Document and Entity Information
Document and Entity Information Document | Apr. 29, 2020 |
Document and Entity Information [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Apr. 29, 2020 |
Entity Registrant Name | NORTHROP GRUMMAN CORP /DE/ |
Entity Central Index Key | 0001133421 |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 1-16411 |
Entity Tax Identification Number | 80-0640649 |
Entity Address, 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 |
Security 12(b) Title | Common Stock |
Trading Symbol | NOC |
Security Exchange Name | NYSE |
Written Communications | false |
Soliciting Material | false |
Pre-Commencement Tender Offer | false |
Pre-Commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 33,841 | $ 30,095 | $ 26,004 |
Operating costs and expenses | |||
General and administrative expenses | 3,290 | 3,011 | 2,712 |
Operating income | 3,969 | 3,780 | 3,218 |
Other (expense) income | |||
Interest expense | (528) | (562) | (360) |
FAS (non-service) pension benefit | 800 | 1,049 | 699 |
Mark-to-market pension and OPB (expense) benefit | (1,800) | (655) | 536 |
Other, net | 107 | 130 | 136 |
Earnings before income taxes | 2,548 | 3,742 | 4,229 |
Federal and foreign income tax expense | 300 | 513 | 1,360 |
Net earnings | $ 2,248 | $ 3,229 | $ 2,869 |
Basic earnings per share | |||
Basic earnings per share | $ 13.28 | $ 18.59 | $ 16.45 |
Weighted-average common shares outstanding, in millions | 169.3 | 173.7 | 174.4 |
Diluted earnings per share | |||
Diluted earnings per share | $ 13.22 | $ 18.49 | $ 16.34 |
Weighted-average diluted shares outstanding, in millions | 170 | 174.6 | 175.6 |
Net earnings (from above) | $ 2,248 | $ 3,229 | $ 2,869 |
Other comprehensive loss | |||
Change in unamortized prior service credit, net of tax expense of $15 in 2019, $19 in 2018 and $35 in 2017 | (47) | (60) | (44) |
Change in cumulative translation adjustment and other, net | 2 | (14) | (2) |
Other comprehensive loss, net of tax | (45) | (74) | (46) |
Comprehensive income | 2,203 | 3,155 | 2,823 |
Product [Member] | |||
Cost of Goods and Services Sold | 18,675 | 15,785 | 12,527 |
Revenues | 23,852 | 20,469 | 16,364 |
Service [Member] | |||
Cost of Goods and Services Sold | 7,907 | 7,519 | 7,547 |
Revenues | $ 9,989 | $ 9,626 | $ 9,640 |
Consolidated Statements of Ea_2
Consolidated Statements of Earnings and Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Tax expense on the change in unamortized prior service credits | $ 15 | $ 19 | $ 35 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 2,245 | $ 1,579 |
Accounts receivable, net | 1,326 | 1,448 |
Unbilled receivables, net | 5,334 | 5,026 |
Inventoried costs, net | 783 | 654 |
Prepaid expenses and other current assets | 997 | 973 |
Total current assets | 10,685 | 9,680 |
Property, plant and equipment, net of accumulated depreciation of $5,850 for 2019 and $5,369 for 2018 | 6,912 | 6,372 |
Operating lease right-of-use assets | 1,511 | 0 |
Goodwill | 18,708 | 18,672 |
Intangible assets, net | 1,040 | 1,372 |
Deferred tax assets | 508 | 94 |
Other non-current assets | 1,725 | 1,463 |
Total assets | 41,089 | 37,653 |
Liabilities | ||
Trade accounts payable | 2,226 | 2,182 |
Accrued employee compensation | 1,865 | 1,676 |
Advance payments and billings in excess of costs incurred | 2,237 | 1,917 |
Other current liabilities | 3,106 | 2,499 |
Total current liabilities | 9,434 | 8,274 |
Long-term debt, net of current portion of $1,109 for 2019 and $517 for 2018 | 12,770 | 13,883 |
Pension and other postretirement benefit plan liabilities | 6,979 | 5,755 |
Operating lease liabilities | 1,308 | 0 |
Deferred tax liabilities | 0 | 108 |
Other non-current liabilities | 1,779 | 1,446 |
Total liabilities | 32,270 | 29,466 |
Commitments and contingencies (Note 12) | ||
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: 2019—167,848,424 and 2018—170,607,336 | 168 | 171 |
Paid-in capital | 0 | 0 |
Retained earnings | 8,748 | 8,068 |
Accumulated other comprehensive loss | (97) | (52) |
Total shareholders’ equity | 8,819 | 8,187 |
Total liabilities and shareholders’ equity | $ 41,089 | $ 37,653 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 5,850 | $ 5,369 |
Long-term Debt, Current Maturities | $ 1,109 | $ 517 |
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 | 167,848,424 | 170,607,336 |
Common stock, shares outstanding | 167,848,424 | 170,607,336 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net earnings | $ 2,248 | $ 3,229 | $ 2,869 |
Adjustments to reconcile to net cash provided by operating activities: | |||
Depreciation and amortization | 1,018 | 800 | 475 |
Mark-to-market pension and OPB expense (benefit) | 1,800 | 655 | (536) |
Non-cash lease expense | 247 | 0 | 0 |
Stock-based compensation | 127 | 86 | 94 |
Deferred income taxes | (509) | 234 | 985 |
Changes in assets and liabilities: | |||
Accounts receivable, net | 122 | 202 | (209) |
Unbilled receivables, net | (335) | (297) | (422) |
Inventoried costs, net | (135) | (37) | 25 |
Prepaid expenses and other assets | (78) | (56) | (92) |
Accounts payable and other liabilities | 617 | 381 | 570 |
Income taxes payable, net | (63) | (258) | (157) |
Retiree benefits | (703) | (1,083) | (946) |
Other, net | (59) | (29) | (43) |
Net cash provided by operating activities | 4,297 | 3,827 | 2,613 |
Investing activities | |||
Acquisition of Orbital ATK, net of cash acquired | 0 | (7,657) | 0 |
Capital expenditures | (1,264) | (1,249) | (928) |
Other investing activities, net | 57 | 28 | 39 |
Net cash used in investing activities | (1,207) | (8,878) | (889) |
Financing activities | |||
Payments of long-term debt | (500) | (2,276) | 0 |
Net proceeds from issuance of long-term debt | 0 | 0 | 8,245 |
Payments to credit facilities | (31) | (320) | (13) |
Net (repayments of) borrowings on commercial paper | (198) | 198 | 0 |
Common stock repurchases | (744) | (1,263) | (393) |
Cash dividends paid | (880) | (821) | (689) |
Payments of employee taxes withheld from share-based awards | (65) | (85) | (92) |
Other financing activities, net | (6) | (28) | (98) |
Net cash (used in) provided by financing activities | (2,424) | (4,595) | 6,960 |
Increase (decrease) in cash and cash equivalents | 666 | (9,646) | 8,684 |
Cash and cash equivalents, beginning of year | 1,579 | 11,225 | 2,541 |
Cash and cash equivalents, end of year | $ 2,245 | $ 1,579 | $ 11,225 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Millions | Total | Common stock | Paid-in capital | Retained earnings | Accumulated other comprehensive loss |
Beginning of year at Dec. 31, 2016 | $ 175 | $ 0 | $ 5,141 | $ 47 | |
Impact from adoption of ASU 2018-02 and ASU 2016-01 | 0 | 0 | |||
Common stock repurchased | (2) | 0 | (371) | ||
Shares issued for employee stock awards and options | 1 | 44 | (39) | ||
Net earnings | $ 2,869 | 2,869 | |||
Dividends declared | (687) | ||||
Other comprehensive loss, net of tax | (46) | (46) | |||
End of year at Dec. 31, 2017 | $ 7,132 | 174 | 44 | 6,913 | 1 |
Cash dividends declared per share | $ 3.90 | ||||
Impact from adoption of ASU 2018-02 and ASU 2016-01 | (21) | 21 | |||
Common stock repurchased | (4) | (34) | (1,225) | ||
Shares issued for employee stock awards and options | 1 | (10) | (6) | ||
Net earnings | $ 3,229 | 3,229 | |||
Dividends declared | (822) | ||||
Other comprehensive loss, net of tax | (74) | (74) | |||
End of year at Dec. 31, 2018 | $ 8,187 | 171 | 0 | 8,068 | (52) |
Cash dividends declared per share | $ 4.70 | ||||
Impact from adoption of ASU 2018-02 and ASU 2016-01 | 0 | 0 | |||
Common stock repurchased | (3) | 0 | (751) | ||
Shares issued for employee stock awards and options | 0 | 0 | 63 | ||
Net earnings | $ 2,248 | 2,248 | |||
Dividends declared | (880) | ||||
Other comprehensive loss, net of tax | (45) | (45) | |||
End of year at Dec. 31, 2019 | $ 8,819 | $ 168 | $ 0 | $ 8,748 | $ (97) |
Cash dividends declared per share | $ 5.16 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | 1 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Northrop Grumman Corporation (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”) is a leading global security company. We offer a broad portfolio of capabilities and technologies that enable us to deliver innovative platforms, systems and solutions for applications that range from undersea to outer space and into cyberspace. We provide capabilities in autonomous systems; cyber; command, control, communications and computers, intelligence, surveillance and reconnaissance (C4ISR); space; strike; and logistics and modernization. We participate in many high-priority defense and government programs in the United States (U.S.) and abroad. We conduct most of our business with the U.S. government, principally the Department of Defense (DoD) and intelligence community. We also conduct business with foreign, state and local governments, as well as commercial customers. At December 31, 2019 , the company was aligned in four operating sectors: Aerospace Systems, Innovation Systems, Mission Systems and Technology Services. Effective January 1, 2020, the company reorganized its sectors to better align the company’s broad portfolio to serve its customers’ needs. The four new sectors are: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. This realignment is reflected in the accompanying financial information. On June 6, 2018 (the “Merger date”), the company completed its previously announced acquisition of Orbital ATK, Inc. (“Orbital ATK”) (the “Merger”). On the Merger date, Orbital ATK became a wholly-owned subsidiary of the company and its name was changed to Northrop Grumman Innovation Systems, Inc., which we established as a new, fourth business sector (“Innovation Systems”). The operating results of legacy Innovation Systems subsequent to the Merger date have been included in the company’s consolidated results of operations and are reflected in the Space Systems, Defense Systems and Aeronautics Systems sectors. See Note 2 for further information regarding the Merger. Principles of Consolidation The consolidated financial statements include the accounts of Northrop Grumman and its subsidiaries and joint ventures or other investments for which we consolidate the financial results. 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 Effective January 1, 2019, we adopted Accounting Standards Codification (ASC) Topic 842, Leases , using the optional transition method to apply the standard through a cumulative effect adjustment in the period of adoption. The adoption of this standard is reflected in the amounts and disclosures set forth in this Form 10-K. Accounting Estimates The company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”). The preparation thereof requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Revenue Recognition The majority of our sales are derived from long-term contracts with the U.S. government for the production of goods, the provision of services, or a combination of both. The company classifies sales as product or service based on the predominant attributes of each performance obligation. The company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. In most cases, goods and services provided under the company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the company provides multiple distinct goods or services to a customer, most commonly when a contract covers multiple phases of the product life cycle (e.g., development, production, sustainment, etc.). In those cases, the company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using cost plus a reasonable margin. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not considered to be separate performance obligations. Assets recognized from the costs to obtain or fulfill a contract are not material. Contracts are often modified for changes in contract specifications or requirements, which may result in scope and/or price changes. Most of the company’s contract modifications are for goods or services that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative estimate-at-completion (EAC) adjustment. The company recognizes revenue as control is transferred to the customer, either over time or at a point in time. In general, our U.S. government contracts contain termination for convenience and/or other clauses that generally provide the customer rights to goods produced and/or in-process. Similarly, our non-U.S. government contracts generally contain contractual termination clauses or entitle the company to payment for work performed to date for goods and services that do not have an alternative use. As control is effectively transferred 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 its performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e., typically upon delivery). Contract Estimates Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total 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 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: Year Ended December 31 $ in millions, except per share data 2019 2018 2017 Revenue $ 538 $ 631 $ 374 Operating income 480 577 360 Net earnings (1) 379 456 234 Diluted earnings per share (1) 2.23 2.61 1.33 (1) Based on a 21% federal statutory tax rate for the years ended December 31, 2019 and 2018 and a 35% federal statutory tax rate for the year ended December 31, 2017 . 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 year ended December 31, 2019 . During the second quarter of 2018 , the company recognized $69 million of favorable EAC adjustments on multiple restricted programs at Aeronautics Systems. During the third quarter of 2017 , the company recorded a $56 million favorable EAC adjustment on a restricted program at Space Systems. 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 December 31, 2019 was $64.8 billion . We expect to recognize approximately 45 percent and 70 percent of our December 31, 2019 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. Contract Assets and Liabilities For each of the company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Fixed-price contracts are typically billed to the customer either using progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract assets are equivalent to and reflected as Unbilled receivables in the 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. Unbilled receivables are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-cycle nature of many of our contracts. Accumulated contract costs in unbilled receivables include costs such as direct production costs, factory and engineering overhead, production tooling costs, and allowable G&A. Unbilled receivables also include certain estimates of variable consideration described above. These contract assets are not considered a significant financing component of the company’s contracts as the payment terms are intended to protect the customer in the event the company does not perform on its obligations under the contract. Contract liabilities are equivalent to and reflected as Advance payments and billings in excess of costs incurred in the consolidated statements of financial position. Certain customers make advance payments prior to the company’s satisfaction of its obligations on the contract. These amounts are recorded as contract liabilities until such obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. Net contract assets are as follows: $ in millions December 31, December 31, $ Change % Change Unbilled receivables, net $ 5,334 $ 5,026 $ 308 6 % Advance payments and amounts in excess of costs incurred (2,237 ) (1,917 ) (320 ) 17 % Net contract assets $ 3,097 $ 3,109 $ (12 ) — % The change in the balances of the company’s contract assets and liabilities primarily results from timing differences between revenue recognition and customer billings and/or payments. Net contract assets as of December 31, 2019 are consistent with the prior year and reflect an increase in Advance payments and amounts in excess of costs incurred at all four sectors as well as an increase in Unbilled receivables, net at Mission Systems and Defense Systems. The amount of revenue recognized for the years ended December 31, 2019 , 2018 and 2017 that was included in the contract liability balance at the beginning of each year was $1.3 billion , $1.3 billion and $1.2 billion , respectively. Disaggregation of Revenue See Note 16 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. General and Administrative Expenses In accordance with the regulations that govern cost accounting requirements for government contracts, most general management and corporate expenses incurred at the segment and corporate locations are considered allowable and allocable costs. Allowable and allocable G&A costs, including independent research and development (IR&D) and bid and proposal (B&P) costs, are allocated on a systematic basis to contracts in progress and are included as a component of total estimated contract costs. Research and Development Company-sponsored research and development activities primarily include efforts related to government programs. Company-sponsored IR&D expenses totaled $953 million , $764 million and $639 million in 2019 , 2018 and 2017 , respectively, which represented 2.8 percent , 2.5 percent and 2.5 percent of total sales, respectively. Customer-funded research and development activities are charged directly to the related contracts. Income Taxes Provisions for federal and foreign income taxes are calculated on reported earnings before income taxes based on current tax law and include the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provisions differ from the amounts currently payable because certain items of income and expense are recognized in different periods for financial reporting purposes than for income tax purposes. The company recognizes federal and foreign interest accrued related to unrecognized tax benefits in income tax expense. Federal tax penalties are recognized as a component of income tax expense. In accordance with the regulations that govern cost accounting requirements for government contracts, current state and local income and franchise taxes are generally considered allowable and allocable costs and, consistent with industry practice, are recorded in operating costs and expenses. The company generally recognizes changes in deferred state taxes and unrecognized state tax benefits in unallocated corporate expenses. Uncertain tax positions reflect the company’s expected treatment of tax positions taken in a filed tax return, or planned to be taken in a future tax return or claim, which have not been reflected in measuring income tax expense or taxes payable for financial reporting purposes. Until these positions are sustained by the taxing authorities or the statute of limitations concerning such issues lapses, the company does not generally recognize the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions in its consolidated statements of financial position. Cash and Cash Equivalents Cash and cash equivalents are comprised of cash in banks and highly liquid instruments with original maturities of three months or less, primarily consisting of bank time deposits and investments in institutional money market funds. Cash in bank accounts often exceeds federally insured limits. Fair Value of Financial Instruments The company measures the fair value of its financial instruments using observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 - Significant inputs to the valuation model are unobservable. The 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. Marketable securities accounted for as trading are recorded at fair value on a recurring basis and are included in Other non-current assets in the consolidated statements of financial position. Changes in unrealized gains and losses on trading securities are included in Other, net in the consolidated statements of earnings and comprehensive income . Investments in held-to-maturity instruments with original maturities greater than three months are recorded at amortized cost. Derivative financial instruments are recognized as assets or liabilities in the financial statements and measured at fair value on a recurring basis. Changes in the fair value of derivative financial instruments that are designated as fair value hedges are recorded in net earnings, while the changes in the fair value of derivative financial instruments that are designated as cash flow hedges are recorded as a component of other comprehensive income until settlement. For derivative financial instruments not designated as hedging instruments, gains or losses resulting from changes in the fair value are reported in Other, net in the consolidated statements of earnings and comprehensive income . The company uses derivative financial instruments to manage its exposure to foreign currency exchange risk related to receipts from customers and payments to suppliers denominated in foreign currencies (i.e., foreign currency forward contracts). For foreign currency forward contracts, where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value and uses the applicable London Interbank Offered Rate (LIBOR) swap rates. The company does not use derivative financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments. Credit risk related to derivative financial instruments is considered minimal and is managed through the use of multiple counterparties with high credit standards and periodic settlements of positions, as well as by entering into master netting agreements with most of our counterparties. Inventoried Costs Inventoried costs generally comprise costs associated with unsatisfied performance obligations on contracts accounted for using point in time revenue recognition, costs incurred in excess of existing contract requirements or funding that are probable of recovery and other accrued contract costs that are expected to be recoverable when allocated to specific contracts. Product inventory primarily consists of raw materials and is stated at the lower of cost or net realizable value, generally using the average cost method. Accumulated contract costs in inventoried costs include costs such as direct production costs, factory and engineering overhead, production tooling costs, and allowable G&A. Inventoried costs are classified as current assets and, in accordance with industry practice, include amounts related to contracts having production cycles longer than one year. Cash Surrender Value of Life Insurance Policies The company maintains whole life insurance policies on a group of executives, which are recorded at their cash surrender value as determined by the insurance carrier. The company also has split-dollar life insurance policies on former officers and executives from acquired businesses, which are recorded at the lesser of their cash surrender value or premiums paid. These policies are utilized as a partial funding source for deferred compensation and other non-qualified employee retirement plans. As of December 31, 2019 and 2018 , the carrying values associated with these policies were $380 million and $316 million , respectively, and are recorded in Other non-current assets in the consolidated statements of financial position. Property, Plant and Equipment Property, plant and equipment are depreciated over the estimated useful lives of individual assets. Most assets are depreciated using declining-balance methods, with the remainder using the straight-line method. Depreciation expense is generally recorded in the same segment where the related assets are held. However, the additional depreciation expense related to the step-up in fair value of property, plant and equipment acquired through business combinations is recorded in unallocated corporate expense within operating income as such depreciation is not considered part of management’s evaluation of segment operating performance. Major classes of property, plant and equipment and their useful lives are as follows: December 31 Useful life in years, $ in millions Useful Life 2019 2018 Land and land improvements Up to 40 (1) $ 619 $ 636 Buildings and improvements Up to 45 2,575 2,139 Machinery and other equipment Up to 20 6,997 6,618 Capitalized software costs 3-5 606 603 Leasehold improvements Length of Lease (2) 1,965 1,745 Property, plant and equipment, at cost 12,762 11,741 Accumulated depreciation (5,850 ) (5,369 ) Property, plant and equipment, net $ 6,912 $ 6,372 (1) Land is not a depreciable asset. (2) Leasehold improvements are depreciated over the shorter of the useful life of the asset or the length of the lease. Goodwill and Other Purchased Intangible Assets The company tests goodwill for impairment at least annually as of December 31, or when an indicator of potential impairment exists. When performing the goodwill impairment test, the company uses a discounted cash flow approach corroborated by comparative market multiples, where appropriate, to determine the fair value of its reporting units. Goodwill and other purchased intangible asset balances are included in the identifiable assets of their assigned business segment. However, the company includes the amortization of other purchased intangible assets in unallocated corporate expense within operating income as such amortization is not considered part of management’s evaluation of segment operating performance. The company’s customer-related intangible assets are generally amortized over their respective useful lives based on the pattern in which the future economic benefits of the intangible assets are expected to be consumed. Other intangible assets are generally amortized on a straight-line basis over their estimated useful lives. Leases The company leases certain buildings, land and equipment. Under ASC 842, at contract inception we determine whether a contract is or contains a lease and whether the lease should be classified as an operating or finance lease. Operating lease balances are included in Operating lease right-of-use assets, Other current liabilities, and Operating lease liabilities in our consolidated statements of financial position. The company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. We use our incremental borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification. Many of our leases include renewal options aligned with our contract terms. We define the initial lease term to include renewal options determined to be reasonably certain. In our adoption of ASC 842, we elected not to recognize a right-of-use asset and a lease liability for leases with an initial term of 12 months or less; we recognize lease expense for these leases on a straight-line basis over the lease term. We elected the practical expedient to not separate lease components from nonlease components and applied that practical expedient to all material classes of leased assets. Many of the company’s real property lease agreements contain incentives for tenant improvements, rent holidays or rent escalation clauses. For tenant improvement incentives, if the incentive is determined to be a leasehold improvement owned by the lessee, the company generally records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. For rent holidays and rent escalation clauses during the lease term, the company records rental expense on a straight-line basis over the term of the lease. For these lease incentives, the company uses the date of initial possession as the commencement date, which is generally when the company is given the right of access to the space and begins to make improvements in preparation for intended use. Finance leases are not material to our consolidated financial statements and the company is not a lessor in any material arrangements. We do not have any material restrictions or covenants in our lease agreements, sale-leaseback transactions, land easements or residual value guarantees. Litigation, Commitments and Contingencies We accrue for litigation, commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, we generally do not recognize potential gains until realized. Environmental Costs We accrue for environmental liabilities when management determines that, based on the facts and circumstances known to the company, it is probable the company will incur costs to address environmental impacts and the costs are reasonably estimable. When only a range of amounts is reasonably estimable and no amount within the range is more probable than another, we record the low end of the range. The company typically projects environmental costs for up to 30 years, records environmental liabilities on an undiscounted basis, and excludes asset retirement obligations and certain legal costs. At sites involving multiple parties, we accrue environmental liabilities based upon our expected share of liability, taking into account the financial viability of other liable parties. Retirement Benefits The company sponsors various defined benefit pension plans and defined contribution retirement plans covering substantially all of its employees. In most cases, our defined contribution plans provide for a company match of employee contributions. The company also provides postretirement benefits other than pensions to eligible retirees and qualifying dependents, consisting principally of health care and life insurance benefits. The liabilities, unamortized prior service credits and annual income or expense of the company’s defined benefit pension and other postretirement benefit plans (OPB) are determined using methodologies that involve several actuarial assumptions. Because U.S. government regulations provide for the costs of pension and OPB plans to be charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS) that govern such plans, we calculate retiree benefit plan costs under both FAS and CAS methods. While both FAS and CAS recognize a normal service cost component in measuring periodic pension cost, there are differences in the way the components of annual pension costs are calculated under each method. Measuring plan obligations under FAS and CAS includes different assumptions and models, such as in estimating returns on plan assets, calculating interest expense and the periods over which gains/losses related to pension assets and actuarial changes are recognized. As a result, annual retiree benefit plan expense amounts for FAS are different from the amounts for CAS in any given reporting period even though the ultimate cost of providing benefits over the life of the plans is the same under either method. CAS retiree benefit plan costs are charged to contracts and are included in segment operating income, and the difference between the service cost component of FAS expense and total CAS expense is recorded in operating income at the consolidated company level. Not all net periodic pension expense is recognized in net earnings in the year incurred because it is allocated as production costs and a portion remains in inventory at the end of a reporting period. Actuarial gains and losses are immediately recognized in net periodic benefit cost for FAS through Mark-to-market pension and OPB (“MTM”) (expense) benefit upon annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement. Prior service credits are recognized as a component of Accumulated other comprehensive loss and amortized into earnings in future periods. Stock Compensation The company’s stock compensation plans are classified as equity plans and compensation expense is generally recognized over the vesting period of stock awards (typically three years ), net of estimated forfeitures. The company issues stock awards in the form of restricted performance stock rights and restricted stock rights. The fair value of stock awards is determined based on the closing market price of the company’s common stock on the grant date. At each reporting date, the number of shares used to calculate compensation expense and diluted earnings per share is adjusted to reflect the number ultimately expected to vest. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: December 31 $ in millions 2019 2018 Unamortized prior service credit, net of tax expense of $17 for 2019 and $32 for 2018 $ 51 $ 98 Cumulative translation adjustment (147 ) (144 ) Other, net (1 ) (6 ) Total accumulated other comprehensive loss $ (97 ) $ (52 ) Related Party Transactions For all periods presented, the company had no material related party transactions. Accounting Standards Updates On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . ASC Topic 842 supersedes existing lease guidance, including ASC 840 - Leases . Among other things, ASU 2016-02 requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease and requires disclosure of certain information about leasing arrangements. On July 30, 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which, among other things, allows companies to elect an optional transition method to apply the new lease standard through a cumulative-effect adjustment in the period of adoption. We adopted the standard on January 1, 2019 using the optional transition method and, as a result, did not recast prior period consolidated financial statements. All prior period amounts and disclosures are presented under ASC 840. We elected the package of practical expedients, which, among other things, allows us to carry forward our prior lease c |
Acquisition of Orbital ATK
Acquisition of Orbital ATK | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | 2 . ACQUISITION OF ORBITAL ATK On June 6, 2018, the company completed its previously announced acquisition of Orbital ATK, by acquiring all of the outstanding shares of Orbital ATK for a purchase price of $7.7 billion in cash. On the Merger date, Orbital ATK became a wholly-owned subsidiary of the company and its name was changed to Northrop Grumman Innovation Systems, Inc. We established Innovation Systems as a new, fourth business sector. Its main products include precision munitions and armaments; tactical missiles and subsystems; ammunition; launch vehicles; space and strategic propulsion systems; aerospace structures; space exploration products; and national security and commercial satellite systems and related components/services. The acquisition was financed with proceeds from the company’s debt financing completed in October 2017 and cash on hand. We believe this acquisition has enabled us to broaden our capabilities and offerings, provide additional innovative solutions to meet our customers’ emerging requirements, create value for shareholders and provide expanded opportunities for our combined employees. The operating results of legacy Innovation Systems subsequent to the Merger date are included in the company’s consolidated results of operations and reflected in the Space Systems, Defense Systems and Aeronautics Systems sectors. We recognized customer sales of $3.1 billion , operating income of $342 million and net earnings of $273 million related to legacy Innovation Systems businesses for the period from the Merger date to December 31, 2018 . The company recognized $29 million of acquisition-related costs that were expensed as incurred during the year ended December 31, 2018 . These costs are included in Product and Service cost in the consolidated statements of earnings and comprehensive income. Purchase Price Allocation The acquisition was accounted for as a purchase business combination. As such, the company recorded the assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the fair value of assets acquired and liabilities assumed recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. In some cases, the company used discounted cash flow analyses, which were based on our best estimate of future sales, earnings and cash flows after considering such factors as general market conditions, customer budgets, existing firm and future orders, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results. During the second quarter of 2019, the company finalized its determination of the fair values of the assets acquired and liabilities assumed as of the Merger date. Based on additional information obtained during the measurement period, the company refined its initial assessment of fair value and recognized the following significant adjustments to our preliminary purchase price allocation: Intangible assets increased $220 million , Other current liabilities increased $114 million , Pension and OPB plan liabilities increased $56 million , Other non-current liabilities increased $53 million , Other current assets increased $44 million and Goodwill decreased $36 million . These adjustments did not result in a material impact on the financial results of prior periods. The Merger date fair value of the consideration transferred totaled $7.7 billion in cash, which was comprised of the following: $ in millions, except per share amounts Purchase price Shares of Orbital ATK common stock outstanding as of the Merger date 57,562,152 Cash consideration per share of Orbital ATK common stock $ 134.50 Total purchase price $ 7,742 The following purchase price allocation table presents the company’s final determination of the fair values of assets acquired and liabilities assumed at the Merger date: $ in millions As of June 6, 2018 Cash and cash equivalents $ 85 Accounts receivable 596 Unbilled receivables 1,237 Inventoried costs 220 Other current assets 237 Property, plant and equipment 1,509 Goodwill 6,259 Intangible assets 1,525 Other non-current assets 151 Total assets acquired 11,819 Trade accounts payable (397 ) Accrued employee compensation (158 ) Advance payments and billings in excess of costs incurred (222 ) Below market contracts (1) (151 ) Other current liabilities (412 ) Long-term debt (1,687 ) Pension and OPB plan liabilities (613 ) Deferred tax liabilities (248 ) Other non-current liabilities (189 ) Total liabilities assumed (4,077 ) Total purchase price $ 7,742 (1) Included in Other current liabilities in the consolidated statements of financial position. The following table presents a summary of purchased intangible assets and their related estimated useful lives: Fair Value (in millions) Estimated Useful Life in Years Customer contracts $ 1,245 9 Commercial customer relationships 280 13 Total customer-related intangible assets $ 1,525 The purchase price allocation resulted in the recognition of $6.3 billion of goodwill, which was allocated to the Space Systems, Defense Systems and Aeronautics Systems sectors (refer to Note 8 ). The goodwill recognized is attributable to expected revenue synergies generated by the integration of Northrop Grumman products and technologies with those of legacy Orbital ATK, synergies resulting from the consolidation or elimination of certain costs, and intangible assets that do not qualify for separate recognition, such as the assembled workforce of Orbital ATK. None of the goodwill is expected to be deductible for tax purposes. Unaudited Supplemental Pro Forma Information The following table presents unaudited pro forma financial information prepared in accordance with Article 11 of Regulation S-X and computed as if Orbital ATK had been included in our results as of January 1, 2017: Year Ended December 31 $ in millions, except per share amounts 2018 2017 Sales $ 32,319 $ 30,634 Net earnings 3,417 2,938 Diluted earnings per share 19.57 16.73 The unaudited supplemental pro forma financial data has been calculated after applying our accounting policies and adjusting the historical results of Orbital ATK with pro forma adjustments, net of tax, that assume the acquisition occurred on January 1, 2017. Significant pro forma adjustments include the following: 1. The impact of the adoption of ASC Topic 606 on Orbital ATK’s historical sales of $21 million and cost of sales of $21 million , for the year ended December 31, 2017 . 2. The elimination of intercompany sales and costs of sales between the company and Orbital ATK of $80 million and $155 million for the years ended December 31, 2018 and 2017 , respectively. 3. The elimination of nonrecurring transaction costs incurred by the company and Orbital ATK in connection with the Merger of $71 million and $57 million for the years ended December 31, 2018 and 2017 , respectively. 4. The recognition of additional depreciation expense, net of removal of historical depreciation expense, of $8 million and $40 million for the years ended December 31, 2018 and 2017 , respectively, related to the step-up in fair value of acquired property, plant and equipment. 5. Additional interest expense related to the debt issued to finance the Merger, including amortization of the debt issuance costs associated with the newly issued debt, of $208 million for the year ended December 31, 2017 . Interest expense and amortization of debt issuance costs have been included in the company's historical financial statements since the date of issuance (October 12, 2017). 6. The recognition of additional amortization expense, net of removal of historical amortization expense, of $90 million and $290 million for the years ended December 31, 2018 and 2017 , respectively, related to the fair value of acquired intangible assets. 7. The elimination of Orbital ATK’s historical amortization of net actuarial losses and prior service credits and impact of the revised pension and OPB net periodic benefit cost as determined under the company’s plan assumptions of $51 million and $110 million for the years ended December 31, 2018 and 2017 , respectively. 8. The income tax effect on the pro forma adjustments, which was calculated using the federal statutory tax rate in effect in each respective period, of $(5) million and $130 million for the years ended December 31, 2018 and 2017 , respectively. The unaudited pro forma financial information does not reflect the potential realization of revenue synergies or cost savings, nor does it reflect other costs relating to the integration of the two companies. This unaudited pro forma financial information should not be considered indicative of the results that would have actually occurred if the acquisition had been consummated on January 1, 2017, nor are they indicative of future results. |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends on Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Share Repurchases and Dividends on Common Stock | 3 . 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 , 0.9 million and 1.2 million shares for the years ended December 31, 2019 , 2018 and 2017 , respectively. Share Repurchases On September 16, 2015, the company’s board of directors authorized a share repurchase program of up to $4.0 billion of the company’s common stock (the “2015 Repurchase Program”). Repurchases under the 2015 Repurchase Program commenced in March 2016. 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”). By its terms, repurchases under the 2018 Repurchase Program will commence upon completion of the 2015 Repurchase Program and will expire when we have used all authorized funds for repurchases. During the fourth quarter of 2018, the company entered into an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co. LLC (Goldman Sachs) to repurchase $1.0 billion of the company’s common stock under the 2015 Repurchase Program. Under the agreement, we made a payment of $1.0 billion to Goldman Sachs and received an initial delivery of 3.0 million shares valued at $800 million that were immediately canceled by the company. The remaining balance was settled on January 4, 2019 with a final delivery of 0.9 million shares from Goldman Sachs. The final average purchase price was $260.32 per share. As of December 31, 2019 , repurchases under the 2015 Repurchase Program totaled $3.7 billion ; $0.3 billion remained under this share repurchase authorization. By its terms, the 2015 Repurchase Program is set to expire when we have used all authorized funds for repurchases. Share repurchases take place from time to time, subject to market conditions and management’s discretion, in the open market or in privately negotiated transactions. The company retires its common stock upon repurchase and, in the periods presented, has not made any purchases of common stock other than in connection with these publicly announced repurchase programs. The table below summarizes the company’s share repurchases to date under the authorizations described above: Repurchase Program Amount Total Average (1) Date Completed Shares Repurchased Year Ended December 31 2019 2018 2017 September 16, 2015 $ 4,000 14.5 $ 255.04 3.2 3.8 1.6 December 4, 2018 $ 3,000 — $ — — — — 3.2 3.8 1.6 (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. In May 2018 , the company increased the quarterly common stock dividend 9 percent to $1.20 per share from the previous amount of $1.10 per share. In January 2018 , the company increased the quarterly common stock dividend 10 percent to $1.10 per share from the previous amount of $1.00 per share. In May 2017 , the company increased the quarterly common stock dividend 11 percent to $1.00 per share from the previous amount of $0.90 per share. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | 4 . ACCOUNTS RECEIVABLE, NET Accounts receivable, net represent amounts billed and due from customers. Substantially all accounts receivable at December 31, 2019 are expected to be collected in 2020 . The company does not believe it has significant exposure to credit risk as the majority of our accounts receivable are due from the U.S. government either as the ultimate customer or in connection with foreign military sales. Accounts receivable consisted of the following: December 31 $ in millions 2019 2018 Due from U.S. government (1) $ 1,030 $ 1,164 Due from international and other customers 329 318 Accounts receivable, gross 1,359 1,482 Allowance for doubtful accounts (33 ) (34 ) Accounts receivable, net $ 1,326 $ 1,448 (1) Includes receivables due from the U.S. government associated with foreign military sales (FMS). For FMS, we contract with and are paid by the U.S. government. |
Unbilled Receivables, Net
Unbilled Receivables, Net | 12 Months Ended |
Dec. 31, 2019 | |
Unbilled Receivables, Net [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 5 . UNBILLED RECEIVABLES, NET Unbilled receivables, net represent revenue recognized under the cost-to-cost method that exceeds amounts billed to customers. Substantially all unbilled receivables at December 31, 2019 are expected to be billed and collected in 2020 . Progress and performance-based payments are reflected as an offset to the related unbilled receivable balances. Unbilled receivables consisted of the following: December 31 $ in millions 2019 2018 Due from U.S. government (1) Unbilled receivables $ 17,347 $ 16,823 Progress and performance-based payments received (12,838 ) (12,539 ) Total due from U.S. government 4,509 4,284 Due from international and other customers Unbilled receivables 4,063 3,811 Progress and performance-based payments received (3,193 ) (3,030 ) Total due from international and other customers 870 781 Unbilled receivables, net of progress and performance-based payments received 5,379 5,065 Allowance for doubtful accounts (45 ) (39 ) Unbilled receivables, net $ 5,334 $ 5,026 (1) |
Inventoried Costs, Net
Inventoried Costs, Net | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventoried Costs, Net | 6 . INVENTORIED COSTS, NET Inventoried costs are primarily associated with contracts where the U.S. government is the primary customer, therefore the company does not believe it has significant exposure to recoverability risk related to these amounts. Inventoried costs, net consisted of the following: December 31 $ in millions 2019 2018 Production costs of contracts in process $ 476 $ 402 G&A expenses 31 16 507 418 Progress and performance-based payments received (41 ) (41 ) 466 377 Product inventory and raw material 317 277 Inventoried costs, net $ 783 $ 654 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7 . INCOME TAXES The 2017 Tax Act was enacted in December 2017 and included a number of changes to previous U.S. tax laws that impacted the company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. In accordance with Staff Accounting Bulletin No.118, the company recognized provisional tax expense of $285 million for the year ended December 31, 2017 and additional tax expense of $5 million for the year ended December 31, 2018 related to the 2017 Tax Act. Federal and foreign income tax expense consisted of the following: Year Ended December 31 $ in millions 2019 2018 2017 Federal income tax expense: Current $ 758 $ 292 $ 449 Deferred (474 ) 213 907 Total federal income tax expense 284 505 1,356 Foreign income tax expense: Current 10 7 8 Deferred 6 1 (4 ) Total foreign income tax expense 16 8 4 Total federal and foreign income tax expense $ 300 $ 513 $ 1,360 Earnings from foreign operations before income taxes are not material for all periods presented. Income tax expense differs from the amount computed by multiplying earnings before income taxes by the statutory federal income tax rate due to the following: Year Ended December 31 $ in millions 2019 2018 2017 Income tax expense at statutory rate $ 535 21.0 % $ 786 21.0 % $ 1,480 35.0 % Stock compensation - excess tax benefits (14 ) (0.5 ) (27 ) (0.7 ) (48 ) (1.1 ) Research credit (216 ) (8.5 ) (186 ) (5.0 ) (130 ) (3.1 ) Foreign derived intangible income (28 ) (1.1 ) (16 ) (0.4 ) — — Manufacturing deduction — — — — (97 ) (2.3 ) Settlements with taxing authorities — — — — (42 ) (1.0 ) Impacts related to the 2017 Tax Act — — (84 ) (2.2 ) 285 6.8 MTM benefit tax rate differential (1) — — — — (72 ) (1.7 ) Other, net 23 0.9 40 1.0 (16 ) (0.4 ) Total federal and foreign income taxes $ 300 11.8 % $ 513 13.7 % $ 1,360 32.2 % (1) Impact of applying the 2017 Tax Act enacted statutory tax rate of 21 percent versus 35 percent . The year to date 2019 effective tax rate decreased to 11.8 percent from 13.7 percent in the same period of 2018 . MTM expense reduced the 2019 effective tax rate by 3.7 percentage points and the 2018 effective tax rate by 1.1 percentage points. In addition, the company’s effective tax rate for 2019 reflects an increase in benefits for research credits and foreign derived intangible income of $30 million and $12 million , respectively, and the absence of an $84 million benefit associated with the 2017 Tax Act realized in 2018. T he year to date 2018 effective tax rate decreased to 13.7 percent from 32.2 percent in the same period of 2017 principally due to the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent as a result of the 2017 Tax Act and a $56 million increase in research credits. In addition, the company’s effective tax rate for 2017 includes $285 million of tax expense recorded in connection with the 2017 Tax Act, largely due to the write-down of net deferred tax assets, offset by $97 million of tax benefits associated with manufacturing deductions and a $72 million tax benefit from the impact of applying the 2017 Tax Act enacted statutory tax rate of 21 percent versus 35 percent to the 2017 MTM benefit. Income tax payments, net of refunds received, were $324 million , $270 million and $517 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Uncertain Tax Positions 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. Tax returns for open tax years related to state and foreign jurisdictions remain subject to examination. As state income taxes are generally considered allowable and allocable costs, any individual or aggregate state examination impacts are not expected to have a material impact on our financial results. Amounts currently subject to examination related to foreign jurisdictions are not material. The change in unrecognized tax benefits during 2019 , 2018 and 2017 , excluding interest, is as follows: December 31 $ in millions 2019 2018 2017 Unrecognized tax benefits at beginning of the year $ 748 $ 283 $ 135 Additions based on tax positions related to the current year 158 293 102 Additions for tax positions of prior years 400 207 110 Reductions for tax positions of prior years (65 ) (23 ) (44 ) Settlements with taxing authorities (15 ) (7 ) (20 ) Other, net (3 ) (5 ) — Net change in unrecognized tax benefits 475 465 148 Unrecognized tax benefits at end of the year $ 1,223 $ 748 $ 283 During 2019, we increased our unrecognized tax benefits by approximately $319 million 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 twelve months our unrecognized tax benefits 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. These liabilities, along with $56 million of accrued interest and penalties, are included in other current and non-current liabilities in the consolidated statements of financial position. If the income tax benefits from these tax positions are ultimately realized, $570 million of federal and foreign tax benefits would reduce the company’s effective tax rate. Net interest expense within the company’s federal, foreign and state income tax provisions was not material for all years presented. Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax purposes. Net deferred tax assets and liabilities are classified as non-current in the consolidated statements of financial position. The tax effects of significant temporary differences and carryforwards that gave rise to year-end deferred federal, state and foreign tax balances, as presented in the consolidated statements of financial position, are as follows: December 31 $ in millions 2019 2018 Deferred Tax Assets Retiree benefits $ 1,827 $ 1,541 Accrued employee compensation 336 308 Provisions for accrued liabilities 166 139 Inventory 684 650 Stock-based compensation 38 42 Operating lease liabilities 411 — Tax credits 166 174 Other 73 59 Gross deferred tax assets 3,701 2,913 Less valuation allowance (160 ) (142 ) Net deferred tax assets 3,541 2,771 Deferred Tax Liabilities Goodwill 515 511 Purchased intangibles 262 346 Property, plant and equipment, net 584 518 Operating lease right-of-use assets 404 — Contract accounting differences 1,225 1,381 Other 43 29 Deferred tax liabilities 3,033 2,785 Total net deferred tax assets (liabilities) $ 508 $ (14 ) Realization of deferred tax assets is primarily dependent on generating sufficient taxable income in future periods. The company believes it is more-likely-than-not our net deferred tax assets will be realized. At December 31, 2019 , the company has available tax credits and unused net operating losses of $324 million and $310 million , respectively, that may be applied against future taxable income. The majority of tax credits and net operating losses expire in 2020 through 2040, however, some may be carried forward indefinitely. Due to the uncertainty of the realization of the tax credits and net operating losses, the company has recorded valuation allowances of $121 million and $32 million as of December 31, 2019 , respectively. Undistributed Foreign Earnings As of December 31, 2019 , the company has accumulated undistributed earnings generated by our foreign subsidiaries and most have been taxed in the U.S. as a result of the 2017 Tax Act. The 2017 Tax Act allows for a dividend received deduction for repatriation of earnings. We intend to indefinitely reinvest these earnings, as well as future earnings from our foreign subsidiaries, to fund our international operations and foreign credit facility. In addition, we expect future U.S. cash generation will be sufficient to meet future U.S. cash needs. |
Goodwill and Other Purchased In
