QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated Filer | ☐ | |||||||||||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||||||||||||||
Emerging Growth Company |
PART I – FINANCIAL INFORMATION | Page | ||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II – OTHER INFORMATION | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
(in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Sales and service revenues | ||||||||||||||||||||||||||
Product sales | $ | $ | $ | $ | ||||||||||||||||||||||
Service revenues | ||||||||||||||||||||||||||
Sales and service revenues | ||||||||||||||||||||||||||
Cost of sales and service revenues | ||||||||||||||||||||||||||
Cost of product sales | ||||||||||||||||||||||||||
Cost of service revenues | ||||||||||||||||||||||||||
Income from operating investments, net | ||||||||||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Non-operating retirement benefit | ||||||||||||||||||||||||||
Other, net | ( | ( | ||||||||||||||||||||||||
Earnings before income taxes | ||||||||||||||||||||||||||
Federal and foreign income taxes | ||||||||||||||||||||||||||
Net earnings | $ | $ | $ | $ | ||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average common shares outstanding | ||||||||||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average diluted shares outstanding | ||||||||||||||||||||||||||
Dividends declared per share | $ | $ | $ | $ | ||||||||||||||||||||||
Net earnings from above | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||
Change in unamortized benefit plan costs | ||||||||||||||||||||||||||
Other | — | |||||||||||||||||||||||||
Tax expense for items of other comprehensive income | ( | ( | ( | ( | ||||||||||||||||||||||
Other comprehensive income, net of tax | ||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
($ in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Assets | ||||||||||||||
Current Assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $1 million as of 2020 and $3 million as of 2019 | ||||||||||||||
Contract assets | ||||||||||||||
Inventoried costs, net | ||||||||||||||
Income taxes receivable | ||||||||||||||
Assets held for sale | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property, plant, and equipment, net of accumulated depreciation of $2,009 million as of 2020 and $1,961 million as of 2019 | ||||||||||||||
Operating lease assets | ||||||||||||||
Goodwill | ||||||||||||||
Other intangible assets, net of accumulated amortization of $640 million as of 2020 and $599 million as of 2019 | ||||||||||||||
Deferred tax assets | ||||||||||||||
Miscellaneous other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||
Current Liabilities | ||||||||||||||
Trade accounts payable | $ | $ | ||||||||||||
Accrued employees’ compensation | ||||||||||||||
Current portion of postretirement plan liabilities | ||||||||||||||
Current portion of workers’ compensation liabilities | ||||||||||||||
Contract liabilities | ||||||||||||||
Liabilities held for sale | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Pension plan liabilities | ||||||||||||||
Other postretirement plan liabilities | ||||||||||||||
Workers’ compensation liabilities | ||||||||||||||
Long-term operating lease liabilities | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and Contingencies (Note 16) | ||||||||||||||
Stockholders’ Equity | ||||||||||||||
Common stock, $0.01 par value; 150 million shares authorized; 53.3 million shares issued and 40.5 million shares outstanding as of September 30, 2020, and 53.2 million shares issued and 40.8 million shares outstanding as of December 31, 2019 | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Treasury stock | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Nine Months Ended September 30 | ||||||||||||||
($ in millions) | 2020 | 2019 | ||||||||||||
Operating Activities | ||||||||||||||
Net earnings | $ | $ | ||||||||||||
Adjustments to reconcile to net cash provided by (used in) operating activities | ||||||||||||||
Depreciation | ||||||||||||||
Amortization of purchased intangibles | ||||||||||||||
Amortization of debt issuance costs | ||||||||||||||
Provision for doubtful accounts | ( | ( | ||||||||||||
Stock-based compensation | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Loss (gain) on investments in marketable securities | ( | ( | ||||||||||||
Asset impairments | — | |||||||||||||
Change in | ||||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Contract assets | ( | ( | ||||||||||||
Inventoried costs | ( | ( | ||||||||||||
Prepaid expenses and other assets | ( | ( | ||||||||||||
Accounts payable and accruals | ||||||||||||||
Retiree benefits | ( | |||||||||||||
Other non-cash transactions, net | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing Activities | ||||||||||||||
Capital expenditures | ||||||||||||||
Capital expenditure additions | ( | ( | ||||||||||||
Grant proceeds for capital expenditures | ||||||||||||||
Acquisitions of businesses, net of cash received | ( | ( | ||||||||||||
Other investing activities, net | ( | |||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing Activities | ||||||||||||||
Proceeds from issuance of long-term debt | — | |||||||||||||
Proceeds from revolving credit facility borrowings | ||||||||||||||
Repayment of revolving credit facility borrowings | ( | ( | ||||||||||||
Debt issuance costs | ( | — | ||||||||||||
Dividends paid | ( | ( | ||||||||||||
Repurchases of common stock | ( | ( | ||||||||||||
Employee taxes on certain share-based payment arrangements | ( | ( | ||||||||||||
Net cash provided by (used in) financing activities | ( | |||||||||||||
Change in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||
Cash and cash equivalents, end of period | $ | $ | ||||||||||||
Supplemental Cash Flow Disclosure | ||||||||||||||
Cash paid for income taxes | $ | $ | ||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Non-Cash Investing and Financing Activities | ||||||||||||||
Capital expenditures accrued in accounts payable | $ | $ | ||||||||||||
Accrued repurchases of common stock | $ | — | $ | |||||||||||
Three Months Ended September 30, 2020 and 2019 ($ in millions) | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.86 per share) | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Treasury stock activity | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared ($1.03 per share) | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, 2020 and 2019 ($ in millions) | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared ($2.58 per share) | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Stock compensation | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Treasury stock activity | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared ($3.09 per share) | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Treasury stock activity | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
($ in millions) | Benefit Plans | Other | Total | |||||||||||||||||
Balance as of June 30, 2019 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Other comprehensive income before reclassifications | — | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||||||||
Amortization of prior service credit1 | ( | — | ( | |||||||||||||||||
Amortization of net actuarial loss1 | — | |||||||||||||||||||
Tax expense for items of other comprehensive income | ( | — | ( | |||||||||||||||||
Net current period other comprehensive income | ||||||||||||||||||||
Balance as of September 30, 2019 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Balance as of June 30, 2020 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Other comprehensive income before reclassifications | — | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||||||||
Amortization of prior service credit1 | ( | — | ( | |||||||||||||||||
Amortization of net actuarial loss1 | — | |||||||||||||||||||
Tax expense for items of other comprehensive income | ( | — | ( | |||||||||||||||||
Net current period other comprehensive income | ||||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | ( | $ | ( |
($ in millions) | Benefit Plans | Other | Total | |||||||||||||||||
Balance as of December 31, 2018 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Other comprehensive income before reclassifications | — | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||||||||
Amortization of prior service credit1 | ( | — | ( | |||||||||||||||||
Amortization of net actuarial loss1 | — | |||||||||||||||||||
Tax expense for items of other comprehensive income | ( | — | ( | |||||||||||||||||
Net current period other comprehensive income | ||||||||||||||||||||
Balance as of September 30, 2019 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Balance as of December 31, 2019 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||||||||
Amortization of prior service credit1 | ( | — | ( | |||||||||||||||||
Amortization of net actuarial loss1 | — | |||||||||||||||||||
Tax expense for items of other comprehensive income | ( | — | ( | |||||||||||||||||
Net current period other comprehensive income | — | |||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
(in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net earnings | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average common shares outstanding | ||||||||||||||||||||||||||
Net dilutive effect of stock awards | — | — | ||||||||||||||||||||||||
Dilutive weighted-average common shares outstanding | ||||||||||||||||||||||||||
Earnings per share - basic | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per share - diluted | $ | $ | $ | $ |
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
($ in millions) | Ingalls | Newport News | Technical Solutions | Intersegment Eliminations | Total | |||||||||||||||||||||||||||
Revenue Type | ||||||||||||||||||||||||||||||||
Product sales | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Service revenues | — | |||||||||||||||||||||||||||||||
Intersegment | — | ( | — | |||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Customer Type | ||||||||||||||||||||||||||||||||
Federal | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Commercial | — | — | — | |||||||||||||||||||||||||||||
Intersegment | — | ( | — | |||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Contract Type | ||||||||||||||||||||||||||||||||
Firm fixed-price | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Fixed-price incentive | — | — | ||||||||||||||||||||||||||||||
Cost-type | — | |||||||||||||||||||||||||||||||
Time and materials | — | — | — | |||||||||||||||||||||||||||||
Intersegment | — | ( | — | |||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ |
Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
($ in millions) | Ingalls | Newport News | Technical Solutions | Intersegment Eliminations | Total | |||||||||||||||||||||||||||
Revenue Type | ||||||||||||||||||||||||||||||||
Product sales | $ | $ | $ | ( | $ | — | $ | |||||||||||||||||||||||||
Service revenues | — | |||||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Customer Type | ||||||||||||||||||||||||||||||||
Federal | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Commercial | — | — | ||||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Contract Type | ||||||||||||||||||||||||||||||||
Firm fixed-price | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Fixed-price incentive | — | — | ||||||||||||||||||||||||||||||
Cost-type | — | |||||||||||||||||||||||||||||||
Time and materials | — | — | — | |||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ |
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
($ in millions) | Ingalls | Newport News | Technical Solutions | Intersegment Eliminations | Total | |||||||||||||||||||||||||||
Revenue Type | ||||||||||||||||||||||||||||||||
Product sales | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Service revenues | — | |||||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Customer Type | ||||||||||||||||||||||||||||||||
Federal | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Commercial | — | — | ||||||||||||||||||||||||||||||
State and local government agencies | — | — | — | |||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Contract Type | ||||||||||||||||||||||||||||||||
Firm fixed-price | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Fixed-price incentive | — | — | ||||||||||||||||||||||||||||||
Cost-type | — | |||||||||||||||||||||||||||||||
Time and materials | — | — | — | |||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ |
Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
($ in millions) | Ingalls | Newport News | Technical Solutions | Intersegment Eliminations | Total | |||||||||||||||||||||||||||
Revenue Type | ||||||||||||||||||||||||||||||||
Product sales | $ | $ | $ | — | $ | — | $ | |||||||||||||||||||||||||
Service revenues | — | |||||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Customer Type | ||||||||||||||||||||||||||||||||
Federal | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Commercial | — | — | ||||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Contract Type | ||||||||||||||||||||||||||||||||
Firm fixed-price | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
Fixed-price incentive | — | |||||||||||||||||||||||||||||||
Cost-type | — | |||||||||||||||||||||||||||||||
Time and materials | — | — | — | |||||||||||||||||||||||||||||
Intersegment | ( | — | ||||||||||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ( | $ |
Three Months Ended September 30 | Three Months Ended September 30 | Nine Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Major Programs | ||||||||||||||||||||||||||
