Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q1 | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-16411 | |
Entity Registrant Name | NORTHROP GRUMMAN CORP /DE/ | |
Entity Central Index Key | 0001133421 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0640649 | |
Entity Address, Line 1 | 2980 Fairview Park Drive | |
Entity Address, City Or Town | Falls Church, | |
Entity Address, State Or Province | VA | |
Entity Address, Postal ZIP Code | 22042 | |
City Area Code | 703 | |
Local Phone Number | 280-2900 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | NOC | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 166,702,730 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings and Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Sales | $ 8,620 | $ 8,189 |
Operating costs and expenses | ||
General and administrative expenses | 788 | 760 |
Operating income | 934 | 936 |
Other (expense) income | ||
Interest expense | (125) | (138) |
FAS (non-service) pension benefit | 302 | 200 |
Other, net | (58) | 36 |
Earnings before income taxes | 1,053 | 1,034 |
Federal and foreign income tax expense | 185 | 171 |
Net earnings | $ 868 | $ 863 |
Basic earnings per share | ||
Basic earnings per share | $ 5.18 | $ 5.08 |
Weighted-average common shares outstanding, in millions | 167.7 | 170 |
Diluted earnings per share | ||
Diluted earnings per share | $ 5.15 | $ 5.06 |
Weighted-average diluted shares outstanding, in millions | 168.4 | 170.7 |
Net earnings (from above) | $ 868 | $ 863 |
Change in unamortized prior service credit, net of tax | (10) | (11) |
Change in cumulative translation adjustment and other, net | (9) | 4 |
Other comprehensive loss, net of tax | (19) | (7) |
Comprehensive income | 849 | 856 |
Product [Member] | ||
Sales | 6,176 | 5,728 |
Cost of Sales | 4,952 | 4,517 |
Service [Member] | ||
Sales | 2,444 | 2,461 |
Cost of Sales | $ 1,946 | $ 1,976 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 3,278 | $ 2,245 |
Accounts receivable, net | 2,136 | 1,326 |
Unbilled receivables, net | 5,918 | 5,334 |
Inventoried costs, net | 785 | 783 |
Prepaid expenses and other current assets | 1,011 | 997 |
Total current assets | 13,128 | 10,685 |
Property, plant and equipment, net of accumulated depreciation of $5,952 for 2020 and $5,850 for 2019 | 6,956 | 6,912 |
Operating lease right-of-use assets | 1,469 | 1,511 |
Goodwill | 18,698 | 18,708 |
Intangible assets, net | 974 | 1,040 |
Deferred tax assets | 355 | 508 |
Other non-current assets | 1,623 | 1,725 |
Total assets | 43,203 | 41,089 |
Liabilities | ||
Trade accounts payable | 2,071 | 2,226 |
Accrued employee compensation | 1,472 | 1,865 |
Advance payments and billings in excess of costs incurred | 2,027 | 2,237 |
Other current liabilities | 4,607 | 3,106 |
Total current liabilities | 10,177 | 9,434 |
Long-term debt, net of current portion of $1,790 for 2020 and $1,109 for 2019 | 14,299 | 12,770 |
Pension and other postretirement benefit plan liabilities | 6,779 | 6,979 |
Operating lease liabilities | 1,280 | 1,308 |
Other non-current liabilities | 1,606 | 1,779 |
Total liabilities | 34,141 | 32,270 |
Commitments and contingencies (Note 6) | ||
Shareholders’ equity | ||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2020—167,099,297 and 2019—167,848,424 | 167 | 168 |
Paid-in capital | 0 | 0 |
Retained earnings | 9,011 | 8,748 |
Accumulated other comprehensive loss | (116) | (97) |
Total shareholders’ equity | 9,062 | 8,819 |
Total liabilities and shareholders’ equity | $ 43,203 | $ 41,089 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Position (Unaudited) (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ (5,952) | $ (5,850) |
Long-term debt, current portion | $ 1,790 | $ 1,109 |
Preferred Stock, par value | $ 1 | $ 1 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 1 | $ 1 |
Common Stock, shares authorized | 800,000,000 | 800,000,000 |
Common Stock, shares issued | 167,099,297 | 167,848,424 |
Common Stock, shares outstanding | 167,099,297 | 167,848,424 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net earnings | $ 868 | $ 863 |
Adjustments to reconcile to net cash used in operating activities: | ||
Depreciation and amortization | 297 | 302 |
Stock-based compensation | 18 | 26 |
Deferred income taxes | 156 | 33 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (810) | (718) |
Unbilled receivables, net | (584) | (759) |
Inventoried costs, net | (2) | (124) |
Prepaid expenses and other assets | 56 | (23) |
Accounts payable and other liabilities | (833) | (480) |
Income taxes payable, net | 10 | 140 |
Retiree benefits | (237) | (142) |
Other, net | 68 | (31) |
Net cash used in operating activities | (993) | (913) |
Investing activities | ||
Capital expenditures | (272) | (284) |
Other, net | 2 | 4 |
Net cash used in investing activities | (270) | (280) |
Financing activities | ||
Net proceeds from issuance of long-term debt | 2,239 | 0 |
Payments to credit facilities | (7) | (20) |
Net borrowings on commercial paper | 744 | 814 |
Common stock repurchases | (344) | (60) |
Cash dividends paid | (227) | (211) |
Payments of employee taxes withheld from share-based awards | (63) | (61) |
Other, net | (46) | 0 |
Net cash provided by financing activities | 2,296 | 462 |
Increase (decrease) in cash and cash equivalents | 1,033 | (731) |
Cash and cash equivalents, beginning of year | 2,245 | 1,579 |
Cash and cash equivalents, end of period | $ 3,278 | $ 848 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common stock | Paid-in capital | Retained earnings | Accumulated other comprehensive (loss) income |
Beginning of period at Dec. 31, 2018 | $ 171 | $ 0 | $ 8,068 | $ (52) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock repurchased | (1) | (62) | |||
Net earnings | $ 863 | 863 | |||
Dividends declared | (206) | ||||
Stock compensation | (35) | ||||
Other | 0 | ||||
Other comprehensive loss, net of tax | (7) | (7) | |||
End of period at Mar. 31, 2019 | $ 8,739 | 170 | 0 | 8,628 | (59) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cash dividends declared per share | $ 1.20 | ||||
Beginning of period at Dec. 31, 2019 | $ 8,819 | 168 | 0 | 8,748 | (97) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock repurchased | (1) | (348) | |||
Net earnings | 868 | 868 | |||
Dividends declared | (223) | ||||
Stock compensation | (45) | ||||
Other | 11 | ||||
Other comprehensive loss, net of tax | (19) | (19) | |||
End of period at Mar. 31, 2020 | $ 9,062 | $ 167 | $ 0 | $ 9,011 | $ (116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cash dividends declared per share | $ 1.32 |
Basis of Presentation (Unaudite
Basis of Presentation (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Principles of Consolidation and Reporting These unaudited condensed consolidated financial statements (the “financial statements”) include the accounts of Northrop Grumman Corporation and its subsidiaries and joint ventures or other investments for which we consolidate the financial results (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”). Intercompany accounts, transactions and profits are eliminated in consolidation. Investments in equity securities and joint ventures where the company has significant influence, but not control, are accounted for using the equity method. These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”) and in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. The financial statements include adjustments of a normal recurring nature considered necessary by management for a fair presentation of the company’s unaudited condensed consolidated financial position, results of operations and cash flows. Effective January 1, 2020, the company reorganized its operating sectors to better align the company’s broad portfolio to serve its customers’ needs. The four new sectors, which also comprise our reportable segments, are Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year. These financial statements should be read in conjunction with the information contained in the company’s 2019 Annual Report on Form 10-K and the Form 8-K that we expect to file with the SEC immediately after filing this Form 10-Q, which recasts the disclosures in certain portions of the 2019 Annual Report on Form 10-K to reflect changes in the company’s reportable segments. The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30 and third quarter as ending on September 30. It is the company’s long-standing practice to establish actual interim closing dates using a “fiscal” calendar, in which we close our books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. This practice is only used at interim periods within a reporting year. Accounting Estimates Preparation of the financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Revenue Recognition The majority of our sales are derived from long-term contracts with the U.S. government for the production of goods, the provision of services, or a combination of both. We recognize revenue as control is transferred to the customer, either over time or at a point in time. As control is effectively transferred while we perform on our contracts, we generally recognize revenue over time using the cost-to-cost method (cost incurred relative to total cost estimated at completion) as the company believes this represents the most appropriate measurement towards satisfaction of our performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e., typically upon delivery). Contract Estimates Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total sales and cost at completion. Contract sales may include estimates of variable consideration, including cost or performance incentives (such as award and incentive fees), contract claims and requests for equitable adjustment (REAs). Variable consideration is included in total estimated sales to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We estimate variable consideration as the most likely amount to which we expect to be entitled. We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis. Cumulative Estimate-at-Completion (EAC) adjustments