Balance Sheet Accounts

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Accounts

Balance Sheet Accounts

a. Fair Value of Financial Instruments

The accounting standards use a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following are measured at fair value:

			Fair value measurement at March 31, 2018
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In millions)
Money market funds	$	175.0	$	175.0	$	—	$	—
Commercial paper	4.1		—		4.1		—
U.S. treasury notes	15.9		—		15.9		—
	$	195.0	$	175.0	$	20.0	$	—
			Fair value measurement at December 31, 2017
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In millions)
Money market funds	$	155.0	$	155.0	$	—	$	—
Commercial paper	135.6		—		135.6		—
U.S. treasury notes	4.1		—		4.1		—
	$	294.7	$	155.0	$	139.7	$	—

As of March 31, 2018, the total estimated fair value for commercial paper and U.S. treasury notes was classified as marketable securities. As of December 31, 2017, of the total estimated fair value for commercial paper and U.S. treasury notes, $119.7 million was classified as cash and cash equivalents as the remaining maturity at date of purchase was less than three months, and $20.0 million was classified as marketable securities. As of March 31, 2018, and December 31, 2017, the contractual maturities of the Company’s available-for-sale marketable securities were less than one year.

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation, and other accrued liabilities, approximate fair value because of their short maturities.

The following table summarizes the estimated fair value and principal amount for outstanding debt obligations:

	Fair Value				Principal Amount
	March 31, 2018		December 31, 2017		March 31, 2018		December 31, 2017
	(In millions)
Term loan	$	365.0	$	370.0	$	365.0	$	370.0
2 1/4% Notes	383.6		415.3		300.0		300.0
Capital leases	1.5		0.9		1.5		0.9
	$	750.1	$	786.2	$	666.5	$	670.9

The fair value of the 2 ¹/₄% Notes was determined using broker quotes that are based on open markets for the Company’s debt securities (Level 2 securities). The term loan bore interest at variable rates, which adjusted based on market conditions, and its carrying value approximated fair value.

b. Accounts Receivable

	March 31, 2018		December 31, 2017
	(In millions)
Billed receivables under long-term contracts	$	169.0	$	63.8
Other receivables	1.1		0.7
Accounts receivable	$	170.1	$	64.5

The Company made certain reclassifications to the December 31, 2017, balance sheet to conform to the current year’s presentation as a result of adopting the new revenue recognition guidance effective January 1, 2018. Accordingly, the Company reclassified $151.0 million of unbilled receivables, net of reserves for disallowances, to contract assets as of December 31, 2017 (see Notes 3 and 13).

c. Other Current Assets, net

	March 31, 2018		December 31, 2017
	(In millions)
Deferred costs recoverable from the U.S. government	$	49.0	$	51.4
Inventories	18.0		19.3
Receivable from Northrop Grumman Corporation ("Northrop") for environmental remediation costs	6.0		6.0
Prepaid expenses	31.3		19.2
Cost-share and other receivables, net	23.2		7.5
Income taxes receivable	20.5		20.5
Other	8.7		5.2
Other current assets, net	$	156.7	$	129.1

The Company made certain reclassifications to the December 31, 2017, balance sheet to conform to the current year’s presentation as a result of adopting the new revenue recognition guidance effective January 1, 2018. Accordingly, the Company reclassified $117.1 million of inventories to contract assets as of December 31, 2017 (see Notes 3 and 13).

d. Property, Plant and Equipment, net

	March 31, 2018			December 31, 2017
	(In millions)
Land	$	71.2		$	71.2
Buildings and improvements	375.1			368.3
Machinery and equipment	493.0			493.2
Construction-in-progress	24.9			30.3
	964.2			963.0
Less: accumulated depreciation	(611.4		)	(604.0		)
Property, plant and equipment, net	$	352.8		$	359.0

e. Other Noncurrent Assets, net

	March 31, 2018		December 31, 2017
	(In millions)
Real estate held for entitlement and leasing	$	94.5	$	94.0
Receivable from Northrop for environmental remediation costs	57.0		58.5
Deferred costs recoverable from the U.S. government	71.2		66.6
Grantor trusts	21.9		24.2
Notes receivable, net	9.0		9.0
Other	9.3		7.0
Other noncurrent assets, net	$	262.9	$	259.3

f. Other Current Liabilities

	March 31, 2018		December 31, 2017
	(In millions)
Accrued compensation and employee benefits	$	88.3	$	113.4
Competitive improvement program obligations	14.1		15.0
Income taxes payable	127.7		0.8
Postretirement medical and life insurance benefits	4.8		4.8
Interest payable	2.3		0.6
Other program liabilities	15.6		6.6
Other	14.8		15.7
Other current liabilities	$	267.6	$	156.9

The Company made certain reclassifications to the December 31, 2017, balance sheet to conform to the current year’s presentation as a result of adopting the new revenue recognition guidance effective January 1, 2018. Accordingly, the Company reclassified $39.0 million of other current liabilities to contract liabilities as of December 31, 2017 (see Notes 3 and 13).

The significant increase in the current income tax payable during this reporting period relates to the impact of the Company’s adoption of the new revenue recognition guidance on January 1, 2018. In anticipation of this impact, the Company filed a non-automatic accounting method change request, Form 3115 Application for Change in Accounting Method, with the Internal Revenue Service (“IRS”) during the three months ended March 31, 2018. The change in accounting method for tax purposes will provide for consistent recognition of costs of sales for both book and tax purposes, under certain circumstances. To the extent that the Company receives IRS consent, the Company expects that the current income tax payable and the corresponding deferred tax asset would decrease by approximately $105 million to $115 million.

g. Other Noncurrent Liabilities

	March 31, 2018		December 31, 2017
	(In millions)
Conditional asset retirement obligations	$	44.5	$	44.0
Pension benefits, non-qualified	17.4		17.6
Deferred compensation	27.6		29.4
Deferred revenue	12.5		12.7
Postretirement medical and life insurance benefits	32.0		32.7
Competitive improvement program obligations	15.6		18.4
Uncertain income tax positions	4.9		2.8
Other	15.9		13.5
Other noncurrent liabilities	$	170.4	$	171.1