ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended October 2, 2016 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware (State or other jurisdiction of incorporation or organization) | 41-1672694 (I.R.S. Employer Identification No.) | |
45101 Warp Drive | ||
Dulles, Virginia | 20166 | |
(Address of principal executive offices) | (Zip Code) |
Large Accelerated Filer ý | Accelerated Filer o | Non-Accelerated Filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Quarters Ended | Nine Months Ended | |||||||||||||||
(Amounts in thousands except per share data) | October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | ||||||||||||
(As Restated) (1) | ||||||||||||||||
Sales | $ | 1,043,702 | $ | 1,143,246 | $ | 3,183,442 | $ | 3,217,974 | ||||||||
Cost of sales | 833,403 | 934,429 | 2,466,496 | 2,563,023 | ||||||||||||
Gross profit | 210,299 | 208,817 | 716,946 | 654,951 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 24,887 | 28,666 | 80,418 | 78,698 | ||||||||||||
Selling | 28,099 | 28,137 | 82,140 | 81,549 | ||||||||||||
General and administrative | 66,337 | 65,204 | 195,388 | 268,442 | ||||||||||||
Goodwill impairment | — | — | — | 34,300 | ||||||||||||
Gain on settlement | — | 50,000 | — | 50,000 | ||||||||||||
Income from continuing operations, before interest, income taxes and noncontrolling interest | 90,976 | 136,810 | 359,000 | 241,962 | ||||||||||||
Net interest expense | (17,614 | ) | (24,636 | ) | (51,193 | ) | (61,171 | ) | ||||||||
Loss on extinguishment of debt | — | — | — | (26,626 | ) | |||||||||||
Income from continuing operations, before income taxes and noncontrolling interest | 73,362 | 112,174 | 307,807 | 154,165 | ||||||||||||
Income taxes | 13,181 | 37,980 | 79,765 | 61,563 | ||||||||||||
Income from continuing operations, before noncontrolling interest | 60,181 | 74,194 | 228,042 | 92,602 | ||||||||||||
Less net (loss) income attributable to noncontrolling interest | (135 | ) | 147 | (311 | ) | 72 | ||||||||||
Income from continuing operations of Orbital ATK, Inc. | 60,316 | 74,047 | 228,353 | 92,530 | ||||||||||||
Discontinued operations: | ||||||||||||||||
Income from discontinued operations, before income taxes | — | — | — | 17,504 | ||||||||||||
Income taxes | — | — | — | 667 | ||||||||||||
Income from discontinued operations | — | — | — | 16,837 | ||||||||||||
Net income attributable to Orbital ATK, Inc. | $ | 60,316 | $ | 74,047 | $ | 228,353 | $ | 109,367 | ||||||||
Basic earnings per common share from: | ||||||||||||||||
Continuing operations | $ | 1.04 | $ | 1.26 | $ | 3.92 | $ | 1.69 | ||||||||
Discontinued operations | — | — | — | 0.31 | ||||||||||||
Net income attributable to Orbital ATK, Inc. | $ | 1.04 | $ | 1.26 | $ | 3.92 | $ | 2.00 | ||||||||
Weighted-average number of common shares outstanding | 57,927 | 58,746 | 58,213 | 54,807 | ||||||||||||
Diluted earnings per common share from: | ||||||||||||||||
Continuing operations | $ | 1.04 | $ | 1.25 | $ | 3.89 | $ | 1.68 | ||||||||
Discontinued operations | — | — | — | 0.30 | ||||||||||||
Net income attributable to Orbital ATK, Inc. | $ | 1.04 | $ | 1.25 | $ | 3.89 | $ | 1.98 | ||||||||
Weighted-average number of diluted common shares outstanding | 58,257 | 59,304 | 58,642 | 55,228 | ||||||||||||
Cash dividends per common share | $ | 0.30 | $ | 0.26 | $ | 0.90 | $ | 0.84 | ||||||||
Comprehensive income (loss): | ||||||||||||||||
Net income attributable to Orbital ATK, Inc. and noncontrolling interest | $ | 60,181 | $ | 74,194 | $ | 228,042 | $ | 109,439 | ||||||||
Comprehensive income (Loss): | ||||||||||||||||
Pension and other postretirement benefit liabilities: | ||||||||||||||||
Reclassification of prior service credits for pension and postretirement benefit plans recorded to net income, net of tax (expense) benefit of $(12,500) and $2,691, $(7,547) and $8,258, respectively | 20,215 | (4,335 | ) | 12,284 | (13,291 | ) | ||||||||||
Reclassification of net actuarial loss for pension and postretirement benefit plans recorded to net income, net of tax (expense) of $(11,146), $(14,196), $(35,578) and $(2,245), respectively | 17,861 | 22,870 | 56,968 | 4,328 | ||||||||||||
Valuation adjustment for pension and postretirement benefit plans, net of tax (expense) benefit of $0, $0, $(648) and $139,583, respectively | — | — | 1,025 | (224,389 | ) | |||||||||||
Change in fair value of derivatives, net of tax (expense) benefit of $(563), $1,896, $(2,097) and $1,276 respectively | 890 | (2,996 | ) | 3,315 | (2,032 | ) | ||||||||||
Other, net of tax (expense) benefit of $(190), $55, $(292) and $93, respectively | 472 | (88 | ) | 1,076 | (153 | ) | ||||||||||
Change in cumulative translation adjustment, net of tax (expense) of $(9,650) | — | — | — | (21,381 | ) | |||||||||||
Total other comprehensive income (loss) | 39,438 | 15,451 | 74,668 | (256,918 | ) | |||||||||||
Comprehensive income (loss) | 99,619 | 89,645 | 302,710 | (147,479 | ) | |||||||||||
Less comprehensive (loss) income attributable to noncontrolling interest | (135 | ) | 147 | (311 | ) | 72 | ||||||||||
Comprehensive income (loss) attributable to Orbital ATK, Inc. | $ | 99,754 | $ | 89,498 | $ | 303,021 | $ | (147,551 | ) |
(Amounts in thousands except share data) | October 2, 2016 | December 31, 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 63,011 | $ | 104,032 | ||||
Net receivables | 1,864,826 | 1,670,821 | ||||||
Net inventories | 230,087 | 213,212 | ||||||
Income taxes receivable | 335 | 50,769 | ||||||
Other current assets | 86,081 | 89,645 | ||||||
Total current assets | 2,244,340 | 2,128,479 | ||||||
Net property, plant and equipment | 769,450 | 761,694 | ||||||
Goodwill and net intangibles | 1,940,635 | 1,975,522 | ||||||
Other noncurrent assets | 411,667 | 458,000 | ||||||
Total assets | $ | 5,366,092 | $ | 5,323,695 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 40,000 | $ | 40,000 | ||||
Accounts payable | 170,756 | 130,812 | ||||||
Accrued compensation | 117,790 | 127,928 | ||||||
Contract loss reserve | 200,569 | 235,841 | ||||||
Other current liabilities | 623,465 | 719,854 | ||||||
Total current liabilities | 1,152,580 | 1,254,435 | ||||||
Long-term debt | 1,542,642 | 1,435,836 | ||||||
Pension and other postretirement benefits | 699,162 | 820,834 | ||||||
Other noncurrent liabilities | 119,974 | 127,152 | ||||||
Total liabilities | 3,514,358 | 3,638,257 | ||||||
Commitments and contingencies (Notes 13 and 16) | ||||||||
Common stock—$.01 par value: authorized—180,000,000 shares; issued and outstanding— 57,892,300 shares at October 2, 2016 and 58,729,995 shares at December 31, 2015 | 579 | 587 | ||||||
Additional paid-in-capital | 2,173,099 | 2,187,940 | ||||||
Retained earnings | 1,218,814 | 1,043,043 | ||||||
Accumulated other comprehensive loss | (711,209 | ) | (785,908 | ) | ||||
Common stock in treasury, at cost—11,042,724 shares held at October 2, 2016 and 10,205,029 shares held at December 31, 2015 | (840,042 | ) | (771,029 | ) | ||||
Total Orbital ATK, Inc. stockholders' equity | 1,841,241 | 1,674,633 | ||||||
Noncontrolling interest | 10,493 | 10,805 | ||||||
Total equity | 1,851,734 | 1,685,438 | ||||||
Total liabilities and equity | $ | 5,366,092 | $ | 5,323,695 |
Nine Months Ended | ||||||||
(Amounts in thousands) | October 2, 2016 | October 4, 2015 | ||||||
Operating Activities | ||||||||
Net income | $ | 228,042 | $ | 109,439 | ||||
Net loss from discontinued operations | — | (16,837 | ) | |||||
Income from continuing operations | 228,042 | 92,602 | ||||||
Adjustments to reconcile income from continuing operations to cash provided by operating activities of continuing operations: | ||||||||
Depreciation and amortization | 120,251 | 120,816 | ||||||
Amortization and write-off of deferred financing costs | 1,806 | 12,481 | ||||||
Fixed asset impairment | 4,809 | 14,833 | ||||||
Deferred income taxes | (12,110 | ) | (25,254 | ) | ||||
Goodwill impairment | — | 34,300 | ||||||
Loss on the extinguishment of debt | — | 26,626 | ||||||
Stock-based plans expense | 17,516 | 28,369 | ||||||
Other | 8,641 | (2,884 | ) | |||||
Change in assets and liabilities: | ||||||||
Net receivables | (203,151 | ) | 19,407 | |||||
Net inventories | (22,575 | ) | 36,644 | |||||
Income taxes receivable | 50,434 | 37,388 | ||||||
Accounts payable | 39,373 | 32,834 | ||||||
Contact loss reserve | (23,754 | ) | (37,368 | ) | ||||
Accrued compensation | (6,902 | ) | 3,924 | |||||
Pension and other postretirement benefits | (7,622 | ) | 1,693 | |||||
Other assets and liabilities | (88,146 | ) | (120,030 | ) | ||||
Cash flows provided by operating activities of continuing operations | 106,612 | 276,381 | ||||||
Cash flows provided by operating activities of discontinued operations | — | 10,741 | ||||||
Cash flows provided by operating activities | 106,612 | 287,122 | ||||||
Investing Activities | ||||||||
Capital expenditures | (105,535 | ) | (104,767 | ) | ||||
Cash acquired in Merger with Orbital | — | 253,734 | ||||||
Cash dividend received from Vista Outdoor, net of cash transferred to Vista Outdoor in conjunction with the Distribution of Sporting Group | — | 188,878 | ||||||
Other | — | 145 | ||||||
Cash flows (used in) provided by investing activities of continuing operations | (105,535 | ) | 337,990 | |||||
Cash flows provided by investing activities of discontinued operations | — | 49 | ||||||
Cash flows (used in) provided by investing activities | (105,535 | ) | 338,039 | |||||
Financing Activities | ||||||||
Borrowings on revolving credit facilities | 800,000 | 723,000 | ||||||
Payments on revolving credit facilities | (665,000 | ) | (773,000 | ) | ||||
Payment of long-term debt | (30,000 | ) | (44,998 | ) | ||||
Payments made to extinguish debt | — | (1,746,260 | ) | |||||
Proceeds from issuance of debt | — | 1,287,000 | ||||||
Payments made for debt issuance costs | — | (9,078 | ) | |||||
Purchase of treasury shares | (94,992 | ) | (71,585 | ) | ||||
Dividends paid | (52,586 | ) | (41,214 | ) | ||||
Other | 480 | 4,481 | ||||||
Cash flows used in financing activities | (42,098 | ) | (671,654 | ) | ||||
Effect of foreign exchange rate fluctuations on cash | — | (1,340 | ) | |||||
Decrease in cash and cash equivalents | (41,021 | ) | (47,833 | ) | ||||
Cash and cash equivalents at beginning of period | 104,032 | 112,920 | ||||||
Cash and cash equivalents at end of period | $ | 63,011 | $ | 65,087 | ||||
Supplemental Cash Flow Disclosures | ||||||||
Noncash investing and operating activity: | ||||||||
Capital expenditures included in accounts payable | $ | 3,727 | $ | 5,296 | ||||
Noncash financing and operating activity: | ||||||||
Debt issuance costs included in accounts payable | $ | — | $ | 819 | ||||
Treasury shares purchased included in accounts payable | $ | 2,859 | $ | 2,159 |
Increase / (Decrease) Restatement Impact | ||||
Quarter ended October 4, 2015 | ||||
Lake City Contract Loss and Related Adjustments: | ||||
Sales | $ | (8,121 | ) | |
Cost of sales | $ | (8,809 | ) | |
Gross profit | $ | 688 | ||
Income before interest expense, income taxes and noncontrolling interest | $ | 688 | ||
Income before income taxes and noncontrolling interest | $ | 688 | ||
Contract Loss Reserve Adjustment: | ||||
Sales | $ | — | ||
Cost of sales | $ | (646 | ) | |
Gross profit | $ | 646 | ||
Income before interest expense, income taxes and noncontrolling interest | $ | 646 | ||
Income before income taxes and noncontrolling interest | $ | 646 | ||
Account Review and Analysis and Other: | ||||
Sales | $ | (2,250 | ) | |
Cost of sales | $ | 742 | ||
Gross profit | $ | (2,992 | ) | |
Income before interest expense, income taxes and noncontrolling interest | $ | (2,992 | ) | |
Income before income taxes and noncontrolling interest | $ | (2,992 | ) |
Quarter Ended October 4, 2015 | ||||||||||||||||
Consolidated Statements of Comprehensive Income (Unaudited) | As Reported | First Restatement Adjustments | Second Restatement Adjustments | As Restated | ||||||||||||
Sales | $ | 1,134,886 | $ | 18,731 | $ | (10,371 | ) | $ | 1,143,246 | |||||||
Cost of sales | 884,734 | 58,408 | (8,713 | ) | 934,429 | |||||||||||
Gross profit | 250,152 | (39,677 | ) | (1,658 | ) | 208,817 | ||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 28,666 | — | — | 28,666 | ||||||||||||
Selling | 28,137 | — | — | 28,137 | ||||||||||||
General and administrative | 69,384 | (4,180 | ) | — | 65,204 | |||||||||||
Gain on settlement | — | 50,000 | — | 50,000 | ||||||||||||
Income before interest, income taxes and noncontrolling interest | 123,965 | 14,503 | (1,658 | ) | 136,810 | |||||||||||
Interest expense, net | (24,293 | ) | (343 | ) | — | (24,636 | ) | |||||||||
Income before income taxes and noncontrolling interest | 99,672 | 14,160 | (1,658 | ) | 112,174 | |||||||||||
Income taxes | 33,123 | 5,487 | (630 | ) | 37,980 | |||||||||||
Net income before noncontrolling interest | 66,549 | 8,673 | (1,028 | ) | 74,194 | |||||||||||
Less net income attributable to noncontrolling interest | 147 | — | — | 147 | ||||||||||||
Net income attributable to Orbital ATK, Inc. | $ | 66,402 | $ | 8,673 | $ | (1,028 | ) | $ | 74,047 | |||||||
Basic earnings per common share from: | ||||||||||||||||
Net income attributable to Orbital ATK, Inc. | $ | 1.13 | $ | 1.26 | ||||||||||||
Weighted-average number of common shares outstanding | 58,746 | 58,746 | ||||||||||||||
Diluted earnings per common share from: | ||||||||||||||||
Net income attributable to Orbital ATK, Inc. | $ | 1.12 | $ | 1.25 | ||||||||||||
Weighted-average number of diluted common shares outstanding | 59,304 | 59,304 | ||||||||||||||
Comprehensive income attributable to Orbital ATK, Inc. | $ | 81,853 | $ | 8,673 | $ | (1,028 | ) | $ | 89,498 |
October 2, 2016 | ||||||||||||
Fair Value Measurements Using Inputs Considered as | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Derivatives | $ | — | $ | 3,188 | $ | — | ||||||
Liabilities | ||||||||||||
Derivatives | $ | — | $ | 2,700 | $ | — |
December 31, 2015 | ||||||||||||
Fair Value Measurements Using Inputs Considered as | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Derivatives | $ | — | $ | 3,979 | $ | — | ||||||
Liabilities | ||||||||||||
Derivatives | $ | — | $ | 8,353 | $ | — |
October 2, 2016 | December 31, 2015 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Fixed-rate debt | $ | 700,000 | $ | 732,750 | $ | 700,000 | $ | 712,500 | ||||||||
Variable-rate debt | $ | 895,000 | $ | 889,531 | $ | 790,000 | $ | 787,697 |
Purchase Price: | ||||
Value of common shares issued to Orbital shareholders (1) | $ | 1,749,323 | ||
Value of replacement equity-based awards to holders of Orbital equity-based awards (2) | 8,654 | |||
Total purchase price | $ | 1,757,977 | ||
Value of assets acquired and liabilities assumed: | ||||
Cash | $ | 253,734 | ||
Net receivables | 558,639 | |||
Net inventories | 75,294 | |||
Intangibles | 173,000 | |||
Property, plant and equipment | 277,438 | |||
Deferred tax assets, net | 64,821 | |||
Other assets | 36,878 | |||
Goodwill | 826,548 | |||
Accounts payable | (52,028 | ) | ||
Contract fair value liabilities | (130,888 | ) | ||
Other liabilities | (325,459 | ) | ||
Total purchase price | $ | 1,757,977 |
(1) | Equals 27.4 million Orbital ATK shares issued to Orbital shareholders multiplied by $63.94, the closing share price of the Company's common stock on the closing date of the Merger. |
(2) | The fair value of replacement equity-based awards attributable to pre-Merger service was recorded as part of the consideration transferred in the Merger. |
Nine Months Ended October 4, 2015 | ||||
Sales | $ | 3,335,115 | ||
Income from continuing operations | $ | 103,418 | ||
Basic per common share from continuing operations | $ | 1.74 | ||
Diluted per common share from continuing operations | $ | 1.73 |
Nine Months Ended October 4, 2015 | ||||
Amortization of acquired Orbital intangible assets (1) | $ | 3,877 | ||
Interest expense adjustment (2) | $ | (6,069 | ) | |
Transaction fees for advisory, legal and accounting services (3) | $ | (19,134 | ) |
Flight Systems Group | Defense Systems Group | Space Systems Group | Total | |||||||||||||
Balance, December 31, 2015 | $ | 922,991 | $ | 363,247 | $ | 542,128 | $ | 1,828,366 | ||||||||
Measurement period adjustments | 5,467 | — | (1,822 | ) | 3,645 | |||||||||||
Balance, October 2, 2016 | $ | 928,458 | $ | 363,247 | $ | 540,306 | $ | 1,832,011 |
October 2, 2016 | December 31, 2015 | |||||||||||||||||||||||