represent the cumulative effect of the changes on current and prior periods; sales and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss is expected to result on an individual performance obligation, the entire amount of the estimable future loss, including an allocation of general and administrative (G&A) costs, is charged against income in the period the loss is identified. The following table presents the effect of aggregate net EAC adjustments: Three Months Ended March 31 $ in millions, except per share data 2020 2019 Revenue $ 136 $ 166 Operating income 124 138 Net earnings (1) 98 109 Diluted earnings per share (1) 0.58 0.64 (1) Based on a 21 percent statutory tax rate. EAC adjustments on a single performance obligation can have a material effect on the company’s financial statements. When such adjustments occur, we generally disclose the nature, underlying conditions and financial impact of the adjustments. No such adjustments were material to the financial statements during the three months ended March 31, 2020 and 2019 . Backlog Backlog represents the future sales we expect to recognize on firm orders received by the company and is equivalent to the company’s remaining performance obligations at the end of each period. It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog. Unexercised contract options and indefinite delivery indefinite quantity (IDIQ) contracts are not included in backlog until the time an option or IDIQ task order is exercised or awarded. Company backlog as of March 31, 2020 was $64.2 billion . We expect to recognize approximately 45 percent and 70 percent of our March 31, 2020 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. Contract Assets and Liabilities For each of the company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Contract assets are equivalent to and reflected as Unbilled receivables in the unaudited condensed consolidated statements of financial position and are primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Contract liabilities are equivalent to and reflected as Advance payments and billings in excess of costs incurred in the unaudited condensed consolidated statements of financial position. The amount of revenue recognized for the three months ended March 31, 2020 and 2019 that was included in the contract liability balances at the beginning of each year was $781 million and $674 million , respectively. Disaggregation of Revenue See Note 9 for information regarding the company’s sales by customer type, contract type and geographic region for each of our segments. We believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: $ in millions March 31, December 31, Unamortized prior service credit, net of tax expense of $13 for 2020 and $17 for 2019 $ 41 $ 51 Cumulative translation adjustment and other, net (157 ) (148 ) Total accumulated other comprehensive loss $ (116 ) $ (97 ) Related Party Transactions For all periods presented, the company had no material related party transactions. Accounting Standards Updates Accounting standards updates adopted and/or issued, but not effective until after March 31, 2020 , are not expected to have a material effect on the company’s unaudited condensed consolidated financial position, annual results of operations and/or cash flows. |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK | EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK Basic Earnings Per Share We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. Diluted Earnings Per Share Diluted earnings per share include the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 0.7 million shares and 0.7 million shares for the three months ended March 31, 2020 and 2019 , respectively. Share Repurchases On September 16, 2015, the company’s board of directors authorized a share repurchase program of up to $4.0 billion of the company’s common stock (the “2015 Repurchase Program”). Repurchases under the 2015 Repurchase Program commenced in March 2016 and were completed in March 2020. On December 4, 2018, the company’s board of directors authorized a new share repurchase program of up to an additional $3.0 billion in share repurchases of the company’s common stock (the “2018 Repurchase Program”). Repurchases under the 2018 Repurchase Program commenced in March 2020 upon the completion of the company’s 2015 Repurchase Program. As of March 31, 2020 , repurchases under the 2018 Repurchase Program totaled $20 million ; $2.98 billion remained under this share repurchase authorization. By its terms, the 2018 Repurchase Program is set to expire when we have used all authorized funds for repurchases. Share repurchases take place from time to time, subject to market conditions and management’s discretion, in the open market or in privately negotiated transactions. The company retires its common stock upon repurchase and, in the periods presented, has not made any purchases of common stock other than in connection with these publicly announced repurchase programs. The table below summarizes the company’s share repurchases to date under the authorizations described above: Shares Repurchased Repurchase Program Amount Total Average (1) Date Completed Three Months Ended March 31 2020 2019 September 16, 2015 $ 4,000 15.4 $ 260.33 March 2020 0.9 1.1 December 4, 2018 $ 3,000 0.1 306.22 0.1 — (1) Includes commissions paid. Dividends on Common Stock In May 2019, the company increased the quarterly common stock dividend 10 percent to $1.32 per share from the previous amount of $1.20 per share. |
Income Taxes (Unaudited)
Income Taxes (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Three Months Ended March 31 $ in millions 2020 2019 Federal and foreign income tax expense $ 185 $ 171 Effective income tax rate 17.6 % 16.5 % The first quarter 2020 effective tax rate increased to 17.6 percent from 16.5 percent in the first quarter of 2019 primarily due to nondeductible losses on marketable securities and an increase in reserves for uncertain tax positions. These were partially offset by an increase in research credits , which totaled $41 million in the first quarter of 2020 and $31 million in the prior year period. Both periods benefited from $13 million of excess tax benefits for employee share-based compensation. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted. The CARES Act includes certain changes to U.S. tax law that impact the company, including a technical correction to the 2017 Tax Cuts and Jobs Act, which makes certain qualified improvement property eligible for bonus depreciation. The CARES Act did not have a significant impact on the company’s first quarter 2020 effective tax rate. The company has recorded unrecognized tax benefits related to our methods of accounting associated with the timing of revenue recognition and related costs, and the 2017 Tax Act. It is reasonably possible that within the next 12 months our unrecognized tax benefits related to these matters may decrease by up to $60 million . Since enactment of the 2017 Tax Act, the IRS and U.S. Treasury Department have issued and are expected to further issue interpretive guidance that impacts taxpayers. We will continue to evaluate such guidance as it is issued. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. The Northrop Grumman 2014-2017 federal tax returns and refund claims related to its 2007-2016 federal tax returns are currently under IRS examination. In addition, legacy Orbital ATK federal tax returns for the year ended March 31, 2015, the nine-month transition period ended December 31, 2015 and calendar years 2016-2017 are currently under IRS examination. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The company holds a portfolio of marketable securities consisting of securities to partially fund non-qualified employee benefit plans. A portion of these securities are held in common/collective trust funds and are measured at fair value using net asset value (NAV) per share as a practical expedient; and therefore are not required to be categorized in the fair value hierarchy table below. Marketable securities are included in Other non-current assets in the unaudited condensed consolidated statements of financial position. The company’s derivative portfolio consists primarily of foreign currency forward contracts. Where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value and uses the applicable London Interbank Offered Rate (LIBOR) swap rates. The following table presents the financial assets and liabilities the company records at fair value on a recurring basis identified by the level of inputs used to determine fair value: March 31, 2020 December 31, 2019 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities $ 288 $ 4 $ 292 $ 364 $ 1 $ 365 Marketable securities valued using NAV 16 17 Total marketable securities 288 4 308 364 1 382 Derivatives — (3 ) (3 ) — (3 ) (3 ) The notional value of the company’s foreign currency forward contracts at March 31, 2020 and December 31, 2019 was $85 million and $98 million , respectively. The portion of notional value designated as a cash flow hedge was $3 million and $7 million as of March 31, 2020 and December 31, 2019 , respectively. The derivative fair values and related unrealized gains/losses at March 31, 2020 and December 31, 2019 were not material. There were no transfers of financial instruments between the three levels of the fair value hierarchy during the three months ended March 31, 2020 . The carrying value of cash and cash equivalents and commercial paper approximates fair value. Long-term Debt The estimated fair value of long-term debt was $17.5 billion and $15.1 billion as of March 31, 2020 and December 31, 2019 , respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements. The carrying value of long-term debt was $16.1 billion and $13.9 billion as of March 31, 2020 and December 31, 2019 , respectively. The current portion of long-term debt is recorded in Other current liabilities in the unaudited condensed consolidated statements of financial position. Unsecured Senior Notes In March 2020, the company issued $2.25 billion of unsecured senior notes for general corporate purposes, including debt repayment and working capital, as follows: • $750 million of 4.40% senior notes due 2030 (the “2030 Notes”), • $500 million of 5.15% senior notes due 2040 (the “2040 Notes”) and • $1.0 billion of 5.25% senior notes due 2050 (the “2050 Notes”). We refer to the 2030 Notes, the 2040 Notes and the 2050 Notes, together, as the “notes.” Interest on the notes is payable semi-annually in arrears. The notes are generally subject to redemption, in whole or in part, at the company’s discretion at any time, or from time to time, prior to maturity at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed or an applicable “make-whole” amount, plus accrued and unpaid interest. |