Amphibious assault ships | $ | $ | $ | $ | ||||||||||||||||||||||
Surface combatants and coast guard cutters | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total Ingalls | ||||||||||||||||||||||||||
Aircraft carriers | ||||||||||||||||||||||||||
Submarines | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total Newport News | ||||||||||||||||||||||||||
Government and energy services | ||||||||||||||||||||||||||
Oil and gas services | ||||||||||||||||||||||||||
Total Technical Solutions | ||||||||||||||||||||||||||
Intersegment eliminations | ( | ( | ( | ( | ||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Sales and Service Revenues | ||||||||||||||||||||||||||
Ingalls | $ | $ | $ | $ | ||||||||||||||||||||||
Newport News | ||||||||||||||||||||||||||
Technical Solutions | ||||||||||||||||||||||||||
Intersegment eliminations | ( | ( | ( | ( | ||||||||||||||||||||||
Sales and service revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Operating Income | ||||||||||||||||||||||||||
Ingalls | $ | $ | $ | $ | ||||||||||||||||||||||
Newport News | ||||||||||||||||||||||||||
Technical Solutions | ||||||||||||||||||||||||||
Segment operating income | ||||||||||||||||||||||||||
Non-segment factors affecting operating income | ||||||||||||||||||||||||||
Operating FAS/CAS Adjustment | ||||||||||||||||||||||||||
Non-current state income taxes | — | — | ( | ( | ||||||||||||||||||||||
Operating income | $ | $ | $ | $ |
($ in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Assets | ||||||||||||||
Ingalls | $ | $ | ||||||||||||
Newport News | ||||||||||||||
Technical Solutions | ||||||||||||||
Corporate | ||||||||||||||
Total assets | $ | $ |
($ in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Production costs of contracts in process1 | $ | $ | ||||||||||||
Raw material inventory | ||||||||||||||
Total inventoried costs, net | $ | $ |
September 30, 2020 | December 31, 2019 | |||||||||||||
($ in millions) | ||||||||||||||
Current assets | $ | $ | ||||||||||||
Property, plant, and equipment | ||||||||||||||
Other intangible assets, net | ||||||||||||||
Goodwill | — | |||||||||||||
Other non-current assets | ||||||||||||||
Valuation allowance | ( | ( | ||||||||||||
Total assets held for sale | $ | $ | ||||||||||||
Current liabilities | ||||||||||||||
Long-term liabilities | ||||||||||||||
Total liabilities held for sale | $ | $ |
($ in millions) | Ingalls | Newport News | Technical Solutions | Total | ||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ||||||||||||||||||||||
Acquisitions | — | — | ||||||||||||||||||||||||
Adjustments | — | — | ( | ( | ||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | $ |
($ in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Senior notes due November 15, 2025, 5.000% | $ | $ | ||||||||||||
Senior notes due December 1, 2027, 3.483% | ||||||||||||||
Senior notes due May 1, 2025, 3.844% | — | |||||||||||||
Senior notes due May 1, 2030, 4.200% | — | |||||||||||||
Mississippi economic development revenue bonds due May 1, 2024, 7.81% | ||||||||||||||
Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55% | ||||||||||||||
Less unamortized debt issuance costs | ( | ( | ||||||||||||
Total long-term debt | $ | $ | ||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Operating lease costs | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term operating lease costs | $ | $ | $ | $ | ||||||||||||||||||||||
Variable operating lease costs | $ | $ | $ | $ | ||||||||||||||||||||||
Operating cash flows from operating leases | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average remaining lease term (years) - operating leases | ||||||||||||||||||||||||||
Weighted-average discount rate - operating leases | % | % | % | % |
Year: | September 30, 2020 | December 31, 2019 | ||||||||||||
2020 | $ | $ | ||||||||||||
2021 | ||||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
Thereafter | ||||||||||||||
Total lease payments | ||||||||||||||
Less: imputed interest | ||||||||||||||
Present value of lease liabilities | $ | $ |
($ in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Short-term operating lease liabilities | $ | $ | ||||||||||||
Lease liabilities included in liabilities held for sale | ||||||||||||||
Long-term operating lease liabilities | ||||||||||||||
Total operating lease liabilities | $ | $ |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefits | Other Benefits | Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Interest cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | — | — | ( | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Amortization of prior service cost (credit) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of net actuarial loss (gain) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( |
Nine Months Ended September 30 | ||||||||||||||
($ in millions) | 2020 | 2019 | ||||||||||||
Pension plans | ||||||||||||||
Discretionary | ||||||||||||||
Qualified | $ | $ | ||||||||||||
Non-qualified | ||||||||||||||
Other benefit plans | ||||||||||||||
Total contributions | $ | $ |
Stock Awards (in thousands) | Weighted-Average Grant Date Fair Value | Weighted-Average Remaining Contractual Term (in years) | ||||||||||||||||||
Total stock awards | $ |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Sales and service revenues | $ | 2,314 | $ | 2,219 | $ | 95 | 4 | % | $ | 6,604 | $ | 6,487 | $ | 117 | 2 | % | ||||||||||||||||||||||||||||||||||
Cost of product sales and service revenues | 1,878 | 1,802 | 76 | 4 | % | 5,481 | 5,388 | 93 | 2 | % | ||||||||||||||||||||||||||||||||||||||||
Income from operating investments, net | 6 | 6 | — | — | % | 19 | 15 | 4 | 27 | % | ||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 220 | 209 | 11 | 5 | % | 648 | 564 | 84 | 15 | % | ||||||||||||||||||||||||||||||||||||||||
Operating income | 222 | 214 | 8 | 4 | % | 494 | 550 | (56) | (10) | % | ||||||||||||||||||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (27) | (18) | (9) | (50) | % | (68) | (52) | (16) | (31) | % | ||||||||||||||||||||||||||||||||||||||||
Non-operating retirement benefit | 29 | 3 | 26 | 867 | % | 89 | 8 | 81 | 1,013 | % | ||||||||||||||||||||||||||||||||||||||||
Other, net | 2 | (1) | 3 | 300 | % | (8) | 5 | (13) | (260) | % | ||||||||||||||||||||||||||||||||||||||||
Federal and foreign income taxes | 4 | 44 | (40) | (91) | % | 60 | 111 | (51) | (46) | % | ||||||||||||||||||||||||||||||||||||||||
Net earnings | $ | 222 | $ | 154 | $ | 68 | 44 | % | $ | 447 | $ | 400 | $ | 47 | 12 | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Product sales | $ | 1,699 | $ | 1,545 | $ | 154 | 10 | % | $ | 4,743 | $ | 4,555 | $ | 188 | 4 | % | ||||||||||||||||||||||||||||||||||
Service revenues | 615 | 674 | (59) | (9) | % | 1,861 | 1,932 | (71) | (4) | % | ||||||||||||||||||||||||||||||||||||||||
Sales and service revenues | $ | 2,314 | $ | 2,219 | $ | 95 | 4 | % | $ | 6,604 | $ | 6,487 | $ | 117 | 2 | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Cost of product sales | $ | 1,388 | $ | 1,246 | $ | 142 | 11 | % | $ | 3,931 | $ | 3,754 | $ | 177 | 5 | % | ||||||||||||||||||||||||||||||||||
% of product sales | 81.7 | % | 80.6 | % | 82.9 | % | 82.4 | % | ||||||||||||||||||||||||||||||||||||||||||
Cost of service revenues | 490 | 556 | (66) | (12) | % | 1,550 | 1,634 | (84) | (5) | % | ||||||||||||||||||||||||||||||||||||||||
% of service revenues | 79.7 | % | 82.5 | % | 83.3 | % | 84.6 | % | ||||||||||||||||||||||||||||||||||||||||||
Income from operating investments, net | 6 | 6 | — | — | % | 19 | 15 | 4 | 27 | % | ||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 220 | 209 | 11 | 5 | % | 648 | 564 | 84 | 15 | % | ||||||||||||||||||||||||||||||||||||||||
% of sales and service revenues | 9.5 | % | 9.4 | % | 9.8 | % | 8.7 | % | ||||||||||||||||||||||||||||||||||||||||||
Cost of sales and service revenues | $ | 2,092 | $ | 2,005 | $ | 87 | 4 | % | $ | 6,110 | $ | 5,937 | $ | 173 | 3 | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 222 | $ | 214 | $ | 8 | 4 | % | $ | 494 | $ | 550 | $ | (56) | (10) | % | ||||||||||||||||||||||||||||||||||
Operating FAS/CAS Adjustment | (60) | (23) | (37) | (161) | % | (186) | (94) | (92) | (98) | % | ||||||||||||||||||||||||||||||||||||||||
Non-current state income taxes | — | — | — | — | % | 5 | 2 | 3 | 150 | % | ||||||||||||||||||||||||||||||||||||||||
Segment operating income | $ | 162 | $ | 191 | $ | (29) | (15) | % | $ | 313 | $ | 458 | $ | (145) | (32) | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
FAS expense | $ | (18) | $ | (35) | $ | 17 | 49 | % | $ | (53) | $ | (105) | $ | 52 | 50 | % | ||||||||||||||||||||||||||||||||||
CAS cost | 107 | 61 | 46 | 75 | % | 328 | 207 | 121 | 58 | % | ||||||||||||||||||||||||||||||||||||||||
FAS/CAS Adjustment | 89 | 26 | 63 | 242 | % | 275 | 102 | 173 | 170 | % | ||||||||||||||||||||||||||||||||||||||||
Non-operating retirement benefit | (29) | (3) | (26) | (867) | % | (89) | (8) | (81) | (1,013) | % | ||||||||||||||||||||||||||||||||||||||||
Operating FAS/CAS Adjustment | $ | 60 | $ | 23 | $ | 37 | 161 | % | $ | 186 | $ | 94 | $ | 92 | 98 | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Sales and Service Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ingalls | $ | 675 | $ | 647 | $ | 28 | 4 | % | $ | 1,926 | $ | 1,853 | $ | 73 | 4 | % | ||||||||||||||||||||||||||||||||||
Newport News | 1,358 | 1,274 | 84 | 7 | % | 3,821 | 3,832 | (11) | — | % | ||||||||||||||||||||||||||||||||||||||||
Technical Solutions | 320 | 326 | (6) | (2) | % | 957 | 887 | 70 | 8 | % | ||||||||||||||||||||||||||||||||||||||||
Intersegment eliminations | (39) | (28) | (11) | (39) | % | (100) | (85) | (15) | (18) | % | ||||||||||||||||||||||||||||||||||||||||
Sales and service revenues | $ | 2,314 | $ | 2,219 | $ | 95 | 4 | % | $ | 6,604 | $ | 6,487 | $ | 117 | 2 | % | ||||||||||||||||||||||||||||||||||
Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ingalls | $ | 62 | $ | 61 | $ | 1 | 2 | % | $ | 185 | $ | 176 | $ | 9 | 5 | % | ||||||||||||||||||||||||||||||||||
Newport News | 79 | 121 | (42) | (35) | % | 105 | 273 | (168) | (62) | % | ||||||||||||||||||||||||||||||||||||||||
Technical Solutions | 21 | 9 | 12 | 133 | % | 23 | 9 | 14 | 156 | % | ||||||||||||||||||||||||||||||||||||||||
Segment operating income | 162 | 191 | (29) | (15) | % | 313 | 458 | (145) | (32) | % | ||||||||||||||||||||||||||||||||||||||||
Non-segment factors affecting operating income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating FAS/CAS Adjustment | 60 | 23 | 37 | 161 | % | 186 | 94 | 92 | 98 | % | ||||||||||||||||||||||||||||||||||||||||
Non-current state income taxes | — | — | — | — | % | (5) | (2) | (3) | (150) | % | ||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 222 | $ | 214 | $ | 8 | 4 | % | $ | 494 | $ | 550 | $ | (56) | (10) | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Gross favorable adjustments | $ | 40 | $ | 64 | $ | 157 | $ | 158 | ||||||||||||||||||
Gross unfavorable adjustments | (36) | (20) | (232) | (101) | ||||||||||||||||||||||
Net adjustments | $ | 4 | $ | 44 | $ | (75) | $ | 57 |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Sales and service revenues | $ | 675 | $ | 647 | $ | 28 | 4 | % | $ | 1,926 | $ | 1,853 | $ | 73 | 4 | % | ||||||||||||||||||||||||||||||||||
Segment operating income | 62 | 61 | 1 | 2 | % | 185 | 176 | 9 | 5 | % | ||||||||||||||||||||||||||||||||||||||||
As a percentage of segment sales | 9.2 | % | 9.4 | % | 9.6 | % | 9.5 | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Sales and service revenues | $ | 1,358 | $ | 1,274 | $ | 84 | 7 | % | $ | 3,821 | $ | 3,832 | $ | (11) | — | % | ||||||||||||||||||||||||||||||||||
Segment operating income | 79 | 121 | (42) | (35) | % | 105 | 273 | (168) | (62) | % | ||||||||||||||||||||||||||||||||||||||||
As a percentage of segment sales | 5.8 | % | 9.5 | % | 2.7 | % | 7.1 | % |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 over 2019 | 2020 over 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | Percent | 2020 | 2019 | Dollars | Percent | ||||||||||||||||||||||||||||||||||||||||||
Sales and service revenues | $ | 320 | $ | 326 | $ | (6) | (2) | % | $ | 957 | $ | 887 | $ | 70 | 8 | % | ||||||||||||||||||||||||||||||||||
Segment operating income | 21 | 9 | 12 | 133 | % | 23 | 9 | 14 | 156 | % | ||||||||||||||||||||||||||||||||||||||||
As a percentage of segment sales | 6.6 | % | 2.8 | % | 2.4 | % | 1.0 | % |
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||||||||||||||||
($ in millions) | Funded | Unfunded | Backlog | Funded | Unfunded | Backlog | ||||||||||||||||||||||||||||||||
Ingalls | $ | 11,186 | $ | 1,792 | $ | 12,978 | $ | 9,062 | $ | 1,693 | $ | 10,755 | ||||||||||||||||||||||||||
Newport News | 10,164 | 21,088 | 31,252 | 8,414 | 26,352 | 34,766 | ||||||||||||||||||||||||||||||||
Technical Solutions | 562 | 556 | 1,118 | 435 | 538 | 973 | ||||||||||||||||||||||||||||||||
Total backlog | $ | 21,912 | $ | 23,436 | $ | 45,348 | $ | 17,911 | $ | 28,583 | $ | 46,494 |
Nine Months Ended September 30 | 2020 over | |||||||||||||||||||
2019 | ||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | |||||||||||||||||
Net earnings | $ | 447 | $ | 400 | $ | 47 | ||||||||||||||
Depreciation and amortization | 182 | 163 | 19 | |||||||||||||||||
Provision for doubtful accounts | (2) | (5) | 3 | |||||||||||||||||
Stock-based compensation | 16 | 19 | (3) | |||||||||||||||||
Deferred income taxes | (7) | 42 | (49) | |||||||||||||||||
Loss (gain) on investments in marketable securities | (3) | (6) | 3 | |||||||||||||||||
Asset impairments | 13 | — | 13 | |||||||||||||||||
