Leonardo DRS (DRS) 10-Q 4 May 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares shares in Millions	3 Months Ended
	Mar. 31, 2023	May 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	333-253583
Entity Registrant Name	Leonardo DRS, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-2632319
Entity Address, Address Line One	2345 Crystal Drive
Entity Address, Address Line Two	Suite 1000
Entity Address, City or Town	Arlington
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22202
City Area Code	703
Local Phone Number	416-8000
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	DRS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		261
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001833756
Current Fiscal Year End Date	--12-31

Consolidated Statements of Earn

Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Total revenues	$ 569	$ 612
Cost of revenues:
Total cost of revenues	(438)	(478)
Gross profit	131	134
General and administrative expenses	(100)	(76)
Amortization of intangibles	(6)	(2)
Other operating expenses, net	0	0
Operating earnings	25	56
Interest expense	(8)	(8)
Other, net	(1)	0
Earnings before taxes	16	48
Income tax provision	4	12
Net earnings	$ 12	$ 36
Net earnings per share from common stock:
Basic earnings per share (in dollars per share)	$ 0.05	$ 0.17
Diluted earnings per share (in dollars per share)	$ 0.05	$ 0.17
Products
Revenues:
Total revenues	$ 520	$ 541
Cost of revenues:
Total cost of revenues	(403)	(422)
Services
Revenues:
Total revenues	49	71
Cost of revenues:
Total cost of revenues	$ (35)	$ (56)

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net earnings	$ 12	$ 36
Other comprehensive income (loss):
Foreign currency translation gain, net of income taxes	0	1
Gain from pension settlements	0	3
Net unrecognized gain (loss) on postretirement obligations, net of income taxes	0	2
Other comprehensive income (loss), net of income tax	0	6
Total comprehensive income	$ 12	$ 42

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 174	$ 306
Accounts receivable, net	158	166
Contract assets	968	872
Inventories	364	319
Prepaid expenses	19	20
Other current assets	29	24
Total current assets	1,712	1,707
Noncurrent assets:
Property plant and equipment, net	402	404
Intangible assets, net	167	172
Goodwill	1,236	1,236
Deferred tax assets	72	66
Other noncurrent assets	92	92
Total noncurrent assets	1,969	1,970
Total assets	3,681	3,677
Liabilities, Current [Abstract]
Short-term borrowings and current portion of long-term debt	250	29
Accounts payable	258	457
Contract liabilities	247	233
Other current liabilities	264	323
Total current liabilities	1,019	1,042
Noncurrent liabilities:
Long-term debt	360	365
Pension and other postretirement benefit plan liabilities	42	45
Deferred tax liabilities	6	0
Other noncurrent liabilities	111	98
Total noncurrent liabilities	519	508
Commitments and contingencies (Note 14)
Shareholders' equity
Preferred stock,$0.01 par value: 10,000,000 shares authorized; none issued	0	0
Common stock, $0.01 par value: 350,000,000 shares authorized; 260,553,101 issued	3	3
Additional paid-in capital	5,151	5,147
Accumulated deficit	(2,962)	(2,974)
Accumulated other comprehensive loss	(49)	(49)
Total shareholders' equity	2,143	2,127
Total liabilities and shareholders' equity	$ 3,681	$ 3,677

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Shareholders' equity
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	350,000,000	350,000,000
Common stock, issued (in shares)	260,553,101	260,553,101

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net earnings	$ 12	$ 36
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization	22	15
Deferred income taxes	0	11
Other	4	0
Changes in assets and liabilities:
Accounts receivable	8	13
Contract assets	(96)	(80)
Inventories	(45)	(30)
Prepaid expenses	1	(1)
Other current assets	(5)	(3)
Other noncurrent assets	5	21
Defined benefit obligations	(3)	1
Other current liabilities	(59)	(14)
Other noncurrent liabilities	7	(21)
Accounts payable	(199)	(215)
Contract liabilities	14	12
Net cash used in operating activities	(334)	(255)
Investing activities
Capital expenditures	(15)	(13)
Proceeds from sales of assets	1	0
Net cash used in investing activities	(14)	(13)
Financing activities
Net (decrease) increase in third party borrowings (maturities of 90 days or less)	6	(9)
Repayment of third party debt	(128)	0
Borrowings of third party debt	340	0
Repayment of related party debt	0	(135)
Borrowings from related parties	0	285
Proceeds from stock issuance	1	0
Cash outlay to reacquire equity instruments	(1)	0
Other	(2)	0
Net cash provided by financing activities	216	141
Effect of exchange rate changes on cash and cash equivalents	0	0
Net decrease in cash and cash equivalents	(132)	(127)
Cash and cash equivalents at beginning of year	306	240
Cash and cash equivalents at end of period	$ 174	$ 113

Consolidated Statements of Shar

Consolidated Statements of Shareholder's Equity (Unaudited) - USD ($) $ in Millions	Total	Common stock	Additional paid- in capital	Accumulated other comprehensive loss	Accumulated deficit
Balance at beginning of period at Dec. 31, 2021	$ 1,593	$ 1	$ 4,633	$ (58)	$ (2,983)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total comprehensive income	42			6	36
Balance at end of period at Mar. 31, 2022	1,635	1	4,633	(52)	(2,947)
Balance at beginning of period at Dec. 31, 2022	2,127	3	5,147	(49)	(2,974)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total comprehensive income	12			0	12
Stock compensation expense	4		4
Balance at end of period at Mar. 31, 2023	$ 2,143	$ 3	$ 5,151	$ (49)	$ (2,962)

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies A. Organization Leonardo DRS, Inc., together with its wholly owned subsidiaries (hereinafter, “DRS,” “the Company,” “us,” “our,” or “we”) is a supplier of defense electronics products, systems and military support services. The Company is controlled by Leonardo S.p.A (hereinafter, “Leonardo S.p.A.,”), an Italian multi-national aerospace, defense and security company headquartered in Rome, Italy, through its ultimate sole ownership of Leonardo US Holding. US Holding is the majority stockholder of the Company. DRS is a provider of defense products and technologies that are used across land, air, sea, space and cyber domains. Our diverse array of defense systems and solutions are offered to all branches of the U.S. military, major aerospace and defense prime contractors, government intelligence agencies, international military customers and industrial markets for deployment on a wide range of military platforms. We focus our capabilities in areas of critical importance to the U.S. military, such as advanced sensing, network computing, force protection and electrical power and propulsion. These capabilities directly align with our two reportable segments: Advanced Sensing and Computing and Integrated Mission Systems. The U.S. DoD is our largest customer and accounts for approximately 80% and 85% of our total revenues as an end-user for the periods ended March 31, 2023 and March 31, 2022, respectively. Specific international and commercial market opportunities exist within these segments and make up approximately 20% and 15% of our total revenues for the periods ended March 31, 2023 and March 31, 2022, respectively. Our two reportable segments reflect the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker (“CODM”). Advanced Sensing and Computing (“ASC”) The Advanced Sensing and Computing (“ASC”) segment designs, develops and manufactures sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution by our customers. Our leading sensing capabilities span applications including missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared (“EO/IR”), signals intelligence (“SIGINT”) and other intelligence systems, electronic warfare (“EW”), ground vehicle sensing, next generation active electronically scanned array (“AESA”) tactical radars, dismounted soldier sensing and space sensing. Across our offering, we are focused on advancing sensor distance, precision, clarity, definition, spectral depth and effectiveness. Furthermore, we seek to leverage our multi-decade experience to optimize size, weight, power and cost tailored to our customers’ specific mission requirements. Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network computing products. Our network computing offering is utilized across a broad range of mission applications including platform computing on ground and shipboard (both surface ship and submarine) for advanced battle management, combat systems, radar, command and control (“C2”), tactical networks, tactical computing and communications. Our network computing products support the DoD’s need for greater situational understanding at the tactical edge and permits data to be rapidly transmitted securely from command centers to forward-positioned defense assets. Integrated Mission Systems (“IMS”) Our Integrated Mission Systems (“IMS”) segment designs, develops, manufactures and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation and logistics systems for the U.S. and allied defense customers. Our naval power and propulsion systems are providing next-generation power capabilities for the future fleet. DRS is currently a leading provider of next-generation electrical propulsion systems for the U.S. Navy. We provide power conversion, control, distribution and propulsion systems for the Navy’s top priority shipbuilding programs, including the Columbia Class ballistic missile submarine, the first modern U.S. electric drive submarine. We believe DRS is well positioned to meet the needs of an increasingly electrified fleet with our high-efficiency, power dense permanent magnet motors, energy storage systems and associated efficient, rugged and compact power conversion, electrical actuation systems, and advanced cooling technologies. DRS has a long history of providing a number of other critical products to the U.S. Navy with a significant installed base on submarines, aircraft carriers and other surface ships including motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems for electronics and ship stores refrigeration. Our technologies and systems help protect U.S. forces and assets against increasingly sophisticated and proliferating threats. DRS is an integrator of systems in ground vehicles for short-range air defense, counter-UAS (“C-UAS”), and vehicle survivability and protection. This integrator role includes utilizing radars, EW equipment, reconnaissance and surveillance systems, modular combat vehicle turrets, and stabilized sensor suites, and kinetic countermeasures for short-range air defense. Our force protection systems, including solutions for counter-unmanned aerial systems (C-UAS), short-range air defense systems and active protection systems used to defend ground combat vehicles help protect personnel and defense assets from these growing threats. Other The Company separately presents the unallocable costs associated with corporate functions and certain non-operating subsidiaries of the Company as Corporate & Eliminations. See Note 16 : Segment Information for further information regarding our business segments. B. Basis of presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of DRS, its wholly owned subsidiaries and its controlling interests and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the periods presented. Interests in ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts significant influence, the Company applies the equity method of accounting. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation. Interim Financial Statements . The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. GAAP to be condensed or omitted. These unaudited Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements as of and for the year ended December 31, 2022 included in our Annual Report on Form 10-K for the year end December 31, 2022, filed with the SEC on March 28, 2023. C. New Accounting Pronouncements Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on our financial statements.