Investigations, Claims and Liti
Investigations, Claims and Litigation (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
INVESTIGATIONS, CLAIMS AND LITIGATION | INVESTIGATIONS, CLAIMS AND LITIGATION On May 4, 2012, the company commenced an action, Northrop Grumman Systems Corp. v. United States , in the U.S. Court of Federal Claims. This lawsuit relates to an approximately $875 million firm fixed-price contract awarded to the company in 2007 by the U.S. Postal Service (USPS) for the construction and delivery of flats sequencing systems (FSS) as part of the postal automation program. The FSS have been delivered. The company’s lawsuit is based on various theories of liability. The complaint seeks approximately $63 million for unpaid portions of the contract price, and approximately $115 million based on the company’s assertions that, through various acts and omissions over the life of the contract, the USPS adversely affected the cost and schedule of performance and materially altered the company’s obligations under the contract. The United States responded to the company’s complaint with an answer, denying most of the company’s claims, and counterclaims seeking approximately $410 million , less certain amounts outstanding under the contract. The principal counterclaim alleges that the company delayed its performance and caused damages to the USPS because USPS did not realize certain costs savings as early as it had expected. On April 2, 2013, the U.S. Department of Justice informed the company of a False Claims Act complaint relating to the FSS contract that was filed under seal by a relator in June 2011 in the U.S. District Court for the Eastern District of Virginia. On June 3, 2013, the United States filed a Notice informing the Court that the United States had decided not to intervene in this case. The relator alleged that the company violated the False Claims Act in a number of ways with respect to the FSS contract, alleged damage to the USPS in an amount of at least approximately $179 million annually, alleged that he was improperly discharged in retaliation, and sought an unspecified partial refund of the contract purchase price, penalties, attorney’s fees and other costs of suit. The relator later voluntarily dismissed his retaliation claim and reasserted it in a separate arbitration, which he also ultimately voluntarily dismissed. On September 5, 2014, the court granted the company’s motion for summary judgment and ordered the relator’s False Claims Act case be dismissed with prejudice. On February 16, 2018, both the company and the United States filed motions to dismiss many of the claims and counterclaims referenced above, in whole or in part. The United States also filed a motion seeking to amend its answer and counterclaim, including to reduce its counterclaim to approximately $193 million , which the court granted on June 11, 2018. On October 17, 2018, the court granted in part and denied in part the parties’ motions to dismiss. On February 3, 2020, the parties commenced what was expected to be a seven-week trial. The first four weeks of trial have concluded, but the court postponed the remaining three weeks until May 2020 as a result of COVID-19-related concerns. Although the ultimate outcome of these matters (“the FSS matters,” collectively), including any possible loss, cannot be predicted or reasonably estimated at this time, the company intends vigorously to pursue and defend the FSS matters. On August 8, 2013, the company received a court-appointed expert’s report in litigation pending in the Second Federal Court of the Federal District in Brazil brought by the Brazilian Post and Telegraph Corporation (ECT), a Brazilian state-owned entity, against Solystic SAS (Solystic), a French subsidiary of the company, and two of its consortium partners. In this suit, commenced on December 17, 2004, ECT alleges the consortium breached its contract with ECT and seeks damages of approximately R$111 million (the equivalent of approximately $22 million as of March 31, 2020 ), plus interest, inflation adjustments and attorneys’ fees, as authorized by Brazilian law, which amounts could be significant over time. The original suit sought R$89 million (the equivalent of approximately $17 million as of March 31, 2020 ) in damages. In October 2013, ECT asserted an additional damage claim of R$22 million (the equivalent of approximately $4 million as of March 31, 2020 ). In its counterclaim, Solystic alleges ECT breached the contract by wrongfully refusing to accept the equipment Solystic had designed and built and seeks damages of approximately €31 million (the equivalent of approximately $34 million as of March 31, 2020 ), plus interest, inflation adjustments and attorneys’ fees, as authorized by Brazilian law. The Brazilian court retained an expert to consider certain issues pending before it. On August 8, 2013 and September 10, 2014, the company received reports from the expert, which contain some recommended findings relating to liability and the damages calculations put forth by ECT. Some of the expert’s recommended findings were favorable to the company and others were favorable to ECT. In November 2014, the parties submitted comments on the expert’s most recent report. On June 16, 2015, the court published a decision denying the parties’ request to present oral testimony. In a decision dated November 13, 2018, the trial court ruled in ECT’s favor on one of its claims against Solystic, and awarded damages of R$41 million (the equivalent of approximately $8 million as of March 31, 2020 ) against Solystic and its consortium partners, with that amount to be adjusted for inflation and interest from November 2004 through any appeal, in accordance with the Manual of Calculations of the Federal Justice, as well as attorneys’ fees. On March 22, 2019, ECT appealed the trial court’s decision to the intermediate court of appeals. Solystic filed its appeal on April 11, 2019. The parties are assessing whether there is a possible path for a negotiated resolution of the dispute. We are engaged in remediation activities relating to environmental conditions allegedly resulting from historic operations at the former United States Navy and Grumman facilities in Bethpage, New York. For over 20 years, we have worked closely with the United States Navy, the United States Environmental Protection Agency, the New York State Department of Environmental Conservation, the New York State Department of Health and other federal, state and local governmental authorities, to address legacy environmental conditions in Bethpage. We have incurred, and expect to continue to incur, as included in Note 6 , substantial remediation costs related to these environmental conditions. The remediation standards or requirements to which we are subject are being reconsidered and may change and costs may increase materially. As discussed in Note 6, the State of New York issued a Feasibility Study and an Amended Record of Decision, seeking to impose additional remedial requirements. The company is engaged in discussions with the State of New York and certain other potentially responsible parties. The State of New York has said that, among other things, it is also evaluating potential natural resource damages. In addition, we are a party to various, and expect to become a party to additional, legal proceedings and disputes related to remediation, costs, allowability and/or alleged environmental impacts in Bethpage, including with federal and state entities, the Navy, local municipalities and water districts, and insurance carriers, as well as class action and individual plaintiffs alleging personal injury and property damage and seeking both monetary and non-monetary relief. These Bethpage matters could result in additional costs, fines, penalties, sanctions, compensatory or other damages (including natural resource damages), determinations on allocation, allowability and coverage, and non-monetary relief. We cannot at this time predict or reasonably estimate the potential cumulative outcomes or ranges of possible liability of these aggregate Bethpage matters. The company is a party to various other investigations, lawsuits, arbitration, claims, enforcement actions and other legal proceedings, including government investigations and claims, that arise in the ordinary course of our business. The nature of legal proceedings is such that we cannot assure the outcome of any particular matter. However, based on information available to the company to date, the company does not believe that the outcome of any of these other matters pending against the company is likely to have a material adverse effect on the company’s unaudited condensed consolidated financial position as of March 31, 2020 |
Commitments and Contingencies (