Retiree benefit funding less than (in excess of) expense | (183) | 56 | (239) | |||||||||||||||||
Trade working capital decrease (increase) | 28 | (339) | 367 | |||||||||||||||||
Net cash provided by operating activities | $ | 491 | $ | 330 | $ | 161 |
Nine Months Ended September 30 | 2020 over | |||||||||||||||||||
2019 | ||||||||||||||||||||
($ in millions) | 2020 | 2019 | Dollars | |||||||||||||||||
Net cash provided by operating activities | $ | 491 | $ | 330 | $ | 161 | ||||||||||||||
Less capital expenditures: | ||||||||||||||||||||
Capital expenditure additions | (220) | (349) | 129 | |||||||||||||||||
Grant proceeds for capital expenditures | 17 | 71 | (54) | |||||||||||||||||
Free cash flow | $ | 288 | $ | 52 | $ | 236 |
Program Name | Program Description | |||||||
America class (LHA 6) amphibious assault ships | Design and build large deck amphibious assault ships that provide forward presence and power projection as an integral part of joint, interagency and multinational maritime expeditionary forces. The America class (LHA 6) ships, together with the Wasp class (LHD 1) ships, are the successors to the decommissioned Tarawa class (LHA 1) ships. The America class (LHA 6) ships optimize aviation operations and support capabilities. We delivered USS America (LHA 6) in April 2014 and Tripoli (LHA 7) in February 2020, and we are currently constructing Bougainville (LHA 8). | |||||||
Arleigh Burke class (DDG 51) destroyers | Build guided missile destroyers designed for conducting anti-air, anti-submarine, anti-surface, and strike operations. The Aegis-equipped Arleigh Burke class (DDG 51) destroyers are the U.S. Navy's primary surface combatant, and have been constructed in variants, allowing technological advances during construction. In 2016 we delivered USS John Finn (DDG 113), in 2017 we delivered Ralph Johnson (DDG 114), in 2019 we delivered Paul Ignatius (DDG 117), and in 2020 we delivered Delbert D. Black (DDG 119). We have contracts to construct the following Arleigh Burke class (DDG 51) destroyers: Frank E. Petersen Jr. (DDG 121), Lenah H. Sutcliffe Higbee (DDG 123), Jack H. Lucas (DDG 125), Ted Stevens (DDG 128), Jeremiah Denton (DDG 129), George M. Neal (DDG 131), Sam Nunn (DDG 133), Thad Cochran (DDG 135), and DDG 137 (unnamed). | |||||||
Carrier RCOH | Perform refueling and complex overhaul ("RCOH") of nuclear-powered aircraft carriers, which is required at the mid-point of their 50-year life cycle. USS Abraham Lincoln (CVN 72) was redelivered to the U.S. Navy in the second quarter of 2017 and USS George Washington (CVN 73) arrived at Newport News for the start of its RCOH in August 2017. | |||||||
Columbia class (SSBN 826) submarines | Newport News is participating in designing the Columbia class submarine as a replacement for the current aging Ohio class nuclear ballistic missile submarines, which were first introduced into service in 1981. The Ohio class SSBN includes 14 nuclear ballistic missile submarines and four nuclear cruise missile submarines. The Columbia class program plan of record is to construct 12 new ballistic missile submarines. The U.S. Navy has initiated the design process for the new class of submarines, and, in early 2017, the DoD signed the acquisition decision memorandum approving the Columbia class program’s Milestone B, which formally authorizes the program’s entry into the engineering and manufacturing development phase. We perform design work as a subcontractor to Electric Boat, and we have entered into a teaming agreement with Electric Boat to build modules for the entire Columbia (SSBN 826) class submarine program that leverages our Virginia class (SSN 774) experience. We have been awarded contracts from Electric Boat to begin integrated product and process development and provide long-lead-time material and advance construction for the Columbia class (SSBN 826) program. Construction of the first Columbia class (SSBN 826) submarine is expected to begin in 2021. | |||||||
Defense and federal solutions | DFS is focused on solving tough national security challenges for the DoD, the intelligence community, and federal civilian agencies around the globe. The group’s expertise includes maritime fleet sustainment; intelligence, surveillance, and reconnaissance; cyber operations; secure enterprise information technology engineering and operations; advanced modeling, simulation, and training; and logistics management. | |||||||
USS Gerald R. Ford class (CVN 78) aircraft carriers | Design and construction for the Ford class program, which is the aircraft carrier replacement program for the decommissioned Enterprise (CVN 65) and Nimitz class (CVN 68) aircraft carriers. USS Gerald R. Ford (CVN 78), the first ship of the Ford class, was delivered to the U.S. Navy in the second quarter of 2017. In June 2015, we were awarded a contract for the detail design and construction of John F. Kennedy (CVN 79), following several years of engineering, advance construction, and purchase of long-lead time components and material. In addition, we have received awards for detail design and construction of Enterprise (CVN 80) and Doris Miller (CVN 81). This category also includes the class' non-recurring engineering. The class is expected to bring improved warfighting capability, quality of life improvements for sailors, and reduced life cycle costs. | |||||||
Legend class National Security Cutter | Design and build the U.S. Coast Guard's National Security Cutters ("NSCs"), the largest and most technically advanced class of cutter in the U.S. Coast Guard. The NSC is equipped to carry out maritime homeland security, maritime safety, protection of natural resources, maritime mobility, and national defense missions. The plan is for a total of 11 ships, of which the first eight ships have been delivered. Stone (NSC 9), Calhoun (NSC 10), and Friedman (NSC 11) are currently under construction. | |||||||
Naval nuclear support services | Provide services to and in support of the U.S. Navy, ranging from services supporting the Navy's carrier and submarine fleets to maintenance services at U.S. Navy training facilities. Naval nuclear support services include design, construction, maintenance, and disposal activities for in service U.S. Navy nuclear ships worldwide through mobile and in-house capabilities. Services include maintenance services on nuclear reactor prototypes. | |||||||
Nuclear and environmental services | Provide services in nuclear management and operations, and nuclear and non-nuclear fabrication and repair. We provide site management, nuclear and industrial facilities operations and maintenance, decontamination and decommissioning, and radiological and hazardous waste management services. We provide services, including fabrication, equipment repair, and technical engineering services. We participate in several joint ventures, including N3B, MSTS, and SRNS. N3B was awarded the Los Alamos Legacy Cleanup Contract at the DoE/National Nuclear Security Administration’s Los Alamos National Laboratory. MSTS was awarded a contract for site management and operations at the Nevada National Security Site. SRNS provides site management and operations at the DoE's Savannah River Site near Aiken, South Carolina. | |||||||
Oil and gas services | Deliver engineering, procurement, and construction management services to the oil and gas industry for major pipeline, production, and treatment facilities. These services include full life-cycle services for domestic and international projects, from concept identification through detail design, execution and construction, and decommissioning. Related field services include survey, inspection, commissioning and start-up, operations and maintenance, and optimization and debottlenecking. | |||||||
San Antonio class (LPD 17) amphibious transport dock ships | Design and build amphibious transport dock ships, which are warships that embark, transport, and land elements of a landing force for a variety of expeditionary warfare missions, and also serve as the secondary aviation platform for Amphibious Readiness Groups. The San Antonio class (LPD 17) is the newest addition to the U.S. Navy's 21st century amphibious assault force, and these ships are a key element of the U.S. Navy's seabase transformation. In 2013, we delivered USS Somerset (LPD 25), in 2016, we delivered USS John P. Murtha (LPD 26), and, in 2017, we delivered USS Portland (LPD 27). We are currently constructing Fort Lauderdale (LPD 28), Richard M. McCool Jr. (LPD 29), and Harrisburg (LPD 30). In 2020 we were awarded a contract to construct LPD 31 (unnamed). | |||||||
The decommissioned Enterprise (CVN 65) | Defuel and inactivate the world's first nuclear-powered aircraft carrier, which began in 2013. The inactivation was completed in the second quarter of 2018. | |||||||
Unmanned systems | Our unmanned systems products and services create advanced unmanned maritime solutions for defense, marine research, and commercial applications. Serving customers in more than 30 countries, unmanned systems provides design, autonomy, manufacturing, testing, operations, and sustainment of unmanned systems, including unmanned underwater vehicles and unmanned surface vessels. | |||||||
Virginia class (SSN 774) fast attack submarines | Construct attack submarines as the principal subcontractor to Electric Boat. The Virginia class (SSN 774) is a post-Cold War design tailored to excel in a wide range of warfighting missions, including anti-submarine and surface ship warfare; special operation forces; strike; intelligence, surveillance, and reconnaissance; carrier and expeditionary strike group support; and mine warfare. | |||||||
Period | Total Number of Shares Purchased1 | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions) | ||||||||||||||||||||||
July 1, 2020 to July 31, 2020 | — | $ | — | — | $ | 1,142.0 | ||||||||||||||||||||
August 1, 2020 to August 31, 2020 | — | — | — | 1,142.0 | ||||||||||||||||||||||
September 1, 2020 to September 30, 2020 | — | — | — | 1,142.0 | ||||||||||||||||||||||
Total | — | $ | — | — | $ | 1,142.0 |
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101 | The following financial information for the Company, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations and Comprehensive Income, (ii) the Condensed Consolidated Statements of Financial Position, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Changes in Equity, and (v) the Notes to Condensed Consolidated Financial Statements. | |||||||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q, formatted in Inline XBRL and contained in Exhibit 101. |
Date: | November 5, 2020 | Huntington Ingalls Industries, Inc. | |||||||||
(Registrant) | |||||||||||
By: | /s/ Nicolas Schuck | ||||||||||
Nicolas Schuck | |||||||||||
Corporate Vice President, Controller and Chief Accounting Officer | |||||||||||
(Duly Authorized Officer and Principal Accounting Officer) |
/s/ C. Michael Petters | |||||
C. Michael Petters | |||||
President and Chief Executive Officer |
/s/ Christopher D. Kastner | |||||
Christopher D. Kastner | |||||
Executive Vice President and Chief Financial Officer |
/s/ C. Michael Petters | |||||
C. Michael Petters | |||||
President and Chief Executive Officer |
/s/ Christopher D. Kastner | |||||
Christopher D. Kastner | |||||
Executive Vice President and Chief Financial Officer |
Condensed Consolidated Statements Of Financial Position (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
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Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 1 | $ 3 |
Accumulated depreciation | 2,009 | 1,961 |
Accumulated amortization | $ 640 | $ 599 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 53,300,000 | 53,200,000 |
Common stock, shares outstanding (in shares) | 40,500,000 | 40,800,000 |
Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share | $ 1.03 | $ 0.86 | $ 3.09 | $ 2.58 |
Description of Business |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Huntington Ingalls Industries, Inc. ("HII" or the "Company") is one of America’s largest military shipbuilding companies and a provider of professional services to partners in government and industry. HII is organized into three reportable segments: Ingalls Shipbuilding ("Ingalls"), Newport News Shipbuilding ("Newport News"), and Technical Solutions. For more than a century, the Company's Ingalls segment in Mississippi and Newport News segment in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder. The Technical Solutions segment provides a range of services to the governmental, energy, and oil and gas markets. HII conducts most of its business with the U.S. Government, primarily the Department of Defense ("DoD"). As prime contractor, principal subcontractor, team member, or partner, the Company participates in many high-priority U.S. defense technology programs. Through its Ingalls segment, HII is a builder of amphibious assault and expeditionary ships for the U.S. Navy, the sole builder of National Security Cutters for the U.S. Coast Guard, and one of only two companies that builds the Navy's current fleet of Arleigh Burke class (DDG 51) destroyers. Through its Newport News segment, HII is the nation's sole designer, builder, and refueler of nuclear-powered aircraft carriers, and one of only two companies currently designing and building nuclear-powered submarines for the U.S. Navy. The Technical Solutions segment provides a wide range of professional services, including defense and federal services ("DFS"), nuclear and environmental services, and unmanned solutions.
