paid | (17 | ) | — | (17 | ) | (17 | ) | — | (17 | ) | ||||||||||||||||||||
Other | 1 | — | 1 | — | — | — | ||||||||||||||||||||||||
Benefit obligation at December 31, | $ | 5,522 | $ | 480 | $ | 6,002 | $ | 6,086 | $ | 525 | $ | 6,611 | ||||||||||||||||||
Roll-forward of Plan Assets | ' | |||||||||||||||||||||||||||||
The following table provides a roll-forward of the plans assets and the ending funded status for our defined benefit plans: | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||
Benefits | Benefits | |||||||||||||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||||||
Plan assets at January 1, | $ | 4,109 | $ | 270 | $ | 4,379 | $ | 3,780 | $ | 259 | $ | 4,039 | ||||||||||||||||||
Actual return on plan assets | 442 | 33 | 475 | 438 | 31 | 469 | ||||||||||||||||||||||||
Employer contributions | 186 | — | 186 | 266 | — | 266 | ||||||||||||||||||||||||
Benefits paid | (432 | ) | (22 | ) | (454 | ) | (359 | ) | (20 | ) | (379 | ) | ||||||||||||||||||
Expenses paid | (17 | ) | — | (17 | ) | (16 | ) | — | (16 | ) | ||||||||||||||||||||
Plan assets at December 31, | $ | 4,288 | $ | 281 | $ | 4,569 | $ | 4,109 | $ | 270 | $ | 4,379 | ||||||||||||||||||
Funded status at end of year | $ | (1,234 | ) | $ | (199 | ) | $ | (1,433 | ) | $ | (1,977 | ) | $ | (255 | ) | $ | (2,232 | ) | ||||||||||||
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | ' | |||||||||||||||||||||||||||||
The following table provides information for defined benefit pension plans with an accumulated benefit obligation in excess of plan assets. | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Projected benefit obligation | $ | 5,482 | $ | 6,043 | ||||||||||||||||||||||||||
Accumulated benefit obligation | 5,445 | 5,882 | ||||||||||||||||||||||||||||
Fair value of plan assets | 4,242 | 4,065 | ||||||||||||||||||||||||||||
Schedule of Net Periodic Pension Benefit Cost and Other Comprehensive Income | ' | |||||||||||||||||||||||||||||
The following table provides the components of net periodic benefit cost and other amounts recognized in other comprehensive income for 2013, 2012 and 2011, as they pertain to our defined benefit plans. Net periodic benefit cost includes the costs for the Transferred Plans beginning on October 31, 2011. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | Pension | Other | Total | ||||||||||||||||||||||
Benefits | Benefits | Benefits | ||||||||||||||||||||||||||||
Net periodic benefit cost | ||||||||||||||||||||||||||||||
Service cost | $ | 70 | $ | 2 | $ | 72 | $ | 75 | $ | 2 | $ | 77 | $ | 22 | $ | 1 | $ | 23 | ||||||||||||
Interest cost | 241 | 19 | 260 | 265 | 22 | 287 | 63 | 8 | 71 | |||||||||||||||||||||
Expected return on plan assets | (341 | ) | (21 | ) | (362 | ) | (386 | ) | (22 | ) | (408 | ) | (85 | ) | (4 | ) | (89 | ) | ||||||||||||
Amortization of net actuarial loss | 106 | 10 | 116 | 76 | 10 | 86 | 34 | 2 | 36 | |||||||||||||||||||||
Amortization of prior service cost (credit) | 1 | — | 1 | 2 | (2 | ) | — | 2 | (1 | ) | 1 | |||||||||||||||||||
Net periodic benefit cost | 77 | 10 | 87 | 32 | 10 | 42 | 36 | 6 | 42 | |||||||||||||||||||||
Effect of curtailments (1) | — | — | — | 1 | — | 1 | 4 | — | 4 | |||||||||||||||||||||
Total net periodic benefit cost (2) | $ | 77 | $ | 10 | $ | 87 | $ | 33 | $ | 10 | $ | 43 | $ | 40 | $ | 6 | $ | 46 | ||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||||||||||||||||||||||||||||
Net actuarial loss (gain) | $ | (514 | ) | $ | (49 | ) | $ | (563 | ) | $ | 379 | $ | (9 | ) | $ | 370 | $ | 57 | $ | (10 | ) | $ | 47 | |||||||
Prior service cost (credit) | 1 | — | 1 | (1 | ) | — | (1 | ) | — | 2 | 2 | |||||||||||||||||||
Amortization of net actuarial loss | (106 | ) | (10 | ) | (116 | ) | (76 | ) | (10 | ) | (86 | ) | (34 | ) | (2 | ) | (36 | ) | ||||||||||||
Amortization of prior service (cost) credit | (1 | ) | — | (1 | ) | (2 | ) | 2 | — | (2 | ) | 1 | (1 | ) | ||||||||||||||||
Total change recognized in other comprehensive income | (620 | ) | (59 | ) | (679 | ) | 300 | (17 | ) | 283 | 21 | (9 | ) | 12 | ||||||||||||||||
Total impact from net periodic benefit cost and changes in other comprehensive income | $ | (543 | ) | $ | (49 | ) | $ | (592 | ) | $ | 333 | $ | (7 | ) | $ | 326 | $ | 61 | $ | (3 | ) | $ | 58 | |||||||
-1 | Curtailments recorded during the years ended December 31, 2012 and 2011 were due to reduction in force related to the Night Vision Hourly Pension Plan, and Retirement Choice and headcount reductions from certain restructuring activities, respectively. | |||||||||||||||||||||||||||||
-2 | Net period benefit cost recorded during the year ended December 31, 2011 includes $34 of cost for the Transferred Plans from October 31, 2011 to December 31, 2011. | |||||||||||||||||||||||||||||
Amount Expected to be Recognized in 2013 in Net Periodic Benefit Cost | ' | |||||||||||||||||||||||||||||
The following table provides the estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2014. | ||||||||||||||||||||||||||||||
Pension | Other | Total | ||||||||||||||||||||||||||||
Benefits | ||||||||||||||||||||||||||||||
Net actuarial loss | $ | 86 | $ | 4 | $ | 90 | ||||||||||||||||||||||||
Prior service cost | 2 | — | 2 | |||||||||||||||||||||||||||
Total | $ | 88 | $ | 4 | $ | 92 | ||||||||||||||||||||||||
Comparison of Actual Rate of Return to Expected Rate of Return Used in Calculating Net Periodic Benefit Costs | ' | |||||||||||||||||||||||||||||
The table below provides the actual rate of return generated on plan assets during each of the years presented, as they compare to the expected long-term rate of return utilized in calculating the net periodic benefit cost. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||
Expected long-term rate of return on plan assets | 8.5 | % | 9 | % | 9 | % | ||||||||||||||||||||||||
Actual rate of return on plan assets | 11.14 | % | 10.96 | % | (1.20 | )% | ||||||||||||||||||||||||
Schedule of Strategic Target Asset Allocation | ' | |||||||||||||||||||||||||||||
The following table provides the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level. | ||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Asset category | ||||||||||||||||||||||||||||||
Domestic equity | ||||||||||||||||||||||||||||||
Large cap | $ | 733 | $ | 562 | $ | 171 | $ | — | $ | 419 | $ | 419 | $ | — | $ | — | ||||||||||||||
Mid cap | 532 | 487 | 45 | — | 450 | 415 | 35 | — | ||||||||||||||||||||||
Small/Micro cap | 109 | 51 | 58 | — | 87 | 44 | 43 | — | ||||||||||||||||||||||
International equity | 461 | 346 | 115 | — | 430 | 313 | 117 | — | ||||||||||||||||||||||
Private equity | ||||||||||||||||||||||||||||||
Buyout funds | 841 | — | — | 841 | 878 | — | — | 878 | ||||||||||||||||||||||
Mezzanine funds | 41 | — | — | 41 | 43 | — | — | 43 | ||||||||||||||||||||||
Venture capital funds | 101 | — | — | 101 | 89 | — | — | 89 | ||||||||||||||||||||||
Distressed asset investments | 197 | — | — | 197 | 238 | — | — | 238 | ||||||||||||||||||||||
Commodities and Real Estate | 60 | — | — | 60 | 63 | — | — | 63 | ||||||||||||||||||||||
Fixed income investments | ||||||||||||||||||||||||||||||
U.S. Government securities | 421 | — | 421 | — | 531 | — | 531 | — | ||||||||||||||||||||||
Corporate bonds | 52 | — | 52 | — | 50 | — | 50 | — | ||||||||||||||||||||||
Hedge funds | 730 | — | 73 | 657 | 794 | — | 274 | 520 | ||||||||||||||||||||||
Other | 83 | — | 71 | 12 | 78 | — | 69 | 9 | ||||||||||||||||||||||
Cash and cash equivalents | 208 | 18 | 190 | — | 196 | 20 | 176 | — | ||||||||||||||||||||||
Total | $ | 4,569 | $ | 1,464 | $ | 1,196 | $ | 1,909 | $ | 4,346 | $ | 1,211 | $ | 1,295 | $ | 1,840 | ||||||||||||||
Receivables (payables), net | — | 33 | ||||||||||||||||||||||||||||
Total fair value of plan assets | $ | 4,569 | $ | 4,379 | ||||||||||||||||||||||||||
The following table provides the strategic target asset allocation ranges by asset category. | ||||||||||||||||||||||||||||||
Target Asset Allocation | ||||||||||||||||||||||||||||||
Range | ||||||||||||||||||||||||||||||
Domestic equity | 25 | % | - | 75% | ||||||||||||||||||||||||||
International equity | 10 | % | - | 45% | ||||||||||||||||||||||||||
Private equity | 10 | % | - | 30% | ||||||||||||||||||||||||||
Fixed income investments | 0 | % | - | 60% | ||||||||||||||||||||||||||
Hedge funds | 10 | % | - | 40% | ||||||||||||||||||||||||||
Cash and cash equivalents | 0 | % | - | 30% | ||||||||||||||||||||||||||
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets | ' | |||||||||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending defined benefit plan asset balances that use significant unobservable inputs (Level 3) to measure fair value. | ||||||||||||||||||||||||||||||
Private | Hedge | Other | Total | |||||||||||||||||||||||||||
Equity | Funds | |||||||||||||||||||||||||||||
Level 3 balance — December 31, 2011 | $ | 1,340 | $ | 652 | $ | 8 | $ | 2,000 | ||||||||||||||||||||||
Realized gains (losses), net | 80 | (6 | ) | — | 74 | |||||||||||||||||||||||||
Unrealized gains (losses), net | 8 | (1 | ) | 1 | 8 | |||||||||||||||||||||||||
Purchases (sales), net | (158 | ) | (128 | ) | — | (286 | ) | |||||||||||||||||||||||
Transfers in (out), net | 41 | 3 | — | 44 | ||||||||||||||||||||||||||
Level 3 balance — December 31, 2012 | 1,311 | 520 | 9 | 1,840 | ||||||||||||||||||||||||||
Realized gains (losses), net | 97 | — | 1 | 98 | ||||||||||||||||||||||||||
Unrealized gains (losses), net | 46 | 26 | 2 | 74 | ||||||||||||||||||||||||||
Purchases (sales), net | (214 | ) | 8 | — | (206 | ) | ||||||||||||||||||||||||
Transfers in (out), net | — | 103 | — | 103 | ||||||||||||||||||||||||||
Level 3 balance — December 31, 2013 | $ | 1,240 | $ | 657 | $ | 12 | $ | 1,909 | ||||||||||||||||||||||
Schedule of Expected Benefit Payments | ' | |||||||||||||||||||||||||||||
The following table provides the projected timing of payments for benefits earned to date and the expectation that certain future service will be earned by current active employees for our defined benefit plans. | ||||||||||||||||||||||||||||||
Pension | Other | Total | ||||||||||||||||||||||||||||
Benefits | ||||||||||||||||||||||||||||||
2014 | $ | 369 | $ | 41 | $ | 410 | ||||||||||||||||||||||||
2015 | 370 | 40 | 410 | |||||||||||||||||||||||||||
2016 | 372 | 40 | 412 | |||||||||||||||||||||||||||
2017 | 373 | 39 | 412 | |||||||||||||||||||||||||||
2018 | 374 | 38 | 412 | |||||||||||||||||||||||||||
2019 — 2023 | 1,871 | 178 | 2,049 | |||||||||||||||||||||||||||
Pension | ' | |||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | |||||||||||||||||||||||||||||
Schedule of Weighted-Average Assumptions Used to Determine Projected Benefit Obligations and Net Periodic Benefit Cost | ' | |||||||||||||||||||||||||||||
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to our defined benefit pension plans. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Obligation assumptions | ||||||||||||||||||||||||||||||
Discount rate | 4.71 | % | 4.09 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 2.75 | % | 3.25 | % | ||||||||||||||||||||||||||
Cost assumptions (1) | ||||||||||||||||||||||||||||||
Discount rate | 4.28 | % | 4.75 | % | ||||||||||||||||||||||||||
Expected return on plan assets | 8.5 | % | 9 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 2.75 | % | 3.75 | % | ||||||||||||||||||||||||||
-1 | Cost assumptions for the current year are based on the prior year-end obligation assumptions, except for defined benefit pension plans remeasured as of May 31, 2013. | |||||||||||||||||||||||||||||
Other Benefits | ' | |||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | |||||||||||||||||||||||||||||
Schedule of Weighted-Average Assumptions Used to Determine Projected Benefit Obligations and Net Periodic Benefit Cost | ' | |||||||||||||||||||||||||||||