Commitments and Contingencies (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES U.S. Government Cost Claims and Contingencies From time to time, the company is advised of claims by the U.S. government concerning certain potential disallowed costs, plus, at times, penalties and interest. When such findings are presented, the company and U.S. government representatives engage in discussions to enable the company to evaluate the merits of these claims, as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the company’s estimated exposure for such potential disallowed costs. Such provisions are reviewed periodically using the most recent information available. The company believes it has adequately reserved for disputed amounts that are probable and reasonably estimable, and that the outcome of any such matters would not have a material adverse effect on its unaudited condensed consolidated financial position as of March 31, 2020 , or its annual results of operations and/or cash flows. Recently, the U.S. government has raised questions about an interest rate assumption used by the company to determine our CAS pension cost in previous years. We are currently engaging with the government to address their questions. Although we believe our pension-related assumptions are appropriate, the sensitivity to changes in interest rate assumptions makes it reasonably possible the outcome of this matter could have a material adverse effect on our financial position, results of operations and/or cash flows, although we are not currently able to estimate a range of any potential loss. Environmental Matters The table below summarizes the amount accrued for environmental remediation costs, management’s estimate of the amount of reasonably possible future costs in excess of accrued costs and the deferred costs expected to be recoverable through overhead charges on U.S. government contracts as of March 31, 2020 and December 31, 2019 : $ in millions Accrued Costs (1)(2) Reasonably Possible Future Costs in Excess of Accrued Costs (2) Deferred Costs (3) March 31, 2020 $ 533 $ 448 $ 439 December 31, 2019 531 448 436 (1) As of March 31, 2020 , $163 million is recorded in Other current liabilities and $370 million is recorded in Other non-current liabilities. (2) Estimated remediation costs are not discounted to present value. The reasonably possible future costs in excess of accrued costs do not take into consideration amounts expected to be recoverable through overhead charges on U.S. government contracts. (3) As of March 31, 2020 , $131 million is deferred in Prepaid expenses and other current assets and $308 million is deferred in Other non-current assets. These amounts are evaluated for recoverability on a routine basis. Although management cannot predict whether new information gained as our environmental remediation projects progress, or as changes in facts and circumstances occur, will materially affect the estimated liability accrued, except with respect to Bethpage, we do not anticipate that future remediation expenditures associated with our currently identified projects will have a material adverse effect on the company’s unaudited condensed consolidated financial position as of March 31, 2020 , or its annual results of operations and/or cash flows. With respect to Bethpage, the State of New York issued a Feasibility Study and an Amended Record of Decision, proposing to impose additional remedial requirements. The company is engaged in discussions with the State of New York and other potentially responsible parties. As discussed in Note 5, the remediation standards or requirements to which we are subject are being reconsidered and may change and costs may increase materially. Financial Arrangements In the ordinary course of business, the company uses standby letters of credit and guarantees issued by commercial banks and surety bonds issued principally by insurance companies to guarantee the performance on certain obligations. At March 31, 2020 , there were $469 million of stand-by letters of credit and guarantees and $182 million of surety bonds outstanding. Commercial Paper The company maintains a commercial paper program that serves as a source of short-term financing with capacity to issue unsecured commercial paper notes up to $2.0 billion . At March 31, 2020 , there were $744 million of outstanding short-term commercial paper borrowings at a weighted-average interest rate of 1.88 percent that have original maturities of three months or less from the date of issuance. The outstanding balance of commercial paper borrowings is recorded in Other current liabilities in the unaudited condensed consolidated statements of financial position. Credit Facilities The company maintains a five-year senior unsecured credit facility in an aggregate principal amount of $2.0 billion (the “2018 Credit Agreement”) that matures in August 2024 and is intended to support the company’s commercial paper program and other general corporate purposes. Commercial paper borrowings reduce the amount available for borrowing under the 2018 Credit Agreement. At March 31, 2020 , there was no balance outstanding under this facility. In December 2016, a subsidiary of the company entered into a two-year credit facility, with two additional one-year option periods, in an aggregate principal amount of £120 million (the equivalent of approximately $149 million as of March 31, 2020 ) (the “2016 Credit Agreement”). The company exercised the second option to extend the maturity to December 2020. The 2016 Credit Agreement is guaranteed by the company. At March 31, 2020 , there was £55 million (the equivalent of approximately $68 million ) outstanding under this facility, which bears interest at a rate of LIBOR plus 1.10 percent . All of the borrowings outstanding under this facility are recorded in Other current liabilities in the unaudited condensed consolidated statement of financial position. At March 31, 2020 , the company was in compliance with all covenants under its credit agreements. |
Retirement Benefits (Unaudited)
Retirement Benefits (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS | RETIREMENT BENEFITS The cost to the company of its pension and other postretirement benefit (OPB) plans is shown in the following table: Three Months Ended March 31 Pension OPB $ in millions 2020 2019 2020 2019 Components of net periodic benefit cost (benefit) Service cost $ 102 $ 92 $ 4 $ 4 Interest cost 307 340 17 20 Expected return on plan assets (594 ) (525 ) (26 ) (23 ) Amortization of prior service credit (15 ) (15 ) 1 (1 ) Net periodic benefit cost (benefit) $ (200 ) $ (108 ) $ (4 ) $ — Employer Contributions The company sponsors defined benefit pension and OPB plans, as well as defined contribution plans. We fund our defined benefit pension plans annually in a manner consistent with the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006. Contributions made by the company to its retirement plans are as follows: Three Months Ended March 31 $ in millions 2020 2019 Defined benefit pension plans $ 20 $ 23 OPB plans 12 12 Defined contribution plans 256 191 |
Stock Compensation Plans and Ot
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS | STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS Stock Awards The following table presents the number of restricted stock rights (RSRs) and restricted performance stock rights (RPSRs) granted to employees under the company’s long-term incentive stock plan and the grant date aggregate fair value of those stock awards for the periods presented: Three Months Ended March 31 in millions 2020 2019 RSRs granted 0.1 0.1 RPSRs granted 0.2 0.2 Grant date aggregate fair value $ 87 $ 91 RSRs typically vest on the third anniversary of the grant date, while RPSRs generally vest and pay out based on the achievement of financial metrics over a three -year period. Cash Awards The following table presents the minimum and maximum aggregate payout amounts related to cash units (CUs) and cash performance units (CPUs) granted to employees in the periods presented: Three Months Ended March 31 $ in millions 2020 2019 Minimum aggregate payout amount $ 31 $ 36 Maximum aggregate payout amount 175 203 CUs typically vest and settle in cash on the third anniversary of the grant date, while CPUs generally vest and pay out in cash based on the achievement of financial metrics over a three -year period. |
Segment Information (Unaudited)
Segment Information (Unaudited) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Effective January 1, 2020, the company reorganized its operating sectors to better align the company’s broad portfolio to serve its customers’ needs. The four new sectors, which also comprise our reportable segments, are Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The following table presents sales and operating income by segment: Three Months Ended March 31 $ in millions 2020 2019 Sales Aeronautics Systems $ 2,843 $ 2,818 Defense Systems 1,881 1,768 Mission Systems 2,347 2,210 Space Systems 1,948 1,801 Intersegment eliminations (399 ) (408 ) Total sales 8,620 8,189 Operating income Aeronautics Systems 259 308 Defense Systems 196 202 Mission Systems 348 319 Space Systems 199 188 Intersegment eliminations (49 ) (50 ) Total segment operating income 953 967 Net FAS (service)/CAS pension adjustment 105 108 Unallocated corporate expense (124 ) (139 ) Total operating income $ 934 $ 936 Net FAS (Service)/CAS Pension Adjustment For financial statement purposes, we account for our employee pension plans in accordance with FAS. However, the cost of these plans is charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS). The net FAS (service)/CAS pension adjustment reflects the difference between CAS pension expense included as cost in segment operating income and the service cost component of FAS expense included in total operating income. Unallocated Corporate Expense Unallocated corporate expense includes the portion of corporate costs not considered allowable or allocable under applicable CAS or FAR, and therefore not allocated to the segments, such as a portion of management and administration, legal, environmental, compensation, retiree benefits and other corporate unallowable costs. Unallocated corporate expense also includes costs not considered part of management’s evaluation of segment operating performance, such as amortization of purchased intangible assets and the additional depreciation expense related to the step-up in fair value of property, plant and equipment acquired through business combinations. Disaggregation