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Basis of Presentation |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation. These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year. Accounting Estimates - The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates. Additionally, the Company has incorporated realized and estimated future effects of the global outbreak of coronavirus disease 2019 (“COVID-19”), including, among other things, orders of civil authorities associated with COVID-19 and steps taken to mitigate the effects of COVID-19 (collectively, “COVID-19 Events”), with respect to contract costs and revenue recognition, effective income tax rates, and the fair values of the Company’s long-lived assets, financial instruments, intangible assets, and goodwill recorded at our reporting units. For the nine months ended September 30, 2020, the Company recognized across all programs an aggregate unfavorable impact on operating margin of $61 million for delay and disruption from lower employee attendance, limited availability of critical skills, and out-of-sequence work directly attributable to COVID-19 Events. While costs related to COVID-19 Events are allowable under U.S. Government contracts, the Company's estimates of the effects of COVID-19 Events reflect uncertainty regarding the Company's ability to recover the full costs related to COVID-19 Events under government relief actions such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and U.S. Department of Defense ("DoD") guidance. Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred. Grants in recognition of specific expenses are recognized in the same period as an offset to those related expenses. Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized. For the nine months ended September 30, 2020, the Company recognized cash grant benefits of approximately $17 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. For the nine months ended September 30, 2019, the Company recognized cash grant benefits of approximately $71 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties. The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $165 million and $147 million as of September 30, 2020, and December 31, 2019, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy. Loan Receivable - The Company holds a loan receivable in connection with a seller financed transaction involving its previously owned Avondale shipyard facility. The receivable is carried at amortized cost of $33 million, net of $15 million of loan discount, which approximates fair value and is recorded in miscellaneous other assets on the unaudited condensed consolidated statements of financial position. Interest income is recognized on an accrual basis using the effective yield method. The discount is accreted into income using the effective yield method over the estimated life of the loan receivable. Related Party Transactions - The Company had $84 million outstanding under Industrial Revenue Bonds issued by the Mississippi Business Finance Corporation as of each of September 30, 2020, and December 31, 2019. Prior to the Company's spinoff from Northrop Grumman Corporation, repayment of principal and interest was guaranteed by Northrop Grumman Systems Corporation. The guaranty remains in effect, and the Company has agreed to indemnify Northrop Grumman Systems Corporation for any losses related to the guaranty pursuant to the Separation and Distribution Agreement with Northrop Grumman Corporation.
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Accounting Standards Updates |
9 Months Ended |
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Sep. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Standards Updates | ACCOUNTING STANDARDS UPDATESIn June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the current incurred loss model to a forward-looking expected credit loss model for most financial assets, such as trade and other receivables, loans and other instruments. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted the provisions of ASU 2016-13 on January 1, 2020. The adoption did not result in a material impact to the Company’s financial results or disclosures.Accounting pronouncements issued but not effective until after December 31, 2020, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows. |
Acquisitions |
9 Months Ended |
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Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Business Combination Disclosure | ACQUISITIONSIn March 2020, the Company acquired Hydroid, Inc. ("Hydroid"), a leading provider of advanced marine robotics to the defense and maritime markets, for approximately $377 million in cash, net of $2 million of acquired cash. The acquisition expands the Company's capabilities in the strategically important and rapidly growing autonomous and unmanned maritime systems market. In connection with this acquisition, the Company preliminarily recorded $310 million of goodwill, which included the value of Hydroid's workforce, all of which was allocated to the Company's Technical Solutions segment. For the nine months ended September 30, 2020, the Company recorded a decrease in goodwill of $71 million, primarily driven by the refinement of fair value calculations for certain assets and liabilities and the recording of $76 million of intangible assets related to technology and existing contract backlog. The Company has not completed the purchase price allocation, because the fair value calculations for certain assets and liabilities have not been finalized. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Hydroid are not material to the Company’s consolidated financial position, results of operations, or cash flows. In February 2019, the Company acquired Fulcrum IT Services, LLC ("Fulcrum"), an information technology and government consulting company, for approximately $195 million in cash, net of $1 million of acquired cash. The acquisition was consistent with the Company's strategy to optimize and expand its services portfolio. In connection with this acquisition, the Company recorded $133 million of goodwill, which includes the value of Fulcrum's workforce, all of which was allocated to the Company's Technical Solutions segment, as well as $49 million of intangible assets related to existing contract backlog. For the year ended December 31, 2019, the Company recorded a decrease in goodwill of $1 million, primarily driven by the finalization of a net working capital adjustment and the fair value calculations for certain assets and liabilities. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Fulcrum are not material to the Company’s consolidated financial position, results of operations, or cash flows. The Company funded each of these acquisitions using cash on hand, issuances of commercial paper, or borrowings on its revolving credit facility. The acquisition costs incurred in connection with these acquisitions were not material. The operating results of these businesses have been included in the Company’s consolidated results as of the respective closing dates of the acquisitions. In allocating the purchase prices of these businesses, the Company considered the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. The total amount of goodwill resulting from these acquisitions is expected to be amortizable for tax purposes. These acquisitions are not material either individually or in the aggregate, and pro forma revenues and results of operations have therefore not been provided.
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Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity [Text Block] | STOCKHOLDERS' EQUITY Treasury Stock - In November 2019, the Company's board of directors authorized an increase in the Company's stock repurchase program from $2.2 billion to $3.2 billion and an extension of the term of the program to October 31, 2024. Repurchases are made from time to time at management's discretion in accordance with applicable federal securities laws. For the nine months ended September 30, 2020, the Company repurchased 390,904 shares at an aggregate cost of $84 million. For the nine months ended September 30, 2019, the Company repurchased 751,497 shares at an aggregate cost of $156 million, of which approximately $2 million was not yet settled for cash as of September 30, 2019. For the nine months ended September 30, 2019, the Company also settled for cash $48 million of shares repurchased in the prior year. The cost of purchased shares is recorded as treasury stock in the unaudited condensed consolidated statements of financial position. Dividends - The Company declared cash dividends per share of $1.03 and $0.86 for the three months ended September 30, 2020 and 2019, respectively. The Company declared cash dividends per share of $3.09 and $2.58 for the nine months ended September 30, 2020 and 2019, respectively. The Company paid cash dividends totaling $126 million and $107 million for the nine months ended September 30, 2020 and 2019, respectively. Accumulated Other Comprehensive Loss - Other comprehensive income (loss) refers to gains and losses recorded as an element of stockholders' equity but excluded from net earnings. The accumulated other comprehensive loss as of September 30, 2020, was comprised of unamortized benefit plan costs of $1,355 million and other comprehensive loss items of $2 million. The accumulated other comprehensive loss as of December 31, 2019, was comprised of unamortized benefit plan costs of $1,407 million and other comprehensive loss items of $2 million. The changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2020 and 2019, were as follows:
1 These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 17: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the three months ended September 30, 2020 and 2019, was $6 million and $7 million, respectively. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2020 and 2019, was $18 million and $19 million, respectively.
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Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE Basic and diluted earnings per common share were calculated as follows:
Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.3 million Restricted Performance Stock Rights ("RPSRs") for the three and nine months ended September 30, 2020 and 2019.