Amortizing intangibles: | Gross Carrying Amount | Accumulated Amortization | Net Intangibles | Gross Carrying Amount | Accumulated Amortization | Net Intangibles | ||||||||||||||||||
Contract Backlog | $ | 173,000 | $ | (68,324 | ) | $ | 104,676 | $ | 179,000 | $ | (36,696 | ) | $ | 142,304 | ||||||||||
Patented technology | 11,018 | (7,070 | ) | 3,948 | 11,018 | (6,206 | ) | 4,812 | ||||||||||||||||
Customer relationships and other | 1,905 | (1,905 | ) | — | 24,294 | (24,254 | ) | 40 | ||||||||||||||||
Net Intangibles | $ | 185,923 | $ | (77,299 | ) | $ | 108,624 | $ | 214,312 | $ | (67,156 | ) | $ | 147,156 |
Contract Backlog | Patents | Total | ||||||||||
Remainder of 2016 | $ | 10,543 | $ | 311 | $ | 10,854 | ||||||
2017 | 35,882 | 1,180 | 37,062 | |||||||||
2018 | 25,609 | 1,120 | 26,729 | |||||||||
2019 | 21,760 | 1,072 | 22,832 | |||||||||
2020 | 10,882 | 265 | 11,147 | |||||||||
Thereafter | — | — | — | |||||||||
Total | $ | 104,676 | $ | 3,948 | $ | 108,624 |
Quarter Ended | Nine Months Ended | |||||||||||
October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||
Basic weighted-average number of shares outstanding | 57,927 | 58,746 | 58,213 | 54,807 | ||||||||
Dilutive common share equivalents - share-based equity awards | 330 | 558 | 429 | 421 | ||||||||
Diluted weighted-average number of shares outstanding | 58,257 | 59,304 | 58,642 | 55,228 | ||||||||
Anti-dilutive stock options excluded from the calculation of diluted shares | 147 | 89 | 147 | 102 |
Number of Pounds | |||
Copper | 11,375 | ||
Zinc | 3,830 |
Notional | Fair Value | Pay Fixed | Receive Floating | Maturity Date | ||||||||||||
Non-amortizing swap | $ | 100,000 | $ | (574 | ) | 1.29 | % | 0.52 | % | August 2017 | ||||||
Non-amortizing swap | $ | 100,000 | $ | (1,781 | ) | 1.69 | % | 0.52 | % | August 2018 | ||||||
Non-amortizing swap | $ | 50,000 | $ | (9 | ) | 0.65 | % | 0.52 | % | November 2016 | ||||||
Non-amortizing swap | $ | 50,000 | $ | (254 | ) | 1.10 | % | 0.52 | % | November 2017 |
Quantity Hedged | |||
Euros sold | 49,820 | ||
Euros purchased | 3,207 |
Asset Derivatives Fair Value | Liability Derivatives Fair Value | |||||||||||||||||
Location | October 2, 2016 | December 31, 2015 | October 2, 2016 | December 31, 2015 | ||||||||||||||
Commodity forward contracts | Other current assets / other current liabilities | $ | 1,557 | $ | — | $ | — | $ | 4,445 | |||||||||
Commodity forward contracts | Other noncurrent assets / other noncurrent liabilities | 486 | — | — | — | |||||||||||||
Foreign currency forward contracts | Other current assets / other current liabilities | 1,126 | 2,875 | 81 | 1,442 | |||||||||||||
Foreign currency forward contracts | Other noncurrent assets / other noncurrent liabilities | 19 | 1,095 | — | 18 | |||||||||||||
Interest rate contracts | Other current assets / other current liabilities | — | 9 | 583 | — | |||||||||||||
Interest rate contracts | Other noncurrent assets / other noncurrent liabilities | — | — | 2,036 | 2,448 | |||||||||||||
Total | $ | 3,188 | $ | 3,979 | $ | 2,700 | $ | 8,353 |
Gain (Loss) Reclassified from AOCI | ||||||
Location | Amount | |||||
Quarter ended October 2, 2016 | ||||||
Commodity forward contracts | Cost of sales | $ | 137 | |||
Interest rate contracts | Interest expense | $ | (673 | ) | ||
Foreign currency forward contracts | Cost of sales | $ | (110 | ) | ||
Quarter ended October 4, 2015 | ||||||
Commodity forward contracts | Cost of sales | $ | (919 | ) | ||
Interest rate contracts | Interest expense | $ | (1,011 | ) | ||
Foreign currency forward contracts | Cost of sales | $ | (834 | ) | ||
Nine months ended October 2, 2016 | ||||||
Commodity forward contracts | Cost of sales | $ | (3,595 | ) | ||
Interest rate contracts | Interest expense | $ | (2,179 | ) | ||
Foreign currency forward contracts | Cost of sales | $ | (74 | ) | ||
Nine months ended October 4, 2015 | ||||||
Commodity forward contracts | Cost of sales | $ | (3,727 | ) | ||
Interest rate contracts | Interest expense | $ | (3,041 | ) | ||
Foreign currency forward contracts | Cost of sales | $ | (10,527 | ) |
October 2, 2016 | December 31, 2015 | |||||||
Derivatives | $ | 256 | $ | (3,059 | ) | |||
Pension and other postretirement benefits | (713,986 | ) | (784,294 | ) | ||||
Available-for-sale securities | 2,521 | 1,445 | ||||||
Total AOCI | $ | (711,209 | ) | $ | (785,908 | ) |
October 2, 2016 | December 31, 2015 | |||||||
Billed receivables | $ | 378,641 | $ | 217,522 | ||||
Unbilled receivables | 1,486,721 | 1,454,327 | ||||||
Less allowance for doubtful accounts | (536 | ) | (1,028 | ) | ||||
Net receivables | $ | 1,864,826 | $ | 1,670,821 |
October 2, 2016 | December 31, 2015 | |||||||
Raw materials | $ | 80,767 | $ | 88,365 | ||||
Contracts in process | 148,987 | 124,315 | ||||||
Finished goods | 333 | 532 | ||||||
Net inventories | $ | 230,087 | $ | 213,212 |
October 2, 2016 | December 31, 2015 | |||||||
Senior Credit Facility: | ||||||||
Term Loan A due 2020 | $ | 760,000 | $ | 790,000 | ||||
Revolving Credit Facility due 2020 | 135,000 | — | ||||||
5.25% Senior Notes due 2021 | 300,000 | 300,000 | ||||||
5.50% Senior Notes due 2023 | 400,000 | 400,000 | ||||||
Principal amount of long-term debt | 1,595,000 | 1,490,000 | ||||||
Unamortized debt issuance costs: | ||||||||
Senior Credit Facility | 5,318 | 6,302 | ||||||
5.25% Senior Notes due 2021 | 1,668 | 1,915 | ||||||
5.50% Senior Notes due 2023 | 5,372 | 5,947 | ||||||
Unamortized debt issuance costs | 12,358 | 14,164 | ||||||
Long-term debt less unamortized debt issuance costs | 1,582,642 | 1,475,836 | ||||||
Less: Current portion of long-term debt | 40,000 | 40,000 | ||||||
Long-term debt | $ | 1,542,642 | $ | 1,435,836 |
• | if, as a result of the sale of its capital stock, such Subsidiary Guarantor ceases to be a Restricted Subsidiary; |
• | if such Subsidiary Guarantor is designated as an "Unrestricted Subsidiary" with respect to the 5.25% Notes and the 5.50% Notes; |
• | upon defeasance or satisfaction and discharge of the 5.25% Notes and the 5.50% Notes, as applicable; and |
• | if such Subsidiary Guarantor has been released from its guarantees of indebtedness under the credit agreement governing the Senior Credit Facility (the "Credit Agreement") and all capital markets debt securities. |
Remainder of 2016 | $ | 10,000 | ||
Calendar 2017 | 40,000 | |||
Calendar 2018 | 40,000 | |||
Calendar 2019 | 40,000 | |||
Calendar 2020 | 765,000 | |||
Thereafter | 700,000 | |||
Total | $ | 1,595,000 |
Pension Benefits | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||
Service cost | $ | 4,556 | $ | 4,815 | $ | 13,645 | $ | 14,445 | ||||||||
Interest cost | 25,360 | 30,348 | 76,186 | 90,866 | ||||||||||||
Expected return on plan assets | (40,578 | ) | (40,117 | ) | (121,733 | ) | (119,867 | ) | ||||||||
Amortization of unrecognized net loss | 31,355 | 37,690 | 94,167 | 112,989 | ||||||||||||
Amortization of unrecognized prior service cost | (5,151 | ) | (5,213 | ) | (15,453 | ) | (15,638 | ) | ||||||||
Net periodic benefit cost | 15,542 | 27,523 | 46,812 | 82,795 | ||||||||||||
Special termination benefit cost / curtailment | — | — | 1,673 | — | ||||||||||||
Net periodic benefit cost | $ | 15,542 | $ | 27,523 | $ | 48,485 | $ | 82,795 |
Other Postretirement Benefits | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||
Service cost | $ | — | $ | 1 | $ | 1 | $ | 1 | ||||||||
Interest cost | 841 | 1,126 | 2,523 | 3,446 | ||||||||||||
Expected return on plan assets | (780 | ) | (922 | ) | (2,405 | ) | (2,732 | ) | ||||||||
Amortization of unrecognized net loss | 364 | 495 | 1,091 | 1,393 | ||||||||||||
Amortization of unrecognized prior service cost | (1,291 | ) | (1,813 | ) | (3,871 | ) | (5,706 | ) | ||||||||
Net periodic benefit income | $ | (866 | ) | $ | (1,113 | ) | $ | (2,661 | ) | $ | (3,598 | ) |
October 2, 2016 | December 31, 2015 | |||||||||||||||
Liability | Receivable | Liability | Receivable | |||||||||||||
Amounts (payable) receivable | $ | (43,939 | ) | $ | 19,762 | $ | (41,824 | ) | $ | 18,236 | ||||||
Unamortized discount | 524 | (179 | ) | 1,718 | (568 | ) | ||||||||||
Present value amounts (payable) receivable | $ | (43,415 | ) | $ | 19,583 | $ | (40,106 | ) | $ | 17,668 |
• | Flight Systems Group develops rockets that are used as small- and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories, interceptor and target vehicles for missile defense systems and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories. The group also develops and produces medium- and large-class rocket propulsion systems for human and cargo launch vehicles, strategic missiles, mi |
• | Defense Systems Group develops and produces small-, medium-, and large-caliber ammunition, precision weapons and munitions, high performance gun systems, and propellant and energetic materials. It operates the Lake City Army Ammunition Plant in Independence, Missouri ("LCAAP") and a Naval Sea Systems Command ("NAVSEA") facility in Rocket Center, West Virginia. Defense Systems Group is also a leader in tactical solid rocket motor development and production for a variety of air-, sea- and land-based missile systems. The group serves a variety of domestic and international customers in the defense and security markets in a prime contractor, partner or supplier role. Defense Systems Group also provides propulsion control systems that support Missile Defense Agency and NASA programs, airborne missile warning systems, advanced fuzes and defense electronics. The group produces the U.S. Navy's Advanced Anti-Radiation Guided Missile ("AARGM") and has developed advanced air-breathing propulsion systems and special-mission aircraft for defense applications. |
• | Space Systems Group develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting, conduct space-related scientific research and perform other activities related to national security. In addition, Space Systems Group develops and produces human-rated space systems for Earth-orbit and deep-space exploration, including delivering cargo to the International Space Station. This Group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. Government agencies. |
Quarters Ended | Nine Months Ended | |||||||||||||||
October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||
(As Restated) | ||||||||||||||||
Sales to external customers: | ||||||||||||||||
Flight Systems Group | $ | 360,531 | $ | 356,131 | $ | 1,081,513 | $ | 1,040,076 | ||||||||
Defense Systems Group | 451,286 | 440,749 | 1,326,076 | 1,355,703 | ||||||||||||
Space Systems Group | 231,885 | 346,366 | 775,853 | 822,195 | ||||||||||||
Total external sales | 1,043,702 | 1,143,246 | 3,183,442 | 3,217,974 | ||||||||||||
Intercompany sales: | ||||||||||||||||
Flight Systems Group | 2,463 | 7,173 | 9,542 | 42,041 | ||||||||||||
Defense Systems Group | 4,668 | 1,488 | 14,396 | 18,892 | ||||||||||||
Space Systems Group | 16,661 | 5,021 | 37,497 | 14,532 | ||||||||||||
Corporate | (23,792 | ) | (13,682 | ) | (61,435 | ) | (75,465 | ) | ||||||||
Total intercompany sales | — | — | — | — | ||||||||||||
Total sales | $ | 1,043,702 | $ | 1,143,246 | $ | 3,183,442 | $ | 3,217,974 | ||||||||
Income from continuing operations, before interest, income taxes and noncontrolling interest: | ||||||||||||||||
Flight Systems Group | $ | 43,886 | $ | 94,015 | $ | 151,454 | $ | 186,247 | ||||||||
Defense Systems Group | 33,066 | 34,299 | 126,437 | 130,778 | ||||||||||||
Space Systems Group | 19,347 | 20,986 | 95,766 | 30,293 | ||||||||||||
Corporate | (5,323 | ) | (12,490 | ) | (14,657 | ) | (105,356 | ) | ||||||||
Total income from continuing operations, before interest, income taxes and noncontrolling interest | $ | 90,976 | $ | 136,810 | $ | 359,000 | $ | 241,962 |
October 2, 2016 | December 31, 2015 | |||||||
Total assets: | ||||||||
Flight Systems Group | $ | 2,307,885 | $ | 2,223,787 | ||||
Defense Systems Group | 1,287,290 | 1,184,071 | ||||||
Space Systems Group | 1,242,167 | 1,272,425 | ||||||
Corporate | 528,750 | 643,412 | ||||||
Total assets | $ | 5,366,092 | $ | 5,323,695 |
• | the effect of the Restatement of our previously issued financial results, and any actual or unasserted claims, investigations or proceedings as a result of the Restatement, |
• | our ability to remediate the material weaknesses in our internal controls over financial reporting described in Part I, Item 4, Controls and Procedures, of this Form 10-Q, |
• | reductions or changes in NASA or U.S. Government military spending, timing of payments and budgetary policies, including impacts of sequestration under the Budget Control Act of 2011 and sourcing strategies, |
• | intense competition for U.S. Government contracts and programs, |
• | increases in costs, which the Company may not be able to react to due to the nature of its U.S. Government contracts, |
• | changes in cost and revenue estimates and/or timing of programs, |
• | potential termination of U.S. Government contracts and the potential inability to recover termination costs, |
• | other risks associated with U.S. Government contracts that might expose the Company to adverse consequences, |
• | government laws and other rules and regulations applicable to the Company, including procurement and import-export control, |
• | reduction or change in demand and manufacturing costs for military and commercial ammunition, |
• | the manufacture and sale of products that create exposure to potential product liability, warranty liability or personal injury claims and litigation, |
• | risks associated with expansion into new and adjacent commercial markets, |
• | results of the Merger or other acquisitions or transactions, including our ability to successfully integrate acquired businesses and realize anticipated synergies, cost savings and other benefits, and costs incurred for pursuits and proposed acquisitions, |
• | greater risk associated with international business, including foreign currency exchange rates and fluctuations in those rates, |
• | federal and state regulation of defense products and ammunition, |
• | costs of servicing the Company's debt, including cash requirements and interest rate fluctuations, |
• | actual pension and other postretirement plan asset returns and assumptions regarding future returns, discount rates, service costs, mortality rates and health care cost trend rates, |
• | security threats, including cyber-security and other industrial and physical security threats, and other disruptions, |
• | supply, availability and costs of raw materials and components, including commodity price fluctuations, |
• | performance of the Company's subcontractors, |
• | development of key technologies and retention of a qualified workforce, |
• | performance of our products, |
• | fires or explosions at any of the Company's facilities, |
• | government investigations and audits, |
• | environmental laws that govern current and past practices and rules and regulations, noncompliance with which may expose the Company to adverse consequences, |
• | impacts of financial market disruptions or volatility to the Company's customers and vendors, |
• | unanticipated changes in income taxes or exposure to additional tax liabilities, and |
• | costs and ultimate outcome of litigation matters, government investigations and other legal proceedings. |
• | Flight Systems Group develops rockets that are used as small- and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories, interceptor and target vehicles for missile defense systems and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories. The group also develops and produces medium- and large-class rocket propulsion systems for human and cargo launch vehicles, strategic missiles, missile defense interceptors and target vehicles. In addition, the division produces advanced flares and decoys that provide illumination for search and rescue missions and countermeasures against missile attacks. |
• | Defense Systems Group develops and produces small-, medium-, and large-caliber military ammunition, propulsion systems for tactical missiles and missile defense applications, strike weapons, precision weapons and munitions, high-performance gun systems, aircraft survivability systems, fuzes and warheads, energetic materials and special mission aircraft. |