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to other postretirement benefit plans. | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Obligation assumptions | ||||||||||||||||||||||||||||||
Discount rate | 4.45 | % | 3.76 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 2.75 | % | 3.25 | % | ||||||||||||||||||||||||||
Cost assumptions (1) | ||||||||||||||||||||||||||||||
Discount rate | 3.76 | % | 4.5 | % | ||||||||||||||||||||||||||
Rate of future compensation increase | 3.25 | % | 3.75 | % | ||||||||||||||||||||||||||
-1 | Cost assumptions for the current year are based on the prior year-end obligation assumptions. |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||||||
Schedule of Compensation Costs | ' | |||||||||||||||||||
The following table provides the impact of stock-based compensation in our Consolidated and Combined Statement of Operations: | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Compensation costs for equity-based awards | $ | 26 | $ | 22 | $ | 18 | ||||||||||||||
Compensation costs for liability-based awards | 6 | 2 | — | |||||||||||||||||
Total compensation costs, pre-tax | $ | 32 | $ | 24 | $ | 18 | ||||||||||||||
Future tax benefit | $ | 11 | $ | 10 | $ | 7 | ||||||||||||||
Schedule of Stock Option Activity | ' | |||||||||||||||||||
A summary of the status of our NQOs as of December 31, 2013, 2012 and 2011 and changes during the years then ended is presented below. The activity presented for 2011 prior to the ITT Spin-off represents the stock options held by Exelis employees under the ITT long-term incentive award program. | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Stock Options | Shares | Weighted- | Shares | Weighted- | Shares | Weighted- | ||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||
Price Per Share | Price Per Share | Price Per Share | ||||||||||||||||||
Outstanding at January 1, | 11.36 | $ | 11.06 | 10.59 | $ | 10.65 | 1.82 | $ | 41.41 | |||||||||||
Granted | — | — | — | — | 0.2 | 57.69 | ||||||||||||||
Exercised | — | — | — | — | (0.46 | ) | 39.08 | |||||||||||||
Forfeited, canceled or expired | — | — | — | — | (0.03 | ) | 48.08 | |||||||||||||
Outstanding at ITT Spin-off | — | — | — | — | 1.53 | 45.97 | ||||||||||||||
Conversion related to the ITT Spin-off (a) | — | — | — | — | 5.16 | — | ||||||||||||||
Post ITT Spin-off activities | ||||||||||||||||||||
Granted | 2.89 | 11.11 | 3.05 | 11.19 | 3.98 | 10.95 | ||||||||||||||
Exercised | (2.21 | ) | 10.53 | (2.10 | ) | 9.14 | (0.08 | ) | 5.74 | |||||||||||
Forfeited, canceled or expired | (0.58 | ) | 11.98 | (0.18 | ) | 11.52 | — | — | ||||||||||||
Outstanding at December 31, | 11.46 | $ | 11.13 | 11.36 | $ | 11.06 | 10.59 | $ | 10.65 | |||||||||||
Options exercisable at December 31, | 4.95 | $ | 11.02 | 4.49 | $ | 10.59 | 4.42 | $ | 9.89 | |||||||||||
(a) | The weighted average grant date fair value of the stock options converted is equal to the weighted average grant date fair value of such stock options prior to the ITT Spin-off, reduced by the ITT Spin-off conversion adjustment. Included in the conversion related to the ITT Spin-off are awards related to employees who transferred among ITT, Xylem Inc. and Exelis as a result of the ITT Spin-off. | |||||||||||||||||||
Schedule of NQOs Outstanding and Exercisable | ' | |||||||||||||||||||
The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2013: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Range of Exercise Prices Per Share | Number | Weighted- | Weighted- | Aggregate | Number | Weighted- | Weighted- | Aggregate | ||||||||||||
Average | Average | Intrinsic | Average | Average | Intrinsic | |||||||||||||||
Remaining | Exercise | Value | Remaining | Exercise | Value | |||||||||||||||
Contractual | Price Per Share | Contractual | Price Per Share | |||||||||||||||||
Life | Life | |||||||||||||||||||
(in Years) | (In Years) | |||||||||||||||||||
$7.52 - $12.03 | 9.97 | 7.7 | $ | 10.88 | $ | 82 | 3.83 | 6.4 | $ | 10.54 | $ | 33 | ||||||||
$12.12 - $15.12 | 1.49 | 5.7 | 12.79 | 9 | 1.12 | 5.2 | 12.7 | 7 | ||||||||||||
Total | 11.46 | 7.5 | $ | 11.13 | $ | 91 | 4.95 | 6.1 | $ | 11.02 | $ | 40 | ||||||||
Schedule of Weighted Average Assumptions Related to Stock Options | ' | |||||||||||||||||||
The following assumptions were utilized in deriving the fair value for NQOs granted from October 31, 2011 to December 31, 2013 under the Black-Scholes model, and prior to October 31, 2011 under the lattice model. | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Dividend yield | 3.72 | % | 3.69 | % | 3.77 | % | ||||||||||||||
Expected volatility | 27 | % | 27.1 | % | 27.1 | % | ||||||||||||||
Expected life (in years) | 7 | 7 | 7 | |||||||||||||||||
Risk-free rates | 1.4 | % | 1.41 | % | 1.51 | % | ||||||||||||||
Weighted-average grant date fair value per share | $ | 1.93 | $ | 1.96 | $ | 1.92 | ||||||||||||||
Schedule of Restricted Stock and Restricted Stock Units Activity | ' | |||||||||||||||||||
The table below provides a roll-forward of outstanding restricted stock and RSUs for each of the previous three years ended. The activity presented for 2011 prior to the ITT Spin-off represents the restricted stock and RSUs held by Exelis employees under the ITT long-term incentive award program. | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Restricted Stock and Restricted Stock Units | Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||
Average | Average | Average | ||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||
Fair Value Per Share | Fair Value Per Share | Fair Value Per Share | ||||||||||||||||||
Outstanding at January 1, | 3.56 | $ | 11.67 | 3.51 | $ | 10.93 | 0.51 | $ | 45.17 | |||||||||||
Granted | — | — | — | — | 0.18 | 57.52 | ||||||||||||||
Vested | — | — | — | — | (0.13 | ) | 50.18 | |||||||||||||
Forfeited and canceled | — | — | — | — | — | — | ||||||||||||||
Outstanding at ITT Spin-off | — | — | — | — | 0.56 | 47.49 | ||||||||||||||
Conversion related to the ITT Spin-off (a) | — | — | — | — | 1.93 | — | ||||||||||||||
Post ITT Spin-off activities | ||||||||||||||||||||
Granted | 1.14 | 11.18 | 1.25 | 11.16 | 1.02 | 10.95 | ||||||||||||||
Vested | (1.02 | ) | 11.83 | (1.01 | ) | 8.44 | — | — | ||||||||||||
Forfeited and canceled | (0.20 | ) | 11.35 | (0.19 | ) | 11.94 | — | — | ||||||||||||
Outstanding at December 31, | 3.48 | $ | 11.48 | 3.56 | $ | 11.67 | 3.51 | $ | 10.93 | |||||||||||
(a) | The weighted average grant date fair value of the restricted stock and RSUs converted is equal to the weighted average grant date fair value of such restricted stock and RSUs prior to the ITT Spin-off, reduced by the ITT Spin-off conversion adjustment. Included in the conversion related to the ITT Spin-off are awards related to employees who transferred among ITT, Xylem Inc. and Exelis as a result of the ITT Spin-off. |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Equity [Abstract] | ' | ||||||||||
Components of Other Comprehensive Loss | ' | ||||||||||
The following table presents changes in accumulated other comprehensive loss, net of tax, by component, included in stockholders’ equity: | |||||||||||
Net Foreign Currency | Unamortized Defined | Accumulated | |||||||||
Translation | Benefit | Other | |||||||||
Adjustments | Plan Costs | Comprehensive | |||||||||
Loss | |||||||||||
Balance at December 31, 2011 | $ | 7 | $ | (1,662 | ) | $ | (1,655 | ) | |||
Net foreign currency translation adjustments | 8 | — | 8 | ||||||||
Net actuarial loss arising during the year | — | (230 | ) | (230 | ) | ||||||
Prior service credit arising during the year | — | 1 | 1 | ||||||||
Other comprehensive income (loss) before reclassifications | 8 | (229 | ) | (221 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Amortization of net actuarial loss | — | 52 | (a) | 52 | |||||||
Other comprehensive income (loss), net of tax | 8 | (177 | ) | (169 | ) | ||||||
Defined benefit plans tax reclassification related to ITT Spin-off | — | (11 | ) | (11 | ) | ||||||
Balance at December 31, 2012 | $ | 15 | $ | (1,850 | ) | $ | (1,835 | ) | |||
Net foreign currency translation adjustments | 1 | — | 1 | ||||||||
Net actuarial gain arising during the year | — | 343 | 343 | ||||||||
Prior service cost arising during the year | — | (1 | ) | (1 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 1 | 342 | 343 | ||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Amortization of net actuarial loss | — | 59 | (a) | 59 | |||||||
Amortization of prior service cost | — | 1 | (a) | 1 | |||||||
Other comprehensive income (loss), net of tax | 1 | 402 | 403 | ||||||||
Balance at December 31, 2013 | $ | 16 | $ | (1,448 | ) | $ | (1,432 | ) | |||
(a) | The amortization of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost (Note 13). | ||||||||||
Summary of Changes in Accumulated Other Comprehensive Loss | ' | ||||||||||
The following tables provide a summary of the changes in accumulated other comprehensive loss for the years ended December 31, 2013 and 2012: | |||||||||||
Year Ended December 31, 2013 | |||||||||||
Pretax | Tax | After Tax | |||||||||
Changes in net foreign currency translation adjustments | $ | 1 | $ | — | $ | 1 | |||||
Changes in defined benefit plans | 679 | (277 | ) | 402 | |||||||
Net change in accumulated other comprehensive loss | $ | 680 | $ | (277 | ) | $ | 403 | ||||
Year Ended December 31, 2012 | |||||||||||
Pretax | Tax | After Tax | |||||||||
Changes in net foreign currency translation adjustments | $ | 8 | $ | — | $ | 8 | |||||
Changes in defined benefit plans | (283 | ) | 106 | (177 | ) | ||||||
Defined benefit plans tax reclassification attributable to the ITT Spin-off | — | (11 | ) | (11 | ) | ||||||
Net change in accumulated other comprehensive loss | $ | (275 | ) | $ | 95 | $ | (180 | ) | |||
Related_Party_Transactions_and1
Related Party Transactions and Parent Company Equity (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Related Party Transactions [Abstract] | ' | |||
Components of Net Transfers (to)/from Parent | ' | |||
The components of the net transfers (to)/from parent are as follows: | ||||
31-Oct-11 | ||||
Intercompany sales and purchases, net | $ | 2 | ||
Intercompany dividends (1) | (887 | ) | ||
Cash pooling and general financing activities | (149 | ) | ||
Corporate allocations including income taxes | 188 | |||
Accumulated other comprehensive loss transferred in connection with the ITT Spin-off (2) | 1,587 | |||
Net liabilities transferred in connection with the ITT Spin-off | (1,169 | ) | ||
Total net transfers to parent | $ | (428 | ) | |
-1 | Primarily represents the dividend paid to ITT in connection with the ITT Spin-off. | |||
-2 | Transfer of postretirement benefit plans from ITT in connection with the ITT Spin-off. During 2012, we recorded tax adjustments attributable to the ITT Spin-off of $11, which increased the accumulated other comprehensive loss transferred in connection with the ITT Spin-off to $1,598, with an offsetting increase to additional paid-in capital. | |||
The components of net assets and liabilities transferred from ITT in connection with the ITT Spin-off were as follows: | ||||
October 31, 2011 | ||||
Receivables, net | $ | 1 | ||
Plant, property and equipment, net | 7 | |||
Deferred income taxes (1) | 840 | |||
Other assets | 14 | |||
Total assets transferred | $ | 862 | ||
Defined benefit plans | $ | 2,047 | ||
Other liabilities | (16 | ) | ||
Total liabilities transferred | $ | 2,031 | ||
Net liabilities transferred in connection with the ITT Spin-off | $ | 1,169 | ||
-1 | During 2012, we recorded tax adjustments attributable to the ITT Spin-off of $3, which increased deferred income taxes attributable to the ITT Spin-off to $843, with on offsetting increase to additional paid-in capital. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||