of Revenue Sales by Customer Type Three Months Ended March 31 2020 2019 $ in millions $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 2,361 83 % $ 2,334 83 % International (2) 444 16 % 435 15 % Other customers 12 — % 25 1 % Intersegment sales 26 1 % 24 1 % Aeronautics Systems sales 2,843 100 % 2,818 100 % Defense Systems U.S. government (1) 1,259 67 % 1,141 65 % International (2) 340 18 % 363 21 % Other customers 111 6 % 97 5 % Intersegment sales 171 9 % 167 9 % Defense Systems sales 1,881 100 % 1,768 100 % Mission Systems U.S. government (1) 1,671 71 % 1,613 73 % International (2) 483 21 % 376 17 % Other customers 17 1 % 24 1 % Intersegment sales 176 7 % 197 9 % Mission Systems sales 2,347 100 % 2,210 100 % Space Systems U.S. government (1) 1,803 93 % 1,669 93 % International (2) 68 3 % 43 2 % Other customers 51 3 % 69 4 % Intersegment sales 26 1 % 20 1 % Space Systems sales 1,948 100 % 1,801 100 % Total U.S. government (1) 7,094 83 % 6,757 83 % International (2) 1,335 15 % 1,217 15 % Other customers 191 2 % 215 2 % Total Sales $ 8,620 100 % $ 8,189 100 % (1) Sales to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. Each of the company’s segments derives substantial revenue from the U.S. government. (2) International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. government. (3) Percentages calculated based on total segment sales. Sales by Contract Type Three Months Ended March 31 2020 2019 $ in millions $ % (1) $ % (1) Aeronautics Systems Cost-type $ 1,343 48 % $ 1,312 47 % Fixed-price 1,474 52 % 1,482 53 % Intersegment sales 26 24 Aeronautics Systems sales 2,843 2,818 Defense Systems Cost-type 628 37 % 623 39 % Fixed-price 1,082 63 % 978 61 % Intersegment sales 171 167 Defense Systems sales 1,881 1,768 Mission Systems Cost-type 846 39 % 835 41 % Fixed-price 1,325 61 % 1,178 59 % Intersegment sales 176 197 Mission Systems sales 2,347 2,210 Space Systems Cost-type 1,398 73 % 1,306 73 % Fixed-price 524 27 % 475 27 % Intersegment sales 26 20 Space Systems sales 1,948 1,801 Total Cost-type 4,215 49 % 4,076 50 % Fixed-price 4,405 51 % 4,113 50 % Total Sales $ 8,620 $ 8,189 (1) Percentages calculated based on external customer sales. Sales by Geographic Region Three Months Ended March 31 2020 2019 $ in millions $ % (2) $ % (2) Aeronautics Systems United States $ 2,373 84 % $ 2,359 85 % Asia/Pacific 207 8 % 233 8 % All other (1) 237 8 % 202 7 % Intersegment sales 26 24 Aeronautics Systems sales 2,843 2,818 Defense Systems United States 1,370 80 % 1,238 77 % Asia/Pacific 82 5 % 88 6 % All other (1) 258 15 % 275 17 % Intersegment sales 171 167 Defense Systems sales 1,881 1,768 Mission Systems United States 1,688 78 % 1,637 81 % Asia/Pacific 176 8 % 135 7 % All other (1) 307 14 % 241 12 % Intersegment sales 176 197 Mission Systems sales 2,347 2,210 Space Systems United States 1,854 97 % 1,738 98 % Asia/Pacific 5 — % 12 — % All other (1) 63 3 % 31 2 % Intersegment sales 26 20 Space Systems sales 1,948 1,801 Total United States 7,285 85 % 6,972 85 % Asia/Pacific 470 5 % 468 6 % All other (1) 865 10 % 749 9 % Total Sales $ 8,620 $ 8,189 (1) All other is principally comprised of Europe and the Middle East. (2) Percentages calculated based on external customer sales. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | These unaudited condensed consolidated financial statements (the “financial statements”) include the accounts of Northrop Grumman Corporation and its subsidiaries and joint ventures or other investments for which we consolidate the financial results (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”). Intercompany accounts, transactions and profits are eliminated in consolidation. Investments in equity securities and joint ventures where the company has significant influence, but not control, are accounted for using the equity method. |
Basis of Presentation | These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”) and in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. The financial statements include adjustments of a normal recurring nature considered necessary by management for a fair presentation of the company’s unaudited condensed consolidated financial position, results of operations and cash flows. Effective January 1, 2020, the company reorganized its operating sectors to better align the company’s broad portfolio to serve its customers’ needs. The four new sectors, which also comprise our reportable segments, are Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year. These financial statements should be read in conjunction with the information contained in the company’s 2019 Annual Report on Form 10-K and the Form 8-K that we expect to file with the SEC immediately after filing this Form 10-Q, which recasts the disclosures in certain portions of the 2019 Annual Report on Form 10-K to reflect changes in the company’s reportable segments. |
Fiscal Period Policy | The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30 and third quarter as ending on September 30. It is the company’s long-standing practice to establish actual interim closing dates using a “fiscal” calendar, in which we close our books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. This practice is only used at interim periods within a reporting year. |
Accounting Estimates | Preparation of the financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Revenue from Contract with Customer | Contract Assets and Liabilities For each of the company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Contract assets are equivalent to and reflected as Unbilled receivables in the unaudited condensed consolidated statements of financial position and are primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Contract liabilities are equivalent to and reflected as Advance payments and billings in excess of costs incurred Revenue Recognition The majority of our sales are derived from long-term contracts with the U.S. government for the production of goods, the provision of services, or a combination of both. We recognize revenue as control is transferred to the customer, either over time or at a point in time. As control is effectively transferred while we perform on our contracts, we generally recognize revenue over time using the cost-to-cost method (cost incurred relative to total cost estimated at completion) as the company believes this represents the most appropriate measurement towards satisfaction of our performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e., typically upon delivery). Contract Estimates Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total sales and cost at completion. Contract sales may include estimates of variable consideration, including cost or performance incentives (such as award and incentive fees), contract claims and requests for equitable adjustment (REAs). Variable consideration is included in total estimated sales to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We estimate variable consideration as the most likely amount to which we expect to be entitled. We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis. Cumulative Estimate-at-Completion (EAC) adjustments represent the cumulative effect of the changes on current and prior periods; sales and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss is expected to result on an individual performance obligation, the entire amount of the estimable future loss, including an allocation of general and administrative (G&A) costs, is charged against income in the period the loss is identified. |
Earnings Per Share | We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. |
Investments in Marketable Securities | The company holds a portfolio of marketable securities consisting of securities to partially fund non-qualified employee benefit plans. A portion of these securities are held in common/collective trust funds and are measured at fair value using net asset value (NAV) per share as a practical expedient; and therefore are not required to be categorized in the fair value hierarchy table |
Derivative Financial Instruments and Hedging Activities | Where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value and uses the applicable London Interbank Offered Rate (LIBOR) swap rates. |
Fair Value of Long-term Debt | We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements. |
U.S. Government Cost Claims | From time to time, the company is advised of claims by the U.S. government concerning certain potential disallowed costs, plus, at times, penalties and interest. When such findings are presented, the company and U.S. government representatives engage in discussions to enable the company to evaluate the merits of these claims, as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the company’s estimated exposure for such potential disallowed costs. Such provisions are reviewed periodically using the most recent information available. |
Pension and Other Postretirement Plans | We fund our defined benefit pension plans annually in a manner consistent with the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 |
Basis of Presentation (Unaudi_2
Basis of Presentation (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Change in Accounting Estimate [Table Text Block] | The following table presents the effect of aggregate net EAC adjustments: Three Months Ended March 31 $ in millions, except per share data 2020 2019 Revenue $ 136 $ 166 Operating income 124 138 Net earnings (1) 98 109 Diluted earnings per share (1) 0.58 0.64 (1) |
Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows: $ in millions March 31, December 31, Unamortized prior service credit, net of tax expense of $13 for 2020 and $17 for 2019 $ 41 $ 51 Cumulative translation adjustment and other, net (157 ) (148 ) Total accumulated other comprehensive loss $ (116 ) $ (97 ) |
Earnings Per Share, Share Rep_2
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Share Repurchases | The table below summarizes the company’s share repurchases to date under the authorizations described above: Shares Repurchased Repurchase Program Amount Total Average (1) Date Completed Three Months Ended March 31 2020 2019 September 16, 2015 $ 4,000 15.4 $ 260.33 March 2020 0.9 1.1 December 4, 2018 $ 3,000 0.1 306.22 0.1 — (1) Includes commissions paid. |