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Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer | REVENUE The following is a description of principal activities from which the Company generates its revenues. For more detailed information regarding reportable segments, see Note 8: Segment Information. For more detailed information regarding the Company's significant accounting policy for revenue, see Note 2: Basis of Presentation. U.S. Government Contracts The Ingalls and Newport News segments generate revenue primarily from performance under multi-year contracts with the U.S. Government, generally the U.S. Navy and U.S. Coast Guard, or prime contractors to contracts with the U.S. Government, relating to the advance planning, design, construction, repair, maintenance, refueling, overhaul, or inactivation of nuclear-powered ships and non-nuclear ships. The period over which the Company performs may extend past five years. The Technical Solutions segment also generates the majority of its revenue from contracts with the U.S. Government, including U.S. Government agencies. The Company generally invoices and receives related payments based upon performance progress no less frequently than monthly. Shipbuilding - For most of the Company's shipbuilding contracts, the customer contracts with the Company to provide a comprehensive service of designing, procuring long-lead-time materials, manufacturing, and integrating complex equipment and technologies into a single ship or project, often resulting in a single performance obligation. Contract modifications to account for changes in specifications and requirements are recognized when approved by the customer. In the majority of circumstances, modifications do not result in additional performance obligations that are distinct from the existing performance obligations in the contract and the effects of the modifications are recognized as an adjustment to revenue on a cumulative catch-up basis. Alternatively, in instances where the performance obligations in the modifications are deemed distinct, contract modifications are accounted for prospectively. The Company considers incentive and award fees to be variable consideration and includes in the transaction price at inception the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable. The Company recognizes revenues related to shipbuilding contracts as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, which best reflects the transfer of control to the customer. Services - The Technical Solutions segment generates revenue primarily under U.S. Government contracts from the provision of defense and federal services. Contracts generally are structured using either an Indefinite Delivery/Indefinite Quantity ("IDIQ") vehicle, under which orders are issued, or a standalone contract. Contracts may be fixed-price or cost-type, include variable consideration such as incentives and awards, and structured as task orders under an IDIQ contract vehicle or requirements contract vehicle. In either case, the Company generally performs over the course of a short-duration period and may continue to perform upon exercise of related period of performance options that are also short in duration, generally one year. The Company’s performance obligations vary in nature and may be stand-ready, in which case the Company responds to the customer’s needs on the basis of its demand, a recurring service, typically recurring maintenance services, or a single performance obligation that does not comprise a series of distinct services. In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service. The Company generally recognizes revenue as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, because, even where the Company has identified a series of services, its cost incurrence pattern generally is not ratable given the complex nature of the services the Company provides. Invoices are issued and related payments are received, on the basis of performance progress, no less frequently than monthly. In addition, many of the Company's U.S. Government services contracts are time and material arrangements. As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date. Non-U.S. Government Contracts Revenues generated under commercial and state and local government agency contracts are primarily derived from the provision of nuclear and environmental and oil and gas services. Non-U.S. Government contracts typically are one or two years in duration. In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. In the context of variable consideration, the Company limits the transaction price to amounts for which the Company believes a significant reversal of revenue is not probable. Such amounts may relate to transaction price in excess of funding, a lack of history with the customer, a lack of history with the goods or services being provided, or other items. Revenue generally is recognized over time given the terms and conditions of the related contracts. The Company generally utilizes a cost-to-cost input method to measure performance progress, which best depicts the transfer of control to the customer. The Company’s non-U.S. Government contract portfolio is comprised of a large number of time and material arrangements. As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date. Disaggregation of Revenue The following tables present revenues on a disaggregated basis, in a manner that reconciles with the Company's reportable segment disclosures, for the following categories: product versus service type, customer type, contract type, and major program. Certain prior year amounts have been reclassified. See Note 8: Segment Information. The Company believes that this level of disaggregation provides investors with information to evaluate the Company’s financial performance and provides the Company with information to make capital allocation decisions in the most appropriate manner.
As of September 30, 2020, the Company had $45.3 billion of remaining performance obligations. The Company expects to recognize approximately 20% of its remaining performance obligations as revenue through 2021, an additional 25% through 2023, and the balance thereafter. Cumulative Catch-up Adjustments For the three months ended September 30, 2020, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $4 million and $0.08, respectively. For the three months ended September 30, 2019, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $44 million and $0.86, respectively. For the nine months ended September 30, 2020, net cumulative catch-up adjustments decreased operating income and decreased diluted earnings per share by $75 million and $1.45, respectively. For the nine months ended September 30, 2019, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $57 million and $1.09, respectively. No individual cumulative catch-up adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income for the three months ended September 30, 2020. Cumulative catch-up adjustments for the nine months ended September 30, 2020, included unfavorable adjustments of $134 million, relating to Block IV of the Virginia class (SSN 774) submarine program at the Company's Newport News segment, which decreased diluted earnings per share by $2.60. While other unfavorable cumulative catch-up adjustments for the nine months ended September 30, 2020, were not individually material, cost estimates for discrete delay and disruption from COVID-19 Events drove $61 million of unfavorable cumulative catch-up adjustments across our contracts, including $16 million relating to Block IV of the Virginia class (SSN 774) submarine program, which is included in the $134 million unfavorable adjustments discussed above. For the nine months ended September 30, 2020, no individual favorable cumulative catch-up adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income. No individual cumulative catch-up adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2019. Contract Balances Contract balances include accounts receivable, contract assets, and contract liabilities from contracts with customers. Accounts receivable represent an unconditional right to consideration and include amounts billed and currently due from customers. Contract assets primarily relate to the Company's rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time. Fixed-price contracts are generally billed to the customer using either 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 liabilities relate to advance payments, billings in excess of revenues, and deferred revenue amounts. The Company reports contract balances in a net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period. The Company’s net contract assets decreased $86 million from December 31, 2019, to September 30, 2020, primarily resulting from an increase in contract liabilities due to unfavorable cumulative catch-up adjustments and billings on certain U.S. Navy contracts. For the three and nine months ended September 30, 2020, the Company recognized revenue of $9 million and $265 million, respectively, related to its contract liabilities as of December 31, 2019. For the three and nine months ended September 30, 2019, the Company recognized revenue of $17 million and $261 million, respectively, related to its contract liabilities as of December 31, 2018.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION The Company is organized into three reportable segments: Ingalls, Newport News, and Technical Solutions, consistent with how management makes operating decisions and assesses performance. In January 2020, the Company realigned its segments to optimize its operating structure. As a result of this realignment, the Company's HII Mechanical business was transferred from the Technical Solutions segment to the Newport News segment to better align HII Mechanical's work primarily supporting Newport News. The Company has reflected the 2020 realignment in prior financial reporting periods on an as-if basis, which has resulted in the transfer of revenue, operating income, assets, and liabilities between the Technical Solutions and Newport News segments. This realignment did not impact the Company's previously reported consolidated financial position, results of operations, or cash flows. See Note 7: Revenue. The following table presents segment results for the three and nine months ended September 30, 2020 and 2019:
Operating FAS/CAS Adjustment - The Operating FAS/CAS Adjustment represents the difference between the service cost component of our pension and other postretirement expense determined in accordance with GAAP ("FAS") and our pension and other postretirement expense under CAS. The following table presents the Company's assets by segment:
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Inventoried Costs, Net |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventoried Costs, Net | INVENTORIED COSTS, NET Inventoried costs were comprised of the following:
1 Includes amounts capitalized pursuant to applicable provisions of the FAR and CAS.
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Assets and Liabilities Held for Sale |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure | ASSETS AND LIABILITIES HELD FOR SALE As of September 30, 2020, the Company determined that two asset groups within its Technical Solutions segment met the criteria to be classified as held for sale. It is the Company's intention to complete the sale of these assets within 12 months following the initial classification as assets held for sale. As a result, during the third quarter of 2020 and fourth quarter of 2019, the Company recorded impairment charges of $5 million and $6 million, respectively, within other, net in the consolidated statements of operations and comprehensive income. The following table summarizes the assets and liabilities classified as held for sale:
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill HII performs impairment tests for goodwill as of November 30 of each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company's reporting units below their carrying values. Accumulated goodwill impairment losses as of each of September 30, 2020, and December 31, 2019, were $2,906 million. The accumulated goodwill impairment losses for Ingalls as of each of September 30, 2020, and December 31, 2019, were $1,568 million. The accumulated goodwill impairment losses for Newport News as of each of September 30, 2020, and December 31, 2019, were $1,187 million. The accumulated goodwill impairment losses for Technical Solutions as of each of September 30, 2020, and December 31, 2019, were $151 million. For the nine months ended September 30, 2020, the carrying amounts of goodwill changed as follows:
As of September 30, 2020, the Company recorded goodwill adjustments of $71 million relating to the acquisition of Hydroid, primarily related to allocations to intangible assets. As of September 30, 2020, the Company allocated $35 million of goodwill at its Technical Solutions segment to an asset group that was classified as held for sale. Other Intangible Assets The Company's purchased intangible assets are amortized on a straight-line basis or a method based on the pattern of benefits over their estimated useful lives. Net intangible assets consist primarily of nuclear-powered aircraft carrier and submarine program intangible assets, with an aggregate weighted-average useful life of 40 years based on the long life cycle of the related programs. Aggregate amortization expense was $15 million and $12 million for the three months ended September 30, 2020 and 2019, respectively. Aggregate amortization expense was $41 million and $35 million for the nine months ended September 30, 2020 and 2019, respectively. In connection with the Hydroid purchase in 2020, the Company recorded $76 million of intangible assets pertaining to existing contract backlog, customer relationships, and technology, which is being amortized using the pattern of benefits method over a weighted-average life of nine years. In connection with the Fulcrum purchase in 2019, the Company recorded $49 million of intangible assets pertaining to existing contract backlog and customer relationships, which is being amortized using the pattern of benefits method over a weighted-average life of seven years. The Company expects amortization expense for purchased intangible assets of approximately $55 million in 2020, $51 million in 2021, $45 million in 2022, $35 million in 2023, and $25 million in 2024.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company's earnings are primarily domestic, and its effective income tax rates on earnings from operations for the three months ended September 30, 2020 and 2019, were 1.8% and 22.2%, respectively. For the nine months ended September 30, 2020 and 2019, the Company's effective income tax rates on its earnings from operations were 11.8% and 21.7%, respectively. The lower effective tax rates for the three and nine months ended September 30, 2020, were primarily attributable to research and development tax credits for prior periods. For the three and nine months ended September 30, 2020, the Company’s effective tax rates differed from the federal statutory rate primarily as a result of the research and development tax credits for prior periods. For the three months ended September 30, 2019, the Company’s effective tax rate differed from the federal statutory rate primarily as a result of a non-recurring increase in tax expense for the true-up of estimated income taxes to the actual filed returns. For the nine months ended September 30, 2019, the Company’s effective tax rate did not differ materially from the federal statutory corporate income tax rate of 21%. On March 27, 2020, the CARES Act was signed into law. The CARES Act includes certain changes to U.S. federal tax law that impact corporations. The Company’s analysis of the tax law changes included in the CARES Act indicates that the Act will not have a material impact on the Company’s effective income tax rate. The Company's unrecognized tax benefits increased by $20 million during the three months ended September 30, 2020. As of September 30, 2020, the estimated amounts of the Company's unrecognized tax benefits, excluding interest and penalties, were liabilities of $60 million. Assuming a sustainment of these tax positions, the reversal of $48 million of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. For the three and nine months ended September 30, 2020, interest resulting from the unrecognized tax benefits noted above increased income tax expense less than $1 million and $1 million, respectively. Non-current state income taxes include deferred state income taxes, which reflect the change in deferred state tax assets and liabilities, and the tax expense or benefit associated with changes in unrecognized state tax benefits in the relevant period. These amounts are recorded within operating income. Current period state income tax expense is charged to contract costs and included in cost of sales and service revenues in segment operating income.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Long-term debt consisted of the following:
Credit Facility - The Company's credit facility (the "Credit Facility") includes a revolving credit facility of $1,250 million, which may be drawn upon during a period of five years from November 22, 2017. The revolving credit facility includes a letter of credit subfacility of $500 million. The Credit Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the Credit Facility. See Note 19: Subsidiary Guarantors. As of September 30, 2020, the Company had $16 million in issued but undrawn letters of credit and $1,234 million unutilized under the Credit Facility. The Company had unamortized debt issuance costs associated with its credit facilities of $6 million and $7 million as of September 30, 2020, and December 31, 2019, respectively. In the second quarter of 2020, the Company entered into a 364-day revolving credit agreement (the "364-Day Facility") with third-party lenders. The 364-Day Facility includes a revolving credit facility of $500 million, which may be drawn upon during a period of 364 days from April 3, 2020. The revolving credit facility has a variable interest rate on outstanding borrowings based on the London Interbank Offered Rate ("LIBOR") plus a spread based upon the Company's credit rating, which may vary between 2.000% and 2.375%. The revolving credit facility also has a commitment fee rate of 0.50%. The 364-Day Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the 364-Day Facility. Under the Company's unsecured commercial paper program, the Company may issue up to $1 billion of unsecured commercial paper notes. Senior Notes - In the second quarter of 2020, the Company issued $500 million aggregate principal amount of unregistered 3.844% senior notes due 2025 and $500 million aggregate principal amount of unregistered 4.200% senior notes due 2030, both with registration rights. The net proceeds are intended to be used for general corporate purposes, which may include debt repayments and working capital. Interest on these senior notes is payable semiannually. In October 2020, the Company announced that it had given notice of the redemption of its outstanding 5.000% senior notes due 2025. They will be redeemed in November 2020 in accordance with the terms of the indenture governing these notes. The terms of the senior notes limit the Company’s ability and the ability of certain of its subsidiaries to create liens, enter into sale and leaseback transactions, sell assets, and effect consolidations or mergers. The Company had unamortized debt issuance costs associated with its senior notes of $21 million and $12 million as of September 30, 2020, and December 31, 2019, respectively. The Company's debt arrangements contain customary affirmative and negative covenants. The Company was in compliance with all debt covenants during the nine months ended September 30, 2020. The estimated fair values of the Company's total long-term debt as of September 30, 2020, and December 31, 2019, were $2,522 million and $1,379 million, respectively. The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy. As of September 30, 2020, the aggregate amounts of principal payments due on long-term debt within the next five years consisted of $84 million due in 2024 and $500 million due in 2025.