Schedule of Range of Estimated Loss and Number of Active Sites | ' | ||||||
The following table illustrates the range of estimated loss and number of active sites for these environmental matters: | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Low-end range | $ | 23 | $ | 24 | |||
High-end range | $ | 44 | $ | 47 | |||
Number of active environmental investigation and remediation sites | 24 | 22 | |||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||||||||||||
Summary of Segment Revenue | ' | |||||||||||||||||||||||||||||
Segment financial results were as follows: | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||
Product | Service | Total | Product | Service | Total | Product | Service | Total | ||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | ||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 2,136 | $ | — | $ | 2,136 | $ | 2,487 | $ | — | $ | 2,487 | $ | 2,817 | $ | — | $ | 2,817 | ||||||||||||
Information and Technical Services | — | 2,680 | 2,680 | — | 3,035 | 3,035 | — | 3,022 | 3,022 | |||||||||||||||||||||
Total | $ | 2,136 | $ | 2,680 | $ | 4,816 | $ | 2,487 | $ | 3,035 | $ | 5,522 | $ | 2,817 | $ | 3,022 | $ | 5,839 | ||||||||||||
Summary of Segment Operating Income and Operating Margin | ' | |||||||||||||||||||||||||||||
Operating Income | Operating Margin | |||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 218 | $ | 350 | $ | 385 | 10.2 | % | 14.1 | % | 13.7 | % | ||||||||||||||||||
Information and Technical Services | 258 | 211 | 150 | 9.6 | % | 7 | % | 5 | % | |||||||||||||||||||||
Total | $ | 476 | $ | 561 | $ | 535 | 9.9 | % | 10.2 | % | 9.2 | % | ||||||||||||||||||
Summary of Segment Reporting Assets | ' | |||||||||||||||||||||||||||||
Total Assets | Plant, Property & | |||||||||||||||||||||||||||||
Equipment | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 3,031 | $ | 3,078 | $ | 283 | $ | 314 | ||||||||||||||||||||||
Information and Technical Services | 1,097 | 1,186 | 187 | 181 | ||||||||||||||||||||||||||
Segments total | 4,128 | 4,264 | 470 | 495 | ||||||||||||||||||||||||||
Corporate and Other | 756 | 948 | 28 | 17 | ||||||||||||||||||||||||||
Total | $ | 4,884 | $ | 5,212 | $ | 498 | $ | 512 | ||||||||||||||||||||||
Summary of Segment Capital Expenditures and Depreciation and Amortization | ' | |||||||||||||||||||||||||||||
Capital Expenditures | Depreciation & | |||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||
C4ISR Electronic and Systems | $ | 28 | $ | 56 | $ | 51 | $ | 81 | $ | 101 | $ | 112 | ||||||||||||||||||
Information and Technical Services | 33 | 44 | 43 | 26 | 23 | 19 | ||||||||||||||||||||||||
Segments total | 61 | 100 | 94 | 107 | 124 | 131 | ||||||||||||||||||||||||
Corporate and Other | 17 | 19 | 1 | 3 | 6 | 2 | ||||||||||||||||||||||||
Total | $ | 78 | $ | 119 | $ | 95 | $ | 110 | $ | 130 | $ | 133 | ||||||||||||||||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Selected Quarterly Financial Data | ' | |||||||||||||||||||||||||
The following table comprises selected financial data for the years ended December 31, 2013 and 2012. | ||||||||||||||||||||||||||
2013 Quarters | 2012 Quarters | |||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | Fourth | |||||||||||||||||||
Total revenue | $ | 1,185 | $ | 1,251 | $ | 1,141 | $ | 1,239 | $ | 1,421 | $ | 1,379 | $ | 1,361 | $ | 1,361 | ||||||||||
Selling, general and administrative expenses | 115 | 122 | 100 | 118 | 133 | 130 | 114 | 139 | ||||||||||||||||||
Net income | 44 | 78 | 80 | 79 | 70 | 86 | 88 | 86 | ||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||
Net income | $ | 0.23 | $ | 0.41 | $ | 0.42 | $ | 0.42 | $ | 0.38 | $ | 0.46 | $ | 0.47 | $ | 0.46 | ||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||
Net income | $ | 0.23 | $ | 0.41 | $ | 0.41 | $ | 0.41 | $ | 0.37 | $ | 0.46 | $ | 0.47 | $ | 0.45 | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Basic | 188.3 | 188.2 | 188.5 | 189 | 186.6 | 187.5 | 187.6 | 187.9 | ||||||||||||||||||
Diluted | 189.8 | 190.5 | 192.8 | 194.2 | 187.5 | 188.5 | 188.7 | 189.5 | ||||||||||||||||||
Description_of_Business_and_Su3
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' | ' |
Issuance of common stock for the ITT Spin-off (in shares) | 184.6 | ' | ' | ' |
Increase in operating income due to cumulative catch up adjustments | ' | $107 | $65 | $143 |
Increase in diluted earnings per share due to cumulative catch-up adjustments (in dollars per share) | ' | $0.36 | $0.22 | $0.46 |
Description_of_Business_and_Su4
Description of Business and Summary of Significant Accounting Policies - Additional Information - Useful life of Capitalized Internal Use Software and Other Intangible Assets (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum | Capitalized Internal Use Software | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Useful life of capitalized internal use software | '3 years |
Minimum | Other Intangible Assets | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Useful life of capitalized internal use software | '10 years |
Maximum | Capitalized Internal Use Software | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Useful life of capitalized internal use software | '7 years |
Maximum | Other Intangible Assets | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Useful life of capitalized internal use software | '25 years |
Description_of_Business_and_Su5
Description of Business and Summary of Significant Accounting Policies - Additional Information - Concentrations of Credit Risk (Detail) (Government Contracts Concentration Risk, Receivables, net, Government) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Government Contracts Concentration Risk | Receivables, net | Government | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage of receivable, net, U.S. government | 83.00% | 85.00% |
Description_of_Business_and_Su6
Description of Business and Summary of Significant Accounting Policies - Plant, Property and Equipment Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum | Buildings and improvements | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '5 years |
Minimum | Machinery and equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '2 years |
Minimum | Furniture, fixtures and office equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '3 years |
Maximum | Buildings and improvements | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '40 years |
Maximum | Machinery and equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '15 years |
Maximum | Furniture, fixtures and office equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '7 years |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
C4ISR Electronic and Systems | ' |
Business Acquisition [Line Items] | ' |
Aggregate purchase price net of cash acquired | $16 |
Applied Kilovolts Group Holdings, Limited And Space Computer Corporation | ' |
Business Acquisition [Line Items] | ' |
Aggregate purchase price net of cash acquired | $43 |
Restructuring_and_Asset_Impair2
Restructuring and Asset Impairment Charges - Components of All Restructuring and Assets Impairment Charges (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Severance charges | $61 | $9 | $18 |
Other restructuring charges | 20 | 5 | 7 |
Reversal of restructuring accruals | -2 | -2 | -2 |
Total restructuring charges | 79 | 12 | 23 |
Asset impairment charges | 4 | 7 | 0 |
Restructuring and asset impairment charges | 83 | 19 | 23 |
C4ISR Electronics and Systems | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring and asset impairment charges | 68 | 17 | 23 |
Information and Technical Services | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring and asset impairment charges | $15 | $2 | $0 |
Restructuring_and_Asset_Impair3
Restructuring and Asset Impairment Charges - Schedule of Roll-forward of Restructuring Accruals Presented in Consolidated Balance Sheets (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accrual | $9 | $17 | ' |
Charges for plans initiated during the year | 79 | 10 | ' |
Charges for plans initiated in prior years | 2 | 4 | ' |
Cash payments | -58 | -20 | -19 |
Reversal of accruals and other | -6 | -2 | ' |
Restructuring accrual | 26 | 9 | 17 |
C4ISR Electronics and Systems | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accrual | 20 | 6 | ' |
Information and Technical Services | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accrual | 6 | 3 | ' |
Severance accrual | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accrual | 12 | 5 | ' |
Facility carrying and other cost accruals | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accrual | $14 | $4 | ' |
Restructuring_and_Asset_Impair4
Restructuring and Asset Impairment Charges - Schedule of Roll-forward of Employee Position Eliminations Associated with Restructuring Activities (Detail) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Position | Position | |
Restructuring and Related Cost, Positions Eliminated [Roll Forward] | ' | ' |
Additional planned reductions | 1,168 | ' |
Severance accrual | ' | ' |
Restructuring and Related Cost, Positions Eliminated [Roll Forward] | ' | ' |
Planned reductions at beginning of period | 46 | 722 |
Additional planned reductions | 1,168 | 344 |
Actual reductions | -1,212 | -1,020 |
Planned reductions at end of period | 2 | 46 |
Restructuring_and_Asset_Impair5
Restructuring and Asset Impairment Charges Additional Information (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Position | |
Restructuring and Related Activities [Abstract] | ' |
Number of positions eliminated through voluntary and involuntary employee reductions | 1,168 |
Income_Taxes_Schedule_of_PreTa
Income Taxes - Schedule of Pre-Tax Income and Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ' | ' | ' |
United States | $431 | $495 | $515 |
Foreign | 6 | 26 | 22 |
Income from continuing operations before income tax expense | 437 | 521 | 537 |
Current income tax provision, United States - federal | 73 | 13 | 73 |
Current income tax provision, United States - state and local | 6 | 4 | 10 |
Current income tax provision, United States - Foreign | 2 | 5 | 7 |
Total current income tax provision | 81 | 22 | 90 |
Deferred income tax provision, United States - federal | 47 | 146 | 115 |
Deferred income tax provision, United States - state and local | 29 | 23 | 5 |
Deferred income tax provision, Foreign | -1 | 0 | 1 |
Total deferred income tax provision | 75 | 169 | 121 |
Total income tax expense | $156 | $191 | $211 |
Effective income tax rate | 35.70% | 36.70% | 39.30% |
Income_Taxes_Schedule_of_Recon
Income Taxes - Schedule of Reconciliation of Tax Provision at U.S. Statutory Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Tax provision at U.S. statutory rate | 35.00% | 35.00% | 35.00% |
Foreign tax rate differential | -0.20% | -0.10% | 0.10% |
Foreign earnings not permanently reinvested, net of U.S. tax credit | 0.20% | 0.40% | 3.00% |
State and local income tax, net of federal benefit | 5.00% | 3.20% | 2.90% |
Research credit | -1.40% | 0.00% | -1.00% |
Domestic manufacturing deduction | -1.80% | -1.10% | -1.20% |
Other | -1.10% | -0.70% | 0.50% |
Effective income tax rate | 35.70% | 36.70% | 39.30% |
Income_Taxes_Schedule_of_Defer
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Deferred Tax Assets | ' | ' | ' |
Employee benefits | $569 | $902 | ' |
Accrued expenses | 37 | 111 | ' |
Loss carryforwards | 3 | 5 | ' |
Inventory | 55 | 27 | ' |
Advance payments | 14 | 20 | ' |
Credit carryforwards | 5 | 6 | ' |
Other | 6 | 5 | ' |
Subtotal | 689 | 1,076 | ' |
Valuation allowance | -3 | -2 | ' |
Total deferred tax assets | 686 | 1,074 | ' |