Income Taxes (Unaudited) (Table
Income Taxes (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense and Effective Income Tax Rates | Three Months Ended March 31 $ in millions 2020 2019 Federal and foreign income tax expense $ 185 $ 171 Effective income tax rate 17.6 % 16.5 % |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value information of assets and liabilities measured at fair value on a recurring basis | The following table presents the financial assets and liabilities the company records at fair value on a recurring basis identified by the level of inputs used to determine fair value: March 31, 2020 December 31, 2019 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities $ 288 $ 4 $ 292 $ 364 $ 1 $ 365 Marketable securities valued using NAV 16 17 Total marketable securities 288 4 308 364 1 382 Derivatives — (3 ) (3 ) — (3 ) (3 ) |
Commitments and Contingencies_2
Commitments and Contingencies (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Environmental Remediation Range of Future Costs [Line Items] | |
Environmental Remediation [Table Text Block] | The table below summarizes the amount accrued for environmental remediation costs, management’s estimate of the amount of reasonably possible future costs in excess of accrued costs and the deferred costs expected to be recoverable through overhead charges on U.S. government contracts as of March 31, 2020 and December 31, 2019 : $ in millions Accrued Costs (1)(2) Reasonably Possible Future Costs in Excess of Accrued Costs (2) Deferred Costs (3) March 31, 2020 $ 533 $ 448 $ 439 December 31, 2019 531 448 436 (1) As of March 31, 2020 , $163 million is recorded in Other current liabilities and $370 million is recorded in Other non-current liabilities. (2) Estimated remediation costs are not discounted to present value. The reasonably possible future costs in excess of accrued costs do not take into consideration amounts expected to be recoverable through overhead charges on U.S. government contracts. (3) As of March 31, 2020 , $131 million is deferred in Prepaid expenses and other current assets and $308 million is deferred in Other non-current assets. These amounts are evaluated for recoverability on a routine basis. |
Retirement Benefits (Unaudite_2
Retirement Benefits (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost | The cost to the company of its pension and other postretirement benefit (OPB) plans is shown in the following table: Three Months Ended March 31 Pension OPB $ in millions 2020 2019 2020 2019 Components of net periodic benefit cost (benefit) Service cost $ 102 $ 92 $ 4 $ 4 Interest cost 307 340 17 20 Expected return on plan assets (594 ) (525 ) (26 ) (23 ) Amortization of prior service credit (15 ) (15 ) 1 (1 ) Net periodic benefit cost (benefit) $ (200 ) $ (108 ) $ (4 ) $ — |
Employer contributions to retirement plans | Contributions made by the company to its retirement plans are as follows: Three Months Ended March 31 $ in millions 2020 2019 Defined benefit pension plans $ 20 $ 23 OPB plans 12 12 Defined contribution plans 256 191 |
Stock Compensation Plans and _2
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table presents the number of restricted stock rights (RSRs) and restricted performance stock rights (RPSRs) granted to employees under the company’s long-term incentive stock plan and the grant date aggregate fair value of those stock awards for the periods presented: Three Months Ended March 31 in millions 2020 2019 RSRs granted 0.1 0.1 RPSRs granted 0.2 0.2 Grant date aggregate fair value $ 87 $ 91 |
Cash Units and Cash Performance Units Aggregate Payout Amount [Table Text Block] | The following table presents the minimum and maximum aggregate payout amounts related to cash units (CUs) and cash performance units (CPUs) granted to employees in the periods presented: Three Months Ended March 31 $ in millions 2020 2019 Minimum aggregate payout amount $ 31 $ 36 Maximum aggregate payout amount 175 203 |
Segment Information (Unaudite_2
Segment Information (Unaudited) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Sales and operating income by segment | The following table presents sales and operating income by segment: Three Months Ended March 31 $ in millions 2020 2019 Sales Aeronautics Systems $ 2,843 $ 2,818 Defense Systems 1,881 1,768 Mission Systems 2,347 2,210 Space Systems 1,948 1,801 Intersegment eliminations (399 ) (408 ) Total sales 8,620 8,189 Operating income Aeronautics Systems 259 308 Defense Systems 196 202 Mission Systems 348 319 Space Systems 199 188 Intersegment eliminations (49 ) (50 ) Total segment operating income 953 967 Net FAS (service)/CAS pension adjustment 105 108 Unallocated corporate expense (124 ) (139 ) Total operating income $ 934 $ 936 |
Revenue by Major Customers by Reporting Segments | Sales by Customer Type Three Months Ended March 31 2020 2019 $ in millions $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 2,361 83 % $ 2,334 83 % International (2) 444 16 % 435 15 % Other customers 12 — % 25 1 % Intersegment sales 26 1 % 24 1 % Aeronautics Systems sales 2,843 100 % 2,818 100 % Defense Systems U.S. government (1) 1,259 67 % 1,141 65 % International (2) 340 18 % 363 21 % Other customers 111 6 % 97 5 % Intersegment sales 171 9 % 167 9 % Defense Systems sales 1,881 100 % 1,768 100 % Mission Systems U.S. government (1) 1,671 71 % 1,613 73 % International (2) 483 21 % 376 17 % Other customers 17 1 % 24 1 % Intersegment sales 176 7 % 197 9 % Mission Systems sales 2,347 100 % 2,210 100 % Space Systems U.S. government (1) 1,803 93 % 1,669 93 % International (2) 68 3 % 43 2 % Other customers 51 3 % 69 4 % Intersegment sales 26 1 % 20 1 % Space Systems sales 1,948 100 % 1,801 100 % Total U.S. government (1) 7,094 83 % 6,757 83 % International (2) 1,335 15 % 1,217 15 % Other customers 191 2 % 215 2 % Total Sales $ 8,620 100 % $ 8,189 100 % (1) Sales to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. Each of the company’s segments derives substantial revenue from the U.S. government. (2) International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. government. (3) Percentages calculated based on total segment sales. |
Revenue from External Customers by Contract Type | Sales by Contract Type Three Months Ended March 31 2020 2019 $ in millions $ % (1) $ % (1) Aeronautics Systems Cost-type $ 1,343 48 % $ 1,312 47 % Fixed-price 1,474 52 % 1,482 53 % Intersegment sales 26 24 Aeronautics Systems sales 2,843 2,818 Defense Systems Cost-type 628 37 % 623 39 % Fixed-price 1,082 63 % 978 61 % Intersegment sales 171 167 Defense Systems sales 1,881 1,768 Mission Systems Cost-type 846 39 % 835 41 % Fixed-price 1,325 61 % 1,178 59 % Intersegment sales 176 197 Mission Systems sales 2,347 2,210 Space Systems Cost-type 1,398 73 % 1,306 73 % Fixed-price 524 27 % 475 27 % Intersegment sales 26 20 Space Systems sales 1,948 1,801 Total Cost-type 4,215 49 % 4,076 50 % Fixed-price 4,405 51 % 4,113 50 % Total Sales $ 8,620 $ 8,189 (1) Percentages calculated based on external customer sales. |
Revenue from External Customers by Geographic Areas | Sales by Geographic Region Three Months Ended March 31 2020 2019 $ in millions $ % (2) $ % (2) Aeronautics Systems United States $ 2,373 84 % $ 2,359 85 % Asia/Pacific 207 8 % 233 8 % All other (1) 237 8 % 202 7 % Intersegment sales 26 24 Aeronautics Systems sales 2,843 2,818 Defense Systems United States 1,370 80 % 1,238 77 % Asia/Pacific 82 5 % 88 6 % All other (1) 258 15 % 275 17 % Intersegment sales 171 167 Defense Systems sales 1,881 1,768 Mission Systems United States 1,688 78 % 1,637 81 % Asia/Pacific 176 8 % 135 7 % All other (1) 307 14 % 241 12 % Intersegment sales 176 197 Mission Systems sales 2,347 2,210 Space Systems United States 1,854 97 % 1,738 98 % Asia/Pacific 5 — % 12 — % All other (1) 63 3 % 31 2 % Intersegment sales 26 20 Space Systems sales 1,948 1,801 Total United States 7,285 85 % 6,972 85 % Asia/Pacific 470 5 % 468 6 % All other (1) 865 10 % 749 9 % Total Sales $ 8,620 $ 8,189 (1) All other is principally comprised of Europe and the Middle East. (2) Percentages calculated based on external customer sales. |
Basis of Presentation (Unaudi_3
Basis of Presentation (Unaudited) Contract Estimates (Details 1) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Change in Accounting Estimate [Line Items] | ||
Revenue | $ 136 | $ 166 |
Operating income | 934 | 936 |
Net earnings | $ 868 | $ 863 |
Diluted earnings per share | $ 5.15 | $ 5.06 |
Contracts Accounted for under Percentage of Completion [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Operating income | $ 124 | $ 138 |
Net earnings | $ 98 | $ 109 |
Diluted earnings per share | $ 0.58 | $ 0.64 |
Basis of Presentation (Unaudi_4
Basis of Presentation (Unaudited) Backlog and Contract Assets and Liabilities (Details 2) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Change in Contract with Customer, Liability [Abstract] | ||
Contract with Customer, Liability, Revenue Recognized | $ 781 | $ 674 |
Revenue from Contract with Customer [Abstract] | ||
Revenue, Remaining Performance Obligation, Amount | $ 64,200 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | We expect to recognize approximately 45 percent and 70 percent of our March 31, 2020 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. |
Basis of Presentation (Unaudi_5
Basis of Presentation (Unaudited) Accumulated Other Comprehensive Income (Loss) (Details 3) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unamortized prior service credit, net of tax expense of $13 for 2020 and $17 for 2019 | $ (41) | $ (51) |
Cumulative translation adjustment and other, net | (157) | (148) |
Total accumulated other comprehensive loss | (116) | (97) |
Unamortized prior service credit, tax expense | $ 13 | $ 17 |
Earnings Per Share, Share Rep_3
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) Earnings Per Share and Dividends (Details 1) - $ / shares shares in Millions | 1 Months Ended | 3 Months Ended | ||