Goodwill and Other Purchased Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 8 . GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS Goodwill As discussed in Note 2 , the Merger resulted in the recognition of $6.3 billion of goodwill, which was allocated to the Space Systems, Defense Systems and Aeronautics Systems sectors. Changes in the carrying amounts of goodwill for the years ended December 31, 2018 and 2019 , were as follows: $ in millions Aeronautics Systems Defense Systems Mission Systems Space Systems Total Balance as of December 31, 2017 $ 2,969 $ 2,259 $ 6,062 $ 1,165 $ 12,455 Acquisition of Orbital ATK 498 2,123 — 3,601 6,222 Other (1) — (5 ) — — (5 ) Balance as of December 31, 2018 $ 3,467 $ 4,377 $ 6,062 $ 4,766 $ 18,672 Acquisition of Orbital ATK — — — 37 37 Other (1) — (1 ) — — (1 ) Balance as of December 31, 2019 $ 3,467 $ 4,376 $ 6,062 $ 4,803 $ 18,708 (1) Other consists primarily of adjustments for foreign currency translation. At December 31, 2019 and 2018 , accumulated goodwill impairment losses totaled $417 million and $153 million at Aeronautics Systems and Space Systems, respectively. Other Purchased Intangible Assets Net customer-related and other intangible assets are as follows: December 31 $ in millions 2019 2018 Gross customer-related and other intangible assets $ 3,356 $ 3,356 Less accumulated amortization (2,316 ) (1,984 ) Net customer-related and other intangible assets $ 1,040 $ 1,372 Amortization expense for 2019 , 2018 and 2017 , was $332 million , $203 million and $14 million , respectively. As of December 31, 2019 , the expected future amortization of purchased intangibles for each of the next five years is as follows: $ in millions 2020 $ 262 2021 204 2022 197 2023 78 2024 55 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 9 . FAIR VALUE OF FINANCIAL INSTRUMENTS 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. See Note 1 for the definitions of these levels and for further information on our financial instruments. December 31, 2019 December 31, 2018 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities $ 364 $ 1 $ 365 $ 319 $ 1 $ 320 Marketable securities valued using NAV 17 15 Total marketable securities 364 1 382 319 1 335 Derivatives — (3 ) (3 ) — (10 ) (10 ) The notional value of the company’s foreign currency forward contracts at December 31, 2019 and 2018 was $98 million and $114 million , respectively. The portion of notional value designated as a cash flow hedge at December 31, 2019 was $7 million . At December 31, 2018 , no portion of the notional value was designated as a cash flow hedge. The derivative fair values and related unrealized gains/losses at December 31, 2019 and 2018 were not material. There were no transfers of financial instruments between the three levels of the fair value hierarchy during the years ended December 31, 2019 and 2018 . The carrying value of cash and cash equivalents and commercial paper approximates fair value. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 10 . DEBT 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 December 31, 2019 , there were no commercial paper borrowings outstanding. At December 31, 2018, there were $198 million of outstanding short-term commercial paper borrowings at a weighted-average interest rate of 2.77 percent that had 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 consolidated statements of financial position. Credit Facilities In August 2018, the company entered into a five-year senior unsecured credit facility in an aggregate principal amount of $2.0 billion (the “2018 Credit Agreement”). The revolving credit facility established under the 2018 Credit Agreement is intended to support the company’s commercial paper program and other general corporate purposes. At December 31, 2019 , there was no balance outstanding under this facility. Commercial paper borrowings reduce the amount available for borrowing under the 2018 Credit Agreement. In October 2019, the company amended the 2018 Credit Agreement to extend its maturity date by one year from August 2023 to August 2024. 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 $155 million as of December 31, 2019 ) (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 December 31, 2019 , there was £60 million (the equivalent of approximately $78 million as of December 31, 2019 ) 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 consolidated statements of financial position. Our credit agreements contain generally customary terms and conditions, including covenants restricting the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake other fundamental changes and incur liens. The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreements) to exceed 65 percent. At December 31, 2019 , the company was in compliance with all covenants under its credit agreements. Unsecured Senior Notes Long-term debt consists of the following: $ in millions December 31 2019 2018 Fixed-rate notes and debentures, maturing in Interest rate 2019 5.05% $ — $ 500 2020 2.08% 1,000 1,000 2021 3.50% 700 700 2022 2.55% 1,500 1,500 2023 3.25% 1,050 1,050 2025 2.93% 1,500 1,500 2026 7.75% - 7.88% 527 527 2027 3.20% 750 750 2028 3.25% 2,000 2,000 2031 7.75% 466 466 2040 5.05% 300 300 2043 4.75% 950 950 2045 3.85% 600 600 2047 4.03% 2,250 2,250 Credit facilities 1.89% 78 108 Other Various 272 272 Debt issuance costs (64 ) (73 ) Total long-term debt 13,879 14,400 Less: current portion (1) 1,109 517 Long-term debt, net of current portion $ 12,770 $ 13,883 (1) The current portion of long-term debt is recorded in Other current liabilities in the consolidated statements of financial position. The estimated fair value of long-term debt was $15.1 billion and $14.3 billion as of December 31, 2019 and 2018 , 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. Indentures underlying long-term debt issued by the company or its subsidiaries contain various restrictions with respect to the issuer, including one or more restrictions relating to limitations on liens, sale-leaseback arrangements and funded debt of subsidiaries. The majority of these fixed rate notes and debentures are subject to redemption at the company’s discretion at any time prior to maturity in whole or in part at the principal amount plus any make-whole premium and accrued and unpaid interest. Interest on these fixed rate notes and debentures are payable semi-annually in arrears. Total interest payments, net of interest received, were $521 million , $456 million and $273 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Maturities of long-term debt as of December 31, 2019 , are as follows: $ in millions Year Ending December 31 2020 $ 1,110 2021 742 2022 1,505 2023 1,053 2024 3 Thereafter 9,532 Total principal payments 13,945 Unamortized premium on long-term debt, net of discount (2 ) Debt issuance costs (64 ) Total long-term debt $ 13,879 |
Investigations, Claims and Liti
Investigations, Claims and Litigation | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Investigations, Claims and Litigation | 11 . 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. After a mediation that did not resolve the dispute, the court has set trial to commence on February 3, 2020, running through March or early April. Although the ultimate outcome of these matters (“the FSS matters,” collectively), including any possible loss, cannot be predicted or reasonably estimated at this time, the company intends vigorously to pursue and defend the FSS matters. On August 8, 2013, the company received a court-appointed expert’s report in litigation pending in the Second Federal Court of the Federal District in Brazil brought by the Brazilian Post and Telegraph Corporation (ECT), a Brazilian state-owned entity, against Solystic SAS (Solystic), a French subsidiary of the company, and two of its consortium partners. In this suit, commenced on December 17, 2004, and relatively inactive for some period of time, ECT alleges the consortium breached its contract with ECT and seeks damages of approximately R$111 million (the equivalent of approximately $27 million as of December 31, 2019 ), 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 $22 million as of December 31, 2019 ) in damages. In October 2013, ECT asserted an additional damage claim of R$22 million (the equivalent of approximately $5 million as of December 31, 2019 ). 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 $35 million as of December 31, 2019 ), 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 $10 million as of December 31, 2019) 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 12 , 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 12 , 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. On August 12, 2016, plaintiffs filed a putative class action complaint in the United States District Court for the Eastern District of Virginia against Orbital ATK and certain individuals, captioned Steven Knurr, et al. v. Orbital ATK, Inc., No. 16-cv-01031 (TSE-MSN). As later amended, the complaint asserted claims on behalf of Orbital ATK shareholders for violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, and Section 14(a) of the Exchange Act allegedly arising out of false and misleading statements and the failure to disclose that: (i) Orbital ATK lacked effective control over financial reporting; and (ii) as a result, Orbital ATK failed to record an anticipated loss on a long-term contract with the U.S. Army to manufacture and supply small caliber ammunition at the U.S. Army’s Lake City Army Ammunition Plant. The complaint sought damages and other relief. On June 7, 2019, the court approved the parties’ proposal to resolve the litigation for $108 million , subject to certain terms and conditions. The company continues to pursue recovery of allowable costs and coverage litigation against various of its insurance carriers. 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 consolidated financial position as of December 31, 2019 , or its annual results of operations and/or cash flows. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12 . COMMITMENTS AND CONTINGENCIES U.S. Government Cost Claims From time to time, the company is advised of claims by the U.S. government concerning certain potential disallowed costs, plus, at times, penalties and interest. When such findings are presented, the company and U.S. government representatives engage in discussions to enable the company to evaluate the merits of these claims, as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the company’s estimated exposure for such potential disallowed costs. Such provisions are reviewed periodically using the most recent information available. The company believes it has adequately reserved for disputed amounts that are probable and reasonably estimable, and that the outcome of any such matters would not have a material adverse effect on its consolidated financial position as of December 31, 2019 , or its annual results of operations and/or cash flows. 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 December 31, 2019 and 2018 : $ in millions Accrued Costs (1)(2) Reasonably Possible Future Costs in excess of Accrued Costs (2) Deferred Costs (3) December 31, 2019 $ 531 $ 448 $ 436 December 31, 2018 461 374 343 (1) As of December 31, 2019 , $148 million is recorded in Other current liabilities and $383 million is recorded in Other non-current liabilities. (2) Estimated remediation costs are not discounted to present value. The range of reasonably possible future costs does not take into consideration amounts expected to be recoverable through overhead charges on U.S. government contracts. (3) As of December 31, 2019 , $119 million is deferred in Prepaid expenses and other current assets and $317 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 consolidated financial position as of December 31, 2019 , 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, seeking 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 11 , 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 December 31, 2019 , there were $498 million of stand-by letters of credit and guarantees and $182 million of surety bonds outstanding. Indemnifications The company has provided indemnifications for certain environmental, income tax and other potential liabilities in connection with certain of its divestitures. The settlement of these liabilities is not expected to have a material adverse effect on the company’s consolidated financial position as of December 31, 2019 , or its annual results of operations and/or cash flows. |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | 13 . RETIREMENT BENEFITS Plan Descriptions U.S. Defined Benefit Pension Plans – The company sponsors several defined benefit pension plans in the U.S. Pension benefits for most participants are based on years of service, age and compensation. It is our policy to fund at least the minimum amount required for all qualified plans, using actuarial cost methods and assumptions acceptable under U.S. government regulations, by making payments into benefit trusts separate from the company. U.S. Defined Contribution Plans – The company also sponsors defined contribution plans covering the majority of its employees, including certain employees covered under collective bargaining agreements. Company contributions vary depending on date of hire, with a majority of employees being eligible for employer matching of employee contributions. Based on date of hire, certain employees are eligible to receive a company non-elective contribution or an enhanced matching contribution in lieu of a defined benefit pension plan benefit. The company’s contributions to these defined contribution plans for the years ended December 31, 2019 , 2018 and 2017 , were $481 million , $403 million and $344 million , respectively. Non-U.S. Benefit Plans – The company sponsors several benefit plans for non-U.S. employees. These plans are designed to provide benefits appropriate to local practice and in accordance with local regulations. Some of these plans are funded using benefit trusts separate from the company. Medical and Life Benefits – The company funds a portion of the costs for certain health care and life insurance benefits for a substantial number of its active and retired employees. In addition to a company and employee cost-sharing feature, the health plans also have provisions for deductibles, co-payments, coinsurance percentages, out-of-pocket limits, conformance to a schedule of reasonable fees, the use of managed care providers and coordination of benefits with other plans. The plans also provide for a Medicare carve-out. The company reserves the right to amend or terminate the plans at any time. Certain covered employees and dependents are eligible to participate in plans upon retirement if they meet specified age and years of service requirements. The company provides subsidies to reimburse certain retirees for a portion of the cost of individual Medicare-supplemental coverage purchased directly by the retiree through a private insurance exchange. The company has capped the amount of its contributions to substantially all of its remaining postretirement medical and life benefit plans. In addition, after January 1, 2005 (or earlier at some businesses), newly hired employees are not eligible for subsidized postretirement medical and life benefits. Summary Plan Results The cost to the company of its retirement benefit plans is shown in the following table: Year Ended December 31 Pension Benefits Medical and Life Benefits $ in millions 2019 2018 2017 2019 2018 2017 Components of net periodic benefit cost (benefit) Service cost $ 367 $ 404 $ 388 $ 16 $ 21 $ 20 Interest cost 1,360 1,226 1,250 80 76 85 Expected return on plan assets (2,101 ) (2,217 ) (1,885 ) (92 ) (101 ) (89 ) Amortization of prior service credit (59 ) (58 ) (57 ) (3 ) (21 ) (22 ) Mark-to-market expense (benefit) 1,783 699 (445 ) 17 (44 ) (91 ) Other — — (7 ) — — — Net periodic benefit cost (benefit) $ 1,350 $ 54 $ (756 ) $ 18 $ (69 ) $ (97 ) The table below summarizes the components of changes in unamortized prior service credit for the years ended December 31, 2017 , 2018 and 2019 : $ in millions Pension Benefits Medical and Life Benefits Total Changes in unamortized prior service credit Amortization of prior service credit $ 57 $ 22 $ 79 Tax expense (26 ) (9 ) (35 ) Change in unamortized prior service credit – 2017 31 13 44 Amortization of prior service credit 58 21 79 Tax expense (14 ) (5 ) (19 ) Change in unamortized prior service credit – 2018 44 16 60 Amortization of prior service credit 59 3 62 Tax expense (14 ) (1 ) (15 ) Change in unamortized prior service credit – 2019 $ 45 $ 2 $ 47 We expect to recognize $60 million and $(4) million of prior year service credit (cost) related to our pension benefit and medical and life benefit plans, respectively, in net periodic benefit cost in 2020. The following table sets forth the funded status and amounts recognized in the consolidated statements of financial position for the company’s defined benefit retirement plans. Pension benefits data includes the qualified plans, foreign plans and U.S. unfunded non-qualified plans for benefits provided to directors, officers and certain employees. The company uses a December 31 measurement date for its plans. Pension Benefits Medical and Life Benefits $ in millions 2019 2018 2019 2018 Plan Assets Fair value of plan assets at beginning of year $ 27,150 $ 27,226 $ 1,247 $ 1,338 Net gain (loss) on plan assets 5,025 (1,043 ) 234 (65 ) Employer contributions 221 370 42 38 Participant contributions 8 9 24 25 Benefits paid (1,763 ) (1,685 ) (156 ) (148 ) Acquired plan assets — 2,293 — 58 Other 5 (20 ) 1 1 Fair value of plan assets at end of year 30,646 27,150 1,392 1,247 Projected Benefit Obligation Projected benefit obligation at beginning of year 32,231 31,967 1,930 2,110 Service cost 367 404 16 21 Interest cost 1,360 1,226 80 76 Participant contributions 8 9 24 25 Actuarial loss (gain) 4,708 (2,561 ) 159 (211 ) Benefits paid (1,763 ) (1,685 ) (156 ) (148 ) Acquired benefit obligation — 2,895 — 50 Other 3 (24 ) (5 ) 7 Projected benefit obligation at end of year 36,914 32,231 2,048 1,930 Funded status $ (6,268 ) $ (5,081 ) $ (656 ) $ (683 ) Classification of amounts recognized in the consolidated statements of financial position Non-current assets $ 124 $ 77 $ 151 $ 124 Current liability (173 ) (164 ) (47 ) (46 ) Non-current liability (6,219 ) (4,994 ) (760 ) (761 ) The accumulated benefit obligation for all defined benefit pension plans was $36.5 billion and $31.9 billion at December 31, 2019 and 2018 , respectively. Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows: December 31 $ in millions 2019 2018 Projected benefit obligation $ 34,715 $ 30,259 Accumulated benefit obligation 34,305 29,961 Fair value of plan assets 28,324 25,101 Plan Assumptions On a weighted-average basis, the following assumptions were used to determine benefit obligations and net periodic benefit cost: Pension Benefits Medical and Life Benefits 2019 2018 2019 2018 Assumptions used to determine benefit obligation at December 31 Discount rate 3.39 % 4.31 % 3.35 % 4.30 % Initial cash balance crediting rate assumed for the next year 2.39 % 3.00 % Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate) 2.64 % 3.25 % Year that the cash balance crediting rate reaches the ultimate rate 2025 2024 Rate of compensation increase 3.00 % 3.00 % Initial health care cost trend rate assumed for the next year 5.90 % 6.20 % Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % Year that the health care cost trend rate reaches the ultimate trend rate 2023 2023 Assumptions used to determine benefit cost for the year ended December 31 Discount rate 4.31 % 3.68 % 4.30 % 3.66 % Initial cash balance crediting rate assumed for the next year 3.00 % 2.75 % Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate) 3.25 % 3.00 % Year that the cash balance crediting rate reaches the ultimate rate 2024 2023 Expected long-term return on plan assets 8.00 % 8.00 % 7.67 % 7.65 % Rate of compensation increase 3.00 % 3.00 % Initial health care cost trend rate assumed for the next year 6.20 % 6.50 % Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % Year that the health care cost trend rate reaches the ultimate trend rate 2023 2023 Plan Assets and Investment Policy Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. Through consultation with our investment management team and outside investment advisers, management develops expected long-term returns for each of the plans’ strategic asset classes. In doing so, we consider a number of factors, including our historical investment performance, current market data such as yields/price-earnings ratios, historical market returns over long periods and periodic surveys of investment managers’ expectations. Liability studies are conducted on a regular basis to provide guidance in setting investment goals with an objective to balance risk. Risk targets are established and monitored against acceptable ranges. Our investment policies and procedures are designed to ensure the plans’ investments are in compliance with the Employee Retirement Income Security Act (ERISA). Guidelines are established defining permitted investments within each asset class. Derivatives are used for transitioning assets, asset class rebalancing, managing currency risk and for management of fixed-income and alternative investments. For the majority of the plans’ assets, the investment policies require that the asset allocation be maintained within the following ranges as of December 31, 2019 : Asset Allocation Ranges Cash and cash equivalents 0% - 12% Global public equities 30% - 50% Fixed-income securities 20% - 40% Alternative investments 18% - 38% The table below provides the fair values of the company’s pension and Voluntary Employee Beneficiary Association (VEBA) trust plan assets at December 31, 2019 and 2018 , by asset category. The table also identifies the level of inputs used to determine the fair value of assets in each category. See Note 1 for the definitions of these levels. Certain investments that are measured at fair value using NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy table. The total fair value of these investments is included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above. As of December 31, 2019 and 2018 , there were no investments expected to be sold at a value materially different than NAV. Level 1 Level 2 Level 3 Total $ in millions 2019 2018 2019 2018 2019 2018 2019 2018 Asset category Cash and cash equivalents $ 233 $ 209 $ 2,572 $ 2,655 $ 2,805 $ 2,864 U.S. equities 3,341 2,859 3,341 2,859 International equities 3,271 2,711 $ 2 $ 1 3,273 2,712 Fixed-income securities U.S. Treasuries 20 26 2,716 1,501 2,736 1,527 U.S. Government Agency 297 322 297 322 Non-U.S. Government 194 206 194 206 Corporate debt 28 34 4,513 4,141 4,541 4,175 Asset backed 892 297 892 297 High yield debt 30 11 104 153 134 164 Bank loans 33 20 33 20 Other assets (9 ) 15 59 51 2 2 52 68 Investments valued using NAV as a practical expedient U.S. equities 1,131 1,170 International equities 5,636 4,017 Fixed-income funds 438 1,386 Hedge funds 246 351 Opportunistic investments 1,459 1,367 Private equity funds 2,454 2,510 Real estate funds 2,376 2,382 Fair value of plan assets at the end of the year $ 6,914 $ 5,865 $ 11,380 $ 9,346 $ 4 $ 3 $ 32,038 $ 28,397 There were no transfers of plan assets between the three levels of the fair value hierarchy during the years ended December 31, 2019 and 2018 . Generally, investments are valued based on information in financial publications of general circulation, statistical and valuation services, records of security exchanges, appraisal by qualified persons, transactions and bona fide offers. Cash and cash equivalents are predominantly held in money market or short-term investment funds. U.S. and international equities consist primarily of common stocks and institutional common trust funds. Investments in certain equity securities, which include domestic and international securities and registered investment companies, and exchange-traded funds with fixed income strategies are valued at the last reported sales or quoted price on the last business day of the reporting period. Fair values for certain fixed-income securities, which are not exchange-traded, are valued using third-party pricing services. Other assets include derivative assets with a fair value of $49 million and $76 million , derivative liabilities with a fair value of $53 million and $52 million , and net notional amounts of $3.6 billion and $3.2 billion , as of December 31, 2019 and 2018 , respectively. Derivative instruments may include exchange traded futures contracts, interest rate swaps, options on futures and swaps, currency contracts, total return swaps and credit default swaps. Notional amounts do not quantify risk or represent assets or liabilities of the pension and VEBA trusts, but are used in the calculation of cash settlement under the contracts. The volume of derivative activity is commensurate with the amounts disclosed at year-end. Certain derivative financial instruments within the pension trust are subject to master netting agreements with certain counterparties. Investments in certain equity and fixed-income funds, which include common/collective trust funds, and alternative investments, including hedge funds, opportunistic investments, private equity funds and real estate funds, are valued based on the NAV derived by the investment managers, as a practical expedient, and are described further below. U.S. and International equities: Generally, redemption periods are daily or monthly with a notice requirement less than 30 days. As of December 31, 2019 and 2018 , there were no unfunded commitments. Fixed-income funds: Redemption periods are daily, monthly or quarterly with various notice requirements but generally are less than 30 days. As of December 31, 2019 and 2018 , there were no unfunded commitments. Hedge funds: Generally, redemption periods are monthly or quarterly with notice requirements from 30 to 95 days. As of December 31, 2019 , unfunded commitments were $8 million . There were no unfunded commitments as of December 31, 2018. Opportunistic investments: Opportunistic investments are primarily held in partnerships with a 5-10 year life. As of December 31, 2019 and 2018 , unfunded commitments were $1.3 billion and $1.1 billion , respectively. Private equity funds: The term of each fund is typically 10 or more years and the fund’s investors do not have an option to redeem their interest in the fund. As of December 31, 2019 and 2018 , unfunded commitments were $1.9 billion and $1.8 billion , respectively. Real estate funds: Consists of closed-end real estate funds and infrastructure funds with terms that are typically 10 or more years. This class also contains open-end funds that generally allow investors to redeem their interests in the fund. As of December 31, 2019 and 2018 , unfunded commitments were $60 million and $73 million , respectively. For the years ended December 31, 2019 and 2018 , the defined benefit pension and VEBA trusts did not hold any Northrop Grumman common stock. Benefit Payments The following table reflects estimated future benefit payments for the next ten years, based upon the same assumptions used to measure the benefit obligation, and includes expected future employee service, as of December 31, 2019 : $ in millions Pension Plans Medical and Life Plans Total Year Ending December 31 2020 $ 1,849 $ 151 $ 2,000 2021 1,898 150 2,048 2022 1,947 139 2,086 2023 1,991 138 2,129 2024 2,039 136 2,175 2025 through 2029 10,702 630 11,332 In 2020 , the company expects to contribute the required minimum funding of approximately $96 million to its pension plans and approximately $44 million to its medical and life benefit plans. During the year ended December 31, 2019 , the company made voluntary pension contributions of $120 million . |