Deferred Tax Liabilities | ' | ' | ' |
Goodwill and other intangible assets | 278 | 259 | ' |
Plant, property and equipment | 77 | 68 | ' |
Unbilled receivables | 83 | 89 | ' |
Foreign subsidiaries | 18 | 16 | 13 |
Other | 0 | 2 | ' |
Total deferred tax liabilities | $456 | $434 | ' |
Income_Taxes_Schedule_of_Net_D
Income Taxes - Schedule of Net Deferred Tax assets/Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ' | ' |
Current assets | $16 | $85 |
Non-current assets | 216 | 556 |
Non-current liabilities | -2 | -1 |
Net deferred tax assets | $230 | $640 |
Income_Taxes_Schedule_of_Tax_A
Income Taxes - Schedule of Tax Attributes Available to Reduce Future Taxable Income (Detail) (United States - State and Local, USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
United States - State and Local | ' |
Operating Loss Carryforwards and Tax Credit Carryforward [Line Items] | ' |
State net operating losses | $3 |
State tax credits | $5 |
Income_Taxes_Unrecognized_Tax_
Income Taxes - Unrecognized Tax Benefits Roll-forward (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' | ' |
Unrecognized tax benefits at January 1, | $56 | $0 | $38 |
Additions for Current year tax positions | 0 | 0 | 2 |
Additions for Prior year tax positions | 0 | 56 | 0 |
Reductions for Indemnification | 0 | 0 | -21 |
Reductions for Prior year tax positions | -56 | 0 | -19 |
Reductions for Statute of limitations | 0 | 0 | 0 |
Unrecognized tax benefits at December 31, | $0 | $56 | $0 |
Income_Taxes_Summary_of_Open_T
Income Taxes - Summary of Open Tax Years by Major Jurisdiction (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
United States | ' |
Income Tax Contingency [Line Items] | ' |
Earliest open tax years | '2009 |
United Kingdom | ' |
Income Tax Contingency [Line Items] | ' |
Earliest open tax years | '2010 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | 26 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income tax expense | ' | ' | $16,000,000 | ' |
Deferred tax liability | 18,000,000 | 16,000,000 | 13,000,000 | 18,000,000 |
Valuation allowance | 3,000,000 | 2,000,000 | ' | 3,000,000 |
Excess of tax benefits of stock-based compensation | 3,000,000 | 2,000,000 | ' | 3,000,000 |
Unrecognized tax benefits that would affect the effective income tax rate | 0 | ' | ' | 0 |
Reversal of recorded liability related to tax positions | 0 | 0 | 21,000,000 | ' |
Unfavorable federal tax audit liabilities | 27,000,000 | ' | ' | 27,000,000 |
Unfavorable tax audit payment | ' | ' | ' | 12,000,000 |
Net interest expense related to tax matters | 0 | ' | ' | ' |
Net interest expense related to tax penalties | -9,000,000 | 9,000,000 | 0 | ' |
Interest accrued for tax penalties | $0 | $9,000,000 | ' | $0 |
Earnings_Per_Share_Schedule_of
Earnings Per Share - Schedule of Basic and Diluted Weighted Average Shares Outstanding (Detail) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Weighted Average Number of Shares Outstanding Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Weighted average common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 188.4 | 186.5 | 184.6 | |||
Add: Weighted average restricted stock awards outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 0.1 | [1] | 0.9 | [1] | 1.6 | [1] |
Basic weighted average common shares outstanding | 189 | 188.5 | 188.2 | 188.3 | 187.9 | 187.6 | 187.5 | 186.6 | 188.5 | 187.4 | 186.2 | |||
Diluted weighted average common shares outstanding | 194.2 | 192.8 | 190.5 | 189.8 | 189.5 | 188.7 | 188.5 | 187.5 | 192 | 188.6 | 186.7 | |||
Employee Stock Option | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Weighted Average Number of Shares Outstanding Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Add: Dilutive impact of share-based payment arrangements | ' | ' | ' | ' | ' | ' | ' | ' | 1.6 | 0.5 | 0.4 | |||
Restricted Stock Units (RSUs) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Weighted Average Number of Shares Outstanding Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Add: Dilutive impact of share-based payment arrangements | ' | ' | ' | ' | ' | ' | ' | ' | 1.9 | 0.7 | 0.1 | |||
[1] | Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share. |
Earnings_Per_Share_Schedule_of1
Earnings Per Share - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Detail) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Stock Option | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Anti-dilutive restricted stock units | 0.1 | 9.5 | 7.8 |
Restricted Stock Units (RSUs) | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Anti-dilutive restricted stock units | 0 | 0 | 0.9 |
Receivables_Net_Schedule_of_Re
Receivables, Net - Schedule of Receivables, Net (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Receivables [Abstract] | ' | ' |
Billed receivables | $395 | $429 |
Unbilled contract receivables | 537 | 562 |
Other | 11 | 7 |
Receivables, gross | 943 | 998 |
Allowance for doubtful accounts | -4 | -3 |
Receivables, net | $939 | $995 |
Receivables_Net_Additional_Inf
Receivables, Net - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Billed receivables, total | $395 | $429 |
Government | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Billed receivables, total | $314 | $340 |
Inventories_Net_Schedule_of_In
Inventories, Net - Schedule of Inventories, Net (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Production costs of contracts in process | $217 | $253 |
Less progress payments | -27 | -22 |
Production costs of contracts in process, net | 190 | 231 |
Product inventory | 56 | 52 |
Inventories, net | $246 | $283 |
Plant_Property_and_Equipment_N2
Plant, Property and Equipment, Net - Schedule of Plant, Property and Equipment, Net (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Plant, property and equipment, gross | $1,216 | $1,193 |
Less accumulated depreciation | -718 | -681 |
Plant, property and equipment, net | 498 | 512 |
Land and improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Plant, property and equipment, gross | 22 | 22 |
Buildings and improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Plant, property and equipment, gross | 376 | 377 |
Machinery and equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Plant, property and equipment, gross | 673 | 627 |
Furniture, fixtures and office equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Plant, property and equipment, gross | 86 | 91 |
Construction in progress | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Plant, property and equipment, gross | $59 | $76 |
Plant_Property_and_Equipment_N3
Plant, Property and Equipment, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation and amortization expense | $83 | $91 | $84 |
Other noncurrent assets | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Capitalized software | $28 | $25 | ' |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets, Net - Goodwill (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | $2,180 | $2,154 |
Acquisitions | 9 | 26 |
Sales | -5 | ' |
Ending balance | 2,184 | 2,180 |
C4ISR Electronic and Systems | ' | ' |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 1,803 | 1,777 |
Acquisitions | 2 | 26 |
Sales | -5 | ' |
Ending balance | 1,800 | 1,803 |
Information and Technical Services | ' | ' |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 377 | 377 |
Acquisitions | 7 | 0 |
Sales | 0 | ' |
Ending balance | $384 | $377 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets, Net - Other Intangible Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $564 | $554 |
Accumulated Amortization | -397 | -370 |
Net Intangibles | 167 | 184 |
Customer and distributor relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 525 | 524 |
Accumulated Amortization | -371 | -348 |
Net Intangibles | 154 | 176 |
Proprietary technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 30 | 25 |
Accumulated Amortization | -22 | -18 |
Net Intangibles | 8 | 7 |
Trademarks, patents and other | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 9 | 5 |
Accumulated Amortization | -4 | -4 |
Net Intangibles | $5 | $1 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets, Net - Estimated Amortization Expense (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
2014 | $24 | ' |
2015 | 21 | ' |
2016 | 19 | ' |
2017 | 17 | ' |
2018 | 14 | ' |
2019 and thereafter | 72 | ' |
Net Intangibles | $167 | $184 |
Goodwill_Additional_Informatio
Goodwill - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Acquisition | Acquisition | |
Goodwill [Line Items] | ' | ' |
Acquisitions completed during the period | 1 | 2 |
Increase in goodwill through acquisition | $9 | $26 |
Increase in other intangible assets through acquisition | 7 | 13 |
Information and Technical Services | ' | ' |
Goodwill [Line Items] | ' | ' |
Increase in goodwill through acquisition | 7 | 0 |
C4ISR Electronic and Systems | ' | ' |
Goodwill [Line Items] | ' | ' |
Increase in goodwill through acquisition | 2 | 26 |
Increase for purchase accounting adjustments | $2 | ' |
Other_Intangible_Assets_Net_Ad
Other Intangible Assets, Net- Additional Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization expense relate to other intangible assets | $27 | $39 | $49 |
Customer and distributor relationships | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Other intangible assets, weighted average life | '14 years | ' | ' |
Proprietary technology | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Other intangible assets, weighted average life | '8 years | ' | ' |
Trademarks, patents and other | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Other intangible assets, weighted average life | '11 years | ' | ' |
Leases_and_Rentals_Schedule_of
Leases and Rentals - Schedule of Future Minimum Lease Payments Under Operating Leases (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Leases [Abstract] | ' |
2014 | $60 |
2015 | 50 |
2016 | 42 |
2017 | 35 |
2018 | 30 |
2019 and thereafter | 52 |
Total future minimum lease payments | $269 |
Leases_and_Rentals_Additional_
Leases and Rentals - Additional information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Leases [Abstract] | ' | ' | ' |
Operating leases and rental expense | $77 | $80 | $76 |
Debt_Summary_of_Debt_Detail
Debt - Summary of Debt (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
Long-term debt | $650 | $650 |
Unamortized debt discounts | -1 | -1 |
Total long-term debt | $649 | $649 |
Debt_Summary_of_Long_Term_Debt
Debt - Summary of Long Term Debt (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 20, 2011 |
Debt Instrument [Line Items] | ' | ' | ' |
Carrying Value | $650,000,000 | $650,000,000 | ' |
Fair Value | 667,000,000 | 699,000,000 | ' |
Senior Notes | Senior notes due 2016 | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Interest rate | 4.25% | ' | 4.25% |
Carrying Value | 250,000,000 | 250,000,000 | ' |
Fair Value | 263,000,000 | 262,000,000 | ' |
Senior Notes | Senior notes due 2021 | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Interest rate | 5.55% | ' | 5.55% |
Carrying Value | 400,000,000 | 400,000,000 | ' |
Fair Value | $404,000,000 | $437,000,000 | ' |
Debt_Credit_Facility_Additiona
Debt - Credit Facility- Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Commercial Paper | Line of Credit | Line of Credit | Line of Credit | Line of Credit | Line of Credit | |
Revolving Credit Facility | Revolving Credit Facility | Letter of Credit | Letter of Credit | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Credit facility, amount outstanding | $0 | ' | $0 | $0 | $0 | $0 |
Debt instrument, term | ' | '4 years | ' | ' | ' | ' |
Credit facility, expiration date | ' | 25-Oct-15 | ' | ' | ' | ' |
Credit facility, extension period | ' | '1 year | ' | ' | ' | ' |