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Investigations, Claims, and Litigation |
9 Months Ended |
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Sep. 30, 2020 | |
Investigations, Claims, And Litigation [Abstract] | |
Investigations, Claims, And Litigation | INVESTIGATIONS, CLAIMS, AND LITIGATION The Company is involved in legal proceedings before various courts and administrative agencies, and is periodically subject to government examinations, inquiries and investigations. Pursuant to FASB Accounting Standards Codification 450 Contingencies, the Company has accrued for losses associated with investigations, claims, and litigation when, and to the extent that, loss amounts related to the investigations, claims, and litigation are probable and can be reasonably estimated. The actual losses that might be incurred to resolve such investigations, claims, and litigation may be higher or lower than the amounts accrued. For matters where a material loss is probable or reasonably possible and the amount of loss cannot be reasonably estimated, but the Company is able to reasonably estimate a range of possible losses, the Company will disclose such estimated range in these notes. This estimated range is based on information currently available to the Company and involves elements of judgment and significant uncertainties. Any estimated range of possible loss does not represent the Company's maximum possible loss exposure. For matters as to which the Company is not able to reasonably estimate a possible loss or range of loss, the Company will indicate the reasons why it is unable to estimate the possible loss or range of loss. For matters not specifically described in these notes, the Company does not believe, based on information currently available to it, that it is reasonably possible that the liabilities, if any, arising from such investigations, claims, and litigation will have a material effect on its consolidated financial position, results of operations, or cash flows. The Company has, in certain cases, provided disclosure regarding certain matters for which the Company believes at this time that the likelihood of material loss is remote. False Claims Act Complaint - In 2016, the Company was made aware that it is a defendant in a qui tam False Claims Act lawsuit pending in the U.S. District Court for the Middle District of Florida related to the Company’s purchases of allegedly non-conforming parts from a supplier for use in connection with U.S. Government contracts. In August 2019, the Department of Justice (“DoJ”) declined to intervene in the lawsuit, and the lawsuit was unsealed. In response to the Company’s motion to dismiss the complaint, the court dismissed the complaint with prejudice. Although the plaintiff may refile the complaint, the Company does not currently believe the litigation will materially impact the Company’s consolidated financial position, results of operations or cash flows. Insurance Claims - In September 2020, the Company filed a complaint in the Superior Court, State of Vermont, Franklin Unit, seeking a judgment declaring that the Company's business interruption and other losses associated with COVID-19 are covered by the Company's property insurance program. A total of 32 reinsurers are named as defendants in the complaint. Prior to filing the complaint, the Company provided a notice of loss to the reinsurers, but, to date, none of the reinsurers have acknowledged coverage. The full extent of the Company's losses resulting from COVID-19 have not yet been determined, and the process of calculating losses is continuing. Although the Company believes its position is well-founded, no assurances can be provided regarding the ultimate resolution of this matter. U.S. Government Investigations and Claims - Departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil, or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory, treble, or other damages. U.S. Government regulations provide that certain findings against a contractor may also lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges. Any suspension or debarment would have a material effect on the Company because of its reliance on government contracts. Asbestos Related Claims - HII and its predecessors-in-interest are defendants in a longstanding series of cases that have been and continue to be filed in various jurisdictions around the country, wherein former and current employees and various third parties allege exposure to asbestos containing materials while on or associated with HII premises or while working on vessels constructed or repaired by HII. The cases allege various injuries, including those associated with pleural plaque disease, asbestosis, cancer, mesothelioma, and other alleged asbestos related conditions. In some cases, several of HII's former executive officers are also named as defendants. In some instances, partial or full insurance coverage is available to the Company for its liability and that of its former executive officers. The costs to resolve cases during the nine months ended September 30, 2020 and 2019, were immaterial individually and in the aggregate. The Company’s estimate of asbestos-related liabilities is subject to uncertainty because liabilities are influenced by numerous variables that are inherently difficult to predict. Key variables include the number and type of new claims, the litigation process from jurisdiction to jurisdiction and from case to case, reforms made by state and federal courts, and the passage of state or federal tort reform legislation. Although the Company believes the ultimate resolution of current cases will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of asbestos related litigation. Other Litigation - In March 2019, a new dry dock being transported for delivery to Ingalls by a heavy lift ship struck an Ingalls work barge, which in turn was pushed into Delbert D. Black (DDG 119) causing damage to Delbert D. Black (DDG 119), the work barge, and the new dry dock. At the time of the incident, responsibility for the new dry dock remained with the builder and the transport company. Repair work on Delbert D. Black (DDG 119) was completed at U.S. Navy direction. The Company is working with the U.S. Navy to ascertain whether third parties will pay for the repairs to Delbert D. Black (DDG 119) or whether the repairs will be paid under the builder's risk insurance included in the Delbert D. Black (DDG 119) contract. Claims were tendered to the Company's insurers, and the Company has received all outstanding claim proceeds. In April 2019, the Company filed suit in the U.S. District Court for the Southern District of Mississippi seeking, among other relief, damages from negligent third parties. Based on information currently available, management believes it will collect sufficient funds from one or more third parties to compensate for the resulting direct and consequential damages, but failure to collect sufficient funds or the length of time required to collect such funds could result in a material effect on the Company’s financial position, results of operations, or cash flows. The Company and its predecessor-in-interest have been in litigation with the Bolivarian Republic of Venezuela (the "Republic") since 2002 over a contract for the repair, refurbishment, and modernization at Ingalls of two foreign-built frigates. The case proceeded towards arbitration, then appeared to settle favorably, but the settlement was overturned in court and the matter returned to litigation. In March 2014, the Company filed an arbitral statement of claim asserting breaches of the contract. In July 2014, the Republic filed a statement of defense in the arbitration denying all the Company’s allegations and a counterclaim alleging late redelivery of the frigates, unfinished work, and breach of warranty. In February 2018, the arbitral tribunal awarded the Company approximately $151 million on its claims and awarded the Republic approximately $22 million on its counterclaims. The Company is seeking to enforce and execute upon the award in multiple jurisdictions. No assurances can be provided regarding the ultimate resolution of this matter. The Company is party to various other claims, legal proceedings and investigations that arise in the ordinary course of business, including U.S. Government investigations that could result in administrative, civil, or criminal proceedings involving the Company. The Company is a contractor with the U.S. Government, and such proceedings can therefore include False Claims Act allegations against the Company. Although the Company believes that the resolution of these other claims, legal proceedings and investigations will not have a material effect on its consolidated financial position, results of operations, or cash flows, the Company cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of these matters.
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Leases |
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Leases of Lessee Disclosure [Text Block] | LEASES The Company leases certain land, warehouses, office space, and production, office, and technology equipment, among other items. Most equipment is leased on a monthly basis. Many land, warehouse, and office space leases include renewal terms that can extend the lease term. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are generally limited by the expected lease term. The Company's lease agreements do not generally contain material residual value guarantees, material restrictive covenants, or purchase options. The Company's lease portfolio consists primarily of operating leases. Amounts after January 1, 2019, are reported under Topic 842 in accordance with ASU 2016-02. Lease costs and related information were as follows:
The undiscounted future non-cancellable lease payments under our operating leases were as follows:
Lease liabilities included in the Company's condensed consolidated statement of financial position were as follows:
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Contract Performance Contingencies - Contract profit margins may include estimates of revenues for matters on which the customer and the Company have not reached agreement, such as settlements in the process of negotiation, contract changes, claims, and requests for equitable adjustment for unanticipated contract costs. These estimates are based upon management's best assessment of the underlying causal events and circumstances and recognized to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer. As of September 30, 2020, amounts recognized in connection with claims and requests for equitable adjustment were not material individually or in aggregate. Guarantees of Performance Obligations - From time to time in the ordinary course of business, HII may enter into joint ventures, teaming agreements, and other business arrangements to support the Company's products and services. The Company attempts to limit its exposure under these arrangements to its investment or the extent of obligations under the applicable contract. In some cases, however, HII may be required to guarantee performance of the arrangement's obligations and, in such cases, generally obtains cross-indemnification from the other members of the arrangement. In the ordinary course of business, the Company may guarantee obligations of its subsidiaries under certain contracts. Generally, the Company is liable under such guarantees only if its subsidiary is unable to perform its obligations. Historically, the Company has not incurred any substantial liabilities resulting from these guarantees. As of September 30, 2020, the Company was not aware of any existing event of default that would require it to satisfy any of these guarantees. Environmental Matters - The estimated cost to complete environmental remediation has been accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party ("PRP") by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be estimated by management. These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations. To assess the potential impact on the Company's consolidated financial statements, management estimates the range of reasonably possible remediation costs that could be incurred by the Company, taking into account currently available facts on each site, as well as the current state of technology and prior experience remediating contaminated sites. These estimates are reviewed periodically and adjusted to reflect changes in facts and technical and legal circumstances. Management estimated that as of September 30, 2020, the probable estimable future cost for environmental remediation was immaterial. Factors that could result in changes to the Company's estimates include: modification of planned remedial actions, increases or decreases in the estimated time required to remediate, changes to the determination of legally responsible parties, discovery of more extensive contamination than anticipated, changes in laws and regulations affecting remediation requirements, and improvements in remediation technology. Should other PRPs not pay their allocable share of remediation costs, the Company may incur costs exceeding those already estimated and accrued. In addition, there are certain potential remediation sites where the costs of remediation cannot be reasonably estimated. Although management cannot predict whether new information gained as remediation progresses will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company's consolidated financial position, results of operations, or cash flows. Financial Arrangements - In the ordinary course of business, HII uses letters of credit issued by commercial banks to support certain leases, insurance policies, and contractual performance obligations, as well as surety bonds issued by insurance companies principally to support the Company's self-insured workers' compensation plans. As of September 30, 2020, the Company had $16 million in issued but undrawn letters of credit, as indicated in Note 13: Debt, and $272 million of surety bonds outstanding. U.S. Government Claims - From time to time, the U.S. Government communicates to the Company potential claims, disallowed costs, and penalties concerning prior costs incurred by the Company with which the U.S. Government disagrees. When such preliminary findings are presented, the Company and U.S. Government representatives engage in discussions, from which HII evaluates the merits of the claims and assesses the amounts being questioned. Although the Company believes that the resolution of any of these matters will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict the ultimate outcome of these matters. Collective Bargaining Agreements - Of the Company's approximately 42,000 employees, approximately 50% are covered by a total of eight collective bargaining agreements and one site stabilization agreement. Newport News has three collective bargaining agreements covering represented employees, which expire in November 2021, December 2022, and April 2024. The collective bargaining agreement that expires in November 2021 covers approximately 50% of Newport News employees. Newport News craft workers employed at the Kesselring Site near Saratoga Springs, New York are represented under an indefinite Department of Energy ("DoE") site agreement. Ingalls has five collective bargaining agreements covering represented employees, all of which expire in March 2022. Approximately 25 Technical Solutions employees at various locations are represented by unions and perform work under collective bargaining agreements. The Company believes its relationship with its employees is satisfactory. Collective bargaining agreements generally expire after to five years and are subject to renegotiation at that time. The Company does not expect the results of these negotiations, either individually or in the aggregate, to have a material effect on the Company's consolidated results of operations.