Stock Compensation Plans and Ot
Stock Compensation Plans and Other Compensation Arrangements | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation Plans and Other Compensation Arrangements | 14 . STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS Stock Compensation Plans At December 31, 2019 , the company had stock-based compensation awards outstanding under the following shareholder-approved plans: the 2011 Long-Term Incentive Stock Plan (2011 Plan), applicable to employees and non-employee directors, and the 1993 Stock Plan for Non-Employee Directors (1993 SPND). Employee Plans – In May 2015, the company’s shareholders approved amendments to the 2011 Plan. These amendments provided that shares issued under the plan would be counted against the aggregate share limit on a one-for-one basis. As amended, 5.1 million shares plus 2.4 million of newly authorized shares were available for issuance under the 2011 Plan; as of December 31, 2019 , 5.5 million shares remain available for issuance. The 2011 Plan provides for the following equity awards: stock options, stock appreciation rights (SARs) and stock awards. Under the 2011 Plan, no SARs have been granted and there are no outstanding stock options. Stock awards include restricted performance stock rights (RPSR) and restricted stock rights (RSR). RPSRs generally vest and are paid following the completion of a three-year performance period, based primarily on achievement of financial objectives determined by the Board. RSRs generally vest 100% after three years. Each includes dividend equivalents, which are paid concurrently with the RPSR or RSR. The terms of equity awards granted under the 2011 Plan provide for accelerated vesting, and in some instances forfeiture, of all or a portion of an award upon termination of employment. Non-Employee Director Plans – Awards to non-employee directors are made pursuant to the Northrop Grumman Corporation Equity Grant Program for Non-Employee Directors under the 2011 Plan (the Director Program), which was amended and restated effective January 1, 2016. Under the amended Director Program, each non-employee director is awarded an annual equity grant in the form of Automatic Stock Units, which vest on the one-year anniversary of the grant date. Directors may elect to have all or any portion of their Automatic Stock Units paid on (A) the earlier of (i) the beginning of a specified calendar year after the vesting date or (ii) their separation from service as a member of the Board, or (B) on the vesting date. Directors also may elect to defer to a later year all or a portion of their remaining cash retainer or committee retainer fees into a stock unit account as Elective Stock Units or in alternative investment options. Elective Stock Units are awarded on a quarterly basis. Directors may elect to have all or a portion of their Elective Stock Units paid on the earlier of (i) the beginning of a specified calendar year or (ii) their separation from service as a member of the Board. Stock units awarded under the Director Program are paid out in an equivalent number of shares of Northrop Grumman common stock. Directors are credited with dividend equivalents in connection with the accumulated stock units until the shares of common stock relating to such stock units are issued. Compensation Expense Stock-based compensation expense for the years ended December 31, 2019 , 2018 and 2017 was $127 million , $86 million and $94 million , respectively. The related tax benefits for stock-based compensation for the years ended December 31, 2019 , 2018 and 2017 were $14 million , $27 million and $48 million , respectively. At December 31, 2019 , there was $101 million of unrecognized compensation expense related to unvested stock awards granted under the company’s stock-based compensation plans. These amounts are expected to be charged to expense over a weighted-average period of 1.3 years . Stock Awards Compensation expense for stock awards is measured at the grant date based on the fair value of the award and is recognized over the vesting period (generally three years ). The fair value of stock awards and performance stock awards is determined based on the closing market price of the company’s common stock on the grant date. The fair value of market-based stock awards is determined at the grant date using a Monte Carlo simulation model. For purposes of measuring compensation expense for performance awards, the number of shares ultimately expected to vest is estimated at each reporting date based on management’s expectations regarding the relevant performance criteria. Stock award activity for the years ended December 31, 2017 , 2018 and 2019 , is presented in the table below. Vested awards do not include any adjustments to reflect the final performance measure for issued shares. Stock Weighted- Weighted- Outstanding at January 1, 2017 1,148 $ 167 1.3 Granted 397 233 Vested (521 ) 152 Forfeited (86 ) 198 Outstanding at December 31, 2017 938 $ 192 1.0 Granted 376 321 Vested (455 ) 181 Forfeited (63 ) 250 Outstanding at December 31, 2018 796 $ 244 0.8 Granted 339 274 Vested (383 ) 222 Forfeited (51 ) 280 Outstanding at December 31, 2019 701 $ 278 0.9 The majority of our stock awards are granted annually during the first quarter. The grant date fair value of shares issued in settlement of fully vested stock awards was $119 million , $93 million and $96 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. Cash Awards The company grants certain employees cash units (CUs) and cash performance units (CPUs). Depending on actual performance against financial objectives, recipients of CPUs earn between 0 and 200 percent of the original grant. The following table presents the minimum and maximum aggregate payout amounts related to those cash awards granted for the periods presented: Year Ended December 31 $ in millions 2019 2018 2017 Minimum aggregate payout amount $ 36 $ 36 $ 38 Maximum aggregate payout amount 203 205 201 The majority of our cash awards are granted annually during the first quarter. 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 primarily on the achievement of financial metrics over a three-year period. At December 31, 2019 , there was $133 million of unrecognized compensation expense related to cash awards. |
Leases (Notes)
Leases (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | 15 . LEASES As described in Note 1 , effective January 1, 2019, we adopted ASC 842 using the optional transition method. In accordance with the optional transition method, we did not recast the prior period consolidated financial statements and all prior period amounts and disclosures are presented under ASC 840. Finance leases are not material to our consolidated financial statements and are therefore not included in the following disclosures. Total Lease Cost Total lease cost is included in Product and Service costs and G&A expenses in the consolidated statement of earnings and comprehensive income and is recorded net of immaterial sublease income. Total lease cost is comprised of the following: $ in millions Year Ended December 31, 2019 Operating lease cost $ 318 Variable lease cost 11 Short-term lease cost 75 Total lease cost $ 404 Supplemental Balance Sheet Information Supplemental operating lease balance sheet information consists of the following: $ in millions December 31, 2019 Operating lease right-of-use assets $ 1,511 Other current liabilities 261 Operating lease liabilities 1,308 Total operating lease liabilities $ 1,569 Other Supplemental Information Other supplemental operating lease information consists of the following: $ in millions Year Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 307 Right-of-use assets obtained in exchange for new lease liabilities 462 Weighted average remaining lease term 11.6 years Weighted average discount rate 3.8 % Maturities of Lease Liabilities Maturities of operating lease liabilities as of December 31, 2019 are as follows: $ in millions Year Ending December 31 2020 $ 300 2021 262 2022 224 2023 185 2024 146 Thereafter 875 Total lease payments 1,992 Less: imputed interest (423 ) Present value of operating lease liabilities $ 1,569 As of December 31, 2019 , we have approximately $125 million in rental commitments for real estate leases that have not yet commenced. These leases are expected to commence in 2020 and 2021 with lease terms of 3 to 11 years . Rental expense for operating leases classified under ASC 840 for the years ended December 31, 2018 and 2017 were $375 million and $300 million , respectively. These amounts are net of immaterial amounts of sublease income. As of December 31, 2018 , future minimum lease payments under long-term non-cancelable operating leases as classified under ASC 840 were as follows: $ in millions Year Ending December 31 2019 $ 312 2020 270 2021 221 2022 186 2023 152 Thereafter 939 Total minimum lease payments $ 2,080 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 16 . SEGMENT INFORMATION The company is aligned in four operating sectors, which also comprise our reportable segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The following table presents sales and operating income by segment: Year Ended December 31 $ in millions 2019 2018 2017 Sales Aeronautics Systems $ 11,116 $ 10,293 $ 9,040 Defense Systems 7,495 6,612 5,479 Mission Systems 9,410 8,949 8,460 Space Systems 7,425 5,845 4,719 Intersegment eliminations (1,605 ) (1,604 ) (1,694 ) Total sales 33,841 30,095 26,004 Operating income Aeronautics Systems 1,170 1,107 848 Defense Systems 781 690 534 Mission Systems 1,382 1,215 1,157 Space Systems 781 635 578 Intersegment eliminations (205 ) (200 ) (214 ) Total segment operating income 3,909 3,447 2,903 Net FAS (service)/CAS pension adjustment 465 613 638 Unallocated corporate expense (405 ) (280 ) (323 ) Total operating income $ 3,969 $ 3,780 $ 3,218 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 FAR and the related 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 Year Ended December 31 2019 2018 2017 $ in millions $ % (3) $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 9,258 83 % $ 8,732 85 % $ 7,817 86 % International (2) 1,688 15 % 1,402 13 % 1,107 12 % Other customers 67 1 % 86 1 % 70 1 % Intersegment sales 103 1 % 73 1 % 46 1 % Aeronautics Systems sales 11,116 100 % 10,293 100 % 9,040 100 % Defense Systems U.S. government (1) 4,952 66 % 4,132 62 % 3,422 62 % International (2) 1,442 19 % 1,249 19 % 726 13 % Other customers 410 6 % 481 7 % 357 7 % Intersegment sales 691 9 % 750 12 % 974 18 % Defense Systems sales 7,495 100 % 6,612 100 % 5,479 100 % Mission Systems U.S. government (1) 6,765 72 % 6,501 73 % 6,186 73 % International (2) 1,839 19 % 1,653 18 % 1,565 18 % Other customers 78 1 % 77 1 % 71 1 % Intersegment sales 728 8 % 718 8 % 638 8 % Mission Systems sales 9,410 100 % 8,949 100 % 8,460 100 % Space Systems U.S. government (1) 6,959 94 % 5,431 93 % 4,544 96 % International (2) 185 2 % 130 2 % 54 1 % Other customers 198 3 % 221 4 % 85 2 % Intersegment sales 83 1 % 63 1 % 36 1 % Space Systems sales 7,425 100 % 5,845 100 % 4,719 100 % Total U.S. government (1) 27,934 83 % 24,796 82 % 21,969 85 % International (2) 5,154 15 % 4,434 15 % 3,452 13 % Other customers 753 2 % 865 3 % 583 2 % Total Sales $ 33,841 100 % $ 30,095 100 % $ 26,004 100 % (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 Year Ended December 31 2019 2018 2017 $ in millions $ % (1) $ % (1) $ % (1) Aeronautics Systems Cost-type $ 5,299 48 % $ 5,066 50 % $ 4,743 53 % Fixed-price 5,714 52 % 5,154 50 % 4,251 47 % Intersegment sales 103 73 46 Aeronautics Systems sales 11,116 10,293 9,040 Defense Systems Cost-type 2,509 37 % 2,386 41 % 2,354 52 % Fixed-price 4,295 63 % 3,476 59 % 2,151 48 % Intersegment sales 691 750 974 Defense Systems sales 7,495 6,612 5,479 Mission Systems Cost-type 3,335 38 % 3,099 38 % 2,919 37 % Fixed-price 5,347 62 % 5,132 62 % 4,903 63 % Intersegment sales 728 718 638 Mission Systems sales 9,410 8,949 8,460 Space Systems Cost-type 5,336 73 % 4,453 77 % 4,181 89 % Fixed-price 2,006 27 % 1,329 23 % 502 11 % Intersegment sales 83 63 36 Space Systems sales 7,425 5,845 4,719 Total Cost-type 16,479 49 % 15,004 50 % 14,197 55 % Fixed-price 17,362 51 % 15,091 50 % 11,807 45 % Total Sales $ 33,841 $ 30,095 $ 26,004 (1) Percentages calculated based on external customer sales. Sales by Geographic Region Year Ended December 31 2019 2018 2017 $ in millions $ % (2) $ % (2) $ % (2) Aeronautics Systems United States $ 9,325 85 % $ 8,818 86 % $ 7,887 88 % Asia/Pacific 810 7 % 677 7 % 635 7 % All other (1) 878 8 % 725 7 % 472 5 % Intersegment sales 103 73 46 Aeronautics Systems sales 11,116 10,293 9,040 Defense Systems United States 5,362 79 % 4,613 79 % 3,779 84 % Asia/Pacific 369 5 % 365 6 % 194 4 % All other (1) 1,073 16 % 884 15 % 532 12 % Intersegment sales 691 750 974 Defense Systems sales 7,495 6,612 5,479 Mission Systems United States 6,843 79 % 6,578 80 % 6,257 80 % Asia/Pacific 637 7 % 592 7 % 617 8 % All other (1) 1,202 14 % 1,061 13 % 948 12 % Intersegment sales 728 718 638 Mission Systems sales 9,410 8,949 8,460 Space Systems United States 7,157 98 % 5,652 98 % 4,629 99 % Asia/Pacific 20 — % 32 — % 15 — % All other (1) 165 2 % 98 2 % 39 1 % Intersegment sales 83 63 36 Space Systems sales 7,425 5,845 4,719 Total United States 28,687 85 % 25,661 85 % 22,552 87 % Asia/Pacific 1,836 5 % 1,666 6 % 1,461 5 % All other (1) 3,318 10 % 2,768 9 % 1,991 8 % Total Sales $ 33,841 $ 30,095 $ 26,004 (1) All other is principally comprised of Europe and the Middle East. (2) Percentages calculated based on external customer sales. Intersegment Sales and Operating Income Sales between segments are recorded at values that include intercompany operating income for the performing segment based on that segment’s estimated average operating margin rate for external sales. Such intercompany operating income is eliminated in consolidation, so that the company’s total sales and total operating income reflect only those transactions with external customers. See Note 1 for additional information. The following table presents intersegment sales and operating income before eliminations: Year Ended December 31 $ in millions 2019 2018 2017 Sales Operating Income Sales Operating Income Sales Operating Income Intersegment sales and operating income Aeronautics Systems $ 103 $ 10 $ 73 $ 8 $ 46 $ 5 Defense Systems 691 74 750 74 974 97 Mission Systems 728 113 718 115 638 106 Space Systems 83 8 63 3 36 6 Total $ 1,605 $ 205 $ 1,604 $ 200 $ 1,694 $ 214 Assets Substantially all of the company’s operating assets are located in the U.S. The following table presents assets by segment: December 31 $ in millions 2019 2018 Assets Aeronautics Systems $ 9,104 $ 8,396 Defense Systems 7,420 7,178 Mission Systems 9,934 9,400 Space Systems 10,595 9,148 Corporate assets (1) 4,036 3,531 Total assets $ 41,089 $ 37,653 (1) Corporate assets principally consist of cash and cash equivalents, refundable taxes, deferred tax assets, property, plant and equipment and marketable securities. Capital Expenditures and Depreciation and Amortization The following table presents capital expenditures and depreciation and amortization by segment: Year Ended December 31 $ in millions 2019 2018 2017 2019 2018 2017 Capital Expenditures Depreciation and Amortization (1) Aeronautics Systems $ 528 $ 657 $ 574 $ 224 $ 190 $ 164 Defense Systems 71 66 14 44 65 47 Mission Systems 229 197 158 133 121 117 Space Systems 352 226 98 189 130 77 Corporate 84 103 84 428 294 70 Total $ 1,264 $ 1,249 $ 928 $ 1,018 $ 800 $ 475 (1) Beginning in 2018, corporate amounts include the 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 as they are not considered part of management’s evaluation of segment operating performance. |
Unaudited Selected Quarterly Da
Unaudited Selected Quarterly Data | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Text Block] | 17 . UNAUDITED SELECTED QUARTERLY DATA Unaudited quarterly financial results are set forth in the following tables and include the operating results of legacy Innovation Systems subsequent to the Merger date. 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 each quarter-end date, in order to normalize the potentially disruptive effects of quarterly closings on business processes. Similarly, legacy Innovation Systems used a “fiscal” calendar by closing its books on a Sunday near these quarter-end dates. Beginning in the second quarter of 2019, legacy Innovation Systems aligned its “fiscal” calendar with legacy Northrop Grumman. This practice is only used at interim periods within a reporting year. 2019 In millions, except per share amounts 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Sales $ 8,189 $ 8,456 $ 8,475 $ 8,721 Operating income 936 946 951 1,136 Net earnings (loss) 863 861 933 (409 ) Basic earnings (loss) per share 5.08 5.07 5.52 (2.43 ) Diluted earnings (loss) per share (1) 5.06 5.06 5.49 (2.43 ) Weighted-average common shares outstanding 170.0 169.7 169.1 168.4 Weighted-average diluted shares outstanding (1) 170.7 170.3 169.9 168.4 2018 In millions, except per share amounts 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Sales $ 6,735 $ 7,119 $ 8,085 $ 8,156 Operating income 848 817 1,172 943 Net earnings 840 789 1,244 356 Basic earnings per share 4.82 4.52 7.15 2.07 Diluted earnings per share 4.79 4.50 7.11 2.06 Weighted-average common shares outstanding 174.3 174.5 174.1 171.8 Weighted-average diluted shares outstanding 175.4 175.4 174.9 172.6 (1) Fourth quarter 2019 excludes the dilutive effect of awards granted to employees under stock-based compensation plans as such awards would be antidilutive. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Accounting Estimates | Accounting Estimates The company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”). The preparation thereof 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 | Revenue Recognition The majority of our sales are derived from long-term contracts with the U.S. government for the production of goods, the provision of services, or a combination of both. The company classifies sales as product or service based on the predominant attributes of each performance obligation. The company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. In most cases, goods and services provided under the company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the company provides multiple distinct goods or services to a customer, most commonly when a contract covers multiple phases of the product life cycle (e.g., development, production, sustainment, etc.). In those cases, the company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using cost plus a reasonable margin. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not considered to be separate performance obligations. Assets recognized from the costs to obtain or fulfill a contract are not material. Contracts are often modified for changes in contract specifications or requirements, which may result in scope and/or price changes. Most of the company’s contract modifications are for goods or services that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative estimate-at-completion (EAC) adjustment. The company recognizes revenue as control is transferred to the customer, either over time or at a point in time. In general, our U.S. government contracts contain termination for convenience and/or other clauses that generally provide the customer rights to goods produced and/or in-process. Similarly, our non-U.S. government contracts generally contain contractual termination clauses or entitle the company to payment for work performed to date for goods and services that do not have an alternative use. As control is effectively transferred 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 its performance obligations. Revenue for contracts in which the control of goods produced does not transfer until delivery to the customer is recognized at a point in time (i.e., typically upon delivery). Contract Estimates Use of the cost-to-cost method requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. The company estimates profit on these contracts as the difference between total estimated sales and total estimated cost at completion and recognizes that profit as costs are incurred. Significant judgment is used to estimate total 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 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. |
General and Administrative Expenses | General and Administrative Expenses In accordance with the regulations that govern cost accounting requirements for government contracts, most general management and corporate expenses incurred at the segment and corporate locations are considered allowable and allocable costs. Allowable and allocable G&A costs, including independent research and development (IR&D) and bid and proposal (B&P) costs, are allocated on a systematic basis to contracts in progress and are included as a component of total estimated contract costs. |
Research and Development | Research and Development |
Income Taxes | Income Taxes Provisions for federal and foreign income taxes are calculated on reported earnings before income taxes based on current tax law and include the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provisions differ from the amounts currently payable because certain items of income and expense are recognized in different periods for financial reporting purposes than for income tax purposes. The company recognizes federal and foreign interest accrued related to unrecognized tax benefits in income tax expense. Federal tax penalties are recognized as a component of income tax expense. In accordance with the regulations that govern cost accounting requirements for government contracts, current state and local income and franchise taxes are generally considered allowable and allocable costs and, consistent with industry practice, are recorded in operating costs and expenses. The company generally recognizes changes in deferred state taxes and unrecognized state tax benefits in unallocated corporate expenses. Uncertain tax positions reflect the company’s expected treatment of tax positions taken in a filed tax return, or planned to be taken in a future tax return or claim, which have not been reflected in measuring income tax expense or taxes payable for financial reporting purposes. Until these positions are sustained by the taxing authorities or the statute of limitations concerning such issues lapses, the company does not generally recognize the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions in its consolidated statements of financial position. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax purposes. Net deferred tax assets and liabilities are classified as non-current in the consolidated statements of financial position. |
Cash and cash equivalents | Cash and Cash Equivalents Cash and cash equivalents are comprised of cash in banks and highly liquid instruments with original maturities of three months or less, primarily consisting of bank time deposits and investments in institutional money market funds. Cash in bank accounts often exceeds federally insured limits. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The company measures the fair value of its financial instruments using observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 - Significant inputs to the valuation model are unobservable. |
Marketable Securities | Marketable securities accounted for as trading are recorded at fair value on a recurring basis and are included in Other non-current assets in the consolidated statements of financial position. Changes in unrealized gains and losses on trading securities are included in Other, net in the consolidated statements of earnings and comprehensive income . Investments in held-to-maturity instruments with original maturities greater than three months are recorded at amortized cost. |
Derivative Financial Instruments | Derivative financial instruments are recognized as assets or liabilities in the financial statements and measured at fair value on a recurring basis. Changes in the fair value of derivative financial instruments that are designated as fair value hedges are recorded in net earnings, while the changes in the fair value of derivative financial instruments that are designated as cash flow hedges are recorded as a component of other comprehensive income until settlement. For derivative financial instruments not designated as hedging instruments, gains or losses resulting from changes in the fair value are reported in Other, net in the consolidated statements of earnings and comprehensive income . The company uses derivative financial instruments to manage its exposure to foreign currency exchange risk related to receipts from customers and payments to suppliers denominated in foreign currencies (i.e., foreign currency forward contracts). For foreign currency forward contracts, where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value and uses the applicable London Interbank Offered Rate (LIBOR) swap rates. The company does not use derivative financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments. Credit risk related to derivative financial instruments is considered minimal and is managed through the use of multiple counterparties with high credit standards and periodic settlements of positions, as well as by entering into master netting agreements with most of our counterparties. |
Inventoried Costs | Inventoried Costs Inventoried costs generally comprise costs associated with unsatisfied performance obligations on contracts accounted for using point in time revenue recognition, costs incurred in excess of existing contract requirements or funding that are probable of recovery and other accrued contract costs that are expected to be recoverable when allocated to specific contracts. Product inventory primarily consists of raw materials and is stated at the lower of cost or net realizable value, generally using the average cost method. Accumulated contract costs in inventoried costs include costs such as direct production costs, factory and engineering overhead, production tooling costs, and allowable G&A. Inventoried costs are classified as current assets and, in accordance with industry practice, include amounts related to contracts having production cycles longer than one year. |
Cash Surrender Value of Life Insurance Policies | Cash Surrender Value of Life Insurance Policies |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are depreciated over the estimated useful lives of individual assets. Most assets are depreciated using declining-balance methods, with the remainder using the straight-line method. Depreciation expense is generally recorded in the same segment where the related assets are held. However, the additional depreciation expense related to the step-up in fair value of property, plant and equipment acquired through business combinations is recorded in unallocated corporate expense within operating income as such depreciation is not considered part of management’s evaluation of segment operating performance. Major classes of property, plant and equipment and their useful lives are as follows: December 31 Useful life in years, $ in millions Useful Life 2019 2018 Land and land improvements Up to 40 (1) $ 619 $ 636 Buildings and improvements Up to 45 2,575 2,139 Machinery and other equipment Up to 20 6,997 6,618 Capitalized software costs 3-5 606 603 Leasehold improvements Length of Lease (2) 1,965 1,745 Property, plant and equipment, at cost 12,762 11,741 Accumulated depreciation (5,850 ) (5,369 ) Property, plant and equipment, net $ 6,912 $ 6,372 (1) Land is not a depreciable asset. (2) Leasehold improvements are depreciated over the shorter of the useful life of the asset or the length of the lease. |