Credit facility, current borrowing capacity | ' | ' | 600,000,000 | ' | 100,000,000 | ' |
Short-term borrowing under credit facility | ' | ' | 200,000,000 | ' | ' | ' |
Credit facility, maximum borrowing capacity | ' | ' | $800,000,000 | ' | ' | ' |
Ratio of total indebtedness to combined EBITDA | ' | 3.5 | ' | ' | ' | ' |
Debt_Senior_Notes_Additional_I
Debt - Senior Notes- Additional Information (Details) (USD $) | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 28, 2013 | Sep. 20, 2011 | Sep. 20, 2011 | Sep. 20, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 20, 2011 | Dec. 31, 2013 | Sep. 20, 2011 | Oct. 31, 2011 | |
Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | ITT | ||||
Change of Control Redemption Option | Minimum | Other Accrued Liabilities | Other Accrued Liabilities | Senior notes due 2016 | Senior notes due 2016 | Senior notes due 2021 | Senior notes due 2021 | Senior Notes | ||||||
Reporting Entity Redemption Option | ||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $250,000,000 | ' | $400,000,000 | ' |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.25% | 4.25% | 5.55% | 5.55% | ' |
Debt issuance costs | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt discounts | 1,000,000 | 1,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest payable | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | 8,000,000 | ' | ' | ' | ' | ' |
Period for failure to pay interest | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period for failure to perform covenant indenture after receipt of notice from trustee | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage holders of outstanding principal amount | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount of Notes | ' | ' | ' | ' | ' | 101.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Senior Notes, part of present value | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of Dividend to ITT | 0 | 0 | 775,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 884,000,000 |
Borrowing under credit facility | $0 | $0 | $240,000,000 | $240,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Postretirement_Benefit_Plans_F
Postretirement Benefit Plans - Funded Status and Amount Reported in Consolidated Balance Sheets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets | $4,569 | $4,379 | $4,039 |
Projected benefit obligation | -6,002 | -6,611 | -6,231 |
Funded status | -1,433 | -2,232 | ' |
Other non-current assets | 6 | 1 | ' |
Accrued liabilities | -32 | -30 | ' |
Non-current liabilities | -1,407 | -2,203 | ' |
Pension | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets | 4,288 | 4,109 | 3,780 |
Projected benefit obligation | -5,522 | -6,086 | -5,705 |
Funded status | -1,234 | -1,977 | ' |
Other non-current assets | 6 | 1 | ' |
Accrued liabilities | -14 | -13 | ' |
Non-current liabilities | -1,226 | -1,965 | ' |
Other Benefits | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets | 281 | 270 | 259 |
Projected benefit obligation | -480 | -525 | -526 |
Funded status | -199 | -255 | ' |
Other non-current assets | 0 | 0 | ' |
Accrued liabilities | -18 | -17 | ' |
Non-current liabilities | ($181) | ($238) | ' |
Postretirement_Benefit_Plans_S
Postretirement Benefit Plans - Schedule of Amounts Recognized in Accumulated Other Comprehensive Loss (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Net actuarial loss | $2,373 | $3,052 |
Prior service cost (credit) | 9 | 9 |
Total | 2,382 | 3,061 |
Pension | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Net actuarial loss | 2,304 | 2,924 |
Prior service cost (credit) | 10 | 10 |
Total | 2,314 | 2,934 |
Other Benefits | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Net actuarial loss | 69 | 128 |
Prior service cost (credit) | -1 | -1 |
Total | $68 | $127 |
Postretirement_Benefit_Plans_R
Postretirement Benefit Plans - Roll-forward of Projected Benefit Obligations (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ' | ' | ' |
Benefit obligation at January 1, | $6,611 | $6,231 | ' |
Service cost | 72 | 77 | 23 |
Interest cost | 260 | 287 | 71 |
Actuarial loss (gain) | -457 | 431 | ' |
Benefits paid | -468 | -398 | ' |
Expenses paid | -17 | -17 | ' |
Other | 1 | 0 | ' |
Benefit obligation at December 31, | 6,002 | 6,611 | 6,231 |
Pension | ' | ' | ' |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ' | ' | ' |
Benefit obligation at January 1, | 6,086 | 5,705 | ' |
Service cost | 70 | 75 | 22 |
Interest cost | 241 | 265 | 63 |
Actuarial loss (gain) | -414 | 430 | ' |
Benefits paid | -445 | -372 | ' |
Expenses paid | -17 | -17 | ' |
Other | 1 | 0 | ' |
Benefit obligation at December 31, | 5,522 | 6,086 | 5,705 |
Other Benefits | ' | ' | ' |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ' | ' | ' |
Benefit obligation at January 1, | 525 | 526 | ' |
Service cost | 2 | 2 | 1 |
Interest cost | 19 | 22 | 8 |
Actuarial loss (gain) | -43 | 1 | ' |
Benefits paid | -23 | -26 | ' |
Expenses paid | 0 | 0 | ' |
Other | 0 | 0 | ' |
Benefit obligation at December 31, | $480 | $525 | $526 |
Postretirement_Benefit_Plans_R1
Postretirement Benefit Plans - Roll-forward of Plan Assets (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Change in plan assets | ' | ' | ' |
Plan assets at January 1, | $4,379 | $4,039 | ' |
Actual return on plan assets | 475 | 469 | ' |
Employer contributions | 186 | 266 | ' |
Benefits paid | -454 | -379 | ' |
Expenses paid | -17 | -16 | ' |
Plan assets at December 31, | 4,569 | 4,379 | ' |
Funded status at end of year | -1,433 | -2,232 | ' |
Pension | ' | ' | ' |
Change in plan assets | ' | ' | ' |
Plan assets at January 1, | 4,109 | 3,780 | ' |
Actual return on plan assets | 442 | 438 | ' |
Employer contributions | 186 | 266 | 87 |
Benefits paid | -432 | -359 | ' |
Expenses paid | -17 | -16 | ' |
Plan assets at December 31, | 4,288 | 4,109 | 3,780 |
Funded status at end of year | -1,234 | -1,977 | ' |
Other Benefits | ' | ' | ' |
Change in plan assets | ' | ' | ' |
Plan assets at January 1, | 270 | 259 | ' |
Actual return on plan assets | 33 | 31 | ' |
Employer contributions | 0 | 0 | ' |
Benefits paid | -22 | -20 | ' |
Expenses paid | 0 | 0 | ' |
Plan assets at December 31, | 281 | 270 | ' |
Funded status at end of year | ($199) | ($255) | ' |
Postretirement_Benefit_Plans_S1
Postretirement Benefit Plans - Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Compensation and Retirement Disclosure [Abstract] | ' | ' |
Projected benefit obligation | $5,482 | $6,043 |
Accumulated benefit obligation | 5,445 | 5,882 |
Fair value of plan assets | $4,242 | $4,065 |
Postretirement_Benefit_Plans_S2
Postretirement Benefit Plans - Schedule of Net Periodic Pension Benefit Cost and Other Comprehensive Income (Detail) (USD $) | 2 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Net periodic benefit cost | ' | ' | ' | ' | |||
Service cost | ' | $72 | $77 | $23 | |||
Interest cost | ' | 260 | 287 | 71 | |||
Expected return on plan assets | ' | -362 | -408 | -89 | |||
Amortization of net actuarial loss | ' | 116 | 86 | 36 | |||
Amortization of prior service cost (credit) | ' | 1 | 0 | 1 | |||
Net periodic benefit cost | ' | 87 | 42 | 42 | |||
Effect of curtailments | ' | 0 | [1] | 1 | [1] | 4 | [1] |
Total net periodic benefit cost | ' | 87 | [2] | 43 | [2] | 46 | [2] |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | ' | |||
Net actuarial loss (gain) | ' | -563 | 370 | 47 | |||
Prior service cost (credit) | ' | 1 | -1 | 2 | |||
Amortization of net actuarial loss | ' | -116 | -86 | -36 | |||
Amortization of prior service (cost) credit | ' | -1 | 0 | -1 | |||
Total change recognized in other comprehensive income | ' | -679 | 283 | 12 | |||
Total impact from net periodic benefit cost and changes in other comprehensive income | ' | -592 | 326 | 58 | |||
Net periodic benefit cost, Transferred Plans | 34 | ' | ' | ' | |||
Pension | ' | ' | ' | ' | |||
Net periodic benefit cost | ' | ' | ' | ' | |||
Service cost | ' | 70 | 75 | 22 | |||
Interest cost | ' | 241 | 265 | 63 | |||
Expected return on plan assets | ' | -341 | -386 | -85 | |||
Amortization of net actuarial loss | ' | 106 | 76 | 34 | |||
Amortization of prior service cost (credit) | ' | 1 | 2 | 2 | |||
Net periodic benefit cost | ' | 77 | 32 | 36 | |||
Effect of curtailments | ' | 0 | [1] | 1 | [1] | 4 | [1] |
Total net periodic benefit cost | ' | 77 | [2] | 33 | [2] | 40 | [2] |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | ' | |||
Net actuarial loss (gain) | ' | -514 | 379 | 57 | |||
Prior service cost (credit) | ' | 1 | -1 | 0 | |||
Amortization of net actuarial loss | ' | -106 | -76 | -34 | |||
Amortization of prior service (cost) credit | ' | -1 | -2 | -2 | |||
Total change recognized in other comprehensive income | ' | -620 | 300 | 21 | |||
Total impact from net periodic benefit cost and changes in other comprehensive income | ' | -543 | 333 | 61 | |||
Other Benefits | ' | ' | ' | ' | |||
Net periodic benefit cost | ' | ' | ' | ' | |||
Service cost | ' | 2 | 2 | 1 | |||
Interest cost | ' | 19 | 22 | 8 | |||
Expected return on plan assets | ' | -21 | -22 | -4 | |||
Amortization of net actuarial loss | ' | 10 | 10 | 2 | |||
Amortization of prior service cost (credit) | ' | 0 | -2 | -1 | |||
Net periodic benefit cost | ' | 10 | 10 | 6 | |||
Effect of curtailments | ' | 0 | [1] | 0 | [1] | 0 | [1] |
Total net periodic benefit cost | ' | 10 | [2] | 10 | [2] | 6 | [2] |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | ' | |||
Net actuarial loss (gain) | ' | -49 | -9 | -10 | |||
Prior service cost (credit) | ' | 0 | 0 | 2 | |||
Amortization of net actuarial loss | ' | -10 | -10 | -2 | |||
Amortization of prior service (cost) credit | ' | 0 | 2 | 1 | |||
Total change recognized in other comprehensive income | ' | -59 | -17 | -9 | |||
Total impact from net periodic benefit cost and changes in other comprehensive income | ' | ($49) | ($7) | ($3) | |||
[1] | Curtailments recorded during the years ended December 31, 2012 and 2011 were due to reduction in force related to the Night Vision Hourly Pension Plan, and Retirement Choice and headcount reductions from certain restructuring activities, respectively. | ||||||
[2] | Net period benefit cost recorded during the year ended December 31, 2011 includes $34 of cost for the Transferred Plans from October 31, 2011 to December 31, 2011. |
Postretirement_Benefit_Plans_A
Postretirement Benefit Plans - Amount Expected to be Recognized in 2014 in Net Periodic Benefit Cost (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | ' |
Net actuarial loss | $90 |
Prior service cost | 2 |
Total | 92 |
Pension | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Net actuarial loss | 86 |
Prior service cost | 2 |
Total | 88 |
Other Benefits | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Net actuarial loss | 4 |
Prior service cost | 0 |
Total | $4 |
Postretirement_Benefit_Plans_S3
Postretirement Benefit Plans - Schedule of Weighted-Average Assumptions Used to Determine Projected Benefit Obligations and Net Periodic Benefit Cost (Detail) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Cost Assumptions | ' | ' | ' | ||
Expected return on plan assets | 8.50% | 9.00% | 9.00% | ||
Pension | ' | ' | ' | ||
Obligation assumptions | ' | ' | ' | ||
Discount rate | 4.71% | 4.09% | ' | ||
Rate of future compensation increase | 2.75% | 3.25% | ' | ||
Cost Assumptions | ' | ' | ' | ||
Discount rate | 4.28% | [1] | 4.75% | [1] | ' |
Expected return on plan assets | 8.50% | [1] | 9.00% | [1] | ' |
Rate of future compensation increase | 2.75% | [1] | 3.75% | [1] | ' |
Other Benefits | ' | ' | ' | ||
Obligation assumptions | ' | ' | ' | ||
Discount rate | 4.45% | 3.76% | ' | ||
Rate of future compensation increase | 2.75% | 3.25% | ' | ||
Cost Assumptions | ' | ' | ' | ||