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Employee Pension And Other Postretirement Benefits |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Pension and Other Postretirement Benefits | EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS The Company provides eligible employees defined benefit pension plans, other postretirement benefit plans, and defined contribution pension plans. The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three and nine months ended September 30, 2020 and 2019, were as follows:
The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the nine months ended September 30, 2020 and 2019:
As of September 30, 2020, the Company anticipates no further significant cash contributions to its qualified defined benefit pension plans in 2020.
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Stock Compensation Plans |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Plans | STOCK COMPENSATION PLANS During the nine months ended September 30, 2020 and 2019, the Company issued new stock awards as follows: Restricted Performance Stock Rights - For the nine months ended September 30, 2020, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $230.10. These rights are subject to cliff vesting on December 31, 2022. For the nine months ended September 30, 2019, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $210.24. These rights are subject to cliff vesting on December 31, 2021. All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0% and 200% of grant date value. For the nine months ended September 30, 2020 and 2019, 0.1 million and 0.3 million of stock awards vested, respectively, of which approximately 0.1 million each year were transferred to the Company from employees in satisfaction of minimum tax withholding obligations. The following table summarizes the status of the Company's outstanding stock awards as of September 30, 2020:
Compensation Expense The Company recorded stock-based compensation for the value of awards granted to Company employees and non-employee members of the board of directors for the three months ended September 30, 2020 and 2019, of $3 million and $7 million, respectively. The Company recorded stock-based compensation for the value of awards granted to Company employees and non-employee members of the board of directors for the nine months ended September 30, 2020 and 2019, of $16 million and $19 million, respectively. The Company recorded tax benefits related to stock awards of $1 million for each of the three months ended September 30, 2020 and 2019. The Company recorded tax benefits related to stock awards of $3 million for each of the nine months ended September 30, 2020 and 2019. The Company recognized tax benefits associated with the issuance of stock in settlement of stock awards for each of the three months ended September 30, 2020 and 2019, of less than $1 million. The Company recognized tax benefits associated with the issuance of stock in settlement of stock awards for the nine months ended September 30, 2020 and 2019, of $3 million and $5 million, respectively. Unrecognized Compensation Expense As of September 30, 2020, the Company had less than $1 million of unrecognized compensation expense associated with Restricted Stock Rights granted in 2020, 2019 and 2018, which will be recognized over a weighted average period of 1.0 year, and $34 million of unrecognized compensation expense associated with RPSRs granted in 2020, 2019, and 2018, which will be recognized over a weighted average period of 1.4 years.
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Subsidiary Guarantors |
9 Months Ended |
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Sep. 30, 2020 | |
Subsidiary Guarantors [Abstract] | |
Subsidiary Guarantors | SUBSIDIARY GUARANTORSAs described in Note 13: Debt, the Company issued senior notes through the consolidating parent company, HII. Performance of the Company's obligations under its senior notes outstanding as of September 30, 2020, and December 31, 2019, including any repurchase obligations resulting from a change of control, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of HII's existing and future material domestic subsidiaries ("Subsidiary Guarantors"). The Subsidiary Guarantors are 100% owned by HII. Under SEC Regulation S-X Rule 3-10, each HII subsidiary that did not provide a guarantee ("Non-Guarantors") is minor and HII, as the parent company issuer, did not have independent assets or operations. There are no significant restrictions on the ability of the parent company and the Subsidiary Guarantors to obtain funds from their respective subsidiaries by dividend or loan, except those imposed by applicable law. |
Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation. These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
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Fiscal Period Policy | The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year. |
Accounting Estimates | Accounting Estimates - The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates. Additionally, the Company has incorporated realized and estimated future effects of the global outbreak of coronavirus disease 2019 (“COVID-19”), including, among other things, orders of civil authorities associated with COVID-19 and steps taken to mitigate the effects of COVID-19 (collectively, “COVID-19 Events”), with respect to contract costs and revenue recognition, effective income tax rates, and the fair values of the Company’s long-lived assets, financial instruments, intangible assets, and goodwill recorded at our reporting units. For the nine months ended September 30, 2020, the Company recognized across all programs an aggregate unfavorable impact on operating margin of $61 million for delay and disruption from lower employee attendance, limited availability of critical skills, and out-of-sequence work directly attributable to COVID-19 Events. While costs related to COVID-19 Events are allowable under U.S. Government contracts, the Company's estimates of the effects of COVID-19 Events reflect uncertainty regarding the Company's ability to recover the full costs related to COVID-19 Events under government relief actions such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and U.S. Department of Defense ("DoD") guidance.
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Government Grants | Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred. Grants in recognition of specific expenses are recognized in the same period as an offset to those related expenses. Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized. For the nine months ended September 30, 2020, the Company recognized cash grant benefits of approximately $17 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. For the nine months ended September 30, 2019, the Company recognized cash grant benefits of approximately $71 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties. The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $165 million and $147 million as of September 30, 2020, and December 31, 2019, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy. |
Loan Receivable | Loan Receivable - The Company holds a loan receivable in connection with a seller financed transaction involving its previously owned Avondale shipyard facility. The receivable is carried at amortized cost of $33 million, net of $15 million of loan discount, which approximates fair value and is recorded in miscellaneous other assets on the unaudited condensed consolidated statements of financial position. Interest income is recognized on an accrual basis using the effective yield method. The discount is accreted into income using the effective yield method over the estimated life of the loan receivable. |
Related Party Transactions | Related Party Transactions - The Company had $84 million outstanding under Industrial Revenue Bonds issued by the Mississippi Business Finance Corporation as of each of September 30, 2020, and December 31, 2019. Prior to the Company's spinoff from Northrop Grumman Corporation, repayment of principal and interest was guaranteed by Northrop Grumman Systems Corporation. The guaranty remains in effect, and the Company has agreed to indemnify Northrop Grumman Systems Corporation for any losses related to the guaranty pursuant to the Separation and Distribution Agreement with Northrop Grumman Corporation. |
Stockholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2020 and 2019, were as follows:
1 These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 17: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the three months ended September 30, 2020 and 2019, was $6 million and $7 million, respectively. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2020 and 2019, was $18 million and $19 million, respectively.
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Earnings Per Share (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Earnings Per Share | Basic and diluted earnings per common share were calculated as follows:
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Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following tables present revenues on a disaggregated basis, in a manner that reconciles with the Company's reportable segment disclosures, for the following categories: product versus service type, customer type, contract type, and major program. Certain prior year amounts have been reclassified. See Note 8: Segment Information. The Company believes that this level of disaggregation provides investors with information to evaluate the Company’s financial performance and provides the Company with information to make capital allocation decisions in the most appropriate manner.
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment operating results | The following table presents segment results for the three and nine months ended September 30, 2020 and 2019:
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Segment assets | The following table presents the Company's assets by segment:
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Inventoried Costs, Net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventoried costs, net | Inventoried costs were comprised of the following:
1 Includes amounts capitalized pursuant to applicable provisions of the FAR and CAS.
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Assets and Liabilities Held for Sale (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Held for Sale | The following table summarizes the assets and liabilities classified as held for sale:
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Goodwill and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | For the nine months ended September 30, 2020, the carrying amounts of goodwill changed as follows:
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consisted of the following:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | Lease costs and related information were as follows:
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The undiscounted future non-cancellable lease payments under our operating leases were as follows:
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Reconciliation of Operating Lease Liability Recognized in Statement of Financial Position [Table Text Block] | Lease liabilities included in the Company's condensed consolidated statement of financial position were as follows:
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Employee Pension and Other Postretirement Benefits (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three and nine months ended September 30, 2020 and 2019, were as follows:
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Schedule of Defined Benefit Plans Disclosures, Cash Contributions | The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the nine months ended September 30, 2020 and 2019:
|
Stock Compensation Plans (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Status of Stock Awards | The following table summarizes the status of the Company's outstanding stock awards as of September 30, 2020:
|
Description of Business (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
segments
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Deferred gain on receipt of property | $ 17 | $ 71 | |
Assets held in rabbi trusts | 165 | $ 147 | |
Financing Receivable, after Allowance for Credit Loss | 33 | ||
Receivable with Imputed Interest, Discount | 15 | ||
Related Party Transaction [Line Items] | |||
Long-term Debt | 2,278 | 1,286 | |
Mississippi Economic Development Revenue Bonds Due May 1, 2024, 7.81% | Bonds | |||
Related Party Transaction [Line Items] | |||
Long-term Debt | 84 | $ 84 | |
COVID-19 Events [Member] | |||
Change in Accounting Estimate | |||
Increase (decrease) in operating income due to net cumulative catch-up adjustments | $ (61) |
Acquisitions (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 377 | $ 195 | |
Goodwill arising from acquisitions | 310 | ||
Goodwill, Purchase Accounting Adjustments | (106) | ||
Hydroid, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | 377 | ||
Cash acquired | 2 | ||
Goodwill arising from acquisitions | 310 | ||
Goodwill, Purchase Accounting Adjustments | (71) | ||
Intangible Assets | $ 76 | ||
Fulcrum IT Services, LLC | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 195 | ||
Cash acquired | 1 | ||
Goodwill arising from acquisitions | 133 | ||
