Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 21, 2017 | Jul. 01, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | ORBITAL ATK, INC. | ||
Entity Central Index Key | 866,121 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4,924 | ||
Entity Common Stock, Shares Outstanding | 57,721,899 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | |||
Sales | $ 3,391 | $ 4,455 | $ 3,113 |
Cost of sales | 2,717 | 3,470 | 2,412 |
Gross profit | 674 | 985 | 701 |
Operating expenses: | |||
Research and development | 83 | 116 | 49 |
Selling | 88 | 107 | 90 |
General and administrative | 220 | 290 | 305 |
Goodwill impairment | 0 | 0 | 34 |
Gain on settlement | 50 | 0 | 0 |
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest | 333 | 472 | 223 |
Interest expense, net | (61) | (68) | (89) |
Loss on extinguishment of debt | 0 | 0 | (27) |
Income (loss) from continuing operations, before income taxes and noncontrolling interest | 272 | 404 | 107 |
Income taxes | 87 | 111 | 37 |
Income from continuing operations | 185 | 293 | 70 |
Less net income attributable to noncontrolling interest | 0 | 0 | 0 |
Income (loss) from continuing operations of Orbital ATK, Inc. | 185 | 293 | 70 |
Income from discontinued operations, before income taxes | 0 | 0 | 205 |
Income taxes | (1) | 0 | 80 |
Income from discontinued operations | 1 | 0 | 125 |
Net income attributable to Orbital ATK, Inc. | $ 186 | $ 293 | $ 195 |
Basic earnings (loss) per common share from: | |||
Continuing operations (in dollars per share) | $ 3.12 | $ 5.05 | $ 1.96 |
Discontinued operations (in dollars per share) | 0.02 | 0 | 3.53 |
Basic (in dollars per share) | $ 3.14 | $ 5.05 | $ 5.49 |
Weighted-average number of common shares outstanding, basic (in shares) | 59,360 | 57,990 | 35,470 |
Diluted earnings (loss) per common share from: | |||
Continuing operations (in dollars per share) | $ 3.09 | $ 5.01 | $ 1.93 |
Discontinued operations (in dollars per share) | 0.02 | 0 | 3.46 |
Diluted (in dollars per share) | $ 3.11 | $ 5.01 | $ 5.39 |
Weighted-average number of common shares outstanding, diluted (in shares) | 59,920 | 58,460 | 36,140 |
Cash dividends per common share (in dollars per share) | $ 0.78 | $ 1.2 | $ 1.28 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 186 | $ 293 | $ 195 |
Pension and other postretirement benefits: | |||
Prior service credits for pension and postretirement benefit plans recorded to net income | (21) | (27) | (30) |
Net actuarial loss for pension and postretirement benefit plans recorded to net income | 114 | 127 | 22 |
Valuation adjustment for pension and postretirement benefit plans | 8 | (79) | (364) |
Change in fair value of derivatives | (2) | 12 | 5 |
Other | 1 | 2 | 0 |
Realization of cumulative translation adjustment | 0 | 0 | (37) |
Income tax expense (benefit) | (38) | (13) | 141 |
Other comprehensive income (loss), net of tax | 62 | 22 | (263) |
Comprehensive income (loss) | 248 | 315 | (68) |
Comprehensive income attributable to non-controlling interests in Orbital ATK, Inc. | 0 | 0 | 0 |
Comprehensive income (loss) attributable to Orbital ATK, Inc. | $ 248 | $ 315 | $ (68) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 200 | $ 104 |
Net receivables | 1,741 | 1,671 |
Net inventories | 215 | 213 |
Income taxes receivable | 0 | 51 |
Other current assets | 79 | 90 |
Total current assets | 2,235 | 2,129 |
Net property, plant and equipment | 816 | 762 |
Goodwill | 1,832 | 1,828 |
Net intangibles | 98 | 147 |
Deferred income taxes | 254 | 319 |
Other noncurrent assets | 183 | 139 |
Total assets | 5,418 | 5,324 |
Current liabilities: | ||
Current portion of long-term debt | 40 | 40 |
Accounts payable | 175 | 131 |
Contract-related liabilities | 394 | 381 |
Contract loss reserve | 197 | 236 |
Contract advances and allowances | 233 | 172 |
Accrued compensation | 120 | 128 |
Other current liabilities | 183 | 166 |
Total current liabilities | 1,342 | 1,254 |
Long-term debt | 1,398 | 1,436 |
Pension and postemployment benefits | 744 | 821 |
Other noncurrent liabilities | 117 | 127 |
Total liabilities | 3,601 | 3,638 |
Commitments and contingencies (Notes 13, 15 and 16) | ||
Stockholders' Equity | ||
Common stock—$.01 par value: authorized—180,000,000 shares; issued and outstanding— 57,487,466 shares held at December 31, 2016 and 58,729,995 shares held at December 31, 2015 | 1 | 1 |
Additional paid-in-capital | 2,175 | 2,188 |
Retained earnings | 1,266 | 1,043 |
Accumulated other comprehensive loss | (764) | (786) |
Common stock in treasury, at cost— 11,447,558 shares held at December 31, 2016 and 10,205,029 shares held at December 31, 2015 | (872) | (771) |
Total Orbital ATK, Inc. stockholders' equity | 1,806 | 1,675 |
Noncontrolling interest | 11 | 11 |
Total equity | 1,817 | 1,686 |
Total liabilities and equity | $ 5,418 | $ 5,324 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 180,000,000 | 180,000,000 |
Common stock, issued shares | 57,487,466 | 58,729,995 |
Common stock, outstanding shares | 57,487,466 | 58,729,995 |
Common stock in treasury, shares | 11,447,558 | 10,205,029 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Operating Activities | |||
Net income | $ 186 | $ 293 | $ 195 |
Net income from discontinued operations | (1) | 0 | (125) |
Income from continuing operations | 185 | 293 | 70 |
Adjustments to reconcile income from continuing operations to cash provided by operating activities of continuing operations: | |||
Depreciation | 89 | 116 | 73 |
Amortization of intangible assets | 33 | 43 | 9 |
Amortization of debt discount | 0 | 0 | 3 |
Amortization and write-off of deferred financing costs | 13 | 2 | 5 |
Goodwill impairment | 0 | 0 | 34 |
Fixed asset impairment | 8 | 10 | 17 |
Loss on the extinguishment of debt | 0 | 0 | 27 |
Deferred income taxes | 58 | 42 | 12 |
Loss on disposal of property | 11 | 6 | 2 |
Share-based plans expense | 19 | 21 | 25 |
Excess tax benefits from share-based plans | (5) | 0 | (7) |
Other | 0 | 4 | 0 |
Changes in assets and liabilities: | |||
Net receivables | 17 | (88) | 10 |
Net inventories | (16) | (9) | 14 |
Income taxes receivable | (19) | 50 | (31) |
Accounts payable | (29) | 38 | 56 |
Contract advances and allowances | (1) | 61 | (6) |
Contract loss reserve | (27) | (26) | (74) |
Accrued compensation | (10) | (5) | (31) |
Contract-related liabilities | (19) | 39 | 95 |
Pension and postemployment benefits | (4) | (71) | (42) |
Other assets and liabilities | 0 | (7) | (70) |
Cash provided by operating activities of continuing operations | 303 | 519 | 191 |
Cash provided by operating activities of discontinued operations | 0 | 0 | 120 |
Cash provided by operating activities | 303 | 519 | 311 |
Investing Activities | |||
Capital expenditures | (105) | (187) | (113) |
Cash acquired in Merger with Orbital | 0 | 0 | 254 |
Cash dividend (refunded to) received from Vista Outdoor, net of cash transferred to Vista Outdoor in conjunction with the Distribution of Sporting Group | (6) | 0 | 189 |
Proceeds from the disposition of property, plant and equipment | 0 | 4 | 2 |
Cash (used in) provided by investing activities of continuing operations | (111) | (183) | 332 |
Cash used in investing activities of discontinued operations | 0 | 0 | (31) |
Cash (used in) provided by investing activities | (111) | (183) | 301 |
Financing Activities | |||
Credit facility borrowings | 745 | 930 | 878 |
Credit facility payments | (745) | (930) | (878) |
Payments made on bank debt | (25) | (40) | (58) |
Payments made to extinguish debt | (1,274) | 0 | (777) |
Proceeds from issuance of long-term debt | 1,200 | 0 | 150 |
Payments made for debt issue costs | (10) | 0 | (1) |
Purchase of treasury shares | (81) | (134) | (17) |
Dividends paid | (46) | (70) | (41) |
Proceeds from employee stock compensation plans | 4 | 4 | 0 |
Excess tax benefits from share-based plans | 5 | 0 | 7 |
Cash used in financing activities of continuing operations | (227) | (240) | (737) |
Effect of foreign currency exchange rate fluctuations on cash | 0 | 0 | (3) |
Increase (Decrease) in cash and cash equivalents | (35) | 96 | (128) |
Cash and cash equivalents at beginning of period | 139 | 104 | 267 |
Cash and cash equivalents at end of period | 104 | 200 | 139 |
Supplemental Cash Flow Disclosures | |||
Cash paid for interest, net | 41 | 62 | 78 |
Cash paid for income taxes, net | $ 26 | $ 36 | $ 143 |
Noncash financing activity: | |||
Issuance of shares for noncash assets and liabilities of Orbital | 0 | 0 | 1,504 |
Noncash investing activity: | |||
Capital expenditures included in accounts payable of continuing operations | $ 5 | $ 7 | $ 3 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Common Stock $.01 Par Value | Additional Paid-in-capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interest |
Balance at Mar. 31, 2014 | $ 1,677 | $ 1 | $ 534 | $ 2,544 | $ (681) | $ (732) | $ 11 |
Balance (in shares) at Mar. 31, 2014 | 31,842,642 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Comprehensive income (loss) | $ (68) | 195 | (263) | 0 | |||
Exercise of stock options (in shares) | 0 | ||||||
Restricted stock grants | (11) | 11 | |||||
Restricted stock grants (in shares) | 128,316 | ||||||
Share-based compensation | $ 25 | 25 | |||||
Shares issued net of treasury stock withheld | (10) | (19) | 9 | ||||
Shares issued net of treasury stock withheld (in shares) | 150,658 | ||||||
Tax benefit related to share based plans and other | 6 | 6 | |||||
Dividends | (57) | (57) | |||||
Employee benefit plans and other | (6) | $ 0 | 1 | (7) | |||
Employee benefit plans and other (in shares) | (73,179) | ||||||
Convertible debt premium, net of tax of $43 | (112) | (112) | |||||
Convertible debt premium, net of tax of $43 (in shares) | 20,678 | ||||||
Distribution of Sporting Group | (1,692) | (1,788) | 96 | ||||
Merger with Orbital | 1,758 | $ 0 | 1,758 | ||||
Merger with Orbital (in shares) | 27,358,827 | ||||||
Balance at Mar. 31, 2015 | 1,521 | $ 1 | 2,182 | 894 | (848) | (719) | 11 |
Balance (in shares) at Mar. 31, 2015 | 59,427,942 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Comprehensive income (loss) | 248 | 186 | 62 | 0 | |||
Exercise of stock options | 4 | (5) | 9 | ||||
Exercise of stock options (in shares) | 121,477 | ||||||
Restricted stock grants | 0 | (7) | 7 | ||||
Restricted stock grants (in shares) | 67,529 | ||||||
Share-based compensation | 20 | 20 | |||||
Treasury stock purchased | (76) | (76) | |||||
Treasury stock purchased (in shares) | (1,008,445) | ||||||
Shares issued net of treasury stock withheld | (5) | (15) | 10 | ||||
Shares issued net of treasury stock withheld (in shares) | 125,717 | ||||||
Tax benefit related to share based plans and other | 11 | 11 | |||||
Dividends | (31) | (31) | |||||
Employee benefit plans and other | 0 | $ 0 | 2 | (2) | |||
Employee benefit plans and other (in shares) | (4,225) | ||||||
Distribution of Sporting Group | (6) | (6) | |||||
Balance at Dec. 31, 2015 | 1,686 | $ 1 | 2,188 | 1,043 | (786) | (771) | 11 |
Balance (in shares) at Dec. 31, 2015 | 58,729,995 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Comprehensive income (loss) | 315 | 293 | 22 | ||||
Exercise of stock options | 0 | (2) | 2 | ||||
Exercise of stock options (in shares) | 32,175 | ||||||
Restricted stock grants | 0 | (13) | 13 | ||||
Restricted stock grants (in shares) | 176,800 | ||||||
Share-based compensation | 21 | 21 | |||||
Treasury stock purchased | (124) | (124) | |||||
Treasury stock purchased (in shares) | (1,570,333) | ||||||
Shares issued net of treasury stock withheld | (4) | (16) | 12 | ||||
Shares issued net of treasury stock withheld (in shares) | 172,582 | ||||||
Tax benefit related to share based plans and other | (4) | (4) | |||||
Dividends | (70) | (70) | |||||
Employee benefit plans and other | (3) | 1 | (4) | ||||
Employee benefit plans and other (in shares) | (53,753) | ||||||
Balance at Dec. 31, 2016 | $ 1,817 | $ 1 | $ 2,175 | $ 1,266 | $ (764) | $ (872) | $ 11 |
Balance (in shares) at Dec. 31, 2016 | 57,487,466 |
CONSOLIDATED STATEMENTS OF EQU8
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) $ in Millions | 12 Months Ended |
Mar. 31, 2015USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Convertible debt, tax | $ 43 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations. Orbital ATK, Inc. (the "Company") is an aerospace and defense systems company and supplier of related products to the U.S. Government, allied nations and prime contractors. The Company is headquartered in Dulles, Virginia and has operating locations throughout the United States. The Company was incorporated in Delaware in 1990. On February 9, 2015, the Company completed a tax-free spin-off of and distribution of its former Sporting Group to its stockholders (the "Distribution") as a new public company called Vista Outdoor Inc. ("Vista Outdoor"). Immediately following the Distribution, the Company combined with Orbital Sciences Corporation ("Orbital") through the merger of a Company subsidiary with Orbital (the "Merger"). These transactions are discussed in greater detail in Note 4, Merger and Divestiture . Following the Distribution and Merger, the Company changed its name from Alliant Techsystems Inc. to Orbital ATK, Inc. As a result of the Distribution, the Sporting Group is reported as a discontinued operation for all prior periods presented. The Company used the acquisition method to account for the Merger; accordingly, the results of Orbital are included in the Company's consolidated financial statements since the date of the Merger. Basis of Presentation. The consolidated financial statements of the Company include all majority-owned affiliates. Intercompany transactions and accounts have been eliminated. The business formerly comprising Sporting Group is presented as discontinued operations - See Note 4. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation, specifically "Postretirement and postemployment benefits" was aggregated into "Pension and postemployment benefits" in the Company's consolidated balance sheets. The consolidated financial statements for the nine-month transition period ended December 31, 2015 ("2015 transition period") and the fiscal year ended March 31, 2015 (see below for discussion of fiscal year) were previously restated and included in Amendment No. 1 to the Company’s Transition Report on Form 10-K/A for the nine-month period ending December 31, 2015 filed with the Securities and Exchange Commission on February 24, 2017. Fiscal Year. Beginning January 1, 2016, the Company changed its fiscal year from the period beginning on April 1 and ending on March 31 to the period beginning on January 1 and ending on December 31. As a result, for the previous fiscal period ended December 31, 2015, in these consolidated statements, including the notes thereto, the financial results are for a nine-month transition period ended December 31, 2015. Audited results for the twelve months ended December 31, 2016 and March 31, 2015 are for a twelve-month period. All references herein to a fiscal year prior to December 31, 2015 refer to the twelve months ended March 31 of such year. Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. Revenue Recognition. The Company's sales come primarily from contracts with agencies of the U.S. Government and its prime contractors and subcontractors. The various U.S. Government customers, including the U.S. Navy, U.S. Army, NASA and the U.S. Air Force, make independent purchasing decisions. Consequently, each agency is regarded as a separate customer. Contracts — Substantially all of the Company's sales are accounted for as long-term contracts. Sales under long-term contracts are accounted for under the percentage-of-completion method and include cost-plus and fixed-price contracts. Sales under cost-plus contracts are recognized as costs are incurred. Sales under fixed-price contracts are either recognized as the actual cost of work performed relates to the estimate at completion ("cost-to-cost") or based on results achieved, which usually coincides with customer acceptance ("units-of-delivery"). The majority of the Company's total revenue is accounted for using the cost-to-cost method of accounting. Profits expected to be realized on contracts are based on management's estimates of total contract sales value and costs at completion. Estimated amounts for contract changes, including scope and claims, are included in contract sales only when realization is estimated to be probable. Assumptions used for recording sales and earnings are adjusted in the period of change to reflect revisions in contract value and estimated costs. In the period in which it is determined that a loss will be incurred on a contract, the entire amount of the estimated loss, based on gross profit along with general and administrative costs, is charged to cost of sales. Changes in estimates of contract sales, costs or profits are recognized using the cumulative catch-up method of accounting. The cumulative effect of a change in estimate is recognized in the period a change in estimate occurs. The effect of the changes on future periods of contract performance is recognized as if the revised estimate had been used since contract inception or, in the case of contracts acquired in business combinations, from the date of acquisition. Changes in contract estimates occur for a variety of reasons including changes in contract scope, unforeseen changes in contract cost estimates due to unanticipated cost growth or risks affecting contract costs and/or the resolution of contract risks at lower costs than anticipated, termination of commercial contracts in the event of a lack of end user demand, as well as changes in contract overhead costs over the performance period. Changes in estimates could have a material effect on the Company's consolidated financial position or annual results of operations. Aggregate net changes in contract estimates recognized using the cumulative catch-up method of accounting increased operating income by approximately $81 million for the year ended December 31, 2016 , approximately $38 million in the 2015 transition period , and approximately $92 million in fiscal 2015 . Estimated costs to complete on loss contracts at December 31, 2016 and 2015 are $1,333 million and $1,392 million , respectively. Contracts may contain provisions to earn incentive and award fees if specified targets are achieved as well as penalty provisions related to performance. Incentive and award fees and penalties that can be reasonably estimated and are probable are recorded over the performance period of the contract. Incentive and award fees that cannot be reasonably estimated are recorded when awarded. Other — Sales not recognized under the long-term contract method are recognized when persuasive evidence of an arrangement exists, the product has been delivered and legal title and all risks of ownership have been transferred, written contract and sales terms are complete, customer acceptance has occurred and payment is reasonably assured. Sales are reduced for allowances and price discounts. Operating Expenses. Research and development, selling and general and administrative costs are expensed in the period incurred. Research and development costs include costs incurred for experimentation and design testing. Selling costs include bid and proposal efforts related to products and services. Costs that are incurred pursuant to contractual arrangements are recorded over the period that revenue is recognized, consistent with the Company's contract accounting policy. Environmental Remediation and Compliance. Costs associated with environmental compliance, restoration and preventing future contamination that are estimable and probable are accrued and expensed, or capitalized as appropriate. Expected remediation, restoration and monitoring costs relating to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are accrued and expensed in the period that such costs become estimable. Liabilities are recognized for remedial and resource restoration activities when they are probable and the cost can be reasonably estimated. The Company expects that a portion of its environmental remediation costs will be recoverable under U.S. Government contracts and has recorded a receivable equal to the present value of the amounts the Company expects to recover. The Company's engineering, financial and legal specialists estimate, based on current law and existing technologies, the cost of each environmental liability. Such estimates are based primarily upon the estimated cost of investigation and remediation required and the likelihood that other potentially responsible parties ("PRPs") will be able to fulfill their commitments at the sites where the Company may be jointly and severally liable. The Company's estimates for environmental obligations are dependent on, and affected by, the nature and extent of historical information and physical data relating to a contaminated site, the complexity of the site, methods of remediation available, the technology that will be required, the outcome of discussions with regulatory agencies and other PRPs at multi-party sites, the number and financial viability of other PRPs, changes in environmental laws and regulations, future technological developments, and the timing of expenditures; accordingly, the Company periodically evaluates and revises such estimates based on expenditures against established reserves and the availability of additional information. Cash Equivalents. Cash equivalents are all highly liquid cash investments purchased with original maturities of three months or less. Marketable Securities. Investments in a common collective trust that primarily invests in fixed income securities are classified as available-for-sale securities and are recorded at fair value within other current assets and deferred charges and other noncurrent assets on the consolidated balance sheet. Unrealized gains and losses are recorded in other comprehensive (loss) income ("OCI"). When such investments are sold, the unrealized gains or losses are reversed from OCI and recognized in the consolidated income statement. Net Inventories. Inventories are stated at the lower of cost or market. Inventoried costs relating to contracts in progress are stated at actual production costs, including factory overhead, initial tooling and other related costs incurred to date, reduced by amounts associated with recognized sales. Recorded amounts for raw materials, work in process and finished goods are generally determined using the average cost method. Net Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated over estimated useful lives. Machinery and equipment is depreciated using the double declining balance method at most of the Company's facilities, and using the straight-line method at other Company facilities. Other depreciable property is depreciated using the straight-line method. Machinery and equipment is depreciated over 1 to 30 years and buildings and improvements is depreciated over 1 to 45 years. Property, plant and equipment is reviewed for impairment when indicators of potential impairment are present. When such impairment is identified, it is recorded as a loss in that period. Maintenance and repairs are charged to expense as incurred. Major improvements that extend useful lives are capitalized and depreciated. The cost and accumulated depreciation of property, plant and equipment retired or otherwise disposed of are removed from the related accounts, and any residual values are charged or credited to income. Accounting for Goodwill and Identifiable Intangible Assets. Goodwill — Historically, the Company has tested goodwill for impairment on January 1 or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired. During 2015, the Company changed its fiscal year end to December 31st and as a result, has changed the timing of impairment testing, primarily in order to better align the timing with our annual operating plan, forecasting and budgeting process, to the first day of the fourth quarter and whenever events or circumstances indicate that the carrying value of goodwill may not be recoverable. The 2016 impairment analysis date was October 3rd. The Company determined that the reporting units for its goodwill impairment review are its operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available, and for which segment management regularly reviews the operating results. The impairment test is performed using a two -step process. In the first step, the Company estimates the fair value of each reporting unit and compares it to the carrying value of the reporting unit, including goodwill. If the carrying amount of a reporting unit is higher than its fair value, an indication of goodwill impairment exists and the second step is performed in order to determine the amount of the goodwill impairment. In the second step, the Company determines the implied fair value of the reporting unit's goodwill which it determines by allocating the estimated fair value of the reporting unit in a manner similar to a purchase price allocation. The implied fair value is compared to the carrying amount and if the carrying amount of the reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized for the excess. Identifiable Intangible Assets — The Company's primary identifiable intangible assets consist of contract backlog intangible assets recorded as part of the Orbital merger transaction, discussed in Note 4, Merger and Divestiture . Identifiable intangible assets with finite lives are amortized and evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangibles with indefinite lives are not amortized and are tested for impairment annually on the first day of the fourth quarter, or more frequently if events warrant. Dividends Payable. On February 27, 2017, the Board of Directors declared a quarterly cash dividend of $0.32 per share. The dividend was paid March 24, 2017 to stockholders of record at March 9, 2017. Treasury Stock. Under the Company's share repurchase program, the Company can repurchase common stock to be held in treasury. Treasury stock is accounted for using the cost method. Shares held in treasury may be reissued to satisfy (i) the payment of performance awards, total stockholder return performance awards ("TSR awards") and restricted stock units, (ii) the grant of restricted stock and (iii) the exercise of stock options. When treasury stock is reissued, the value is determined using a weighted-average basis. Stock-based Compensation. The Company's stock-based compensation plans, which are described more fully in Note 17, Stock Based Compensation , provide for the grant of various types of stock-based incentive awards, including performance awards, TSR awards, restricted stock and options to purchase common stock. The types and mix of stock-based incentive awards are evaluated on an ongoing basis and may vary based on the Company's overall strategy regarding compensation, including consideration of the impact of expensing stock awards on the Company's results of operations. Performance awards are valued at the fair value of the Company stock at the grant date and expense is recognized based on the number of shares expected to vest under the terms of the award under which they are granted. The Company uses an integrated Monte Carlo simulation model to determine the fair value of the TSR awards and the calculated fair value is recognized in income over the vesting period, which approximates the service period. Restricted stock issued vests over periods ranging from one to three years and is valued based on the market value of the Company stock on the grant date. The estimated grant date fair value of stock options is recognized in income on a straight-line basis over the requisite service period, generally one to three years. The estimated fair value of each option is calculated using the Black-Scholes option-pricing model. Income Taxes. Provisions for federal, state and foreign income taxes are calculated based on reported pre-tax earnings and current tax law. Such provisions differ from the amounts currently receivable or payable because certain items of income and expense are recognized in different time periods for financial reporting purposes than for income tax purposes. Significant judgment is required in determining income taxes and evaluating tax positions. The Company periodically assesses its liabilities and contingencies for all periods that are currently open to examination or have not been effectively settled based on the most current available information. Where it is not more likely than not that the Company's tax position will be sustained, the Company records the entire resulting tax liability and when it is more likely than not of being sustained, the Company records its best estimate of the resulting tax liability. Any applicable interest and penalties related to those positions are also recorded in the consolidated financial statements. To the extent the Company's assessment of the tax outcome of these matters changes, such change in estimate will impact income taxes in the period of the change. It is the Company's policy to record any interest and penalties related to income taxes as part of the income taxes for financial reporting purposes. Deferred tax assets related to carryforwards are reduced by a valuation allowance when it is not more likely than not that the amount will be realized before expiration of the carryforward period. As part of this analysis the Company takes into account the amount and character of the income to determine if the carryforwards will be realized. Significant estimates and judgments are required for this analysis. Changes in the amounts of valuation allowance are recorded in tax expense in the period when the change occurs. Derivative Instruments and Hedging Activities. From time to time, the Company uses derivative instruments, consisting mainly of commodity forward contracts to hedge forecasted purchases of certain commodities, foreign currency exchange contracts to hedge forecasted transactions denominated in a foreign currency and interest rate swaps to manage interest rate risk on debt. The Company does not hold or issue derivatives for trading purposes. At the inception of each derivative instrument, the Company documents the relationship between the derivative instrument and the hedged item, as well as its risk-management objectives and strategy for undertaking the hedge transaction. The Company assesses, both at the derivative's inception and on an ongoing basis, whether the derivative instrument is highly effective in offsetting changes in the fair value of the hedged item. Derivatives are recognized on the balance sheet at fair value. The effective portion of changes in fair value of derivatives designated as cash flow hedges are recorded to accumulated OCI and recognized in earnings in the same account in which the hedged item is recognized when the hedged item impacts earnings, and the cash flows from the effective portion of cash flow hedges are classified in the same section of the cash flows as the hedged item. The ineffective portion of derivatives designated as cash flow hedges and changes in fair value of derivative instruments not designated in a qualifying hedging relationship are reflected in current earnings, and the cash flows from the ineffective portion of cash flow hedges are classified as investing activities. The Company's current derivatives are designated as cash flow hedges. See Note 3 , Derivative Financial Instruments for further details. Earnings Per Share Data. Basic earnings per share ("EPS") is computed based upon the weighted-average number of common shares outstanding for each period. Diluted EPS is computed based on the weighted-average number of common shares and common equivalent shares outstanding for each period. Common equivalent shares represent the effect of stock-based awards (see Note 17 , Stock-Based Compensation ) during each period presented, which, if exercised or earned, would have a dilutive effect on earnings per share. Fair Value of Non-financial Instruments. The carrying amounts of receivables, inventory, accounts payable, accrued liabilities and other current assets and liabilities, approximate fair values due to the short maturity of these instruments. See Note 2 , Fair Value of Financial Instruments , for additional disclosure regarding fair value of financial instruments. Accounting Standards Updates Adopted During calendar year 2016, the Company adopted the following Accounting Standard Updates (ASUs): In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-02, Amendments to the Consolidation Analysis, which simplifies the consolidation evaluation process by placing more emphasis on risk of loss when determining a controlling financial interest. This new standard is effective for interim and annual periods beginning after December 15, 2015. The ASU became effective for the Company in the quarter ended April 3, 2016 and the adoption did not have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. These ASUs more closely align the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs to be presented as a direct deduction from the carrying amount of the related debt. The amendments in these ASUs became effective retrospectively for the Company in the quarter ended April 3, 2016. The adoption of these new standards impacted the presentation of the net debt issuance costs included in Note 10, Long-term Debt . This resulted in a reclassification of debt issuance costs related to the Company's notes of $14 million from "Other noncurrent assets" to "Long-term debt, net of current portion" in the Company's consolidated balance sheets as of December 31, 2015. In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Such investments should be disclosed separate from the fair value hierarchy. This ASU became effective retrospectively for the Company beginning in the quarter ended April 3, 2016. The adoption of this new standard did not have an impact on the Company's consolidated financial statements but impacted certain disclosures reflected in the notes to the accompanying consolidated financial statements. The new standard removed the fair value hierarchy disclosure for the Company's investment in marketable securities. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, which requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase a greater number of an employee's shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for annual reporting periods beginning after December 15, 2016 with early adoption permitted. The Company elected to early adopt this ASU in the quarter ended April 3, 2016. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements. Accounting Standards Updates Issued But Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard now will be effective for annual reporting periods beginning after December 15, 2017. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company commenced their evaluation of the impact of the ASU in 2016, by evaluating its impact on selected contracts at each of the business segments. With this baseline understanding, the Company developed a project plan to evaluate the portfolio of contracts across business segments, develop processes and tools to report financial results under the ASU, and assess the internal control structure in order to adopt the ASU on January 1, 2018. Under the new standard, the Company expects to continue using the cost-to-cost percentage of completion method to recognize revenue for most of its long-term contracts. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company has not yet quantified the impact of the new standard or selected a transition method. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires leasees to recognize lease assets and lease liabilities for those leases classified as operating leases under previous generally accepted accounting principles in the United States ("U.S. GAAP"). The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company currently is evaluating the provisions of ASU 2016-02 and its impact on the Company's consolidated financial position, results of operations and cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. It addresses eight specific cash flows where there currently exists diversity in the way these cash flows are reported. They are: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments; (3) Contingent Consideration Payments Made after a Business Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance (COLI) Policies including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Investees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash Flows and Application of the Predominance Principle. In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. As an example, for item (1) the cash flows will be classified as financing activities; for item (3) contingent payments made soon after the acquisition will be classified as investing activities and financing activities if made thereafter; and for item (5) cash payments made to settle COLI policies will be classified as investing activities and premium payments may be classified as cash outflows for investing, operating or a combination of both. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires retrospective application but if it is impracticable to do so for an issue, the amendments related to that issue will be applied prospectively. The Company is still evaluating the provisions of ASU 2016-15 and its impact on the consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are under Common Control. This ASU amends the consolidation guidance issued under ASU 2015-02: Consolidation (Topic 810): Amendments to the Consolidation Analysis for those entities that are the single decision maker of a VIE such that a single decision marker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interest in their entirety. Instead, they are required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. Effective for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The adoption method varies depending on which aspect is relevant/being adopted. This ASU is required to be adopted in conjunction with ASU 2015-02 and those entities that have already adopted ASU 2015-02 are required to apply the amendments in this update retrospectively through initial adoption. The adoption of this standard is not expected have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard is effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is still evaluating the provisions of ASU 2016-18 and its impact on the consolidated statement of cash flows. Other new pronouncements issued but not effective for the Company until after December 31, 2016 are not expected to have a material impact on the Company's continuing financial position, results of operations or liquidity. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The valuation techniques required by the current authoritative literature are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1—Quoted prices for identical instruments in active markets. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3—Significant inputs to the valuation model are unobservable. The following section describes the valuation methodologies used by the Company to measure its financial instruments at fair value. Derivative financial instruments and hedging activities — In order to manage its exposure to commodity pricing and foreign currency risk, the Company periodically utilizes commodity and foreign currency derivatives, which are considered Level 2 instruments. As discussed further in Note 3 , Derivative Financial Instruments , the Company has outstanding commodity forward contracts that were entered into to hedge forecasted purchases of copper and zinc, as well as outstanding foreign currency forward contracts that were entered into to hedge forecasted transactions denominated in a foreign currency. Commodity derivatives are valued based on prices of futures exchanges and recently reported transactions in the marketplace. The Company currently holds three interest rate swaps with a total notional value of $250 million . These swaps are valued based on future LIBOR, and the established fixed rate is based primarily on quotes from banks. Foreign currency derivatives are valued based on observable market transactions of spot currency rates and forward currency prices. Long-term Debt — The fair value of the variable-rate long-term debt is calculated based on current market rates for debt of the same risk and maturities. The fair value of the fixed-rate debt is based on market quotes for each issuance. The Company considers these to be Level 2 instruments. The Company’s non-financial instruments measured at fair value on a non-recurring basis include goodwill, indefinite-lived intangible assets and long-lived tangible assets. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions. As such, the Company generally classifies non-financial instruments as either Level 2 or Level 3 fair value measurements. At December 31, 2016 and 2015, the Company did not have any non-financial instruments measured at fair value on a non-recurring basis. The following tables set forth, by level within the fair value hierarchy, the Company's financial assets and liabilities that are measured at fair value on a recurring basis (in millions) : December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Assets: Derivatives $ — $ 9 $ — Liabilities: Derivatives $ — $ 1 $ — December 31, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Level 3 Assets: Derivatives $ — $ 4 $ — Liabilities: Derivatives $ — $ 8 $ — Recorded carrying amount and fair value of debt was as follows (in millions) : December 31, 2016 December 31, 2015 Carrying Fair Carrying Amount Fair Value Fixed rate debt $ 700 $ 727 $ 700 $ 713 Variable rate debt $ 750 $ 746 $ 790 $ 788 Investments in marketable securities — The Company's investments in marketable securities represent investments held in a common collective trust ("CCT") that primarily invests in fixed income securities which are used to pay benefits under a nonqualified supplemental executive retirement plan for certain executives and highly compensated employees. Investments in a collective investment vehicle are valued by multiplying the investee company's net asset value per share with the number of units or shares owned at the valuation date as determined by the investee company. Net asset value per share is determined by the investee company's custodian or fund administrator by deducting from the value of the assets of the investee company all its liabilities and the resulting number is divided by the outstanding number of shares or units. Investments held by the CCT, including collateral invested for securities on loan, are valued on the basis of valuations furnished by a pricing service approved by the CCT's investment manager, which determines valuations using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders, or at fair value as determined in good faith by the CCT's investment manager. The fair value of these securities, not subject to leveling, is included within other noncurrent assets on the Company's consolidated balance sheet. The fair value of these securities is measured on a recurring basis and was $13 million and $12 million at December 31, 2016 and 2015, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company entered into interest rate swaps during fiscal 2014 requiring fixed rate payments on a total notional amount of $400 million , of which $250 million remains outstanding, and receive one-month LIBOR. The fair value of interest rate swap agreements approximates the amount at which they could be settled, based on future LIBOR, and the established fixed rate is based primarily on quotes from banks. The Company performs assessments of the effectiveness of hedge instruments on a quarterly basis and has determined the hedges to be highly effective. The counterparties to the interest rate swap agreements expose the Company to credit risk in the event of nonperformance. However, at December 31, 2016 , the outstanding swap agreements were in a net liability position which would require the Company to make the net settlement payments to the counterparties. The Company does not anticipate nonperformance by counterparties and does not hold or issue derivative financial instruments for trading purposes. The Company is exposed to market risks arising from adverse changes in commodity prices affecting the cost of raw materials and energy; interest rates and foreign exchange risks. In the normal course of business, these risks are managed through a variety of strategies, including the use of derivative instruments. Commodity forward contracts are periodically used to hedge forecasted purchases of certain commodities, foreign currency exchange contracts are used to hedge forecasted transactions denominated in a foreign currency, and the Company periodically uses interest rate swaps to hedge forecasted interest payments and the risk associated with variable interest rates on long-term debt. The Company enters into forward contracts for copper and zinc. The contracts essentially establish a fixed price for the underlying commodity and are designated and qualify as effective cash flow hedges of purchases of the commodity. Ineffectiveness is calculated as the amount by which the change in the fair value of the derivatives exceeds the change in the fair value of the anticipated commodity purchases. The Company enters into foreign currency forward contracts to hedge forecasted transactions, denominated in foreign currencies. These transactions qualify as effective cash flow hedges and are designated as such. Ineffectiveness with respect to forecasted transactions is calculated based on changes in the forward rate until the anticipated purchase or cash receipt occurs; ineffectiveness of the hedge of the accounts payable is evaluated based on the change in fair value of its anticipated settlement. The fair value of the commodity and foreign currency forward contracts is recorded within other assets or liabilities, as appropriate, and the effective portion is reflected in accumulated other comprehensive income (loss) in the financial statements. The gains or losses on the commodity forward contracts are recorded in inventory as the commodities are purchased and in cost of sales when the related inventory is sold. The gains or losses on the foreign currency forward contracts are recorded in earnings when the related inventory is sold or customer cash receipts are received. Commodity forward contracts outstanding that hedge forecasted commodity purchases were as follows: (Amounts in millions of pounds) December 31, 2016 2015 Copper 10 8 Zinc 3 2 At December 31, 2016, the Company had the following outstanding interest rate swap contracts (See Note 10, Long-term Debt for additional information): Notional Fair Value Pay Fixed Receive Floating Maturity Date (in millions) Non-amortizing swap $ 100 — 1.29 % 0.77 % August 2017 Non-amortizing swap $ 100 (1 ) 1.69 % 0.77 % August 2018 Non-amortizing swap $ 50 — 1.10 % 0.77 % November 2017 The amount to be paid or received under these swaps is recorded as an adjustment to interest expense. As of December 31, 2016, the Company had the following outstanding Euro currency forward contracts in place: (Amounts in millions of Euros) December 31, 2016 2015 Euros Sold 33 68 Euros Purchased 45 13 Derivative instruments designated as hedging instruments in the consolidated balance sheets were as follows: Asset Derivatives Fair Value Liability Derivatives Fair Value Location December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 (in millions) Commodity forward contracts Other current assets / $ 5 $ — $ — $ 4 Foreign currency forward contracts Other current assets / 3 3 — 1 Foreign currency forward contracts Other noncurrent assets / 1 1 — — Interest rate swap contracts Other noncurrent assets / — — 1 3 Total $ 9 $ 4 $ 1 $ 8 Due to the customer contract requirements, the benefits associated with the commodity contracts may be passed on to the customer and not realized by the Company. Gains and losses reclassified from AOCI in the condensed consolidated statements of comprehensive income related to derivative instruments were as follows: Gain (Loss) Reclassified from AOCI Location Amount (in millions) Year Ended December 31, 2016 Commodity forward contracts Cost of sales $ (3 ) Interest rate swap contracts Interest expense (3 ) Foreign currency forward contracts Cost of sales — Nine Months Ended December 31, 2015 Commodity forward contracts Cost of sales (3 ) Interest rate swap contracts Interest expense (3 ) Foreign currency forward contracts Cost of sales (2 ) There was no ineffective portion of derivative instruments and no derivatives were excluded from effectiveness testing during the year ended December 31, 2016 and the 2015 transition period; accordingly, the Company did not recognize any related gains or losses in the income statement. All derivatives used by the Company during the periods presented were designated as hedging instruments. The Company expects the remaining unrealized losses will be realized and reported in cost of sales or interest expense depending on the type of contract consistent with realized gains and losses noted in the table above. Estimated and actual gains or losses will change as market prices change. |
Merger and Divestiture
Merger and Divestiture | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Mergers and Divestiture | Merger and Divestiture On February 9, 2015, the Company completed the spin-off and Distribution of its former Sporting Group to its stockholders and merged with Orbital pursuant to a transaction agreement dated April 28, 2014 (the "Transaction Agreement"). The Company completed the Merger with Orbital in order to create a global aerospace and defense company with greater technical and industrial capabilities and increased financial resources. Both the Distribution and Merger were structured to be tax-free to U.S. stockholders for U.S. federal income tax purposes. Under the Transaction Agreement, a subsidiary of the Company merged with and into Orbital, with Orbital continuing as a wholly-owned subsidiary of the Company. Pursuant to the Distribution, Company stockholders received two shares of Vista Outdoor for each share of Company common stock held. The Company distributed a total of approximately 63.9 million shares of Vista Outdoor common stock to its stockholders of record as of the close of business on February 2, 2015 the record date for the Distribution. As a result of the Distribution, Sporting Group is no longer reported within the Company’s results from continuing operations but is reported as a discontinued operation for all prior periods presented in accordance with ASC Topic 205, "Presentation of Financial Statements." Sales reported as discontinued operations were $1.8 billion for the year ended March 31, 2015. In connection with the Merger, each outstanding share of Orbital common stock was converted into the right to receive 0.449 shares of Company common stock. The Company issued approximately 27.4 million shares of common stock to Orbital stockholders. Immediately following the Merger, Orbital stockholders owned 46.2% of the common stock of the Company and existing stockholders owned 53.8% . Based on the closing price of the Company's common stock following the Distribution on February 9, 2015 as reported on the New York Stock Exchange, the aggregate value of the consideration paid or payable to former holders of Orbital common stock was approximately $1.8 billion . The Company used the acquisition method to account for the Merger; accordingly, the results of Orbital have been included in the Company's consolidated financial statements since the date of the Merger. Valuation of Net Assets Acquired The following amounts represent the final determination (as of the Merger date) of the fair value of identifiable assets acquired and liabilities assumed in the Merger, including adjustments made to date during the one year measurement period from the date of the Merger: Purchase Price: (in millions) Value of common shares issued to Orbital shareholders (1) $ 1,749 Value of replacement equity-based awards to holders of Orbital equity-based awards (2) 9 Total purchase price $ 1,758 Value of assets acquired and liabilities assumed: Cash $ 254 Net receivables 559 Net inventories 75 Intangibles 173 Property, plant and equipment 277 Deferred tax assets, net 65 Other assets 37 Goodwill 826 Accounts payable (52 ) Contract fair value liabilities (131 ) Other liabilities (325 ) Total purchase price $ 1,758 _________________________________________ (1) Equals 27 million Orbital ATK shares issued to Orbital shareholders multiplied by the Company's Merger-date share price of $63.94 . (2) The fair value of replacement equity-based awards attributable to pre-Merger service was recorded as part of the consideration transferred in the Merger. The consideration paid for Orbital's assets and liabilities was determined using the fair market value of the Company stock issued at the date of the Merger along with restricted stock awards granted to certain employees of Orbital. Goodwill recognized from the Merger primarily relates to the expanded market opportunities, expected synergies and benefits of increased scale and scope of combined human, physical and financial resources attributable to merging the operations of the two companies. As stated above, the Merger was a tax-free transaction and as such, there is no goodwill that is deductible for tax purposes. In determining the fair value of identifiable assets acquired and liabilities assumed, a review was conducted for any significant contingent assets or liabilities existing at the Merger date. There were no significant contingencies identified related to any legal or government action. Measurement Period Adjustments In accordance with the Company's adoption of ASU 2015-16, measurement period adjustments pertaining to the Merger were recorded within the year ended December 31, 2016 and the 2015 transition period and were not retroactively reclassified to prior periods. Such measurement period adjustment amounts that were included in the aforementioned periods were not material. Supplemental Pro Forma Data The following unaudited supplemental pro forma data for the year ended March 31, 2015 presents consolidated information as if the Merger had been completed on April 1, 2013. The pro forma results were calculated by combining the results from continuing operations of the Company with the stand-alone results of Orbital for the pre-Merger periods, which were adjusted to eliminate historical sales between the companies and to account for certain costs which would have been incurred during this pre-Merger period: (amounts in millions) Year Ended March 31, 2015 Sales $ 4,167 Income (loss) from continuing operations 155 Basic earnings (loss) per common share from continuing operations $ 2.46 Diluted earnings (loss) per common share from continuing operations 2.43 The unaudited supplemental pro forma data above includes the following significant adjustments made to account for certain costs which would have been incurred if the Merger had been completed on April 1, 2013, as adjusted for the applicable income tax impact: (amounts in millions) Year Ended Amortization of acquired Orbital intangible assets (1) $ 27 Interest expense adjustment (2) (26 ) Transaction fees for advisory, legal and accounting services (3) (37 ) _________________________________________ (1) Added the amortization of acquired Orbital intangible assets recognized at fair value in purchase accounting and eliminated historical Orbital intangible asset amortization expense. (2) Reduced interest expense for the net reduction in debt of the Company and Orbital. (3) Added transaction fees for advisory, legal and accounting services to the first quarter of fiscal 2014. Costs were recorded in general and administrative expense. The unaudited supplemental pro forma data above does not reflect the potential realization of cost savings related to the integration of the two companies. Further, the pro forma data should not be considered indicative of the results that would have occurred if the Merger had been completed on April 1, 2013, nor are they indicative of future results. Ongoing Business with Vista Outdoor In conjunction with the Distribution , the Company entered into two supply agreements and one Transition Services Agreement ("TSA") with Vista Outdoor. The supply agreements call for Vista Outdoor to purchase certain minimum quantities of ammunition and gun powder from the Company through 2017 or 2018, as applicable. The supply agreements, which are priced at arms-length, expire in 2017 (powder) and 2018 (ammunition) and may be extended in one -to- three year increments. Under the terms of the TSA, the Company provided Vista Outdoors with administrative services for 12 months following the Distribution and provided tax-related services for 18 months following the Distribution, extendable to 30 months. At the option of Vista Outdoor, the Company is currently providing tax-audit related services. Fees for services under the TSA are charged to Vista Outdoor. Sales to Vista Outdoor under the two supply agreements were $238 million for year ended December 31, 2016 , $138 million for the 2015 transition period and $19 million for the period from the date of the Distribution to March 31, 2015. Sales to Sporting Group, previously reported as intercompany sales and eliminated in consolidation (see Note 19, Operating Segment Information ) were $171 million for the period April 1, 2014 through February 8, 2015. |
Net Receivables
Net Receivables | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Net Receivables | Net Receivables Net receivables, including amounts due under long-term contracts consisted of the following: December 31, 2016 2015 (in millions) Billed receivables U.S. Government contracts $ 132 $ 122 Commercial and other 112 96 Unbilled receivables U.S. Government contracts 806 808 Commercial and other 691 646 Less allowance for doubtful accounts — (1 ) Net receivables $ 1,741 $ 1,671 Receivable balances are shown net of customer progress payments received of $601 million at December 31, 2016 and $584 million at December 31, 2015 . Unbilled receivables represent the balance of recoverable costs and accrued profit, comprised principally of revenue recognized on contracts for which billings have not been presented to the customer because the amounts were earned but not contractually billable at the balance sheet date. These amounts include expected additional billable general overhead costs and fees on flexibly priced contracts awaiting final rate negotiations. Progress payments received from customers relating to the uncompleted portions of contracts are offset against unbilled receivable balances or applicable inventories. Any remaining progress payment balances are classified as contract advances. At December 31, 2016 and 2015, the aggregate amount of contract-related unbilled receivables the Company does not expect to collect within the next 12 months was $287 million and $312 million , respectively. The Company records an allowance for doubtful accounts, reducing the receivables balance to an amount the Company estimates is collectible from customers. Estimates used in determining the allowance for doubtful accounts are based on current trends, aging of accounts receivable, periodic credit evaluations of customers’ financial condition and historical collection experience. |
Net Inventories
Net Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Net Inventories | Net Inventories Net inventories consisted of the following: December 31, 2016 2015 (in millions) Raw materials $ 93 $ 88 Work/contracts in process 121 124 Finished goods 1 1 Net inventories $ 215 $ 213 Changes in allowances for excess and obsolete inventory were as follows: Balance, March 31, 2015 $ 17 Expense 3 Write-offs — Other adjustments 4 Balance, December 31, 2015 $ 24 Expense — Write-offs (1 ) Other adjustments 1 Balance, December 31, 2016 $ 24 |
Net Property, Plant and Equipme
Net Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Net Property, Plant, and Equipment | Net Property, Plant and Equipment Net property, plant and equipment consisted of the following: December 31, 2016 2015 (in millions) Land $ 29 $ 34 Buildings and other improvements 383 370 Machinery, equipment and other 1,313 1,290 Property not yet in service 212 134 Gross property, plant and equipment 1,937 1,828 Less accumulated depreciation (1,121 ) (1,066 ) Net property, plant and equipment $ 816 $ 762 Depreciation expense was $116 million for the year ended December 31, 2016 , $89 million in the 2015 transition period and $73 million in fiscal 2015 . |
Goodwill, Net Intangibles and O
Goodwill, Net Intangibles and Other Noncurrent Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Net Intangibles and Other Noncurrent Assets | Goodwill, Net Intangibles and Other Noncurrent Assets Changes in goodwill by segment were as follows: Flight Systems Group Defense Systems Group Space Systems Group Total (in millions) Balance, March 31, 2015 $ 798 $ 363 $ 701 $ 1,862 Measurement period adjustments 125 — (159 ) (34 ) Balance, December 31, 2015 923 363 542 1,828 Measurement period adjustments 6 — (2 ) 4 Balance, December 31, 2016 $ 929 $ 363 $ 540 $ 1,832 The results of the Company's annual goodwill impairment test in fiscal 2015 indicated that the net book value of Space Systems Group's, Space Components division exceeded the implied fair market value. The Company recorded an impairment of $34 million in the fourth quarter of fiscal 2015. The impairment was primarily driven by a reduction in near-term estimated cash flows compared to the prior year forecast, resulting from, among other things, government budget constraints and increased competitive pressures in the satellite and spacecraft manufacturing market. In the 2015 transition period, the Company did not identify any indications of goodwill impairment. The goodwill impairment analysis conducted for the year ended December 31, 2016 concluded there were no impairments. Goodwill recorded within Defense Systems Group and Space Systems Group is presented net of accumulated impairment losses totaling $4 million and $143 million , respectively, at December 31, 2016. Net intangibles consisted of the following amortizing intangibles: December 31, 2016 December 31, 2015 Gross Accumulated Total Gross Accumulated Total (in millions) Contract Backlog $ 173 $ (79 ) $ 94 $ 179 $ (37 ) $ 142 Patented technology 11 (7 ) 4 11 (6 ) 5 Customer relationships and other 2 (2 ) — 24 (24 ) — Net intangibles $ 186 $ (88 ) $ 98 $ 214 $ (67 ) $ 147 The contract backlog asset in the table above is being amortized as underlying costs are recognized under the contract. The other assets in the table above are being amortized using a straight-line method. Amortization expense related to these assets was $ 43 million for the year ended December 31, 2016 , $33 million in the 2015 transition period and $9 million in fiscal 2015 . Scheduled amortization is as follows: Contract Backlog Patents and Customer Relationships Total (in millions) 2017 $ 36 $ 1 $ 37 2018 25 1 26 2019 22 1 23 2020 11 1 12 2021 — — — Total $ 94 $ 4 $ 98 Other noncurrent assets consisted of the following: December 31, 2016 2015 (in millions) Parts inventory $ 2 $ 10 Environmental remediation receivable 15 15 Derivative contracts 1 1 Tax refund receivable 81 43 Other noncurrent assets 84 70 Total other noncurrent assets $ 183 $ 139 |
Current Liabilities