Goodwill and Other Purchased Intangible Assets | Goodwill and Other Purchased Intangible Assets The company tests goodwill for impairment at least annually as of December 31, or when an indicator of potential impairment exists. When performing the goodwill impairment test, the company uses a discounted cash flow approach corroborated by comparative market multiples, where appropriate, to determine the fair value of its reporting units. Goodwill and other purchased intangible asset balances are included in the identifiable assets of their assigned business segment. However, the company includes the amortization of other purchased intangible assets in unallocated corporate expense within operating income as such amortization is not considered part of management’s evaluation of segment operating performance. The company’s customer-related intangible assets are generally amortized over their respective useful lives based on the pattern in which the future economic benefits of the intangible assets are expected to be consumed. Other intangible assets are generally amortized on a straight-line basis over their estimated useful lives. |
Leases | Leases The company leases certain buildings, land and equipment. Under ASC 842, at contract inception we determine whether a contract is or contains a lease and whether the lease should be classified as an operating or finance lease. Operating lease balances are included in Operating lease right-of-use assets, Other current liabilities, and Operating lease liabilities in our consolidated statements of financial position. |
Litigation, Commitments, and Contingencies | Litigation, Commitments and Contingencies We accrue for litigation, commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, we generally do not recognize potential gains until realized. 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 consolidated financial position as of |
Environmental costs | Environmental Costs We accrue for environmental liabilities when management determines that, based on the facts and circumstances known to the company, it is probable the company will incur costs to address environmental impacts and the costs are reasonably estimable. When only a range of amounts is reasonably estimable and no amount within the range is more probable than another, we record the low end of the range. The company typically projects environmental costs for up to 30 years, records environmental liabilities on an undiscounted basis, and excludes asset retirement obligations and certain legal costs. At sites involving multiple parties, we accrue environmental liabilities based upon our expected share of liability, taking into account the financial viability of other liable parties. |
Retirement Benefits | Retirement Benefits The company sponsors various defined benefit pension plans and defined contribution retirement plans covering substantially all of its employees. In most cases, our defined contribution plans provide for a company match of employee contributions. The company also provides postretirement benefits other than pensions to eligible retirees and qualifying dependents, consisting principally of health care and life insurance benefits. The liabilities, unamortized prior service credits and annual income or expense of the company’s defined benefit pension and other postretirement benefit plans (OPB) are determined using methodologies that involve several actuarial assumptions. Because U.S. government regulations provide for the costs of pension and OPB plans to be charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS) that govern such plans, we calculate retiree benefit plan costs under both FAS and CAS methods. While both FAS and CAS recognize a normal service cost component in measuring periodic pension cost, there are differences in the way the components of annual pension costs are calculated under each method. Measuring plan obligations under FAS and CAS includes different assumptions and models, such as in estimating returns on plan assets, calculating interest expense and the periods over which gains/losses related to pension assets and actuarial changes are recognized. As a result, annual retiree benefit plan expense amounts for FAS are different from the amounts for CAS in any given reporting period even though the ultimate cost of providing benefits over the life of the plans is the same under either method. CAS retiree benefit plan costs are charged to contracts and are included in segment operating income, and the difference between the service cost component of FAS expense and total CAS expense is recorded in operating income at the consolidated company level. Not all net periodic pension expense is recognized in net earnings in the year incurred because it is allocated as production costs and a portion remains in inventory at the end of a reporting period. Actuarial gains and losses are immediately recognized in net periodic benefit cost for FAS through Mark-to-market pension and OPB (“MTM”) (expense) benefit upon annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement. Prior service credits are recognized as a component of Accumulated other comprehensive loss and amortized into earnings in future periods. Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. Through consultation with our investment management team and outside investment advisers, management develops expected long-term returns for each of the plans’ strategic asset classes. In doing so, we consider a number of factors, including our historical investment performance, current market data such as yields/price-earnings ratios, historical market returns over long periods and periodic surveys of investment managers’ expectations. Liability studies are conducted on a regular basis to provide guidance in setting investment goals with an objective to balance risk. Risk targets are established and monitored against acceptable ranges. Our investment policies and procedures are designed to ensure the plans’ investments are in compliance with the Employee Retirement Income Security Act (ERISA). Guidelines are established defining permitted investments within each asset class. Derivatives are used for transitioning assets, asset class rebalancing, managing currency risk and for management of fixed-income and alternative investments. For the majority of the plans’ assets, the investment policies require that the asset allocation be maintained within the following ranges as of December 31, 2019 : Asset Allocation Ranges Cash and cash equivalents 0% - 12% Global public equities 30% - 50% Fixed-income securities 20% - 40% Alternative investments 18% - 38% Hedge funds: Generally, redemption periods are monthly or quarterly with notice requirements from 30 to 95 Fixed-income funds: Redemption periods are daily, monthly or quarterly with various notice requirements but generally are less than 30 Private equity funds: The term of each fund is typically 10 Real estate funds: Consists of closed-end real estate funds and infrastructure funds with terms that are typically 10 Generally, investments are valued based on information in financial publications of general circulation, statistical and valuation services, records of security exchanges, appraisal by qualified persons, transactions and bona fide offers. Cash and cash equivalents are predominantly held in money market or short-term investment funds. U.S. and international equities consist primarily of common stocks and institutional common trust funds. Investments in certain equity securities, which include domestic and international securities and registered investment companies, and exchange-traded funds with fixed income strategies are valued at the last reported sales or quoted price on the last business day of the reporting period. Fair values for certain fixed-income securities, which are not exchange-traded, are valued using third-party pricing services. Investments in certain equity and fixed-income funds, which include common/collective trust funds, and alternative investments, including hedge funds, opportunistic investments, private equity funds and real estate funds, are valued based on the NAV derived by the investment managers, as a practical expedient, and are described further below. |
Stock Compensation | Stock Compensation The company’s stock compensation plans are classified as equity plans and compensation expense is generally recognized over the vesting period of stock awards (typically three years ), net of estimated forfeitures. The company issues stock awards in the form of restricted performance stock rights and restricted stock rights. The fair value of stock awards is determined based on the closing market price of the company’s common stock on the grant date. At each reporting date, the number of shares used to calculate compensation expense and diluted earnings per share is adjusted to reflect the number ultimately expected to vest. Compensation expense for stock awards is measured at the grant date based on the fair value of the award and is recognized over the vesting period (generally three years ). The fair value of stock awards and performance stock awards is determined based on the closing market price of the company’s common stock on the grant date. The fair value of market-based stock awards is determined at the grant date using a Monte Carlo simulation model. For purposes of measuring compensation expense for performance awards, the number of shares ultimately expected to vest is estimated at each reporting date based on management’s expectations regarding the relevant performance criteria. |
Earnings Per Share | Diluted earnings per share include the dilutive effect of awards granted to employees under stock-based compensation plans. We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. |
Fiscal Month Accounting Convention | 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 each quarter-end date, in order to normalize the potentially disruptive effects of quarterly closings on business processes. Similarly, legacy Innovation Systems used a “fiscal” calendar by closing its books on a Sunday near these quarter-end dates. Beginning in the second quarter of 2019, legacy Innovation Systems aligned its “fiscal” calendar with legacy Northrop Grumman. This practice is only used at interim periods within a reporting year. |
Trade and Other Accounts Receivable, Unbilled Receivables, Policy [Policy Text Block] | Accounts receivable, net represent amounts billed and due from customers.Unbilled receivables, net represent revenue recognized under the cost-to-cost method that exceeds amounts billed to customers. |
New Accounting Pronouncements, Policy | On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . ASC Topic 842 supersedes existing lease guidance, including ASC 840 - Leases . Among other things, ASU 2016-02 requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease and requires disclosure of certain information about leasing arrangements. On July 30, 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which, among other things, allows companies to elect an optional transition method to apply the new lease standard through a cumulative-effect adjustment in the period of adoption. We adopted the standard on January 1, 2019 using the optional transition method and, as a result, did not recast prior period consolidated financial statements. All prior period amounts and disclosures are presented under ASC 840. We elected the package of practical expedients, which, among other things, allows us to carry forward our prior lease classifications under ASC 840. We did not elect to adopt the hindsight practical expedient and are therefore maintaining the lease terms we previously determined under ASC 840. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities on the consolidated statements of financial position with no cumulative impact to retained earnings and did not have a material impact on our results of operations or cash flows. Other accounting standards updates adopted and/or issued, but not effective until after December 31, 2019, are not expected to have a material effect on the company’s consolidated financial position, annual results of operations and/or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Change in Accounting Estimate | The following table presents the effect of aggregate net EAC adjustments: Year Ended December 31 $ in millions, except per share data 2019 2018 2017 Revenue $ 538 $ 631 $ 374 Operating income 480 577 360 Net earnings (1) 379 456 234 Diluted earnings per share (1) 2.23 2.61 1.33 (1) Based on a 21% federal statutory tax rate for the years ended December 31, 2019 and 2018 and a 35% federal statutory tax rate for the year ended December 31, 2017 . |
Contract with Customer, Asset and Liability | Net contract assets are as follows: $ in millions December 31, December 31, $ Change % Change Unbilled receivables, net $ 5,334 $ 5,026 $ 308 6 % Advance payments and amounts in excess of costs incurred (2,237 ) (1,917 ) (320 ) 17 % Net contract assets $ 3,097 $ 3,109 $ (12 ) — % |
Property, Plant and Equipment | Major classes of property, plant and equipment and their useful lives are as follows: December 31 Useful life in years, $ in millions Useful Life 2019 2018 Land and land improvements Up to 40 (1) $ 619 $ 636 Buildings and improvements Up to 45 2,575 2,139 Machinery and other equipment Up to 20 6,997 6,618 Capitalized software costs 3-5 606 603 Leasehold improvements Length of Lease (2) 1,965 1,745 Property, plant and equipment, at cost 12,762 11,741 Accumulated depreciation (5,850 ) (5,369 ) Property, plant and equipment, net $ 6,912 $ 6,372 (1) Land is not a depreciable asset. (2) Leasehold improvements are depreciated over the shorter of the useful life of the asset or the length of the lease. |
Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows: December 31 $ in millions 2019 2018 Unamortized prior service credit, net of tax expense of $17 for 2019 and $32 for 2018 $ 51 $ 98 Cumulative translation adjustment (147 ) (144 ) Other, net (1 ) (6 ) Total accumulated other comprehensive loss $ (97 ) $ (52 ) |
Acquisition of Orbital ATK (Tab
Acquisition of Orbital ATK (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The Merger date fair value of the consideration transferred totaled $7.7 billion in cash, which was comprised of the following: $ in millions, except per share amounts Purchase price Shares of Orbital ATK common stock outstanding as of the Merger date 57,562,152 Cash consideration per share of Orbital ATK common stock $ 134.50 Total purchase price $ 7,742 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following purchase price allocation table presents the company’s final determination of the fair values of assets acquired and liabilities assumed at the Merger date: $ in millions As of June 6, 2018 Cash and cash equivalents $ 85 Accounts receivable 596 Unbilled receivables 1,237 Inventoried costs 220 Other current assets 237 Property, plant and equipment 1,509 Goodwill 6,259 Intangible assets 1,525 Other non-current assets 151 Total assets acquired 11,819 Trade accounts payable (397 ) Accrued employee compensation (158 ) Advance payments and billings in excess of costs incurred (222 ) Below market contracts (1) (151 ) Other current liabilities (412 ) Long-term debt (1,687 ) Pension and OPB plan liabilities (613 ) Deferred tax liabilities (248 ) Other non-current liabilities (189 ) Total liabilities assumed (4,077 ) Total purchase price $ 7,742 (1) Included in Other current liabilities in the consolidated statements of financial position. |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following table presents a summary of purchased intangible assets and their related estimated useful lives: Fair Value (in millions) Estimated Useful Life in Years Customer contracts $ 1,245 9 Commercial customer relationships 280 13 Total customer-related intangible assets $ 1,525 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table presents unaudited pro forma financial information prepared in accordance with Article 11 of Regulation S-X and computed as if Orbital ATK had been included in our results as of January 1, 2017: Year Ended December 31 $ in millions, except per share amounts 2018 2017 Sales $ 32,319 $ 30,634 Net earnings 3,417 2,938 Diluted earnings per share 19.57 16.73 |
Earnings Per Share, Share Rep_2
Earnings Per Share, Share Repurchases and Dividends on Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Share Repurchases | The table below summarizes the company’s share repurchases to date under the authorizations described above: Repurchase Program Amount Total Average (1) Date Completed Shares Repurchased Year Ended December 31 2019 2018 2017 September 16, 2015 $ 4,000 14.5 $ 255.04 3.2 3.8 1.6 December 4, 2018 $ 3,000 — $ — — — — 3.2 3.8 1.6 (1) Includes commissions paid. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts receivable | Accounts receivable consisted of the following: December 31 $ in millions 2019 2018 Due from U.S. government (1) $ 1,030 $ 1,164 Due from international and other customers 329 318 Accounts receivable, gross 1,359 1,482 Allowance for doubtful accounts (33 ) (34 ) Accounts receivable, net $ 1,326 $ 1,448 (1) Includes receivables due from the U.S. government associated with foreign military sales (FMS). For FMS, we contract with and are paid by the U.S. government. |
Unbilled Receivables, Net (Tabl
Unbilled Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Unbilled Receivables, Net [Abstract] | |
Unbilled receivables | Unbilled receivables consisted of the following: December 31 $ in millions 2019 2018 Due from U.S. government (1) Unbilled receivables $ 17,347 $ 16,823 Progress and performance-based payments received (12,838 ) (12,539 ) Total due from U.S. government 4,509 4,284 Due from international and other customers Unbilled receivables 4,063 3,811 Progress and performance-based payments received (3,193 ) (3,030 ) Total due from international and other customers 870 781 Unbilled receivables, net of progress and performance-based payments received 5,379 5,065 Allowance for doubtful accounts (45 ) (39 ) Unbilled receivables, net $ 5,334 $ 5,026 (1) |
Inventoried Costs, Net (Tables)
Inventoried Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventoried Costs | Inventoried costs, net consisted of the following: December 31 $ in millions 2019 2018 Production costs of contracts in process $ 476 $ 402 G&A expenses 31 16 507 418 Progress and performance-based payments received (41 ) (41 ) 466 377 Product inventory and raw material 317 277 Inventoried costs, net $ 783 $ 654 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income tax expense | Federal and foreign income tax expense consisted of the following: Year Ended December 31 $ in millions 2019 2018 2017 Federal income tax expense: Current $ 758 $ 292 $ 449 Deferred (474 ) 213 907 Total federal income tax expense 284 505 1,356 Foreign income tax expense: Current 10 7 8 Deferred 6 1 (4 ) Total foreign income tax expense 16 8 4 Total federal and foreign income tax expense $ 300 $ 513 $ 1,360 |
Income tax reconciliation | Income tax expense differs from the amount computed by multiplying earnings before income taxes by the statutory federal income tax rate due to the following: Year Ended December 31 $ in millions 2019 2018 2017 Income tax expense at statutory rate $ 535 21.0 % $ 786 21.0 % $ 1,480 35.0 % Stock compensation - excess tax benefits (14 ) (0.5 ) (27 ) (0.7 ) (48 ) (1.1 ) Research credit (216 ) (8.5 ) (186 ) (5.0 ) (130 ) (3.1 ) Foreign derived intangible income (28 ) (1.1 ) (16 ) (0.4 ) — — Manufacturing deduction — — — — (97 ) (2.3 ) Settlements with taxing authorities — — — — (42 ) (1.0 ) Impacts related to the 2017 Tax Act — — (84 ) (2.2 ) 285 6.8 MTM benefit tax rate differential (1) — — — — (72 ) (1.7 ) Other, net 23 0.9 40 1.0 (16 ) (0.4 ) Total federal and foreign income taxes $ 300 11.8 % $ 513 13.7 % $ 1,360 32.2 % (1) Impact of applying the 2017 Tax Act enacted statutory tax rate of 21 percent versus 35 percent . |
Unrecognized tax benefit rollforward | The change in unrecognized tax benefits during 2019 , 2018 and 2017 , excluding interest, is as follows: December 31 $ in millions 2019 2018 2017 Unrecognized tax benefits at beginning of the year $ 748 $ 283 $ 135 Additions based on tax positions related to the current year 158 293 102 Additions for tax positions of prior years 400 207 110 Reductions for tax positions of prior years (65 ) (23 ) (44 ) Settlements with taxing authorities (15 ) (7 ) (20 ) Other, net (3 ) (5 ) — Net change in unrecognized tax benefits 475 465 148 Unrecognized tax benefits at end of the year $ 1,223 $ 748 $ 283 |
Components of deferred tax assets and liabilities | The tax effects of significant temporary differences and carryforwards that gave rise to year-end deferred federal, state and foreign tax balances, as presented in the consolidated statements of financial position, are as follows: December 31 $ in millions 2019 2018 Deferred Tax Assets Retiree benefits $ 1,827 $ 1,541 Accrued employee compensation 336 308 Provisions for accrued liabilities 166 139 Inventory 684 650 Stock-based compensation 38 42 Operating lease liabilities 411 — Tax credits 166 174 Other 73 59 Gross deferred tax assets 3,701 2,913 Less valuation allowance (160 ) (142 ) Net deferred tax assets 3,541 2,771 Deferred Tax Liabilities Goodwill 515 511 Purchased intangibles 262 346 Property, plant and equipment, net 584 518 Operating lease right-of-use assets 404 — Contract accounting differences 1,225 1,381 Other 43 29 Deferred tax liabilities 3,033 2,785 Total net deferred tax assets (liabilities) $ 508 $ (14 ) |
Goodwill and Other Purchased _2
Goodwill and Other Purchased Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Changes in the carrying amounts of goodwill for the years ended December 31, 2018 and 2019 , were as follows: $ in millions Aeronautics Systems Defense Systems Mission Systems Space Systems Total Balance as of December 31, 2017 $ 2,969 $ 2,259 $ 6,062 $ 1,165 $ 12,455 Acquisition of Orbital ATK 498 2,123 — 3,601 6,222 Other (1) — (5 ) — — (5 ) Balance as of December 31, 2018 $ 3,467 $ 4,377 $ 6,062 $ 4,766 $ 18,672 Acquisition of Orbital ATK — — — 37 37 Other (1) — (1 ) — — (1 ) Balance as of December 31, 2019 $ 3,467 $ 4,376 $ 6,062 $ 4,803 $ 18,708 (1) |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | Net customer-related and other intangible assets are as follows: December 31 $ in millions 2019 2018 Gross customer-related and other intangible assets $ 3,356 $ 3,356 Less accumulated amortization (2,316 ) (1,984 ) Net customer-related and other intangible assets $ 1,040 $ 1,372 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of December 31, 2019 , the expected future amortization of purchased intangibles for each of the next five years is as follows: $ in millions 2020 $ 262 2021 204 2022 197 2023 78 2024 55 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value of assets and liabilities measured 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. See Note 1 for the definitions of these levels and for further information on our financial instruments. December 31, 2019 December 31, 2018 $ in millions Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets (Liabilities) Marketable securities $ 364 $ 1 $ 365 $ 319 $ 1 $ 320 Marketable securities valued using NAV 17 15 Total marketable securities 364 1 382 319 1 335 Derivatives — (3 ) (3 ) — (10 ) (10 ) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consists of the following: $ in millions December 31 2019 2018 Fixed-rate notes and debentures, maturing in Interest rate 2019 5.05% $ — $ 500 2020 2.08% 1,000 1,000 2021 3.50% 700 700 2022 2.55% 1,500 1,500 2023 3.25% 1,050 1,050 2025 2.93% 1,500 1,500 2026 7.75% - 7.88% 527 527 2027 3.20% 750 750 2028 3.25% 2,000 2,000 2031 7.75% 466 466 2040 5.05% 300 300 2043 4.75% 950 950 2045 3.85% 600 600 2047 4.03% 2,250 2,250 Credit facilities 1.89% 78 108 Other Various 272 272 Debt issuance costs (64 ) (73 ) Total long-term debt 13,879 14,400 Less: current portion (1) 1,109 517 Long-term debt, net of current portion $ 12,770 $ 13,883 (1) The current portion of long-term debt is recorded in Other current liabilities in the consolidated statements of financial position. |
Long-term debt maturities | Maturities of long-term debt as of December 31, 2019 , are as follows: $ in millions Year Ending December 31 2020 $ 1,110 2021 742 2022 1,505 2023 1,053 2024 3 Thereafter 9,532 Total principal payments 13,945 Unamortized premium on long-term debt, net of discount (2 ) Debt issuance costs (64 ) Total long-term debt $ 13,879 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 December 31, 2019 and 2018 : $ in millions Accrued Costs (1)(2) Reasonably Possible Future Costs in excess of Accrued Costs (2) Deferred Costs (3) December 31, 2019 $ 531 $ 448 $ 436 December 31, 2018 461 374 343 (1) As of December 31, 2019 , $148 million is recorded in Other current liabilities and $383 million is recorded in Other non-current liabilities. (2) Estimated remediation costs are not discounted to present value. The range of reasonably possible future costs does not take into consideration amounts expected to be recoverable through overhead charges on U.S. government contracts. (3) As of December 31, 2019 , $119 million is deferred in Prepaid expenses and other current assets and $317 million is deferred in Other non-current assets. These amounts are evaluated for recoverability on a routine basis. |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost | The cost to the company of its retirement benefit plans is shown in the following table: Year Ended December 31 Pension Benefits Medical and Life Benefits $ in millions 2019 2018 2017 2019 2018 2017 Components of net periodic benefit cost (benefit) Service cost $ 367 $ 404 $ 388 $ 16 $ 21 $ 20 Interest cost 1,360 1,226 1,250 80 76 85 Expected return on plan assets (2,101 ) (2,217 ) (1,885 ) (92 ) (101 ) (89 ) Amortization of prior service credit (59 ) (58 ) (57 ) (3 ) (21 ) (22 ) Mark-to-market expense (benefit) 1,783 699 (445 ) 17 (44 ) (91 ) Other — — (7 ) — — — Net periodic benefit cost (benefit) $ 1,350 $ 54 $ (756 ) $ 18 $ (69 ) $ (97 ) |
Changes in unamortized benefit plan costs | The table below summarizes the components of changes in unamortized prior service credit for the years ended December 31, 2017 , 2018 and 2019 : $ in millions Pension Benefits Medical and Life Benefits Total Changes in unamortized prior service credit Amortization of prior service credit $ 57 $ 22 $ 79 Tax expense (26 ) (9 ) (35 ) Change in unamortized prior service credit – 2017 31 13 44 Amortization of prior service credit 58 21 79 Tax expense (14 ) (5 ) (19 ) Change in unamortized prior service credit – 2018 44 16 60 Amortization of prior service credit 59 3 62 Tax expense (14 ) (1 ) (15 ) Change in unamortized prior service credit – 2019 $ 45 $ 2 $ 47 |