Business Acquisitions and Dispo

Business Acquisitions and Dispositions	3 Months Ended
	Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]
Business Acquisitions and Dispositions	Business Acquisitions and Dispositions Acquisitions On June 21, 2022, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RADA Electronic Industries, Ltd (“RADA”), a leading Israel-based provider of small-form tactical radar, for an all-stock merger, with RADA surviving as a wholly owned subsidiary of the Company. The Company acquired RADA as part of the Company’s goal to become a market leader in advanced sensing and force protection. The acquisition of RADA has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with the Company as the accounting acquirer, which requires the assets acquired and liabilities assumed be recognized at their acquisition date fair value. The acquisition was completed on November 28, 2022, when each issued and outstanding ordinary share of RADA was converted and exchanged for one share of common stock of the Company. The total purchase consideration for RADA was $511 million and is comprised of the Company’s shares of common stock issued in exchange for all issued and outstanding ordinary shares of RADA, as well $20 million of replacement stock compensation awards’ fair value attributable to pre-combination services. The preliminary fair value estimates of the net assets acquired and liabilities assumed are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date). The Company has not yet finalized the determination of fair values allocated to the acquired assets and liabilities, including but not limited to the valuation of contract related assets and liabilities and related tax impacts of the opening balance sheet adjustments. The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Identifiable intangibles assets of $131 million consist of $90 million of technology related assets while the remaining $41 million consists of customer and contractual relationships. The goodwill of $284 million arising from the acquisition is primarily attributable to the growth opportunities related to the RADA business. None of the goodwill resulting from the acquisition is deductible for tax purposes. All of the goodwill recognized related to the RADA acquisition was assigned to the ASC segment. Dispositions On March 21, 2022, the Company entered into a definitive agreement to sell its Global Enterprise Solutions (“GES”) business to SES Government Solutions, Inc., a wholly-owned subsidiary of SES S.A., for $450 million subject to certain working capital adjustments. The transaction was completed on August 1, 2022 and resulted in cash proceeds of $427 million after net working capital adjustments.

Revenue from Contracts with Cus

Revenue from Contracts with Customers	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue from Contracts with Customers	Revenue from Contracts with CustomersThe Company recognizes revenue for each separately identifiable performance obligation in a contract representing an obligation to transfer a distinct good or service to a customer. In most cases, goods and services provided under the Company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the Company provides multiple distinct goods or services to a customer. In those cases, the Company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using cost plus a reasonable margin. We classify revenues as products or services on our Consolidated Statements of Earnings based on the predominant attributes of the performance obligations. While the Company provides warranties on certain contracts, we typically do not provide for services beyond standard assurances and therefore do not consider warranties to be separate performance obligations. Typically we enter into three types of contracts: fixed-price contracts, cost-plus contracts and time and material (“T&M”) contracts (cost-plus contracts and T&M contracts are aggregated below as flexibly priced contracts). The majority of our total revenues are derived from fixed-price contracts; refer to the revenue disaggregation disclosures that follow. For fixed-price contracts, customers agree to pay a fixed amount, negotiated in advanced for a specified scope of work. For cost-plus contracts, typically we are reimbursed for allowable or otherwise defined total costs (defined as cost of revenues plus allowable general and administrative expenses) incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness and cost-effectiveness. In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract. T&M contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs. The fixed labor rates on T&M contracts include amounts for the cost of direct labor, indirect contract costs and profit. Revenue from contracts with customers is recognized when the performance obligations are satisfied through the transfer of control over the good or service to the customer, which may occur either over time or at a point in time. Revenues for the majority of our contracts are measured using the over time, percentage of completion cost-to-cost method of accounting to calculate percentage of completion. We believe this is an appropriate measure of progress toward satisfaction of performance obligations as this measure most accurately depicts the progress of our work and transfer of control to our customers. Due to the long-term nature of many of our contracts, developing the estimated total cost at completion and total transaction price often requires judgment. Factors that must be considered in estimating the cost of the work to be completed include the nature and complexity of the work to be performed, subcontractor performance and the risk and impact of delayed performance. After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts on a routine basis. Adjustments to original estimates for a contract's revenue, estimated costs at completion and estimated profit or loss often are required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change and are also required if contract modifications occur. When adjustments in estimated total costs at completion or in estimated total transaction price are determined, the related impact on revenue and operating income are recognized using the cumulative catch-up method, which recognizes in the current period the cumulative effect of such adjustments for all prior periods. Any anticipated losses on these contracts are fully recognized in the period in which the losses become evident. EAC adjustments had the following impacts to revenue for the periods presented: Three Months Ended March 31, (Dollars in millions) 2023 2022 Revenue $ (9) $ (1) Total % of Revenue 2 % — % The impacts noted above are attributed primarily to changes in our firm-fixed-price development type programs. As changes happen in the design required to achieve contractual specifications, those changes often result in the programs’ estimate and related profitability. Conversely, if the requirements for the recognition of contracts over time are not met, revenue is recognized at a point in time when control transfers to the customer, which is generally upon transfer of title. In such cases, the production that is in progress and costs that will be recognized at a future point in time are reported within “inventories”. Costs to obtain a contract are incremental direct costs incurred to obtain a contract with a customer, including sales commissions and dealer fees, and are capitalized if material. Costs to fulfill a contract include costs directly related to a contract or specific anticipated contract (e.g., certain design costs) that generate or enhance our ability to satisfy our performance obligations under these contracts. These costs are capitalized to the extent they are expected to be recovered from the associated contract. Contract Assets and Liabilities The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities. (Dollars in millions) March 31, 2023 December 31, 2022 Contract assets $ 968 $ 872 Contract liabilities 247 233 Net contract assets $ 721 $ 639 Revenue recognized in the periods ending March 31, 2023 and March 31, 2022, that was included in the contract liability balance at the beginning of each period was $84 million and $74 million, respectively. Contract assets related to amounts withheld by customers until contract completion are not considered a significant financing component of our contracts because the intent is to protect the customers from our failure to satisfactorily complete our performance obligations. Payments received from customers in advance of revenue recognition (contract liabilities) are not considered a significant financing component of our contracts because they are utilized to pay for contract costs within a one-year period or are requested by us to ensure the customers meet their payment obligations. Value of Remaining Performance Obligations The value of remaining performance obligations, which we also refer to as total backlog, includes the following components: • Funded - Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. • Unfunded - Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts. The following table summarizes the value of our total backlog as of March 31, 2023, incorporating both funded and unfunded components: Backlog: (Dollars in millions) March 31, 2023 Funded $ 2,947 Unfunded $ 1,325 Total Backlog $ 4,272 We expect to recognize approximately 39% of our March 31, 2023 backlog as revenue over the next nine months, with the remainder to be recognized thereafter. Disaggregation of Revenue ASC : ASC revenue is primarily derived from U.S. government development and production contracts and is generally recognized using the over time, percentage of completion cost-to-cost method of accounting. We disaggregate ASC revenue by geographical region, customer relationship and contract type. We believe these categories best depict how the nature, amount, timing and uncertainty of ASC revenue and cash flows are affected by economic factors: Three Months Ended March 31, (Dollars in millions) 2023 2022 Revenue by Geographical Region United States $ 330 $ 372 International 50 22 Intersegment Sales 11 2 Total $ 391 $ 396 Revenue by Customer Relationship Prime contractor $ 162 $ 232 Subcontractor 218 162 Intersegment Sales 11 2 Total $ 391 $ 396 Revenue by Contract Type Firm Fixed Price $ 324 $ 342 Flexibly Priced (1) 56 52 Intersegment Sales 11 2 Total $ 391 $ 396 ________________ (1) Includes revenue derived from time-and-materials contracts. IMS : IMS revenue is primarily derived from U.S. government development and production contracts and is generally recognized over time using the over time, percentage of completion cost-to-cost method of accounting We disaggregate IMS revenue by geographical region, customer relationship and contract type. We believe these categories best depict how the nature, amount, timing and uncertainty of IMS revenue and cash flows are affected by economic factors: Three Months Ended March 31, (Dollars in millions) 2023 2022 Revenue by Geographical Region United States $ 186 $ 212 International 3 6 Intersegment Sales — — Total $ 189 $ 218 Revenue by Customer Relationship Prime contractor $ 46 $ 33 Subcontractor 143 185 Intersegment Sales — — Total $ 189 $ 218 Revenue by Contract Type Firm Fixed Price $ 155 $ 193 Flexibly Priced (1) 34 25 Intersegment Sales — — Total $ 189 $ 218 ________________ (1) Includes revenue derived from time-and-materials contracts.