Current Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Current Liabilities | Current Liabilities Other current liabilities consisted of the following: December 31, 2016 2015 (in millions) Employee benefits and insurance $ 74 $ 62 Deferred lease obligation 2 12 Interest 10 10 Other 97 82 Total other current liabilities $ 183 $ 166 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt, including the current portion, consisted of the following: December 31, 2016 2015 (in millions) Senior Credit Facility: Term Loan A due 2020 $ 750 $ 790 Revolving Credit Facility due 2020 — — 5.25% Senior Notes due 2021 300 300 5.50% Senior Notes due 2023 400 400 Carrying amount of long-term debt 1,450 1,490 Unamortized debt issuance costs: Senior Credit Facility 5 6 5.25% Senior Notes due 2021 2 2 5.50% Senior Notes due 2023 5 6 Unamortized debt issuance costs 12 14 Long-term debt less unamortized debt issuance costs 1,438 1,476 Less: Current portion of long-term debt 40 40 Long-term debt $ 1,398 $ 1,436 Senior Credit Facility In September 2015, the Company refinanced its former senior credit facility with a new senior credit facility (the "Senior Credit Facility"), which is comprised of a term loan of $800 million (the "Term Loan A") and a revolving credit facility of $1,000 million (the "Revolving Credit Facility"), both of which mature in 2020. The Term Loan A is subject to quarterly principal payments of $10 million, with the remaining balance due at maturity. Substantially all tangible and intangible assets of the Company and certain domestic subsidiaries, excluding real property, are pledged as collateral under the Senior Credit Facility. Borrowings under the Senior Credit Facility bear interest at a per annum rate equal to either the sum of a base rate plus a margin or the sum of a LIBOR rate plus a margin. Each margin is based on the Company's total leverage ratio. In compliance with the terms of the Senior Credit Facility, the current base rate margin is 0.50% and the current LIBOR margin is 1.50% . The weighted-average interest rate for the Term Loan A, after taking into account the interest rate swaps discussed below, was 2.48% at December 31, 2016 . The Company pays a quarterly commitment fee on the unused portion of the Revolving Credit Facility based on its total leverage ratio. Based on the Company's current total leverage ratio, this current fee is 0.25% . At December 31, 2016 , the Company had no borrowings outstanding on the Revolving Credit Facility and had outstanding letters of credit of $182 million , which reduced amounts available on the Revolving Credit Facility to $818 million . As a result of the refinancing in September 2015, the Company recorded a charge of $10 million , reported in net interest expense, to write off a portion of the unamortized debt issuance costs associated with the Former Senior Credit Facility (the "Former Senior Credit Facility"). There are debt issuance costs totaling $6 million associated with the Former Senior Credit Facility in addition to debt issuance costs incurred related to the new Senior Credit Facility that are being amortized to interest expense over five years , the term of the Senior Credit Facility. 5.25% Senior Notes In fiscal 2014 , the Company issued $300 million aggregate principal amount of 5.25% Senior Notes (the " 5.25% Notes") that mature on October 1, 2021. These notes are general unsecured obligations. Interest on these notes is payable on April 1 and October 1 of each year. The Company has the right to redeem some or all of these notes on or after October 1, 2016, at specified redemption prices. Debt issuance costs of $3 million related to these notes are being amortized to interest expense over eight years , the term of the notes. 5.50% Senior Notes In September 2015, the Company issued $400 million aggregate principal amount of 5.50% Senior Notes (the " 5.50% Notes") that mature on October 1, 2023. These notes are general unsecured obligations. Interest on these notes is payable on April 1 and October 1 of each year. The Company has the right to redeem some or all of these notes from time to time on or after October 1, 2018, at specified redemption prices. Debt issuance costs of $6 million related to these notes are being amortized to interest expense over eight years , the term of the notes. Loss on Extinguishment of Debt In fiscal 2015, the Company recorded a $27 million loss on extinguishment of debt pertaining to the redemption of its former 6.875% senior subordinated notes in connection with the Distribution and Merger. Former Senior Credit Facility As noted above, in September 2015 the Company refinanced and paid off its Former Senior Credit Facility which was comprised of a term loan of $1,160 million (the "Former Term A Loan"), a term loan of $250 million (the "Former Term B Loan") and a $700 million revolving credit facility (the "Former Revolving Credit Facility"), all of which were to mature from 2018 to 2020. The Former Term A Loan and the Former Term B loan were subject to quarterly principal payments of $15 million in the aggregate. Substantially all domestic tangible and intangible assets of the Company and its subsidiaries were pledged as collateral under the Former Senior Credit Facility. Borrowings under the Former Senior Credit Facility were charged interest at a rate equal to either the sum of a base rate plus a margin or the sum of a Eurodollar rate plus a margin. Each margin was based on the Company's senior secured credit ratings. The Company paid an annual commitment fee on the unused portion of the Former Revolving Credit Facility based on its senior secured credit ratings. Interest Rate Swaps In fiscal 2014 , the Company entered into floating-to-fixed interest rate swap agreements in order to hedge the Company's forecasted interest payments on its outstanding variable rate debt, which has included the term loans associated with the Senior Credit Facility and Former Senior Credit Facility. At December 31, 2016 , the Company had the following cash flow hedge interest rate swaps in place: Notional Fair Value Pay Fixed Receive Floating Maturity Date (in millions) Non-amortizing swap $ 100 $ — 1.29 % 0.77 % August 2017 Non-amortizing swap $ 100 $ (1 ) 1.69 % 0.77 % August 2018 Non-amortizing swap $ 50 $ — 1.10 % 0.77 % November 2017 The amount to be paid or received under these swaps is recorded as an adjustment to interest expense. Rank and Guarantees The 5.25% Notes and the 5.50% Notes are the Company's general unsecured and unsubordinated obligations and rank equally in right of payment with all of the Company's existing and future unsecured and unsubordinated indebtedness, rank senior in right of payment to all of the Company's existing and future subordinated indebtedness, and are effectively subordinated to all existing and future senior secured indebtedness, including the Senior Credit Facility, to the extent of the collateral. The 5.25% Notes and the 5.50% Notes are guaranteed on an unsecured basis, jointly and severally and fully and unconditionally, by substantially all of the Company's domestic subsidiaries. The Senior Credit Facility obligations are guaranteed on a secured basis, jointly and severally and fully and unconditionally, by substantially all of the Company's domestic subsidiaries. All of these guarantor subsidiaries are 100% owned by the Company. The Company, exclusive of these guarantor subsidiaries, has no independent operations or material assets. Scheduled Minimum Loan Payments Scheduled minimum loan payments are as follows: (in millions) 2017 $ 40 2018 40 2019 40 2020 630 2021 300 Thereafter 400 Total $ 1,450 Covenants and Default Provisions The Company's Senior Credit Facility and the indentures governing the 5.25% Notes and the 5.50% Notes impose restrictions on the Company, including limitations on its ability to incur additional debt, enter into capital leases, grant liens, pay dividends and make certain other payments, sell assets, or merge or consolidate with or into another entity. In addition, the Senior Credit Facility limits the Company's ability to enter into sale-and-leaseback transactions. The 5.25% Notes and 5.50% Notes limit the aggregate sum of dividends, share repurchases and other designated restricted payments. The Senior Credit Facility also requires the Company to meet and maintain specified financial ratios, including a minimum interest coverage ratio and a maximum consolidated total leverage ratio. The Company's debt agreements contain cross-default provisions so that noncompliance with the covenants within one debt agreement that would give rise to the right to accelerate repayment of any outstanding indebtedness could cause a default under other debt agreements as well. The Company's ability to comply with these covenants and to meet and maintain the financial ratios may be affected by events beyond its control. Borrowings under the Senior Credit Facility are subject to compliance with these covenants. The Company entered into an extension agreement with our credit agreement lenders to extend, until June 30, 2017, the deadline under our credit agreement for filing with the Securities and Exchange Commission our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Form 10-Q for the first quarter of 2017. As a result of this extension, we are in compliance with our financial covenants as of December 31, 2016 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Changes in Accumulated Other Comprehensive Income ("AOCI"), net of income taxes, were as follows, with amounts in millions: Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Derivatives Pension and Other Post- Available-for-sale Securities Total Derivatives Pension and Other Post- Available-for-sale Securities Total (in millions) Beginning of period unrealized gain (loss) in AOCI $ (3 ) $ (784 ) $ 1 $ (786 ) $ (2 ) $ (847 ) $ 1 $ (848 ) Net increase (decrease) in fair value of derivatives 4 — — 4 (6 ) — — (6 ) Net losses reclassified from AOCI, offsetting the price paid to suppliers (1) 4 — — 4 5 — — 5 Net actuarial losses reclassified from AOCI (2) — 79 — 79 — 71 — 71 Prior service costs reclassified from AOCI (2) — (17 ) — (17 ) — (13 ) — (13 ) Valuation adjustment for pension and postretirement benefit plans (2) — (49 ) — (49 ) — 5 — 5 Other — — 1 1 — — — — End of period unrealized gain (loss) in AOCI $ 5 $ (771 ) $ 2 $ (764 ) $ (3 ) $ (784 ) $ 1 $ (786 ) _________________________________________ (1) Amounts related to derivative instruments that were reclassified from AOCI and recorded as a component of cost of sales or interest expense for each period presented. (2) Amounts related to pension and other postretirement benefits that were reclassified from AOCI and recorded as a component of net periodic benefit cost for each period presented (Note 13, Employee Benefit Plans ). There was no ineffectiveness recognized in earnings for these contracts during any period presented. The Company expects that any unrealized gains and losses will be realized and reported in cost of sales as the cost of the commodities is included in cost of sales. Estimated and actual gains or losses will change as market prices change. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share ("EPS") calculations, with amounts in million, except per share data: Year Ended Nine Months Ended Year Ended March 31, 2015 Numerator: Income from continuing operations of Orbital ATK, Inc. $ 293 $ 185 $ 70 Income from discontinued operations — 1 125 Net income attributable to Orbital ATK, Inc. 293 186 195 Earnings allocated to participating securities — — — Income available to common stockholders $ 293 $ 186 $ 195 Denominator: Weighted-average shares of common stock 57.99 59.36 35.47 Dilutive effect of stock-based awards 0.47 0.56 0.67 Diluted weighted-average of common stock 58.46 59.92 36.14 Net income per common share from: Basic: Continuing operations $ 5.05 $ 3.12 $ 1.96 Discontinued operations — 0.02 3.53 Net income attributable to Orbital ATK, Inc. $ 5.05 $ 3.14 $ 5.49 Diluted: Continuing operations $ 5.01 $ 3.09 $ 1.93 Discontinued operations — 0.02 3.46 Net income attributable to Orbital ATK, Inc. $ 5.01 $ 3.11 $ 5.39 Diluted earnings per share is calculated using net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during each period determined using the treasury stock method. The amount of anti-dilutive stock options excluded from the calculation of diluted earnings per share was immaterial for the periods presented. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company provides defined benefit pension plans and defined contribution plans for its employees. The Company has tax-qualified defined benefit plans, a supplemental (nonqualified) defined benefit pension plan, a defined contribution plan and a supplemental (non-qualified) defined contribution plan. A qualified plan meets the requirements of certain sections of the Internal Revenue Code and, generally, contributions to qualified plans are tax deductible. A qualified plan typically provides benefits to a broad group of employees and may not discriminate in favor of highly compensated employees in coverage, benefits or contributions. In addition, the Company provides medical and life insurance benefits to certain retirees and their eligible dependents through its postretirement plans. In connection with the Distribution, the Company transferred its obligation for pension benefits and other postretirement benefit ("PRB") plans for all current and former employees of Sporting Group to Vista Outdoor. The transfer of this obligation reduced the Company's pension liabilities by $224 million , pension assets by $163 million and accumulated other comprehensive loss for pension benefits by $98 million . The transfer of this obligation also reduced the Company's PRB liabilities by $2 million and accumulated other comprehensive gain for PRB benefits by $2 million . Defined Benefit Plans The Company's noncontributory defined benefit pension plans include the following legacy Alliant Techsystems Inc. plans: "Alliant Techsystems Inc. Pension and Retirement Plan" and "Thiokol Propulsion Pension Plan" (the "ATK Plans") and the legacy Orbital Sciences plans: "Fairchild Bargained Plan" and "Fairchild Space and Defense Plan" (the "Orbital Plans"). The Orbital Plans were merged into the Alliant Techsystems Inc. Pension and Retirement Plan on December 31, 2015 and the combined plan's name was changed to the "Orbital ATK, Inc. Pension and Retirement Plan". The Company's ongoing defined benefit pension plans are the Orbital ATK Inc. Pension and Retirement Plan and the Thiokol Propulsion Pension Plan (the "Orbital ATK Plans"). The Company is required to reflect the funded status of the pension and PRB plans on the consolidated balance sheet. The funded status of the plans is measured as the difference between the plan assets at fair value and the projected benefit obligation. The Company has recognized the aggregate of all underfunded plans within the accrued pension liability and postretirement and postemployment benefits liabilities. The Company has recognized the aggregate of all overfunded plans within other noncurrent assets. The portion of the amount by which the actuarial present value of benefits included in the projected benefit obligation exceeds the fair value of plan assets, payable in the next 12 months , is reflected in other accrued liabilities. Previously unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in accumulated other comprehensive loss in the consolidated balance sheet and the difference between actual amounts and estimates based on actuarial assumptions has been recognized in other comprehensive income in the period in which they occur. The Company's measurement date for remeasuring its plan assets and benefit obligations is December 31. Pension Plans. The ATK Plans are qualified noncontributory defined benefit pension plans that cover substantially all legacy ATK employees hired prior to January 1, 2007. Eligible legacy ATK non-union employees hired on or after January 1, 2007 and certain union employees are not covered by a defined benefit plan but receive an employer contribution through a defined contribution plan, discussed below. Prior to July 1, 2013 (January 1, 2014, January 1, 2015 and April 1, 2016 for certain union groups), the ATK Plans provided either pension benefits based on employee annual pay levels and years of credited service or stated amounts for each year of credited service. Effective July 1, 2013 and with certain collective bargaining agreements, pension benefits were frozen and a new cash balance formula applicable to pay and service was implemented. The cash balance formula provides each impacted employee with pay credits based on the sum of that employee's age plus years of pension service at December 31 of each calendar year, plus 4% annual interest credits. As a result of the latest plan amendment for certain collective bargaining agreements effective April 1, 2016, the projected benefit obligation was reduced by $2.3 million . The Orbital Plans were frozen in 1994 and no pension benefits are being accrued by those employees. The Company funds the Orbital ATK Plans in accordance with federal requirements calculated using appropriate actuarial methods. Depending on the plan they are covered by, employees generally vest after three or five years. The Company also sponsors a nonqualified supplemental executive retirement plan which provides certain executives and highly compensated employees the opportunity to receive pension benefits in excess of those payable through tax-qualified pension plans. The benefit obligation of these plans is included in the pension information below. Other Postretirement Benefit Plans. Generally, employees who terminated employment from the Company on or before January 1, 2004 and were at least age 50 or 55 with at least five or ten years of service, depending on the provisions of the pension plan they are eligible for, are entitled to a pre- and/or post-65 health care company subsidy and retiree life insurance coverage. Employees who terminated employment after January 1, 2004, but before January 1, 2006, are eligible only for a pre-65 Company subsidy. The portion of the health care premium cost borne by the Company for such benefits is based on the pension plan the employees are eligible for, years of service and age at termination. During the year ending December 31, 2016, the Company amended its retiree health care plan to provide coverage through a private exchange effective January 1, 2017. The exchange offers the retiree a broad choice of health care plans from which to choose. The Company will contribute fixed payments to a Health Retirement Account (HRA), when applicable, for those retirees that previously had subsidized health care coverage through the Company. The Company's contributions to the HRAs are retirees’ funds to be spent on qualified health care premiums and eligible out-of-pocket expenses. This plan amendment caused a remeasurement that increased the Company's funded status by $39 million and will reduce expenses recorded in future periods. The following table shows changes in the benefit obligation, plan assets and funded status of the Company's qualified and non-qualified pension plans and other PRB plans, including Orbital Plans. Benefit obligation balances presented below reflect the projected benefit obligation ("PBO") for pension plans and Accumulated PRB obligations ("APBO") or other PRB plans. Pension Benefits Other Postretirement Benefits Year Ended Nine Months Ended December 31, 2015 Year Ended Nine Months Ended December 31, 2015 (in millions) Change in benefit obligation: Benefit obligation at beginning of period $ 2,953 $ 3,199 $ 114 $ 132 Service cost 18 14 — — Interest cost 101 91 3 3 Plan Amendments — (2 ) (39 ) — Actuarial loss (gain) (1) 87 (211 ) 1 (13 ) Retiree contributions — — 5 3 Benefits paid (233 ) (138 ) (15 ) (11 ) Benefit obligation at end of period 2,926 2,953 69 114 Change in plan assets: Fair value of plan assets at beginning of period 2,190 2,349 60 64 Actual return on plan assets 131 (95 ) 4 (2 ) Retiree contributions — — 5 3 Employer contributions 120 74 7 6 Benefits paid (233 ) (138 ) (15 ) (11 ) Fair value of plan assets at end of period 2,208 2,190 61 60 Funded status $ (718 ) $ (763 ) $ (8 ) $ (54 ) _________________________________________ (1) The mortality projection scale was updated from MP-2014 to MP-2015 at December 31, 2015. This change resulted in an actuarial gain of $50 million and $4 million for the Pension Benefits and Other Postretirement Benefits, respectively. Pension Benefits Other Postretirement Benefits December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 (in millions) Noncurrent assets $ — $ 4 $ 17 $ — Other current liabilities (3 ) (5 ) (3 ) (3 ) Postretirement benefit liabilities — — (22 ) (51 ) Pension liabilities (715 ) (762 ) — — Net amount recognized (718 ) (763 ) (8 ) (54 ) Accumulated other comprehensive loss (income) related to: Unrecognized net actuarial losses 1,398 1,408 15 16 Unrecognized prior service benefits (110 ) (131 ) (43 ) (10 ) Accumulated other comprehensive loss (income) $ 1,288 $ 1,277 $ (28 ) $ 6 The estimated amount that will be amortized from AOCI into net periodic benefit cost in 2017 is as follows: Pension Other Postretirement Benefits (in millions) Recognized net actuarial losses $ 126 $ 2 Amortization of prior service benefits (20 ) (7 ) Total $ 106 $ (5 ) The accumulated benefit obligation for all defined benefit pension plans was $2,926 million at December 31, 2016 and $2,953 million at December 31, 2015 . December 31, 2016 2015 (in millions) Information for pension plans with an accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 2,926 $ 2,953 Accumulated benefit obligation $ 2,926 $ 2,953 Fair value of plan assets $ 2,208 $ 2,190 Components of net periodic benefit cost were as follows (in millions) : Pension Benefits Other Postretirement Benefits Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Components of net periodic benefit cost: Service cost $ 18 $ 14 $ 24 $ — $ — $ — Interest cost 101 91 129 3 3 5 Expected return on plan assets (162 ) (120 ) (166 ) (3 ) (3 ) (4 ) Amortization of unrecognized net loss 126 113 118 1 2 2 Amortization of unrecognized prior service benefit (21 ) (16 ) (22 ) (6 ) (5 ) (8 ) Net periodic benefit cost before special termination benefits cost/curtailment 62 82 83 (5 ) (3 ) (5 ) Special termination benefits cost/curtailment 2 — 2 — — — Net periodic benefit cost 64 82 85 (5 ) (3 ) (5 ) Amounts reported in: Continuing operations 64 82 81 (5 ) (3 ) (5 ) Discontinued operations — — 4 — — — Net periodic benefit cost $ 64 $ 82 $ 85 $ (5 ) $ (3 ) $ (5 ) The special termination benefits cost/curtailment cost in the table above represents a settlement expense to recognize the impact of lump sum benefit payments made in the non-qualified supplemental executive retirement plan. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act") reduced the Company's APBO measured at December 31, 2005. One of the Company's other PRB plans is actuarially equivalent to Medicare, but the Company does not believe that the subsidies it will receive under the Act will be significant. Because the Company believes that participation levels in its other PRB plans will decline, the impact to the Company's results of operations in any period has not been and is not expected to be significant. At the end of the 2015 transition period , the Company changed the approach used to measure service and interest costs for pension and other postretirement benefits. For the 2015 transition period , the Company measured service and interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations. For 2016, the Company elected to measure service and interest costs by applying the specific spot rates along that yield curve to the plans' liability cash flows. The Company believes the new approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' liability cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of our plan obligations. The Company accounted for this change as a change in accounting estimate and, accordingly, has accounted for it on a prospective basis. Assumptions Pension Benefits Other Postretirement Benefits Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Weighted-average assumptions used to determine benefit obligations at the end of each period Discount rate 4.14 % 4.40 % 3.90 % 3.62 % 3.98 % 3.55 % Rate of compensation increase: Union 3.11 % 3.13 % 3.66 % Salaried 3.56 % 3.62 % 3.14 % Pension Benefits Other Postretirement Benefits Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Weighted-average assumptions used to determine net periodic benefit cost for each period Discount rate 4.40 % 3.90 % 4.50 % 3.98 % 3.55 % 3.95 % Expected long-term rate of return on plan assets 7.25 % 7.25 % 7.25 % 4.00% / 6.00% 5.00% / 6.25% 5.00% / 6.25% Rate of compensation increase: Union 3.13 % 3.66 % 3.22 % Salaried 3.60 % 3.14 % 3.47 % In developing the expected long-term rate of return assumption, the Company considers input from its actuaries and other advisors, annualized returns of various major indices over a long-term time horizon and the Company's own historical 5 -year and 10 -year compounded investment returns. The expected long-term rate of return of 7.25% used in the year ended December 31, 2016 for the plans was based on an asset allocation range of 20 - 45% in public equity investments, 35 - 50% in fixed income investments, 0 - 10% in real estate investments, 15 - 30% collectively in hedge fund and private investments and 0 - 6% in cash investments. The actual return in any fiscal year will likely differ from the Company's assumption, but the Company's estimate of its return is based on long-term projections and historical results. Therefore, any variance in a given year does not necessarily indicate that the assumption should be changed. In developing the expected long-term rate of return assumption for other PRB plans, the Company considers input from actuaries, historical returns and annualized returns of various major indices over long periods. The expected long-term rates of returns are based on the weighted average asset allocation between the assets held within the 401(h) and those held in fixed income investments. Assumed Health Care Cost Trend Rates Used to Measure Expected Cost of Benefits December 31, 2017 2016 Weighted average health care cost trend rate N/A 6.10 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) N/A 4.50 % Fiscal year that the rate reaches the ultimate trend rate N/A 2027 The Company amended its retiree health care plan to provide coverage through a private exchange effective January 1, 2017. The Company will contribute fixed payments to an HRA for those retirees who previously had subsidized health care coverage through the Company. As such, health care cost trend rates have no effect on the amounts reported for health care plans. A one percentage point increase or decrease in the assumed health care cost trend rates would have no effect. Plan Assets Pension. Pension plan weighted-average asset allocations: Anticipated 2017 Actual Low High December 31, 2016 December 31, 2015 Asset Category: Domestic equity 10.0 % 20.0 % 12.5 % 19.9 % International equity 10.0 % 20.0 % 18.4 % 13.1 % Fixed income 35.0 % 50.0 % 38.2 % 40.5 % Real estate 2.0 % 6.0 % 3.5 % 5.0 % Hedge funds/private equity 15.0 % 30.0 % 21.1 % 16.8 % Other investments/cash 2.0 % 8.0 % 6.3 % 4.7 % The Company has a committee which, assisted by outside consultants, evaluates the objectives and investment policies concerning its long-term investment goals and asset allocation strategies. Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. The investment goals are (1) to meet or exceed the assumed actuarial rate of return over the long term within reasonable and prudent levels of risk, and (2) to preserve the real purchasing power of assets to meet future obligations. The nature and duration of benefit obligations, along with assumptions concerning asset class returns and return correlations, are considered when determining an appropriate asset allocation to achieve the investment objectives. Pension plan assets for the Company's qualified pension plans are held in a trust for the benefit of the plan participants and are invested in a diversified portfolio of equity investments, fixed income investments, real asset investments, hedge funds, private equity and cash. Risk targets are established and monitored against acceptable ranges. All investment policies and procedures are designed to ensure that the plans' investments are in compliance with the Employee Retirement Income Security Act. Guidelines are established defining permitted investments within each asset class. During the 2015 transition period , the Company implemented an investment strategy derived from the asset-liability study conducted during fiscal 2013. The results of the asset-liability study reinforced the emphasis on managing the volatility of pension assets relative to pension liabilities while still achieving a competitive investment return, achieving diversification between and within various asset classes and managing other risks. In order to manage the volatility between the value of pension assets and liabilities, the Company has maintained an allocation to long-duration fixed income investments. The Company regularly reviews its actual asset allocation and periodically rebalances its investments to the targeted allocation when considered appropriate. Target allocation ranges are guidelines, not limitations, and occasionally due to market conditions and other factors actual asset allocation may vary above or below a target. The implementation of the investment strategy discussed above is executed through a variety of investment structures such as: direct share or bond ownership, common/collective trusts or registered investment companies. Valuation methodologies differ for each of these structures. The valuation methodologies used for these investment structures are as follows: U.S. Government Securities, Corporate Debt, Common and Preferred Stock, Other Investments and Registered Investment Companies: Investments are valued at the closing price reported on the active market on which the individual securities are traded. Common/Collective Trusts: Investments in a collective investment vehicle are valued by multiplying the investee company's net asset value per share with the number of units or shares owned at the valuation date as determined by the investee company. Net asset value per share is determined by the investee company's custodian or fund administrator by deducting from the value of the assets of the investee company all of its liabilities and the resulting number is divided by the outstanding number of shares or units. Investments held by the common/collective trusts ("CCT"), including collateral invested for securities on loan, are valued on the basis of valuations furnished by a pricing service approved by the CCT's investment manager, which determines valuations using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders, or at fair value as determined in good faith by the CCT's investment manager. Partnership/Joint Venture Interests: Given the inherent illiquidity of many partnership/joint venture investments, these investments are generally valued based on unobservable inputs that reflect the reporting entity's own assumptions about the assumptions that market participants would use pricing the asset. While the valuation methodologies may differ among each entity, the method for valuing these assets is primarily net asset values; other methods may include, but are not limited to, discounted cash flow analysis and comparable trading data for similar investments. The General Partner or Account Manager for these Interests aggregates the values of underlying account securities and assets, then determines a final net asset value at the overall fund or account level and apportions that among the various investors by percentage of partnership or account ownership percentages. Funds in Insurance Company Accounts: These investments are valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Fair Value: Pension plan investments using the fair value hierarchy consisted of the following: December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in millions) Interest-bearing cash $ — $ 2 $ — $ 2 U.S. Government securities 3 — — 3 Corporate debt — 138 — 138 Common stock 62 1 — 63 Registered investment companies\Collective investment trust 56 — — 56 Value of funds in insurance company accounts — 39 1 40 Total Assets in the Fair Value Hierarchy $ 121 $ 180 $ 1 $ 302 Investments measured at NAV 1,906 Total Investments, excluding Plan Interest in Master Trust at fair value $ 2,208 Pension plan investments using the fair value hierarchy consisted of the following: December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in millions) Interest-bearing cash $ — $ 33 $ — $ 33 U.S. Government securities 62 6 — 68 Corporate debt — 406 — 406 Common stock 89 7 — 96 Registered investment companies\Collective investment trust 59 165 — 224 Value of funds in insurance company accounts — 40 1 41 Total Assets in the Fair Value Hierarchy $ 210 $ 657 $ 1 $ 868 Investments measured at NAV 1,322 Total Investments, excluding Plan interest in Master Trust at fair value $ 2,190 There were no material changes in Level 3 assets during the year ended December 31, 2016 or the nine month transition period ended December 31, 2015 . There was no direct ownership of the Company common stock included in plan assets at any of the periods presented. Other Postretirement Benefits. The Company's other PRB obligations were 88.4% and 52.5% pre-funded at December 31, 2016 and December 31, 2015 , respectively. Portions of the assets are held in a 401(h) account held within the pension master trust and are invested in the same manner as the pension assets. Approximately 47% and 44% of the assets were held in the 401(h) account at December 31, 2016 and December 31, 2015 , respectively. The remaining assets are in fixed income investments. The Company's investment objective for the other PRB plan assets is the preservation and safety of capital. Contributions During the year ended December 31, 2016 , the Company contributed $114 million directly to the ATK Plans' pension trust and $6 million directly to retirees under its supplemental (nonqualified) executive retirement plan. The Company also contributed $7 million to its other PRB plans. The Company is required to make contributions of $24 million to meet its legally required minimum contributions for 2017 . The Company also expects to distribute approximately $3 million directly to retirees under its supplemental executive retirement plans and to contribute approximately $5 million to its other postretirement benefit plans in 2017 . Expected Future Benefit Payments The following benefit payments, which reflect expected future service, are expected to be paid in the years ending December 31. The pension benefits will be paid primarily out of the pension trust. The postretirement benefit payments are shown net of the expected subsidy for the Medicare prescription drug benefit under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which are not material to be presented separately. (amounts in millions) Pension Benefits Other Postretirement Benefits 2017 $ 219 $ 9 2018 194 8 2019 199 8 2020 201 7 2021 205 6 2022 through 2026 1,014 24 Termination In the event the Company terminates any of the plans under conditions in which the plan's assets exceed that plan's obligations, U.S. Government regulations require that a fair allocation of any of the plan's assets based on plan contributions that were reimbursed under U.S. Government contracts will be returned to the U.S. Government. Defined Contribution Plan Through December 31, 2016, the Company also sponsored two defined contribution plans - the Alliant Techsystems Inc. 401(k) Plan and the Deferred Salary and Profit Sharing Plan for Employees of Orbital Sciences Corporation (the "Orbital Sciences 401(k) Plan"). Participation in these plans was available to substantially all U.S. employees. Effective January 1, 2016, the Orbital Sciences 401(k) Plan merged into the Alliant Techsystems Inc. 401(k) Plan, and the combined plan's name was changed to the Orbital ATK, Inc. 401(k) Plan. The Orbital ATK, Inc. 401(k) Plan is a 401(k) plan, with an employee stock ownership ("ESOP") feature. Employees may contribute up to 50% of their pay (highly compensated employees are subject to limitations). Employee contributions are invested, at the employees' direction, among a variety of investment alternatives including a Company common stock fund. Participants may transfer amounts into and out of the investment alternatives at any time, except for the Company common stock fund. Effective January 1, 2013, employees no longer had the option to invest in the Company common stock fund, other than for the reinvestment of dividends paid on the Company common stock in participants' accounts. Balances in the fund prior to January 1, 2013 remain in the fund unless distributed or transferred. Any dividends declared on the Company common stock can be either reinvested within the Company common stock fund or provided as a cash payment. The Company matching contributions and non-elective contribution to this plan are summarized below: • a matching contribution of 100% of the first 3% of the participant's contributed pay plus 50% of the next 3% of the participant's contributed pay for most employees (subject to one-year vesting), or • a matching contribution of 100% of the first 6% of the participant's contributed pay for Technical Services Division employees (subject to one-year vesting), or • a non-elective contribution based on the recognized compensation, age and service for most employees who are not earning a pension benefit (subject to three-year vesting). The Company's contributions to the 401(K) plan were $56 million in the year ended December 31, 2016 , $41 million in the 2015 transition period and $51 million in fiscal 2015 . The company also made a contribution to the 401(k) plan of $4 million in fiscal 2016 for a prior Orbital Sciences 401(k) Plan annual discretionary profit sharing contribution based on the participant's compensation earned prior to the merger. At December 31, 2016 , the Company had approximately 12,700 U.S. employees eligible under the plan. The Company has union-represented employees at five locations, comprising less than 20% of its total workforce. One location has two separate bargaining units, each with its own collective bargaining agreement ("CBA"). The Company's current CBAs expire in 2017, 2018 and 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income taxes consisted of the following: Year Ended Nine Months Ended December 31, 2015 Year Ended (in millions) Current: Federal $ 63 $ 28 $ 21 State 2 2 4 Non-US 4 — — Deferred: Federal 39 55 17 State 3 2 (5 ) Income taxes $ 111 $ 87 $ 37 Differences between the federal statutory rate and the Company's effective rate related to the following: Year Ended Nine Months Ended December 31, 2015 Year Ended Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal impact 2.8 2.1 (0.1 ) Domestic manufacturing deduction (2.3 ) (1.5 ) (5.6 ) Goodwill impairment — — 11.2 Research and development