Discount rate | 3.76% | [2] | 4.50% | [2] | ' |
Rate of future compensation increase | 3.25% | [2] | 3.75% | [2] | ' |
[1] | Cost assumptions for the current year are based on the prior year-end obligation assumptions, except for defined benefit pension plans remeasured as of May 31, 2013. | ||||
[2] | Cost assumptions for the current year are based on the prior year-end obligation assumptions. |
Postretirement_Benefit_Plans_C
Postretirement Benefit Plans - Comparison of Actual Rate of Return to Expected Rate of Return Used in Calculating Net Periodic Benefit Costs (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Compensation and Retirement Disclosure [Abstract] | ' | ' | ' |
Expected return on plan assets | 8.50% | 9.00% | 9.00% |
Actual rate of return on plan assets | 11.14% | 10.96% | -1.20% |
Postretirement_Benefit_Plans_S4
Postretirement Benefit Plans - Schedule of Strategic Target Asset Allocation (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Domestic equity | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Target Asset Allocation Range Minimum | 25.00% |
Target Asset Allocation Range Maximum | 75.00% |
International equity | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Target Asset Allocation Range Minimum | 10.00% |
Target Asset Allocation Range Maximum | 45.00% |
Private equity | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Target Asset Allocation Range Minimum | 10.00% |
Target Asset Allocation Range Maximum | 30.00% |
Fixed income investments | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Target Asset Allocation Range Minimum | 0.00% |
Target Asset Allocation Range Maximum | 60.00% |
Hedge funds | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Target Asset Allocation Range Minimum | 10.00% |
Target Asset Allocation Range Maximum | 40.00% |
Cash and cash equivalents | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Target Asset Allocation Range Minimum | 0.00% |
Target Asset Allocation Range Maximum | 30.00% |
Postretirement_Benefit_Plans_A1
Postretirement Benefit Plans - Asset Category and Fair Value Hierarchy Level (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | $4,569 | $4,346 | ' |
Receivables (payables), net | 0 | 33 | ' |
Fair value of plan assets | 4,569 | 4,379 | 4,039 |
Large cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 733 | 419 | ' |
Mid cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 532 | 450 | ' |
Small/Micro cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 109 | 87 | ' |
International equity | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 461 | 430 | ' |
Buyout funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 841 | 878 | ' |
Mezzanine funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 41 | 43 | ' |
Venture capital funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 101 | 89 | ' |
Distressed asset investments | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 197 | 238 | ' |
Commodities and Real Estate | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 60 | 63 | ' |
U.S. Government securities | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 421 | 531 | ' |
Corporate bonds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 52 | 50 | ' |
Hedge funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 730 | 794 | ' |
Other | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 83 | 78 | ' |
Cash and cash equivalents | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 208 | 196 | ' |
Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 1,464 | 1,211 | ' |
Level 1 | Large cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 562 | 419 | ' |
Level 1 | Mid cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 487 | 415 | ' |
Level 1 | Small/Micro cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 51 | 44 | ' |
Level 1 | International equity | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 346 | 313 | ' |
Level 1 | Buyout funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Mezzanine funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Venture capital funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Distressed asset investments | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Commodities and Real Estate | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | U.S. Government securities | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Corporate bonds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Hedge funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Other | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 1 | Cash and cash equivalents | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 18 | 20 | ' |
Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 1,196 | 1,295 | ' |
Level 2 | Large cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 171 | 0 | ' |
Level 2 | Mid cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 45 | 35 | ' |
Level 2 | Small/Micro cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 58 | 43 | ' |
Level 2 | International equity | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 115 | 117 | ' |
Level 2 | Buyout funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 2 | Mezzanine funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 2 | Venture capital funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 2 | Distressed asset investments | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 2 | Commodities and Real Estate | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 2 | U.S. Government securities | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 421 | 531 | ' |
Level 2 | Corporate bonds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 52 | 50 | ' |
Level 2 | Hedge funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 73 | 274 | ' |
Level 2 | Other | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 71 | 69 | ' |
Level 2 | Cash and cash equivalents | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 190 | 176 | ' |
Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 1,909 | 1,840 | ' |
Fair value of plan assets | 1,909 | 1,840 | 2,000 |
Level 3 | Large cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 3 | Mid cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 3 | Small/Micro cap | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 3 | International equity | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 3 | Private equity | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets | 1,240 | 1,311 | 1,340 |
Level 3 | Buyout funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 841 | 878 | ' |
Level 3 | Mezzanine funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 41 | 43 | ' |
Level 3 | Venture capital funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 101 | 89 | ' |
Level 3 | Distressed asset investments | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 197 | 238 | ' |
Level 3 | Commodities and Real Estate | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 60 | 63 | ' |
Level 3 | U.S. Government securities | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 3 | Corporate bonds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 0 | 0 | ' |
Level 3 | Hedge funds | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 657 | 520 | ' |
Fair value of plan assets | 657 | 520 | 652 |
Level 3 | Other | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | 12 | 9 | ' |
Fair value of plan assets | 12 | 9 | 8 |
Level 3 | Cash and cash equivalents | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Fair value of plan assets, gross | $0 | $0 | ' |
Postretirement_Benefit_Plans_S5
Postretirement Benefit Plans - Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | |||
Private equity | Private equity | Hedge funds | Hedge funds | Other | Other | ||||||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Plan assets at January 1, | $4,569 | $4,379 | $4,039 | $1,840 | $2,000 | $1,311 | $1,340 | $520 | $652 | $9 | $8 |
Realized gains (losses), net | ' | ' | ' | 98 | 74 | 97 | 80 | 0 | -6 | 1 | 0 |
Unrealized gains (losses), net | ' | ' | ' | 74 | 8 | 46 | 8 | 26 | -1 | 2 | 1 |
Purchases (sales), net | ' | ' | ' | -206 | -286 | -214 | -158 | 8 | -128 | 0 | 0 |
Transfers in (out), net | ' | ' | ' | 103 | 44 | 0 | 41 | 103 | 3 | 0 | 0 |
Plan assets at December 31, | $4,569 | $4,379 | $4,039 | $1,909 | $1,840 | $1,240 | $1,311 | $657 | $520 | $12 | $9 |
Postretirement_Benefit_Plans_S6
Postretirement Benefit Plans - Schedule of Expected Benefit Payments (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Defined Benefit Plan Disclosure [Line Items] | ' |
2014 | $410 |
2015 | 410 |
2016 | 412 |
2017 | 412 |
2018 | 412 |
2019 - 2023 | 2,049 |
Pension | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
2014 | 369 |
2015 | 370 |
2016 | 372 |
2017 | 373 |
2018 | 374 |
2019 - 2023 | 1,871 |
Other Benefits | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
2014 | 41 |
2015 | 40 |
2016 | 40 |
2017 | 39 |
2018 | 38 |
2019 - 2023 | $178 |
Postretirement_Benefit_Plans_A2
Postretirement Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Matching contributions charged to expense | $39 | $42 | $35 | ||
Employee stock ownership plan, shares | 6.1 | ' | ' | ||
Defined benefit plan with assets | 4,569 | 4,379 | 4,039 | ||
Projected benefit obligation | 6,002 | 6,611 | 6,231 | ||
Estimate of the long-term annual rate of return on assets (percentage) | 8.25% | ' | ' | ||
Expected return on plan assets | 8.50% | 9.00% | 9.00% | ||
Health care cost trend rate assumed for next fiscal year | 7.40% | ' | ' | ||
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 5.00% | ' | ' | ||
Defined benefit plan, year that rate reaches ultimate trend rate | '2022 | ' | ' | ||
Private equity funds liquidity restrictions period | '12 years | ' | ' | ||
Hedge funds redemption period | '90 days | ' | ' | ||
Total contribution of qualified defined benefit pension plans | 186 | 266 | ' | ||
Expense on allocation of pension and other postretirement benefit costs | 87 | 43 | 46 | ||
Level 3 | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined benefit plan with assets | 1,909 | 1,840 | 2,000 | ||
Private equity | Level 3 | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined benefit plan with assets | 1,240 | 1,311 | 1,340 | ||
Future unfunded commitments amount | 268 | ' | ' | ||
Minimum | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Percentage of employee contributions | 2.00% | ' | ' | ||
Maximum | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Percentage of employee contributions | 7.50% | ' | ' | ||
Pension | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined benefit plan with assets | 4,288 | 4,109 | 3,780 | ||
Projected benefit obligation | 5,522 | 6,086 | 5,705 | ||
Accumulated benefit obligation for all defined benefit pension plans | 5,485 | 5,925 | ' | ||
Expected return on plan assets | 8.50% | [1] | 9.00% | [1] | ' |
Total contribution of qualified defined benefit pension plans | 186 | 266 | 87 | ||
Pension | ITT | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Expense on allocation of pension and other postretirement benefit costs | ' | ' | 79 | ||
Pension | Minimum | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Future contribution towards defined pension plan | 185 | ' | ' | ||
Pension | Maximum | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Future contribution towards defined pension plan | 200 | ' | ' | ||
United States Postretirement Benefit Plans | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Defined benefit plan with assets | 3,930 | ' | ' | ||
Projected benefit obligation | 4,923 | ' | ' | ||
Voluntary contribution | $40 | ' | $50 | ||