Accounts Receivable

Accounts Receivable	3 Months Ended
	Mar. 31, 2023
Receivables [Abstract]
Accounts Receivable	Accounts Receivable Accounts receivable represent amounts billed and currently due from customers. Payment is typically received from our customers either at periodic intervals (e.g., biweekly, or monthly) or upon achievement of contractual milestones. Accounts receivable consist of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Accounts receivable $ 159 $ 168 Less allowance for credit losses (1) (2) Accounts receivable, net $ 158 $ 166 The Company maintains certain agreements with financial institutions to sell certain trade receivables. Receivables are derecognized in their entirety when sold, and the Company’s continuing involvement in the sold receivables is limited to their servicing, for which the Company receives a fee commensurate with the service provided. Pursuant to the servicing agreements, the Company collected approximately $15 million and $10 million at March 31, 2023 and December 31, 2022, respectively, of these sold receivables that had not yet been remitted to the financial institutions. These unremitted amounts collected on behalf of the financial institutions are included within short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheet.

Sale of Receivables

Sale of Receivables	3 Months Ended
	Mar. 31, 2023
Transfers and Servicing [Abstract]
Sale of Receivables	Sale of ReceivablesThe Company is party to factoring facilities with various financial institutions with an aggregate capacity of $325 million. The receivables sold under the factoring facilities are without recourse for any customer credit risk and result in a true sale. Receivables are derecognized in their entirety when sold, and the Company’s continuing involvement is limited to their servicing, for which the Company receives a fee commensurate with the service provided and therefore no servicing asset or liability related to these receivables was recognized for any period presented. The fair value of the sold receivables approximated their book value due to their short-term nature. Proceeds from the sold receivables are reflected in operating cash flows on the statement of cash flows. During the periods ended March 31, 2023 and March 31, 2022, the Company incurred immaterial purchase discount fees which are presented in other general and administrative expenditures, net on the consolidated statements of earnings. Three months ended March 31, (Dollars in millions) 2023 2022 Beginning balance $ 243 $ 215 Sales of receivables 30 44 Cash returned to purchaser 192 164 Outstanding balance sold to purchasers (1) 81 95 Cash collected, not remitted to purchaser (2) 15 9 Remaining sold receivables $ (66) $ (86) ________________ (1) For the period ended March 31, 2023, the Company recorded a net decrease to cash flows from operating activities of $162 million and for the period ended March 31, 2022 a decrease to cash flow from operating activities of $120 million. (2) Represents cash collected on behalf of purchasers and not yet remitted.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories consists of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Raw materials $ 80 $ 83 Work in progress 272 224 Finished goods 12 12 Total $ 364 $ 319

Property, Plant and Equipment

Property, Plant and Equipment	3 Months Ended
	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment by major asset class consists of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Land, buildings and improvements $ 333 $ 321 Plant and machinery 192 190 Equipment and other 329 335 Total property, plant and equipment, at cost 854 846 Less accumulated depreciation (452) (442) Total property, plant and equipment, net $ 402 $ 404 Depreciation expense related to property, plant and equipment was $16 million and $13 million for the periods ended March 31, 2023 and March 31, 2022, respectively.

Other Liabilities

Other Liabilities	3 Months Ended
	Mar. 31, 2023
Other Liabilities Disclosure [Abstract]
Other Liabilities	Other Liabilities A summary of significant other liabilities by balance sheet caption follows: (Dollars in millions) March 31, 2023 December 31, 2022 Salaries, wages and accrued bonuses $ 53 $ 63 Fringe benefits 63 76 Litigation 10 10 Restructuring costs 4 4 Provision for contract losses 51 54 Operating lease liabilities 27 25 Taxes Payable 10 31 Other (1) 46 60 Total other current liabilities $ 264 $ 323 Operating lease liabilities $ 68 $ 68 Taxes Payable 23 21 Other 20 9 Total other noncurrent liabilities $ 111 $ 98 ________________ (1) Consists primarily of environmental remediation reserves and warranty reserves. See Note 14: Commitments and Contingencies for more information regarding the warranty provision.

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible Assets Other intangible assets mainly refer to the fair value of existing customer contractual relationships attributable to the acquired business and patents which are being amortized over their respective lives. The fair value of intangible assets typically is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows (including cash flows for working capital) arising from backlog and follow-on sales to the customer over their estimated lives, including the probability of expected future contract renewals and sales, less a contributory assets charge, all of which is discounted to present value. The following disclosure presents certain information regarding the Company's intangible assets as of March 31, 2023 and December 31, 2022. All intangible assets are being amortized over their estimated useful lives, as indicated below, with no estimated residual values. March 31, 2023 December 31, 2022 (Dollars in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired Intangible Assets $ 1,087 $ (923) $ 164 $ 1,087 $ (918) $ 169 Patents and licenses 9 (6) 3 9 (6) 3 Total intangible assets $ 1,096 $ (929) $ 167 $ 1,096 $ (924) $ 172 Amortization expense related to intangible assets was $6 million for the periods ended March 31, 2023 and $2 million for the three months ended March 31, 2022.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2023 and December 31, 2022 is as follows: (Dollars in millions) March 31, 2023 December 31, 2022 Deferred tax assets $ 208 $ 208 Less valuation allowance 17 17 Deferred tax assets 191 191 Deferred tax liabilities 125 125 Net deferred tax asset $ 66 $ 66 Our deferred tax balance associated with our retirement benefit plans includes a deferred tax asset of $8 million and $8 million as March 31, 2023 and December 31, 2022 respectively, that are recorded in accumulated other comprehensive earnings to recognize the funded status of our retirement plans. See Note 12: Pension and Other Postretirement Benefits