tax credit (12.6 ) (5.2 ) (3.2 ) Change in prior year contingent tax liabilities 0.1 1.0 (3.7 ) Nondeductible transaction costs — — 7.2 Other (2.5 ) (1.1 ) (3.3 ) Change in valuation allowance 7.0 1.6 (2.7 ) Income tax provision 27.5 % 31.9 % 34.8 % Deferred Income Taxes Deferred income taxes arise because of temporary differences in the timing of the recognition of income and expense items for financial statement reporting and income tax purposes. The net effect of these temporary differences are classified in the consolidated financial statements of financial position as noncurrent assets or liabilities. In December 2015, the Protecting Americans from Tax Hikes (PATH) Act was enacted to permanently reinstate the Research & Development tax credit (R&D tax credit) which had expired on December 31, 2014. The impact of this extension was included in the tax rate for the period ended December 31, 2015. In addition, we recorded additional R&D tax credit during the acquisition accounting measurement period. Deferred income tax assets and liabilities resulting from temporary differences related to the following: December 31, 2016 2015 (in millions) Deferred income tax assets: Retirement benefits $ 271 $ 306 Federal carryforwards 13 36 State carryforwards 50 9 Other 19 33 Other reserves 21 26 Accruals for employee benefits 40 42 Inventory 25 14 Contract method of revenue recognition 80 109 Total deferred income tax assets before valuation allowance 519 575 Valuation allowance (42 ) (13 ) Total deferred income tax assets 477 562 Deferred income tax liabilities: Intangible assets (86 ) (98 ) Property, plant and equipment (127 ) (129 ) Debt-related (10 ) (16 ) Total deferred income tax liabilities (223 ) (243 ) Net deferred income tax assets $ 254 $ 319 The Company believes it is more likely than not that the recorded deferred benefits will be realized through the reduction of future taxable income. The Company's recorded valuation allowance of $42 million at December 31, 2016 relates to certain capital loss, tax credits and net operating losses that are not expected to be realized before their expiration. Included in the net deferred tax asset are net operating loss and credit carryovers of $14 million , net of valuation allowances, which expire in years ending from December 31, 2017 through December 31, 2037, and $9 million that may be carried over indefinitely. The following summarizes activity related to valuation allowances for deferred tax assets: Year Ended Nine Months Ended Year Ended (in millions) Beginning Balance $ 13 $ 9 $ 3 Additions, charged to expense 37 5 — Additions, due to the Merger — — 7 Deductions (8 ) (1 ) (1 ) Ending Balance $ 42 $ 13 $ 9 The Company has significant deferred tax assets in the U.S. against which valuation allowances have been established to reduce such deferred tax assets to an amount that is more likely than not to be realized. The establishment of valuation allowances requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. While the Company believes positive evidence exists with regard to the realizability of these deferred tax assets, it is not considered sufficient to outweigh the objectively verifiable negative evidence. Unrecognized Tax Benefits Unrecognized tax benefits consist of the carrying value of the Company's recorded uncertain tax positions as well as the potential tax benefits that could result from other tax positions that have not been recognized in the financial statements under current authoritative guidance. At December 31, 2016 and December 31, 2015 , unrecognized tax benefits that have not been recognized in the financial statements amounted to $121 million and $83 million , respectively, of which $106 million and $79 million , respectively, would affect the effective tax rate, if recognized. The remaining balance is related to deferred tax items which only impact the timing of tax payments. Although the timing and outcome of audit settlements are uncertain, it is reasonably possible that a $11 million reduction of the uncertain tax benefits will occur in the next 12 months . The settlement of these unrecognized tax benefits could result in earnings from $0 million to $10 million . Changes in unrecognized tax benefits, excluding interest and penalties, were as follows: Year Ended Nine Months Ended December 31, 2015 Year Ended (in millions) Unrecognized tax benefits, beginning of period $ 81 $ 34 $ 32 Gross increases—tax positions in prior periods 30 42 22 Gross decreases—tax positions in prior periods (4 ) (1 ) (16 ) Gross increases—current-period tax positions 18 6 1 Settlements (5 ) — (3 ) Lapse of statute of limitations (1 ) — (2 ) Unrecognized tax benefits, end of period $ 119 $ 81 $ 34 The Company reports income tax-related interest income within income taxes. Penalties and tax-related interest expense are also reported as a component of income taxes. At December 31, 2016 and December 31, 2015 , $2 million and $2 million of income tax-related interest and an immaterial amount of penalties were included in accrued income taxes, respectively. The Company or one of its subsidiaries files income tax returns in the U.S. federal, various U.S. state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2010. The IRS has completed the audits of the Company through March 31, 2014 and is currently auditing the Company's tax returns for periods ending March 31, 2015 and December 31, 2015. The Company believes appropriate provisions for all outstanding issues have been made for all remaining open years in all jurisdictions. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments The Company leases land, buildings and equipment under various operating leases, which generally have renewal options of one to five years. Rent expense was $88 million in the year ended December 31, 2016 , $69 million in the 2015 transition period , and $73 million in fiscal 2015 . Scheduled operating lease payments are as follows: (in millions) 2017 $ 77 2018 71 2019 65 2020 55 2021 51 Thereafter 66 Total $ 385 The Company currently leases land from a private party for its facility in Magna, Utah. This facility is used in the production and testing of some of the Company's rocket motors. The current lease extends through September 2022. The lease requires the Company to surrender the property back to its owner in its original condition. While the Company currently anticipates operating this facility indefinitely, the Company could incur significant costs if the Company were to terminate this lease. The Company has known conditional asset retirement obligations, such as contractual lease restoration obligations, to be performed in the future, that are not reasonably estimable due to insufficient information about the timing and method of settlement of the obligation. Accordingly, these obligations have not been recorded in the consolidated financial statements. A liability for these obligations will be recorded in the period when sufficient information regarding timing and method of settlement becomes available to make a reasonable estimate of the liability's fair value. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies Litigation. From time to time, the Company is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of the Company's business. The Company does not consider any of such proceedings that are currently pending, individually or in the aggregate, notwithstanding that the unfavorable resolution of any matter may have a material effect on net earnings in any particular quarter, to be material to its business or likely to result in a material adverse effect on its operating results, financial condition, or cash flows. Securities Class Action. On August 12, 2016, a putative class action complaint, naming the Company, our Chief Executive Officer and our Chief Financial Officer as defendants, was filed in the United States District Court for the Eastern District of Virginia ( Steven Knurr, et al. v. Orbital ATK, Inc., No. 16-cv-01031 (TSE-MSN) ). The class action complaint asserts claims on behalf of purchasers of Orbital ATK securities for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder, arising out of allegedly false and misleading statements and the failure to disclose that: (i) the Company lacked effective control over financial reporting; and (ii) as a result, the Company failed to record an anticipated loss on its long-term contract with the U.S. Army to manufacture and supply small caliber ammunition at the U.S. Army's Lake City Army Ammunition Plant. On April 24, 2017, the plaintiffs filed an amended complaint adding our Chief Operating Officer and a former Chief Executive Officer/Director as defendants and asserting claims for violations of additional sections of the Exchange Act. The amended complaint also alleges false and misleading statements in the Company’s Form S-4 filed with the SEC relating to the merger between the Company and Orbital Sciences Corporation. The complaint seeks an award of damages, an award of reasonable costs and expenses at trial, including counsel and expert fees, and an award of such other relief as deemed appropriate by the Court. The Company intends to defend this action vigorously. SEC Investigation . The SEC is conducting a non-public investigation relating to our historical accounting practices as a result of the prior restatement of the Company's unaudited condensed consolidated financial statements for the quarterly periods ended July 5, 2015 and October 4, 2015 described in the Transition Report on Form 10-K for the nine-month period ending December 31, 2015 previously filed on March 15, 2016, and the Company also has voluntarily self-reported to the SEC regarding matters pertaining to the restatement described in the Form 10-K/A filed on February 24, 2017. The Company is cooperating fully with the SEC in connection with these matters. U.S. Government Investigations. The Company is also subject to U.S. Government investigations from which civil, criminal, or administrative proceedings could result. Such proceedings could involve claims by the U.S. Government for fines, penalties, compensatory and treble damages, restitution, and/or forfeitures. Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations. The Company believes, based upon all available information, that the outcome of any such pending government investigations will not have a material adverse effect on its operating results, financial condition, or cash flows. Claim Recovery. Profits expected to be realized on contracts are based on management's estimates of total contract sales value and costs at completion. Estimated amounts for contract changes and claims are included in contract sales only when realization is estimated to be probable. At December 31, 2016 and December 31, 2015 , based on progress to date on certain contracts, there is $18 million and $25 million included in unbilled receivables for contract claims. Environmental Liabilities. The Company's operations and ownership or use of real property are subject to a number of federal, state and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those for discharge of hazardous materials, remediation of contaminated sites and restoration of damage to the environment. At certain sites that the Company owns or operates or formerly owned or operated, there is known or potential contamination that the Company is required to investigate or remediate. The Company could incur substantial costs, including remediation costs, resource restoration costs, fines and penalties, or third party property damage or personal injury claims, as a result of liabilities associated with past practices or violations of environmental laws or non-compliance with environmental permits. The Company has been identified as a potentially responsible party (“PRP”), along with other parties, in several regulatory agency actions associated with hazardous waste sites. As a PRP, the Company may be required to pay a share of the costs of the investigation and clean-up of these sites. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, the Company has concluded that these matters, individually or in the aggregate, will not have a material adverse effect on operating results, financial condition, or cash flows. The Company could incur substantial costs, including cleanup costs, resource restoration, fines and penalties or third-party property damage or personal injury claims, as a result of violations or liabilities under environmental laws or non-compliance with environmental permits. While environmental laws and regulations have not had a material adverse effect on the Company's operating results, financial condition, or cash flows in the past and the Company has environmental management programs in place to mitigate these risks, it is difficult to predict whether they will have a material impact in the future. The liability for environmental remediation represents management's best estimate of the present value of the probable and reasonably estimable costs related to known remediation obligations. The receivable represents the present value of the amount that the Company expects to recover, as discussed below. Both the liability and receivable have been discounted to reflect the present value of the expected future cash flows, using a discount rate of approximately 1.0% and 0.7% at December 31, 2016 and December 31, 2015, respectively. The Company's discount rate is calculated using the 20-year Treasury constant maturities rate, net of an estimated inflationary factor of 1.9% , rounded to the nearest quarter percent. Environmental remediation consisted of the following: December 31, 2016 December 31, 2015 Liability Receivable Liability Receivable (in millions) Amounts (payable) receivable $ (43 ) $ 19 $ (42 ) $ 18 Unamortized discount 2 (1 ) 2 — Present value amounts (payable) receivable $ (41 ) $ 18 $ (40 ) $ 18 Amounts expected to be paid or received in periods more than one year from the balance sheet date are classified as noncurrent. At December 31, 2016, $6 million was recorded within other current liabilities and $35 million was recorded within other long-term liabilities. Of the total discounted receivable, the Company recorded $3 million within other current assets and $15 million within other noncurrent assets. At December 31, 2016, the estimated discounted range of reasonably possible costs of environmental remediation was $41 million to $65 million . The Company expects that a portion of its environmental compliance and remediation costs will be recoverable under U.S. Government contracts. Some of the remediation costs that are not recoverable from the U.S. Government that are associated with facilities purchased in a business acquisition may be covered by various indemnification agreements, as described below. • As part of its acquisition of the Hercules Aerospace Company in fiscal 1995, the Company generally assumed responsibility for environmental compliance at the facilities acquired from Hercules ("the Hercules Facilities"). The Company believes that a portion of the compliance and remediation costs associated with the Hercules Facilities will be recoverable under U.S. Government contracts. If the Company were unable to recover those environmental remediation costs under these contracts, the Company believes that these costs will be covered by Hercules Incorporated, a subsidiary of Ashland Inc., ("Hercules") under environmental agreements entered into in connection with the Hercules acquisition. Under these agreements, Hercules has agreed to indemnify the Company for environmental conditions relating to releases or hazardous waste activities occurring prior to the Company's purchase of the Hercules Facilities as long as they were identified in accordance with the terms of the agreement; fines relating to pre-acquisition environmental compliance; and environmental claims arising out of breaches of Hercules' representations and warranties. Hercules is not required to indemnify the Company for any individual claims below $50 thousand . Hercules is obligated to indemnify the Company for the lowest cost response of remediation required at the facility that is acceptable to the applicable regulatory agencies. The Company is not responsible for conducting any remedial activities with respect to the Clearwater, FL facility. In accordance with its agreement with Hercules, the Company notified Hercules of all known contamination on non-federal lands on or before March 31, 2000, and on federal lands on or before March 31, 2005. • The Company generally assumed responsibility for environmental compliance at the Thiokol Facilities acquired from Alcoa Inc. ("Alcoa") in fiscal 2002. The Company expects that a portion of the compliance and remediation costs associated with the acquired Thiokol Facilities will be recoverable under U.S. Government contracts. In accordance with its agreement with Alcoa, the Company notified Alcoa of all known environmental remediation issues at January 30, 2004. Of these known issues, the Company is responsible for any costs not recovered through U.S. Government contracts at the Thiokol Facilities up to $14 million , the Company and Alcoa have agreed to split evenly any amounts between $14 million and $34 million , and the Company is responsible for any payments in excess of $34 million . At this time, the Company believes that costs not recovered through U.S. Government contracts will be immaterial. The Company cannot ensure that the U.S. Government, Hercules, Alcoa, or other third parties will reimburse it for any particular environmental costs or reimburse the Company in a timely manner or that any claims for indemnification will not be disputed. U.S. Government reimbursements for cleanups are financed out of a particular agency's operating budget and the ability of a particular governmental agency to make timely reimbursements for cleanup costs will be subject to national budgetary constraints. The Company's failure to obtain full or timely reimbursement from the U.S. Government, Hercules, Alcoa, or other third parties could have a material adverse effect on its operating results, financial condition, or cash flows. While the Company has environmental management programs in place to mitigate these risks, and environmental laws and regulations have not had a material adverse effect on the Company's operating results, financial condition, or cash flows in the past, it is difficult to predict whether they will have a material impact in the future. In December 2001, the Company received notice from the State of Utah of a potential claim against the Company under Section 107(f) of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") for natural resource damages at Bacchus, one of the Hercules Facilities, in Magna, Utah. The notice letter, which was issued to preserve the State's rights under CERCLA, also expressly acknowledged the State's willingness to allow the Company to go forward with its currently-planned monitoring and remediation program. The State's preliminary estimate of damages contained in this claim was $139 million , which is based on known and alleged groundwater contamination at and near Bacchus and is related to Hercules' manufacturing operations at the site. The Company received similar notices related to the Promontory facility that was acquired from Alcoa in the acquisition of Thiokol and Kennecott’s Section 21 Well Field due the presence of perchlorate. Although the Company has previously made accruals for its best estimate of the probable and reasonably estimable costs related to the remediation obligations known to the Company with respect to the affected areas, the Company cannot yet predict if or when a suit may be filed against it, nor can the Company determine any additional costs that may be incurred in connection with this matter. Expected aggregate undiscounted environmental remediation payments, net of expected recoveries, are as follows: (in millions) 2017 $ 2 2018 — 2019 — 2020 3 2021 2 Thereafter 17 Total $ 24 There were no material insurance recoveries related to environmental remediation during any of the periods presented. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has authorized 5,000,000 shares of preferred stock, par value $1.00 , none of which has been issued. During the year ended December 31, 2016, the Company adopted an Employee Stock Purchase Plan ("ESPP") whereby eligible employees may purchase shares of the Company's common stock at the lesser of 85% of the fair market value of a share of common stock at the beginning or at the end of the quarterly offering period. The ESPP is compensatory and the fair value of the shares purchased is determined using the Black-Scholes option pricing model. As of December 31, 2016 , the Company had authorized up to 2,000,000 common shares, of which 1,901,954 shares of common shares were available for purchase under the ESPP. ESPP expense in 2016 was $1 million . The Company sponsors five stock-based incentive plans, including: the Orbital ATK, Inc. 2015 Stock Incentive Plan (the "2015 Stock Incentive Plan"); three legacy ATK plans (the Alliant Techsystems Inc. 2005 Stock Incentive Plan, the Non-Employee Director Restricted Stock Plan and the 1990 Equity Incentive Plan); and one legacy Orbital plan, under which the Company assumed the obligation to issue Company common stock pursuant to the terms of the Transaction Agreement relating to the Merger (the Orbital Sciences Corporation 2005 Amended and Restated Stock Incentive Plan). At December 31, 2016 , the Company has authorized up to 3,750,000 common shares under the 2015 Stock Incentive Plan, of which 2,811,466 common shares are available to be granted. No new grants will be made out of the other four plans. There are five types of awards outstanding under the Company's stock incentive plans: performance awards, total stockholder return performance awards ("TSR awards"), restricted stock units, restricted stock and stock options. The Company issues treasury shares upon (i) the payment of performance awards, TSR awards and restricted stock units, (ii) the grant of restricted stock, and (iii) the exercise of stock options. The Company's nonvested stock-based compensation awards activity was as follows: Performance Share Restricted Stock Restricted Stock Combined Nonvested, March 31, 2014 308,092 — 282,944 $ 83.91 Granted 161,661 — 139,094 81.88 Converted in conjunction with the Merger — 647,436 — 71.29 Canceled/forfeited (309,223 ) — (13,521 ) 87.05 Vested — (146,497 ) (195,882 ) 72.50 Nonvested, March 31, 2015 160,530 500,939 212,635 $ 77.02 Granted 2,976 — 86,108 74.88 Canceled/forfeited (5,374 ) (10,908 ) (9,914 ) 80.88 Vested (333 ) (191,084 ) (17,806 ) 43.87 Nonvested, December 31, 2015 157,799 298,947 271,023 $ 75.57 Granted 153,888 — 176,800 80.14 Canceled/forfeited (706 ) (2,933 ) (7,720 ) 78.73 Vested — (193,687 ) (128,854 ) 64.68 Nonvested, December 31, 2016 310,981 102,327 311,249 $ 82.31 Performance Awards. There were performance shares reserved for executive officers and key employees. Performance shares are valued at the fair value of the Company's stock as of the grant date and expense is recognized based on the number of shares expected to vest according to the terms of the awards under which they are granted. Of these performance shares: • up to 73,802 will become payable upon achievement of financial performance goals relating to absolute sales growth and return on investment of capital for the performance period beginning January 1, 2016 and ending December 31, 2018; and • up to 81,689 will become payable upon achievement of financial performance goal relating to absolute earnings and absolute sales growth for performance beginning April 1, 2015 and ending December 31, 2017. TSR Awards. There were 73,802 shares with a fair value of $87.85 and 81,688 shares with a fair value of $94.93 reserved for key employees for the fiscal year 2016-2018 and 2015-2017 performance periods, respectively. The Company used an integrated Monte Carlo simulation model to determine the fair value of the TSR awards. The Monte Carlo model calculates the probability of satisfying the market conditions stipulated in the award. This probability is an input into the trinomial lattice model used to determine the fair value of the awards as well as the assumptions of other variables, including the risk-free interest rate and expected volatility of the Company's stock price in future periods. The risk-free rate is based on the U.S. dollar-denominated U.S. Treasury strip rate with a remaining term that approximates the life assumed at the date of grant. Weighted-average assumptions used in estimating the value of the TSR award were as follows: Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended Risk-free rate 1.00 % 1.02 % 1.02 % Expected volatility 25.39 % 22.81 % 22.81 % Expected dividend yield 1.51 % 1.78 % 1.78 % Expected award life 2.8 years 2.8 years 2.8 years Restricted Stock Units. Pursuant to the terms of the Transaction Agreement and under the terms of the ATK 2005 Stock Incentive Plan, all of the performance awards and TSR awards outstanding at February 9, 2015 were converted into time-vesting restricted stock units in connection with the Distribution, with vesting periods corresponding to the respective performance periods. At December 31, 2016 , there were 53,449 restricted stock units outstanding for the performance period ending March 31, 2017. Pursuant to the terms of the Transaction Agreement, the Company also assumed the obligation to issue Company common stock from the legacy Orbital plan. At December 31, 2016 , there were 48,878 restricted stock units outstanding under the legacy Orbital plan. Restricted Stock Awards. Restricted stock granted to non-employee directors and certain key employees vests over periods generally ranging from one to three years from the date of award and are valued at the fair value of the Company's common stock at the grant date. Stock Options. Stock options may be granted periodically, with an exercise price equal to the fair market value of the Company's common stock on the date of grant, and generally vest from one to three years from the date of grant. Options are generally granted with seven -year or ten -year terms. The Company's stock option activity was as follows: Shares Weighted Average Weighted Average Aggregate Intrinsic Outstanding, March 31, 2014 270,405 $ 74.11 8.3 $ 68.04 Granted 73,100 72.06 Converted in conjunction with the Merger 11,225 27.45 Outstanding, March 31, 2015 354,730 $ 41.83 7.8 $ 34.80 Granted 1,443 73.13 Exercised (122,893 ) 30.90 Outstanding, December 31, 2015 233,280 $ 47.79 7.7 $ 41.55 Granted 72,328 79.43 Exercised (33,629 ) 29.93 Outstanding, December 31, 2016 271,979 $ 58.41 7.6 $ 29.32 Options exercisable at: December 31, 2016 138,403 $ 42.25 6.5 $ 45.48 December 31, 2015 109,509 $ 32.43 6.6 $ 56.91 March 31, 2015 230,715 $ 64.32 7.0 $ 44.99 The weighted-average fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and represents the difference between fair market value on the date of grant and the estimated market value on the expected exercise date. The option pricing model requires the Company to make assumptions. The risk-free rate is based on U.S. Treasury zero-coupon issues with a remaining term that approximates the expected life assumed at the date of grant. Expected volatility is based on the historical volatility of peer companies' stock over the past seven years. The expected option life is based on the contractual term of the stock option and expected employee exercise and post-vesting employment termination trends. The weighted-average fair value of options granted was $20.53 , $20.80 and $39.81 during year ended December 31, 2016, the 2015 transition period and the year ended March 31, 2015 , respectively. Weighted-average assumptions used in estimating the value of the stock option grants were as follows: Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended Risk-free rate 1.62% 1.99% 1.82% Expected volatility 26.89% 27.91% 27.67% Expected dividend yield 1.36% 1.17% 0.99% Expected option life 7 years 7 years 7 years The total intrinsic value of options exercised was $2 million and $5 million during the year ended December 31, 2016 and the 2015 transition period , respectively; there were no options exercised during fiscal 2015. Total cash received from options exercised during year ended December 31, 2016 and the 2015 transition period was $1 million and $4 million , respectively. Total pre-tax stock-based compensation expense of $20 million , $19 million and $25 million was recognized during the year ended December 31, 2016 , the 2015 transition period and fiscal 2015, respectively. The total income tax benefit recognized in the statement of comprehensive income for share-based compensation was $7 million , $8 million and $9 million during the year ended December 31, 2016 , the 2015 transition period and fiscal 2015, respectively. At December 31, 2016 , the total unrecognized compensation cost related to nonvested stock-based compensation awards was $26 million and is expected to be realized over a weighted average period of 1.7 years. Share Repurchases Shares of the Company's common stock may be purchased in the open market, subject to compliance with applicable laws and regulations and the Company's debt covenants, depending upon market conditions and other factors. On November 1, 2016, the Board of Directors authorized the amount for repurchase of the Company's common stock to the lesser of $300 million or 4,000,000 shares and extended the repurchase period through March 31, 2017. On February 27, 2017, the Board of Directors increased the amount authorized for repurchase to $450 million and extended the repurchase period through March 31, 2018. The Company repurchased 1,570,333 shares for $124 million during the year ended December 31, 2016 and 1,008,445 shares for $76 million in the 2015 transition period . There were no shares repurchased during fiscal 2015. |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs During the 2015 transition period and fiscal 2015 , the Company executed business restructuring initiatives aimed at reducing the Company's fixed cost structure. In May 2014, the Company consolidated a portion of its Eden Prairie, Minnesota corporate facility. In conjunction with that consolidation, the Company incurred restructuring charges in the first quarter of fiscal 2015 related primarily to the fair value of the remaining lease rentals, asset impairment charges and costs associated with facility reconfiguration. In the fourth quarter of fiscal 2015 , the Company incurred termination costs for management restructuring. Additionally, in the fourth quarter of fiscal 2015 , the Company consolidated a portion of its Arlington, Virginia corporate facility, incurring charges related primarily to the fair value of the remaining lease rentals and asset impairment charges. In the last quarter of the 2015 transition period , the Company consolidated the remaining portion of its Eden Prairie, Minnesota corporate facility and a further portion of its Arlington, Virginia corporate facility, incurring charges related primarily to the fair value of the remaining lease rentals and asset impairment charges. In addition, in the last quarter of the 2015 transition period , the Company incurred termination costs for management restructuring. Changes in restructuring liabilities were as follows: Termination Remaining Lease Rentals Asset Total (in millions) Balance, March 31, 2015 $ 9 $ 10 $ — $ 19 Expense 4 18 6 28 Payments (9 ) (2 ) — (11 ) Noncash settlements — — (6 ) (6 ) Balance, December 31, 2015 4 26 — 30 Expense (1 ) — — (1 ) Payments (2 ) (7 ) — (9 ) Noncash settlements — — — — Balance, December 31, 2016 $ 1 $ 19 $ — $ 20 |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Operating Segment Information The Company operates its business structure within three operating groups. These operating segments ("groups") are defined based on the reporting and review process used by the Company's chief executive officer and other management. The operating structure aligns the Company's capabilities and resources with its customers and markets and positions the Company for long-term growth and improved profitability. At December 31, 2016 , the Company's three operating groups were: • Flight Systems Group develops rockets that are used as small- and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories, interceptor and target vehicles for missile defense systems and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories. The group also develops and produces medium- and large-class rocket propulsion systems for human and cargo launch vehicles, strategic missiles, missile defense interceptors and target vehicles. Additionally, Flight Systems Group operates in the military and commercial aircraft and launch structures markets. Other products include illuminating flares and aircraft countermeasures. • Defense Systems Group develops and produces military small-, medium- and large-caliber ammunition, small-caliber commercial ammunition, propulsion systems for tactical missiles and missile defense applications, strike weapons, precision weapons and munitions, high-performance gun systems, aircraft survivability systems, fuzes and warheads, energetic materials and special mission aircraft. • Space Systems Group develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting, conduct space-related scientific research, and perform other activities related to national security. In addition, Space Systems Group develops and produces human-rated space systems for Earth-orbit and deep-space exploration, including re-supplying the ISS. This group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. Government agencies. The Company derives the majority of its sales from contracts with, and prime contractors to, the U.S. Government. Sales to the U.S. Government and U.S. Government prime contractors were as follows: U.S. Government Sales Percentage of sales (in millions) Year ended December 31, 2016 $ 3,368 76 % Nine months ended December 31, 2015 $ 2,359 70 % Year ended March 31, 2015 $ 2,332 75 % The CRS contracts with NASA, which are reported within Flight Systems Group and Space Systems Group , comprised 5% and 10% of total sales in the year ended December 31, 2016 and the 2015 transition period , respectively. The Company's small-caliber ammunition contract with the U.S. Army, which is reported within Defense Systems Group , comprised 6% , 6% and 12% of total sales in calendar 2016, the 2015 transition period, and fiscal 2015, respectively. No single commercial customer accounted for more than 10% of the Company's sales in the year ended December 31, 2016 , the 2015 transition period or fiscal 2015 , respectively. The Company's international sales were $778 million in the year ended December 31, 2016 , $766 million in the 2015 transition period and $608 million in fiscal 2015 . During 2016 , $434 million of these sales were in Defense Systems Group , $192 million of these sales were in Space Systems Group and $152 million of these sales were in Flight Systems Group . Sales to no individual country outside the United States accounted for more than 4% , 4% or 6% of the Company's sales in the year ended December 31, 2016 , the 2015 transition period and fiscal 2015 , respectively. Substantially all of the Company's assets are held in the United States. Operating results and total assets by segment were as follows, with amounts in millions: Year Ended December 31, 2016 Flight Systems Group Defense Systems Group Space Systems Group Corporate Total (in millions) Sales: External customers $ 1,483 $ 1,804 $ 1,168 $ — $ 4,455 Intercompany 13 19 70 (102 ) — Total $ 1,496 $ 1,823 $ 1,238 $ (102 ) $ 4,455 Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest $ 204 $ 172 $ 129 $ (33 ) $ 472 Capital expenditures $ 78 $ 44 $ 56 $ 9 $ 187 Depreciation $ 54 $ 18 $ 31 $ 13 $ 116 Amortization of intangibles $ — $ 1 $ — $ 42 $ 43 Total assets $ 2,208 $ 1,228 $ 1,280 $ 702 $ 5,418 Nine Months Ended December 31, 2015 Flight Systems Group Defense Systems Group Space Systems Group Corporate Total (in millions) Sales: External customers $ 1,115 $ 1,314 $ 962 $ — $ 3,391 Intercompany 27 6 15 (48 ) — Total $ 1,142 $ 1,320 $ 977 $ (48 ) $ 3,391 Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest $ 197 $ 126 $ 67 $ (57 ) $ 333 Capital expenditures $ 48 $ 23 $ 31 $ 3 $ 105 Depreciation $ 39 $ 15 $ 24 $ 11 $ 89 Amortization of intangibles $ — $ 1 $ — $ 32 $ 33 Total assets $ 2,224 $ 1,184 $ 1,273 $ 643 $ 5,324 Year Ended March 31, 2015 Flight Systems Group Defense Systems Group Space Systems Group Corporate Total (in millions) Sales: External customers $ 1,064 $ 1,655 $ 394 $ — $ 3,113 Intercompany 29 178 17 (224 ) — Total $ 1,093 $ 1,833 $ 411 $ (224 ) $ 3,113 Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest $ 145 $ 185 $ (6 ) $ (101 ) $ 223 Capital expenditures $ 49 $ 44 $ 6 $ 14 $ 113 Depreciation $ 35 $ 20 $ 11 $ 7 $ 73 Amortization of intangibles $ 1 $ 2 $ — $ 6 $ 9 Total assets $ 2,044 $ 1,173 $ 1,455 $ 806 $ 5,478 During fiscal 2015 , the Company recognized a goodwill impairment charge in Space Systems Group of $34 million . Defense Systems Group had sales to Vista Outdoor for the 2015 transition period of $138 million and for the period from Distribution to March 31, 2015 of $19 million , in conjunction with two supply agreements. Sales to Sporting Group were previously reported as intercompany sales and eliminated in consolidation and totaled $171 million for the period April 1, 2014 through February 8, 2015. Certain administrative functions are primarily managed by the Company at the corporate headquarters ("Corporate"). Some examples of such functions are human resources, pension and postretirement benefits, corporate accounting, legal, tax and treasury. Significant assets and liabilities managed at Corporate include those associated with debt, restructuring, pension and postretirement benefits, environmental liabilities, litigation liabilities, strategic growth costs and income taxes. Costs related to the administrative functions managed by Corporate are either recorded at Corporate or allocated to the business units based on the nature of the expense. The difference between pension and postretirement benefit expense calculated under Financial Accounting Standards and the expense calculated under U.S. Cost Accounting Standards is recorded at the corporate level which provides for greater clarity on the operating results of the business segments. Administrative expenses such as corporate accounting, legal and treasury costs are allocated out to the business segments. Environmental expenses are allocated to each segment based on the origin of the underlying environmental cost. Transactions between segments are recorded at the segment level, consistent with the Company's financial accounting policies. Intercompany balances and transactions involving different segments are eliminated at the Company's consolidated financial statements level and are shown above in Corporate. The amortization expense related to purchase accounting attributed to the acquisition of Orbital is also recorded in Corporate. |