• | Space Systems Group develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting, conduct space-related scientific research and perform other activities related to national security. In addition, Space Systems Group develops and produces human-rated space systems for Earth-orbit and deep-space exploration, including cargo delivery to the International Space Station. This group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. government agencies. |
• | Quarterly sales of $1.04 billion. |
• | Diluted earnings per share of $1.04. |
• | New firm and option contract bookings of $1.7 billion and option exercises of $0.3 billion under existing contracts. |
• | Total backlog of $14.7 billion, at October 2, 2016. |
• | Income from continuing operations, before interest, income taxes and noncontrolling interest as a percentage of sales of 8.7%. |
• | Effective income tax rate of 18.0%. |
• | Paid quarterly dividend of $0.30 on September 22, 2016 to stockholders of record on September 7, 2016. |
• | Repurchased 576,407 shares for $43,800. |
Quarters Ended | Nine Months Ended | |||||||||||||||||||||||||||||
October 2, 2016 | October 4, 2015 | Change | Percent Change | October 2, 2016 | October 4, 2015 | Change | Percent Change | |||||||||||||||||||||||
(As Restated) | ||||||||||||||||||||||||||||||
Flight Systems Group | $ | 362,994 | $ | 363,304 | $ | (310 | ) | (0.1 | ) | $ | 1,091,055 | $ | 1,082,117 | $ | 8,938 | 0.8 | % | |||||||||||||
Defense Systems Group | 455,954 | 442,237 | 13,717 | 3.1 | % | 1,340,472 | 1,374,595 | (34,123 | ) | (2.5 | )% | |||||||||||||||||||
Space Systems Group | 248,546 | 351,387 | (102,841 | ) | (29.3 | )% | 813,350 | 836,727 | (23,377 | ) | (2.8 | )% | ||||||||||||||||||
Corporate/Eliminations | (23,792 | ) | (13,682 | ) | (10,110 | ) | (73.9 | )% | (61,435 | ) | (75,465 | ) | 14,030 | 18.6 | % | |||||||||||||||
Total sales | $ | 1,043,702 | $ | 1,143,246 | $ | (99,544 | ) | (8.7 | )% | $ | 3,183,442 | $ | 3,217,974 | $ | (34,532 | ) | (1.1 | )% |
Quarters Ended | Nine Months Ended | |||||||||||||||||||||||||||||
October 2, 2016 | October 4, 2015 | Change | Percent Change | October 2, 2016 | October 4, 2015 | Change | Percent Change | |||||||||||||||||||||||
(As Restated) | ||||||||||||||||||||||||||||||
Flight Systems Group | $ | 278,045 | $ | 279,005 | $ | (960 | ) | (0.3 | )% | $ | 812,889 | $ | 824,336 | $ | (11,447 | ) | (1.4 | )% | ||||||||||||
Defense Systems Group | 379,696 | 366,130 | 13,566 | 3.7 | % | 1,087,106 | 1,111,785 | (24,679 | ) | (2.2 | )% | |||||||||||||||||||
Space Systems Group | 207,751 | 299,664 | (91,913 | ) | (30.7 | )% | 647,838 | 693,498 | (45,660 | ) | (6.6 | )% | ||||||||||||||||||
Corporate/Eliminations | (32,089 | ) | (10,370 | ) | (21,719 | ) | (209.4 | )% | (81,337 | ) | (66,596 | ) | (14,741 | ) | (22.1 | )% | ||||||||||||||
Total cost of sales | $ | 833,403 | $ | 934,429 | $ | (101,026 | ) | (10.8 | )% | $ | 2,466,496 | $ | 2,563,023 | $ | (96,527 | ) | (3.8 | )% |
Quarters Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
October 2, 2016 | Percent of Sales | October 4, 2015 | Percent of Sales | Change | October 2, 2016 | Percent of Sales | October 4, 2015 | Percent of Sales | Change | |||||||||||||||||||||||||||
(As Restated) | ||||||||||||||||||||||||||||||||||||
Research and development | $ | 24,887 | 2.4 | % | $ | 28,666 | 2.5 | % | $ | (3,779 | ) | $ | 80,418 | 2.5 | % | $ | 78,698 | 2.4 | % | $ | 1,720 | |||||||||||||||
Selling | 28,099 | 2.7 | % | 28,137 | 2.5 | % | (38 | ) | 82,140 | 2.6 | % | 81,549 | 2.5 | % | 591 | |||||||||||||||||||||
General and administrative | 66,337 | 6.4 | % | 65,204 | 5.7 | % | 1,133 | 195,388 | 6.1 | % | 268,442 | 8.3 | % | (73,054 | ) | |||||||||||||||||||||
Goodwill impairment | — | — | % | — | — | — | — | — | % | 34,300 | 1.1 | % | (34,300 | ) | ||||||||||||||||||||||
Total operating expenses | $ | 119,323 | 11.5 | % | $ | 122,007 | 10.7 | % | $ | (2,684 | ) | $ | 357,946 | 11.2 | % | $ | 462,989 | 14.3 | % | $ | (105,043 | ) |
Quarters Ended | Nine Months Ended | |||||||||||||||||||||||
October 2, 2016 | October 4, 2015 | Change | October 2, 2016 | October 4, 2015 | Change | |||||||||||||||||||
(As Restated) | ||||||||||||||||||||||||
Flight Systems Group | $ | 43,886 | $ | 94,015 | $ | (50,129 | ) | $ | 151,454 | $ | 186,247 | $ | (34,793 | ) | ||||||||||
Defense Systems Group | 33,066 | 34,299 | (1,233 | ) | 126,437 | 130,778 | (4,341 | ) | ||||||||||||||||
Space Systems Group | 19,347 | 20,986 | (1,639 | ) | 95,766 | 30,293 | 65,473 | |||||||||||||||||
Corporate/Eliminations | (5,323 | ) | (12,490 | ) | 7,167 | (14,657 | ) | (105,356 | ) | 90,699 | ||||||||||||||
Total | $ | 90,976 | $ | 136,810 | $ | (45,834 | ) | $ | 359,000 | $ | 241,962 | $ | 117,038 |
Quarters Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
October 2, 2016 | Effective Rate | October 4, 2015 | Effective Rate | Change | October 2, 2016 | Effective Rate | October 4, 2015 | Effective Rate | Change | |||||||||||||||||||||||||||
(As Restated) | ||||||||||||||||||||||||||||||||||||
Income taxes | $ | 13,181 | 18.0 | % | $ | 37,980 | 33.9 | % | $ | (24,799 | ) | $ | 79,765 | 25.9 | % | $ | 61,563 | 39.9 | % | $ | 18,202 |
Nine Months Ended | ||||||||
October 2, 2016 | October 4, 2015 | |||||||
Cash provided by operating activities of continuing operations | $ | 106,612 | $ | 276,381 | ||||
Cash (used in) provided by investing activities of continuing operations | (105,535 | ) | 337,990 | |||||
Cash used in financing activities of continuing operations | (42,098 | ) | (671,654 | ) | ||||
Net cash flows from continuing operations | $ | (41,021 | ) | $ | (57,283 | ) |
October 2, 2016 | December 31, 2015 | |||||||
Senior Credit Facility: | ||||||||
Term Loan A due 2020 | $ | 760,000 | $ | 790,000 | ||||
Revolving Credit Facility due 2020 | 135,000 | — | ||||||
5.25% Senior Notes due 2021 | 300,000 | 300,000 | ||||||
5.50% Senior Notes due 2023 | 400,000 | 400,000 | ||||||
Principal amount of long-term debt | 1,595,000 | 1,490,000 | ||||||
Unamortized debt issuance costs: | ||||||||
Senior Credit Facility | 5,318 | 6,302 | ||||||
5.25% Senior Notes due 2021 | 1,668 | 1,915 | ||||||
5.50% Senior Notes due 2023 | 5,372 | 5,947 | ||||||
Unamortized debt issuance costs | 12,358 | 14,164 | ||||||
Long-term debt less unamortized debt issuance costs | 1,582,642 | 1,475,836 | ||||||
Less: Current portion of long-term debt | 40,000 | 40,000 | ||||||
Long-term debt | $ | 1,542,642 | $ | 1,435,836 |
Total Leverage Ratio (1) | Interest Coverage Ratio (2) | |||||
Requirement | 4.00 | 3.00 | ||||
Actual at October 2, 2016 | 2.46 | 15.08 |
October 2, 2016 | December 31, 2015 | |||||||||||||||
Liability | Receivable | Liability | Receivable | |||||||||||||
Amounts (payable) receivable | $ | (43,939 | ) | $ | 19,762 | $ | (41,824 | ) | $ | 18,236 | ||||||
Unamortized discount | 524 | (179 | ) | 1,718 | (568 | ) | ||||||||||
Present value amounts (payable) receivable | $ | (43,415 | ) | $ | 19,583 | $ | (40,106 | ) | $ | 17,668 |
• | We evaluated our accounting organization and augmented our team with additional professionals with the appropriate levels of accounting and controls knowledge, experience and training. Our evaluation included benchmarking key accounting functions and resulted in the identification of a number of areas where the team needed to be augmented. As a result of this evaluation in the second and third quarters of fiscal 2016, we hired 11 additional accounting and controls professionals in key areas of technical accounting, general accounting oversight, business unit accounting, external reporting and controls. Each of these 11 new professionals is a CPA and 9 of the 11 have experience with a “Big 4” accounting firm. We will continue to evaluate our accounting organization and augment the team as appropriate. |
• | We revised our accounting policy for loss contracts to include general and administrative costs in the measurement of loss contracts. |
• | We designed an enterprise-wide process to timely identify, track and appropriately resolve and conclude on complex transactions and disclosures during the quarter ended October 2, 2016. |
• | Certain Small Caliber Systems Division personnel responsible for the inappropriate behaviors described under “Internal Investigation” above are no longer employed by the Company. In addition, certain members of the Defense Systems Group leadership will receive appropriate training, adverse compensation action and additional supervision. |
• | Additional accounting, controls and financial reporting personnel have been added to the Small Caliber Systems Division to take responsibility for its financial data forming part of the basis for preparation of these consolidated financial statements. |
• | We are increasing communication and training to employees regarding internal control over financial reporting, disclosure controls and procedures, and emphasizing the importance of adherence to our policies and procedures. |
• | We redesigned, developed and implemented processes and controls over the execution of purchase accounting. |
• | We revised our account reconciliation policy and controls, including the timing of reconciliations, thresholds for review and the process for resolving reconciling items during the quarter ended October 2, 2016. We continue to monitor the reconciliation control execution and will make further changes as necessary. In addition, we implemented an enhanced company-wide balance sheet review process during the quarter ended October 2, 2016 to perform a more detailed analysis of accounts, including balance composition, fluctuation and trend analysis, which is performed at a segment level. |
• | We completed a detailed review of the Lake City Contract and the underlying estimates for its percentage-of-completion revenue recognition accounting model and developed extensive analysis and procedures to develop our management estimates going forward. |
• | We are designing and implementing enhancements to the internal controls related to the reconciliation and analysis of unbilled accounts receivable. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Maximum Number of Shares that May Yet Be Purchased Under the Program (3) | ||||||||
July 4 - July 31 | 99,188 | $ | 86.05 | 54,584 | ||||||||
August 1 - August 28 | 198,775 | 74.31 | 198,569 | |||||||||
August 29 - October 2 | 323,782 | 75.29 | 323,254 | |||||||||
Quarter ended October 2, 2016 | 621,745 | 76.69 | 576,407 | 1,130,966 |
(1) | The 621,745 shares purchased include shares purchased during the quarter and shares withheld to pay taxes upon vesting of shares of restricted stock and restricted stock units or payment of performance shares that were granted under our incentive compensation plans. |
(2) | During 2015, the Board approved a stock repurchase program that authorized the repurchase of up to the lesser of $250 million or 3.25 million shares through December 31, 2016. We repurchased 576,407 shares for $43,750 during the quarter ended October 2, 2016. |
(3) | The maximum number of shares that may yet be purchased under the program was calculated using the Orbital ATK closing stock price of $76.23 on September 30, 2016. |
Exhibit Number | Description of Exhibit (and document from which incorporated by reference, if applicable) | |
3(i).1 | Restated Certificate of Incorporation of the Registrant, effective August 3, 2016. | |
3(i).2 | Certificate of Elimination of Series A Junior Participating Preferred Stock of the Registrant dated August 3, 2016 (Exhibit 3.1 to Form 8-K dated August 3, 2016). | |
31.1 | Certification of Chief Executive Officer. | |
31.2 | Certification of Chief Financial Officer. | |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
ORBITAL ATK, INC. | |||||
April 7, 2017 | By: | /s/ David W. Thompson | |||
Name: | David W. Thompson | ||||
Title: | President and Chief Executive Officer | ||||
(duly authorized and principal executive officer) | |||||
April 7, 2017 | By: | /s/ Garrett E. Pierce | |||
Name: | Garrett E. Pierce | ||||
Title: | Chief Financial Officer | ||||
(principal financial officer) | |||||
I, David W. Thompson, certify that: | ||
1. | I have reviewed this quarterly report on Form 10-Q of Orbital ATK, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
April 7, 2017 | By: | /s/ David W. Thompson | |
Name: | David W. Thompson | ||
Title: | President and Chief Executive Officer | ||
I, Garrett E. Pierce, certify that: | ||
1. | I have reviewed this quarterly report on Form 10-Q of Orbital ATK, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
April 7, 2017 | By: | /s/ Garrett E. Pierce | |
Name: | Garrett E. Pierce | ||
Title: | Chief Financial Officer | ||
(1) | the Quarterly Report on Form 10-Q for the period ended October 2, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
April 7, 2017 | By: | /s/ David W. Thompson | |
Name: | David W. Thompson | ||
Title: | President and Chief Executive Officer | ||
By: | /s/ Garrett E. Pierce | ||
Name: | Garrett E. Pierce | ||
Title: | Chief Financial Officer | ||
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Oct. 02, 2016 |
Apr. 05, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | ORBITAL ATK, INC. | |
Entity Central Index Key | 0000866121 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 02, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 57,653,024 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Pension and other postretirement benefit liabilities: | ||||
Reclassification of prior service credits for pension and postretirement benefit plans recorded to net income, tax benefit (expense) | $ (12,500) | $ 2,691 | $ (7,547) | $ 8,258 |
Reclassification of net actuarial loss for pension and postretirement benefit plans recorded to net income, tax benefit (expense) | (11,146) | (14,196) | (35,578) | (2,245) |
Valuation adjustment for pension and postretirement benefit plans, tax benefit (expense) | 0 | 0 | (648) | 139,583 |
Change in fair value of derivatives, tax benefit (expense) | (563) | 1,896 | (2,097) | 1,276 |
Other Comprehensive Income, other, tax benefit (expense) | (190) | 55 | (292) | 93 |
Change in cumulative translation adjustment, tax benefit (expense) | $ 0 | $ 0 | $ 0 | $ (9,650) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 180,000,000 | 180,000,000 |
Common stock, issued shares | 57,892,300 | 58,729,995 |
Common stock, outstanding shares | 57,892,300 | 58,729,995 |
Common stock in treasury, shares | 11,042,724 | 10,205,029 |