Goodwill, Purchase Accounting Adjustments | (1) | ||
Intangible Assets | $ 49 |
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
Nov. 05, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
Nov. 07, 2017 |
|
Stockholders' Equity [Line Items] | ||||||||||
Amount authorized for stock repurchase program | $ 3,200 | $ 2,200 | ||||||||
Repurchased shares of treasury stock | 390,904 | 751,497 | ||||||||
Treasury stock activity | $ 68 | $ 84 | $ 156 | |||||||
Treasury Stock, Value Acquired, Not Yet Settled for Cash | 2 | |||||||||
Treasury Stock Value Previously Acquired, settled for cash | $ 48 | |||||||||
Dividends declared per share | $ 1.03 | $ 0.86 | $ 3.09 | $ 2.58 | ||||||
Dividends paid | $ 126 | $ 107 | ||||||||
Accumulated other comprehensive income (loss) | $ (1,357) | $ (1,232) | (1,357) | (1,232) | $ (1,376) | $ (1,409) | $ (1,251) | $ (1,288) | ||
Benefit Plans | ||||||||||
Stockholders' Equity [Line Items] | ||||||||||
Accumulated other comprehensive income (loss) | (1,355) | (1,228) | (1,355) | (1,228) | (1,373) | (1,407) | (1,246) | (1,283) | ||
Other | ||||||||||
Stockholders' Equity [Line Items] | ||||||||||
Accumulated other comprehensive income (loss) | $ (2) | $ (4) | $ (2) | $ (4) | $ (3) | $ (2) | $ (5) | $ (5) |
Stockholders' Equity Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance, beginning | $ (1,376) | $ (1,251) | $ (1,409) | $ (1,288) | ||
Other comprehensive income (loss) before reclassifications | 1 | 1 | 1 | |||
Amortization of prior service cost (credit) | [1] | (2) | (1) | (7) | (3) | |
Amortization of net actuarial loss (gain) | [1] | 26 | 26 | 77 | 77 | |
Tax benefit (expense) for items of other comprehensive income | (6) | (7) | (18) | (19) | ||
Other comprehensive income (loss), net of tax | 19 | 19 | 52 | 56 | ||
Balance, ending | (1,357) | (1,232) | (1,357) | (1,232) | ||
Income tax expense (benefit) | 4 | 44 | 60 | 111 | ||
Benefit Plans | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance, beginning | (1,373) | (1,246) | (1,407) | (1,283) | ||
Amortization of prior service cost (credit) | [1] | (2) | (1) | (7) | (3) | |
Amortization of net actuarial loss (gain) | [1] | 26 | 26 | 77 | 77 | |
Tax benefit (expense) for items of other comprehensive income | (6) | (7) | (18) | (19) | ||
Other comprehensive income (loss), net of tax | 18 | 18 | 52 | 55 | ||
Balance, ending | (1,355) | (1,228) | (1,355) | (1,228) | ||
Other | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance, beginning | (3) | (5) | (2) | (5) | ||
Other comprehensive income (loss) before reclassifications | 1 | 1 | 1 | |||
Other comprehensive income (loss), net of tax | 1 | 1 | 1 | |||
Balance, ending | (2) | (4) | (2) | (4) | ||
Reclassification out of AOCI | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Income tax expense (benefit) | $ 6 | $ 7 | $ 18 | $ 19 | ||
|
Basic and Diluted Earnings Per Share (Table) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net earnings (loss) | $ 222 | $ 154 | $ 447 | $ 400 |
Weighted-average common shares outstanding (in shares) | 40.6 | 41.2 | 40.6 | 41.4 |
Net dilutive effect of stock options and awards (in shares) | 0.1 | 0.1 | ||
Dilutive weighted-average common shares outstanding (in shares) | 40.7 | 41.2 | 40.7 | 41.4 |
Earnings (loss) per share - basic (in dollars per share) | $ 5.47 | $ 3.74 | $ 11.01 | $ 9.66 |
Earnings (loss) per share - diluted (in dollars per share) | $ 5.45 | $ 3.74 | $ 10.98 | $ 9.66 |
Earnings Per Share (Narrative) (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Restricted performance stock rights | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Number of shares from stock awards excluded from computation of earnings per share | 0.3 | 0.3 | 0.3 | 0.3 |
Segment Information (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
segments
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Assets (Table) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Segment Reporting Information | ||
Assets | $ 8,445 | $ 7,031 |
Ingalls | ||
Segment Reporting Information | ||
Assets | 1,679 | 1,618 |
Newport News | ||
Segment Reporting Information | ||
Assets | 4,178 | 3,886 |
Technical Solutions | ||
Segment Reporting Information | ||
Assets | 1,384 | 1,022 |
Corporate | ||
Segment Reporting Information | ||
Assets | $ 1,204 | $ 505 |
Inventoried Costs, Net (Table) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Inventory Disclosure [Abstract] | ||||
Inventoried costs | [1] | $ 25 | $ 30 | |
Raw material inventory | 127 | 106 | ||
Total inventoried costs, net | $ 152 | $ 136 | ||
|
Assets and Liabilities Held for Sale (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Technical Solutions | ||
Assets and Liabilities Held for Sale [Line Items] | ||
Impairment charge | $ 5 | $ 6 |
Assets and Liabilities Held for Sale (Table) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets and Liabilities Held for Sale [Line Items] | ||
Total assets held for sale | $ 154 | $ 95 |
Total liabilities held for sale | 86 | 77 |
Technical Solutions | ||
Assets and Liabilities Held for Sale [Line Items] | ||
Current assets | 74 | 74 |
Property, plant, and equipment | 18 | 2 |
Other intangible assets, net | 2 | 2 |
Goodwill | 35 | |
Other non-current assets | 36 | 23 |
Valuation allowance | (11) | (6) |
Total assets held for sale | 154 | 95 |
Current liabilities | 60 | 62 |
Long-term liabilities | 26 | 15 |
Total liabilities held for sale | $ 86 | $ 77 |
Goodwill (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Goodwill | ||
Accumulated goodwill impairment losses | $ 2,906 | $ 2,906 |
Goodwill, Purchase Accounting Adjustments | (106) | |
Hydroid, Inc. [Member] | ||
Goodwill | ||
Goodwill, Purchase Accounting Adjustments | (71) | |
Ingalls | ||
Goodwill | ||
Accumulated goodwill impairment losses | 1,568 | 1,568 |
Newport News | ||
Goodwill | ||
Accumulated goodwill impairment losses | 1,187 | 1,187 |
Technical Solutions | ||
Goodwill | ||
Accumulated goodwill impairment losses | 151 | $ 151 |
Goodwill, Purchase Accounting Adjustments | (106) | |
Goodwill allocated to disposal group | $ 35 |
Change in Carrying Amount of Goodwill (Table) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 1,373 |
Goodwill, acquisitions | 310 |
Goodwill, Purchase Accounting Adjustments | (106) |
Goodwill ending balance | 1,577 |
Ingalls | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 175 |
Goodwill ending balance | 175 |
Newport News | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 721 |
Goodwill ending balance | 721 |
Technical Solutions | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 477 |
Goodwill, acquisitions | 310 |
Goodwill, Purchase Accounting Adjustments | (106) |
Goodwill ending balance | $ 681 |
Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Aggregate weighted-average amortization period | 40 years | ||||
Amortization of purchased intangibles | $ 15 | $ 12 | $ 41 | $ 35 | |
Expected amortization for purchased intangible assets: | |||||
Expected amortization, 2020 | 55 | 55 | |||
Expected amortization, 2021 | 51 | 51 | |||
Expected amortization, 2022 | 45 | 45 | |||
Expected amortization, 2023 | 35 | 35 | |||
Expected amortization, 2024 | 25 | $ 25 | |||
Fulcrum IT Services, LLC | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Aggregate weighted-average amortization period | 7 years | ||||
Identifiable intangible assets acquired | $ 49 | ||||
Hydroid, Inc. [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Aggregate weighted-average amortization period | 9 years | ||||
Identifiable intangible assets acquired | $ 76 | $ 76 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Tax Contingency [Line Items] | ||||
Effective income tax rate | 1.80% | 22.20% | 11.80% | 21.70% |
Federal Statutory Income Tax Rate, Percent | 21.00% | |||
Unrecognized Tax Benefits, Period Increase (Decrease) | $ 20 | |||
Unrecognized Tax Benefits | 60 | $ 60 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 48 | 48 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 1 | |||
Maximum | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 1 |
Debt Commercial Paper (Narrative) (Details) $ in Billions |
Sep. 30, 2020
USD ($)
|
---|---|
Maximum | |
Short-term Debt [Line Items] | |
Commercial Paper | $ 1 |
Debt Senior Note (Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term Debt | $ 2,278 | $ 1,286 |
Unamortized Debt Issuance Expense | 27 | 19 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Expense | 21 | $ 12 |
Senior Notes | Senior notes due May 1, 2025, 3.844% [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 500 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.844% | |
Senior Notes | Senior notes due May 1, 2030, 4.200% | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 500 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.20% |
Debt (Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Fair value of long term debt | $ 2,522 | $ 1,379 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 84 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | $ 500 |
Investigations, Claims, and Litigation (Narrative) (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020
USD ($)
numberOfReinsurers
|
Sep. 30, 2020
USD ($)
frigates
|
|
Loss Contingencies | ||
Number of reinsurers/defendants | numberOfReinsurers | 32 | |
Bolivarian Republic of Venezuela | ||
Loss Contingencies | ||
Number of Foreign Built Frigates | frigates | 2 | |
Arbitral statement claim | $ 151 | $ 151 |
Litigation counter claim [Member] | Bolivarian Republic of Venezuela | ||
Loss Contingencies | ||
Arbitral statement claim | $ 22 | $ 22 |
Components of Lease Expense (Table) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 13 | $ 12 | $ 42 | $ 35 |
Short-term lease cost | 8 | 9 | 21 | 21 |
Variable operating lease cost | 1 | 2 | 3 | 5 |
Operating cash flows from operating leases | (14) | (12) | (42) | (34) |
Right-of-Use asset obtained in exchange for new operating lease liability | $ 26 | $ 4 | $ 47 | $ 21 |
Weighted-average remaining lease term (years) - operating leases | 10 years | 11 years | 10 years | 11 years |
Weighted-average discount rate - operating leases | 4.10% | 4.50% | 4.10% | 4.50% |
Future Minimum Operating Lease Payments (Table) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
2020 | $ 12 | $ 45 |
2021 | 44 | 38 |
2022 | 34 | 30 |
2023 | 29 | 24 |
2024 | 25 | 22 |
Thereafter | 128 | 114 |
Total lease payments | 272 | 273 |
Less: imputed interest | 57 | 58 |
Present value of lease liabilities | $ 215 | $ 215 |
Leases Reconciliation of Operating Lease Liability Recognized in Statement of Financial Position (Table) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Short-term operating lease liabilities | $ 35 | $ 35 |
Lease liabilities included in liabilities held for sale | 27 | 16 |
Long-term operating lease liabilities | 153 | 164 |
Total operating lease liabilities | $ 215 | $ 215 |
Employee Pension and Other Postretirement Benefits Net Benefit Costs (Table) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 45 | $ 36 | $ 135 | $ 108 |
Interest cost | 64 | 69 | 193 | 208 |
Expected return on plan assets | (122) | (102) | (365) | (305) |
Amortization of prior service cost (credit) | 3 | 4 | 9 | 13 |
Amortization of net actuarial loss (gain) | 28 | 29 | 82 | 85 |
Net periodic benefit cost | 18 | 36 | 54 | 109 |
Other Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 2 | 2 | 7 | 5 |
Interest cost | 4 | 5 | 12 | 15 |
Amortization of prior service cost (credit) | (5) | (5) | (16) | (16) |
Amortization of net actuarial loss (gain) | (2) | (3) | (5) | (8) |
Net periodic benefit cost | $ (1) | $ (1) | $ (2) | $ (4) |
Employee Pension and Other Postretirement Benefits Cash Contributions (Table) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Defined Benefit Plan Disclosure | ||
Other benefit plans | $ 25 | $ 23 |
Total contributions | 236 | 49 |
Discretionary Contribution | Qualified | ||
Defined Benefit Plan Disclosure | ||
Pension contributions | 205 | 21 |
Discretionary Contribution | Non-qualified | ||
Defined Benefit Plan Disclosure | ||
Pension contributions | $ 6 | $ 5 |
Stock Compensation Plans (Narrative) (Details) - $ / shares shares in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stock awards | ||
Stock rights, weighted-average grant date fair value | $ 212.44 | |
Stock awards, vested in the period | 0.1 | 0.3 |
Stock awards, transferred for employee withholding taxes | 0.1 | 0.1 |
Restricted performance stock rights | ||
Stock awards | ||
Stock rights, granted | 0.1 | 0.1 |
Stock rights, weighted-average grant date fair value | $ 230.10 | $ 210.24 |
Restricted performance stock rights | Minimum | ||
Stock awards | ||
Restricted performance stock rights ultimate vesting percentage | 0.00% | |
Restricted performance stock rights | Maximum | ||
Stock awards | ||
Restricted performance stock rights ultimate vesting percentage | 200.00% |
Schedule of Status of Stock Awards (Table) (Details) shares in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
shares
| |
Stock awards | |
Stock awards, outstanding | shares | 376 |
Stock awards, weighted-average grant date fair value | $ / shares | $ 212.44 |
Stock awards, weighted-average remaining contractual term | 1 year 2 months 12 days |
Subsidiary Guarantors Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Subsidiary Guarantors [Abstract] | |
Parent ownership percentage of subsidiary guarantors | 100.00% |
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