Transition Period Comparative D
Transition Period Comparative Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Transition Period Comparative Data | Transition Period Comparative Data The following table presents certain financial information for the nine months ended December 31, 2015 and December 28, 2014 respectively: Nine Months Ended (Amounts in millions except per share data) December 31, 2015 December 28, 2014 (unaudited) Sales $ 3,391 $ 2,142 Gross profit $ 674 $ 478 Income from continuing operations $ 185 $ 109 Income from discontinued operations $ 1 $ 108 Net income attributable to Orbital ATK, Inc. $ 186 $ 217 Basic earnings per common share Income from continuing operations $ 3.12 $ 3.44 Income from discontinued operations 0.02 3.42 Net income attributable to Orbital ATK, Inc. $ 3.14 $ 6.86 Diluted earnings per common share Income from continuing operations $ 3.09 $ 3.37 Income from discontinued operations 0.02 3.34 Net income attributable to Orbital ATK, Inc. $ 3.11 $ 6.71 Note: earnings per share amounts may not recalculate due to rounding. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) For the Year Ended December 31, 2016 Quarter Ended (in millions, except per share data) April 3, July 3, October 2, December 31, Sales $ 1,056 $ 1,083 $ 1,044 $ 1,272 Gross profit $ 227 $ 280 $ 210 $ 268 Income from continuing operations $ 77 $ 91 $ 60 $ 65 Income from discontinued operations — — — — Net income attributable to Orbital ATK, Inc. $ 77 $ 91 $ 60 $ 65 Basic earnings per common share from: (1) Continuing operations $ 1.33 $ 1.56 $ 1.04 $ 1.12 Discontinued operations — — — — Net income attributable to Orbital ATK, Inc. $ 1.33 $ 1.56 $ 1.04 $ 1.12 Diluted earnings per common share from: (1) Continuing operations $ 1.31 $ 1.55 $ 1.04 $ 1.11 Discontinued operations — — — — Net income attributable to Orbital ATK, Inc. $ 1.31 $ 1.55 $ 1.04 $ 1.11 Cash dividends per common share: Declared $ 0.30 $ 0.30 $ 0.30 $ 0.30 Paid $ 0.30 $ 0.30 $ 0.30 $ 0.30 For the Nine Months Ended December 31, 2015 Quarter Ended (in millions, except per share data) July 5, October 4, December 31, Sales $ 1,104 $ 1,143 $ 1,145 Gross profit $ 223 $ 209 $ 242 Income from continuing operations $ 58 $ 74 $ 53 Income from discontinued operations — — 1 Net income attributable to Orbital ATK, Inc. $ 58 $ 74 $ 54 Basic earnings per common share from: (1) Continuing operations $ 0.98 $ 1.26 $ 0.90 Discontinued operations — — 0.02 Net income attributable to Orbital ATK, Inc. $ 0.98 $ 1.26 $ 0.92 Diluted earnings per common share from: (1) Continuing operations $ 0.97 $ 1.25 $ 0.89 Discontinued operations — — 0.02 Net income attributable to Orbital ATK, Inc. $ 0.97 $ 1.25 $ 0.91 Cash dividends per common share: Declared $ — $ 0.26 $ 0.26 Paid $ 0.26 $ 0.26 $ 0.26 (1) Quarterly earnings (loss) per common share amounts may not total to annual earnings per common share amounts because quarterly and annual earnings per share are calculated separately based on earnings and basic and diluted weighted-average common shares outstanding during the respective periods. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Discontinued Operations | As a result of the Distribution, the Sporting Group is reported as a discontinued operation for all prior periods presented. |
Business Combinations Policy | The Company used the acquisition method to account for the Merger; accordingly, the results of Orbital are included in the Company's consolidated financial statements since the date of the Merger. |
Basis of Presentation | Basis of Presentation. The consolidated financial statements of the Company include all majority-owned affiliates. Intercompany transactions and accounts have been eliminated. The business formerly comprising Sporting Group is presented as discontinued operations |
Fiscal Year | Fiscal Year. Beginning January 1, 2016, the Company changed its fiscal year from the period beginning on April 1 and ending on March 31 to the period beginning on January 1 and ending on December 31. As a result, for the previous fiscal period ended December 31, 2015, in these consolidated statements, including the notes thereto, the financial results are for a nine-month transition period ended December 31, 2015. Audited results for the twelve months ended December 31, 2016 and March 31, 2015 are for a twelve-month period. All references herein to a fiscal year prior to December 31, 2015 refer to the twelve months ended March 31 of such year. |
Use of Estimates | Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. |
Revenue Recognition | Revenue Recognition. The Company's sales come primarily from contracts with agencies of the U.S. Government and its prime contractors and subcontractors. The various U.S. Government customers, including the U.S. Navy, U.S. Army, NASA and the U.S. Air Force, make independent purchasing decisions. Consequently, each agency is regarded as a separate customer. Contracts — Substantially all of the Company's sales are accounted for as long-term contracts. Sales under long-term contracts are accounted for under the percentage-of-completion method and include cost-plus and fixed-price contracts. Sales under cost-plus contracts are recognized as costs are incurred. Sales under fixed-price contracts are either recognized as the actual cost of work performed relates to the estimate at completion ("cost-to-cost") or based on results achieved, which usually coincides with customer acceptance ("units-of-delivery"). The majority of the Company's total revenue is accounted for using the cost-to-cost method of accounting. Profits expected to be realized on contracts are based on management's estimates of total contract sales value and costs at completion. Estimated amounts for contract changes, including scope and claims, are included in contract sales only when realization is estimated to be probable. Assumptions used for recording sales and earnings are adjusted in the period of change to reflect revisions in contract value and estimated costs. In the period in which it is determined that a loss will be incurred on a contract, the entire amount of the estimated loss, based on gross profit along with general and administrative costs, is charged to cost of sales. Changes in estimates of contract sales, costs or profits are recognized using the cumulative catch-up method of accounting. The cumulative effect of a change in estimate is recognized in the period a change in estimate occurs. The effect of the changes on future periods of contract performance is recognized as if the revised estimate had been used since contract inception or, in the case of contracts acquired in business combinations, from the date of acquisition. Changes in contract estimates occur for a variety of reasons including changes in contract scope, unforeseen changes in contract cost estimates due to unanticipated cost growth or risks affecting contract costs and/or the resolution of contract risks at lower costs than anticipated, termination of commercial contracts in the event of a lack of end user demand, as well as changes in contract overhead costs over the performance period. Changes in estimates could have a material effect on the Company's consolidated financial position or annual results of operations. Aggregate net changes in contract estimates recognized using the cumulative catch-up method of accounting increased operating income by approximately $81 million for the year ended December 31, 2016 , approximately $38 million in the 2015 transition period , and approximately $92 million in fiscal 2015 . Estimated costs to complete on loss contracts at December 31, 2016 and 2015 are $1,333 million and $1,392 million , respectively. Contracts may contain provisions to earn incentive and award fees if specified targets are achieved as well as penalty provisions related to performance. Incentive and award fees and penalties that can be reasonably estimated and are probable are recorded over the performance period of the contract. Incentive and award fees that cannot be reasonably estimated are recorded when awarded. Other — Sales not recognized under the long-term contract method are recognized when persuasive evidence of an arrangement exists, the product has been delivered and legal title and all risks of ownership have been transferred, written contract and sales terms are complete, customer acceptance has occurred and payment is reasonably assured. Sales are reduced for allowances and price discounts. |
Operating Expenses | Operating Expenses. Research and development, selling and general and administrative costs are expensed in the period incurred. Research and development costs include costs incurred for experimentation and design testing. Selling costs include bid and proposal efforts related to products and services. Costs that are incurred pursuant to contractual arrangements are recorded over the period that revenue is recognized, consistent with the Company's contract accounting policy. |
Environmental Remediation and Compliance | Environmental Remediation and Compliance. Costs associated with environmental compliance, restoration and preventing future contamination that are estimable and probable are accrued and expensed, or capitalized as appropriate. Expected remediation, restoration and monitoring costs relating to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are accrued and expensed in the period that such costs become estimable. Liabilities are recognized for remedial and resource restoration activities when they are probable and the cost can be reasonably estimated. The Company expects that a portion of its environmental remediation costs will be recoverable under U.S. Government contracts and has recorded a receivable equal to the present value of the amounts the Company expects to recover. The Company's engineering, financial and legal specialists estimate, based on current law and existing technologies, the cost of each environmental liability. Such estimates are based primarily upon the estimated cost of investigation and remediation required and the likelihood that other potentially responsible parties ("PRPs") will be able to fulfill their commitments at the sites where the Company may be jointly and severally liable. The Company's estimates for environmental obligations are dependent on, and affected by, the nature and extent of historical information and physical data relating to a contaminated site, the complexity of the site, methods of remediation available, the technology that will be required, the outcome of discussions with regulatory agencies and other PRPs at multi-party sites, the number and financial viability of other PRPs, changes in environmental laws and regulations, future technological developments, and the timing of expenditures; accordingly, the Company periodically evaluates and revises such estimates based on expenditures against established reserves and the availability of additional information. |
Cash Equivalents | Cash Equivalents. Cash equivalents are all highly liquid cash investments purchased with original maturities of three months or less. |
Marketable Securities | Marketable Securities. Investments in a common collective trust that primarily invests in fixed income securities are classified as available-for-sale securities and are recorded at fair value within other current assets and deferred charges and other noncurrent assets on the consolidated balance sheet. Unrealized gains and losses are recorded in other comprehensive (loss) income ("OCI"). When such investments are sold, the unrealized gains or losses are reversed from OCI and recognized in the consolidated income statement. |
Net Inventories | Net Inventories. Inventories are stated at the lower of cost or market. Inventoried costs relating to contracts in progress are stated at actual production costs, including factory overhead, initial tooling and other related costs incurred to date, reduced by amounts associated with recognized sales. Recorded amounts for raw materials, work in process and finished goods are generally determined using the average cost method. |
Net Property, Plant and Equipment | Net Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated over estimated useful lives. Machinery and equipment is depreciated using the double declining balance method at most of the Company's facilities, and using the straight-line method at other Company facilities. Other depreciable property is depreciated using the straight-line method. Machinery and equipment is depreciated over 1 to 30 years and buildings and improvements is depreciated over 1 to 45 years. Property, plant and equipment is reviewed for impairment when indicators of potential impairment are present. When such impairment is identified, it is recorded as a loss in that period. Maintenance and repairs are charged to expense as incurred. Major improvements that extend useful lives are capitalized and depreciated. The cost and accumulated depreciation of property, plant and equipment retired or otherwise disposed of are removed from the related accounts, and any residual values are charged or credited to income. |
Accounting for Goodwill and Identifiable Intangible Assets | Accounting for Goodwill and Identifiable Intangible Assets. Goodwill — Historically, the Company has tested goodwill for impairment on January 1 or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired. During 2015, the Company changed its fiscal year end to December 31st and as a result, has changed the timing of impairment testing, primarily in order to better align the timing with our annual operating plan, forecasting and budgeting process, to the first day of the fourth quarter and whenever events or circumstances indicate that the carrying value of goodwill may not be recoverable. The 2016 impairment analysis date was October 3rd. The Company determined that the reporting units for its goodwill impairment review are its operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available, and for which segment management regularly reviews the operating results. The impairment test is performed using a two -step process. In the first step, the Company estimates the fair value of each reporting unit and compares it to the carrying value of the reporting unit, including goodwill. If the carrying amount of a reporting unit is higher than its fair value, an indication of goodwill impairment exists and the second step is performed in order to determine the amount of the goodwill impairment. In the second step, the Company determines the implied fair value of the reporting unit's goodwill which it determines by allocating the estimated fair value of the reporting unit in a manner similar to a purchase price allocation. The implied fair value is compared to the carrying amount and if the carrying amount of the reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized for the excess. Identifiable Intangible Assets — The Company's primary identifiable intangible assets consist of contract backlog intangible assets recorded as part of the Orbital merger transaction, discussed in Note 4, Merger and Divestiture . Identifiable intangible assets with finite lives are amortized and evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangibles with indefinite lives are not amortized and are tested for impairment annually on the first day of the fourth quarter, or more frequently if events warrant. |
Dividends Payable | Dividends Payable. On February 27, 2017, the Board of Directors declared a quarterly cash dividend of $0.32 per share. The dividend was paid March 24, 2017 to stockholders of record at March 9, 2017. |
Treasury Stock | Treasury Stock. Under the Company's share repurchase program, the Company can repurchase common stock to be held in treasury. Treasury stock is accounted for using the cost method. Shares held in treasury may be reissued to satisfy (i) the payment of performance awards, total stockholder return performance awards ("TSR awards") and restricted stock units, (ii) the grant of restricted stock and (iii) the exercise of stock options. When treasury stock is reissued, the value is determined using a weighted-average basis. |
Stock-Based Compensation | Stock-based Compensation. The Company's stock-based compensation plans, which are described more fully in Note 17, Stock Based Compensation , provide for the grant of various types of stock-based incentive awards, including performance awards, TSR awards, restricted stock and options to purchase common stock. The types and mix of stock-based incentive awards are evaluated on an ongoing basis and may vary based on the Company's overall strategy regarding compensation, including consideration of the impact of expensing stock awards on the Company's results of operations. Performance awards are valued at the fair value of the Company stock at the grant date and expense is recognized based on the number of shares expected to vest under the terms of the award under which they are granted. The Company uses an integrated Monte Carlo simulation model to determine the fair value of the TSR awards and the calculated fair value is recognized in income over the vesting period, which approximates the service period. Restricted stock issued vests over periods ranging from one to three years and is valued based on the market value of the Company stock on the grant date. The estimated grant date fair value of stock options is recognized in income on a straight-line basis over the requisite service period, generally one to three years. The estimated fair value of each option is calculated using the Black-Scholes option-pricing model. |
Income Taxes | Income Taxes. Provisions for federal, state and foreign income taxes are calculated based on reported pre-tax earnings and current tax law. Such provisions differ from the amounts currently receivable or payable because certain items of income and expense are recognized in different time periods for financial reporting purposes than for income tax purposes. Significant judgment is required in determining income taxes and evaluating tax positions. The Company periodically assesses its liabilities and contingencies for all periods that are currently open to examination or have not been effectively settled based on the most current available information. Where it is not more likely than not that the Company's tax position will be sustained, the Company records the entire resulting tax liability and when it is more likely than not of being sustained, the Company records its best estimate of the resulting tax liability. Any applicable interest and penalties related to those positions are also recorded in the consolidated financial statements. To the extent the Company's assessment of the tax outcome of these matters changes, such change in estimate will impact income taxes in the period of the change. It is the Company's policy to record any interest and penalties related to income taxes as part of the income taxes for financial reporting purposes. Deferred tax assets related to carryforwards are reduced by a valuation allowance when it is not more likely than not that the amount will be realized before expiration of the carryforward period. As part of this analysis the Company takes into account the amount and character of the income to determine if the carryforwards will be realized. Significant estimates and judgments are required for this analysis. Changes in the amounts of valuation allowance are recorded in tax expense in the period when the change occurs. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities. From time to time, the Company uses derivative instruments, consisting mainly of commodity forward contracts to hedge forecasted purchases of certain commodities, foreign currency exchange contracts to hedge forecasted transactions denominated in a foreign currency and interest rate swaps to manage interest rate risk on debt. The Company does not hold or issue derivatives for trading purposes. At the inception of each derivative instrument, the Company documents the relationship between the derivative instrument and the hedged item, as well as its risk-management objectives and strategy for undertaking the hedge transaction. The Company assesses, both at the derivative's inception and on an ongoing basis, whether the derivative instrument is highly effective in offsetting changes in the fair value of the hedged item. Derivatives are recognized on the balance sheet at fair value. The effective portion of changes in fair value of derivatives designated as cash flow hedges are recorded to accumulated OCI and recognized in earnings in the same account in which the hedged item is recognized when the hedged item impacts earnings, and the cash flows from the effective portion of cash flow hedges are classified in the same section of the cash flows as the hedged item. The ineffective portion of derivatives designated as cash flow hedges and changes in fair value of derivative instruments not designated in a qualifying hedging relationship are reflected in current earnings, and the cash flows from the ineffective portion of cash flow hedges are classified as investing activities. The Company's current derivatives are designated as cash flow hedges. See Note 3 , Derivative Financial Instruments for further details. |
Earnings Per Share Data | Earnings Per Share Data. Basic earnings per share ("EPS") is computed based upon the weighted-average number of common shares outstanding for each period. Diluted EPS is computed based on the weighted-average number of common shares and common equivalent shares outstanding for each period. Common equivalent shares represent the effect of stock-based awards (see Note 17 , Stock-Based Compensation ) during each period presented, which, if exercised or earned, would have a dilutive effect on earnings per share. |
Fair Value of Non-financial Instruments | Fair Value of Non-financial Instruments. The carrying amounts of receivables, inventory, accounts payable, accrued liabilities and other current assets and liabilities, approximate fair values due to the short maturity of these instruments. See Note 2 , Fair Value of Financial Instruments , for additional disclosure regarding fair value of financial instruments. |
Accounting Standards Updates Adopted | Accounting Standards Updates Adopted During calendar year 2016, the Company adopted the following Accounting Standard Updates (ASUs): In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-02, Amendments to the Consolidation Analysis, which simplifies the consolidation evaluation process by placing more emphasis on risk of loss when determining a controlling financial interest. This new standard is effective for interim and annual periods beginning after December 15, 2015. The ASU became effective for the Company in the quarter ended April 3, 2016 and the adoption did not have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. These ASUs more closely align the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs to be presented as a direct deduction from the carrying amount of the related debt. The amendments in these ASUs became effective retrospectively for the Company in the quarter ended April 3, 2016. The adoption of these new standards impacted the presentation of the net debt issuance costs included in Note 10, Long-term Debt . This resulted in a reclassification of debt issuance costs related to the Company's notes of $14 million from "Other noncurrent assets" to "Long-term debt, net of current portion" in the Company's consolidated balance sheets as of December 31, 2015. In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Such investments should be disclosed separate from the fair value hierarchy. This ASU became effective retrospectively for the Company beginning in the quarter ended April 3, 2016. The adoption of this new standard did not have an impact on the Company's consolidated financial statements but impacted certain disclosures reflected in the notes to the accompanying consolidated financial statements. The new standard removed the fair value hierarchy disclosure for the Company's investment in marketable securities. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, which requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase a greater number of an employee's shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for annual reporting periods beginning after December 15, 2016 with early adoption permitted. The Company elected to early adopt this ASU in the quarter ended April 3, 2016. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements. Accounting Standards Updates Issued But Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard now will be effective for annual reporting periods beginning after December 15, 2017. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company commenced their evaluation of the impact of the ASU in 2016, by evaluating its impact on selected contracts at each of the business segments. With this baseline understanding, the Company developed a project plan to evaluate the portfolio of contracts across business segments, develop processes and tools to report financial results under the ASU, and assess the internal control structure in order to adopt the ASU on January 1, 2018. Under the new standard, the Company expects to continue using the cost-to-cost percentage of completion method to recognize revenue for most of its long-term contracts. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company has not yet quantified the impact of the new standard or selected a transition method. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires leasees to recognize lease assets and lease liabilities for those leases classified as operating leases under previous generally accepted accounting principles in the United States ("U.S. GAAP"). The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company currently is evaluating the provisions of ASU 2016-02 and its impact on the Company's consolidated financial position, results of operations and cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. It addresses eight specific cash flows where there currently exists diversity in the way these cash flows are reported. They are: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments; (3) Contingent Consideration Payments Made after a Business Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance (COLI) Policies including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Investees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash Flows and Application of the Predominance Principle. In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. As an example, for item (1) the cash flows will be classified as financing activities; for item (3) contingent payments made soon after the acquisition will be classified as investing activities and financing activities if made thereafter; and for item (5) cash payments made to settle COLI policies will be classified as investing activities and premium payments may be classified as cash outflows for investing, operating or a combination of both. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires retrospective application but if it is impracticable to do so for an issue, the amendments related to that issue will be applied prospectively. The Company is still evaluating the provisions of ASU 2016-15 and its impact on the consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are under Common Control. This ASU amends the consolidation guidance issued under ASU 2015-02: Consolidation (Topic 810): Amendments to the Consolidation Analysis for those entities that are the single decision maker of a VIE such that a single decision marker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interest in their entirety. Instead, they are required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. Effective for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The adoption method varies depending on which aspect is relevant/being adopted. This ASU is required to be adopted in conjunction with ASU 2015-02 and those entities that have already adopted ASU 2015-02 are required to apply the amendments in this update retrospectively through initial adoption. The adoption of this standard is not expected have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard is effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is still evaluating the provisions of ASU 2016-18 and its impact on the consolidated statement of cash flows. Other new pronouncements issued but not effective for the Company until after December 31, 2016 are not expected to have a material impact on the Company's continuing financial position, results of operations or liquidity. |
Fair Value of Financial Instr31
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities measured on a recurring basis | The following tables set forth, by level within the fair value hierarchy, the Company's financial assets and liabilities that are measured at fair value on a recurring basis (in millions) : December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Assets: Derivatives $ — $ 9 $ — Liabilities: Derivatives $ — $ 1 $ — December 31, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Level 3 Assets: Derivatives $ — $ 4 $ — Liabilities: Derivatives $ — $ 8 $ — |
Schedule of carrying values and estimated fair values of assets and liabilities that are not measured on a recurring basis | Recorded carrying amount and fair value of debt was as follows (in millions) : December 31, 2016 December 31, 2015 Carrying Fair Carrying Amount Fair Value Fixed rate debt $ 700 $ 727 $ 700 $ 713 Variable rate debt $ 750 $ 746 $ 790 $ 788 |