Debt

Debt	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Debt	Debt The Company’s debt consists of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Term loan A $ 222 $ 225 Outstanding revolver 215 — Finance lease and other 160 161 Short-term borrowings 15 10 Total debt principal 612 396 Less unamortized debt issuance costs and discounts (2) (2) Total debt, net 610 394 Less short-term borrowings and current portion of long-term debt (250) (29) Total long-term debt $ 360 $ 365 Term Loans In November 2022, the Company entered into a senior unsecured credit agreement with Bank of America in the amount of $500 million (the “2022 Credit Agreement”) with a maturity of November 29, 2027. The 2022 Credit Agreement provides for a term loan of $225 million bearing interest at a variable rate generally based on the Secured Overnight Financing Rate, (“SOFR”), plus a spread ranging from 1.48% to 2.10% depending on the leverage ratio, as defined in the 2022 Credit Agreement, or an alternative variable rate based on the higher of the Bank of America prime rate, the federal funds rate, or a rate generally based on SOFR, in each case subject to additional basis point spread as defined in the 2022 Credit Agreement, (“2022 Term Loan A”). Interest is payable quarterly in arrears. The outstanding balance of the 2022 Term Loan A at March 31, 2023 was $222 million. The fair value of Term Loan A at March 31, 2023 was approximately $222 million, however the Company has the ability to prepay the outstanding principal balance without penalty. Credit Facilities The 2022 Credit Agreement provides for a revolving credit facility available for working capital needs of the Company, (“the 2022 Revolving Credit Facility”). As of March 31, 2023 and December 31, 2022, the 2022 Revolving Credit Facility had a limit of $275 million. Loans under the 2022 Revolving Credit Facility bear interest at a variable rate generally based on the SOFR, plus a spread ranging from 1.48% to 2.10% depending on the leverage ratio, as defined in the 2022 Credit Agreement, or an alternative variable rate based on the higher of the Bank of America prime rate, the federal funds rate, or a rate generally based on SOFR, in each case subject to additional basis point spread as defined in the 2022 Credit Agreement. The Company also pays a commitment fee ranging between 0.20% and 0.35% depending on the Company’s leverage ratio applied to the unused balance of the 2022 Revolving Credit Facility. The outstanding balance as of March 31, 2023 was $215 million and there was no outstanding balance on the 2022 Revolving Credit Facility as of December 31, 2022. The weighted average interest rate on the 2022 Revolving Credit Facility as of March 31, 2023 was 5.06%. The Company also maintains uncommitted working capital credit facilities with certain financial institutions in an aggregate of $65 million at March 31, 2023 and December 31, 2022, respectively (the “Financial Institution Credit Facilities”). The Financial Institution Credit Facilities are guaranteed by Leonardo S.p.A. The primary purpose of the Financial Institution Credit Facilities is to support standby letter of credit issuances on contracts with customers and the Financial Institution Credit Facilities also included a revolving facility with a maximum borrowing limit of $15 million, which bore interest at LIBOR plus 0.5%. The revolving facility was eliminated from the Financial Institution Credit Facilities as of March 31, 2023. As of December 31, 2022, there was no balance outstanding on the revolving facility of the Financial Institution Credit Facilities. The Company had letters of credit outstanding of approximately $41 million and $36 million as of March 31, 2023 and December 31, 2022, which reduces the available capacity of the Financial Institution Credit Facilities by an equal amount. Short-term Borrowings As of March 31, 2023 and December 31, 2022, the Company recognized $15 million and $10 million, respectively, collected on behalf of the buyers of our trade receivables pursuant to our factoring arrangements as short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheet, which approximates its fair value. Refer to Note 4: Accounts Receivable and Note 5: Sale of Receivables for more information.

Pension and Other Postretiremen

Pension and Other Postretirement Benefits	3 Months Ended
	Mar. 31, 2023
Retirement Benefits [Abstract]
Pension and Other Postretirement Benefits	Pension and Other Postretirement Benefits Retirement Plan Summary Information The Company maintains multiple pension plans, both contributory and non-contributory, covering employees at certain locations. Eligibility requirements for participation in the plans vary, and benefits generally are based on the participant's compensation and years of service, as defined in the respective plan. The Company's funding policy generally is to contribute in accordance with cost accounting standards that affect government contractors, subject to the Tax Code and regulations thereunder. For all periods presented, the Company made no discretionary pension contributions. Plan assets are invested primarily in equities, bonds (both corporate and U.S. government), U.S. government-sponsored entity instruments, cash and cash equivalents and real estate. The Company also provides postretirement medical benefits for certain retired employees and dependents at certain locations. Participants are eligible for these benefits when they retire from active service and meet the eligibility requirements for the Company's postretirement benefit plans. The Company's contractual arrangements with the U.S. government provide for the recovery of contributions to a Voluntary Employees' Beneficiary Association trust and, for non-funded plans, recovery of claims on a pay-as-you-go basis, subject to the Tax Code and regulations thereunder, with the retiree generally paying a portion of the costs through contributions, deductibles and coinsurance provisions. The Company also maintains certain non-contributory and unfunded supplemental retirement plans. Eligibility for participation in the supplemental retirement plans is limited, and benefits generally are based on the participant's compensation and/or years of service. The following tables provide certain information regarding the Company's pension, postretirement and supplemental retirement plans as of for the three months ended March 31,: Defined Benefit Pension Plans Postretirement Benefit Plan Supplemental Retirement Plans (Dollars in millions) March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 Service cost $ — $ — $ — $ — $ — $ — Interest cost 2 2 — — — — Less Expected return on plan assets (1) (2) — — — — Amortization of net actuarial loss (gain) — — — — — — Amortization of prior service cost — — — — — — Settlement expense (income) — 1 — — — — Net periodic benefit cost $ 1 $ 1 $ — $ — $ — $ — The expected long-term return on plan assets assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company's benefit plans, including those from dividends, interest income and capital appreciation. The assumption has been determined based on expectations regarding future rates of return for the plans' investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class. Pension related expenses are reflected in the Total costs of revenues and General and administrative expenses on the Consolidated Statement of Earnings (unaudited). A one percentage increase or decrease in healthcare trend rates in the table above would have an insignificant impact to our service and interest cost and the postretirement medical obligations.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share March 31, (Dollars in millions, except per share amounts; shares in millions 2023 2022 Net earnings attributable to common shareholders $ 12 $ 36 Basic weighted average number of shares outstanding 260 210 Impact of dilutive share-based awards 2 — Diluted weighted average number of shares outstanding 262 210 Earnings per share attributable to common shareholders - basic $ 0.05 $ 0.17 Earnings per share attributable to common shareholders - diluted $ 0.05 $ 0.17 For the period ended March 31, 2023, potential dilutive common shares primarily consisted of employee stock options, restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), however, the amount of dilutive securities included in the diluted weighted average number of shares outstanding was immaterial. For the period ended March 31, 2022, the basic and diluted weighted average number of shares outstanding were equal as there were no dilutive securities. The computation of diluted earnings per share (“EPS”) excludes the effect of the potential exercise of stock awards when the average market price of the common stock is lower than the exercise price of the stock awards during the period because the effect would be anti-dilutive. In addition, the computation of diluted EPS excludes

Commitment and Contingencies

Commitment and Contingencies	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments The Company’s commitments are primarily related to our lease agreements, purchase obligations, and credit agreements. Contingencies From time to time we are subject to certain legal proceedings and claims in the ordinary course of business. These matters are subject to many uncertainties and it is possible that some of these matters ultimately could be decided, resolved or settled in a manner adverse to us. Although the precise amount of liability that may result from these matters is not ascertainable, the Company believes that any amounts exceeding the Company's recorded accruals should not materially adversely affect the Company's financial condition or liquidity. It is possible, however, that the ultimate resolution of those matters could result in a material adverse effect on the Company's results of operations and/or cash flows from operating activities for a particular reporting period. We establish reserves for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Some environmental laws, such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (also known as “CERCLA” or the “Superfund law”) and similar state statutes, can impose liability upon former owners or operators for the entire cost of investigating and remediating contaminated sites regardless of the lawfulness of the original activities that led to the contamination. In July 2000, an entity which later became a subsidiary of the Company received a Section 104(e) Request for Information (“RFI”) from the National Park Service (“NPS”), pursuant to CERCLA, regarding the presence of radioactive material at a site within a national park, which site was operated by an alleged predecessor to our subsidiary over 50 years ago. Following the subsidiary’s response to the RFI, the NPS directed it and another alleged former operator to perform an Engineering Evaluation and Cost Analysis (“EE/CA”) of a portion of the site. The Company’s subsidiary made a good faith offer to conduct an alternative EE/CA work plan, but the NPS rejected this offer and opted to perform the EE/CA itself. The NPS previously posted its intention to open a formal public comment period regarding the EE/CA at the end of 2019. To the Company’s knowledge, the EE/CA has not been released and a public comment period has yet to be opened. Following completion of the EE/CA, the NPS may seek reimbursement for its investigative and remedial efforts to date, or direct one or more of the potentially responsible parties to perform any remediation that may be required by CERCLA or may enter an alternative dispute resolution proceeding to attempt to resolve each party’s share. In addition, the NPS may seek to recover damages for loss of use of certain natural resources. The Company believes that it has legitimate defenses to its subsidiary’s potential liability and that there are other potentially responsible parties for the environmental conditions at the site, including the U.S. government as owner, operator and arranger at the site. The potential liability associated with this matter could change substantially due to such factors as additional information on the nature or extent of contamination, methods of remediation that might be recommended or required, changes in the apportionment of costs among the responsible parties, whether the NPS seeks to recover additional damages, whether the NPS’s plans to investigate additional areas to identify a need for further remedial action for which the Company may be identified as a potentially responsible party and other actions by governmental agencies or private parties. The Company has recorded its best estimate of damages and its share of remediation costs related to the site to reflect what we and our advisors reasonably believe we would be liable for based on the current information and circumstances of the claim, exclusive of other potential liabilities that may be asserted in the future. In the performance of our contracts we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (“REAs”) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows. As a government contractor, with customers including the U.S. government as well as various state and local government entities, the Company may be subject to audits, investigations and claims with respect to its contract performance, pricing, costs, cost allocations and procurement practices. Additionally, amounts billed under such contracts, including direct and indirect costs, are subject to potential adjustments before final settlement. Management believes that adequate provisions for such potential audits, investigations, claims and contract adjustments, if any, have been made in the financial statements. Product Warranties Product warranty costs generally are accrued in proportion to product revenue realized in conjunction with our over-time revenue recognition policy. Product warranty expense is recognized based on the term of the product warranty, generally one year to three years, and the related estimated costs, considering historical claims expense. Accrued warranty costs are reduced as these costs are incurred and as the warranty period expires, and otherwise may be modified as specific product performance issues are identified and resolved. The following is a summary of changes in the product warranty balances during the period ended March 31, 2023: (Dollars in millions) Balance at December 31, 2022 $ 18 Additional provision 8 Reversal and utilization (3) Balance at Balance at March 31, 2023 23