May 31, 2019 | May 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.7 | 0.7 | ||
Common stock dividends per share, declared (in dollars per share) | $ 1.32 | $ 1.20 | $ 1.32 | $ 1.20 |
Increase in quarterly common stock dividend (percent) | 10.00% |
Earnings Per Share, Share Rep_4
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Unaudited) Share Repurchases (Details 2) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 48 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Dec. 04, 2018 | Sep. 16, 2015 | |
September 2015 Share Repurchase Program Original Authorization | ||||||
Share Repurchase [Line Items] | ||||||
Amount Authorized | $ 4,000,000 | |||||
Shares Retired | 15.4 | |||||
Average Cost Per Share | $ 260.33 | |||||
Shares Repurchased | 0.9 | 1.1 | ||||
December 2018 Share Repurchase Original Authorization [Member] | ||||||
Share Repurchase [Line Items] | ||||||
Amount Authorized | $ 3,000,000 | |||||
Shares Retired | 0.1 | |||||
Average Cost Per Share | $ 306.22 | |||||
Shares Repurchased | 0.1 | |||||
Share Repurchases - Notes to Table | ||||||
Shares repurchased amount | $ 20,000 | |||||
Amount remaining under authorization for share repurchases | $ 2,980,000 | $ 2,980,000 | $ 2,980,000 |
Income Taxes (Unaudited) Effect
Income Taxes (Unaudited) Effective Income Tax Rate Reconciliation (Details 1) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal and foreign income tax expense | $ 185 | $ 171 |
Effective income tax rate | 17.60% | 16.50% |
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount | $ 41 | $ 31 |
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Amount | $ 13 | $ 13 |
Income Taxes (Unaudited) Unreco
Income Taxes (Unaudited) Unrecognized Tax Benefit (Details 2) $ in Millions | Mar. 31, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 60 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Unaudited) (Details 1) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | $ 308 | $ 382 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 288 | 364 |
Derivatives | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 4 | 1 |
Derivatives | (3) | (3) |
Fair Value, Recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 292 | 365 |
Derivatives | (3) | (3) |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 288 | 364 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | 4 | 1 |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable Securities | $ 16 | $ 17 |
Amounts in Paragraphs - Fair Va
Amounts in Paragraphs - Fair Value of Financial Instruments (Unaudited) (Details 2) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | $ 85 | $ 98 |
Foreign Currency Cash Flow Hedge Derivative at Fair Value, Net | $ 3 | $ 7 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Unaudited) Long-term Debt (Details 3) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 23, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | |||
Long-term Debt, Fair Value | $ 17,500 | $ 15,100 | |
Debt and Lease Obligation | $ 16,100 | $ 13,900 | |
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 2,250 | ||
Two Thousand Thirty [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 750 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.40% | ||
Two Thousand Forty 2 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.15% | ||
Two Thousand Fifty [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% |
Investigations, Claims and Li_2
Investigations, Claims and Litigation (Unaudited) (Details) € in Millions, R$ in Millions, $ in Millions | 12 Months Ended | 63 Months Ended | 78 Months Ended | 80 Months Ended | 82 Months Ended | ||||||
Dec. 31, 2007USD ($) | Nov. 13, 2018BRL (R$) | Nov. 13, 2018USD ($) | Mar. 31, 2020EUR (€) | Mar. 31, 2020BRL (R$) | Mar. 31, 2020USD ($) | Mar. 31, 2020BRL (R$)Defendant | Mar. 31, 2020USD ($)Defendant | Mar. 31, 2020USD ($) | Feb. 16, 2018USD ($) | May 04, 2012USD ($) | |
United States Postal Service | |||||||||||
Loss Contingencies | |||||||||||
CounterclaimForDamagesSought | $ 193 | ||||||||||
Solystic Matter [Member] | |||||||||||
Loss Contingencies | |||||||||||
Loss Contingency, Damages Sought, Value | R$ 111 | $ 22 | |||||||||
Counterclaim | € 31 | $ 34 | |||||||||
Loss Contingency, Damages Awarded, Value | R$ 41 | $ 8 | |||||||||
Unpaid Portions of Contract Price and Direct Costs Incurred [Member] | United States Postal Service | |||||||||||
Loss Contingencies | |||||||||||
Unbilled receivables, net | $ 63 | ||||||||||
Acts and Omissions with Adverse Affects on Performance and Obligations [Member] | United States Postal Service | |||||||||||
Loss Contingencies | |||||||||||
Gain contingency, unrecorded amount | $ 115 | ||||||||||
United States Postal Service | |||||||||||
Loss Contingencies | |||||||||||
Contract award | $ 875 | ||||||||||
United States Postal Service | False Claims Act | Threatened Litigation | |||||||||||
Loss Contingencies | |||||||||||
Loss Contingency, Damages Sought, Value | $ 179 | ||||||||||
Solystic Matter [Member] | Solystic Matter [Member] | |||||||||||
Loss Contingencies | |||||||||||
Loss Contingency, Number of Additional Defendants | Defendant | 2 | 2 | |||||||||
Initial Claim [Member] | Solystic Matter [Member] | |||||||||||
Loss Contingencies | |||||||||||
Loss Contingency, Damages Sought, Value | R$ 89 | $ 17 | |||||||||
Incremental claim [Member] | Solystic Matter [Member] | |||||||||||
Loss Contingencies | |||||||||||
Loss Contingency, Damages Sought, Value | R$ 22 | 4 | |||||||||
Maximum | United States Postal Service | |||||||||||
Loss Contingencies | |||||||||||
Loss Contingency, Estimate of Possible Loss | $ 410 | $ 410 | $ 410 |
Commitments and Contingencies_3
Commitments and Contingencies (Unaudited) (Details) £ in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2020GBP (£)Rate | Mar. 31, 2020USD ($)Rate | Dec. 31, 2019USD ($) | |
Site Contingency [Line Items] | |||
Accrual for Environmental Remediation Costs | $ 533 | $ 531 | |
Loss Contingency, Range of Possible Loss, Portion Not Accrued | 448 | 448 | |
Recorded Third-Party Environmental Recoveries, Amount | 439 | $ 436 | |
Financial Arrangements | |||
Standby Unused Letters Of Credit and bank guarantees | 469 | ||
Surety Bond Outstanding | 182 | ||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Covenant Compliance | the company was in compliance with all covenants under its credit agreements. | ||
Two Year Term [Member] [Domain] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | £ 120 | 149 | |
Line of Credit Outstanding | £ 55 | 68 | |
Five Year Term [Member] [Domain] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 2,000 | ||
Line of Credit Outstanding | 0 | ||
London Interbank Offered Rate (LIBOR) [Member] | Two Year Term [Member] [Domain] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Interest Rate During Period | Rate | 1.10% | ||
Commercial Paper [Member] | |||
Line of Credit Facility [Line Items] | |||
Commercial Paper, Maximum Borrowing Capacity | 2,000 | ||
Commercial Paper | $ 744 | ||
Commercial Paper, Weighted Average Interest Rate | Rate | 1.88% | 1.88% | |
Commercial Paper, Term | 3 months | ||
Other Current Liabilities [Member] | |||
Site Contingency [Line Items] | |||
Accrual for Environmental Remediation Costs | $ 163 | ||
Other Noncurrent Liabilities [Member] | |||
Site Contingency [Line Items] | |||
Accrual for Environmental Remediation Costs | 370 | ||
Other Current Assets [Member] | |||
Site Contingency [Line Items] | |||
Recorded Third-Party Environmental Recoveries, Amount | 131 | ||
Other Noncurrent Assets [Member] | |||
Site Contingency [Line Items] | |||
Recorded Third-Party Environmental Recoveries, Amount | $ 308 |
Retirement Benefits (Unaudite_3
Retirement Benefits (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Contribution Plan [Abstract] | ||
Defined contribution plan, employer contributions | $ 256 | $ 191 |
Pension Benefits | ||
Components of Net Periodic Benefit Cost | ||
Service cost | 102 | 92 |
Interest cost | 307 | 340 |
Expected return on plan assets | (594) | (525) |
Amortization of prior service credit | (15) | (15) |
Net periodic benefit cost (benefit) | (200) | (108) |
Defined benefit plan, contributions by Employer | 20 | 23 |
OPB | ||
Components of Net Periodic Benefit Cost | ||
Service cost | 4 | 4 |
Interest cost | 17 | 20 |
Expected return on plan assets | (26) | (23) |
Amortization of prior service credit | 1 | (1) |
Net periodic benefit cost (benefit) | (4) | 0 |
Defined benefit plan, contributions by Employer | $ 12 | $ 12 |
Stock Compensation Plans and _3
Stock Compensation Plans and Other Compensation Arrangements (Unaudited) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Rights and Restricted Performance Stock Rights Grant Date Aggregate Fair Value | $ 87 | $ 91 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 0.1 | 0.1 |
Vesting period | 3 years | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 0.2 | 0.2 |
Vesting period | 3 years | |
Cash Units and Cash Performance Units | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | $ 31 | $ 36 |
Cash Units and Cash Performance Units | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | $ 175 | $ 203 |
Cash Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Cash Performance Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Segment Information (Unaudite_3
Segment Information (Unaudited) Reconciliation to Consolidated Operating Income (Details 1) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 4 | |
Sales | $ 8,620 | $ 8,189 |
Operating income | 934 | 936 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating income | 953 | 967 |
Operating Segments [Member] | Aeronautics Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 2,843 | 2,818 |
Operating income | 259 | 308 |
Operating Segments [Member] | Defense Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 1,881 | 1,768 |
Operating income | 196 | 202 |
Operating Segments [Member] | Mission Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 2,347 | 2,210 |
Operating income | 348 | 319 |