Derivative Financial Instrume32
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of outstanding commodity forward contracts | Commodity forward contracts outstanding that hedge forecasted commodity purchases were as follows: (Amounts in millions of pounds) December 31, 2016 2015 Copper 10 8 Zinc 3 2 At December 31, 2016, the Company had the following outstanding interest rate swap contracts (See Note 10, Long-term Debt for additional information): Notional Fair Value Pay Fixed Receive Floating Maturity Date (in millions) Non-amortizing swap $ 100 — 1.29 % 0.77 % August 2017 Non-amortizing swap $ 100 (1 ) 1.69 % 0.77 % August 2018 Non-amortizing swap $ 50 — 1.10 % 0.77 % November 2017 The amount to be paid or received under these swaps is recorded as an adjustment to interest expense. As of December 31, 2016, the Company had the following outstanding Euro currency forward contracts in place: (Amounts in millions of Euros) December 31, 2016 2015 Euros Sold 33 68 Euros Purchased 45 13 |
Schedule of fair value and location of derivative instruments designated as hedging instruments in the consolidated balance sheet | Derivative instruments designated as hedging instruments in the consolidated balance sheets were as follows: Asset Derivatives Fair Value Liability Derivatives Fair Value Location December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 (in millions) Commodity forward contracts Other current assets / $ 5 $ — $ — $ 4 Foreign currency forward contracts Other current assets / 3 3 — 1 Foreign currency forward contracts Other noncurrent assets / 1 1 — — Interest rate swap contracts Other noncurrent assets / — — 1 3 Total $ 9 $ 4 $ 1 $ 8 |
Schedule of derivative gains and losses in the consolidated income statements related to commodity forward contracts and foreign currency forward contracts | Gains and losses reclassified from AOCI in the condensed consolidated statements of comprehensive income related to derivative instruments were as follows: Gain (Loss) Reclassified from AOCI Location Amount (in millions) Year Ended December 31, 2016 Commodity forward contracts Cost of sales $ (3 ) Interest rate swap contracts Interest expense (3 ) Foreign currency forward contracts Cost of sales — Nine Months Ended December 31, 2015 Commodity forward contracts Cost of sales (3 ) Interest rate swap contracts Interest expense (3 ) Foreign currency forward contracts Cost of sales (2 ) |
Merger and Divestiture (Tables)
Merger and Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following amounts represent the final determination (as of the Merger date) of the fair value of identifiable assets acquired and liabilities assumed in the Merger, including adjustments made to date during the one year measurement period from the date of the Merger: Purchase Price: (in millions) Value of common shares issued to Orbital shareholders (1) $ 1,749 Value of replacement equity-based awards to holders of Orbital equity-based awards (2) 9 Total purchase price $ 1,758 Value of assets acquired and liabilities assumed: Cash $ 254 Net receivables 559 Net inventories 75 Intangibles 173 Property, plant and equipment 277 Deferred tax assets, net 65 Other assets 37 Goodwill 826 Accounts payable (52 ) Contract fair value liabilities (131 ) Other liabilities (325 ) Total purchase price $ 1,758 _________________________________________ (1) Equals 27 million Orbital ATK shares issued to Orbital shareholders multiplied by the Company's Merger-date share price of $63.94 . (2) The fair value of replacement equity-based awards attributable to pre-Merger service was recorded as part of the consideration transferred in the Merger. |
Business Acquisition, Pro Forma Information | The following unaudited supplemental pro forma data for the year ended March 31, 2015 presents consolidated information as if the Merger had been completed on April 1, 2013. The pro forma results were calculated by combining the results from continuing operations of the Company with the stand-alone results of Orbital for the pre-Merger periods, which were adjusted to eliminate historical sales between the companies and to account for certain costs which would have been incurred during this pre-Merger period: (amounts in millions) Year Ended March 31, 2015 Sales $ 4,167 Income (loss) from continuing operations 155 Basic earnings (loss) per common share from continuing operations $ 2.46 Diluted earnings (loss) per common share from continuing operations 2.43 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments | The unaudited supplemental pro forma data above includes the following significant adjustments made to account for certain costs which would have been incurred if the Merger had been completed on April 1, 2013, as adjusted for the applicable income tax impact: (amounts in millions) Year Ended Amortization of acquired Orbital intangible assets (1) $ 27 Interest expense adjustment (2) (26 ) Transaction fees for advisory, legal and accounting services (3) (37 ) _________________________________________ (1) Added the amortization of acquired Orbital intangible assets recognized at fair value in purchase accounting and eliminated historical Orbital intangible asset amortization expense. (2) Reduced interest expense for the net reduction in debt of the Company and Orbital. (3) Added transaction fees for advisory, legal and accounting services to the first quarter of fiscal 2014. Costs were recorded in general and administrative expense. |
Net Receivables (Tables)
Net Receivables (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of receivables, including amounts due under long-term contracts (contract receivables) | Net receivables, including amounts due under long-term contracts consisted of the following: December 31, 2016 2015 (in millions) Billed receivables U.S. Government contracts $ 132 $ 122 Commercial and other 112 96 Unbilled receivables U.S. Government contracts 806 808 Commercial and other 691 646 Less allowance for doubtful accounts — (1 ) Net receivables $ 1,741 $ 1,671 |
Net Inventories (Tables)
Net Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Net inventories consisted of the following: December 31, 2016 2015 (in millions) Raw materials $ 93 $ 88 Work/contracts in process 121 124 Finished goods 1 1 Net inventories $ 215 $ 213 |
Schedule Of Valuation And Qualifying Accounts Disclosure | Changes in allowances for excess and obsolete inventory were as follows: Balance, March 31, 2015 $ 17 Expense 3 Write-offs — Other adjustments 4 Balance, December 31, 2015 $ 24 Expense — Write-offs (1 ) Other adjustments 1 Balance, December 31, 2016 $ 24 |
Net Property, Plant and Equip36
Net Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Net property, plant and equipment consisted of the following: December 31, 2016 2015 (in millions) Land $ 29 $ 34 Buildings and other improvements 383 370 Machinery, equipment and other 1,313 1,290 Property not yet in service 212 134 Gross property, plant and equipment 1,937 1,828 Less accumulated depreciation (1,121 ) (1,066 ) Net property, plant and equipment $ 816 $ 762 |
Goodwill, Net Intangibles and37
Goodwill, Net Intangibles and Other Noncurrent Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill by operating segment | Changes in goodwill by segment were as follows: Flight Systems Group Defense Systems Group Space Systems Group Total (in millions) Balance, March 31, 2015 $ 798 $ 363 $ 701 $ 1,862 Measurement period adjustments 125 — (159 ) (34 ) Balance, December 31, 2015 923 363 542 1,828 Measurement period adjustments 6 — (2 ) 4 Balance, December 31, 2016 $ 929 $ 363 $ 540 $ 1,832 |
Schedule of amortizing assets | Net intangibles consisted of the following amortizing intangibles: December 31, 2016 December 31, 2015 Gross Accumulated Total Gross Accumulated Total (in millions) Contract Backlog $ 173 $ (79 ) $ 94 $ 179 $ (37 ) $ 142 Patented technology 11 (7 ) 4 11 (6 ) 5 Customer relationships and other 2 (2 ) — 24 (24 ) — Net intangibles $ 186 $ (88 ) $ 98 $ 214 $ (67 ) $ 147 |
Schedule of expected future amortization expense | Scheduled amortization is as follows: Contract Backlog Patents and Customer Relationships Total (in millions) 2017 $ 36 $ 1 $ 37 2018 25 1 26 2019 22 1 23 2020 11 1 12 2021 — — — Total $ 94 $ 4 $ 98 |
Schedule of other assets, noncurrent | Other noncurrent assets consisted of the following: December 31, 2016 2015 (in millions) Parts inventory $ 2 $ 10 Environmental remediation receivable 15 15 Derivative contracts 1 1 Tax refund receivable 81 43 Other noncurrent assets 84 70 Total other noncurrent assets $ 183 $ 139 |
Current Liabilities (Tables)
Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of major categories of other current and long-term accrued liabilities | Other current liabilities consisted of the following: December 31, 2016 2015 (in millions) Employee benefits and insurance $ 74 $ 62 Deferred lease obligation 2 12 Interest 10 10 Other 97 82 Total other current liabilities $ 183 $ 166 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt, including the current portion | Long-term debt, including the current portion, consisted of the following: December 31, 2016 2015 (in millions) Senior Credit Facility: Term Loan A due 2020 $ 750 $ 790 Revolving Credit Facility due 2020 — — 5.25% Senior Notes due 2021 300 300 5.50% Senior Notes due 2023 400 400 Carrying amount of long-term debt 1,450 1,490 Unamortized debt issuance costs: Senior Credit Facility 5 6 5.25% Senior Notes due 2021 2 2 5.50% Senior Notes due 2023 5 6 Unamortized debt issuance costs 12 14 Long-term debt less unamortized debt issuance costs 1,438 1,476 Less: Current portion of long-term debt 40 40 Long-term debt $ 1,398 $ 1,436 |
Schedule of interest rate derivatives | At December 31, 2016 , the Company had the following cash flow hedge interest rate swaps in place: Notional Fair Value Pay Fixed Receive Floating Maturity Date (in millions) Non-amortizing swap $ 100 $ — 1.29 % 0.77 % August 2017 Non-amortizing swap $ 100 $ (1 ) 1.69 % 0.77 % August 2018 Non-amortizing swap $ 50 $ — 1.10 % 0.77 % November 2017 |
Schedule of minimum payments on outstanding long-term debt | Scheduled minimum loan payments are as follows: (in millions) 2017 $ 40 2018 40 2019 40 2020 630 2021 300 Thereafter 400 Total $ 1,450 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated Other Comprehensive Income ("AOCI"), net of income taxes, were as follows, with amounts in millions: Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Derivatives Pension and Other Post- Available-for-sale Securities Total Derivatives Pension and Other Post- Available-for-sale Securities Total (in millions) Beginning of period unrealized gain (loss) in AOCI $ (3 ) $ (784 ) $ 1 $ (786 ) $ (2 ) $ (847 ) $ 1 $ (848 ) Net increase (decrease) in fair value of derivatives 4 — — 4 (6 ) — — (6 ) Net losses reclassified from AOCI, offsetting the price paid to suppliers (1) 4 — — 4 5 — — 5 Net actuarial losses reclassified from AOCI (2) — 79 — 79 — 71 — 71 Prior service costs reclassified from AOCI (2) — (17 ) — (17 ) — (13 ) — (13 ) Valuation adjustment for pension and postretirement benefit plans (2) — (49 ) — (49 ) — 5 — 5 Other — — 1 1 — — — — End of period unrealized gain (loss) in AOCI $ 5 $ (771 ) $ 2 $ (764 ) $ (3 ) $ (784 ) $ 1 $ (786 ) _________________________________________ (1) Amounts related to derivative instruments that were reclassified from AOCI and recorded as a component of cost of sales or interest expense for each period presented. (2) Amounts related to pension and other postretirement benefits that were reclassified from AOCI and recorded as a component of net periodic benefit cost for each period presented (Note 13, Employee Benefit Plans ). |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share ("EPS") calculations, with amounts in million, except per share data: Year Ended Nine Months Ended Year Ended March 31, 2015 Numerator: Income from continuing operations of Orbital ATK, Inc. $ 293 $ 185 $ 70 Income from discontinued operations — 1 125 Net income attributable to Orbital ATK, Inc. 293 186 195 Earnings allocated to participating securities — — — Income available to common stockholders $ 293 $ 186 $ 195 Denominator: Weighted-average shares of common stock 57.99 59.36 35.47 Dilutive effect of stock-based awards 0.47 0.56 0.67 Diluted weighted-average of common stock 58.46 59.92 36.14 Net income per common share from: Basic: Continuing operations $ 5.05 $ 3.12 $ 1.96 Discontinued operations — 0.02 3.53 Net income attributable to Orbital ATK, Inc. $ 5.05 $ 3.14 $ 5.49 Diluted: Continuing operations $ 5.01 $ 3.09 $ 1.93 Discontinued operations — 0.02 3.46 Net income attributable to Orbital ATK, Inc. $ 5.01 $ 3.11 $ 5.39 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of change in benefit obligation and change in plan assets | The following table shows changes in the benefit obligation, plan assets and funded status of the Company's qualified and non-qualified pension plans and other PRB plans, including Orbital Plans. Benefit obligation balances presented below reflect the projected benefit obligation ("PBO") for pension plans and Accumulated PRB obligations ("APBO") or other PRB plans. Pension Benefits Other Postretirement Benefits Year Ended Nine Months Ended December 31, 2015 Year Ended Nine Months Ended December 31, 2015 (in millions) Change in benefit obligation: Benefit obligation at beginning of period $ 2,953 $ 3,199 $ 114 $ 132 Service cost 18 14 — — Interest cost 101 91 3 3 Plan Amendments — (2 ) (39 ) — Actuarial loss (gain) (1) 87 (211 ) 1 (13 ) Retiree contributions — — 5 3 Benefits paid (233 ) (138 ) (15 ) (11 ) Benefit obligation at end of period 2,926 2,953 69 114 Change in plan assets: Fair value of plan assets at beginning of period 2,190 2,349 60 64 Actual return on plan assets 131 (95 ) 4 (2 ) Retiree contributions — — 5 3 Employer contributions 120 74 7 6 Benefits paid (233 ) (138 ) (15 ) (11 ) Fair value of plan assets at end of period 2,208 2,190 61 60 Funded status $ (718 ) $ (763 ) $ (8 ) $ (54 ) _________________________________________ (1) The mortality projection scale was updated from MP-2014 to MP-2015 at December 31, 2015. This change resulted in an actuarial gain of $50 million and $4 million for the Pension Benefits and Other Postretirement Benefits, respectively. |
Schedule of amounts recognized in the balance sheet | Pension Benefits Other Postretirement Benefits December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 (in millions) Noncurrent assets $ — $ 4 $ 17 $ — Other current liabilities (3 ) (5 ) (3 ) (3 ) Postretirement benefit liabilities — — (22 ) (51 ) Pension liabilities (715 ) (762 ) — — Net amount recognized (718 ) (763 ) (8 ) (54 ) Accumulated other comprehensive loss (income) related to: Unrecognized net actuarial losses 1,398 1,408 15 16 Unrecognized prior service benefits (110 ) (131 ) (43 ) (10 ) Accumulated other comprehensive loss (income) $ 1,288 $ 1,277 $ (28 ) $ 6 |
Schedule of estimated amount that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in fiscal 2013 | The estimated amount that will be amortized from AOCI into net periodic benefit cost in 2017 is as follows: Pension Other Postretirement Benefits (in millions) Recognized net actuarial losses $ 126 $ 2 Amortization of prior service benefits (20 ) (7 ) Total $ 106 $ (5 ) |
Schedule of information for pension plans with an accumulated benefit obligation in excess of plan assets | The accumulated benefit obligation for all defined benefit pension plans was $2,926 million at December 31, 2016 and $2,953 million at December 31, 2015 . December 31, 2016 2015 (in millions) Information for pension plans with an accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 2,926 $ 2,953 Accumulated benefit obligation $ 2,926 $ 2,953 Fair value of plan assets $ 2,208 $ 2,190 |
Schedule of components of net periodic benefit cost | Components of net periodic benefit cost were as follows (in millions) : Pension Benefits Other Postretirement Benefits Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Components of net periodic benefit cost: Service cost $ 18 $ 14 $ 24 $ — $ — $ — Interest cost 101 91 129 3 3 5 Expected return on plan assets (162 ) (120 ) (166 ) (3 ) (3 ) (4 ) Amortization of unrecognized net loss 126 113 118 1 2 2 Amortization of unrecognized prior service benefit (21 ) (16 ) (22 ) (6 ) (5 ) (8 ) Net periodic benefit cost before special termination benefits cost/curtailment 62 82 83 (5 ) (3 ) (5 ) Special termination benefits cost/curtailment 2 — 2 — — — Net periodic benefit cost 64 82 85 (5 ) (3 ) (5 ) Amounts reported in: Continuing operations 64 82 81 (5 ) (3 ) (5 ) Discontinued operations — — 4 — — — Net periodic benefit cost $ 64 $ 82 $ 85 $ (5 ) $ (3 ) $ (5 ) |
Schedule of weighted average assumptions used to determine benefit obligations and net periodic benefit cost | Assumptions Pension Benefits Other Postretirement Benefits Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Weighted-average assumptions used to determine benefit obligations at the end of each period Discount rate 4.14 % 4.40 % 3.90 % 3.62 % 3.98 % 3.55 % Rate of compensation increase: Union 3.11 % 3.13 % 3.66 % Salaried 3.56 % 3.62 % 3.14 % Pension Benefits Other Postretirement Benefits Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended March 31, 2015 Weighted-average assumptions used to determine net periodic benefit cost for each period Discount rate 4.40 % 3.90 % 4.50 % 3.98 % 3.55 % 3.95 % Expected long-term rate of return on plan assets 7.25 % 7.25 % 7.25 % 4.00% / 6.00% 5.00% / 6.25% 5.00% / 6.25% Rate of compensation increase: Union 3.13 % 3.66 % 3.22 % Salaried 3.60 % 3.14 % 3.47 % |
Schedule of assumed health care cost trend rates used to measure expected cost of benefits | Assumed Health Care Cost Trend Rates Used to Measure Expected Cost of Benefits December 31, 2017 2016 Weighted average health care cost trend rate N/A 6.10 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) N/A 4.50 % Fiscal year that the rate reaches the ultimate trend rate N/A 2027 |
Schedule of allocation of plan assets | Pension plan weighted-average asset allocations: Anticipated 2017 Actual Low High December 31, 2016 December 31, 2015 Asset Category: Domestic equity 10.0 % 20.0 % 12.5 % 19.9 % International equity 10.0 % 20.0 % 18.4 % 13.1 % Fixed income 35.0 % 50.0 % 38.2 % 40.5 % Real estate 2.0 % 6.0 % 3.5 % 5.0 % Hedge funds/private equity 15.0 % 30.0 % 21.1 % 16.8 % Other investments/cash 2.0 % 8.0 % 6.3 % 4.7 % |
Schedule of fair value of pension plan investments | Pension plan investments using the fair value hierarchy consisted of the following: December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in millions) Interest-bearing cash $ — $ 2 $ — $ 2 U.S. Government securities 3 — — 3 Corporate debt — 138 — 138 Common stock 62 1 — 63 Registered investment companies\Collective investment trust 56 — — 56 Value of funds in insurance company accounts — 39 1 40 Total Assets in the Fair Value Hierarchy $ 121 $ 180 $ 1 $ 302 Investments measured at NAV 1,906 Total Investments, excluding Plan Interest in Master Trust at fair value $ 2,208 Pension plan investments using the fair value hierarchy consisted of the following: December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in millions) Interest-bearing cash $ — $ 33 $ — $ 33 U.S. Government securities 62 6 — 68 Corporate debt — 406 — 406 Common stock 89 7 — 96 Registered investment companies\Collective investment trust 59 165 — 224 Value of funds in insurance company accounts — 40 1 41 Total Assets in the Fair Value Hierarchy $ 210 $ 657 $ 1 $ 868 Investments measured at NAV 1,322 Total Investments, excluding Plan interest in Master Trust at fair value $ 2,190 |
Schedule of expected future benefit payments | The following benefit payments, which reflect expected future service, are expected to be paid in the years ending December 31. The pension benefits will be paid primarily out of the pension trust. The postretirement benefit payments are shown net of the expected subsidy for the Medicare prescription drug benefit under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which are not material to be presented separately. (amounts in millions) Pension Benefits Other Postretirement Benefits 2017 $ 219 $ 9 2018 194 8 2019 199 8 2020 201 7 2021 205 6 2022 through 2026 1,014 24 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | Income taxes consisted of the following: Year Ended Nine Months Ended December 31, 2015 Year Ended (in millions) Current: Federal $ 63 $ 28 $ 21 State 2 2 4 Non-US 4 — — Deferred: Federal 39 55 17 State 3 2 (5 ) Income taxes $ 111 $ 87 $ 37 |
Schedule of items responsible for the differences between the federal statutory rate and ATK's effective rate | Differences between the federal statutory rate and the Company's effective rate related to the following: Year Ended Nine Months Ended December 31, 2015 Year Ended Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal impact 2.8 2.1 (0.1 ) Domestic manufacturing deduction (2.3 ) (1.5 ) (5.6 ) Goodwill impairment — — 11.2 Research and development tax credit (12.6 ) (5.2 ) (3.2 ) Change in prior year contingent tax liabilities 0.1 1.0 (3.7 ) Nondeductible transaction costs — — 7.2 Other (2.5 ) (1.1 ) (3.3 ) Change in valuation allowance 7.0 1.6 (2.7 ) Income tax provision 27.5 % 31.9 % 34.8 % |
Schedule of deferred tax assets and liabilities resulted from temporary differences | Deferred income tax assets and liabilities resulting from temporary differences related to the following: December 31, 2016 2015 (in millions) Deferred income tax assets: Retirement benefits $ 271 $ 306 Federal carryforwards 13 36 State carryforwards 50 9 Other 19 33 Other reserves 21 26 Accruals for employee benefits 40 42 Inventory 25 14 Contract method of revenue recognition 80 109 Total deferred income tax assets before valuation allowance 519 575 Valuation allowance (42 ) (13 ) Total deferred income tax assets 477 562 Deferred income tax liabilities: Intangible assets (86 ) (98 ) Property, plant and equipment (127 ) (129 ) Debt-related (10 ) (16 ) Total deferred income tax liabilities (223 ) (243 ) Net deferred income tax assets $ 254 $ 319 |
Summary of valuation allowance | The following summarizes activity related to valuation allowances for deferred tax assets: Year Ended Nine Months Ended Year Ended (in millions) Beginning Balance $ 13 $ 9 $ 3 Additions, charged to expense 37 5 — Additions, due to the Merger — — 7 Deductions (8 ) (1 ) (1 ) Ending Balance $ 42 $ 13 $ 9 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties | Changes in unrecognized tax benefits, excluding interest and penalties, were as follows: Year Ended Nine Months Ended December 31, 2015 Year Ended (in millions) Unrecognized tax benefits, beginning of period $ 81 $ 34 $ 32 Gross increases—tax positions in prior periods 30 42 22 Gross decreases—tax positions in prior periods (4 ) (1 ) (16 ) Gross increases—current-period tax positions 18 6 1 Settlements (5 ) — (3 ) Lapse of statute of limitations (1 ) — (2 ) Unrecognized tax benefits, end of period $ 119 $ 81 $ 34 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | Scheduled operating lease payments are as follows: (in millions) 2017 $ 77 2018 71 2019 65 2020 55 2021 51 Thereafter 66 Total $ 385 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Loss Contingency [Abstract] | |
Summary of the amounts recorded for environmental remediation | Environmental remediation consisted of the following: December 31, 2016 December 31, 2015 Liability Receivable Liability Receivable (in millions) Amounts (payable) receivable $ (43 ) $ 19 $ (42 ) $ 18 Unamortized discount 2 (1 ) 2 — Present value amounts (payable) receivable $ (41 ) $ 18 $ (40 ) $ 18 |
Schedule of aggregate undiscounted amounts payable for environmental remediation costs, net of expected recoveries | Expected aggregate undiscounted environmental remediation payments, net of expected recoveries, are as follows: (in millions) 2017 $ 2 2018 — 2019 — 2020 3 2021 2 Thereafter 17 Total $ 24 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of stock option activity | The Company's nonvested stock-based compensation awards activity was as follows: Performance Share Restricted Stock Restricted Stock Combined Nonvested, March 31, 2014 308,092 — 282,944 $ 83.91 Granted 161,661 — 139,094 81.88 Converted in conjunction with the Merger — 647,436 — 71.29 Canceled/forfeited (309,223 ) — (13,521 ) 87.05 Vested — (146,497 ) (195,882 ) 72.50 Nonvested, March 31, 2015 160,530 500,939 212,635 $ 77.02 Granted 2,976 — 86,108 74.88 Canceled/forfeited (5,374 ) (10,908 ) (9,914 ) 80.88 Vested (333 ) (191,084 ) (17,806 ) 43.87 Nonvested, December 31, 2015 157,799 298,947 271,023 $ 75.57 Granted 153,888 — 176,800 80.14 Canceled/forfeited (706 ) (2,933 ) (7,720 ) 78.73 Vested — (193,687 ) (128,854 ) 64.68 Nonvested, December 31, 2016 310,981 102,327 311,249 $ 82.31 |
Weighted average assumptions used in estimating the value of the award | Weighted-average assumptions used in estimating the value of the TSR award were as follows: Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended Risk-free rate 1.00 % 1.02 % 1.02 % Expected volatility 25.39 % 22.81 % 22.81 % Expected dividend yield 1.51 % 1.78 % 1.78 % Expected award life 2.8 years 2.8 years 2.8 years |
Schedule of performance share award, TSR award, and restricted stock award activity | The Company's stock option activity was as follows: Shares Weighted Average Weighted Average Aggregate Intrinsic Outstanding, March 31, 2014 270,405 $ 74.11 8.3 $ 68.04 Granted 73,100 72.06 Converted in conjunction with the Merger 11,225 27.45 Outstanding, March 31, 2015 354,730 $ 41.83 7.8 $ 34.80 Granted 1,443 73.13 Exercised (122,893 ) 30.90 Outstanding, December 31, 2015 233,280 $ 47.79 7.7 $ 41.55 Granted 72,328 79.43 Exercised (33,629 ) 29.93 Outstanding, December 31, 2016 271,979 $ 58.41 7.6 $ 29.32 Options exercisable at: December 31, 2016 138,403 $ 42.25 6.5 $ 45.48 December 31, 2015 109,509 $ 32.43 6.6 $ 56.91 March 31, 2015 230,715 $ 64.32 7.0 $ 44.99 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Weighted-average assumptions used in estimating the value of the stock option grants were as follows: Year Ended December 31, 2016 Nine Months Ended December 31, 2015 Year Ended Risk-free rate 1.62% 1.99% 1.82% Expected volatility 26.89% 27.91% 27.67% Expected dividend yield 1.36% 1.17% 0.99% Expected option life 7 years 7 years 7 years |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of realignment liability activity | Changes in restructuring liabilities were as follows: Termination Remaining Lease Rentals Asset Total (in millions) Balance, March 31, 2015 $ 9 $ 10 $ — $ 19 Expense 4 18 6 28 Payments (9 ) (2 ) — (11 ) Noncash settlements — — (6 ) (6 ) Balance, December 31, 2015 4 26 — 30 Expense (1 ) — — (1 ) Payments (2 ) (7 ) — (9 ) Noncash settlements — — — — Balance, December 31, 2016 $ 1 $ 19 $ — $ 20 |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Sales to the U.S. Government and U.S. Government prime contractors were as follows: U.S. Government Sales Percentage of sales (in millions) Year ended December 31, 2016 $ 3,368 76 % Nine months ended December 31, 2015 $ 2,359 70 % Year ended March 31, 2015 $ 2,332 75 % |
Schedule of Revenue by Major Customers by Reporting Segments | Operating results and total assets by segment were as follows, with amounts in millions: Year Ended December 31, 2016 Flight Systems Group Defense Systems Group Space Systems Group Corporate Total (in millions) Sales: External customers $ 1,483 $ 1,804 $ 1,168 $ — $ 4,455 Intercompany 13 19 70 (102 ) — Total $ 1,496 $ 1,823 $ 1,238 $ (102 ) $ 4,455 Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest $ 204 $ 172 $ 129 $ (33 ) $ 472 Capital expenditures $ 78 $ 44 $ 56 $ 9 $ 187 Depreciation $ 54 $ 18 $ 31 $ 13 $ 116 Amortization of intangibles $ — $ 1 $ — $ 42 $ 43 Total assets $ 2,208 $ 1,228 $ 1,280 $ 702 $ 5,418 Nine Months Ended December 31, 2015 Flight Systems Group Defense Systems Group Space Systems Group Corporate Total (in millions) Sales: External customers $ 1,115 $ 1,314 $ 962 $ — $ 3,391 Intercompany 27 6 15 (48 ) — Total $ 1,142 $ 1,320 $ 977 $ (48 ) $ 3,391 Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest $ 197 $ 126 $ 67 $ (57 ) $ 333 Capital expenditures $ 48 $ 23 $ 31 $ 3 $ 105 Depreciation $ 39 $ 15 $ 24 $ 11 $ 89 Amortization of intangibles $ — $ 1 $ — $ 32 $ 33 Total assets $ 2,224 $ 1,184 $ 1,273 $ 643 $ 5,324 Year Ended March 31, 2015 Flight Systems Group Defense Systems Group Space Systems Group Corporate Total (in millions) Sales: External customers $ 1,064 $ 1,655 $ 394 $ — $ 3,113 Intercompany 29 178 17 (224 ) — Total $ 1,093 $ 1,833 $ 411 $ (224 ) $ 3,113 Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest $ 145 $ 185 $ (6 ) $ (101 ) $ 223 Capital expenditures $ 49 $ 44 $ 6 $ 14 $ 113 Depreciation $ 35 $ 20 $ 11 $ 7 $ 73 Amortization of intangibles $ 1 $ 2 $ — $ 6 $ 9 Total assets $ 2,044 $ 1,173 $ 1,455 $ 806 $ 5,478 |
Transition Period Comparative49
Transition Period Comparative Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Transition Period Comparative Data | The following table presents certain financial information for the nine months ended December 31, 2015 and December 28, 2014 respectively: Nine Months Ended (Amounts in millions except per share data) December 31, 2015 December 28, 2014 (unaudited) Sales $ 3,391 $ 2,142 Gross profit $ 674 $ 478 Income from continuing operations $ 185 $ 109 Income from discontinued operations $ 1 $ 108 Net income attributable to Orbital ATK, Inc. $ 186 $ 217 Basic earnings per common share Income from continuing operations $ 3.12 $ 3.44 Income from discontinued operations 0.02 3.42 Net income attributable to Orbital ATK, Inc. $ 3.14 $ 6.86 Diluted earnings per common share Income from continuing operations $ 3.09 $ 3.37 Income from discontinued operations 0.02 3.34 Net income attributable to Orbital ATK, Inc. $ 3.11 $ 6.71 Note: earnings per share amounts may not recalculate due to rounding. |
Quarterly Financial Data (una50
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | For the Year Ended December 31, 2016 Quarter Ended (in millions, except per share data) April 3, July 3, October 2, December 31, Sales $ 1,056 $ 1,083 $ 1,044 $ 1,272 Gross profit $ 227 $ 280 $ 210 $ 268 Income from continuing operations $ 77 $ 91 $ 60 $ 65 Income from discontinued operations — — — — Net income attributable to Orbital ATK, Inc. $ 77 $ 91 $ 60 $ 65 Basic earnings per common share from: (1) Continuing operations $ 1.33 $ 1.56 $ 1.04 $ 1.12 Discontinued operations — — — — Net income attributable to Orbital ATK, Inc. $ 1.33 $ 1.56 $ 1.04 $ 1.12 Diluted earnings per common share from: (1) Continuing operations $ 1.31 $ 1.55 $ 1.04 $ 1.11 Discontinued operations — — — — Net income attributable to Orbital ATK, Inc. $ 1.31 $ 1.55 $ 1.04 $ 1.11 Cash dividends per common share: Declared $ 0.30 $ 0.30 $ 0.30 $ 0.30 Paid $ 0.30 $ 0.30 $ 0.30 $ 0.30 For the Nine Months Ended December 31, 2015 Quarter Ended (in millions, except per share data) July 5, October 4, December 31, Sales $ 1,104 $ 1,143 $ 1,145 Gross profit $ 223 $ 209 $ 242 Income from continuing operations $ 58 $ 74 $ 53 Income from discontinued operations — — 1 Net income attributable to Orbital ATK, Inc. $ 58 $ 74 $ 54 Basic earnings per common share from: (1) Continuing operations $ 0.98 $ 1.26 $ 0.90 Discontinued operations — — 0.02 Net income attributable to Orbital ATK, Inc. $ 0.98 $ 1.26 $ 0.92 Diluted earnings per common share from: (1) Continuing operations $ 0.97 $ 1.25 $ 0.89 Discontinued operations — — 0.02 Net income attributable to Orbital ATK, Inc. $ 0.97 $ 1.25 $ 0.91 Cash dividends per common share: Declared $ — $ 0.26 $ 0.26 Paid $ 0.26 $ 0.26 $ 0.26 (1) Quarterly earnings (loss) per common share amounts may not total to annual earnings per common share amounts because quarterly and annual earnings per share are calculated separately based on earnings and basic and diluted weighted-average common shares outstanding during the respective periods. |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Millions | Feb. 27, 2017$ / shares | Dec. 31, 2016USD ($)$ / shares | Oct. 02, 2016$ / shares | Jul. 03, 2016$ / shares | Apr. 03, 2016$ / shares | Dec. 31, 2015USD ($)$ / shares | Oct. 04, 2015$ / shares | Jul. 05, 2015$ / shares | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)step | Mar. 31, 2015USD ($) |
Concentration risk | |||||||||||
Increase in operating income | $ 38 | $ 81 | $ 92 | ||||||||
Estimated costs to complete on loss contracts | $ 1,333 | $ 1,392 | 1,392 | $ 1,333 | |||||||
Dividend declared (in dollars per share) | $ / shares | $ 0.3 | $ 0.3 | $ 0.3 | $ 0.30 | $ 0.26 | $ 0.26 | $ 0 | ||||
Number of steps involved in the process of impairment testing | step | 2 | ||||||||||
Subsequent Event | |||||||||||
Concentration risk | |||||||||||
Dividend declared (in dollars per share) | $ / shares | $ 0.32 | ||||||||||
Accounting Standards Update 2015-03 | Other noncurrent assets | |||||||||||
Concentration risk | |||||||||||
Deferred issuance costs | $ (14) | (14) | |||||||||
Accounting Standards Update 2015-03 | Long-term debt | |||||||||||
Concentration risk | |||||||||||
Deferred issuance costs | $ 14 | $ 14 | |||||||||
Machinery, equipment and other | Minimum | |||||||||||
Concentration risk | |||||||||||
Useful life of property, plant and equipment | 1 year | ||||||||||
Machinery, equipment and other | Maximum | |||||||||||
Concentration risk | |||||||||||
Useful life of property, plant and equipment | 30 years | ||||||||||
Buildings and other improvements | Minimum | |||||||||||
Concentration risk | |||||||||||
Useful life of property, plant and equipment | 1 year | ||||||||||
Buildings and other improvements | Maximum | |||||||||||
Concentration risk | |||||||||||
Useful life of property, plant and equipment | 45 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Stock-based compensation (Details) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Restricted Stock | Minimum | ||
Stock-Based Compensation | ||
Award vesting period | 1 year | 1 year |
Restricted Stock | Maximum | ||
Stock-Based Compensation | ||
Award vesting period | 3 years | 3 years |
Stock options | Minimum | ||
Stock-Based Compensation | ||