Basis of Presentation and Responsibility for Interim Financial Statements |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Responsibility for Interim Financial Statements | Basis of Presentation and Responsibility for Interim Financial Statements The unaudited condensed consolidated financial statements of Orbital ATK, Inc. ("the Company" or "Orbital ATK") as set forth in this quarterly report have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States can be condensed or omitted. The Company's accounting policies are described in the notes to the consolidated financial statements in its Amended Transition Report on Form 10-K/A ("Form 10-K/A") for the nine-month transition period ended December 31, 2015 filed on February 24, 2017 with the SEC. Management is responsible for the unaudited condensed consolidated financial statements included in this document. The unaudited condensed consolidated financial statements included in this document, in the opinion of management, include all adjustments necessary for a fair statement of the Company’s financial position as of October 2, 2016, its results of operations for the quarter and nine months ended October 2, 2016 and October 4, 2015 and cash flows for the nine months ended October 2, 2016 and October 4, 2015. The condensed consolidated balance sheet as of December 31, 2015 was derived from the audited financial statements included in the Form 10-K/A but does not include all of the information and footnotes required by Generally Accepted Accounting Principles ("U.S. GAAP") for complete financial statements. On February 9, 2015, the Company completed a tax-free spin-off of and distribution of its former Sporting Group to its stockholders (the "Distribution") as a new public company called Vista Outdoor Inc. ("Vista Outdoor"). Immediately following the Distribution, the Company combined with Orbital Sciences Corporation ("Orbital") through the merger of a Company subsidiary with Orbital (the "Merger"). These transactions are discussed in greater detail in Note 5. Following the Distribution and Merger, the Company changed its name from Alliant Techsystems Inc. to Orbital ATK, Inc. As a result of the Distribution, Sporting Group is no longer reported within the Company's results from continuing operations but is reported as a discontinued operation for all prior periods presented. The Company used the acquisition method to account for the Merger; accordingly, the results of Orbital have been included in the Company's condensed consolidated financial statements since the date of the Merger. Following the Distribution and Merger, the Company reorganized its business groups and realigned its reporting segments. The Company's remaining businesses, combined with the businesses of Orbital, are now reported in three segments: Flight Systems Group, Defense Systems Group and Space Systems Group, as discussed in Note 20. The business comprising Sporting Group is presented as a discontinued operation - see Note 5. Sales, expenses, cash flows, assets and liabilities can and do vary during the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year. Certain reclassifications have been made to prior year amounts to conform to current year presentation. This Form 10-Q should be read in conjunction with the Company's consolidated financial statements and notes included in its Form 10-K/A. Fiscal Year Change and the presentation of the Nine Months Ended October 4, 2015. On March 10, 2015, the Company's Board of Directors approved a change in the Company's fiscal year end from March 31 to a calendar year ending on December 31 of each year. The Company's interim quarterly periods are based on 13-week periods and ending on the Sunday closest to the last calendar day of each of March, June and September. The Company filed a Transition Report on Form 10-K for the nine-month transition period ended December 31, 2015 on March 15, 2016, which was subsequently amended on February 24, 2017. Information in this document referring to the nine months ended October 4, 2015, includes the Company's restated results for the quarters ended March 31, 2015, July 5, 2015 and the quarter ended October 4, 2015 as disclosed in the Company's Form 10-K/A. Additionally, the restated results for the quarter ended March 31, 2015 were also reported in the Amended Quarterly Report on Form 10-Q for the quarter ended April 3, 2016 (filed with the SEC on April 3, 2017). Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements. In this Form 10-Q, the Company has restated its unaudited condensed consolidated statement of comprehensive income for the quarter ended October 4, 2015 as disclosed in the Company’s Form 10-K/A. |
New Accounting Pronouncements |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Updates Adopted In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, which requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase a greater number of an employee's shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for annual reporting periods beginning after December 15, 2016 with early adoption permitted. The Company elected to early adopt this ASU in the quarter ended April 3, 2016. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements. In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Such investments should be disclosed separate from the fair value hierarchy. This ASU became effective retrospectively for the Company beginning in the quarter ended April 3, 2016. The adoption of this new standard did not have an impact on the Company's consolidated financial statements but impacted certain disclosures reflected in the notes to the accompanying condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, and in August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. These ASUs more closely align the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs to be presented as a direct deduction from the carrying amount of the related debt. The amendments in these ASUs became effective for the Company in the quarter ended April 3, 2016. The adoption of these new standards impacted the presentation of the current and prior period debt issuance costs included in Note 12. In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis, which simplifies the consolidation evaluation process by placing more emphasis on risk of loss when determining a controlling financial interest. This new standard is effective for interim and annual periods beginning after December 15, 2015. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements. Accounting Standards Updates Issued But Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires recognition of lease assets and lease liabilities for those leases classified as operating leases under previous generally accepted accounting principles in the United States ("U.S. GAAP"). The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company currently is evaluating the potential changes from this ASU to its future financial reporting and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Under the new standard, the Company expects to continue using the cost-to-cost percentage-of-completion method to recognize revenue for most of its long-term contracts. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company has not yet selected a transition method. The Company currently is evaluating the potential changes from this ASU to its future financial reporting and disclosures. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard will now be effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. It addresses eight specific cash flows where there currently exists diversity in the way these cash flows are reported. They are (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments; (3) Contingent Consideration Payments Made after a Business Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance (COLI) Policies including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Investees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash Flows and Application of the Predominance Principle. In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. As an example, for item (1) the cash flows will be classified as financing activities; for item (3) contingent payments made soon after the acquisition will be classified as investing activities and financing activities if made thereafter and for item (5) cash payments made to settle COLI policies will be classified as investing activities and premium payments may be classified as cash outflows for investing, operating or a combination of both. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires retrospective application but if it is impracticable to do so for an issue, the amendments related to that issue would be applied prospectively. The Company is still evaluating the provisions of ASU 2016-15 and its impact on the condensed consolidated statement of cash flows. Other new pronouncements issued but not effective for the Company until after October 2, 2016 are not expected to have a material impact on the Company's continuing financial position, results of operations or liquidity. |
Restatement |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restatement | Restatement In February 2017, the Company filed the Form 10-K/A to restate its consolidated financial statements for the nine-month transition period ended December 31, 2015 ("2015 transition period"), fiscal year ended March 31, 2015 ("fiscal 2015"), fiscal year ended March 31, 2014 ("fiscal 2014"), the quarters in the 2015 transition period and fiscal 2015 (the "Restatement") to correct errors primarily related to (i) the estimation of contract costs at completion on the long-term contract (the “Lake City Contract”) with the U.S. Army to manufacture and supply small caliber ammunition at the Lake City Army Ammunition Plant ("LCAAP") causing a forward loss provision to not be identified timely and recorded in prior periods; and (ii) correcting the Company’s accounting policy for measurement of forward loss provisions. In this Form 10-Q, the Company restated its unaudited condensed consolidated financial statement of comprehensive income for the quarter ended October 4, 2015 for the consequential impact of these errors. The Audit Committee of the Board of Directors, in consultation with senior management, determined that the Company should conduct an internal investigation, under its supervision, of the circumstances surrounding the misstatements in the accounting for the Lake City Contract and related matters. The investigation was undertaken by outside counsel, along with independent counsel for the Audit Committee. Counsel received assistance from outside forensic accountants. As disclosed in the Form 10-K/A, the investigation was previously completed. Based on the internal investigation, the Audit Committee and senior management concluded as follows: Certain personnel at the Small Caliber Systems Division and, in some cases, Defense Systems Group, acted inappropriately and failed to adhere to the high standards established in the Company’s policies and expected by senior management and the Board of Directors. Specifically, with respect to the Lake City Contract: (a) there likely was a bias toward maintaining a targeted profit rate; (b) in some cases, there appears to have been inappropriate use of management reserves to maintain the targeted profit rate; (c) some members of the Small Caliber Systems Division finance staff failed to follow up and inquire further into indicators that cost overruns were occurring, and if such inquiries had been made, it could have led to further contemporaneous discussion and an earlier conclusion that the Lake City Contract was in a forward loss position; and (d) negative information was suppressed, and concerns at the Small Caliber Systems Division about cost overruns were not escalated appropriately to higher-level Company management or finance staff, nor were they communicated to the Audit Committee, the Board of Directors or the independent registered public accounting firms. The Lake City Contract is within the Small Caliber Systems Division, a business unit within the Company’s Defense Systems Group, and is a fixed price contract accounted for under the percentage-of-completion revenue recognition method. The Lake City Contract was entered into in September 2012. It has an initial term of seven years plus the possibility of an award term extension of an additional three years if by July 17, 2017 the Company does not provide written notice of rejection to the U.S. Army. It is probable that the Company will provide written notice of rejection to the U.S. Army. As a result, the Restatement presents the total estimated forward loss provision for the initial seven-year term. Management identified that the underlying contract costs estimated at completion for the Lake City Contract in prior periods contained misstatements which, when corrected, resulted in the Lake City Contract’s estimated costs at completion exceeding the contracted revenues. This necessitated a forward loss charge for the seven-year term of the Lake City Contract to be recorded for the entire anticipated forward loss on the contract in the period in which the loss became evident. The Company determined that $31,500 of the loss was evident at contract signing (second quarter of fiscal 2013) and $342,000 became evident at the time of initial production (second quarter of fiscal 2014) and restated those periods and the consequential impact in subsequent periods. Due to the contract loss identified at the Lake City facility, the Company recognized an impairment charge for the long lived assets capitalized for the Lake City Ammunition Plant asset group in fiscal 2014. Subsequent to the impairments, costs incurred for the purchase or construction of additional long-lived assets related to this contract were expensed in the periods incurred, as such costs will not be recovered, and the depreciation expense recorded in subsequent periods was revised. The impairment charge recognized on long lived assets was $8,962, $3,576 and $2,295 in the quarters ended March 31, 2015, July 5, 2015 and October 4, 2015, respectively. The Company corrected its accounting policy from measurement of a forward loss provision based on gross profit to measurement based on gross profit along with general and administrative costs and adjusted the previously recorded forward loss provisions. The Company's prior accounting policy for measurement of a forward loss excluded general and administrative costs from the forward loss determination resulting in an incorrect measurement of a forward loss as these costs should be included in the measurement. The aggregate impact of this correction to the contract loss reserve liability, excluding the adjustment for the Lake City Contract, was an increase of $3,061 at October 4, 2015. As part of the correction in accounting policy, the Company also reclassified certain forward loss provisions recorded in net receivables to the contract loss reserve liability. In addition to the matters in (i) and (ii) described above, the Company also corrected for (iii) certain immaterial misstatements identified during an account review and analysis exercise. A summary of the impact of these matters on income before income taxes and noncontrolling interest is presented below:
The restatement adjustments were tax effected and any tax adjustments reflected in the condensed consolidated financial statements relate entirely to the tax effect on the restatement adjustments. The account balances labeled “As Reported” in the following table represents the amounts previously reported in the Company's Quarterly Report on Form 10-Q for the quarter ended October 4, 2015 filed on November 5, 2015 with the SEC. The columns labeled First Restatement Adjustments and Second Restatement Adjustments represent the restatement adjustments disclosed in the Transition Report on Form 10-K for the 2015 transition period previously filed with the SEC on March 15, 2016 and the restatement adjustments disclosed in the Form 10-K/A filed with the SEC in February 2017, respectively. The effects of these prior period errors on the unaudited condensed consolidated statement of comprehensive income for the quarter ended October 4, 2015 were as follows:
|
Fair Value of Financial Instruments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | air Value of Financial Instruments The current authoritative guidance on fair value clarifies the definition of fair value, prescribes a framework for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques required by the current authoritative literature are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1—Quoted prices for identical instruments in active markets. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3—Significant inputs to the valuation model are unobservable. The following section describes the valuation methodologies used by the Company to measure its financial instruments at fair value. Derivative financial instruments and hedging activities—In order to manage its exposure to commodity pricing, foreign currency risk and interest rate risk on debt, the Company periodically utilizes commodity, foreign currency and interest rate derivatives, which are considered Level 2 instruments. As discussed further in Note 8, the Company has outstanding commodity forward contracts that were entered into to hedge forecasted purchases of copper and zinc, as well as outstanding foreign currency forward contracts that were entered into to hedge forecasted transactions denominated in a foreign currency. Commodity derivatives are valued based on prices of futures exchanges and recently reported transactions in the marketplace. The Company currently holds four interest rate swaps with a total notional value of $300,000. These swaps are valued based on future LIBOR rates and the established fixed rate is based primarily on quotes from banks. Foreign currency derivatives are valued based on observable market transactions of spot currency rates and forward currency prices. The carrying amounts of the Company’s financial instruments, other than derivatives, which include net receivables, inventory, accounts payable, accrued liabilities and other current assets and liabilities, are reasonable estimates of their related fair values. The fair value of the variable-rate long-term debt is calculated based on current market rates for debt of the same risk and maturities. The fair value of the fixed-rate debt is based on market quotes for each issuance. The Company considers these to be Level 2 instruments. The Company’s non-financial instruments measured at fair value on a non-recurring basis include goodwill, indefinite-lived intangible assets and long-lived tangible assets. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions. As such, the Company generally classifies non-financial instruments as either Level 2 or Level 3 fair value measurements. The following tables set forth, by level within the fair value hierarchy, the Company's financial assets and liabilities that are measured at fair value on a recurring basis:
Recorded carrying amount and fair value of debt was as follows:
Investments in marketable securities—The Company has investments in marketable securities held in a common collective trust ("CCT") that are primarily fixed income securities used to pay benefits under a nonqualified supplemental executive retirement plan for certain executives and highly compensated employees. Investments in a collective investment vehicle are valued by multiplying the investee company's net asset value per share with the number of units or shares owned at the valuation date as determined by the investee company. Net asset value per share is determined by the investee company's custodian or fund administrator by deducting from the value of the assets of the investee company all of its liabilities and dividing the resulting number by the outstanding number of shares or units. Investments held by the CCT, including collateral invested for securities on loan, are valued on the basis of valuations furnished by a pricing service approved by the CCT's investment manager, which determines valuations using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders, or at fair value as determined in good faith by the CCT's investment manager. The fair value of these securities, not subject to leveling, is included within other noncurrent assets on the Company's consolidated balance sheet. The fair value of these securities is measured on a recurring basis and was $12,383 and $12,065 as of October 2, 2016 and December 31, 2015, respectively. |
Mergers, Acquisitions and Divestitures |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mergers, Acquisitions and Divestitures | Mergers, Acquisitions and Divestitures On February 9, 2015, the Company completed the spin-off and Distribution of its former Sporting Group to its stockholders and merged with Orbital pursuant to a transaction agreement, dated April 28, 2014 (the "Transaction Agreement"). The Company completed the Merger with Orbital in order to create a global aerospace and defense company with greater technical and industrial capabilities and increased financial resources. Both the Distribution and Merger were structured to be tax-free to U.S. stockholders for U.S. federal income tax purposes. Under the Transaction Agreement, a subsidiary of the Company merged with and into Orbital, with Orbital continuing as a wholly-owned subsidiary of the Company. Pursuant to the Distribution, Company stockholders received two shares of Vista Outdoor for each share of Company common stock held. The Company distributed a total of approximately 63.9 million shares of Vista Outdoor common stock to its stockholders of record as of the close of business on February 2, 2015 the record date for the Distribution. As a result of the Distribution, Sporting Group is no longer reported within the Company’s results from continuing operations but is reported as a discontinued operation for all prior periods presented in accordance with ASC Topic 205, "Presentation of Financial Statements." Sales reported as discontinued operations were $186,000 for the nine months ended October 4, 2015. In connection with the Merger, each outstanding share of Orbital common stock was converted into the right to receive 0.449 shares of Company common stock. The Company issued approximately 27.4 million shares of common stock to Orbital stockholders. Immediately following the Merger, Orbital stockholders owned 46.2% of the common stock of the Company and existing stockholders owned 53.8%. Based on the closing price of the Company's common stock following the Distribution on February 9, 2015 as reported on the New York Stock Exchange, the aggregate value of the consideration paid or payable to former holders of Orbital common stock was approximately $1,800,000. The Company used the acquisition method to account for the Merger; accordingly, the results of Orbital have been included in the Company's consolidated financial statements since the date of the Merger. Valuation of Net Assets Acquired The following amounts represent the final determination (as of the Merger date) of the fair value of identifiable assets acquired and liabilities assumed in the Merger, including adjustments made to date during the one year measurement period from the date of the Merger:
The consideration paid for Orbital's assets and liabilities was determined using the fair market value of the Company stock issued on the closing date of the Merger along with restricted stock awards granted to certain employees of Orbital. Goodwill recognized from the Merger primarily relates to the expanded market opportunities, expected synergies and benefits of increased scale and scope of combined human, physical and financial resources attributable to merging the operations of the two companies. As stated above, the Merger was a tax-free transaction and as such, goodwill is not amortized for tax purposes. In determining the fair values of identifiable assets acquired and liabilities assumed, a review was conducted for any significant contingent assets or liabilities existing as of the Merger date. There were no significant contingencies identified related to any legal or government action. The accompanying condensed consolidated statements of comprehensive income (loss) for the nine months ended October 2, 2016 included a measurement period adjustment of $6,000 pertaining to the fair value of intangibles. All elements in the determination of the fair value of identifiable assets acquired and liabilities assumed in the Merger were completed during the quarter ended April 3, 2016. Supplemental Pro Forma Data The following unaudited supplemental pro forma data for the nine months ended October 4, 2015 presents condensed consolidated information as if the Merger had been completed on April 1, 2013. The pro forma results were calculated by combining the results from continuing operations of the Company with the stand-alone results of Orbital for the pre-Merger period, which were adjusted to eliminate historical sales between the companies and to account for certain costs which would have been incurred during this pre-Merger period:
The unaudited supplemental pro forma data above includes the following significant adjustments made to account for certain costs which would have been incurred if the Merger had been completed on April 1, 2013, as adjusted for the applicable income tax impact:
(1) Added the amortization of acquired Orbital intangible assets recognized at fair value in purchase accounting and eliminated historical Orbital intangible asset amortization expense. (2) Reduced interest expense for the net reduction in debt of the Company and Orbital. (3) Excluded transaction fees for advisory, legal and accounting services incurred in the nine months ended October 4, 2015. The unaudited supplemental pro forma data above does not reflect the potential realization of cost savings related to the integration of the two companies. Further, the pro forma data should not be considered indicative of the results that would have occurred if the Merger had been completed on April 1, 2013, nor are they indicative of future results. Ongoing Business with Vista Outdoor In conjunction with the Distribution, the Company entered into two supply agreements and a Transition Services Agreement ("TSA") with Vista Outdoor. The supply agreements call for Vista Outdoor to purchase certain minimum quantities of ammunition and gun powder from the Company through March 2017 or 2018, as applicable. The supply agreements, which are priced at arms-length, expire in 2017 (powder) and 2018 (ammunition) and may be extended in one-to-three year increments. Under the terms of the TSA, the Company provided Vista Outdoor with administrative services for 12 months following the Distribution and provided tax-related services through August 31, 2016. At the option of Vista Outdoor, the Company is currently providing tax-audit related services to Vista Outdoor. Under the terms of the TSA, Vista Outdoor has this option through August 31, 2017. Fees for services under the TSA are charged to Vista Outdoor. Sales to Vista Outdoor under the supply agreements were $58,677 and $167,788 for the quarter and nine months ended October 2, 2016, respectively; and $43,589 (as restated) and $119,956 for the quarter and for the period from the date of Distribution to October 4, 2015, respectively. Prior to the Merger, sales to Sporting Group previously reported as intercompany sales and eliminated in consolidation $13,595 for the nine months ended October 4, 2015. |
Goodwill and Net Intangibles |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Net Intangibles | Goodwill and Net Intangibles The changes in the carrying amount of goodwill by segment were as follows:
Goodwill recorded within Defense Systems Group is presented net of accumulated impairment losses totaling $3,700 at October 2, 2016. Goodwill recorded within Space Systems Group is presented net of accumulated impairment losses totaling $142,800 at October 2, 2016. Net Intangibles consisted of the following:
The contract backlog asset in the table above is being amortized as the underlying costs are recognized under the contracts. The other assets in the table above are being amortized using a straight-line method. Amortization expense related to net intangible assets was $10,821 and $32,535 for the quarter and nine months ended October 2, 2016, respectively, and $13,218 and $33,183 for the quarter and nine months ended October 4, 2015, respectively. The Company expects amortization expense related to these assets to be as follows:
|
Earnings Per Share Data |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Data | Earnings Per Share Data Basic earnings per share ("EPS") is computed based upon the weighted-average number of common shares outstanding for each period. Diluted EPS is computed based on the weighted-average number of common shares outstanding and increased to include the dilutive effect of outstanding stock-based equity awards for each period. In computing basic and diluted EPS for both the quarter and nine months ended October 2, 2016 and October 4, 2015, the reported earnings for each respective period were divided by the weighted-average shares outstanding, determined as follows (in thousands):
|
Derivative Financial Instruments |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | erivative Financial Instruments The Company is exposed to market risks arising from adverse changes in commodity prices affecting the cost of raw materials and energy, interest rates and foreign exchange risks. In the normal course of business, these risks are managed through a variety of strategies, including the use of derivative instruments. Commodity forward contracts are periodically used to hedge forecasted purchases of certain commodities, foreign currency exchange contracts are used to hedge forecasted transactions denominated in a foreign currency, and the Company periodically uses interest rate swaps to hedge forecasted interest payments and the risk associated with variable interest rates on long-term debt. The Company entered into forward contracts for copper and zinc in 2016. The contracts establish a fixed price for the underlying commodity and are designated and qualify as effective cash flow hedges of purchases of the commodity. Ineffectiveness is calculated as the amount by which the change in the fair value of the derivatives exceeds the change in the fair value of the anticipated commodity purchases. The Company entered into interest rate swaps in fiscal 2014 in order to manage interest costs and the risk associated with variable rates, whereby the Company pays a fixed rate on a total notional amount of $300,000 and receives one-month LIBOR. The fair value of interest rate swap agreements approximates the amount at which they could be settled, based on future LIBOR, and the established fixed rate is based primarily on quotes from banks. The Company performs assessments of the effectiveness of hedge instruments on a quarterly basis and determined the hedges to be highly effective. The counterparties to the interest rate swap agreements expose the Company to credit risk in the event of nonperformance. At October 2, 2016, the outstanding swap agreements were in a net liability position which would require the Company to make the net settlement payments to the counterparties if the agreements were settled as of that date. The Company does not anticipate nonperformance by the Company's counterparties. The Company does not hold or issue derivative financial instruments for trading purposes. The Company entered into foreign currency forward contracts in 2016 to hedge forecasted cash payments to a customer. This transaction was designated and qualified as an effective cash flow hedge. Ineffectiveness with respect to forecasted inventory purchases or customer cash receipts is calculated based on changes in the forward rate until the anticipated purchase or cash receipt occurs; ineffectiveness of the hedge of the accounts payable is evaluated based on the change in fair value of its anticipated settlement. The fair values of the commodity and foreign currency forward contracts are recorded in other assets or liabilities, as appropriate, and the effective portion is reflected in accumulated other comprehensive income (loss) in the financial statements. The gains or losses on the commodity forward contracts are recorded in inventory as the commodities are purchased and in cost of sales when the related inventory is sold. The gains or losses on the foreign currency forward contracts are recorded in earnings when the related inventory is sold or customer cash receipts are received. Outstanding commodity forward contracts that hedge forecasted commodity purchases were as follows:
Interest rate swap agreements in order to manage interest costs and risk associated with variable interest rates were as follows:
The amount to be paid or received under these swaps is recorded as an adjustment to interest expense. Outstanding foreign currency forward contracts were as follows:
Fair values in the condensed consolidated balance sheets related to derivative instruments designated as hedging instruments were as follows:
Due to the customer contract requirements, the benefits associated with the commodity contracts may be passed on to the customer and not realized by the Company. Gains and losses reclassified from AOCI in the condensed consolidated statements of comprehensive income related to derivative instruments were as follows:
The ineffective portion of derivative instruments was not material and no derivatives were excluded from effectiveness testing during the quarter and nine months ended October 2, 2016 and October 4, 2015; accordingly, the Company did not recognize any related gains or losses in the income statement. All derivatives used by the Company during the periods presented were designated as hedging instruments for accounting purposes. The Company expects the remaining unrealized losses will be realized and reported in cost of sales or interest expense depending on the type of contract consistent with realized gains and losses noted in the table above. Estimated and actual gains or losses will change as market prices change. |
Accumulated Other Comprehensive Loss |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss ("AOCI") The following table summarizes the components of AOCI, net of income taxes:
|