Change in plan assets and amounts recognized in the consolidated statements of financial position | The following table sets forth the funded status and amounts recognized in the consolidated statements of financial position for the company’s defined benefit retirement plans. Pension benefits data includes the qualified plans, foreign plans and U.S. unfunded non-qualified plans for benefits provided to directors, officers and certain employees. The company uses a December 31 measurement date for its plans. Pension Benefits Medical and Life Benefits $ in millions 2019 2018 2019 2018 Plan Assets Fair value of plan assets at beginning of year $ 27,150 $ 27,226 $ 1,247 $ 1,338 Net gain (loss) on plan assets 5,025 (1,043 ) 234 (65 ) Employer contributions 221 370 42 38 Participant contributions 8 9 24 25 Benefits paid (1,763 ) (1,685 ) (156 ) (148 ) Acquired plan assets — 2,293 — 58 Other 5 (20 ) 1 1 Fair value of plan assets at end of year 30,646 27,150 1,392 1,247 Projected Benefit Obligation Projected benefit obligation at beginning of year 32,231 31,967 1,930 2,110 Service cost 367 404 16 21 Interest cost 1,360 1,226 80 76 Participant contributions 8 9 24 25 Actuarial loss (gain) 4,708 (2,561 ) 159 (211 ) Benefits paid (1,763 ) (1,685 ) (156 ) (148 ) Acquired benefit obligation — 2,895 — 50 Other 3 (24 ) (5 ) 7 Projected benefit obligation at end of year 36,914 32,231 2,048 1,930 Funded status $ (6,268 ) $ (5,081 ) $ (656 ) $ (683 ) Classification of amounts recognized in the consolidated statements of financial position Non-current assets $ 124 $ 77 $ 151 $ 124 Current liability (173 ) (164 ) (47 ) (46 ) Non-current liability (6,219 ) (4,994 ) (760 ) (761 ) |
Pension plans with accumulated benefit obligations in excess of fair value of plan assets | Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows: December 31 $ in millions 2019 2018 Projected benefit obligation $ 34,715 $ 30,259 Accumulated benefit obligation 34,305 29,961 Fair value of plan assets 28,324 25,101 |
Weighted-average plan assumptions | On a weighted-average basis, the following assumptions were used to determine benefit obligations and net periodic benefit cost: Pension Benefits Medical and Life Benefits 2019 2018 2019 2018 Assumptions used to determine benefit obligation at December 31 Discount rate 3.39 % 4.31 % 3.35 % 4.30 % Initial cash balance crediting rate assumed for the next year 2.39 % 3.00 % Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate) 2.64 % 3.25 % Year that the cash balance crediting rate reaches the ultimate rate 2025 2024 Rate of compensation increase 3.00 % 3.00 % Initial health care cost trend rate assumed for the next year 5.90 % 6.20 % Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % Year that the health care cost trend rate reaches the ultimate trend rate 2023 2023 Assumptions used to determine benefit cost for the year ended December 31 Discount rate 4.31 % 3.68 % 4.30 % 3.66 % Initial cash balance crediting rate assumed for the next year 3.00 % 2.75 % Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate) 3.25 % 3.00 % Year that the cash balance crediting rate reaches the ultimate rate 2024 2023 Expected long-term return on plan assets 8.00 % 8.00 % 7.67 % 7.65 % Rate of compensation increase 3.00 % 3.00 % Initial health care cost trend rate assumed for the next year 6.20 % 6.50 % Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % Year that the health care cost trend rate reaches the ultimate trend rate 2023 2023 |
Plan asset allocation | For the majority of the plans’ assets, the investment policies require that the asset allocation be maintained within the following ranges as of December 31, 2019 : Asset Allocation Ranges Cash and cash equivalents 0% - 12% Global public equities 30% - 50% Fixed-income securities 20% - 40% Alternative investments 18% - 38% The table below provides the fair values of the company’s pension and Voluntary Employee Beneficiary Association (VEBA) trust plan assets at December 31, 2019 and 2018 , by asset category. The table also identifies the level of inputs used to determine the fair value of assets in each category. See Note 1 for the definitions of these levels. Certain investments that are measured at fair value using NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy table. The total fair value of these investments is included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above. As of December 31, 2019 and 2018 , there were no investments expected to be sold at a value materially different than NAV. Level 1 Level 2 Level 3 Total $ in millions 2019 2018 2019 2018 2019 2018 2019 2018 Asset category Cash and cash equivalents $ 233 $ 209 $ 2,572 $ 2,655 $ 2,805 $ 2,864 U.S. equities 3,341 2,859 3,341 2,859 International equities 3,271 2,711 $ 2 $ 1 3,273 2,712 Fixed-income securities U.S. Treasuries 20 26 2,716 1,501 2,736 1,527 U.S. Government Agency 297 322 297 322 Non-U.S. Government 194 206 194 206 Corporate debt 28 34 4,513 4,141 4,541 4,175 Asset backed 892 297 892 297 High yield debt 30 11 104 153 134 164 Bank loans 33 20 33 20 Other assets (9 ) 15 59 51 2 2 52 68 Investments valued using NAV as a practical expedient U.S. equities 1,131 1,170 International equities 5,636 4,017 Fixed-income funds 438 1,386 Hedge funds 246 351 Opportunistic investments 1,459 1,367 Private equity funds 2,454 2,510 Real estate funds 2,376 2,382 Fair value of plan assets at the end of the year $ 6,914 $ 5,865 $ 11,380 $ 9,346 $ 4 $ 3 $ 32,038 $ 28,397 |
Estimated benefit payments | The following table reflects estimated future benefit payments for the next ten years, based upon the same assumptions used to measure the benefit obligation, and includes expected future employee service, as of December 31, 2019 : $ in millions Pension Plans Medical and Life Plans Total Year Ending December 31 2020 $ 1,849 $ 151 $ 2,000 2021 1,898 150 2,048 2022 1,947 139 2,086 2023 1,991 138 2,129 2024 2,039 136 2,175 2025 through 2029 10,702 630 11,332 |
Stock Compensation Plans and _2
Stock Compensation Plans and Other Compensation Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Award Rollforward Activity | Stock award activity for the years ended December 31, 2017 , 2018 and 2019 , is presented in the table below. Vested awards do not include any adjustments to reflect the final performance measure for issued shares. Stock Weighted- Weighted- Outstanding at January 1, 2017 1,148 $ 167 1.3 Granted 397 233 Vested (521 ) 152 Forfeited (86 ) 198 Outstanding at December 31, 2017 938 $ 192 1.0 Granted 376 321 Vested (455 ) 181 Forfeited (63 ) 250 Outstanding at December 31, 2018 796 $ 244 0.8 Granted 339 274 Vested (383 ) 222 Forfeited (51 ) 280 Outstanding at December 31, 2019 701 $ 278 0.9 |
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 those cash awards granted for the periods presented: Year Ended December 31 $ in millions 2019 2018 2017 Minimum aggregate payout amount $ 36 $ 36 $ 38 Maximum aggregate payout amount 203 205 201 |
Leases Leases (Tables)
Leases Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | Total lease cost is comprised of the following: $ in millions Year Ended December 31, 2019 Operating lease cost $ 318 Variable lease cost 11 Short-term lease cost 75 Total lease cost $ 404 |
Supplemental Balance Sheet Disclosures [Text Block] | Supplemental operating lease balance sheet information consists of the following: $ in millions December 31, 2019 Operating lease right-of-use assets $ 1,511 Other current liabilities 261 Operating lease liabilities 1,308 Total operating lease liabilities $ 1,569 |
Other Supplemental Lease Information [Table Text Block] | Other supplemental operating lease information consists of the following: $ in millions Year Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 307 Right-of-use assets obtained in exchange for new lease liabilities 462 Weighted average remaining lease term 11.6 years Weighted average discount rate 3.8 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Maturities of operating lease liabilities as of December 31, 2019 are as follows: $ in millions Year Ending December 31 2020 $ 300 2021 262 2022 224 2023 185 2024 146 Thereafter 875 Total lease payments 1,992 Less: imputed interest (423 ) Present value of operating lease liabilities $ 1,569 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of December 31, 2018 , future minimum lease payments under long-term non-cancelable operating leases as classified under ASC 840 were as follows: $ in millions Year Ending December 31 2019 $ 312 2020 270 2021 221 2022 186 2023 152 Thereafter 939 Total minimum lease payments $ 2,080 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Sales and operating income by segment | The following table presents sales and operating income by segment: Year Ended December 31 $ in millions 2019 2018 2017 Sales Aeronautics Systems $ 11,116 $ 10,293 $ 9,040 Defense Systems 7,495 6,612 5,479 Mission Systems 9,410 8,949 8,460 Space Systems 7,425 5,845 4,719 Intersegment eliminations (1,605 ) (1,604 ) (1,694 ) Total sales 33,841 30,095 26,004 Operating income Aeronautics Systems 1,170 1,107 848 Defense Systems 781 690 534 Mission Systems 1,382 1,215 1,157 Space Systems 781 635 578 Intersegment eliminations (205 ) (200 ) (214 ) Total segment operating income 3,909 3,447 2,903 Net FAS (service)/CAS pension adjustment 465 613 638 Unallocated corporate expense (405 ) (280 ) (323 ) Total operating income $ 3,969 $ 3,780 $ 3,218 |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Sales by Customer Type Year Ended December 31 2019 2018 2017 $ in millions $ % (3) $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 9,258 83 % $ 8,732 85 % $ 7,817 86 % International (2) 1,688 15 % 1,402 13 % 1,107 12 % Other customers 67 1 % 86 1 % 70 1 % Intersegment sales 103 1 % 73 1 % 46 1 % Aeronautics Systems sales 11,116 100 % 10,293 100 % 9,040 100 % Defense Systems U.S. government (1) 4,952 66 % 4,132 62 % 3,422 62 % International (2) 1,442 19 % 1,249 19 % 726 13 % Other customers 410 6 % 481 7 % 357 7 % Intersegment sales 691 9 % 750 12 % 974 18 % Defense Systems sales 7,495 100 % 6,612 100 % 5,479 100 % Mission Systems U.S. government (1) 6,765 72 % 6,501 73 % 6,186 73 % International (2) 1,839 19 % 1,653 18 % 1,565 18 % Other customers 78 1 % 77 1 % 71 1 % Intersegment sales 728 8 % 718 8 % 638 8 % Mission Systems sales 9,410 100 % 8,949 100 % 8,460 100 % Space Systems U.S. government (1) 6,959 94 % 5,431 93 % 4,544 96 % International (2) 185 2 % 130 2 % 54 1 % Other customers 198 3 % 221 4 % 85 2 % Intersegment sales 83 1 % 63 1 % 36 1 % Space Systems sales 7,425 100 % 5,845 100 % 4,719 100 % Total U.S. government (1) 27,934 83 % 24,796 82 % 21,969 85 % International (2) 5,154 15 % 4,434 15 % 3,452 13 % Other customers 753 2 % 865 3 % 583 2 % Total Sales $ 33,841 100 % $ 30,095 100 % $ 26,004 100 % (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. |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Sales by Contract Type Year Ended December 31 2019 2018 2017 $ in millions $ % (1) $ % (1) $ % (1) Aeronautics Systems Cost-type $ 5,299 48 % $ 5,066 50 % $ 4,743 53 % Fixed-price 5,714 52 % 5,154 50 % 4,251 47 % Intersegment sales 103 73 46 Aeronautics Systems sales 11,116 10,293 9,040 Defense Systems Cost-type 2,509 37 % 2,386 41 % 2,354 52 % Fixed-price 4,295 63 % 3,476 59 % 2,151 48 % Intersegment sales 691 750 974 Defense Systems sales 7,495 6,612 5,479 Mission Systems Cost-type 3,335 38 % 3,099 38 % 2,919 37 % Fixed-price 5,347 62 % 5,132 62 % 4,903 63 % Intersegment sales 728 718 638 Mission Systems sales 9,410 8,949 8,460 Space Systems Cost-type 5,336 73 % 4,453 77 % 4,181 89 % Fixed-price 2,006 27 % 1,329 23 % 502 11 % Intersegment sales 83 63 36 Space Systems sales 7,425 5,845 4,719 Total Cost-type 16,479 49 % 15,004 50 % 14,197 55 % Fixed-price 17,362 51 % 15,091 50 % 11,807 45 % Total Sales $ 33,841 $ 30,095 $ 26,004 (1) Percentages calculated based on external customer sales. |
Revenue from External Customers by Geographic Areas [Table Text Block] | Sales by Geographic Region Year Ended December 31 2019 2018 2017 $ in millions $ % (2) $ % (2) $ % (2) Aeronautics Systems United States $ 9,325 85 % $ 8,818 86 % $ 7,887 88 % Asia/Pacific 810 7 % 677 7 % 635 7 % All other (1) 878 8 % 725 7 % 472 5 % Intersegment sales 103 73 46 Aeronautics Systems sales 11,116 10,293 9,040 Defense Systems United States 5,362 79 % 4,613 79 % 3,779 84 % Asia/Pacific 369 5 % 365 6 % 194 4 % All other (1) 1,073 16 % 884 15 % 532 12 % Intersegment sales 691 750 974 Defense Systems sales 7,495 6,612 5,479 Mission Systems United States 6,843 79 % 6,578 80 % 6,257 80 % Asia/Pacific 637 7 % 592 7 % 617 8 % All other (1) 1,202 14 % 1,061 13 % 948 12 % Intersegment sales 728 718 638 Mission Systems sales 9,410 8,949 8,460 Space Systems United States 7,157 98 % 5,652 98 % 4,629 99 % Asia/Pacific 20 — % 32 — % 15 — % All other (1) 165 2 % 98 2 % 39 1 % Intersegment sales 83 63 36 Space Systems sales 7,425 5,845 4,719 Total United States 28,687 85 % 25,661 85 % 22,552 87 % Asia/Pacific 1,836 5 % 1,666 6 % 1,461 5 % All other (1) 3,318 10 % 2,768 9 % 1,991 8 % Total Sales $ 33,841 $ 30,095 $ 26,004 (1) All other is principally comprised of Europe and the Middle East. (2) Percentages calculated based on external customer sales. |
Intersegment sales and operating income | The following table presents intersegment sales and operating income before eliminations: Year Ended December 31 $ in millions 2019 2018 2017 Sales Operating Income Sales Operating Income Sales Operating Income Intersegment sales and operating income Aeronautics Systems $ 103 $ 10 $ 73 $ 8 $ 46 $ 5 Defense Systems 691 74 750 74 974 97 Mission Systems 728 113 718 115 638 106 Space Systems 83 8 63 3 36 6 Total $ 1,605 $ 205 $ 1,604 $ 200 $ 1,694 $ 214 |
Total assets by segment | The following table presents assets by segment: December 31 $ in millions 2019 2018 Assets Aeronautics Systems $ 9,104 $ 8,396 Defense Systems 7,420 7,178 Mission Systems 9,934 9,400 Space Systems 10,595 9,148 Corporate assets (1) 4,036 3,531 Total assets $ 41,089 $ 37,653 (1) Corporate assets principally consist of cash and cash equivalents, refundable taxes, deferred tax assets, property, plant and equipment and marketable securities. |
Additional information by segment | The following table presents capital expenditures and depreciation and amortization by segment: Year Ended December 31 $ in millions 2019 2018 2017 2019 2018 2017 Capital Expenditures Depreciation and Amortization (1) Aeronautics Systems $ 528 $ 657 $ 574 $ 224 $ 190 $ 164 Defense Systems 71 66 14 44 65 47 Mission Systems 229 197 158 133 121 117 Space Systems 352 226 98 189 130 77 Corporate 84 103 84 428 294 70 Total $ 1,264 $ 1,249 $ 928 $ 1,018 $ 800 $ 475 (1) Beginning in 2018, corporate amounts include the 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 as they are not considered part of management’s evaluation of segment operating performance. |
Unaudited Selected Quarterly _2
Unaudited Selected Quarterly Data (Tables) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Quarterly Financial Information [Table Text Block] | 2019 In millions, except per share amounts 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Sales $ 8,189 $ 8,456 $ 8,475 $ 8,721 Operating income 936 946 951 1,136 Net earnings (loss) 863 861 933 (409 ) Basic earnings (loss) per share 5.08 5.07 5.52 (2.43 ) Diluted earnings (loss) per share (1) 5.06 5.06 5.49 (2.43 ) Weighted-average common shares outstanding 170.0 169.7 169.1 168.4 Weighted-average diluted shares outstanding (1) 170.7 170.3 169.9 168.4 | 2018 In millions, except per share amounts 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Sales $ 6,735 $ 7,119 $ 8,085 $ 8,156 Operating income 848 817 1,172 943 Net earnings 840 789 1,244 356 Basic earnings per share 4.82 4.52 7.15 2.07 Diluted earnings per share 4.79 4.50 7.11 2.06 Weighted-average common shares outstanding 174.3 174.5 174.1 171.8 Weighted-average diluted shares outstanding 175.4 175.4 174.9 172.6 |
Amounts in Paragraphs - Summary
Amounts in Paragraphs - Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies (Amounts in paragraphs) | |||
Research and development expenses | $ 953 | $ 764 | $ 639 |
Research and Development as a Percent of Sales | 2.80% | 2.50% | 2.50% |
Cash surrender value of life insurance | $ 380 | $ 316 | |
Stock plans, vesting period | 3 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Property, Plant and Equipment (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | $ 12,762 | $ 11,741 |
Accumulated depreciation | (5,850) | (5,369) |
Property, plant, and equipment, net | 6,912 | 6,372 |
Land and land improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 619 | 636 |
Buildings and improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 2,575 | 2,139 |
Machinery and other equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 6,997 | 6,618 |
Capitalized software costs | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 606 | 603 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | $ 1,965 | $ 1,745 |
Minimum | Capitalized software costs | ||
Property, Plant and Equipment | ||
Property, plant and equipment, estimated useful life | 3 years | |
Maximum [Member] | Land and land improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, estimated useful life | 40 years | |
Maximum [Member] | Buildings and improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, estimated useful life | 45 years | |
Maximum [Member] | Machinery and other equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, estimated useful life | 20 years | |
Maximum [Member] | Capitalized software costs | ||
Property, Plant and Equipment | ||
Property, plant and equipment, estimated useful life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Accumulated Other Comprehensive Income (Loss) (Details 3) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accumulated Other Comprehensive Loss | ||
Unamortized prior service credit, net of tax expense of $17 for 2019 and $32 for 2018 | $ 51 | $ 98 |
Cumulative translation adjustment | (147) | (144) |
Other, net | (1) | (6) |
Total accumulated other comprehensive loss | (97) | (52) |
Unamortized benefit plan costs - Tax Benefit | $ 17 | $ 32 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Contract Estimates (Details 4) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in Accounting Estimate [Line Items] | ||||||||||||
Contract with Customer, Performance Obligation Satisfied in Previous Period | $ 538 | $ 631 | $ 374 | |||||||||
Operating income | $ 1,136 | $ 951 | $ 946 | $ 936 | $ 943 | $ 1,172 | $ 817 | $ 848 | 3,969 | 3,780 | 3,218 | |
Net earnings | $ (409) | $ 933 | $ 861 | $ 863 | $ 356 | $ 1,244 | $ 789 | $ 840 | $ 2,248 | $ 3,229 | $ 2,869 | |
Diluted earnings per share | $ (2.43) | $ 5.49 | $ 5.06 | $ 5.06 | $ 2.06 | $ 7.11 | $ 4.50 | $ 4.79 | $ 13.22 | $ 18.49 | $ 16.34 | |
Contracts Accounted for under Percentage of Completion [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Operating income | $ 480 | $ 577 | $ 360 | |||||||||
Net earnings | $ 379 | $ 456 | $ 234 | |||||||||
Diluted earnings per share | $ 2.23 | $ 2.61 | $ 1.33 | |||||||||
Aeronautics Systems | Contracts Accounted for under Percentage of Completion [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Operating income | $ 69 | |||||||||||
Space Systems | Contracts Accounted for under Percentage of Completion [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Operating income | $ 56 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Backlog and Contract Assets and Liabilities (Details 5) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Revenue, Remaining Performance Obligation, Amount | $ 64,800 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | We expect to recognize approximately 45 percent and 70 percent of our December 31, 2019 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. | ||
Unbilled Receivables, Current | $ 5,334 | $ 5,026 | |
Amount of increase (decrease) in Unbilled Receivables | $ 308 | ||
Percent increase (decrease) in Unbilled Receivables | 6.00% | ||
Contract with Customer, Liability, Current | $ (2,237) | (1,917) | |
Amount of decrease (increase) in Contract with Customer, Liability, Current | $ (320) | ||
Percent decrease (increase) in Contract with Customer, Liability, Current | 17.00% | ||
Contract with Customer, Asset, Net, Current | $ 3,097 | 3,109 | |
Amount of increase (decrease) in net contract assets (liabilities) | $ (12) | ||
Percent increase (decrease) in net contract assets (liabilities) | 0.00% | ||
Contract with Customer, Liability, Revenue Recognized | $ 1,300 | $ 1,300 | $ 1,200 |
Acquisition of Orbital ATK Oper
Acquisition of Orbital ATK Operating Results Post Acquisition (Details 1) - USD ($) $ in Millions | Jun. 06, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred | $ 7,742 | ||||||||||||
Revenues | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 | ||
Operating Income (Loss) | 1,136 | 951 | 946 | 936 | 943 | 1,172 | 817 | 848 | 3,969 | 3,780 | 3,218 | ||
Net earnings | $ (409) | $ 933 | $ 861 | $ 863 | $ 356 | $ 1,244 | $ 789 | $ 840 | $ 2,248 | 3,229 | $ 2,869 | ||
Business Combination, Acquisition Related Costs | $ 29 | ||||||||||||
Orbital ATK [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenues | $ 3,100 | ||||||||||||
Operating Income (Loss) | 342 | ||||||||||||
Net earnings | $ 273 |
Acquisition of Orbital ATK Purc
Acquisition of Orbital ATK Purchase Price Allocation (Details 2) - USD ($) $ / shares in Units, $ in Millions | Jun. 06, 2018 | Jun. 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles | $ 220 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Other current liabilities | 114 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Pension and other post-retirement benefit plan liabilities | 56 | ||||
Business Combination, Provisional, Initial Accounting Incomplete, Adjustments, Other Non-Current Liabilities | 53 | ||||
Business Combination, Provisional, Initial Accounting Incomplete, Adjustments, Other Current Assets | 44 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Goodwill | $ 36 | ||||
Goodwill | $ 18,708 | $ 18,672 | $ 12,455 | ||
Shares of Orbital ATK common stock outstanding as of the Merger date | 57,562,152 | ||||
Cash consideration per share of Orbital ATK common stock | $ 134.50 | ||||
Total purchase price | $ 7,742 | ||||
Orbital ATK [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 85 | ||||
Accounts receivable | 596 | ||||
Unbilled receivables | 1,237 | ||||
Inventoried costs | 220 | ||||
Other current assets | 237 | ||||
Property, plant and equipment | 1,509 | ||||
Goodwill | 6,259 | ||||
Intangible assets | 1,525 | ||||
Other non-current assets | 151 | ||||
Total assets acquired | 11,819 | ||||
Trade accounts payable | (397) | ||||
Accrued employee compensation | (158) | ||||
Advance payments and billings in excess of costs incurred | (222) | ||||
Below market contracts(1) | (151) | ||||
Other current liabilities | (412) | ||||
Long-term debt | (1,687) | ||||
Pension and OPB plan liabilities | (613) | ||||
Deferred tax liabilities | (248) | ||||
Other non-current liabilities | (189) | ||||
Total liabilities assumed | (4,077) | ||||
Total purchase price | $ 7,742 |
Acquisition of Orbital ATK Acqu
Acquisition of Orbital ATK Acquired Purchased Intangbile Assets (Details 3) - USD ($) $ in Millions | Jun. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 18,708 | $ 18,672 | $ 12,455 | |
Orbital ATK [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,525 | |||
Goodwill | $ 6,259 | |||
Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 280 | |||
Customer Contracts [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,245 |
Acquisition of Orbital ATK Pro
Acquisition of Orbital ATK Pro Forma Financial Information (Details 4) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Business Acquisition, Pro Forma Revenue | $ 32,319 | $ 30,634 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 3,417 | $ 2,938 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 19.57 | $ 16.73 |
Pro Forma Adjustments, Orbital ATK ASC606 Sales adjustment | $ 21 | |
Pro Forma Adjustments, Orbital ATK ASC606 Cost of Sales adjustment | 21 | |
Pro Forma Adjustments, Orbital ATK intercompany sales elimination | $ 80 | 155 |
Pro Forma Adjustments, Elimination of nonrecurring transaction costs | 71 | 57 |
Pro Forma Adjustments, Additional depreciation expense, net of removal of historical depreciation | 8 | 40 |
Pro Forma Adjustments, Additional interest expense due to debt issued to finance merger | 208 | |
Pro Forma Adjustments, Additional amortization expense, net of removal of historical amortization expense | 90 | 290 |
Pro Forma Adjustments, Elimination of Orbital ATK’s historical amortization of net actuarial losses and prior service credits and revised pension and other post-retirement costs | 51 | 110 |
Income Tax Effects of Pro Forma Adjustments | $ (5) | $ 130 |
Earnings Per Share, Share Rep_3
Earnings Per Share, Share Repurchases and Dividends on Common Stock Share Repurchases (Details 1) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | 33 Months Ended | 42 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2019 | Dec. 04, 2018 | Sep. 16, 2015 | |
Stock Repurchase [Line Items] | |||||||
Shares Repurchased | 3.2 | 3.8 | 1.6 | ||||
September 2015 Share Repurchase Original Authorization | |||||||
Stock Repurchase [Line Items] | |||||||
Amount Authorized | $ 4,000 | ||||||
Total Shares Retired | 14.5 | ||||||
Average Price Per Share | $ 255.04 | ||||||
Shares Repurchased | 3.2 | 3.8 | 1.6 | ||||
Amount repurchased | $ 3,700 | ||||||
Amount remaining under authorization for share repurchases | $ 300 | ||||||
December 2018 Share Repurchase Program Original Authorization | |||||||
Stock Repurchase [Line Items] | |||||||
Amount Authorized | $ 3,000 | ||||||
Total Shares Retired | 0 | ||||||
Average Price Per Share | $ 0 | ||||||
Shares Repurchased | 0 | 0 | 0 |
Earnings Per Share, Share Rep_4
Earnings Per Share, Share Repurchases and Dividends on Common Stock Accelerated Share Repurchase Program and Dividends (Details 2) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 2 Months Ended | 12 Months Ended | 33 Months Ended | |||||||||
May 31, 2019 | May 31, 2018 | Jan. 31, 2018 | May 30, 2017 | May 31, 2016 | Jan. 04, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Oct. 29, 2018 | Sep. 16, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Accelerated Share Repurchase | $ 1,000 | ||||||||||||
Accelerated Share Repurchases, Payment | $ 1,000 | ||||||||||||
Accelerated Share Repurchase Initial Receipt of Shares | 3 | ||||||||||||
Accelerated Share Repurchase Initial Receipt Monetary | $ 800 | ||||||||||||
Accelerated Share Repurchase Final Receipt Shares | 0.9 | ||||||||||||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 260.32 | ||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||||
Dilutive effect of stock options and other stock awards granted | 0.7 | 0.9 | 1.2 | ||||||||||
Increase (Decrease) in Stock Dividend, Percentage | 10.00% | 9.00% | 10.00% | 11.00% | |||||||||
Common stock dividend (in dollars per share) | $ 1.32 | $ 1.20 | $ 1.10 | $ 1 | $ 0.90 | $ 5.16 | $ 4.70 | $ 3.90 | |||||
September 2015 Share Repurchase Original Authorization [Member] | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Treasury Stock, Value, Acquired, Par Value Method | $ 3,700 | ||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||||
Stock Repurchase Program, Authorized Amount | $ 4,000 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Accounts receivable, gross | $ 1,359 | $ 1,482 |
Allowance for doubtful accounts | (33) | (34) |
Accounts receivable, net | 1,326 | 1,448 |
US Government [Member] | ||
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Accounts receivable, gross | 1,030 | 1,164 |
International and Other Customers [Member] | ||
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Accounts receivable, gross | $ 329 | $ 318 |
Unbilled Receivables, Net (Deta
Unbilled Receivables, Net (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unbilled receivable, net of progress and performance-based payments received | $ 5,379 | $ 5,065 |
Allowance for doubtful accounts | (45) | (39) |
Unbilled receivables, net | 5,334 | 5,026 |
US Government [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unbilled receivables | 17,347 | 16,823 |
Government Contract Receivable, Progress Payment Offset | 12,838 | 12,539 |
Government Contract Receivable, Unbilled Amounts | 4,509 | 4,284 |