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company has related-party sales with the ultimate majority stockholder and its other affiliates that occur in the regular course of business. Related-party sales for these transactions are included in revenues and were $6 million and $1 million for the periods ended March 31, 2023 and March 31, 2022, respectively. The Company has related-party purchases with the ultimate majority stockholder and its other affiliates that occur in the regular course of business. Related-party purchases for these transactions are included in cost of revenues and were $0 million and $0 million for the periods ended March 31, 2023 and March 31, 2022, respectively. The receivables related to these transactions with the ultimate majority stockholder and its other affiliates of $10 million and $14 million, respectively, and payables of $1 million and $1 million, respectively, are included in accounts receivable and accounts payable in our Consolidated Balance Sheet as of March 31, 2023 and December 31, 2022. In addition, there was a related-party balance in contract assets of $4 million and $5 million at March 31, 2023 and December 31, 2022, respectively.

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2023
Segment Reporting [Abstract]
Segment Information	Segment InformationOperating segments represent components of an enterprise for which separate financial information is available that is regularly reviewed by the CODM in determining how to allocate resources and assess performance. Our Chief Executive Officer is our CODM and he uses a variety of measures to assess the performance of the Company as a whole, depending on the nature of the activity. Beginning in the first quarter of 2022, the Company’s operating and reportable segments were revised into two reportable segments, ASC and IMS, to align our market strategy and capital allocation decision making with our operating structure. Prior year information was revised to reflect the new segment structure. All other operations, which consists primarily of DRS corporate headquarters and certain non-operating subsidiaries of the Company, are grouped in Corporate & Eliminations. We primarily use Adjusted EBITDA, a non-GAAP financial measure, to manage the Company and allocate resources. Adjusted EBITDA of our business segments includes our net earnings before income taxes, amortization of acquired intangible assets, depreciation, restructuring costs, interest, transaction costs related to an anticipated offering of securities, acquisition and divestiture related expenses, foreign exchange, the coronavirus pandemic (“COVID-19”) response costs, non-service pension expenditures and other one-time non-operational events. Adjusted EBITDA is used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business segments. This measure assists the CODM in assessing segment operating performance consistently over time without the impact of our capital structure, asset base and items outside the control of the management team and expenses that do not relate to our core operations. Certain information related to our segments for the periods ended March 31, 2023 and March 31, 2022 is presented in the following tables. Consistent accounting policies have been applied by all segments within the Company, within all reporting periods. A description of our reportable segments as of March 31, 2023 and March 31, 2022 has been included in Note 1: Summary of Significant Accounting Policies . Intersegment sales are generally transferred at cost to the buying segment, and the sourcing segment does not recognize a profit. Such intercompany operating income is eliminated in consolidation, so that the Company’s total revenues and operating earnings reflect only those transactions with external customers. Total revenues and intersegment revenues by segment for the periods ended March 31, 2023 and, March 31, 2022 consists of the following: Three Months Ended March 31, (Dollars in millions) 2023 2022 ASC $ 391 $ 396 IMS 189 218 Corporate & Eliminations (11) (2) Total revenue $ 569 $ 612 (Dollars in millions) 2023 2022 ASC $ 11 $ 2 IMS — — Total intersegment revenue $ 11 $ 2 Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following: (Dollars in millions) March 31, 2023 March 31, 2022 Adjusted EBITDA ASC $ 37 $ 32 IMS 12 41 Corporate & Eliminations — — Total Adjusted EBITDA 49 73 Amortization of intangibles (6) (2) Depreciation (16) (13) Interest expense (8) (8) Deal related transaction costs (2) (2) Other one-time non-operational events (1) — Income tax (provision) benefit (4) (12) Net earnings $ 12 $ 36

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Segment Reporting	Advanced Sensing and Computing (“ASC”) The Advanced Sensing and Computing (“ASC”) segment designs, develops and manufactures sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution by our customers. Our leading sensing capabilities span applications including missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared (“EO/IR”), signals intelligence (“SIGINT”) and other intelligence systems, electronic warfare (“EW”), ground vehicle sensing, next generation active electronically scanned array (“AESA”) tactical radars, dismounted soldier sensing and space sensing. Across our offering, we are focused on advancing sensor distance, precision, clarity, definition, spectral depth and effectiveness. Furthermore, we seek to leverage our multi-decade experience to optimize size, weight, power and cost tailored to our customers’ specific mission requirements. Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network computing products. Our network computing offering is utilized across a broad range of mission applications including platform computing on ground and shipboard (both surface ship and submarine) for advanced battle management, combat systems, radar, command and control (“C2”), tactical networks, tactical computing and communications. Our network computing products support the DoD’s need for greater situational understanding at the tactical edge and permits data to be rapidly transmitted securely from command centers to forward-positioned defense assets. Integrated Mission Systems (“IMS”) Our Integrated Mission Systems (“IMS”) segment designs, develops, manufactures and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation and logistics systems for the U.S. and allied defense customers. Our naval power and propulsion systems are providing next-generation power capabilities for the future fleet. DRS is currently a leading provider of next-generation electrical propulsion systems for the U.S. Navy. We provide power conversion, control, distribution and propulsion systems for the Navy’s top priority shipbuilding programs, including the Columbia Class ballistic missile submarine, the first modern U.S. electric drive submarine. We believe DRS is well positioned to meet the needs of an increasingly electrified fleet with our high-efficiency, power dense permanent magnet motors, energy storage systems and associated efficient, rugged and compact power conversion, electrical actuation systems, and advanced cooling technologies. DRS has a long history of providing a number of other critical products to the U.S. Navy with a significant installed base on submarines, aircraft carriers and other surface ships including motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems for electronics and ship stores refrigeration. Our technologies and systems help protect U.S. forces and assets against increasingly sophisticated and proliferating threats. DRS is an integrator of systems in ground vehicles for short-range air defense, counter-UAS (“C-UAS”), and vehicle survivability and protection. This integrator role includes utilizing radars, EW equipment, reconnaissance and surveillance systems, modular combat vehicle turrets, and stabilized sensor suites, and kinetic countermeasures for short-range air defense. Our force protection systems, including solutions for counter-unmanned aerial systems (C-UAS), short-range air defense systems and active protection systems used to defend ground combat vehicles help protect personnel and defense assets from these growing threats. Other The Company separately presents the unallocable costs associated with corporate functions and certain non-operating subsidiaries of the Company as Corporate & Eliminations.
Basis of Presentation	Basis of presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of DRS, its wholly owned subsidiaries and its controlling interests and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the periods presented. Interests in ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts significant influence, the Company applies the equity method of accounting. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation. Interim Financial Statements . The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. GAAP to be condensed or omitted.
New Accounting Pronouncements	New Accounting Pronouncements Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on our financial statements.
Revenue from Contracts with Customers	The Company recognizes revenue for each separately identifiable performance obligation in a contract representing an obligation to transfer a distinct good or service to a customer. In most cases, goods and services provided under the Company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the Company provides multiple distinct goods or services to a customer. In those cases, the Company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using cost plus a reasonable margin. We classify revenues as products or services on our Consolidated Statements of Earnings based on the predominant attributes of the performance obligations. While the Company provides warranties on certain contracts, we typically do not provide for services beyond standard assurances and therefore do not consider warranties to be separate performance obligations. Typically we enter into three types of contracts: fixed-price contracts, cost-plus contracts and time and material (“T&M”) contracts (cost-plus contracts and T&M contracts are aggregated below as flexibly priced contracts). The majority of our total revenues are derived from fixed-price contracts; refer to the revenue disaggregation disclosures that follow. For fixed-price contracts, customers agree to pay a fixed amount, negotiated in advanced for a specified scope of work. For cost-plus contracts, typically we are reimbursed for allowable or otherwise defined total costs (defined as cost of revenues plus allowable general and administrative expenses) incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness and cost-effectiveness. In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract. T&M contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs. The fixed labor rates on T&M contracts include amounts for the cost of direct labor, indirect contract costs and profit. Revenue from contracts with customers is recognized when the performance obligations are satisfied through the transfer of control over the good or service to the customer, which may occur either over time or at a point in time. Revenues for the majority of our contracts are measured using the over time, percentage of completion cost-to-cost method of accounting to calculate percentage of completion. We believe this is an appropriate measure of progress toward satisfaction of performance obligations as this measure most accurately depicts the progress of our work and transfer of control to our customers. Due to the long-term nature of many of our contracts, developing the estimated total cost at completion and total transaction price often requires judgment. Factors that must be considered in estimating the cost of the work to be completed include the nature and complexity of the work to be performed, subcontractor performance and the risk and impact of delayed performance. After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts on a routine basis. Adjustments to original estimates for a contract's revenue, estimated costs at completion and estimated profit or loss often are required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change and are also required if contract modifications occur. When adjustments in estimated total costs at completion or in estimated total transaction price are determined, the related impact on revenue and operating income are recognized using the cumulative catch-up method, which recognizes in the current period the cumulative effect of such adjustments for all prior periods. Any anticipated losses on these contracts are fully recognized in the period in which the losses become evident. production that is in progress and costs that will be recognized at a future point in time are reported within “inventories”. Costs to obtain a contract are incremental direct costs incurred to obtain a contract with a customer, including sales commissions and dealer fees, and are capitalized if material. Costs to fulfill a contract include costs directly related to a contract or specific anticipated contract (e.g., certain design costs) that generate or enhance our ability to satisfy our performance obligations under these contracts. These costs are capitalized to the extent they are expected to be recovered from the associated contract. Contract Assets and Liabilities The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities. Contract assets related to amounts withheld by customers until contract completion are not considered a significant financing component of our contracts because the intent is to protect the customers from our failure to satisfactorily complete our performance obligations. Payments received from customers in advance of revenue recognition (contract liabilities) are not considered a significant financing component of our contracts because they are utilized to pay for contract costs within a one-year period or are requested by us to ensure the customers meet their payment obligations. Value of Remaining Performance Obligations The value of remaining performance obligations, which we also refer to as total backlog, includes the following components: • Funded - Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. • Unfunded - Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts.
Intangible Assets	Other intangible assets mainly refer to the fair value of existing customer contractual relationships attributable to the acquired business and patents which are being amortized over their respective lives. The fair value of intangible assets typically is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows (including cash flows for working capital) arising from backlog and follow-on sales to the customer over their estimated lives, including the probability of expected future contract renewals and sales, less a contributory assets charge, all of which is discounted to present value.
Pension and Other Postretirement Benefits	The Company maintains multiple pension plans, both contributory and non-contributory, covering employees at certain locations. Eligibility requirements for participation in the plans vary, and benefits generally are based on the participant's compensation and years of service, as defined in the respective plan. The Company's funding policy generally is to contribute in accordance with cost accounting standards that affect government contractors, subject to the Tax Code and regulations thereunder. For all periods presented, the Company made no discretionary pension contributions. Plan assets are invested primarily in equities, bonds (both corporate and U.S. government), U.S. government-sponsored entity instruments, cash and cash equivalents and real estate. The Company also provides postretirement medical benefits for certain retired employees and dependents at certain locations. Participants are eligible for these benefits when they retire from active service and meet the eligibility requirements for the Company's postretirement benefit plans. The Company's contractual arrangements with the U.S. government provide for the recovery of contributions to a Voluntary Employees' Beneficiary Association trust and, for non-funded plans, recovery of claims on a pay-as-you-go basis, subject to the Tax Code and regulations thereunder, with the retiree generally paying a portion of the costs through contributions, deductibles and coinsurance provisions. The Company also maintains certain non-contributory and unfunded supplemental retirement plans. Eligibility for participation in the supplemental retirement plans is limited, and benefits generally are based on the participant's compensation and/or years of service.