Net Receivables |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Receivables | Net Receivables Net receivables, including amounts due under long-term contracts, consisted of the following:
Receivable balances are shown net of customer progress payments received of $609,255 as of October 2, 2016 and $584,325 as of December 31, 2015. Unbilled receivables represent the balance of recoverable costs and accrued profit, comprised principally of revenue recognized on contracts for which billings have not been presented to the customer because the amounts were earned but not contractually billable as of the balance sheet date. As of October 2, 2016 and December 31, 2015, the net receivable balance includes contract-related unbilled receivables which the Company does not expect to collect within the next 12 months of $293,200 and $311,600, respectively. |
Net Inventories |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Inventories | Net Inventories Net inventories consisted of the following:
|
Long-term Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Long-term debt consisted of the following:
Senior Credit Facility In September 2015, the Company refinanced its former senior credit facility with a new senior credit facility (the "Senior Credit Facility"), which is comprised of a term loan of $800,000 (the "Term Loan A") and a revolving credit facility of $1,000,000 (the "Revolving Credit Facility"), which mature in September 2020. The Term Loan A is subject to quarterly principal payments of $10,000, with the remaining balance due at maturity. Substantially all tangible and intangible assets of the Company and certain domestic subsidiaries, excluding real property, are pledged as collateral under the Senior Credit Facility. Borrowings under the Senior Credit Facility bear interest at a per annum rate equal to either the sum of a base rate plus a margin or the sum of a LIBOR rate plus a margin. Each margin is based on the Company's total leverage ratio. In compliance with the terms of the Senior Credit Facility, the current base rate margin is 0.5% and the current LIBOR margin is 1.5%. The weighted-average interest rate for the Term Loan A, after taking into account the interest rate swaps discussed below, was 2.33% at October 2, 2016. The Company pays a quarterly commitment fee on the unused portion of the Revolving Credit Facility based on its total leverage ratio. Based on the Company's current total leverage ratio, this fee is currently 0.25%. As of October 2, 2016, the Company had borrowings of $135,000 under the Revolving Credit Facility and had outstanding letters of credit of $128,121, which reduced amounts available on the Revolving Credit Facility to $736,879. There are unamortized debt issuance costs of $6,667 associated with the former senior credit facility in addition to debt issuance costs incurred related to the new Senior Credit Facility that are being amortized to interest expense over five years, the term of the Senior Credit Facility. 5.50% Senior Notes In September 2015, the Company issued $400,000 aggregate principal amount of 5.50% Senior Notes (the "5.50% Notes") that mature on October 1, 2023. These notes are general unsecured obligations. Interest on these notes is payable on April 1 and October 1 of each year. The Company has the right to redeem some or all of these notes from time to time on or after October 1, 2018, at specified redemption prices. Prior to October 1, 2018, the Company may redeem some or all of these notes at a price equal to 100% of their principal amount plus accrued and unpaid interest to the date of redemption and a specified make-whole premium. In addition, prior to October 1, 2018, the Company may redeem up to 35% of the aggregate principal amount of these notes with the net cash proceeds of certain equity offerings, at a price equal to 105.5% of their principal amount plus accrued and unpaid interest to the date of redemption. Debt issuance costs of $6,136 related to these notes are being amortized to interest expense over eight years, the term of the notes. 5.25% Senior Notes In fiscal 2014, the Company issued $300,000 aggregate principal amount of 5.25% Senior Notes (the "5.25% Notes") that mature on October 1, 2021. These notes are general unsecured obligations. Interest on these notes is payable on April 1 and October 1 of each year. The Company has the right to redeem some or all of these notes from time to time on or after October 1, 2016, at specified redemption prices. Debt issuance costs of $2,625 related to these notes are being amortized to interest expense over eight years, the term of the notes. Interest Rate Swaps As of October 2, 2016, the Company had interest rate swap agreements in order to manage interest costs and the risk associated with variable interest rates - see Note 8. Rank and Guarantees The 5.50% Notes and the 5.25% Notes are the Company's general unsecured and unsubordinated obligations and rank equally in right of payment with all of the Company’s existing and future unsecured and unsubordinated indebtedness, rank senior in right of payment to all of the Company's existing and future subordinated indebtedness and are effectively subordinated to all existing and future senior secured indebtedness, including the Senior Credit Facility, to the extent of the collateral. The 5.50% Notes and the 5.25% Notes are guaranteed on an unsecured basis, jointly and severally and fully and unconditionally, by substantially all of the Company's domestic subsidiaries. The Senior Credit Facility obligations are guaranteed on a secured basis, jointly and severally and fully and unconditionally, by substantially all of the Company's domestic subsidiaries. All of these guarantor subsidiaries are 100% owned by the Company. The Company, exclusive of these guarantor subsidiaries, has no independent operations or material assets. The guarantee by any Subsidiary Guarantor of the Company's obligations in respect of the 5.50% Notes and the 5.25% Notes will be released in each of the following circumstances:
Scheduled Minimum Loan Payments The scheduled minimum loan payments on outstanding long-term debt are as follows:
Covenants and Default Provisions The Company's Senior Credit Facility and the indentures governing the 5.50% Notes and the 5.25% Notes impose restrictions on the Company, including limitations on its ability to incur additional debt, enter into capital leases, grant liens, pay dividends and make certain other payments, sell assets, or merge or consolidate with or into another entity. In addition, the Senior Credit Facility limits the Company's ability to enter into sale-and-leaseback transactions. The 5.50% Notes and 5.25% Notes limit the aggregate sum of dividends, share repurchases and other designated restricted payments to an amount based on the Company's net income, stock issuance proceeds and certain other items since April 1, 2001, less restricted payments made since that date. The Senior Credit Facility allows the Company to make unlimited "restricted payments" (as defined in the Credit Agreement), which, among other items, would allow payments for future stock repurchases, as long as the Company maintains a certain amount of liquidity and maintains certain senior secured debt limits, with a limit, when those senior secured debt limits are not met, of $250,000 plus proceeds of any equity issuances plus 50% of net income since October 7, 2010. The Senior Credit Facility also requires the Company to meet and maintain specified financial ratios, including a minimum interest coverage ratio and a maximum consolidated total leverage ratio. The Company's debt agreements contain cross-default provisions so that noncompliance with the covenants within one debt agreement could cause a default under other debt agreements as well. The Company's ability to comply with these covenants and to meet and maintain the financial ratios may be affected by events beyond its control. Borrowings under the Senior Credit Facility are subject to compliance with these covenants. As of October 2, 2016, the Company was in compliance with the financial covenants. |
Employee Benefit Plans |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The components of net periodic benefit cost for pension benefits were as follows:
During the nine months ended October 2, 2016, the Company recorded a settlement expense of $1,673 to recognize the impact of lump sum benefit payments made in the nonqualified supplemental executive retirement plan. The components of net periodic benefit income for other postretirement benefits were as follows:
Effective January 1, 2016, the Company changed the approach used to measure service and interest costs for pension and other postretirement benefits. Prior to January 1, 2016, the Company measured service and interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations. Beginning January 1, 2016, the Company has elected to measure service and interest costs by applying the specific spot rates along that yield curve to the plans' liability cash flows. The Company believes the new approach provides a more precise measurement of service and interest costs by aligning the timing of the plans’ forecasted cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of plan obligations. The Company accounted for this change on a prospective basis as a change in accounting estimate, resulting in lower pension expense compared to the method used prior to January 1, 2016. Employer Contributions. During the nine months ended October 2, 2016, the Company contributed $39,500 to the pension trust. The Company also paid $4,776 to retirees in connection with its nonqualified supplemental executive retirement plan and $4,814 to retirees in connection with its other postretirement benefit plans. During the remainder of 2016, the Company is not required to make any additional pension benefit contributions in order to meet the minimum required contributions for 2016. In addition, the Company anticipates making additional payments of approximately $692 to retirees under the nonqualified plan and $2,674 to retirees in connection with its other postretirement benefit plans during the remainder of 2016. During the quarter ended October 2, 2016, the Company amended its retiree health care plan to provide coverage through a private exchange effective January 1, 2017. The exchange offers the retiree a broad choice of health care plans from which to choose. The Company will contribute fixed payments to a Health Retirement Account (HRA), when applicable, for those retirees who previously had subsidized health care coverage through the Company. The contributions to the HRA account are retirees' funds to be spent on qualified health care premiums and eligible out-of pocket expenses. The plan amendment caused a remeasurement that increased the Company's funded status as of October 2, 2016 by $36,444 and will reduce expenses recorded in future periods. |
Income Taxes |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's income taxes include federal, foreign and state income taxes. Income taxes for interim periods are based on estimated effective annual income tax rates. The effective income tax rates for the quarters ended October 2, 2016 and October 4, 2015 were 18.0% and 33.9% (as restated), respectively. The decrease in the rate from the quarter ended October 4, 2015 is primarily due to increased benefits from the Research and Development tax credit, the true up of prior-year taxes and settlement of the examination by the Internal Revenue Service ("IRS") of the fiscal 2013 and 2014 tax returns in the quarter ended October 2, 2016. The effective income tax rates for the nine months ended October 2, 2016 and October 4, 2015 were 25.9% and 39.9%, respectively. The decrease in the rate from the nine months ended October 4, 2015 is primarily due to the impact of goodwill impairment and nondeductible transaction costs in the nine months ended October 4, 2015, as well as increased benefits from the Domestic Manufacturing Deduction, increased Research and Development tax credits, the true up of prior-year taxes and settlement of the examination by the IRS of the fiscal 2013 and 2014 tax returns partially offset by an increase in state tax expense in the nine months ended October 2, 2016. The Company or one of its subsidiaries files income tax returns in the U.S. federal, various U.S. state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2010. The IRS has completed the audits of the Company through fiscal 2014. The Company believes appropriate provisions for all outstanding issues have been made for all remaining open years in all jurisdictions. Although the timing and outcome of audit settlements are uncertain, it is reasonably possible that a $11,176 reduction of the uncertain tax benefits will occur in the next 12 months. The settlement of these unrecognized tax benefits could result in an increase in net income from $0 to $10,074. |
Stock-based Compensation |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Equity [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company has 5,000,000 shares of $1.00 par value preferred stock authorized, none of which has been issued. The Company sponsors five stock-based incentive plans: the Orbital ATK, Inc. 2015 Stock Incentive Plan (the "2015 Stock Incentive Plan"); three legacy ATK plans (the Alliant Techsystems Inc. 2005 Stock Incentive Plan, the Non-Employee Director Restricted Stock Plan and the 1990 Equity Incentive Plan); and one legacy Orbital plan, under which the Company assumed the obligation to issue Company common stock pursuant to the terms of the Transaction Agreement relating to the Merger (the Orbital Sciences Corporation 2005 Amended and Restated Stock Incentive Plan). At October 2, 2016, the Company had authorized up to 3,750,000 common shares under the 2015 Stock Incentive Plan, of which 2,812,847 common shares were available to be granted. No new grants will be made out of the other four plans. During the quarter ended October 2, 2016, the Company adopted an Employee Stock Purchase Plan ("ESPP") whereby eligible employees may purchase shares of the Company's common stock at the lesser of 85% of the fair market value of a share of common stock at the beginning or at the end of the quarterly offering period. The ESPP is compensatory and the fair value of the shares purchased is determined using the Black-Scholes option pricing model. There are five types of awards outstanding under the Company's stock incentive plans: performance awards, total stockholder return performance awards ("TSR awards"), restricted stock units, restricted stock and stock options. The Company issues treasury shares upon (i) the payment of performance awards, TSR awards and restricted stock units, (ii) the grant of restricted stock and (iii) the exercise of stock options. Restricted Stock Units. Pursuant to the terms of the Transaction Agreement and under the terms of the ATK 2005 Stock Incentive Plan, all of the performance awards and TSR awards outstanding as of February 9, 2015 were converted into time-vesting restricted stock units with vesting periods corresponding to the respective performance periods. During the nine months ended October 2, 2016, 42,935 shares were issued upon the vesting of restricted stock units for the performance period ending in 2016. As of October 2, 2016, there were 53,449 restricted stock units outstanding for the performance period ending in 2017. Performance Awards. Performance shares are valued at the fair value of the Company's stock as of the grant date and expense is recognized based on the number of shares expected to vest under the terms of the award under which they are granted. As of October 2, 2016, there were 81,689 shares reserved for executive officers and key employees for the performance period beginning April 1, 2015 and ending December 31, 2017. Of these shares, up to 50% will become payable only upon achievement of a financial performance goal relating to absolute earnings per share growth; and up to 50% will become payable only upon achievement of a performance goal relating to absolute sales growth. As of October 2, 2016, there were 73,802 shares reserved for executive officers and key employees for the performance period beginning January 1, 2016 and ending December 31, 2018. Of these shares, up to 50% will become payable only upon achievement of a financial