Award vesting period | 1 year | 1 year |
Stock options | Maximum | ||
Stock-Based Compensation | ||
Award vesting period | 3 years | 3 years |
Fair Value of Financial Instr53
Fair Value of Financial Instruments - Fair value of financial assets and liabilities (Details) | Dec. 31, 2016USD ($)derivative | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Fair value of assets and liabilities measured on a recurring basis | |||
Number of interest rate derivatives held | derivative | 3 | ||
Derivative, notional amount | $ 400,000,000 | ||
Fair value of assets and liabilities that are measured on a recurring basis | |||
Liabilities: | |||
Marketable securities | $ 13,000,000 | $ 12,000,000 | |
Fair value of assets and liabilities that are measured on a recurring basis | Level 1 | |||
Assets: | |||
Derivatives | 0 | 0 | |
Liabilities: | |||
Derivatives | 0 | 0 | |
Fair value of assets and liabilities that are measured on a recurring basis | Level 2 | |||
Assets: | |||
Derivatives | 9,000,000 | 4,000,000 | |
Liabilities: | |||
Derivatives | 1,000,000 | 8,000,000 | |
Fair value of assets and liabilities that are measured on a recurring basis | Level 3 | |||
Assets: | |||
Derivatives | 0 | 0 | |
Liabilities: | |||
Derivatives | 0 | $ 0 | |
Interest Rate Swap | |||
Fair value of assets and liabilities measured on a recurring basis | |||
Derivative, notional amount | $ 250,000,000 |
Fair Value of Financial Instr54
Fair Value of Financial Instruments - Carrying amount and fair value of financial assets and liabilities (Details) - Fair value of assets and liabilities that are not measured on a recurring basis - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Carrying Amount | ||
Assets and liabilities that are not measured on a recurring basis | ||
Fixed rate debt | $ 700 | $ 700 |
Variable rate debt | 750 | 790 |
Fair Value | ||
Assets and liabilities that are not measured on a recurring basis | ||
Fixed rate debt | 727 | 713 |
Variable rate debt | $ 746 | $ 788 |
Derivative Financial Instrume55
Derivative Financial Instruments - Additional Information (Details) € in Millions, lb in Millions | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)lb | Dec. 31, 2015USD ($)lb | Dec. 31, 2016EUR (€) | Dec. 31, 2015EUR (€) | Dec. 31, 2014USD ($) | |
Derivative [Line Items] | ||||||
Derivative, notional amount | $ 400,000,000 | |||||
Fair value of derivative instruments designated as hedging instruments | ||||||
Fair value of derivative assets designated as hedging instruments | $ 4,000,000 | $ 9,000,000 | $ 4,000,000 | |||
Fair value of derivative liabilities designated as hedging instruments | 8,000,000 | 1,000,000 | 8,000,000 | |||
Gain (Loss) Reclassified from AOCI | ||||||
Commodity forward contracts, (gain) loss reclassified from AOCI | (3,000,000) | (3,000,000) | ||||
Interest rate swap contracts, (gain) loss reclassified from AOCI | (3,000,000) | (3,000,000) | ||||
Forward foreign currency contracts, (gain) loss reclassified from AOCI | (2,000,000) | 0 | ||||
Other current assets | ||||||
Fair value of derivative instruments designated as hedging instruments | ||||||
Commodity forward contracts designated as hedging instruments, fair value of assets | 0 | 5,000,000 | 0 | |||
Foreign currency forward contracts designated as hedging instruments, fair value of assets | 3,000,000 | 3,000,000 | 3,000,000 | |||
Other current liabilities | ||||||
Fair value of derivative instruments designated as hedging instruments | ||||||
Commodity forward contracts designated as hedging instruments, fair value of liabilities | 4,000,000 | 0 | 4,000,000 | |||
Foreign currency forward contracts designated as hedging instruments, fair value of liabilities | 1,000,000 | 0 | 1,000,000 | |||
Other noncurrent assets | ||||||
Fair value of derivative instruments designated as hedging instruments | ||||||
Foreign currency forward contracts designated as hedging instruments, fair value of assets | 1,000,000 | 1,000,000 | 1,000,000 | |||
Interest rate swap contracts designated as hedging instruments, fair value of assets | 0 | 0 | 0 | |||
Other noncurrent liabilities | ||||||
Fair value of derivative instruments designated as hedging instruments | ||||||
Foreign currency forward contracts designated as hedging instruments, fair value of liabilities | 0 | 0 | 0 | |||
Interest rate swap contracts designated as hedging instruments, fair value of liability | $ 3,000,000 | 1,000,000 | $ 3,000,000 | |||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Derivative, notional amount | $ 250,000,000 | |||||
Copper | ||||||
Derivative [Line Items] | ||||||
Commodity derivatives (mass) | lb | 10 | 8 | ||||
Zinc | ||||||
Derivative [Line Items] | ||||||
Commodity derivatives (mass) | lb | 3 | 2 | ||||
Foreign Exchange Forward | Euros Sold | ||||||
Derivative [Line Items] | ||||||
Derivative, notional amount | € | € 33 | € 68 | ||||
Foreign Exchange Forward | Euros Purchased | ||||||
Derivative [Line Items] | ||||||
Derivative, notional amount | € | € 45 | € 13 |
Derivative Financial Instrume56
Derivative Financial Instruments - Floating-to-fixed interest rate swap agreements (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Notional | $ 400,000,000 | |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional | $ 250,000,000 | |
Interest Rate Swap | Notional amount to mature August 2017 | ||
Derivative [Line Items] | ||
Notional | 100,000,000 | |
Fair Value | $ 0 | |
Pay Fixed | 1.29% | |
Receive Floating | 0.77% | |
Interest Rate Swap | Notional amount to mature August 2018 | ||
Derivative [Line Items] | ||
Notional | $ 100,000,000 | |
Fair Value | $ (1,000,000) | |
Pay Fixed | 1.69% | |
Receive Floating | 0.77% | |
Interest Rate Swap | Notional amount to mature November 2017 | ||
Derivative [Line Items] | ||
Notional | $ 50,000,000 | |
Fair Value | $ 0 | |
Pay Fixed | 1.10% | |
Receive Floating | 0.77% |
Merger and Divestiture - Merger
Merger and Divestiture - Merger (Details) $ / shares in Units, $ in Millions | Feb. 09, 2015USD ($)$ / sharesshares | Feb. 02, 2015shares | Mar. 31, 2015USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisitions [Line Items] | |||||
Consideration transferred | $ 1,800 | ||||
Goodwill | $ 1,862 | $ 1,832 | $ 1,828 | ||
Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Cash | 254 | ||||
Net receivables | 559 | ||||
Net inventories | 75 | ||||
Intangibles | 173 | ||||
Property, plant and equipment | 277 | ||||
Deferred tax assets, net | 65 | ||||
Other assets | 37 | ||||
Goodwill | 826 | ||||
Accounts payable | (52) | ||||
Contract fair value liabilities | (131) | ||||
Other liabilities | (325) | ||||
Total purchase price | $ 1,758 | ||||
Merger-date share price (in dollars per share) | $ / shares | $ 63.94 | ||||
Common Stock | Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Total purchase price | $ 1,749 | ||||
Equity-based awards | Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Total purchase price | $ 9 | ||||
Common Stock | |||||
Business Acquisitions [Line Items] | |||||
Merger with Orbital (in shares) | shares | 27,358,827 | ||||
Common Stock | Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Number of shares issued to shareholders | shares | 27,000,000 | ||||
Common Stock | |||||
Business Acquisitions [Line Items] | |||||
Shares, conversion ratio | 2 | ||||
Shares issued | shares | 63,900,000 | ||||
Common Stock | Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Shares, conversion ratio | 0.449 | ||||
Merger with Orbital (in shares) | shares | 27,400,000 | ||||
Orbital Stockholders | Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Percentage of voting interests acquired | 46.20% | ||||
Existing Stockholders | Orbital Sciences Corporation | |||||
Business Acquisitions [Line Items] | |||||
Percentage of voting interests acquired | 53.80% |
Merger and Divestiture - Additi
Merger and Divestiture - Additional Information (Details) $ / shares in Units, $ in Millions | Feb. 09, 2015agreement | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)entity | Feb. 08, 2015USD ($) | Dec. 31, 2016USD ($)entity | Mar. 31, 2015USD ($)$ / shares |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Number of companies that were integrated | entity | 2 | |||||
Sales | $ 4,167 | |||||
Income (loss) from continuing operations | $ 155 | |||||
Basic earnings (loss) per common share from continuing operations (in dollars per share) | $ / shares | $ 2.46 | |||||
Diluted earnings (loss) per common share from continuing operations (in dollars per share) | $ / shares | $ 2.43 | |||||
Amortization of intangible assets | $ 33 | $ 43 | $ 9 | |||
Number of companies | entity | 2 | |||||
Acquisition-related Costs | ||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Amortization of intangible assets | 27 | |||||
Interest expense adjustment | (26) | |||||
Transaction fees for advisory, legal and accounting services | (37) | |||||
Vista Outdoor Inc. | ||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Number of supply agreements | agreement | 2 | |||||
Number of transition services agreements | agreement | 1 | |||||
Period administrative services provided | 12 months | |||||
Period tax assistance services provided | 18 months | |||||
Period tax assistance services provided, extension | 30 months | |||||
Revenue from related parties | $ 19 | $ 138 | $ 238 | |||
Vista Outdoor Inc. | Minimum | ||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Incremental extension period for supply agreements | 1 year | |||||
Vista Outdoor Inc. | Maximum | ||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Incremental extension period for supply agreements | 3 years | |||||
Sporting Group | ||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Revenue from related parties | $ 171 | |||||
Discontinued operations | Sporting Group | ||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||||
Discontinued operations, sales | $ 1,800 |
Net Receivables (Details)
Net Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
U.S. Government contracts | $ 132 | $ 122 |
Commercial and other | 112 | 96 |
U.S. Government contracts | 806 | 808 |
Commercial and other | 691 | 646 |
Less allowance for doubtful accounts | 0 | (1) |
Net receivables | 1,741 | 1,671 |
Progress payments | ||
Customer progress payment received | 601 | 584 |
Unbilled receivables | ||
Long-term unbilled receivables, relating to commercial aerospace programs | $ 287 | $ 312 |
Net Inventories - Schedule (Det
Net Inventories - Schedule (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 93 | $ 88 |
Work/contracts in process | 121 | 124 |
Finished goods | 1 | 1 |
Net inventories | $ 215 | $ 213 |
Net Inventories - Valuation (De
Net Inventories - Valuation (Details) - Inventory Valuation - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at the beginning of the year | $ 17 | $ 24 |
Expense | 3 | 0 |
Write-offs | 0 | (1) |
Other adjustments | 4 | 1 |
Balance at the end of the year | $ 24 | $ 24 |
Net Property, Plant and Equip62
Net Property, Plant and Equipment (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Property, plant and equipment | |||
Depreciation expenses | $ 89 | $ 116 | $ 73 |
Gross property, plant and equipment | 1,828 | 1,937 | |
Less accumulated depreciation | (1,066) | (1,121) | |
Net property, plant and equipment | 762 | 816 | |
Land | |||
Property, plant and equipment | |||
Gross property, plant and equipment | 34 | 29 | |
Buildings and other improvements | |||
Property, plant and equipment | |||
Gross property, plant and equipment | 370 | 383 | |
Machinery, equipment and other | |||
Property, plant and equipment | |||
Gross property, plant and equipment | 1,290 | 1,313 | |
Property not yet in service | |||
Property, plant and equipment | |||
Gross property, plant and equipment | $ 134 | $ 212 |
Goodwill, Net Intangibles and63
Goodwill, Net Intangibles and Other Noncurrent Assets - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Changes in the carrying amount of goodwill | ||||
Balance at the beginning of the period | $ 1,862 | $ 1,828 | ||
Measurement period adjustments | (34) | 4 | ||
Balance at the end of the period | $ 1,862 | 1,828 | 1,832 | $ 1,862 |
Goodwill impairment | 0 | 0 | 34 | |
Flight Systems Group | ||||
Changes in the carrying amount of goodwill | ||||
Balance at the beginning of the period | 798 | 923 | ||
Measurement period adjustments | 125 | 6 | ||
Balance at the end of the period | 798 | 923 | 929 | 798 |
Defense Systems Group | ||||
Changes in the carrying amount of goodwill | ||||
Balance at the beginning of the period | 363 | 363 | ||
Measurement period adjustments | 0 | 0 | ||
Balance at the end of the period | 363 | 363 | 363 | 363 |
Accumulated impairment losses | 4 | |||
Space Systems Group | ||||
Changes in the carrying amount of goodwill | ||||
Balance at the beginning of the period | 701 | 542 | ||
Measurement period adjustments | (159) | (2) | ||
Balance at the end of the period | 701 | $ 542 | 540 | $ 701 |
Goodwill impairment | $ 34 | |||
Accumulated impairment losses | $ 143 |
Goodwill, Net Intangibles and64
Goodwill, Net Intangibles and Other Noncurrent Assets - Amortizing intangibles (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Non-amortizing intangible assets | |||
Gross Carrying Amount | $ 214 | $ 186 | |
Accumulated Amortization | (67) | (88) | |
Total | 147 | 98 | |
Amortization expense | 33 | 43 | $ 9 |
Contract Backlog | |||
Non-amortizing intangible assets | |||
Gross Carrying Amount | 179 | 173 | |
Accumulated Amortization | (37) | (79) | |
Total | 142 | 94 | |
Patented technology | |||
Non-amortizing intangible assets | |||
Gross Carrying Amount | 11 | 11 | |
Accumulated Amortization | (6) | (7) | |
Total | 5 | 4 | |
Customer relationships and other | |||
Non-amortizing intangible assets | |||
Gross Carrying Amount | 24 | 2 | |
Accumulated Amortization | (24) | (2) | |
Total | $ 0 | $ 0 |
Goodwill, Net Intangibles and65
Goodwill, Net Intangibles and Other Noncurrent Assets - Scheduled amortization (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Expected future amortization expense | ||
2,017 | $ 37 | |
2,018 | 26 | |
2,019 | 23 | |
2,020 | 12 | |
2,021 | 0 | |
Total | 98 | $ 147 |
Contract Backlog | ||
Expected future amortization expense | ||
2,017 | 36 | |
2,018 | 25 | |
2,019 | 22 | |
2,020 | 11 | |
2,021 | 0 | |
Total | 94 | $ 142 |
Patents and Customer Relationships | ||
Expected future amortization expense | ||
2,017 | 1 | |
2,018 | 1 | |
2,019 | 1 | |
2,020 | 1 | |
2,021 | 0 | |
Total | $ 4 |
Goodwill, Net Intangibles and66
Goodwill, Net Intangibles and Other Noncurrent Assets - Other Noncurrent Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Parts inventory | $ 2 | $ 10 |
Environmental remediation receivable | 15 | 15 |
Derivative contracts | 1 | 1 |
Tax refund receivable | 81 | 43 |
Other noncurrent assets | 84 | 70 |
Total other noncurrent assets | $ 183 | $ 139 |
Current Liabilities (Details)
Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Employee benefits and insurance | $ 74 | $ 62 |
Deferred lease obligation | 2 | 12 |
Interest | 10 | 10 |
Other | 97 | 82 |
Total other current liabilities | $ 183 | $ 166 |
Long-term Debt - Summary of deb
Long-term Debt - Summary of debt (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Carrying amount of long-term debt | $ 1,450,000 | $ 1,490,000 |
Unamortized debt issuance costs | 12,000 | 14,000 |
Long-term debt less unamortized debt issuance costs | 1,438,000 | 1,476,000 |
Less: Current portion of long-term debt | 40,000 | 40,000 |
Long-term debt | 1,398,000 | 1,436,000 |
Senior Credit Facility | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | 5,000 | 6,000 |
Term Loan A due 2020 | Senior Credit Facility | Term Loan | ||
Debt Instrument [Line Items] | ||
Carrying amount of long-term debt | 750,000 | 790,000 |
Revolving Credit Facility due 2020 | Senior Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Carrying amount of long-term debt | 0 | 0 |
Long-term debt less unamortized debt issuance costs | 0 | |
5.25% Senior Notes due 2021 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Carrying amount of long-term debt | 300,000 | 300,000 |
Unamortized debt issuance costs | $ 2,000 | 2,000 |
Stated interest rate | 5.25% | |
5.50% Senior Notes due 2023 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Carrying amount of long-term debt | $ 400,000 | 400,000 |
Unamortized debt issuance costs | $ 5,000 | $ 6,000 |
Stated interest rate | 5.50% |
Long-term Debt - Senior credit
Long-term Debt - Senior credit facility (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,476,000,000 | $ 1,438,000,000 | |
Senior Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding, amount | $ 182,000,000 | ||
Debt instrument, term | 5 years | ||
Senior Credit Facility | Line of Credit | Base Rate | |||
Debt Instrument [Line Items] | |||
Base rate margin (as a percent) | 0.50% | ||
Senior Credit Facility | Line of Credit | LIBOR | |||
Debt Instrument [Line Items] | |||
Base rate margin (as a percent) | 1.50% | ||
Senior Credit Facility | Line of Credit | Term Loan A due 2020 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 800,000,000 | ||
Repayments of principal quarterly through maturity | 10,000,000 | ||
Weighted-average interest rate | 2.48% | ||
Senior Credit Facility | Line of Credit | Revolving Credit Facility due 2020 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 1,000,000,000 | ||
Commitment fee percentage | 0.25% | ||
Long-term debt | $ 0 | ||
Remaining borrowing capacity | $ 818,000,000 | ||
Former Senior Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Deferred issuance costs | 6,000,000 | ||
Former Senior Credit Facility | Line of Credit | Interest Expense | |||
Debt Instrument [Line Items] | |||
Amortization of debt discount | $ 10,000,000 | ||
Former Senior Credit Facility | Line of Credit | Term A Loan due 2018 | |||
Debt Instrument [Line Items] | |||
Principal amount | 1,160,000,000 | ||
Repayments of principal quarterly through maturity | 15,000,000 | ||
Former Senior Credit Facility | Line of Credit | Term B Loan due 2020 | |||
Debt Instrument [Line Items] | |||
Principal amount | 250,000,000 | ||
Former Senior Credit Facility | Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 700,000,000 |
Long-term Debt - Senior notes (
Long-term Debt - Senior notes (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 27,000,000 | ||
Senior Notes | 5.25% Senior Notes due 2021 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 300,000,000 | ||||
Stated interest rate | 5.25% | ||||
Accordion feature | $ 3,000,000 | ||||
Debt instrument, term | 8 years | ||||
Senior Notes | 5.50% Senior Notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 400,000,000 | ||||
Stated interest rate | 5.50% | ||||
Accordion feature | $ 6,000,000 | ||||
Debt instrument, term | 8 years | ||||
Senior Notes | 6.875% Senior Notes Due 2020 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.875% | ||||
Loss on extinguishment of debt | $ 27,000,000 |
Long-term Debt - Interest rate
Long-term Debt - Interest rate swaps (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Notional | $ 400,000,000 | |
Interest Rate Swap | ||
Debt Instrument [Line Items] | ||
Notional | $ 250,000,000 | |
Interest Rate Swap | Notional amount to mature August 2017 | ||
Debt Instrument [Line Items] | ||
Notional | 100,000,000 | |
Fair Value | $ 0 | |
Pay Fixed | 1.29% | |
Receive Floating | 0.77% | |
Interest Rate Swap | Notional amount to mature August 2018 | ||
Debt Instrument [Line Items] | ||
Notional | $ 100,000,000 | |
Fair Value | $ (1,000,000) | |
Pay Fixed | 1.69% | |
Receive Floating | 0.77% | |
Interest Rate Swap | Notional amount to mature November 2017 | ||
Debt Instrument [Line Items] | ||
Notional | $ 50,000,000 | |
Fair Value | $ 0 | |
Pay Fixed | 1.10% | |
Receive Floating | 0.77% |
Long-term Debt - Scheduled mini
Long-term Debt - Scheduled minimum loan payments (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Minimum payments on outstanding long-term debt | ||
2,017 | $ 40 | |
2,018 | 40 | |
2,019 | 40 | |
2,020 | 630 | |
2,021 | 300 | |
Thereafter | 400 | |
Total | $ 1,450 | $ 1,490 |
Accumulated Other Comprehensi73
Accumulated Other Comprehensive Income (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Rollforward of Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance | $ 1,521,000,000 | $ 1,686,000,000 |
Net increase (decrease) in fair value of derivatives | (6,000,000) | 4,000,000 |
Net losses reclassified from AOCI, offsetting the price paid to suppliers | 5,000,000 | 4,000,000 |
Net actuarial losses reclassified from AOCI | 71,000,000 | 79,000,000 |
Prior service costs reclassified from AOCI | (13,000,000) | (17,000,000) |
Valuation adjustment for pension and postretirement benefit plans | 5,000,000 | (49,000,000) |
Other | 0 | 1,000,000 |
Balance | 1,686,000,000 | 1,817,000,000 |
Ineffectiveness recognized in earnings | 0 | 0 |
Derivatives | ||
Rollforward of Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance | (2,000,000) | (3,000,000) |
Net increase (decrease) in fair value of derivatives | (6,000,000) | 4,000,000 |
Net losses reclassified from AOCI, offsetting the price paid to suppliers | 5,000,000 | 4,000,000 |
Net actuarial losses reclassified from AOCI | 0 | 0 |
Prior service costs reclassified from AOCI | 0 | 0 |
Valuation adjustment for pension and postretirement benefit plans | 0 | 0 |
Other | 0 | 0 |
Balance | (3,000,000) | 5,000,000 |
Pension and Other Post- retirement Benefits | ||
Rollforward of Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance | (847,000,000) | (784,000,000) |
Net increase (decrease) in fair value of derivatives | 0 | 0 |
Net losses reclassified from AOCI, offsetting the price paid to suppliers | 0 | 0 |
Net actuarial losses reclassified from AOCI | 71,000,000 | 79,000,000 |
Prior service costs reclassified from AOCI | (13,000,000) | (17,000,000) |
Valuation adjustment for pension and postretirement benefit plans | 5,000,000 | (49,000,000) |
Other | 0 | 0 |
Balance | (784,000,000) | (771,000,000) |
Available-for-sale Securities | ||
Rollforward of Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance | 1,000,000 | 1,000,000 |
Net increase (decrease) in fair value of derivatives | 0 | 0 |
Net losses reclassified from AOCI, offsetting the price paid to suppliers | 0 | 0 |
Net actuarial losses reclassified from AOCI | 0 | 0 |
Prior service costs reclassified from AOCI | 0 | 0 |
Valuation adjustment for pension and postretirement benefit plans | 0 | 0 |
Other | 0 | 1,000,000 |
Balance | 1,000,000 | 2,000,000 |
Accumulated Other Comprehensive Loss | ||
Rollforward of Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance | (848,000,000) | (786,000,000) |
Balance | $ (786,000,000) | $ (764,000,000) |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Dec. 31, 2015 | Dec. 28, 2014 | Dec. 31, 2016 | Mar. 31, 2015 | |
Numerator: | |||||||||||
Income from continuing operations of Orbital ATK, Inc. | $ 65 | $ 60 | $ 91 | $ 77 | $ 53 | $ 74 | $ 58 | $ 185 | $ 109 | $ 293 | $ 70 |
Income from discontinued operations | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 1 | 108 | 0 | 125 |
Net income attributable to Orbital ATK, Inc. | 186 | 293 | 195 | ||||||||
Earnings allocated to participating securities | 0 | 0 | 0 | ||||||||
Net income attributable to Orbital ATK, Inc. | $ 65 | $ 60 | $ 91 | $ 77 | $ 54 | $ 74 | $ 58 | $ 186 | $ 217 | $ 293 | $ 195 |
Denominator: | |||||||||||
Weighted-average number of common shares outstanding, basic (in shares) | 59,360 | 57,990 | 35,470 | ||||||||
Dilutive effect of stock-based awards (in shares) | 560 | 470 | 670 | ||||||||
Weighted-average number of common shares outstanding, diluted (in shares) | 59,920 | 58,460 | 36,140 | ||||||||
Net income (loss) per common share from Basic: | |||||||||||
Continuing operations (in dollars per share) | $ 1.12 | $ 1.04 | $ 1.56 | $ 1.33 | $ 0.90 | $ 1.26 | $ 0.98 | $ 3.12 | $ 3.44 | $ 5.05 | $ 1.96 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.02 | 0 | 0 | 0.02 | 3.42 | 0 | 3.53 |
Basic (in dollars per share) | 1.12 | 1.04 | 1.56 | 1.33 | 0.92 | 1.26 | 0.98 | 3.14 | 6.86 | 5.05 | 5.49 |
Net income (loss) per common share from Diluted: | |||||||||||
Continuing operations (in dollars per share) | 1.11 | 1.04 | 1.55 | 1.31 | 0.89 | 1.25 | 0.97 | 3.09 | 3.37 | 5.01 | 1.93 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.02 | 0 | 0 | 0.02 | 3.34 | 0 | 3.46 |
Diluted (in dollars per share) | $ 1.11 | $ 1.04 | $ 1.55 | $ 1.31 | $ 0.91 | $ 1.25 | $ 0.97 | $ 3.11 | $ 6.71 | $ 5.01 | $ 5.39 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Pension liabilities transferred to vista outdoor in spin-off | $ 224 | |
Transfer of pension assets to vista outdoor in spin-off | 163 | |
Transfer of accumulated other comprehensive income to Vista Outdoor in spin-off | 98 | |
Reduction of PRB liabilities due to transfer to Vista Outdoor | 2 | |
Reduction in AOCI for PRB benefits due to transfer to Vista Outdoor | 2 | |
Increase in funded status of plan | $ 39 | |
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest credit, percent | 4.00% | |
Decrease in projected benefit obligation | $ (2.3) | |
Accumulated benefit obligation | $ 2,926 | $ 2,953 |
Pension Benefits | Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Vesting period (in years) | 3 years | |
Pension Benefits | Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Vesting period (in years) | 5 years | |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of postretirement benefit obligations that were pre-funded as of period end | 88.40% | 52.50% |
Percentage of pension plan assets held in 401 (h) account | 47.00% | 44.00% |
Other Postretirement Benefits | Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Age for eligibility for pre and/or post 65 healthcare company subsidy and retiree life insurance coverage (in years) | 50 years | |
Term of service for eligibility for pre and/or post 65 healthcare company subsidy and retiree life insurance coverage (in years) | 5 years | |
Other Postretirement Benefits | Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Age for eligibility for pre and/or post 65 healthcare company subsidy and retiree life insurance coverage (in years) | 55 years | |
Term of service for eligibility for pre and/or post 65 healthcare company subsidy and retiree life insurance coverage (in years) | 10 years |
Employee Benefit Plans - Change
Employee Benefit Plans - Changes in Benefit Obligation, Plan Assets and Funded Status (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Pension Benefits | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | $ 3,199 | $ 2,953 | |
Service cost | 14 | 18 | $ 24 |
Interest cost | 91 | 101 | 129 |
Plan Amendments | (2) | 0 | |
Actuarial loss (gain) | (211) | 87 | |
Retiree contributions | 0 | 0 | |
Benefits paid | (138) | (233) | |
Benefit obligation at end of year | 2,953 | 2,926 | 3,199 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 2,349 | 2,190 | |
Actual return on plan assets | (95) | 131 | |
Retiree contributions | 0 | 0 | |
Employer contributions | 74 | 120 | |
Benefits paid | (138) | (233) | |
Fair value of plan assets at end of year | 2,190 | 2,208 | 2,349 |
Funded status | (763) | (718) | |
Pension Benefits | Change in Assumptions for Pension Plans | |||
Change in benefit obligation | |||
Actuarial loss (gain) | (50) | ||
Other Postretirement Benefits | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 132 | 114 | |
Service cost | 0 | 0 | 0 |
Interest cost | 3 | 3 | 5 |
Plan Amendments | 0 | (39) | |
Actuarial loss (gain) | (13) | 1 | |
Retiree contributions | 3 | 5 | |
Benefits paid | (11) | (15) | |
Benefit obligation at end of year | 114 | 69 | 132 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 64 | 60 | |
Actual return on plan assets | (2) | 4 | |
Retiree contributions | 3 | 5 | |
Employer contributions | 6 | 7 | |
Benefits paid | (11) | (15) | |
Fair value of plan assets at end of year | 60 | 61 | $ 64 |
Funded status | (54) | $ (8) | |
Other Postretirement Benefits | Change in Assumptions for Pension Plans | |||
Change in benefit obligation | |||
Actuarial loss (gain) | $ (4) |
Employee Benefit Plans - Recogn
Employee Benefit Plans - Recognized in Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Pension Benefits | ||
Amounts Recognized in the Balance Sheet | ||
Noncurrent assets | $ 0 | $ 4 |
Other current liabilities | (3) | (5) |
Postretirement benefit liabilities | 0 | 0 |
Pension liabilities | (715) | (762) |
Net amount recognized | (718) | (763) |
Accumulated other comprehensive loss (income) related to: | ||
Unrecognized net actuarial losses | 1,398 | 1,408 |
Unrecognized prior service benefits | (110) | (131) |
Accumulated other comprehensive loss (income) | 1,288 | 1,277 |
Other Postretirement Benefits | ||
Amounts Recognized in the Balance Sheet | ||
Noncurrent assets | 17 | 0 |
Other current liabilities | (3) | (3) |
Postretirement benefit liabilities | (22) | (51) |
Pension liabilities | 0 | 0 |
Net amount recognized | (8) | (54) |
Accumulated other comprehensive loss (income) related to: | ||
Unrecognized net actuarial losses | 15 | 16 |
Unrecognized prior service benefits | (43) | (10) |
Accumulated other comprehensive loss (income) | $ (28) | $ 6 |
Employee Benefit Plans - Amorti
Employee Benefit Plans - Amortized From AOCI (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Pension Benefits | |
Estimated amount that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in fiscal 2013 | |
Recognized net actuarial losses | $ 126 |
Amortization of prior service benefits | (20) |
Total | 106 |
Other Postretirement Benefits | |
Estimated amount that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in fiscal 2013 | |
Recognized net actuarial losses | 2 |
Amortization of prior service benefits | (7) |
Total | $ (5) |
Employee Benefit Plans - Plans
Employee Benefit Plans - Plans with Obligation in Excess of Plan Assets (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Information for pension plans with an accumulated benefit obligation in excess of plan assets: | ||
Projected benefit obligation | $ 2,926 | $ 2,953 |
Accumulated benefit obligation | 2,926 | 2,953 |
Fair value of plan assets | $ 2,208 | $ 2,190 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Periodic Benefit Cost (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Pension Benefits | |||
Components of net periodic benefit cost | |||
Service cost | $ 14 | $ 18 | $ 24 |
Interest cost | 91 | 101 | 129 |
Expected return on plan assets | (120) | (162) | (166) |
Amortization of unrecognized net loss | 113 | 126 | 118 |
Amortization of unrecognized prior service benefit | (16) | (21) | (22) |
Net periodic benefit cost before special termination benefits cost/curtailment | 82 | 62 | 83 |
Special termination benefits cost/curtailment | 0 | 2 | 2 |
Net periodic benefit cost | 82 | 64 | 85 |
Pension Benefits | Continuing operations | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | 82 | 64 | 81 |
Pension Benefits | Discontinued operations | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | 0 | 0 | 4 |
Other Postretirement Benefits | |||
Components of net periodic benefit cost | |||
Service cost | 0 | 0 | 0 |
Interest cost | 3 | 3 | 5 |
Expected return on plan assets | (3) | (3) | (4) |
Amortization of unrecognized net loss | 2 | 1 | 2 |
Amortization of unrecognized prior service benefit | (5) | (6) | (8) |
Net periodic benefit cost before special termination benefits cost/curtailment | (3) | (5) | (5) |
Special termination benefits cost/curtailment | 0 | 0 | 0 |
Net periodic benefit cost | (3) | (5) | (5) |
Other Postretirement Benefits | Continuing operations | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | (3) | (5) | (5) |
Other Postretirement Benefits | Discontinued operations | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | $ 0 | $ 0 | $ 0 |
Employee Benefit Plans - Assump
Employee Benefit Plans - Assumptions (Details) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Pension Benefits | |||
Weighted-Average Assumptions Used to Determine Benefit Obligations | |||
Discount rate (as a percent) | 4.40% | 4.14% | 3.90% |
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost | |||
Discount rate (as a percent) | 3.90% | 4.40% | 4.50% |
Expected long-term rate of return on plan assets (as a percent) | 7.25% | 7.25% | 7.25% |
Pension Benefits | Union employees | |||
Rate of compensation increase: | |||
Compensation increase (as a percent) | 3.13% | 3.11% | 3.66% |
Rate of compensation increase: | |||
Compensation increase (as a percent) | 3.66% | 3.13% | 3.22% |
Pension Benefits | Salaried employees | |||
Rate of compensation increase: | |||
Compensation increase (as a percent) | 3.62% | 3.56% | 3.14% |
Rate of compensation increase: | |||
Compensation increase (as a percent) | 3.14% | 3.60% | 3.47% |
Other Postretirement Benefits | |||
Weighted-Average Assumptions Used to Determine Benefit Obligations | |||
Discount rate (as a percent) | 3.98% | 3.62% | 3.55% |
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost | |||
Discount rate (as a percent) | 3.55% | 3.98% | 3.95% |
Other Postretirement Benefits | Minimum | |||
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost | |||
Expected long-term rate of return on plan assets (as a percent) | 5.00% | 4.00% | 5.00% |
Other Postretirement Benefits | Maximum | |||
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost | |||
Expected long-term rate of return on plan assets (as a percent) | 6.25% | 6.00% | 6.25% |
Employee Benefit Plans - Assume
Employee Benefit Plans - Assumed Health Care Cost Trend Rates (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Assumed Health Care Cost Trend Rates used to Measure Expected Cost of Benefits | |
Weighted average health care cost trend rate | 6.10% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% |
Fiscal year that the rate reaches the ultimate trend rate | 2,027 |
Employee Benefit Plans - Plan A
Employee Benefit Plans - Plan Assets (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Actual | ||
Compounded investment returns, period one (in years) | 5 years | |
Compounded investment returns, period two (in years) | 10 years | |
Equity Investment | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 20.00% | |
Asset allocation percentage, maximum | 45.00% | |
Fixed Income Investment | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 35.00% | |
Asset allocation percentage, maximum | 50.00% | |
Real Estate | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 0.00% | |