Revenue from Contracts with C_2

Revenue from Contracts with Customers (Tables)	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Change in Estimate at Completion Adjustments	EAC adjustments had the following impacts to revenue for the periods presented: Three Months Ended March 31, (Dollars in millions) 2023 2022 Revenue $ (9) $ (1) Total % of Revenue 2 % — %
Schedule of Contract Assets and Contract Liabilities	(Dollars in millions) March 31, 2023 December 31, 2022 Contract assets $ 968 $ 872 Contract liabilities 247 233 Net contract assets $ 721 $ 639
Schedule of Remaining Performance Obligations, Expected Timing of Satisfaction	The following table summarizes the value of our total backlog as of March 31, 2023, incorporating both funded and unfunded components: Backlog: (Dollars in millions) March 31, 2023 Funded $ 2,947 Unfunded $ 1,325 Total Backlog $ 4,272
Schedule of Disaggregation of Revenue	We believe these categories best depict how the nature, amount, timing and uncertainty of ASC revenue and cash flows are affected by economic factors: Three Months Ended March 31, (Dollars in millions) 2023 2022 Revenue by Geographical Region United States $ 330 $ 372 International 50 22 Intersegment Sales 11 2 Total $ 391 $ 396 Revenue by Customer Relationship Prime contractor $ 162 $ 232 Subcontractor 218 162 Intersegment Sales 11 2 Total $ 391 $ 396 Revenue by Contract Type Firm Fixed Price $ 324 $ 342 Flexibly Priced (1) 56 52 Intersegment Sales 11 2 Total $ 391 $ 396 ________________ (1) Includes revenue derived from time-and-materials contracts. categories best depict how the nature, amount, timing and uncertainty of IMS revenue and cash flows are affected by economic factors: Three Months Ended March 31, (Dollars in millions) 2023 2022 Revenue by Geographical Region United States $ 186 $ 212 International 3 6 Intersegment Sales — — Total $ 189 $ 218 Revenue by Customer Relationship Prime contractor $ 46 $ 33 Subcontractor 143 185 Intersegment Sales — — Total $ 189 $ 218 Revenue by Contract Type Firm Fixed Price $ 155 $ 193 Flexibly Priced (1) 34 25 Intersegment Sales — — Total $ 189 $ 218 ________________ (1) Includes revenue derived from time-and-materials contracts.

Accounts Receivable (Tables)

Accounts Receivable (Tables)	3 Months Ended
	Mar. 31, 2023
Receivables [Abstract]
Schedule of Accounts Receivable	Accounts receivable consist of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Accounts receivable $ 159 $ 168 Less allowance for credit losses (1) (2) Accounts receivable, net $ 158 $ 166

Sale of Receivables (Tables)

Sale of Receivables (Tables)	3 Months Ended
	Mar. 31, 2023
Transfers and Servicing [Abstract]
Schedule of Sale of Receivables	Three months ended March 31, (Dollars in millions) 2023 2022 Beginning balance $ 243 $ 215 Sales of receivables 30 44 Cash returned to purchaser 192 164 Outstanding balance sold to purchasers (1) 81 95 Cash collected, not remitted to purchaser (2) 15 9 Remaining sold receivables $ (66) $ (86) ________________ (1) For the period ended March 31, 2023, the Company recorded a net decrease to cash flows from operating activities of $162 million and for the period ended March 31, 2022 a decrease to cash flow from operating activities of $120 million. (2) Represents cash collected on behalf of purchasers and not yet remitted.

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventories consists of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Raw materials $ 80 $ 83 Work in progress 272 224 Finished goods 12 12 Total $ 364 $ 319

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	3 Months Ended
	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property, Plant and Equipment	Property, plant and equipment by major asset class consists of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Land, buildings and improvements $ 333 $ 321 Plant and machinery 192 190 Equipment and other 329 335 Total property, plant and equipment, at cost 854 846 Less accumulated depreciation (452) (442) Total property, plant and equipment, net $ 402 $ 404

Other Liabilities (Tables)

Other Liabilities (Tables)	3 Months Ended
	Mar. 31, 2023
Other Liabilities Disclosure [Abstract]
Other Liabilities	A summary of significant other liabilities by balance sheet caption follows: (Dollars in millions) March 31, 2023 December 31, 2022 Salaries, wages and accrued bonuses $ 53 $ 63 Fringe benefits 63 76 Litigation 10 10 Restructuring costs 4 4 Provision for contract losses 51 54 Operating lease liabilities 27 25 Taxes Payable 10 31 Other (1) 46 60 Total other current liabilities $ 264 $ 323 Operating lease liabilities $ 68 $ 68 Taxes Payable 23 21 Other 20 9 Total other noncurrent liabilities $ 111 $ 98 ________________ (1) Consists primarily of environmental remediation reserves and warranty reserves. See Note 14: Commitments and Contingencies for more information regarding the warranty provision.