International and Other Customers [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unbilled receivables | 4,063 | 3,811 |
Progress and performance-based payments received | (3,193) | (3,030) |
Unbilled receivable, net of progress and performance-based payments received | $ 870 | $ 781 |
Inventoried Costs, Net (Details
Inventoried Costs, Net (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Production costs of contracts in process | $ 476 | $ 402 |
General and administrative expenses | 31 | 16 |
Inventoried costs | 507 | 418 |
Progress and performance-based payments received | (41) | (41) |
Inventoried costs, net of progress payments | 466 | 377 |
Product inventory | 317 | 277 |
Inventory, Net | $ 783 | $ 654 |
Income Taxes Federal and Foreig
Income Taxes Federal and Foreign Income Tax Expense (Details 1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes on Continuing Operations (Table Amounts) | |||
Current federal income tax expense (benefit) | $ 758 | $ 292 | $ 449 |
Deferred federal income tax expense (benefit) | (474) | 213 | 907 |
Total federal income tax expense (benefit) | 284 | 505 | 1,356 |
Current foreign income tax expense (benefit) | 10 | 7 | 8 |
Deferred foreign income tax expense (benefit) | 6 | 1 | (4) |
Total foreign income tax expense (benefit) | 16 | 8 | 4 |
Total federal and foreign income tax expense | $ 300 | $ 513 | $ 1,360 |
Income Taxes Effective Income T
Income Taxes Effective Income Tax Rate Reconciliation (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Reconciliation (Table Amounts) [Abstract] | |||
Income tax expense at statutory rate | $ 535 | $ 786 | $ 1,480 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 35.00% |
Stock compensation - excess tax benefits | $ (14) | $ (27) | $ (48) |
Stock compensation - excess tax benefits, Percent | (0.50%) | (0.70%) | (1.10%) |
Research credit | $ (216) | $ (186) | $ (130) |
Research credit, Percent | (8.50%) | (5.00%) | (3.10%) |
Foreign derived intangible income | $ (28) | $ (16) | $ 0 |
Foreign derived intangible income, Percent | (1.10%) | (0.40%) | 0.00% |
Manufacturing deduction | $ 0 | $ 0 | $ (97) |
Manufacturing deduction, Percent | 0.00% | 0.00% | (2.30%) |
Settlements with taxing authorities | $ 0 | $ 0 | $ (42) |
Settlements with taxing authorities, Percent | 0.00% | 0.00% | (1.00%) |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Amount | $ 0 | $ (84) | $ 285 |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Percent | 0 | (0.022) | 0.068 |
Effective Tax Rate Reconciliation, Mark-to-Market benefit tax rate differential, amount | $ 0 | $ 0 | $ (72) |
Effective Tax Rate Reconciliation, Mark-to-Market benefit tax rate differential, percent | 0.00% | 0.00% | (1.70%) |
Other, net | $ 23 | $ 40 | $ (16) |
Other net, Percent | 0.90% | 1.00% | (0.40%) |
Total federal and foreign income tax expense | $ 300 | $ 513 | $ 1,360 |
Effective income tax rate | 11.80% | 13.70% | 32.20% |
Income Taxes Unrecognized Tax B
Income Taxes Unrecognized Tax Benefits (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits, Increase Resulting from 2017 Tax Act | $ 319 | ||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 60 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 56 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 570 | ||
Unrecognized Tax Benefits Rollforward (Table Amounts) [Abstract] | |||
Unrecognized tax benefits at beginning of the year | 748 | $ 283 | $ 135 |
Additions based on tax positions related to the current year | 158 | 293 | 102 |
Additions for tax positions of prior years | 400 | 207 | 110 |
Reductions for tax positions of prior years | (65) | (23) | (44) |
Settlements with taxing authorities | (15) | (7) | (20) |
Other, net | (3) | (5) | 0 |
Net change in unrecognized tax benefits | 475 | 465 | 148 |
Unrecognized tax benefits at end of the year | $ 1,223 | $ 748 | $ 283 |
Income Taxes Deferred Income Ta
Income Taxes Deferred Income Taxes (Details 4) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets (Table Amounts) | ||
Retiree benefits | $ 1,827 | $ 1,541 |
Accrued employee compensation | 336 | 308 |
Provisions for accrued liabilities | 166 | 139 |
Inventory | 684 | 650 |
Stock-based compensation | 38 | 42 |
Operating lease liabilities | 411 | 0 |
Tax credits | 166 | 174 |
Other | 73 | 59 |
Gross deferred tax assets | 3,701 | 2,913 |
Less valuation allowance | (160) | (142) |
Net deferred tax assets | 3,541 | 2,771 |
Deferred Tax Liabilities (Table Amounts) | ||
Goodwill | 515 | 511 |
Purchased intangibles | 262 | 346 |
Property, plant and equipment, net | 584 | 518 |
Operating lease right-of-use assets | 404 | 0 |
Contract accounting differences | 1,225 | 1,381 |
Other | 43 | 29 |
Deferred tax liabilities | 3,033 | 2,785 |
Total net deferred tax assets (liabilities) | $ (14) | |
Total net deferred tax assets (liabilities) | $ 508 |
Amounts in Paragraphs - Income
Amounts in Paragraphs - Income Taxes (Details 5) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Reconciliation, change in enacted tax rate due to 2017 Tax Act, amount | $ 5 | ||
Effective income tax rate | 11.80% | 13.70% | 32.20% |
Significant matters affecting comparability | (3.70%) | (1.10%) | |
Increase in Research Tax Credit | $ 30 | $ 56 | |
Increase in Foreign Derived Intangible Income | 12 | ||
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Amount | 0 | (84) | $ 285 |
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount | 0 | 0 | 97 |
Effective Tax Rate Reconciliation, Mark-to-Market benefit tax rate differential, amount | 0 | 0 | 72 |
Income taxes paid, net | 324 | $ 270 | $ 517 |
Tax Credit Carryforward, Amount | 324 | ||
Operating Loss Carryforwards | 310 | ||
Tax Credit Carryforward, Valuation Allowance | 121 | ||
Operating Loss Carryforwards, Valuation Allowance | $ 32 |
Goodwill and Other Purchased _3
Goodwill and Other Purchased Intangible Assets Goodwill Rollforward (Details 1) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill (Table Amounts) | ||
Beginning balance | $ 18,672 | $ 12,455 |
Acquisition of Orbital ATK | 37 | 6,222 |
Other | (1) | (5) |
Ending balance | 18,708 | 18,672 |
Aeronautics Systems | ||
Goodwill (Table Amounts) | ||
Beginning balance | 3,467 | 2,969 |
Acquisition of Orbital ATK | 0 | 498 |
Other | 0 | 0 |
Ending balance | 3,467 | 3,467 |
Defense Systems | ||
Goodwill (Table Amounts) | ||
Beginning balance | 4,377 | 2,259 |
Acquisition of Orbital ATK | 0 | 2,123 |
Other | (1) | (5) |
Ending balance | 4,376 | 4,377 |
Mission Systems | ||
Goodwill (Table Amounts) | ||
Beginning balance | 6,062 | 6,062 |
Acquisition of Orbital ATK | 0 | 0 |
Other | 0 | 0 |
Ending balance | 6,062 | 6,062 |
Space Systems | ||
Goodwill (Table Amounts) | ||
Beginning balance | 4,766 | 1,165 |
Acquisition of Orbital ATK | 37 | 3,601 |
Other | 0 | 0 |
Ending balance | $ 4,803 | $ 4,766 |
Goodwill and Other Purchased _4
Goodwill and Other Purchased Intangible Assets Other Purchased Intangible Assets (Details 2) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross customer-related and other intangible assets | $ 3,356 | $ 3,356 |
Less accumulated amortization | (2,316) | (1,984) |
Net contract, program and other intangible assets | $ 1,040 | $ 1,372 |
Goodwill and Other Purchased _5
Goodwill and Other Purchased Intangible Assets Future Amortization of Purchased Intangibles (Details 3) $ in Millions | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 262 |
2021 | 204 |
2022 | 197 |
2023 | 78 |
2024 | $ 55 |
Goodwill and Other Purchased _6
Goodwill and Other Purchased Intangible Assets Amounts in Paragraphs - Goodwill and Other Purchased Intangible Assets (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | |||
Amortization of Intangible Assets | $ 332 | $ 203 | $ 14 |
Aeronautics Systems | |||
Goodwill [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | 417 | 417 | |
Space Systems | |||
Goodwill [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | $ 153 | $ 153 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details 1) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | $ 382 | $ 335 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 364 | 319 |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 1 | 1 |
Derivative Assets (Liabilities), at Fair Value, Net | (3) | (10) |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 365 | 320 |
Derivative Assets (Liabilities), at Fair Value, Net | (3) | (10) |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 364 | 319 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | 1 | 1 |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | $ 17 | $ 15 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments Amounts in Paragraphs - Fair Value of Financial Instruments (Details 2) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | $ 98 | $ 114 |
Foreign Currency Cash Flow Hedge Derivative at Fair Value, Net | $ 7 | $ 0 |
Debt Fixed-rate Notes and Other
Debt Fixed-rate Notes and Other (Details 1) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Long-Term Debt (Table Amounts) [Abstract] | ||
Long-term debt | $ 13,879 | |
Other long-term debt | 272 | $ 272 |
Debt issuance costs | (64) | (73) |
Total long-term debt | 13,879 | 14,400 |
Less: current portion | 1,109 | 517 |
Long-term Debt and Lease Obligation | $ 12,770 | 13,883 |
2019 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.05% | |
Long-term debt | $ 0 | 500 |
2020 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.08% | |
Long-term debt | $ 1,000 | 1,000 |
2021 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | |
Long-term debt | $ 700 | 700 |
2022 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.55% | |
Long-term debt | $ 1,500 | 1,500 |
2023 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | |
Long-term debt | $ 1,050 | 1,050 |
2025 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.93% | |
Long-term debt | $ 1,500 | 1,500 |
2026 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Long-term debt | $ 527 | 527 |
2027 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.20% | |
Long-term debt | $ 750 | 750 |
2028 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | |
Long-term debt | $ 2,000 | 2,000 |
2031 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | |
Long-term debt | $ 466 | 466 |
2040 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.05% | |
Long-term debt | $ 300 | 300 |
2043 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | |
Long-term debt | $ 950 | 950 |
2045 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | |
Long-term debt | $ 600 | 600 |
2047 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.03% | |
Long-term debt | $ 2,250 | 2,250 |
Two Year Term [Member] [Domain] | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.89% | |
Credit facilities | $ 78 | $ 108 |
Minimum | 2026 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | |
Maximum | 2026 | ||
Long-Term Debt (Table Amounts) [Abstract] | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.88% |
Debt Maturities of Long-term De
Debt Maturities of Long-term Debt (Details 2) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Maturities of Long-term Debt [Abstract] | ||
2020 | $ 1,110 | |
2021 | 742 | |
2022 | 1,505 | |
2023 | 1,053 | |
2024 | 3 | |
Thereafter | 9,532 | |
Total principal payments | 13,945 | |
Unamortized premium on long-term debt, net of discount | (2) | |
Debt issuance costs | (64) | $ (73) |
Total long-term debt | $ 13,879 |
Amounts in Paragraphs - Debt (D
Amounts in Paragraphs - Debt (Details 3) £ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($)Rate | Dec. 31, 2018USD ($)Rate | Dec. 31, 2017USD ($) | Dec. 31, 2019GBP (£) | |
Debt Instrument [Line Items] | ||||
Credit Facility, Covenant Terms, Maximum Debt to Capitalization Ratio | The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreements) to exceed 65 percent. | |||
Line of Credit Facility, Covenant Compliance | the company was in compliance with all covenants under its credit agreements. | |||
Long-term Debt, Fair Value | $ 15,100 | $ 14,300 | ||
Interest paid, net of interest received | 521 | 456 | $ 273 | |
Five Year Term [Member] [Domain] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,000 | |||
Credit facilities | 0 | |||
Two Year Term [Member] [Domain] | ||||
Debt Instrument [Line Items] | ||||
Credit facilities | 78 | 108 | ||
Revolving Credit Facility [Member] | Two Year Term [Member] [Domain] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 155 | £ 120 | ||
Credit facilities | £ | £ 60 | |||
London Interbank Offered Rate (LIBOR) [Member] | Two Year Term [Member] [Domain] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | Rate | 1.10% | |||
Commercial Paper [Member] | ||||
Debt Instrument [Line Items] | ||||
Commercial Paper, Maximum Borrowing Capacity | $ 2,000 | |||
Short-term Debt | $ 0 | $ 198 | ||
Short-term Debt, Weighted Average Interest Rate, at Point in Time | Rate | 2.77% | |||
Debt Instrument, Term | 3 months |
Investigations, Claims and Li_2
Investigations, Claims and Litigation (Details 1) € in Millions, R$ in Millions, $ in Millions | Jun. 07, 2019USD ($) | Dec. 31, 2007USD ($) | Nov. 13, 2018USD ($) | Nov. 13, 2018BRL (R$) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($)Defendant | Dec. 31, 2019BRL (R$)Defendant | Dec. 31, 2019USD ($) | Feb. 16, 2018USD ($) | May 04, 2012USD ($) |
United States Postal Service [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
CounterclaimForDamagesSought | $ 193 | ||||||||||
Solystic Matter [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Damages Sought, Value | $ 27 | R$ 111 | |||||||||
Counterclaim | $ 35 | € 31 | |||||||||
Loss Contingency, Damages Awarded, Value | $ 10 | R$ 41 | |||||||||
Orbital ATK [Domain] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Damages Awarded, Value | $ 108 | ||||||||||
Unpaid Portions of Contract Price and Direct Costs Incurred [Member] | United States Postal Service [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Receivables, unpaid long-term contracts | $ 63 | ||||||||||
Acts and Omissions with Adverse Affects on Performance and Obligations [Member] | United States Postal Service [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Gain Contingency, Unrecorded Amount | $ 115 | ||||||||||
United States Postal Service [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Contract award | $ 875 | ||||||||||
United States Postal Service [Member] | False Claims Act [Member] | Threatened Litigation [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Damages Sought, Value | $ 179 | ||||||||||
Solystic Matter [Member] | Solystic Matter [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Number of Defendants | Defendant | 2 | 2 | |||||||||
Initial Claim [Member] | Solystic Matter [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Damages Sought, Value | $ 22 | R$ 89 | |||||||||
Incremental claim [Member] | Solystic Matter [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Damages Sought, Value | 5 | R$ 22 | |||||||||
Maximum [Member] | United States Postal Service [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Estimate of Possible Loss | $ 410 | $ 410 | $ 410 |
Commitments and Contingencies_2
Commitments and Contingencies (Details 1) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Environmental Commitments and Contingencies (Amounts in Paragraphs) | ||
Amounts accrued for probable environmental remediation costs | $ 531 | $ 461 |
Loss Contingency, Range of Possible Loss, Portion Not Accrued | 448 | 374 |
Recorded Third-Party Environmental Recoveries, Amount | 436 | $ 343 |
Financial Arrangements (Amounts in Paragraph) | ||
Unused standby letters of credit and bank guarantees | 498 | |
Surety Bond Outstanding | 182 | |
Other Current Liabilities [Member] | ||
Environmental Commitments and Contingencies (Amounts in Paragraphs) | ||
Amounts accrued for probable environmental remediation costs | 148 | |
Other Noncurrent Liabilities [Member] | ||
Environmental Commitments and Contingencies (Amounts in Paragraphs) | ||
Amounts accrued for probable environmental remediation costs | 383 | |
Prepaid Expenses and Other Current Assets [Member] | ||
Environmental Commitments and Contingencies (Amounts in Paragraphs) | ||
Recorded Third-Party Environmental Recoveries, Amount | 119 | |
Other Noncurrent Assets [Member] | ||
Environmental Commitments and Contingencies (Amounts in Paragraphs) | ||
Recorded Third-Party Environmental Recoveries, Amount | $ 317 |
Retirement Benefits Net Periodi
Retirement Benefits Net Periodic Benefit Cost (Benefit) (Details 1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of Net Periodic Benefit Cost (Table Amounts) [Abstract] | |||
Mark-to-market expense (benefit) | $ (1,800) | $ (655) | $ 536 |
Pension Benefits | |||
Components of Net Periodic Benefit Cost (Table Amounts) [Abstract] | |||
Service cost | 367 | 404 | 388 |
Interest cost | 1,360 | 1,226 | 1,250 |
Expected return on plan assets | (2,101) | (2,217) | (1,885) |
Amortization of prior service credit | (59) | (58) | (57) |
Mark-to-market expense (benefit) | (1,783) | (699) | 445 |
Other | 0 | 0 | (7) |
Net periodic benefit cost (benefit) | 1,350 | 54 | (756) |
Medical and Life Benefits | |||
Components of Net Periodic Benefit Cost (Table Amounts) [Abstract] | |||
Service cost | 16 | 21 | 20 |
Interest cost | 80 | 76 | 85 |
Expected return on plan assets | (92) | (101) | (89) |
Amortization of prior service credit | (3) | (21) | (22) |
Mark-to-market expense (benefit) | (17) | 44 | 91 |
Other | 0 | 0 | 0 |
Net periodic benefit cost (benefit) | $ 18 | $ (69) | $ (97) |
Retirement Benefits Unamortized
Retirement Benefits Unamortized Prior Service Credit Rollforward (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of: | |||
Prior service credit | $ 62 | $ 79 | $ 79 |
Tax expense (benefit) related to above items | (15) | (19) | (35) |
Change in unamortized benefit plan costs | 47 | 60 | 44 |
Pension Benefits | |||
Amortization of: | |||
Prior service credit | 59 | 58 | 57 |
Tax expense (benefit) related to above items | (14) | (14) | (26) |
Change in unamortized benefit plan costs | 45 | 44 | 31 |
Medical and Life Benefits | |||
Amortization of: | |||
Prior service credit | 3 | 21 | 22 |
Tax expense (benefit) related to above items | (1) | (5) | (9) |
Change in unamortized benefit plan costs | $ 2 | $ 16 | $ 13 |
Retirement Benefits Funded Stat
Retirement Benefits Funded Status of Plan Assets (Liabilities) (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in plan assets | |||
Fair value of plan assets at beginning of year | $ 28,397 | ||
Fair value of plan assets at end of year | 32,038 | $ 28,397 | |
Amounts Recognized on the Balance Sheet | |||
Non-current liability | (6,979) | (5,755) | |
Pension Benefits | |||
Change in plan assets | |||
Fair value of plan assets at beginning of year | 27,150 | 27,226 | |
Net gain (loss) on plan assets | 5,025 | (1,043) | |
Employer contributions | 221 | 370 | |
Participant contributions | 8 | 9 | |
Benefits paid | (1,763) | (1,685) | |
Acquired plan assets | 0 | 2,293 | |
Other | 5 | (20) | |
Fair value of plan assets at end of year | 30,646 | 27,150 | $ 27,226 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 32,231 | 31,967 | |
Service cost | 367 | 404 | 388 |
Interest cost | 1,360 | 1,226 | 1,250 |
Participant contributions | 8 | 9 | |
Actuarial loss (gain) | 4,708 | (2,561) | |
Benefits paid | (1,763) | (1,685) | |
Acquired benefit obligation | 0 | 2,895 | |
Other | 3 | (24) | |
Projected benefit obligation at end of year | 36,914 | 32,231 | 31,967 |
Funded status | (6,268) | (5,081) | |
Amounts Recognized on the Balance Sheet | |||
Non-current assets | 124 | 77 | |
Current liability | (173) | (164) | |
Non-current liability | (6,219) | (4,994) | |
Medical and Life Benefits | |||
Change in plan assets | |||
Fair value of plan assets at beginning of year | 1,247 | 1,338 | |
Net gain (loss) on plan assets | 234 | (65) | |
Employer contributions | 42 | 38 | |
Participant contributions | 24 | 25 | |
Benefits paid | (156) | (148) | |
Acquired plan assets | 0 | 58 | |
Other | 1 | 1 | |
Fair value of plan assets at end of year | 1,392 | 1,247 | 1,338 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 1,930 | 2,110 | |
Service cost | 16 | 21 | 20 |
Interest cost | 80 | 76 | 85 |
Participant contributions | 24 | 25 | |
Actuarial loss (gain) | 159 | (211) | |
Benefits paid | (156) | (148) | |
Acquired benefit obligation | 0 | 50 | |
Other | (5) | 7 | |
Projected benefit obligation at end of year | 2,048 | 1,930 | $ 2,110 |
Funded status | (656) | (683) | |
Amounts Recognized on the Balance Sheet | |||
Non-current assets | 151 | 124 | |
Current liability | (47) | (46) | |
Non-current liability | $ (760) | $ (761) |
Retirement Benefits Accumulated
Retirement Benefits Accumulated Benefit Obligations in Excess of Fair Value (Details 4) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Pension plans with accumulated benefit obligations in excess of fair value of plan assets (Table Amounts) [Abstract] | ||
Projected benefit obligation | $ 34,715 | $ 30,259 |
Accumulated benefit obligation | 34,305 | 29,961 |
Fair value of plan assets | $ 28,324 | $ 25,101 |
Retirement Benefits Plan Assump
Retirement Benefits Plan Assumptions (Details 5) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Benefit Obligation [Member] | ||
Defined Benefit Plan Disclosure (Table Amounts) | ||
Initial health care cost trend rate assumed for the next year | 5.90% | 6.20% |
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% |
Year that the health care cost trend rate reaches the ultimate trend rate | 2023 | 2023 |
Pension Benefits | ||
Assumptions Used to Determine Benefit Obligation | ||
Discount rate | 3.39% | 4.31% |
Initial cash balance crediting rate assumed for the next year | 2.39% | 3.00% |
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate) | 2.64% | 3.25% |
Year that the cash balance crediting rate reaches the ultimate rate | 2025 | 2024 |
Rate of compensation increase | 3.00% | 3.00% |
Assumptions Used to Determine Benefit Cost | ||
Discount rate | 4.31% | 3.68% |
Initial cash balance crediting rate assumed for the next year | 3.00% | 2.75% |
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate) | 3.25% | 3.00% |
Year that the cash balance crediting rate reaches the ultimate rate | 2024 | 2023 |
Expected long-term return on plan assets | 8.00% | 8.00% |
Rate of compensation increase | 3.00% | 3.00% |
Post-retirement Benefit Cost [Member] | ||
Defined Benefit Plan Disclosure (Table Amounts) | ||
Initial health care cost trend rate assumed for the next year | 6.20% | 6.50% |
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% |
Year that the health care cost trend rate reaches the ultimate trend rate | 2023 | 2023 |
Medical and Life Benefits | ||
Assumptions Used to Determine Benefit Obligation | ||
Discount rate | 3.35% | 4.30% |
Assumptions Used to Determine Benefit Cost | ||
Discount rate | 4.30% | 3.66% |
Expected long-term return on plan assets | 7.67% | 7.65% |
Retirement Benefits Plan Asset
Retirement Benefits Plan Asset Allocation (Details 6) | Dec. 31, 2019 |
Cash and Cash Equivalents [Member] | Minimum | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 0.00% |
Cash and Cash Equivalents [Member] | Maximum [Member] | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 12.00% |
Equity Securities [Member] | Minimum | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 30.00% |
Equity Securities [Member] | Maximum [Member] | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 50.00% |
Fixed income securities | Minimum | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 20.00% |
Fixed income securities | Maximum [Member] | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 40.00% |
Alternative investments | Minimum | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 18.00% |
Alternative investments | Maximum [Member] | |
Plan Asset Allocation Ranges (Table Amounts) [Abstract] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 38.00% |
Retirement Benefits Categorizat
Retirement Benefits Categorization of Plan Assets (Details 7) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | $ 32,038 | $ 28,397 |
Cash & cash equivalents | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 2,805 | 2,864 |
U.S. Equity Securities [Member] | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 3,341 | 2,859 |
Alternative Investment, Net Asset Value | 1,131 | 1,170 |
International equities | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 3,273 | 2,712 |
Alternative Investment, Net Asset Value | 5,636 | 4,017 |
U.S. Treasuries | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 2,736 | 1,527 |
U.S. Government Agency | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 297 | 322 |
Non-U.S. Government | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 194 | 206 |
Corporate debt | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 4,541 | 4,175 |
Asset backed | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 892 | 297 |
High yield debt | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 134 | 164 |
Bank loans | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 33 | 20 |
Other | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 52 | 68 |
Fixed Income Funds | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Alternative Investment, Net Asset Value | 438 | 1,386 |
Hedge Funds | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Alternative Investment, Net Asset Value | 246 | 351 |
OpportunisticFunds | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Alternative Investment, Net Asset Value | 1,459 | 1,367 |
Private Equity Funds [Member] | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Alternative Investment, Net Asset Value | 2,454 | 2,510 |
Real Estate Funds [Member] | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Alternative Investment, Net Asset Value | 2,376 | 2,382 |
Level 1 | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 6,914 | 5,865 |
Level 1 | Cash & cash equivalents | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 233 | 209 |
Level 1 | U.S. Equity Securities [Member] | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 3,341 | 2,859 |
Level 1 | International equities | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 3,271 | 2,711 |
Level 1 | U.S. Treasuries | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 20 | 26 |
Level 1 | Corporate debt | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 28 | 34 |
Level 1 | High yield debt | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 30 | 11 |
Level 1 | Other | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | (9) | 15 |
Level 2 | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 11,380 | 9,346 |
Level 2 | Cash & cash equivalents | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 2,572 | 2,655 |
Level 2 | U.S. Treasuries | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 2,716 | 1,501 |
Level 2 | U.S. Government Agency | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 297 | 322 |
Level 2 | Non-U.S. Government | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 194 | 206 |
Level 2 | Corporate debt | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 4,513 | 4,141 |
Level 2 | Asset backed | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 892 | 297 |
Level 2 | High yield debt | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 104 | 153 |
Level 2 | Bank loans | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 33 | 20 |
Level 2 | Other | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 59 | 51 |
Level 3 | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 4 | 3 |
Level 3 | International equities | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 2 | 1 |
Level 3 | Other | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Fair value of plan assets | 2 | 2 |
Pension and Other Post-retirement benefit plans [Member] | ||