[1] | Cost assumptions for the current year are based on the prior year-end obligation assumptions, except for defined benefit pension plans remeasured as of May 31, 2013. |
Stockbased_Compensation_Compen
Stock-based Compensation - Compensation Costs (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Compensation costs for awards | $32 | $24 | $18 |
Future tax benefit | 11 | 10 | 7 |
Equity-based awards | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Compensation costs for awards | 26 | 22 | 18 |
Liability-based awards | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Compensation costs for awards | $6 | $2 | $0 |
Stockbased_Compensation_Stock_
Stock-based Compensation - Stock Option Activity (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 10 Months Ended | 2 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2011 | Oct. 31, 2011 | Dec. 31, 2011 | |
Spinoff | ITT Long Term Incentive Award Program | 2011 Omnibus Incentive Plan | ||||
Stock Options, Outstanding [Roll Forward] | ' | ' | ' | ' | ' | |
Outstanding at beginning of period | 11.36 | 10.59 | ' | 1.82 | ' | |
Granted | 2.89 | 3.05 | ' | 0.2 | 3.98 | |
Exercised | -2.21 | -2.1 | ' | -0.46 | -0.08 | |
Forfeited, canceled or expired | -0.58 | -0.18 | ' | -0.03 | 0 | |
Conversion related to Spin-off | ' | ' | 5.16 | [1] | ' | ' |
Outstanding at end of period | 11.46 | 11.36 | ' | 1.53 | 10.59 | |
Options exercisable at end of period | 4.95 | 4.49 | ' | ' | 4.42 | |
Stock Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | |
Outstanding at beginning of period | $11.06 | $10.65 | ' | $41.41 | ' | |
Granted | $11.11 | $11.19 | ' | $57.69 | $10.95 | |
Exercised | $10.53 | $9.14 | ' | $39.08 | $5.74 | |
Forfeited, canceled or expired | $11.98 | $11.52 | ' | $48.08 | $0 | |
Conversion related to Spin-off | ' | ' | $0 | [1] | ' | ' |
Outstanding at end of period | $11.13 | $11.06 | ' | $45.97 | $10.65 | |
Options exercisable, weighted-average exercise price | $11.02 | $10.59 | ' | ' | $9.89 | |
[1] | The weighted average grant date fair value of the stock options converted is equal to the weighted average grant date fair value of such stock options prior to the ITT Spin-off, reduced by the ITT Spin-off conversion adjustment. Included in the conversion related to the ITT Spin-off are awards related to employees who transferred among ITT, Xylem Inc. and Exelis as a result of the ITT Spin-off. |
Stockbased_Compensation_NQOs_O
Stock-based Compensation - NQOs Outstanding and Exercisable (Detail) (USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Options Outstanding, Number (in shares) | 11.46 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in Years) | '7 years 5 months 23 days |
Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $11.13 |
Options Outstanding, Aggregate Intrinsic Value | $91 |
Options Exercisable, Number (in shares) | 4.95 |
Options Exercisable, Weighted-Average Remaining Contractual Life (in Years) | '6 years 1 month 13 days |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $11.02 |
Options Exercisable, Aggregate Intrinsic Value | 40 |
Range of Exercise Prices, $7.52 - $12.03 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Prices Per Share, Minimum (in dollars per share) | $7.52 |
Range of Exercise Prices Per Share, Maximum (in dollars per share) | $12.03 |
Options Outstanding, Number (in shares) | 9.97 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in Years) | '7 years 8 months 27 days |
Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $10.88 |
Options Outstanding, Aggregate Intrinsic Value | 82 |
Options Exercisable, Number (in shares) | 3.83 |
Options Exercisable, Weighted-Average Remaining Contractual Life (in Years) | '6 years 4 months 17 days |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $10.54 |
Options Exercisable, Aggregate Intrinsic Value | 33 |
Range of Exercise Prices, $ 12.12 - $15.12 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Prices Per Share, Minimum (in dollars per share) | $12.12 |
Range of Exercise Prices Per Share, Maximum (in dollars per share) | $15.12 |
Options Outstanding, Number (in shares) | 1.49 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in Years) | '5 years 8 months 19 days |
Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $12.79 |
Options Outstanding, Aggregate Intrinsic Value | 9 |
Options Exercisable, Number (in shares) | 1.12 |
Options Exercisable, Weighted-Average Remaining Contractual Life (in Years) | '5 years 2 months 23 days |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $12.70 |
Options Exercisable, Aggregate Intrinsic Value | $7 |
Stockbased_Compensation_Assump
Stock-based Compensation - Assumptions Related to Valuation of Stock Options (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' |
Dividend yield | 3.72% | 3.69% | 3.77% |
Expected volatility | 27.00% | 27.10% | 27.10% |
Expected life (in years) | '7 years | '7 years | '7 years |
Risk-free rates | 1.40% | 1.41% | 1.51% |
Weighted-average grant date fair value (in dollars per share) | $1.93 | $1.96 | $1.92 |
Stockbased_Compensation_Restri
Stock-based Compensation - Restricted Stock and Restricted Stock Units Activity (Detail) (Restricted Stock And RSU's, USD $) | 2 Months Ended | 10 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2011 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2011 | |
Spinoff | ||||||
Restricted Stock (Including RSU's), Outstanding [Roll Forward] | ' | ' | ' | ' | ' | |
Outstanding at beginning of period | 0.56 | 0.51 | 3.56 | 3.51 | ' | |
Granted | 1.02 | 0.18 | 1.14 | 1.25 | ' | |
Vested | 0 | -0.13 | -1.02 | -1.01 | ' | |
Forfeited and canceled | 0 | 0 | -0.2 | -0.19 | ' | |
Conversion related to Spin-off | ' | ' | ' | ' | 1.93 | [1] |
Outstanding at end of period | 3.51 | 0.56 | 3.48 | 3.56 | ' | |
Restricted Stock (Including RSU's), Outstanding, Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' | ' | ' | ' | |
Outstanding at beginning of period | $47.49 | $45.17 | $11.67 | $10.93 | ' | |
Granted | $10.95 | $57.52 | $11.18 | $11.16 | ' | |
Vested | $0 | $50.18 | $11.83 | $8.44 | ' | |
Forfeited and canceled | $0 | $0 | $11.35 | $11.94 | ' | |
Conversion related to Spin-off | ' | ' | ' | ' | $0 | [1] |
Outstanding at end of period | $10.93 | $47.49 | $11.48 | $11.67 | ' | |
[1] | The weighted average grant date fair value of the restricted stock and RSUs converted is equal to the weighted average grant date fair value of such restricted stock and RSUs prior to the ITT Spin-off, reduced by the ITT Spin-off conversion adjustment. Included in the conversion related to the ITT Spin-off are awards related to employees who transferred among ITT, Xylem Inc. and Exelis as a result of the ITT Spin-off. |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2013 | Nov. 07, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Spinoff | Non-Qualified Stock Option (NQOs) | Non-Qualified Stock Option (NQOs) | Non-Qualified Stock Option (NQOs) | Total Shareholder Return Awards (TSRs) | Total Shareholder Return Awards (TSRs) | Total Shareholder Return Awards (TSRs) | Total Shareholder Return Awards (TSRs) | Total Shareholder Return Awards (TSRs) | Restricted Stock Units (RSUs) | Equity-based awards | Liability-based awards | 2011 Omnibus Incentive Plan | ||||
Options granted between 2004 and 2009 | Options granted prior to 2004 and 2009 | Minimum | Maximum | Spinoff | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards granted under Plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21.2 |
Number of shares remaining available for future awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.8 |
Incurred incremental compensation expense | ' | ' | ' | $2.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18 | 4 | ' |
Unrecognized compensation costs recognized period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year 9 months 18 days | '1 year 7 months 6 days | ' |
Award vesting period | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Award expiration period | ' | ' | ' | ' | ' | '7 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of options exercised | 12 | 4 | 9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exelis Stock Price on December 31, 2013 | $19.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total number of stock options expected to vest including those that have already vested | 11.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options exercisable, weighted-average exercise price | $11.13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, aggregate intrinsic value | 90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average remaining contractual life, options | '7 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected life (in years) | '7 years | '7 years | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate target value of shareholder return awards | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | ' | ' | ' | ' | ' | ' | ' |
Percentage of shareholder return award target | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 200.00% | ' | ' | ' | ' |
Settled in cash at value equal to uncompleted portion at target | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.10 | ' | ' | ' | ' | ' | ' |
Granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | ' | ' | ' |
Weighted-average grant date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.95 | ' | ' | ' |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Oct. 09, 2013 | Dec. 11, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly_Dividend | Quarterly_Dividend | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | 750,000,000 | 750,000,000 | ' |
Common stock, par value (in dollars per share) | ' | ' | $0.01 | $0.01 | ' |
Preferred stock, shares authorized | ' | ' | 50,000,000 | 50,000,000 | ' |
Preferred stock, par value (in dollars per share) | ' | ' | $0 | $0 | ' |
Common stock, shares issued | ' | ' | 190,400,000 | 188,300,000 | ' |
Common stock, shares outstanding | ' | ' | 189,400,000 | 187,600,000 | ' |
Preferred stock, shares issued | ' | ' | 0 | 0 | ' |
Preferred stock, shares outstanding | ' | ' | 0 | 0 | ' |
Share repurchase program, authorized amount | ' | $100 | ' | ' | ' |
Total shares repurchased of common stock | ' | ' | 1,000,000 | ' | ' |
Value of total shares repurchased of common stock | ' | ' | 16 | ' | ' |
Remaining amount authorized for future share repurchases | ' | ' | 84 | ' | ' |
Dividend declared per share (in dollars per share) | $0.10 | ' | $0.41 | $0.41 | $0.10 |
Number of quarterly cash dividends declared during the period | ' | ' | 4 | 4 | ' |
Total dividends declared | ' | ' | $80 | $79 | $19 |
2011 Omnibus Incentive Plan | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Common stock reserved for issuance | ' | ' | 40,000,000 | ' | ' |
Common stock available for future grants | ' | ' | 18,800,000 | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - Components of Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | |
Balance | ($1,835) | ($1,655) | ' | |
Net foreign currency translation adjustments | 1 | 8 | ' | |
Net actuarial loss arising during the year | 343 | -230 | -29 | |
Prior service credit (cost) arising during the year | -1 | 1 | -1 | |
Other comprehensive income (loss) before reclassifications | 343 | -221 | ' | |
Amortization of net actuarial loss | 59 | 52 | 22 | |
Other comprehensive income (loss), net of tax | 403 | -169 | ' | |
Defined benefit plans tax reclassification related to ITT Spin-off | ' | -11 | ' | |
Amortization of prior service cost (credit) included in net periodic benefit cost | 1 | 0 | 1 | |
Balance | -1,432 | -1,835 | -1,655 | |
Taxes for unamortized defined benefit plan costs included in accumulated other comprehensive loss | 934 | 1,211 | ' | |
Net Foreign Currency Translation Adjustments | ' | ' | ' | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | |
Balance | 15 | 7 | ' | |
Net foreign currency translation adjustments | 1 | 8 | ' | |
Other comprehensive income (loss) before reclassifications | 1 | 8 | ' | |
Other comprehensive income (loss), net of tax | 1 | 8 | ' | |
Defined benefit plans tax reclassification related to ITT Spin-off | ' | 0 | ' | |
Balance | 16 | 15 | ' | |
Unamortized Defined Benefit Plan Costs | ' | ' | ' | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | |
Balance | -1,850 | -1,662 | ' | |
Net actuarial loss arising during the year | 343 | -230 | ' | |
Prior service credit (cost) arising during the year | -1 | 1 | ' | |
Other comprehensive income (loss) before reclassifications | 342 | -229 | ' | |
Amortization of net actuarial loss | 59 | 52 | [1] | ' |
Other comprehensive income (loss), net of tax | 402 | -177 | ' | |
Defined benefit plans tax reclassification related to ITT Spin-off | ' | -11 | ' | |
Amortization of prior service cost (credit) included in net periodic benefit cost | 1 | ' | ' | |
Balance | ($1,448) | ($1,850) | ' | |
[1] | The amortization of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost (Note 13). |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Equity [Abstract] | ' | ' | ' |
Changes in foreign exchange translation, Pretax | $1 | $8 | ' |
Changes in defined benefit plans, Pretax | 679 | -283 | -12 |
Defined benefit plans tax reclassification attributable to spin-off | ' | 0 | ' |
Net change in accumulated other comprehensive loss, Pretax | 680 | -275 | ' |
Changes in foreign exchange translation, Tax | 0 | 0 | ' |
Changes in defined benefit plans, Tax | -277 | 106 | ' |
Defined benefit plans tax reclassification attributable to Spin-off, Tax | ' | -11 | ' |
Net change in accumulated other comprehensive loss, Tax | -277 | 95 | ' |
Changes in foreign exchange translation, After Tax | 1 | 8 | ' |
Changes in defined benefit plans, After Tax | 402 | -177 | ' |
Defined benefit plans tax reclassification attributable to Spin-off, After Tax | ' | -11 | ' |
Net change in accumulated other comprehensive loss, After Tax | 403 | -169 | ' |
Net change in accumulated other comprehensive loss, After Tax | ' | ($180) | ' |
Related_Party_Transactions_and2
Related Party Transactions and Parent Company Equity - Components of Net Transfers (to)/from Parent (Detail) (USD $) | 12 Months Ended | 10 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 31, 2011 | Dec. 31, 2012 | |
ITT | ITT | |||||
Spinoff | ||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Intercompany sales and purchases, net | ' | ' | ' | $2 | ' | |
Transfers to parent, net | 0 | 0 | -775 | -887 | [1] | ' |
Cash pooling and general financing activities | ' | ' | ' | -149 | ' | |
Corporate allocations including income taxes | ' | ' | ' | 188 | ' | |
Accumulated other comprehensive loss transferred in connection with the ITT Spin-off (2) | ' | ' | ' | 1,587 | [2] | ' |
Net liabilities transferred in connection with the ITT Spin-off | ' | ' | ' | -1,169 | ' | |
Total net transfers to parent | ' | ' | ' | -428 | ' | |
Postretirement benefit plans tax adjustments attributable to Spin-off | ' | -11 | ' | ' | 11 | |
Accumulated other comprehensive loss transferred in connection with Spin-off | ' | ' | ' | ' | $1,598 | |
[1] | Primarily represents the dividend paid to ITT in connection with the ITT Spin-off. | |||||
[2] | Transfer of postretirement benefit plans from ITT in connection with the ITT Spin-off. During 2012, we recorded tax adjustments attributable to the ITT Spin-off of $11, which increased the accumulated other comprehensive loss transferred in connection with the ITT Spin-off to $1,598, with an offsetting increase to additional paid-in capital. |
Related_Party_Transactions_and3
Related Party Transactions and Parent Company Equity - Components of Net Assets and Liabilities Transferred from ITT (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | Oct. 31, 2011 | |
In Millions, unless otherwise specified | Spinoff | ITT | Receivables, net | Plant, property and equipment, net | Deferred income taxes | Other assets | Total assets transferred | Defined benefit plans | Other liabilities | Total liabilities transferred | |||
ITT | ITT | ITT | ITT | ITT | ITT | ITT | ITT | ||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net liabilities transferred in connection with Spin-off | ' | ' | ' | $1,169 | ($1) | ($7) | ($840) | [1] | ($14) | ($862) | $2,047 | ($16) | $2,031 |
Tax adjustments attributable to Spin-off | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Deferred income taxes attributable to Spin-off | $216 | $556 | $843 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | During 2012, we recorded tax adjustments attributable to the ITT Spin-off of $3, which increased deferred income taxes attributable to the ITT Spin-off to $843, with on offsetting increase to additional paid-in capital. |
Related_Party_Transactions_and4
Related Party Transactions and Parent Company Equity - Additional Information (Detail) (USD $) | 10 Months Ended | 12 Months Ended | 10 Months Ended | 2 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 |
ITT | ITT | ITT | Principal Owner | Xylem And ITT | Xylem And ITT | Xylem And ITT | Xylem And ITT | Xylem And ITT | Xylem And ITT | Xylem And ITT | Xylem And ITT | |
Minimum | Maximum | Charges for Services Provided to the Company | Charges for Services Provided to the Company | Charges for Services Provided to the Company | Charges for Servcies Provided by the Company | Charges for Servcies Provided by the Company | Charges for Servcies Provided by the Company | |||||
Intellectual Property License Agreement | Intellectual Property License Agreement | |||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated general corporate expenses incurred by ITT | $102 | ' | ' | ' | ' | ' | $1 | $1 | $2 | $0.40 | $1 | $2 |
Related party sales | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Recognized cost of revenues from inventory purchased | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Total payables due from Exelis to related parties | ' | ' | ' | ' | 9 | 3 | ' | ' | ' | ' | ' | ' |
Total receivables due to Exelis from related parties | ' | ' | ' | ' | $7 | $7 | ' | ' | ' | ' | ' | ' |
Related party transaction license agreement | ' | '3 years | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Range of Estimated Loss and Number of Active Sites (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | site | site |
Range of Estimated Loss and Number of Active Sites for Environmental Matters: | ' | ' |
Low-end range | $23 | $24 |
High-end range | $44 | $47 |
Number of active environmental investigation and remediation sites | 24 | 22 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Rabbi Trust | ||
plan | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Estimated and accrued environmental matters | $26 | $27 | ' |
Aggregate amount of surety bonds, guarantees and stand-by letters of credit | $102 | ' | ' |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ' | ' | ' |
Deferred compensation, employer contribution requirement, percentage | ' | ' | 110.00% |
Deferred compensation, number of plans | ' | ' | 8 |
Segment_Information_Summary_of
Segment Information - Summary of Segment Revenue (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenue | ' | ' | ' | ' | ' | ' | ' | ' | $2,136 | $2,487 | $2,817 |
Service revenue | ' | ' | ' | ' | ' | ' | ' | ' | 2,680 | 3,035 | 3,022 |
Total Revenue | 1,239 | 1,141 | 1,251 | 1,185 | 1,361 | 1,361 | 1,379 | 1,421 | 4,816 | 5,522 | 5,839 |
C4ISR Electronic and Systems | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenue | ' | ' | ' | ' | ' | ' | ' | ' | 2,136 | 2,487 | 2,817 |
Service revenue | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 |
Total Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 2,136 | 2,487 | 2,817 |
Information and Technical Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenue | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 |
Service revenue | ' | ' | ' | ' | ' | ' | ' | ' | 2,680 | 3,035 | 3,022 |
Total Revenue | ' | ' | ' | ' | ' | ' | ' | ' | $2,680 | $3,035 | $3,022 |
Segment_Information_Summary_of1
Segment Information - Summary of Segment Operating Income and Operating Margin (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' |
Operating Income | $476 | $561 | $535 |
Operating Margin | 9.90% | 10.20% | 9.20% |
C4ISR Electronic and Systems | ' | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' |
Operating Income | 218 | 350 | 385 |
Operating Margin | 10.20% | 14.10% | 13.70% |
Information and Technical Services | ' | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' |
Operating Income | $258 | $211 | $150 |
Operating Margin | 9.60% | 7.00% | 5.00% |
Segment_Information_Summary_of2
Segment Information - Summary of Segment Reporting Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total Assets | $4,884 | $5,212 |
Plant, Property & Equipment | 498 | 512 |
Corporate and Other | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total Assets | 756 | 948 |
Plant, Property & Equipment | 28 | 17 |
Operating Segments | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total Assets | 4,128 | 4,264 |
Plant, Property & Equipment | 470 | 495 |
Operating Segments | C4ISR Electronic and Systems | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total Assets | 3,031 | 3,078 |
Plant, Property & Equipment | 283 | 314 |
Operating Segments | Information and Technical Services | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total Assets | 1,097 | 1,186 |
Plant, Property & Equipment | $187 | $181 |
Segment_Information_Summary_of3
Segment Information - Summary of Segment Capital Expenditures and Depreciation and Amortization (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ' | ' | ' |
Capital Expenditures | $78 | $119 | $95 |
Depreciation & Amortization | 110 | 130 | 133 |
C4ISR Electronic and Systems | ' | ' | ' |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ' | ' | ' |
Capital Expenditures | 28 | 56 | 51 |
Depreciation & Amortization | 81 | 101 | 112 |
Information and Technical Services | ' | ' | ' |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ' | ' | ' |
Capital Expenditures | 33 | 44 | 43 |
Depreciation & Amortization | 26 | 23 | 19 |
Corporate and Other | ' | ' | ' |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ' | ' | ' |
Capital Expenditures | 17 | 19 | 1 |
Depreciation & Amortization | 3 | 6 | 2 |
Operating Segments | ' | ' | ' |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ' | ' | ' |
Capital Expenditures | 61 | 100 | 94 |
Depreciation & Amortization | $107 | $124 | $131 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of operating segments | 2 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Revenue | $1,239 | $1,141 | $1,251 | $1,185 | $1,361 | $1,361 | $1,379 | $1,421 | $4,816 | $5,522 | $5,839 |
Selling, general and administrative expenses | 118 | 100 | 122 | 115 | 139 | 114 | 130 | 133 | 455 | 516 | 566 |
Net income | $79 | $80 | $78 | $44 | $86 | $88 | $86 | $70 | $281 | $330 | $326 |
Basic earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (in dollars per share) | $0.42 | $0.42 | $0.41 | $0.23 | $0.46 | $0.47 | $0.46 | $0.38 | $1.49 | $1.76 | $1.75 |
Diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (in dollars per share) | $0.41 | $0.41 | $0.41 | $0.23 | $0.45 | $0.47 | $0.46 | $0.37 | $1.46 | $1.75 | $1.75 |
Weighted average common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in shares) | 189 | 188.5 | 188.2 | 188.3 | 187.9 | 187.6 | 187.5 | 186.6 | 188.5 | 187.4 | 186.2 |
Diluted (in shares) | 194.2 | 192.8 | 190.5 | 189.8 | 189.5 | 188.7 | 188.5 | 187.5 | 192 | 188.6 | 186.7 |