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets	The following disclosure presents certain information regarding the Company's intangible assets as of March 31, 2023 and December 31, 2022. All intangible assets are being amortized over their estimated useful lives, as indicated below, with no estimated residual values. March 31, 2023 December 31, 2022 (Dollars in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired Intangible Assets $ 1,087 $ (923) $ 164 $ 1,087 $ (918) $ 169 Patents and licenses 9 (6) 3 9 (6) 3 Total intangible assets $ 1,096 $ (929) $ 167 $ 1,096 $ (924) $ 172

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Schedule of Deferred Tax Assets and Liabilities	The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2023 and December 31, 2022 is as follows: (Dollars in millions) March 31, 2023 December 31, 2022 Deferred tax assets $ 208 $ 208 Less valuation allowance 17 17 Deferred tax assets 191 191 Deferred tax liabilities 125 125 Net deferred tax asset $ 66 $ 66

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Schedule of Debt	The Company’s debt consists of the following: (Dollars in millions) March 31, 2023 December 31, 2022 Term loan A $ 222 $ 225 Outstanding revolver 215 — Finance lease and other 160 161 Short-term borrowings 15 10 Total debt principal 612 396 Less unamortized debt issuance costs and discounts (2) (2) Total debt, net 610 394 Less short-term borrowings and current portion of long-term debt (250) (29) Total long-term debt $ 360 $ 365

Pension and Other Postretirem_2

Pension and Other Postretirement Benefits (Tables)	3 Months Ended
	Mar. 31, 2023
Retirement Benefits [Abstract]
Schedule of Net Benefit Costs	The following tables provide certain information regarding the Company's pension, postretirement and supplemental retirement plans as of for the three months ended March 31,: Defined Benefit Pension Plans Postretirement Benefit Plan Supplemental Retirement Plans (Dollars in millions) March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 Service cost $ — $ — $ — $ — $ — $ — Interest cost 2 2 — — — — Less Expected return on plan assets (1) (2) — — — — Amortization of net actuarial loss (gain) — — — — — — Amortization of prior service cost — — — — — — Settlement expense (income) — 1 — — — — Net periodic benefit cost $ 1 $ 1 $ — $ — $ — $ —

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	March 31, (Dollars in millions, except per share amounts; shares in millions 2023 2022 Net earnings attributable to common shareholders $ 12 $ 36 Basic weighted average number of shares outstanding 260 210 Impact of dilutive share-based awards 2 — Diluted weighted average number of shares outstanding 262 210 Earnings per share attributable to common shareholders - basic $ 0.05 $ 0.17 Earnings per share attributable to common shareholders - diluted $ 0.05 $ 0.17

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Schedule of Product Warranty Liability	The following is a summary of changes in the product warranty balances during the period ended March 31, 2023: (Dollars in millions) Balance at December 31, 2022 $ 18 Additional provision 8 Reversal and utilization (3) Balance at Balance at March 31, 2023 23

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2023
Segment Reporting [Abstract]
Schedule of Total Revenues and Intersegment Revenues by Segment	Total revenues and intersegment revenues by segment for the periods ended March 31, 2023 and, March 31, 2022 consists of the following: Three Months Ended March 31, (Dollars in millions) 2023 2022 ASC $ 391 $ 396 IMS 189 218 Corporate & Eliminations (11) (2) Total revenue $ 569 $ 612 (Dollars in millions) 2023 2022 ASC $ 11 $ 2 IMS — — Total intersegment revenue $ 11 $ 2
Schedule of Depreciation, Assets by Segment and EBITDA Reconciliation to Net Earnings	Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following: (Dollars in millions) March 31, 2023 March 31, 2022 Adjusted EBITDA ASC $ 37 $ 32 IMS 12 41 Corporate & Eliminations — — Total Adjusted EBITDA 49 73 Amortization of intangibles (6) (2) Depreciation (16) (13) Interest expense (8) (8) Deal related transaction costs (2) (2) Other one-time non-operational events (1) — Income tax (provision) benefit (4) (12) Net earnings $ 12 $ 36

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Concentration Risk (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2023 reporting_unit	Mar. 31, 2023 segment	Mar. 31, 2022
Concentration Risk [Line Items]
Number of reportable segments		2	2
U.S. Department Of Defense | Revenue from Contract with Customer Benchmark | Government Contracts Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	80%			85%
International And Commercial Customers | Revenue from Contract with Customer Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	20%			15%

Business Acquisitions and Dis_2

Business Acquisitions and Dispositions - Narrative (Details) $ in Millions	Nov. 28, 2022 USD ($)	Aug. 01, 2022 USD ($)	Jul. 08, 2022 USD ($)	Mar. 21, 2022 USD ($)
Advanced Acoustic Concepts
Business Acquisition [Line Items]
Proceeds from sale of equity method investments			$ 56
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Global Enterprise Solutions
Business Acquisition [Line Items]
Sale of business, consideration to be received				$ 450
Proceeds from divestiture of businesses		$ 427
RADA
Business Acquisition [Line Items]
Share exchange ratio	1
Preliminary aggregate purchase consideration	$ 511
Replacement share-based payment awards pre-combination vesting expense	20
Intangible Assets	131
Goodwill, acquired in business combination	284
RADA | Technology Related Assets
Business Acquisition [Line Items]
Intangible Assets	90
RADA | Acquired Intangible Assets
Business Acquisition [Line Items]
Intangible Assets	$ 41

Revenue from Contracts with C_3

Revenue from Contracts with Customers - Estimate at Completion Adjustments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Change in Accounting Estimate [Line Items]
Total revenues	$ 569	$ 612
Contracts Accounted for under Percentage of Completion
Change in Accounting Estimate [Line Items]
Total revenues	$ (9)	$ (1)
Total % of Revenue	2%	0%

Revenue from Contracts with C_4

Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 968	$ 872
Contract liabilities	247	233
Net contract assets	$ 721	$ 639

Revenue from Contracts with C_5

Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract with customer, liability, revenue recognized	$ 84	$ 74

Revenue from Contracts with C_6

Revenue from Contracts with Customers - Remaining Performance Obligations, Backlog Schedule (Details) $ in Millions	Mar. 31, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Funded	$ 2,947
Unfunded	1,325
Total Backlog	$ 4,272

Revenue from Contracts with C_7

Revenue from Contracts with Customers - Remaining Performance Obligations, Narrative (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01	Mar. 31, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	39%
Revenue, remaining performance obligation, expected timing of satisfaction, period	9 months

Revenue from Contracts with C_8

Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 569	$ 612
Intersegment Sales
Disaggregation of Revenue [Line Items]
Total revenues	(11)	(2)
ASC | Prime contractor
Disaggregation of Revenue [Line Items]
Total revenues	162	232
ASC | Subcontractor
Disaggregation of Revenue [Line Items]
Total revenues	218	162
ASC | Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total revenues	324	342
ASC | Flexibly Priced
Disaggregation of Revenue [Line Items]
Total revenues	56	52
ASC | Intersegment Sales
Disaggregation of Revenue [Line Items]
Total revenues	11	2
ASC | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	391	396
IMS | Prime contractor
Disaggregation of Revenue [Line Items]
Total revenues	46	33
IMS | Subcontractor
Disaggregation of Revenue [Line Items]
Total revenues	143	185
IMS | Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total revenues	155	193
IMS | Flexibly Priced
Disaggregation of Revenue [Line Items]
Total revenues	34	25
IMS | Intersegment Sales
Disaggregation of Revenue [Line Items]
Total revenues	0	0
IMS | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	189	218
United States | ASC
Disaggregation of Revenue [Line Items]
Total revenues	330	372
United States | IMS
Disaggregation of Revenue [Line Items]
Total revenues	186	212
International | ASC
Disaggregation of Revenue [Line Items]
Total revenues	50	22
International | IMS
Disaggregation of Revenue [Line Items]
Total revenues	$ 3	$ 6

Accounts Receivable - Summary (

Accounts Receivable - Summary (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Accounts receivable	$ 159	$ 168
Less allowance for credit losses	(1)	(2)
Accounts receivable, net	$ 158	$ 166

Accounts Receivable - Narrative

Accounts Receivable - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Collection of sold receivables	$ 15	$ 10

Sale of Receivables - Narrative

Sale of Receivables - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($)
Transfers and Servicing [Abstract]
Sale of receivable, aggregate capacity	$ 325