Operating Segments [Member] | Space Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 1,948 | 1,801 |
Operating income | 199 | 188 |
Intersegment sales | ||
Segment Reporting Information [Line Items] | ||
Sales | (399) | (408) |
Operating income | (49) | (50) |
Segment Reconciling Items [Member] | ||
Segment Reporting Information [Line Items] | ||
Net FAS (service)/ CAS pension adjustment | 105 | 108 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating income | $ (124) | $ (139) |
Segment Information (Unaudite_4
Segment Information (Unaudited) Sales by Customer Type (Details 2) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||
Sales | $ 8,620 | $ 8,189 |
Concentration Risk, Percentage | 100.00% | 100.00% |
U.S. government(1) | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 7,094 | $ 6,757 |
Concentration Risk, Percentage | 83.00% | 83.00% |
U.S. government(1) | Aeronautics Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 2,361 | $ 2,334 |
Concentration Risk, Percentage | 83.00% | 83.00% |
U.S. government(1) | Defense Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 1,259 | $ 1,141 |
Concentration Risk, Percentage | 67.00% | 65.00% |
U.S. government(1) | Mission Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 1,671 | $ 1,613 |
Concentration Risk, Percentage | 71.00% | 73.00% |
U.S. government(1) | Space Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 1,803 | $ 1,669 |
Concentration Risk, Percentage | 93.00% | 93.00% |
International(2) | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 1,335 | $ 1,217 |
Concentration Risk, Percentage | 15.00% | 15.00% |
International(2) | Aeronautics Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 444 | $ 435 |
Concentration Risk, Percentage | 16.00% | 15.00% |
International(2) | Defense Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 340 | $ 363 |
Concentration Risk, Percentage | 18.00% | 21.00% |
International(2) | Mission Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 483 | $ 376 |
Concentration Risk, Percentage | 21.00% | 17.00% |
International(2) | Space Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 68 | $ 43 |
Concentration Risk, Percentage | 3.00% | 2.00% |
Other customers | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 191 | $ 215 |
Concentration Risk, Percentage | 2.00% | 2.00% |
Other customers | Aeronautics Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 12 | $ 25 |
Concentration Risk, Percentage | 0.00% | 1.00% |
Other customers | Defense Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 111 | $ 97 |
Concentration Risk, Percentage | 6.00% | 5.00% |
Other customers | Mission Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 17 | $ 24 |
Concentration Risk, Percentage | 1.00% | 1.00% |
Other customers | Space Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 51 | $ 69 |
Concentration Risk, Percentage | 3.00% | 4.00% |
Intersegment Sales [Member] | Aeronautics Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 26 | $ 24 |
Concentration Risk, Percentage | 1.00% | 1.00% |
Intersegment Sales [Member] | Defense Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 171 | $ 167 |
Concentration Risk, Percentage | 9.00% | 9.00% |
Intersegment Sales [Member] | Mission Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 176 | $ 197 |
Concentration Risk, Percentage | 7.00% | 9.00% |
Intersegment Sales [Member] | Space Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 26 | $ 20 |
Concentration Risk, Percentage | 1.00% | 1.00% |
Operating Segments [Member] | Aeronautics Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 2,843 | $ 2,818 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Defense Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 1,881 | $ 1,768 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Mission Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 2,347 | $ 2,210 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Space Systems [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales | $ 1,948 | $ 1,801 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Segment Information (Unaudite_5
Segment Information (Unaudited) Sales by Contract Type (Details 3) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue, Contract Type [Line Items] | ||
Sales | $ 8,620 | $ 8,189 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Cost-type [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 4,215 | $ 4,076 |
Concentration Risk, Percentage | 49.00% | 50.00% |
Cost-type [Member] | Aeronautics Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,343 | $ 1,312 |
Concentration Risk, Percentage | 48.00% | 47.00% |
Cost-type [Member] | Defense Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 628 | $ 623 |
Concentration Risk, Percentage | 37.00% | 39.00% |
Cost-type [Member] | Mission Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 846 | $ 835 |
Concentration Risk, Percentage | 39.00% | 41.00% |
Cost-type [Member] | Space Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,398 | $ 1,306 |
Concentration Risk, Percentage | 73.00% | 73.00% |
Fixed-price [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 4,405 | $ 4,113 |
Concentration Risk, Percentage | 51.00% | 50.00% |
Fixed-price [Member] | Aeronautics Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,474 | $ 1,482 |
Concentration Risk, Percentage | 52.00% | 53.00% |
Fixed-price [Member] | Defense Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,082 | $ 978 |
Concentration Risk, Percentage | 63.00% | 61.00% |
Fixed-price [Member] | Mission Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,325 | $ 1,178 |
Concentration Risk, Percentage | 61.00% | 59.00% |
Fixed-price [Member] | Space Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 524 | $ 475 |
Concentration Risk, Percentage | 27.00% | 27.00% |
Intersegment sales | Aeronautics Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 26 | $ 24 |
Intersegment sales | Defense Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | 171 | 167 |
Intersegment sales | Mission Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | 176 | 197 |
Intersegment sales | Space Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | 26 | 20 |
Operating Segments [Member] | Aeronautics Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 2,843 | $ 2,818 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Defense Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,881 | $ 1,768 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Mission Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 2,347 | $ 2,210 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Space Systems [Member] | ||
Revenue, Contract Type [Line Items] | ||
Sales | $ 1,948 | $ 1,801 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Segment Information (Unaudite_6
Segment Information (Unaudited) Sales by Geographic Location (Details 4) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue, Geographic Location [Line Items] | ||
Sales | $ 8,620 | $ 8,189 |
Concentration Risk, Percentage | 100.00% | 100.00% |
United States | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 7,285 | $ 6,972 |
Concentration Risk, Percentage | 85.00% | 85.00% |
United States | Aeronautics Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 2,373 | $ 2,359 |
Concentration Risk, Percentage | 84.00% | 85.00% |
United States | Defense Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 1,370 | $ 1,238 |
Concentration Risk, Percentage | 80.00% | 77.00% |
United States | Mission Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 1,688 | $ 1,637 |
Concentration Risk, Percentage | 78.00% | 81.00% |
United States | Space Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 1,854 | $ 1,738 |
Concentration Risk, Percentage | 97.00% | 98.00% |
Asia/Pacific | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 470 | $ 468 |
Concentration Risk, Percentage | 5.00% | 6.00% |
Asia/Pacific | Aeronautics Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 207 | $ 233 |
Concentration Risk, Percentage | 8.00% | 8.00% |
Asia/Pacific | Defense Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 82 | $ 88 |
Concentration Risk, Percentage | 5.00% | 6.00% |
Asia/Pacific | Mission Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 176 | $ 135 |
Concentration Risk, Percentage | 8.00% | 7.00% |
Asia/Pacific | Space Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 5 | $ 12 |
Concentration Risk, Percentage | 0.00% | 0.00% |
All other | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 865 | $ 749 |
Concentration Risk, Percentage | 10.00% | 9.00% |
All other | Aeronautics Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 237 | $ 202 |
Concentration Risk, Percentage | 8.00% | 7.00% |
All other | Defense Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 258 | $ 275 |
Concentration Risk, Percentage | 15.00% | 17.00% |
All other | Mission Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 307 | $ 241 |
Concentration Risk, Percentage | 14.00% | 12.00% |
All other | Space Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 63 | $ 31 |
Concentration Risk, Percentage | 3.00% | 2.00% |
Intersegment sales | Aeronautics Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 26 | $ 24 |
Intersegment sales | Defense Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | 171 | 167 |
Intersegment sales | Mission Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | 176 | 197 |
Intersegment sales | Space Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | 26 | 20 |
Operating Segments [Member] | Aeronautics Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 2,843 | $ 2,818 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Defense Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 1,881 | $ 1,768 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Mission Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 2,347 | $ 2,210 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Operating Segments [Member] | Space Systems [Member] | ||
Revenue, Geographic Location [Line Items] | ||
Sales | $ 1,948 | $ 1,801 |
Concentration Risk, Percentage | 100.00% | 100.00% |