Plan Assets by Fair Value Measurement Input (Table Amounts) [Abstract] | ||
Derivative Asset | 49 | 76 |
Derivative Liability | (53) | (52) |
Derivative, Notional Amount | $ 3,600 | $ 3,200 |
Retirement Benefits Estimated F
Retirement Benefits Estimated Future Benefit Payments (Details 8) $ in Millions | Dec. 31, 2019USD ($) |
Estimated Benefit Payments (Table Amounts) [Abstract] | |
2020 | $ 2,000 |
2021 | 2,048 |
2022 | 2,086 |
2023 | 2,129 |
2024 | 2,175 |
2025 through 2029 | 11,332 |
Pension Benefits | |
Estimated Benefit Payments (Table Amounts) [Abstract] | |
2020 | 1,849 |
2021 | 1,898 |
2022 | 1,947 |
2023 | 1,991 |
2024 | 2,039 |
2025 through 2029 | 10,702 |
Medical and Life Benefits | |
Estimated Benefit Payments (Table Amounts) [Abstract] | |
2020 | 151 |
2021 | 150 |
2022 | 139 |
2023 | 138 |
2024 | 136 |
2025 through 2029 | $ 630 |
Retirement Benefits Amounts in
Retirement Benefits Amounts in Paragraphs - Retirement Benefits (Details 9) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plans Disclosure (Amounts in paragraphs) | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 481 | $ 403 | $ 344 |
Pension and post-retirement benefits disclosures (Amounts in paragraphs) | |||
Accumulated benefit obligation for all defined benefit pension plans | 36,500 | 31,900 | |
Pension Benefits | |||
Defined Benefit Plan Disclosure (Table Amounts) | |||
Defined Benefit Plan, Expected Amortization of Prior Service Cost (Credit), Next Fiscal Year | 60 | ||
Defined Contribution Plans Disclosure (Amounts in paragraphs) | |||
Expected 2019 employer contributions | 96 | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 221 | 370 | |
Pension Benefits | Voluntary Contributions [Member] | |||
Defined Contribution Plans Disclosure (Amounts in paragraphs) | |||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 120 | ||
OPB contributions | |||
Defined Benefit Plan Disclosure (Table Amounts) | |||
Defined Benefit Plan, Expected Amortization of Prior Service Cost (Credit), Next Fiscal Year | (4) | ||
Defined Contribution Plans Disclosure (Amounts in paragraphs) | |||
Expected 2019 employer contributions | 44 | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 42 | 38 | |
U.S. Equity Securities [Member] | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 0 | 0 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Frequency | Daily, monthly | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 30 days | ||
International Equity Securities [Member] | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 0 | 0 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Frequency | Daily, monthly | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 30 days | ||
Fixed Income Funds | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 0 | 0 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Frequency | daily, monthly or quarterly | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 30 days | ||
Hedge Funds [Member] | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 8 | 0 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Frequency | monthly or quarterly | ||
OpportunisticFunds | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 1,300 | 1,100 | |
Private Equity Funds [Member] | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 1,900 | 1,800 | |
Average investment term, alternative investments | 10 years | ||
Real Estate Funds | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 60 | $ 73 | |
Average investment term, alternative investments | 10 years | ||
Minimum | Hedge Funds [Member] | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 30 days | ||
Minimum | OpportunisticFunds | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Average investment term, alternative investments | 5 years | ||
Maximum | Hedge Funds [Member] | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Investment Redemption, Notice Period | 95 days | ||
Maximum | OpportunisticFunds | |||
Information About Plan Assets (Amounts in paragraphs) [Abstract] | |||
Average investment term, alternative investments | 10 years |
Stock Compensation Plans Compen
Stock Compensation Plans Compensation Expense (Details 1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 127 | $ 86 | $ 94 |
Tax benefits from stock-based compensation expense | 14 | $ 27 | $ 48 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 101 | ||
Weighted-average period for unrecognized compensation expense to be charged to expense | 1 year 3 months 18 days |
Stock Compensation Plans Stock
Stock Compensation Plans Stock Awards (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation by Share-based Payment Award | ||||
Stock plans, vesting period | 3 years | |||
Stock awards, outstanding, weighted average remaining contractual terms | 10 months 24 days | 9 months 18 days | 1 year | 1 year 3 months 18 days |
Stock issued, settlement of fully vested stock awards, fair value grant date | $ 119 | $ 93 | $ 96 | |
Stock Award Activity (Table) | ||||
Stock awards - outstanding at period start | 796 | 938 | 1,148 | |
Stock awards - granted | 339 | 376 | 397 | |
Stock awards - vested | (383) | (455) | (521) | |
Stock awards - forfeited | (51) | (63) | (86) | |
Stock awards - outstanding at period end | 701 | 796 | 938 | 1,148 |
Stock Awards, Weighted Average Grant Date Fair Value [Table] | ||||
Weighted-average grant date fair value - outstanding at period start | $ 244 | $ 192 | $ 167 | |
Weighted-average grant date fair value - granted | 274 | 321 | 233 | |
Weighted-average grant date fair value - vested | 222 | 181 | 152 | |
Weighted-average grant date fair value - forfeited | 280 | 250 | 198 | |
Weighted-average grant date fair value - outstanding at period end | $ 278 | $ 244 | $ 192 | $ 167 |
Amended 2011 Plan [Domain] | ||||
Share-based Compensation by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 5,100 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 2,400 | |||
2011 Long-Term Incentive Stock Plan [Member] | ||||
Share-based Compensation by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 5,500 |
Stock Compensation Plans Cash A
Stock Compensation Plans Cash Awards (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation by Share-based Payment Award | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 101 | ||
Minimum | Grants During 2010 and After [Member] | |||
Share-based Compensation by Share-based Payment Award | |||
Share Based Compensation Arrangement By Share Based Payment Award Award Grants Percentage Financial Metric Met Exceeded | 0.00% | ||
Maximum [Member] | Grants During 2010 and After [Member] | |||
Share-based Compensation by Share-based Payment Award | |||
Share Based Compensation Arrangement By Share Based Payment Award Award Grants Percentage Financial Metric Met Exceeded | 200.00% | ||
Cash Units and Cash Performance Units [Member] | |||
Share-based Compensation by Share-based Payment Award | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 133 | ||
Cash Units and Cash Performance Units [Member] | Minimum | |||
Share-based Compensation by Share-based Payment Award | |||
Deferred Compensation Cash-based Arrangements, Liability, Current | 36 | $ 36 | $ 38 |
Cash Units and Cash Performance Units [Member] | Maximum [Member] | |||
Share-based Compensation by Share-based Payment Award | |||
Deferred Compensation Cash-based Arrangements, Liability, Current | $ 203 | $ 205 | $ 201 |
Leases Total Lease Cost (Detail
Leases Total Lease Cost (Details 1) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 318 |
Variable lease cost | 11 |
Short-term lease cost | 75 |
Total lease cost | $ 404 |
Leases Lease Balance Sheet (Det
Leases Lease Balance Sheet (Details 2) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating lease right-of-use assets | $ 1,511 | $ 0 |
Operating Lease, Liability, Current | 261 | |
Operating Lease, Liability, Noncurrent | 1,308 | $ 0 |
Total operating lease liabilities | $ 1,569 |
Leases Lease Other Supplemental
Leases Lease Other Supplemental Information (Details 3) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2019 | |
Lease Other Supplemental Information (Details 3) [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 307 | |
Right-of-use assets obtained in exchange for new lease liabilities | $ 462 | |
Operating Lease, Weighted Average Remaining Lease Term | 11 years 7 months 6 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.80% |
Leases Lease Maturities (Detail
Leases Lease Maturities (Details 4) $ in Millions | Dec. 31, 2019USD ($) |
Lessee, Operating Lease, Lease Not yet Commenced, Value | $ 125 |
Lessee, Operating Lease, Liability, Payments, Due Next Year | 300 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 262 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 224 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 185 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 146 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 875 |
Lessee, Operating Lease, Liability, Payments, Due | 1,992 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 423 |
Operating Lease, Liability | $ 1,569 |
Minimum | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 3 years |
Maximum [Member] | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 11 years |
Leases Future Minimum Lease Pay
Leases Future Minimum Lease Payments Under 840 (Details 5) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Future Minimum Lease Payments Under 840 [Abstract] | ||
Operating Leases, Rent Expense | $ 375 | $ 300 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 312 | |
Operating Leases, Future Minimum Payments, Due in Two Years | 270 | |
Operating Leases, Future Minimum Payments, Due in Three Years | 221 | |
Operating Leases, Future Minimum Payments, Due in Four Years | 186 | |
Operating Leases, Future Minimum Payments, Due in Five Years | 152 | |
Operating Leases, Future Minimum Payments, Due Thereafter | 939 | |
Operating Leases, Future Minimum Payments Due | $ 2,080 |
Segment Information Reconciliat
Segment Information Reconciliation to Consolidated Operating Income (Details 1) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Number of reportable segments | 4 | ||||||||||
Sales | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 |
Operating income | $ 1,136 | $ 951 | $ 946 | $ 936 | $ 943 | $ 1,172 | $ 817 | $ 848 | 3,969 | 3,780 | 3,218 |
Operating Segments | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Operating income | 3,909 | 3,447 | 2,903 | ||||||||
Operating Segments | Aeronautics Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 11,116 | 10,293 | 9,040 | ||||||||
Operating income | 1,170 | 1,107 | 848 | ||||||||
Operating Segments | Defense Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 7,495 | 6,612 | 5,479 | ||||||||
Operating income | 781 | 690 | 534 | ||||||||
Operating Segments | Mission Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 9,410 | 8,949 | 8,460 | ||||||||
Operating income | 1,382 | 1,215 | 1,157 | ||||||||
Operating Segments | Space Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 7,425 | 5,845 | 4,719 | ||||||||
Operating income | 781 | 635 | 578 | ||||||||
Intersegment sales | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 1,605 | 1,604 | 1,694 | ||||||||
Operating income | 205 | 200 | 214 | ||||||||
Intersegment sales | Aeronautics Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 103 | 73 | 46 | ||||||||
Operating income | 10 | 8 | 5 | ||||||||
Intersegment sales | Defense Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 691 | 750 | 974 | ||||||||
Operating income | 74 | 74 | 97 | ||||||||
Intersegment sales | Mission Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 728 | 718 | 638 | ||||||||
Operating income | 113 | 115 | 106 | ||||||||
Intersegment sales | Space Systems | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Sales | 83 | 63 | 36 | ||||||||
Operating income | 8 | 3 | 6 | ||||||||
Corporate, Non-Segment [Member] | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Operating income | (405) | (280) | (323) | ||||||||
Segment Reconciling Items [Member] | |||||||||||
Sales and Service Revenues by Segment (Table Amounts) [Abstract] | |||||||||||
Net FAS (service)/ CAS pension adjustment | $ 465 | $ 613 | $ 638 |
Segment Information Sales by Cu
Segment Information Sales by Customer Type (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
US Government | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 27,934 | $ 24,796 | $ 21,969 | ||||||||
Concentration Risk, Percentage | 83.00% | 82.00% | 85.00% | ||||||||
US Government | Aeronautics Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 9,258 | $ 8,732 | $ 7,817 | ||||||||
Concentration Risk, Percentage | 83.00% | 85.00% | 86.00% | ||||||||
US Government | Defense Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 4,952 | $ 4,132 | $ 3,422 | ||||||||
Concentration Risk, Percentage | 66.00% | 62.00% | 62.00% | ||||||||
US Government | Mission Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 6,765 | $ 6,501 | $ 6,186 | ||||||||
Concentration Risk, Percentage | 72.00% | 73.00% | 73.00% | ||||||||
US Government | Space Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 6,959 | $ 5,431 | $ 4,544 | ||||||||
Concentration Risk, Percentage | 94.00% | 93.00% | 96.00% | ||||||||
International | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 5,154 | $ 4,434 | $ 3,452 | ||||||||
Concentration Risk, Percentage | 15.00% | 15.00% | 13.00% | ||||||||
International | Aeronautics Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 1,688 | $ 1,402 | $ 1,107 | ||||||||
Concentration Risk, Percentage | 15.00% | 13.00% | 12.00% | ||||||||
International | Defense Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 1,442 | $ 1,249 | $ 726 | ||||||||
Concentration Risk, Percentage | 19.00% | 19.00% | 13.00% | ||||||||
International | Mission Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 1,839 | $ 1,653 | $ 1,565 | ||||||||
Concentration Risk, Percentage | 19.00% | 18.00% | 18.00% | ||||||||
International | Space Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 185 | $ 130 | $ 54 | ||||||||
Concentration Risk, Percentage | 2.00% | 2.00% | 1.00% | ||||||||
Other Customers | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 753 | $ 865 | $ 583 | ||||||||
Concentration Risk, Percentage | 2.00% | 3.00% | 2.00% | ||||||||
Other Customers | Aeronautics Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 67 | $ 86 | $ 70 | ||||||||
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | ||||||||
Other Customers | Defense Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 410 | $ 481 | $ 357 | ||||||||
Concentration Risk, Percentage | 6.00% | 7.00% | 7.00% | ||||||||
Other Customers | Mission Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 78 | $ 77 | $ 71 | ||||||||
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | ||||||||
Other Customers | Space Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 198 | $ 221 | $ 85 | ||||||||
Concentration Risk, Percentage | 3.00% | 4.00% | 2.00% | ||||||||
Intersegment Sales [Member] | Aeronautics Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 103 | $ 73 | $ 46 | ||||||||
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | ||||||||
Intersegment Sales [Member] | Defense Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 691 | $ 750 | $ 974 | ||||||||
Concentration Risk, Percentage | 9.00% | 12.00% | 18.00% | ||||||||
Intersegment Sales [Member] | Mission Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 728 | $ 718 | $ 638 | ||||||||
Concentration Risk, Percentage | 8.00% | 8.00% | 8.00% | ||||||||
Intersegment Sales [Member] | Space Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 83 | $ 63 | $ 36 | ||||||||
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | ||||||||
Operating Segments [Member] | Aeronautics Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 11,116 | $ 10,293 | $ 9,040 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Defense Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 7,495 | $ 6,612 | $ 5,479 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Mission Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 9,410 | $ 8,949 | $ 8,460 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Space Systems | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Sales | $ 7,425 | $ 5,845 | $ 4,719 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% |
Segment Information Sales by Co
Segment Information Sales by Contract Type (Details 3) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Aeronautics Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 11,116 | $ 10,293 | $ 9,040 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Defense Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 7,495 | $ 6,612 | $ 5,479 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Mission Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 9,410 | $ 8,949 | $ 8,460 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Operating Segments [Member] | Space Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 7,425 | $ 5,845 | $ 4,719 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Cost-type | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 16,479 | $ 15,004 | $ 14,197 | ||||||||
Concentration Risk, Percentage | 49.00% | 50.00% | 55.00% | ||||||||
Cost-type | Aeronautics Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 5,299 | $ 5,066 | $ 4,743 | ||||||||
Concentration Risk, Percentage | 48.00% | 50.00% | 53.00% | ||||||||
Cost-type | Defense Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 2,509 | $ 2,386 | $ 2,354 | ||||||||
Concentration Risk, Percentage | 37.00% | 41.00% | 52.00% | ||||||||
Cost-type | Mission Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 3,335 | $ 3,099 | $ 2,919 | ||||||||
Concentration Risk, Percentage | 38.00% | 38.00% | 37.00% | ||||||||
Cost-type | Space Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 5,336 | $ 4,453 | $ 4,181 | ||||||||
Concentration Risk, Percentage | 73.00% | 77.00% | 89.00% | ||||||||
Fixed-price | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 17,362 | $ 15,091 | $ 11,807 | ||||||||
Concentration Risk, Percentage | 51.00% | 50.00% | 45.00% | ||||||||
Fixed-price | Aeronautics Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 5,714 | $ 5,154 | $ 4,251 | ||||||||
Concentration Risk, Percentage | 52.00% | 50.00% | 47.00% | ||||||||
Fixed-price | Defense Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 4,295 | $ 3,476 | $ 2,151 | ||||||||
Concentration Risk, Percentage | 63.00% | 59.00% | 48.00% | ||||||||
Fixed-price | Mission Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 5,347 | $ 5,132 | $ 4,903 | ||||||||
Concentration Risk, Percentage | 62.00% | 62.00% | 63.00% | ||||||||
Fixed-price | Space Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 2,006 | $ 1,329 | $ 502 | ||||||||
Concentration Risk, Percentage | 27.00% | 23.00% | 11.00% | ||||||||
Intersegment Sales [Member] | Aeronautics Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 103 | $ 73 | $ 46 | ||||||||
Intersegment Sales [Member] | Defense Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | 691 | 750 | 974 | ||||||||
Intersegment Sales [Member] | Mission Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | 728 | 718 | 638 | ||||||||
Intersegment Sales [Member] | Space Systems | |||||||||||
Revenue, Contract Type [Line Items] | |||||||||||
Sales | $ 83 | $ 63 | $ 36 |
Segment Information Sales by Ge
Segment Information Sales by Geographic Location (Details 4) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 28,687 | $ 25,661 | $ 22,552 | ||||||||
Concentration Risk, Percentage | 85.00% | 85.00% | 87.00% | ||||||||
Asia/Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 1,836 | $ 1,666 | $ 1,461 | ||||||||
Concentration Risk, Percentage | 5.00% | 6.00% | 5.00% | ||||||||
All Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 3,318 | $ 2,768 | $ 1,991 | ||||||||
Concentration Risk, Percentage | 10.00% | 9.00% | 8.00% | ||||||||
Aeronautics Systems | United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 9,325 | $ 8,818 | $ 7,887 | ||||||||
Concentration Risk, Percentage | 85.00% | 86.00% | 88.00% | ||||||||
Aeronautics Systems | Asia/Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 810 | $ 677 | $ 635 | ||||||||
Concentration Risk, Percentage | 7.00% | 7.00% | 7.00% | ||||||||
Aeronautics Systems | All Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 878 | $ 725 | $ 472 | ||||||||
Concentration Risk, Percentage | 8.00% | 7.00% | 5.00% | ||||||||
Aeronautics Systems | Intersegment Sales [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 103 | $ 73 | $ 46 | ||||||||
Aeronautics Systems | Operating Segments [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 11,116 | $ 10,293 | $ 9,040 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Defense Systems | United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 5,362 | $ 4,613 | $ 3,779 | ||||||||
Concentration Risk, Percentage | 79.00% | 79.00% | 84.00% | ||||||||
Defense Systems | Asia/Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 369 | $ 365 | $ 194 | ||||||||
Concentration Risk, Percentage | 5.00% | 6.00% | 4.00% | ||||||||
Defense Systems | All Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 1,073 | $ 884 | $ 532 | ||||||||
Concentration Risk, Percentage | 16.00% | 15.00% | 12.00% | ||||||||
Defense Systems | Intersegment Sales [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 691 | $ 750 | $ 974 | ||||||||
Defense Systems | Operating Segments [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 7,495 | $ 6,612 | $ 5,479 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Mission Systems | United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 6,843 | $ 6,578 | $ 6,257 | ||||||||
Concentration Risk, Percentage | 79.00% | 80.00% | 80.00% | ||||||||
Mission Systems | Asia/Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 637 | $ 592 | $ 617 | ||||||||
Concentration Risk, Percentage | 7.00% | 7.00% | 8.00% | ||||||||
Mission Systems | All Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 1,202 | $ 1,061 | $ 948 | ||||||||
Concentration Risk, Percentage | 14.00% | 13.00% | 12.00% | ||||||||
Mission Systems | Intersegment Sales [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 728 | $ 718 | $ 638 | ||||||||
Mission Systems | Operating Segments [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 9,410 | $ 8,949 | $ 8,460 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Space Systems | United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 7,157 | $ 5,652 | $ 4,629 | ||||||||
Concentration Risk, Percentage | 98.00% | 98.00% | 99.00% | ||||||||
Space Systems | Asia/Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 20 | $ 32 | $ 15 | ||||||||
Concentration Risk, Percentage | 0.00% | 0.00% | 0.00% | ||||||||
Space Systems | All Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 165 | $ 98 | $ 39 | ||||||||
Concentration Risk, Percentage | 2.00% | 2.00% | 1.00% | ||||||||
Space Systems | Intersegment Sales [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 83 | $ 63 | $ 36 | ||||||||
Space Systems | Operating Segments [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 7,425 | $ 5,845 | $ 4,719 | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% |
Segment Information Intersegmen
Segment Information Intersegment Sales and Operating Income (Details 5) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Sales | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 |
Intersegment sales and operating income (Table Amounts) [Abstract] | |||||||||||
Operating income | $ 1,136 | $ 951 | $ 946 | $ 936 | $ 943 | $ 1,172 | $ 817 | $ 848 | 3,969 | 3,780 | 3,218 |
Intersegment sales | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 1,605 | 1,604 | 1,694 | ||||||||
Intersegment sales and operating income (Table Amounts) [Abstract] | |||||||||||
Operating income | 205 | 200 | 214 | ||||||||
Intersegment sales | Aeronautics Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 103 | 73 | 46 | ||||||||
Intersegment sales and operating income (Table Amounts) [Abstract] | |||||||||||
Operating income | 10 | 8 | 5 | ||||||||
Intersegment sales | Defense Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 691 | 750 | 974 | ||||||||
Intersegment sales and operating income (Table Amounts) [Abstract] | |||||||||||
Operating income | 74 | 74 | 97 | ||||||||
Intersegment sales | Mission Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 728 | 718 | 638 | ||||||||
Intersegment sales and operating income (Table Amounts) [Abstract] | |||||||||||
Operating income | 113 | 115 | 106 | ||||||||
Intersegment sales | Space Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 83 | 63 | 36 | ||||||||
Intersegment sales and operating income (Table Amounts) [Abstract] | |||||||||||
Operating income | $ 8 | $ 3 | $ 6 |
Segment Information Assets (Det
Segment Information Assets (Details 6) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 41,089 | $ 37,653 |
Operating Segments [Member] | Aeronautics Systems | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,104 | 8,396 |
Operating Segments [Member] | Defense Systems | ||
Segment Reporting Information [Line Items] | ||
Total assets | 7,420 | 7,178 |
Operating Segments [Member] | Mission Systems | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,934 | 9,400 |
Operating Segments [Member] | Space Systems | ||
Segment Reporting Information [Line Items] | ||
Total assets | 10,595 | 9,148 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 4,036 | $ 3,531 |
Segment Information Capital Exp
Segment Information Capital Expenditures and Depreciation and Amortization (Details 7) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Additional information by Segment (Table Amounts) [Abstract] | |||
Capital Expenditures | $ 1,264 | $ 1,249 | $ 928 |
Depreciation and amortization | 1,018 | 800 | 475 |
Aeronautics Systems | |||
Additional information by Segment (Table Amounts) [Abstract] | |||
Capital Expenditures | 528 | 657 | 574 |
Depreciation and amortization | 224 | 190 | 164 |
Defense Systems | |||
Additional information by Segment (Table Amounts) [Abstract] | |||
Capital Expenditures | 71 | 66 | 14 |
Depreciation and amortization | 44 | 65 | 47 |
Mission Systems | |||
Additional information by Segment (Table Amounts) [Abstract] | |||
Capital Expenditures | 229 | 197 | 158 |
Depreciation and amortization | 133 | 121 | 117 |
Space Systems | |||
Additional information by Segment (Table Amounts) [Abstract] | |||
Capital Expenditures | 352 | 226 | 98 |
Depreciation and amortization | 189 | 130 | 77 |
Corporate | |||
Additional information by Segment (Table Amounts) [Abstract] | |||
Capital Expenditures | 84 | 103 | 84 |
Depreciation and amortization | $ 428 | $ 294 | $ 70 |
Unaudited Selected Quarterly _3
Unaudited Selected Quarterly Data (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unaudited Selected Quarterly Data (Table Amounts) [Abstract] | |||||||||||
Sales | $ 8,721 | $ 8,475 | $ 8,456 | $ 8,189 | $ 8,156 | $ 8,085 | $ 7,119 | $ 6,735 | $ 33,841 | $ 30,095 | $ 26,004 |
Operating income | 1,136 | 951 | 946 | 936 | 943 | 1,172 | 817 | 848 | 3,969 | 3,780 | 3,218 |
Net earnings | $ (409) | $ 933 | $ 861 | $ 863 | $ 356 | $ 1,244 | $ 789 | $ 840 | $ 2,248 | $ 3,229 | $ 2,869 |
Basic earnings per share | $ (2.43) | $ 5.52 | $ 5.07 | $ 5.08 | $ 2.07 | $ 7.15 | $ 4.52 | $ 4.82 | $ 13.28 | $ 18.59 | $ 16.45 |
Diluted earnings per share | $ (2.43) | $ 5.49 | $ 5.06 | $ 5.06 | $ 2.06 | $ 7.11 | $ 4.50 | $ 4.79 | $ 13.22 | $ 18.49 | $ 16.34 |
Weighted-average common shares outstanding | 168.4 | 169.1 | 169.7 | 170 | 171.8 | 174.1 | 174.5 | 174.3 | 169.3 | 173.7 | 174.4 |
Weighted-average diluted shares outstanding | 168.4 | 169.9 | 170.3 | 170.7 | 172.6 | 174.9 | 175.4 | 175.4 | 170 | 174.6 | 175.6 |