performance goal relating to return on investment of capital; and up to 50% will become payable only upon achievement of a performance goal relating to absolute sales growth. TSR Awards. As of October 2, 2016, there were 73,802 shares and 81,689 shares reserved for TSR awards for key employees for the fiscal year 2016-2018 and 2015-2017 performance periods, respectively. The Company used an integrated Monte Carlo simulation model to determine the fair value of the TSR awards. The Monte Carlo model calculates the probability of satisfying the market conditions stipulated in the award. This probability is an input into the trinomial lattice model used to determine the fair value of the awards as well as the assumptions of other variables, including the risk-free interest rate and expected volatility of the Company's stock price in future periods. The risk-free rate is based on the U.S. dollar-denominated U.S. Treasury strip rate with a remaining term that approximates the life assumed at the date of grant. There were 73,802 TSR awards granted with a fair value of $87.85 per share and 3,208 TSR awards granted with a fair value of $94.93 per share during the nine months ended October 2, 2016. Restricted Stock Awards. Restricted stock granted to non-employee directors and certain key employees totaled 160,242 shares during the nine months ended October 2, 2016. Restricted shares vest over periods generally ranging from one to three years from the date of award and are valued at the fair value of the Company's common stock as of the grant date. Stock Options. Stock options are granted periodically, with an exercise price equal to the fair market value of the Company's common stock on the date of grant, and generally vest from one to three years from the date of grant. Options are generally granted with seven-year or ten-year terms. The weighted-average fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and represents the difference between fair market value on the date of grant and the estimated market value on the expected exercise date. The option pricing model requires the Company to make assumptions. The risk-free rate is based on U.S. Treasury zero-coupon issues with a remaining term that approximates the expected life assumed at the date of grant. Expected volatility is based on the historical volatility of the Company's stock over the past seven years. The expected option life is based on the contractual term of the stock option and expected employee exercise and post-vesting employment termination trends. There were 72,328 stock options granted during the nine months ended October 2, 2016 with a weighted-average fair value of $20.53 per stock option. There were 74,543 stock options granted during the nine months ended October 4, 2015 with a weighted-average fair value of $39.44 per stock option. Stock-based compensation expense totaled $6,317 and $17,515 in the quarter and nine months ended October 2, 2016; and $6,046 and $28,369 in the quarter and nine months ended October 4, 2015. The income tax benefit recognized for stock-based compensation was $2,182 and $6,445 during the quarter and nine months ended October 2, 2016; and $2,194 and $9,815 during the quarter and nine months ended October 4, 2015. |
Contingencies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies | Contingencies Litigation. From time to time, the Company is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of the Company's business. The Company does not consider any of such proceedings that are currently pending, individually or in the aggregate, notwithstanding that the unfavorable resolution of any matter may have a material effect on net earnings in any particular quarter, to be material to its business or likely to result in a material adverse effect on its operating results, financial condition or cash flows. Securities Class Action. On August 12, 2016, a putative class action complaint, naming the Company, our Chief Executive Officer and our Chief Financial Officer as defendants, was filed in the United States District Court for the Eastern District of Virginia (Steven Knurr v. Orbital ATK, Inc., et al., No. 16-cv-01031 (TSE-MSN)). The class action complaint asserts claims on behalf of purchasers of Orbital ATK securities for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, arising out of allegedly false and misleading statements and the failure to disclose that: (i) the Company lacked effective control over financial reporting; and (ii) as a result, the Company failed to record an anticipated loss on its long-term contract with the U.S. Army to manufacture and supply small caliber ammunition at the U.S. Army’s Lake City Army Ammunition Plant. The complaint seeks a determination that this matter is a proper class action and certifying the plaintiff as the class representative, an award of damages, an award of reasonable costs and expenses of trial, including counsel and expert fees, and an award of such other relief as deemed appropriate by the Court. The Company intends to defend this action vigorously. SEC Investigation. The SEC is conducting a non-public investigation relating to our historical accounting practices as a result of the prior restatement of the Company’s unaudited condensed consolidated financial statements for the quarterly periods ended July 5, 2015 and October 4, 2015 as described in the Company's Amendment to the Transition Report on Form 10-K for the nine-month transition period ending December 31, 2015 filed on March 15, 2016. The Company has also voluntarily self-reported to the SEC regarding matters pertaining to the Restatement described in the Company's Amendment to the Form 10-K for the nine-month transition period ending December 31, 2015 filed on February 24, 2017. The Company is cooperating fully with the SEC in connection with these matters. U.S. Government Investigations. The Company is also subject to U.S. Government investigations from which civil, criminal or administrative proceedings could result. Such proceedings could involve claims by the U.S. Government for fines, penalties, compensatory and treble damages, restitution and/or forfeitures. Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations. The Company believes, based upon all available information, that the outcome of any such pending government investigations will not have a material adverse effect on its operating results, financial condition or cash flows. Claim Recovery. Profits expected to be realized on contracts are based on management's estimates of total contract sales value and costs at completion. Estimated amounts for contract changes and claims are included in contract sales only when realization is estimated to be probable. Unbilled receivables included $13,175 and $25,042 as of October 2, 2016 and December 31, 2015, respectively, for contract claims. Environmental Liabilities. The Company's operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, including those for discharge of hazardous materials, remediation of contaminated sites and restoration of damage to the environment. At certain sites that the Company owns or operates or formerly owned or operated, there is known or potential contamination that the Company is required to investigate or remediate. The Company could incur substantial costs, including remediation costs, resource restoration costs, fines, and penalties, or third party property damage or personal injury claims, as a result of liabilities associated with past practices or violations of environmental laws or noncompliance with environmental permits. The Company has been identified as a potentially responsible party (“PRP”), along with other parties, in several regulatory agency actions associated with hazardous waste sites. As a PRP, the Company may be required to pay a share of the costs of the investigation and clean-up of these sites. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, the Company has concluded that these matters, individually or in the aggregate, will not have a material adverse effect on operating results, financial condition, or cash flows. The Company could incur substantial costs, including cleanup costs, resource restoration, fines and penalties or third party property damage or personal injury claims, as a result of violations or liabilities under environmental laws or noncompliance with environmental permits. While environmental laws and regulations have not had a material adverse effect on the Company's operating results, financial condition, or cash flows in the past and the Company has environmental management programs in place to mitigate these risks, it is difficult to predict whether they will have a material impact in the future. The liability for environmental remediation represents management's best estimate of the present value of the probable and reasonably estimable costs related to known remediation obligations. The receivable represents the present value of the amount that the Company expects to recover, as discussed below. Both the liability and receivable have been discounted to reflect the present value of the expected future cash flows, using a discount rate of 0.2% and 0.7% as of October 2, 2016 and December 31, 2015, respectively. The Company's discount rate is calculated using the 20-year Treasury constant maturities rate, net of an estimated inflationary factor of 1.9%, rounded to the nearest quarter percent. The following is a summary of the amounts recorded for environmental remediation:
Amounts expected to be paid or received in periods more than one year from the balance sheet date are classified as noncurrent. Of the $43,415 discounted liability as of October 2, 2016, $5,706 was recorded in other current liabilities. Of the $19,583 discounted receivable, the Company recorded $3,318 in other current assets. As of October 2, 2016, the estimated discounted range of reasonably possible costs of environmental remediation was $43,415 to $68,340. The Company expects that a portion of its environmental compliance and remediation costs will be recoverable under U.S. Government contracts. Some of the remediation costs that are not recoverable from the U.S. Government that are associated with facilities purchased in a business acquisition are covered by various indemnification agreements, as described in Note 14 to the audited consolidated financial statements included in the Company’s Form 10-K/A. |
Share Repurchases |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Equity [Abstract] | |
Share Repurchases | Share Repurchases On March 11, 2015, the Company's Board of Directors authorized the Company to repurchase up to the lesser of $75,000 or 1.0 million shares of its common stock through December 31, 2015. On August 4, 2015, the Board of Directors increased the amount authorized for repurchase to the lesser of $100,000 or 1.4 million shares of the Company's common stock. On October 29, 2015, the Board of Directors further increased the amount authorized for repurchase to the lesser of $250,000 or 3.25 million shares through December 31, 2016. On November 1, 2016, the Board of Directors further increased the amount authorized for repurchase to the lesser of $300,000 or 4.0 million shares and extended the repurchase period through March 31, 2017. On February 27, 2017, the Board of Directors further increased the amount authorized for repurchase to $450,000 and extended the repurchase period through March 31, 2018. Shares of the Company's common stock may be purchased in the open market, subject to compliance with applicable laws and regulations and the Company’s debt covenants, depending upon market conditions and other factors. The Company purchased 576,407 shares for $43,750 and 1,104,511 shares for $87,991 during the quarter and nine months ended October 2, 2016, respectively. The Company purchased 497,145 shares for $36,275 and 825,986 shares for $60,777 during the quarter and nine months ended October 4, 2015. In accordance with the Transaction Agreement entered into on April 28, 2014, we did not repurchase any outstanding shares prior to the closing of the Distribution and Merger during the quarter ended March 31, 2015. |
Changes in Estimates |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Changes in Estimates [Abstract] | |
Changes in Estimates | Changes in Estimates The majority of our sales are accounted for as long-term contracts, which are accounted for using the percentage-of-completion method. Accounting for contracts under the percentage-of-completion method requires judgment relative to assessing risks and estimating contract revenues and costs. Profits expected to be realized on contracts are based on management’s estimates of total contract sales value and costs at completion. Estimated amounts for contract changes, including scope and claims, are included in contract sales only when realization is probable. Assumptions used for recording sales and earnings are modified in the period of change to reflect revisions in contract value and estimated costs. In the period in which it is determined that a loss will be incurred on a contract, the entire amount of the estimated loss, based on gross profit along with general and administrative costs, is charged to cost of sales. Changes in estimates of contract value, costs or profits are recognized using the cumulative catch-up method of accounting. The cumulative effect of a change in estimate is recognized in the period a change in estimate occurs. Changes in contract estimates occur for a variety of reasons including changes in contract scope, unforeseen changes in contract cost estimates due to unanticipated cost growth or risks affecting contract costs and/or the resolution of contract risks at lower costs than anticipated, as well as changes in contract overhead costs over the performance period. Changes in estimates could have a material effect on the Company's consolidated financial position or annual results of operations. Aggregate net changes in contract estimates recognized using the cumulative catch-up method of accounting increased operating income by approximately $6,000 and $27,000 for the quarters ended October 2, 2016 and October 4, 2015, respectively. The changes in estimates for the quarter ended October 2, 2016 were primarily attributable to changes in scope on the Company's contracts in all segments, primarily in Flight Systems Group. The changes in estimates for the quarter ended October 4, 2015 were attributable to profit margin improvements in all segments, primarily in Flight Systems Group and Space Systems Group. Aggregate net changes in contract estimates recognized using the cumulative catch-up method of accounting increased operating income by approximately $92,000 and $81,000 for the nine months ended October 2, 2016 and October 4, 2015, respectively. The changes in estimates for the nine months ended October 2, 2016 were attributable to profit margin improvements in all segments, primarily in Defense Systems Group and Flight Systems Group. The changes in estimates for the nine months ended October 4, 2015 were attributable to profit margin improvements in all segments, primarily Defense Systems Group and Flight Systems Group. Estimated costs to complete on loss contracts at October 2, 2016 and December 31, 2015 were $1,248,549 and $1,392,218, respectively. |
Restructuring Costs |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs The Company had restructuring liabilities for termination benefits of $400 and $3,589 and facility-related liabilities of $19,570 and $26,154, at October 2, 2016 and December 31, 2015, respectively. The decrease in restructuring liabilities for the nine months ended October 2, 2016, was primarily attributed to cash expenditures for termination benefits and facilities. |
Operating Segment Information |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segment Information | Operating Segment Information The Company operates its business structure within three operating segments. These operating segments ("groups") are defined based on the reporting and review process used by the Company's chief executive officer and other management. The operating structure aligns the Company's capabilities and resources with its customers and markets and positions the Company for long-term growth and improved profitability.