Asset allocation percentage, maximum | 10.00% | |
Hedge Funds, Equity | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 15.00% | |
Asset allocation percentage, maximum | 30.00% | |
Cash Investment | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 0.00% | |
Asset allocation percentage, maximum | 6.00% | |
Pension Benefits | Equity Investment | Domestic | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 10.00% | |
Asset allocation percentage, maximum | 20.00% | |
Actual | ||
Actual plan asset allocation (as a percent) | 12.50% | 19.90% |
Pension Benefits | Equity Investment | International | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 10.00% | |
Asset allocation percentage, maximum | 20.00% | |
Actual | ||
Actual plan asset allocation (as a percent) | 18.40% | 13.10% |
Pension Benefits | Fixed Income Investment | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 35.00% | |
Asset allocation percentage, maximum | 50.00% | |
Actual | ||
Actual plan asset allocation (as a percent) | 38.20% | 40.50% |
Pension Benefits | Real Estate | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 2.00% | |
Asset allocation percentage, maximum | 6.00% | |
Actual | ||
Actual plan asset allocation (as a percent) | 3.50% | 5.00% |
Pension Benefits | Hedge Funds, Equity | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 15.00% | |
Asset allocation percentage, maximum | 30.00% | |
Actual | ||
Actual plan asset allocation (as a percent) | 21.10% | 16.80% |
Pension Benefits | Cash Investment | ||
Anticipated 2,017 | ||
Asset allocation percentage, minimum | 2.00% | |
Asset allocation percentage, maximum | 8.00% | |
Actual | ||
Actual plan asset allocation (as a percent) | 6.30% | 4.70% |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Value Hierarchy of Plan Assets (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total Assets in the Fair Value Hierarchy | $ 302 | $ 868 | |
Investments measured at NAV | 1,906 | 1,322 | |
Fair value of plan assets | 2,208 | 2,190 | $ 2,349 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 121 | 210 | |
Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 180 | 657 | |
Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1 | 1 | |
Interest-bearing cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | 33 | |
Interest-bearing cash | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Interest-bearing cash | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | 33 | |
Interest-bearing cash | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
U.S. Government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 68 | |
U.S. Government securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 62 | |
U.S. Government securities | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 6 | |
U.S. Government securities | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate debt | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 138 | 406 | |
Corporate debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate debt | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 138 | 406 | |
Corporate debt | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 63 | 96 | |
Common Stock | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 62 | 89 | |
Common Stock | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1 | 7 | |
Common Stock | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Registered investment companies\Collective investment trust | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 56 | 224 | |
Registered investment companies\Collective investment trust | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 56 | 59 | |
Registered investment companies\Collective investment trust | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 165 | |
Registered investment companies\Collective investment trust | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Value of funds in insurance company accounts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 40 | 41 | |
Value of funds in insurance company accounts | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Value of funds in insurance company accounts | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 39 | 40 | |
Value of funds in insurance company accounts | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1 | $ 1 |
Employee Benefit Plans - Expect
Employee Benefit Plans - Expected Future Benefit Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
Pension Benefits | |
Expected Future Benefit Payments | |
2,017 | $ 219 |
2,018 | 194 |
2,019 | 199 |
2,020 | 201 |
2,021 | 205 |
2022 through 2026 | 1,014 |
Other Postretirement Benefits | |
Expected Future Benefit Payments | |
2,017 | 9 |
2,018 | 8 |
2,019 | 8 |
2,020 | 7 |
2,021 | 6 |
2022 through 2026 | $ 24 |
Employee Benefit Plans - Contri
Employee Benefit Plans - Contributions (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Pension Benefits | ||
Contributions | ||
Employer contributions | $ 74 | $ 120 |
Expected employer's contribution in next fiscal year | 24 | |
Other Postretirement Benefits | ||
Contributions | ||
Employer contributions | $ 6 | 7 |
Expected employer's contribution in next fiscal year | 5 | |
Supplemental (nonqualified) executive retirement plan | ||
Contributions | ||
Employer contributions directly to the pension trust for the period | 114 | |
Employer's contribution to retirees during the period | 6 | |
Expected employer's contribution directly to retirees in next fiscal year | $ 3 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Contribution Plan (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)employeeunitlocation | Mar. 31, 2015USD ($) | |
Defined Contribution Plan | |||
Employee's maximum contribution to 401 (k) defined contribution plan (as a percent) | 50.00% | ||
Percentage of employer's matching contribution of first 3% of participant's contribution, option one | 100.00% | ||
Maximum percentage of contribution by employee in order to be eligible for 100% matching portion under the plan, option one | 3.00% | ||
Percentage of employer's matching contribution of next 2% of participant's contribution, option one | 50.00% | ||
Maximum additional percentage of contribution by employee in order to qualify for 50% matching portion under the plan, option one | 3.00% | ||
Percentage of employer's matching contribution of first 6% of participant's contribution, option two | 100.00% | ||
Maximum percentage contribution by employee in order to be eligible for 50% matching portion under the plan, option two | 6.00% | ||
Employer's contribution | $ | $ 41 | $ 56 | $ 51 |
Collective bargaining agreements | |||
Number of locations at which the majority of covered employees work | location | 5 | ||
Percentage of employees covered by collective bargaining agreements | 20.00% | ||
Number of locations with multiple collective bargaining agreements | location | 1 | ||
Number of collective bargaining agreements at locations with multiple CBAs | unit | 2 | ||
Workforce Subject to Collective Bargaining Arrangements | |||
Collective bargaining agreements | |||
Number of employees exceeding the value, employed as of period end | employee | 12,700 | ||
Prior Orbital 401K Plan | |||
Defined Contribution Plan | |||
Employer's contribution | $ | $ 4 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Current: | |||
Federal | $ 28 | $ 63 | $ 21 |
State | 2 | 2 | 4 |
Non-US | 0 | 4 | 0 |
Deferred: | |||
Federal | 55 | 39 | 17 |
State | 2 | 3 | (5) |
Income taxes | $ 87 | $ 111 | $ 37 |
Items responsible for the differences between the federal statutory rate and ATK's effective rate | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal impact | 2.10% | 2.80% | (0.10%) |
Domestic manufacturing deduction | (1.50%) | (2.30%) | (5.60%) |
Goodwill impairment | 0.00% | 0.00% | 11.20% |
Research and development tax credit | (5.20%) | (12.60%) | (3.20%) |
Change in prior year contingent tax liabilities | 1.00% | 0.10% | (3.70%) |
Nondeductible transaction costs | 0.00% | 0.00% | 7.20% |
Other | (1.10%) | (2.50%) | (3.30%) |
Change in valuation allowance | 1.60% | 7.00% | (2.70%) |
Income tax provision | 31.90% | 27.50% | 34.80% |
Deferred income tax assets: | |||
Retirement benefits | $ 306 | $ 271 | |
Federal carryforwards | 36 | 13 | |
State carryforwards | 9 | 50 | |
Other | 33 | 19 | |
Other reserves | 26 | 21 | |
Accruals for employee benefits | 42 | 40 | |
Inventory | 14 | 25 | |
Contract method of revenue recognition | 109 | 80 | |
Total deferred income tax assets before valuation allowance | 575 | 519 | |
Valuation allowance | (13) | (42) | |
Total deferred income tax assets | 562 | 477 | |
Deferred income tax liabilities: | |||
Intangible assets | (98) | (86) | |
Property, plant and equipment | (129) | (127) | |
Debt-related | (16) | (10) | |
Total deferred income tax liabilities | (243) | (223) | |
Net deferred income tax assets | $ 319 | $ 254 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ (42,000,000) | $ (13,000,000) |
Operating loss carryforwards, subject to expiration | 14,000,000 | |
Operating loss carryforwards, not subject to expiration | 9,000,000 | |
Unrecognized tax benefits including interest and penalties | 121,000,000 | 83,000,000 |
Unrecognized tax benefits that would impact effective tax rate | 106,000,000 | 79,000,000 |
Decrease in unrecognized tax benefits is reasonably possible | 11,000,000 | |
Estimated minimum increase (decrease) in earnings related to settlement of unrecognized tax benefits | 0 | |
Estimated maximum increase (decrease) in earnings related to settlement of unrecognized tax benefits | 10,000,000 | |
Unrecognized tax benefits, interest on income taxes accrued | $ 2,000,000 | $ 2,000,000 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at the beginning of the year | $ 9 | $ 13 | $ 3 |
Additions, charged to expense | 5 | 37 | 0 |
Additions, due to the Merger | 0 | 0 | 7 |
Deductions | (1) | (8) | (1) |
Balance at the end of the year | $ 13 | $ 42 | $ 9 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties | |||
Unrecognized tax benefits, beginning of period | $ 34 | $ 81 | $ 32 |
Gross increases—tax positions in prior periods | 42 | 30 | 22 |
Gross decreases—tax positions in prior periods | (1) | (4) | (16) |
Gross increases—current-period tax positions | 6 | 18 | 1 |
Settlements | 0 | (5) | (3) |
Lapse of statute of limitations | 0 | (1) | (2) |
Unrecognized tax benefits, end of period | $ 81 | $ 119 | $ 34 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | |
Other Commitments [Line Items] | |||
Rent expenses | $ 69 | $ 88 | $ 73 |
Contractual obligation payment schedule | |||
2,017 | 77 | ||
2,018 | 71 | ||
2,019 | 65 | ||
2,020 | 55 | ||
2,021 | 51 | ||
Thereafter | 66 | ||
Total | $ 385 | ||
Minimum | |||
Other Commitments [Line Items] | |||
Operating leases renewal period | 1 year | ||
Maximum | |||
Other Commitments [Line Items] | |||
Operating leases renewal period | 5 years |
Contingencies (Details)
Contingencies (Details) - USD ($) | 1 Months Ended | ||
Dec. 31, 2001 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisitions [Line Items] | |||
Unbilled receivables for contract claims | $ 18,000,000 | $ 25,000,000 | |
Recorded third-party environmental recoveries, discount rate | 1.00% | 0.70% | |
Estimated inflationary factor (as a percent) | 1.90% | ||
Environmental remediation | |||
Amounts (payable) receivable | $ (43,000,000) | $ (42,000,000) | |
Unamortized discount | 2,000,000 | 2,000,000 | |
Present value amounts (payable) receivable | (41,000,000) | (40,000,000) | |
Amounts (payable) receivable | 19,000,000 | 18,000,000 | |
Unamortized discount | (1,000,000) | 0 | |
Present value amounts (payable) receivable | 18,000,000 | 18,000,000 | |
Discounted liability recorded in other current liabilities | 6,000,000 | ||
Discounted liability recorded in other long-term liabilities | 35,000,000 | ||
Discounted receivable recorded in other current assets | 3,000,000 | ||
Discounted receivable recorded in other non-current assets | $ 15,000,000 | ||
Threshold for Hercules to indemnify the Company for environmental remediation | 50,000 | ||
Utah state estimated damages | $ 139,000,000 | ||
Aggregate undiscounted amounts payable for environmental remediation costs, net of expected recoveries | |||
2,017 | 2,000,000 | ||
2,018 | 0 | ||
2,019 | 0 | ||
2,020 | 3,000,000 | ||
2,021 | 2,000,000 | ||
Thereafter | 17,000,000 | ||
Total | 24,000,000 | ||
Minimum | |||
Environmental remediation | |||
Estimated discounted reasonably possible costs of environmental remediation | 41,000,000 | ||
Maximum | |||
Environmental remediation | |||
Estimated discounted reasonably possible costs of environmental remediation | 65,000,000 | ||
Thiokol | Environmental Remediation Cost Sharing Level 1 | Maximum | |||
Environmental remediation | |||
Threshold for environmental remediation if costs are not recovered through U.S. Government contracts | 14,000,000 | ||
Thiokol | Environmental Remediation Cost Sharing Level 2 | Minimum | |||
Environmental remediation | |||
Threshold for environmental remediation if costs are not recovered through U.S. Government contracts | 14,000,000 | ||
Thiokol | Environmental Remediation Cost Sharing Level 2 | Maximum | |||
Environmental remediation | |||
Threshold for environmental remediation if costs are not recovered through U.S. Government contracts | 34,000,000 | ||
Thiokol | Environmental Remediation Cost Sharing Level 3 | Minimum | |||
Environmental remediation | |||
Threshold for environmental remediation if costs are not recovered through U.S. Government contracts | $ 34,000,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)awardplan$ / sharesshares | Mar. 31, 2015USD ($)$ / sharesshares | |
Stock-Based Compensation | |||
Number of authorized shares of preferred stock | 5,000,000 | ||
Par value of preferred stock (in dollars per share) | $ / shares | $ 1 | ||
Total pre-tax stock-based compensation expense | $ | $ 19 | $ 20 | $ 25 |
Number of stock-based incentive plans | plan | 5 | ||
Number of plans under which no new grants are being made | plan | 4 | ||
Number of types of awards outstanding under the entity's stock incentive plans | award | 5 | ||
Weighted average fair value of awards granted (in dollars per share) | $ / shares | $ 74.88 | $ 80.14 | $ 81.88 |
Weighted average assumptions used in estimating the value of the award | |||
Risk-free rate | 1.99% | 1.62% | 1.82% |
Expected dividend yield | 1.17% | 1.36% | 0.99% |
Expected award life | 7 years | 7 years | 7 years |
Share-based compensation, additional disclosures | |||
Total intrinsic value of options exercised | $ | $ 5 | $ 2 | |
Exercise of stock options (in shares) | 0 | ||
Total cash received from options exercised | $ | 4 | 1 | |
Total income tax benefit recognized in the income statement for share-based compensation | $ | $ 8 | $ 7 | $ 9 |
Employee Stock Purchase Plan | |||
Stock-Based Compensation | |||
Price as percent of FMV of shares | 85.00% | ||
Number of authorized common shares | 2,000,000 | ||
Number of available shares to be granted | 1,901,954 | ||
Total pre-tax stock-based compensation expense | $ | $ 1 | ||
TSR Awards | |||
Weighted average assumptions used in estimating the value of the award | |||
Risk-free rate | 1.02% | 1.00% | 1.02% |
Expected volatility | 22.81% | 25.39% | 22.81% |
Expected dividend yield | 1.78% | 1.51% | 1.78% |
Expected award life | 2 years 9 months 23 days | 2 years 9 months 16 days | 2 years 9 months 23 days |
Restricted Stock | Minimum | |||
Share-based compensation, additional disclosures | |||
Award vesting period | 1 year | 1 year | |
Restricted Stock | Maximum | |||
Share-based compensation, additional disclosures | |||
Award vesting period | 3 years | 3 years | |
Stock options | |||
Weighted average assumptions used in estimating the value of the award | |||
Expected volatility | 27.91% | 26.89% | 27.67% |
Share-based compensation, additional disclosures | |||
Minimum terms of options | 7 years | ||
Maximum terms of options | 10 years | ||
Number of years upon which expected volatility is based | 7 years | ||
Weighted average fair value of options granted (in dollars per share) | $ / shares | $ 20.80 | $ 20.53 | $ 39.81 |
Exercise of stock options (in shares) | 122,893 | 33,629 | |
Stock options | Minimum | |||
Share-based compensation, additional disclosures | |||
Award vesting period | 1 year | 1 year | |
Stock options | Maximum | |||
Share-based compensation, additional disclosures | |||
Award vesting period | 3 years | 3 years | |
Performance share award, TSR award, and restricted stock award | |||
Share-based compensation, additional disclosures | |||
Total unrecognized compensation cost related to nonvested stock-based compensation awards | $ | $ 26 | ||
Nonvested stock-based compensation expected to be realized over a weighted average period | 1 year 8 months | ||
Legacy ATK Plans | |||
Stock-Based Compensation | |||
Legacy ATK stock-based incentive plans | plan | 3 | ||
Legacy Orbital Plans | |||
Stock-Based Compensation | |||
Legacy Orbital Sciences stock-based incentive plans | plan | 1 | ||
Legacy Orbital Plans | Restricted Stock | |||
Stock-Based Compensation | |||
Contingent shares issuable | 48,878 | ||
2005 Stock Incentive Plan | |||
Stock-Based Compensation | |||
Number of authorized common shares | 3,750,000 | ||
Number of available shares to be granted | 2,811,466 | ||
Fiscal year 2016-2018 | TSR Awards | |||
Stock-Based Compensation | |||
Contingent shares issuable | 73,802 | ||
Weighted average fair value of awards granted (in dollars per share) | $ / shares | $ 87.85 | ||
Fiscal year 2015-2017 | TSR Awards | |||
Stock-Based Compensation | |||
Contingent shares issuable | 81,688 | ||
Weighted average fair value of awards granted (in dollars per share) | $ / shares | $ 94.93 | ||
Performance period ending March 31, 2017 | Restricted Stock | |||
Stock-Based Compensation | |||
Contingent shares issuable | 53,449 | ||
Executive Officers And Key Employees | Fiscal year 2016-2018 | Performance Shares | |||
Stock-Based Compensation | |||
Contingent shares issuable | 73,802 | ||
Executive Officers And Key Employees | Fiscal year 2015-2017 | Performance Shares | |||
Stock-Based Compensation | |||
Contingent shares issuable | 81,689 |
Stock-Based Compensation - Awar
Stock-Based Compensation - Award Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stock option activity, Shares | ||||
Exercised (in shares) | 0 | |||
Share-based compensation, additional disclosures | ||||
Total intrinsic value of options exercised | $ 5 | $ 2 | ||
Total cash received from options exercised | $ 4 | $ 1 | ||
Performance share award, TSR award, and restricted stock award activity, Weighted Average Exercise Price | ||||
Nonvested at beginning of the period, Weighted average grant date fair value (in dollars per share) | $ 77.02 | $ 75.57 | $ 83.91 | |
Granted, Weighted average grant date fair value (in dollars per share) | 74.88 | 80.14 | 81.88 | |
Converted in Merger, Weighted Average Grant Date Fair Value | 71.29 | |||
Canceled/forfeited, Weighted average grant date fair value (in dollars per share) | 80.88 | 78.73 | 87.05 | |
Vested, Weighted average grant date fair value (in dollars per share) | 43.87 | 64.68 | 72.50 | |
Nonvested at end of the period, Weighted average grant date fair value (in dollars per share) | $ 75.57 | $ 82.31 | $ 77.02 | $ 83.91 |
Performance Share and TSR Awards | ||||
Performance share award, TSR award, and restricted stock award activity, Shares | ||||
Nonvested at the beginning of the period (in shares) | 160,530 | 157,799 | 308,092 | |
Granted (in shares) | 2,976 | 153,888 | 161,661 | |
Canceled/forfeited (in shares) | (5,374) | (706) | (309,223) | |
Vested (in shares) | (333) | 0 | 0 | |
Nonvested at the end of the period (in shares) | 157,799 | 310,981 | 160,530 | 308,092 |
Restricted Stock Unit | ||||
Performance share award, TSR award, and restricted stock award activity, Shares | ||||
Nonvested at the beginning of the period (in shares) | 500,939 | 298,947 | 0 | |
Granted (in shares) | 0 | 0 | 0 | |
Converted in conjunction with the Merger | 647,436 | |||
Canceled/forfeited (in shares) | (10,908) | (2,933) | 0 | |
Vested (in shares) | (191,084) | (193,687) | (146,497) | |
Nonvested at the end of the period (in shares) | 298,947 | 102,327 | 500,939 | 0 |
Restricted Stock Award | ||||
Performance share award, TSR award, and restricted stock award activity, Shares | ||||
Nonvested at the beginning of the period (in shares) | 212,635 | 271,023 | 282,944 | |
Granted (in shares) | 86,108 | 176,800 | 139,094 | |
Canceled/forfeited (in shares) | (9,914) | (7,720) | (13,521) | |
Vested (in shares) | (17,806) | (128,854) | (195,882) | |
Nonvested at the end of the period (in shares) | 271,023 | 311,249 | 212,635 | 282,944 |
Stock options | ||||
Stock option activity, Shares | ||||
Outstanding at beginning of period (in shares) | 354,730 | 233,280 | 270,405 | |
Granted (in shares) | 1,443 | 72,328 | 73,100 | |
Converted in conjunction with the Merger (in shares) | 11,225 | |||
Exercised (in shares) | (122,893) | (33,629) | ||
Outstanding at end of period (in shares) | 233,280 | 271,979 | 354,730 | 270,405 |
Options exercisable at end of period (in shares) | 109,509 | 138,403 | 230,715 | |
Stock option activity, Weighted Average Exercise Price | ||||
Outstanding at beginning of period (in dollars per share) | $ 41.83 | $ 47.79 | $ 74.11 | |
Granted (in dollars per share) | 73.13 | 79.43 | 72.06 | |
Converted in conjunction with the Merger (in dollars per share) | 27.45 | |||
Exercised (in dollars per share) | 30.90 | 29.93 | ||
Outstanding at end of period (in dollars per share) | 47.79 | 58.41 | 41.83 | $ 74.11 |
Options exercisable at end of period (in dollars per share) | $ 32.43 | $ 42.25 | $ 64.32 | |
Weighted Average Remaining Contractual Term | ||||
Options outstanding, Weighted Average Remaining Contractual Life (in years) | 7 years 7 months 29 days | 7 years 7 months 6 days | 7 years 9 months 29 days | 8 years 3 months 18 days |
Options exercisable, Weighted Average Remaining Contractual Life (in years) | 6 years 7 months 12 days | 6 years 6 months 4 days | 7 years | |
Aggregate Intrinsic Value | ||||
Options outstanding, Aggregate intrinsic value | $ 41.55 | $ 29.32 | $ 34.80 | $ 68.04 |
Options exercisable, Aggregate Intrinsic Value | $ 56.91 | $ 45.48 | $ 44.99 | |
Performance share award, TSR award, and restricted stock award | ||||
Share-based compensation, additional disclosures | ||||
Total unrecognized compensation cost related to nonvested stock-based compensation awards | $ 26 | |||
Nonvested stock-based compensation expected to be realized over a weighted average period | 1 year 8 months |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share Repurchases (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | Feb. 27, 2017 | Nov. 01, 2016 | |
Class of Stock [Line Items] | |||||
The limit of repurchase of common stock authorized. | $ 300,000,000 | ||||
Number of shares authorized to be repurchased | 4,000,000 | ||||
Number of shares repurchased | 1,008,445 | 1,570,333 | |||
Value of shares repurchased | $ 76,000,000 | $ 124,000,000 | $ 0 | ||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
The limit of repurchase of common stock authorized. | $ 450,000,000 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Realignment liability activity | ||
Balance at the beginning of the period | $ 19 | $ 30 |
Expense | 28 | (1) |
Payments | (11) | (9) |
Noncash settlements | (6) | 0 |
Balance at the end of the period | 30 | 20 |
Termination Benefits | ||
Realignment liability activity | ||
Balance at the beginning of the period | 9 | 4 |
Expense | 4 | (1) |
Payments | (9) | (2) |
Noncash settlements | 0 | 0 |
Balance at the end of the period | 4 | 1 |
Remaining Lease Rentals | ||
Realignment liability activity | ||
Balance at the beginning of the period | 10 | 26 |
Expense | 18 | 0 |
Payments | (2) | (7) |
Noncash settlements | 0 | 0 |
Balance at the end of the period | 26 | 19 |
Asset Impairment | ||
Realignment liability activity | ||
Balance at the beginning of the period | 0 | 0 |
Expense | 6 | 0 |
Payments | 0 | 0 |
Noncash settlements | (6) | 0 |
Balance at the end of the period | $ 0 | $ 0 |
Operating Segment Information98
Operating Segment Information (Details) $ in Millions | 2 Months Ended | 3 Months Ended | 9 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2015USD ($)segment | Dec. 31, 2016USD ($) | Oct. 02, 2016USD ($) | Jul. 03, 2016USD ($) | Apr. 03, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 04, 2015USD ($) | Jul. 05, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 28, 2014USD ($) | Feb. 08, 2015USD ($) | Dec. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | |
Results by operating segment | ||||||||||||||
Percentage of revenues related to CRS contract within Flight and Space Systems Group | 10.00% | 5.00% | ||||||||||||
Number of operating segments | segment | 2 | 3 | ||||||||||||
Sales | $ 1,272 | $ 1,044 | $ 1,083 | $ 1,056 | $ 1,145 | $ 1,143 | $ 1,104 | $ 3,391 | $ 2,142 | $ 4,455 | $ 3,113 | |||
Goodwill impairment | 0 | 0 | 34 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 1,272 | $ 1,044 | $ 1,083 | $ 1,056 | 1,145 | $ 1,143 | $ 1,104 | 3,391 | $ 2,142 | 4,455 | 3,113 | |||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest | 333 | 472 | 223 | |||||||||||
Capital expenditures | 105 | 187 | 113 | |||||||||||
Depreciation | 89 | 116 | 73 | |||||||||||
Amortization of intangible assets | 33 | 43 | 9 | |||||||||||
Assets | $ 5,478 | 5,418 | 5,324 | $ 5,478 | 5,324 | 5,418 | 5,478 | |||||||
U.S. Government | Sales | Customer concentration | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | $ 2,359 | $ 3,368 | $ 2,332 | |||||||||||
Percentage of sales to major customer | 70.00% | 76.00% | 75.00% | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | $ 2,359 | $ 3,368 | $ 2,332 | |||||||||||
Foreign customers | Sales | Geographic Concentration | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 766 | 778 | 608 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 766 | 778 | 608 | |||||||||||
Vista Outdoor Inc. | ||||||||||||||
Results by operating segment | ||||||||||||||
Revenue from related parties | 19 | 138 | 238 | |||||||||||
Sporting Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Revenue from related parties | $ 171 | |||||||||||||
Flight Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 1,142 | 1,496 | 1,093 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 1,142 | 1,496 | 1,093 | |||||||||||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest | 197 | 204 | 145 | |||||||||||
Assets | 2,044 | 2,208 | 2,224 | 2,044 | 2,224 | 2,208 | 2,044 | |||||||
Flight Systems Group | Foreign customers | Sales | Geographic Concentration | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 152 | |||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 152 | |||||||||||||
Defense Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | $ 1,320 | $ 1,823 | $ 1,833 | |||||||||||
Revenues from external customers from military small caliber ammunition contract, percentage | 6.00% | 6.00% | 12.00% | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | $ 1,320 | $ 1,823 | $ 1,833 | |||||||||||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest | 126 | 172 | 185 | |||||||||||
Assets | 1,173 | 1,228 | 1,184 | 1,173 | 1,184 | 1,228 | 1,173 | |||||||
Defense Systems Group | Foreign customers | Sales | Geographic Concentration | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 434 | |||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 434 | |||||||||||||
Space Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 977 | 1,238 | 411 | |||||||||||
Goodwill impairment | 34 | |||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 977 | 1,238 | 411 | |||||||||||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest | 67 | 129 | (6) | |||||||||||
Assets | 1,455 | 1,280 | 1,273 | 1,455 | 1,273 | 1,280 | 1,455 | |||||||
Space Systems Group | Foreign customers | Sales | Geographic Concentration | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 192 | |||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 192 | |||||||||||||
Operating Segments | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 3,391 | 4,455 | 3,113 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 3,391 | 4,455 | 3,113 | |||||||||||
Operating Segments | Flight Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 1,115 | 1,483 | 1,064 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 1,115 | 1,483 | 1,064 | |||||||||||
Operating Segments | Defense Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 1,314 | 1,804 | 1,655 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 1,314 | 1,804 | 1,655 | |||||||||||
Operating Segments | Space Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 962 | 1,168 | 394 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 962 | 1,168 | 394 | |||||||||||
Intersegment Eliminations | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | (48) | (102) | (224) | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | (48) | (102) | (224) | |||||||||||
Intersegment Eliminations | Flight Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 27 | 13 | 29 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 27 | 13 | 29 | |||||||||||
Intersegment Eliminations | Defense Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 6 | 19 | 178 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 6 | 19 | 178 | |||||||||||
Intersegment Eliminations | Space Systems Group | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | 15 | 70 | 17 | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | 15 | 70 | 17 | |||||||||||
Segment Reconciling Items | ||||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Capital expenditures | 105 | 187 | 113 | |||||||||||
Depreciation | 89 | 116 | 73 | |||||||||||
Amortization of intangible assets | 33 | 43 | 9 | |||||||||||
Segment Reconciling Items | Flight Systems Group | ||||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Capital expenditures | 48 | 78 | 49 | |||||||||||
Depreciation | 39 | 54 | 35 | |||||||||||
Amortization of intangible assets | 0 | 0 | 1 | |||||||||||
Segment Reconciling Items | Defense Systems Group | ||||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Capital expenditures | 23 | 44 | 44 | |||||||||||
Depreciation | 15 | 18 | 20 | |||||||||||
Amortization of intangible assets | 1 | 1 | 2 | |||||||||||
Segment Reconciling Items | Space Systems Group | ||||||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Capital expenditures | 31 | 56 | 6 | |||||||||||
Depreciation | 24 | 31 | 11 | |||||||||||
Amortization of intangible assets | 0 | 0 | 0 | |||||||||||
Corporate | ||||||||||||||
Results by operating segment | ||||||||||||||
Sales | (48) | (102) | (224) | |||||||||||
Segment Reconciliation [Abstract] | ||||||||||||||
Sales | (48) | (102) | (224) | |||||||||||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest | (57) | (33) | (101) | |||||||||||
Capital expenditures | 3 | 9 | 14 | |||||||||||
Depreciation | 11 | 13 | 7 | |||||||||||
Amortization of intangible assets | 32 | 42 | 6 | |||||||||||
Assets | $ 806 | $ 702 | $ 643 | $ 806 | $ 643 | $ 702 | $ 806 | |||||||
Maximum | Foreign customers | Sales | Geographic Concentration | ||||||||||||||
Results by operating segment | ||||||||||||||
Percentage of sales to major customer | 4.00% | 4.00% | 6.00% |
Transition Period Comparative99
Transition Period Comparative Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Dec. 31, 2015 | Dec. 28, 2014 | Dec. 31, 2016 | Mar. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 1,272 | $ 1,044 | $ 1,083 | $ 1,056 | $ 1,145 | $ 1,143 | $ 1,104 | $ 3,391 | $ 2,142 | $ 4,455 | $ 3,113 |
Gross profit | 268 | 210 | 280 | 227 | 242 | 209 | 223 | 674 | 478 | 985 | 701 |
Income from continuing operations of Orbital ATK, Inc. | 65 | 60 | 91 | 77 | 53 | 74 | 58 | 185 | 109 | 293 | 70 |
Income from discontinued operations | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 1 | 108 | 0 | 125 |
Net income attributable to Orbital ATK, Inc. | $ 65 | $ 60 | $ 91 | $ 77 | $ 54 | $ 74 | $ 58 | $ 186 | $ 217 | $ 293 | $ 195 |
Continuing operations (in dollars per share) | $ 1.12 | $ 1.04 | $ 1.56 | $ 1.33 | $ 0.90 | $ 1.26 | $ 0.98 | $ 3.12 | $ 3.44 | $ 5.05 | $ 1.96 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.02 | 0 | 0 | 0.02 | 3.42 | 0 | 3.53 |
Basic (in dollars per share) | 1.12 | 1.04 | 1.56 | 1.33 | 0.92 | 1.26 | 0.98 | 3.14 | 6.86 | 5.05 | 5.49 |
Continuing operations (in dollars per share) | 1.11 | 1.04 | 1.55 | 1.31 | 0.89 | 1.25 | 0.97 | 3.09 | 3.37 | 5.01 | 1.93 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.02 | 0 | 0 | 0.02 | 3.34 | 0 | 3.46 |
Diluted (in dollars per share) | $ 1.11 | $ 1.04 | $ 1.55 | $ 1.31 | $ 0.91 | $ 1.25 | $ 0.97 | $ 3.11 | $ 6.71 | $ 5.01 | $ 5.39 |
Quarterly Financial Data (un100
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Dec. 31, 2015 | Dec. 28, 2014 | Dec. 31, 2016 | Mar. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 1,272 | $ 1,044 | $ 1,083 | $ 1,056 | $ 1,145 | $ 1,143 | $ 1,104 | $ 3,391 | $ 2,142 | $ 4,455 | $ 3,113 |
Gross profit | 268 | 210 | 280 | 227 | 242 | 209 | 223 | 674 | 478 | 985 | 701 |
Income from continuing operations | 65 | 60 | 91 | 77 | 53 | 74 | 58 | 185 | 109 | 293 | 70 |
Income from discontinued operations | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 1 | 108 | 0 | 125 |
Net income attributable to Orbital ATK, Inc. | $ 65 | $ 60 | $ 91 | $ 77 | $ 54 | $ 74 | $ 58 | $ 186 | $ 217 | $ 293 | $ 195 |
Continuing operations (in dollars per share) | $ 1.12 | $ 1.04 | $ 1.56 | $ 1.33 | $ 0.90 | $ 1.26 | $ 0.98 | $ 3.12 | $ 3.44 | $ 5.05 | $ 1.96 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.02 | 0 | 0 | 0.02 | 3.42 | 0 | 3.53 |
Basic (in dollars per share) | 1.12 | 1.04 | 1.56 | 1.33 | 0.92 | 1.26 | 0.98 | 3.14 | 6.86 | 5.05 | 5.49 |
Continuing operations (in dollars per share) | 1.11 | 1.04 | 1.55 | 1.31 | 0.89 | 1.25 | 0.97 | 3.09 | 3.37 | 5.01 | 1.93 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.02 | 0 | 0 | 0.02 | 3.34 | 0 | 3.46 |
Diluted (in dollars per share) | 1.11 | 1.04 | 1.55 | 1.31 | 0.91 | 1.25 | 0.97 | 3.11 | $ 6.71 | 5.01 | 5.39 |
Dividend declared (in dollars per share) | 0.3 | 0.3 | 0.3 | 0.30 | 0.26 | 0.26 | 0 | ||||
Dividend paid (in dollars per share) | $ 0.3 | $ 0.3 | $ 0.3 | $ 0.30 | $ 0.26 | $ 0.26 | $ 0.26 | $ 0.78 | $ 1.2 | $ 1.28 |