Sale of Receivables - Schedule

Sale of Receivables - Schedule of Sale of Receivables (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Transfer Of Financial Assets Accounted For As Sales [Roll Forward]
Beginning balance	$ 243	$ 215
Sales of receivables	30	44
Cash returned to purchaser	192	164
Outstanding balance sold to purchasers	81	95
Cash collected, not remitted to purchaser	15	9
Remaining sold receivables	(66)	(86)
Increase (decrease) to cash flows from operating activities, attributable to transfer of financial assets accounted for as sales	$ (162)	$ (120)

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 80	$ 83
Work in progress	272	224
Finished goods	12	12
Total	$ 364	$ 319

Property, Plant and Equipment -

Property, Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 854	$ 846
Less accumulated depreciation	(452)	(442)
Total property, plant and equipment, net	402	404
Land, buildings and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	333	321
Plant and machinery
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	192	190
Equipment and other
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 329	$ 335

Property, Plant and Equipment_2

Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 16	$ 13

Other Liabilities (Details)

Other Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Salaries, wages and accrued bonuses	$ 53	$ 63
Fringe benefits	63	76
Litigation	10	10
Restructuring costs	4	4
Provision for contract losses	51	54
Operating lease liabilities	27	25
Taxes Payable	10	31
Other	$ 46	$ 60
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Total other current liabilities	Total other current liabilities
Total other current liabilities	$ 264	$ 323
Operating lease liabilities	68	68
Taxes Payable	23	21
Other	$ 20	$ 9
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Total other noncurrent liabilities	Total other noncurrent liabilities
Total other noncurrent liabilities	$ 111	$ 98

Intangible Assets - Summary (De

Intangible Assets - Summary (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,096	$ 1,096
Accumulated Amortization	(929)	(924)
Net Carrying Amount	167	172
Acquired Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,087	1,087
Accumulated Amortization	(923)	(918)
Net Carrying Amount	164	169
Patents and licenses
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	9	9
Accumulated Amortization	(6)	(6)
Net Carrying Amount	$ 3	$ 3

Intangible Assets - Narrative (

Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 6	$ 2
Minimum | Acquired Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	10 years
Minimum | Patents and licenses
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	5 years
Maximum | Acquired Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	15 years
Maximum | Patents and licenses
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	10 years

Income Taxes - Deferred Tax Ass

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Deferred tax assets	$ 208	$ 208
Less valuation allowance	17	17
Deferred tax assets	191	191
Deferred tax liabilities	125	125
Net deferred tax asset	$ 66	$ 66

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Tax deferred asset	$ 8	$ 8

Debt - Schedule of Long-Term De

Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Finance lease and other	$ 160	$ 161
Short-term borrowings	15	10
Total debt principal	612	396
Less unamortized debt issuance costs and discounts	(2)	(2)
Total debt, net	610	394
Less short-term borrowings and current portion of long-term debt	(250)	(29)
Total long-term debt	360	365
Term loan A | Notes Payable, Other Payables
Debt Instrument [Line Items]
Long-term debt, gross	222	225
Outstanding revolver | Notes Payable, Other Payables
Debt Instrument [Line Items]
Long-term debt, gross	$ 215	$ 0

Debt - Narrative (Details)

Debt - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 30, 2022	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Collection of sold receivables		$ 15,000,000	$ 10,000,000
2022 Credit Agreement | Notes Payable, Other Payables
Debt Instrument [Line Items]
Credit limit	$ 500,000,000
Term loan A | Notes Payable, Other Payables
Debt Instrument [Line Items]
Principal amount	$ 225,000,000
Long-Term Debt		222,000,000
Fair value of long-term debt		222,000,000
Long-term debt, gross		222,000,000	225,000,000
Term loan A | Notes Payable, Other Payables | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum
Debt Instrument [Line Items]
Variable rate percentage	1.48%
Term loan A | Notes Payable, Other Payables | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum
Debt Instrument [Line Items]
Variable rate percentage	2.10%
Outstanding revolver | Notes Payable, Other Payables
Debt Instrument [Line Items]
Credit limit		275,000,000	275,000,000
Long-term debt, gross		$ 215,000,000	0
Debt, weighted average interest rate		5.06%
Outstanding revolver | Notes Payable, Other Payables | Minimum
Debt Instrument [Line Items]
Commitment fee percentage		0.20%
Outstanding revolver | Notes Payable, Other Payables | Maximum
Debt Instrument [Line Items]
Commitment fee percentage		0.35%
Outstanding revolver | Notes Payable, Other Payables | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum
Debt Instrument [Line Items]
Variable rate percentage		1.48%
Outstanding revolver | Notes Payable, Other Payables | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum
Debt Instrument [Line Items]
Variable rate percentage		2.10%
Financial Institution Credit Facilities | Line of Credit
Debt Instrument [Line Items]
Credit limit		$ 65,000,000	65,000,000
Letters of credit outstanding		41,000,000	36,000,000
Financial Institution Credit Facilities | Line of Credit | Outstanding revolver
Debt Instrument [Line Items]
Credit limit		$ 15,000,000
Line of credit outstanding			$ 0
Financial Institution Credit Facilities | Line of Credit | Outstanding revolver | LIBOR
Debt Instrument [Line Items]
Variable rate percentage		0.50%

Pension and Other Postretirem_3

Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 0
Interest cost	2	2
Less Expected return on plan assets	(1)	(2)
Amortization of net actuarial loss (gain)	0	0
Amortization of prior service cost	0	0
Settlement expense (income)	0	1
Net periodic benefit cost	1	1
Other Postretirement Benefits Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	0	0
Less Expected return on plan assets	0	0
Amortization of net actuarial loss (gain)	0	0
Amortization of prior service cost	0	0
Settlement expense (income)	0	0
Net periodic benefit cost	0	0
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	0	0
Less Expected return on plan assets	0	0
Amortization of net actuarial loss (gain)	0	0
Amortization of prior service cost	0	0
Settlement expense (income)	0	0
Net periodic benefit cost	$ 0	$ 0

Earnings Per Share - Narrative

Earnings Per Share - Narrative (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	1.4	0

Earnings Per Share - Schedule o

Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net earnings attributable to common shareholders, basic	$ 12	$ 36
Net earnings attributable to common shareholders, diluted	$ 12	$ 36
Basic weighted average number of shares outstanding (in shares)	260	210
Impact of dilutive share-based awards (in shares)	2	0
Diluted weighted average number of shares outstanding (in shares)	262	210
Earnings per share attributable to common shareholders - basic (in dollars per share)	$ 0.05	$ 0.17
Earnings per share attributable to common shareholders - diluted (in dollars per share)	$ 0.05	$ 0.17

Commitment and Contingencies (D

Commitment and Contingencies (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at December 31, 2022	$ 18
Additional provision	8
Reversal and utilization	(3)
Balance at March 31, 2023	$ 23
Minimum
Product Warranty Liability [Line Items]
Product warranty term	1 year
Maximum
Product Warranty Liability [Line Items]
Product warranty term	3 years

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Contract assets	$ 968		$ 872
Affiliated Entity | Hoverfly
Related Party Transaction [Line Items]
Revenue from related parties	6	$ 1
Affiliated Entity | Leonardo S.p.A.
Related Party Transaction [Line Items]
Related parties amount in cost of sales	0	$ 0
Receivables	10		14
Payables	1		1
Contract assets	$ 4		$ 5

Segment Information - Narrative

Segment Information - Narrative (Details) - 3 months ended Mar. 31, 2023	reporting_unit	segment
Segment Reporting [Abstract]
Number of reportable segments	2	2

Segment Information - Revenues

Segment Information - Revenues and Intersegment Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Revenue	$ 569	$ 612
Operating Segments | ASC
Segment Reporting Information [Line Items]
Revenue	391	396
Operating Segments | IMS
Segment Reporting Information [Line Items]
Revenue	189	218
Corporate & Eliminations
Segment Reporting Information [Line Items]
Revenue	(11)	(2)
Corporate & Eliminations | ASC
Segment Reporting Information [Line Items]
Revenue	11	2
Corporate & Eliminations | IMS
Segment Reporting Information [Line Items]
Revenue	$ 0	$ 0

Segment Information - EBITDA Re

Segment Information - EBITDA Reconciliation to Net Earnings (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Adjusted EBITDA
Adjusted EBITDA	$ 49	$ 73
Amortization of intangibles	(6)	(2)
Depreciation	(16)	(13)
Interest expense	(8)	(8)
Deal related transaction costs	(2)	(2)
Other one-time non-operational events	(1)	0
Income tax (provision) benefit	(4)	(12)
Net earnings	12	36
Operating Segments | ASC
Adjusted EBITDA
Adjusted EBITDA	37	32
Operating Segments | IMS
Adjusted EBITDA
Adjusted EBITDA	12	41
Corporate & Eliminations
Adjusted EBITDA
Adjusted EBITDA	$ 0	$ 0