The following summarizes the Company's results by segment:
Certain administrative functions are primarily managed by the Company at the corporate headquarters ("Corporate"). Some examples of such functions are human resources, pension and postretirement benefits, corporate accounting, legal, tax and treasury. Significant assets and liabilities managed at Corporate include those associated with debt, restructuring, pension and postretirement benefits, environmental liabilities, litigation liabilities, strategic growth costs and income taxes. Costs related to the administrative functions managed by Corporate are either recorded at Corporate or allocated to the segments based on the nature of the expense. The difference between pension and postretirement benefit expense calculated under U.S. GAAP and the expense calculated under U.S. Cost Accounting Standards is recorded at the corporate level which provides for greater clarity on the operating results of the business segments. Administrative expenses such as corporate accounting, legal and treasury costs are allocated out to the business segments. Environmental expenses are allocated to each segment based on the origin of the underlying environmental cost. Transactions between segments are recorded at the segment level, consistent with the Company's financial accounting policies. Intercompany balances and transactions involving different segments are eliminated at the Company's consolidated financial statements level and are shown above in Corporate. The amortization expense related to purchase accounting attributed to the acquisition of Orbital is also recorded in Corporate. |
Subsequent Events |
9 Months Ended |
---|---|
Oct. 02, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events As a result of the Restatement, the Company was unable to timely file its Quarterly Reports on Form 10-Q with the SEC for the fiscal quarters ended July 3, 2016 and October 2, 2016 ("the 2016 Quarterly Reports"), as well as its Annual Report on Form 10-K for 2016. The Company has entered into an extension agreement with its Senior Credit Facility lender group to extend, until April 14, 2017, the deadline under its credit agreement for filing with the SEC the 2016 Quarterly Reports, as well as an Amended Form 10-Q for the fiscal quarter ended April 3, 2016 and the Company's Annual Report on Form 10-K for 2016. As a result of the extension, the Company is in compliance with the financial covenants as of the date of the filing of this Form 10-Q based on the Company's restated financial results. |
Basis of Presentation and Responsibility for Interim Financial Statements (Policies) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The unaudited condensed consolidated financial statements of Orbital ATK, Inc. ("the Company" or "Orbital ATK") as set forth in this quarterly report have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States can be condensed or omitted. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | The current authoritative guidance on fair value clarifies the definition of fair value, prescribes a framework for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques required by the current authoritative literature are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1—Quoted prices for identical instruments in active markets. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3—Significant inputs to the valuation model are unobservable. The following section describes the valuation methodologies used by the Company to measure its financial instruments at fair value. Derivative financial instruments and hedging activities—In order to manage its exposure to commodity pricing, foreign currency risk and interest rate risk on debt, the Company periodically utilizes commodity, foreign currency and interest rate derivatives, which are considered Level 2 instruments. As discussed further in Note 8, the Company has outstanding commodity forward contracts that were entered into to hedge forecasted purchases of copper and zinc, as well as outstanding foreign currency forward contracts that were entered into to hedge forecasted transactions denominated in a foreign currency. Commodity derivatives are valued based on prices of futures exchanges and recently reported transactions in the marketplace. The Company currently holds four interest rate swaps with a total notional value of $300,000. These swaps are valued based on future LIBOR rates and the established fixed rate is based primarily on quotes from banks. Foreign currency derivatives are valued based on observable market transactions of spot currency rates and forward currency prices. The carrying amounts of the Company’s financial instruments, other than derivatives, which include net receivables, inventory, accounts payable, accrued liabilities and other current assets and liabilities, are reasonable estimates of their related fair values. The fair value of the variable-rate long-term debt is calculated based on current market rates for debt of the same risk and maturities. The fair value of the fixed-rate debt is based on market quotes for each issuance. The Company considers these to be Level 2 instruments. The Company’s non-financial instruments measured at fair value on a non-recurring basis include goodwill, indefinite-lived intangible assets and long-lived tangible assets. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions. As such, the Company generally classifies non-financial instruments as either Level 2 or Level 3 fair value measurements. The following tables set forth, by level within the fair value hierarchy, the Company's financial assets and liabilities that are measured at fair value on a recurring basis:
|
Restatement (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | A summary of the impact of these matters on income before income taxes and noncontrolling interest is presented below:
The restatement adjustments were tax effected and any tax adjustments reflected in the condensed consolidated financial statements relate entirely to the tax effect on the restatement adjustments. The account balances labeled “As Reported” in the following table represents the amounts previously reported in the Company's Quarterly Report on Form 10-Q for the quarter ended October 4, 2015 filed on November 5, 2015 with the SEC. The columns labeled First Restatement Adjustments and Second Restatement Adjustments represent the restatement adjustments disclosed in the Transition Report on Form 10-K for the 2015 transition period previously filed with the SEC on March 15, 2016 and the restatement adjustments disclosed in the Form 10-K/A filed with the SEC in February 2017, respectively. The effects of these prior period errors on the unaudited condensed consolidated statement of comprehensive income for the quarter ended October 4, 2015 were as follows:
|
Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying values and estimated fair values of assets and liabilities that are not measured on a recurring basis | :
|
Mergers, Acquisitions and Divestitures (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of preliminary fair value of assets acquired and liabilities assumed | The following amounts represent the final determination (as of the Merger date) of the fair value of identifiable assets acquired and liabilities assumed in the Merger, including adjustments made to date during the one year measurement period from the date of the Merger:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The following unaudited supplemental pro forma data for the nine months ended October 4, 2015 presents condensed consolidated information as if the Merger had been completed on April 1, 2013. The pro forma results were calculated by combining the results from continuing operations of the Company with the stand-alone results of Orbital for the pre-Merger period, which were adjusted to eliminate historical sales between the companies and to account for certain costs which would have been incurred during this pre-Merger period:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments | The unaudited supplemental pro forma data above includes the following significant adjustments made to account for certain costs which would have been incurred if the Merger had been completed on April 1, 2013, as adjusted for the applicable income tax impact:
(1) Added the amortization of acquired Orbital intangible assets recognized at fair value in purchase accounting and eliminated historical Orbital intangible asset amortization expense. (2) Reduced interest expense for the net reduction in debt of the Company and Orbital. (3) Excluded transaction fees for advisory, legal and accounting services incurred in the nine months ended October 4, 2015. |
Goodwill and Net Intangibles (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying amount of goodwill by operating segment | The changes in the carrying amount of goodwill by segment were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Net Intangibles consisted of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The Company expects amortization expense related to these assets to be as follows:
|
Earnings Per Share Data (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average number of shares | In computing basic and diluted EPS for both the quarter and nine months ended October 2, 2016 and October 4, 2015, the reported earnings for each respective period were divided by the weighted-average shares outstanding, determined as follows (in thousands):
|
Derivative Financial Instruments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding commodity forward contracts | Outstanding commodity forward contracts that hedge forecasted commodity purchases were as follows:
Interest rate swap agreements in order to manage interest costs and risk associated with variable interest rates were as follows:
The amount to be paid or received under these swaps is recorded as an adjustment to interest expense. Outstanding foreign currency forward contracts were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value and location of derivative instruments designated as hedging instruments in the consolidated balance sheet | Fair values in the condensed consolidated balance sheets related to derivative instruments designated as hedging instruments were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative gains and losses in the consolidated income statements related to commodity forward contracts and foreign currency forward contracts | Gains and losses reclassified from AOCI in the condensed consolidated statements of comprehensive income related to derivative instruments were as follows:
|
Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of accumulated OCI, net of income taxes | he following table summarizes the components of AOCI, net of income taxes:
|
Net Receivables (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of receivables, including amounts due under long-term contracts (contract receivables) | Net receivables, including amounts due under long-term contracts, consisted of the following:
|
Net Inventories (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net inventories | Net inventories consisted of the following:
|
Long-term Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt, including the current portion | Long-term debt consisted of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of minimum payments on outstanding long-term debt | The scheduled minimum loan payments on outstanding long-term debt are as follows:
|
Employee Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost | The components of net periodic benefit cost for pension benefits were as follows:
During the nine months ended October 2, 2016, the Company recorded a settlement expense of $1,673 to recognize the impact of lump sum benefit payments made in the nonqualified supplemental executive retirement plan. The components of net periodic benefit income for other postretirement benefits were as follows:
|
Contingencies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the amounts recorded for environmental remediation | The following is a summary of the amounts recorded for environmental remediation:
|
Operating Segment Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information, by segment | The following summarizes the Company's results by segment:
|
Basis of Presentation and Responsibility for Interim Financial Statements (Details) |
9 Months Ended |
---|---|
Oct. 02, 2016
segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | 3 |
Fair Value of Financial Instruments - Carrying values and estimated fair values of assets and liabilities not measured on a recurring basis (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Carrying Amount | ||
Assets and liabilities that are not measured on a recurring basis | ||
Fixed-rate debt | $ 700,000 | $ 700,000 |
Variable-rate debt | 895,000 | 790,000 |
Fair Value | ||
Assets and liabilities that are not measured on a recurring basis | ||
Fixed-rate debt | 732,750 | 712,500 |
Variable-rate debt | $ 889,531 | $ 787,697 |
Mergers, Acquisitions and Divestitures - Supplemental Pro Forma Data (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016
USD ($)
entity
|
Oct. 04, 2015
USD ($)
|
Oct. 02, 2016
USD ($)
entity
|
Oct. 04, 2015
USD ($)
$ / shares
|
|
Business Acquisition [Line Items] | ||||
Number of companies that were integrated | entity | 2 | 2 | ||
Sales | $ 3,335,115 | |||
Income from continuing operations | $ 103,418 | |||
Basic earnings per common share from continuing operations (in dollars per share) | $ / shares | $ 1.74 | |||
Diluted earnings per common share from continuing operations (in dollars per share) | $ / shares | $ 1.73 | |||
Amortization of intangible assets | $ 10,821 | $ 13,218 | $ 32,535 | $ 33,183 |
Acquisition-related Costs | ||||
Business Acquisition [Line Items] | ||||
Amortization of intangible assets | 3,877 | |||
Interest expense adjustment | (6,069) | |||
Transaction fees for advisory, legal and accounting services | $ (19,134) |
Goodwill and Net Intangibles - Goodwill and Deferred Charges (Details) $ in Thousands |
9 Months Ended |
---|---|
Oct. 02, 2016
USD ($)
| |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 1,828,366 |
Measurement period adjustments | 3,645 |
Balance at the end of the period | 1,832,011 |
Flight Systems Group | |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 922,991 |
Measurement period adjustments | 5,467 |
Balance at the end of the period | 928,458 |
Defense Systems Group | |
Goodwill | |
Goodwill, Impaired, Accumulated Impairment Loss | 3,700 |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 363,247 |
Measurement period adjustments | 0 |
Balance at the end of the period | 363,247 |
Space Systems Group | |
Goodwill | |
Goodwill, Impaired, Accumulated Impairment Loss | 142,800 |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 542,128 |
Measurement period adjustments | (1,822) |
Balance at the end of the period | $ 540,306 |
Goodwill and Net Intangibles - Intangibles Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 10,821 | $ 13,218 | $ 32,535 | $ 33,183 |
Goodwill and Net Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 185,923 | $ 214,312 |
Accumulated Amortization | (77,299) | (67,156) |
Net Intangibles | 108,624 | 147,156 |
Contract Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 173,000 | 179,000 |
Accumulated Amortization | (68,324) | (36,696) |
Net Intangibles | 104,676 | 142,304 |
Patented technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,018 | 11,018 |
Accumulated Amortization | (7,070) | (6,206) |
Net Intangibles | 3,948 | 4,812 |
Customer relationships and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,905 | 24,294 |
Accumulated Amortization | (1,905) | (24,254) |
Net Intangibles | $ 0 | $ 40 |
Goodwill and Net Intangibles - Amortization (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2016 | $ 10,854 | |
2017 | 37,062 | |
2018 | 26,729 | |
2019 | 22,832 | |
2020 | 11,147 | |
Thereafter | 0 | |
Net Intangibles | 108,624 | $ 147,156 |
Contract Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2016 | 10,543 | |
2017 | 35,882 | |
2018 | 25,609 | |
2019 | 21,760 | |
2020 | 10,882 | |
Thereafter | 0 | |
Net Intangibles | 104,676 | $ 142,304 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2016 | 311 | |
2017 | 1,180 | |
2018 | 1,120 | |
2019 | 1,072 | |
2020 | 265 | |
Thereafter | 0 | |
Net Intangibles | $ 3,948 |
Earnings Per Share Data (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Earnings Per Share [Abstract] | ||||
Basic (in shares) | 57,927 | 58,746 | 58,213 | 54,807 |
Dilutive effect of stock-based awards (in shares) | 330 | 558 | 429 | 421 |
Diluted (in shares) | 58,257 | 59,304 | 58,642 | 55,228 |
Anti-dilutive stock options excluded from the calculation of diluted shares (in shares) | 147 | 89 | 147 | 102 |
Derivative Financial Instruments - Floating to fixed rate (Details) - Interest Rate Swap |
Oct. 02, 2016
USD ($)
|
---|---|
Derivative [Line Items] | |
Notional | $ 300,000,000 |
Notional amount to mature August 2017 | |
Derivative [Line Items] | |
Notional | 100,000,000 |
Fair Value | $ (574,000) |
Pay Fixed | 1.29% |
Receive Floating | 0.52% |
Notional amount to mature August 2018 | |
Derivative [Line Items] | |
Notional | $ 100,000,000 |
Fair Value | $ (1,781,000) |
Pay Fixed | 1.69% |
Receive Floating | 0.52% |
Notional amount to mature November 2016 | |
Derivative [Line Items] | |
Notional | $ 50,000,000 |
Fair Value | $ (9,000) |
Pay Fixed | 0.65% |
Receive Floating | 0.52% |
Notional amount to mature November 2017 | |
Derivative [Line Items] | |
Notional | $ 50,000,000 |
Fair Value | $ (254,000) |
Pay Fixed | 1.10% |
Receive Floating | 0.52% |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated other comprehensive income (loss) | $ (711,209) | $ (785,908) |
Derivatives | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated other comprehensive income (loss) | 256 | (3,059) |
Pension and Other Postretirement Benefits | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated other comprehensive income (loss) | (713,986) | (784,294) |
Available-for-sale Securities | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Accumulated other comprehensive income (loss) | $ 2,521 | $ 1,445 |
Net Receivables (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
Billed receivables | $ 378,641 | $ 217,522 |
Unbilled receivables | 1,486,721 | 1,454,327 |
Less allowance for doubtful accounts | (536) | (1,028) |
Net receivables | 1,864,826 | 1,670,821 |
Customer progress payments received | 609,255 | 584,325 |
Unbilled receivables | ||
Long-term unbilled receivables, relating to commercial aerospace programs | $ 293,200 | $ 311,600 |
Net Inventories (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 80,767 | $ 88,365 |
Contracts in process | 148,987 | 124,315 |
Finished goods | 333 | 532 |
Net inventories | $ 230,087 | $ 213,212 |
Long-term Debt - Senior Notes (Details) - Senior Notes - USD ($) |
9 Months Ended | ||
---|---|---|---|
Oct. 02, 2016 |
Sep. 30, 2015 |
Oct. 31, 2013 |
|
5.50% Senior Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 400,000,000 | ||
Interest rate | 5.50% | 5.50% | |
Percentage of principal amount at which the entity may redeem some or all of the notes prior to specified date | 100.00% | ||
Maximum redemption with net proceeds from equity offerings as percentage of original principal | 35.00% | ||
Redemption price with net proceeds from equity offerings as percentage of original principal | 105.50% | ||
Debt issuance costs | $ 6,136,000 | ||
Debt instrument, term (in years) | 8 years | ||
5.25% Senior Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 300,000,000 | ||
Interest rate | 5.25% | 5.25% | |
Deferred finance costs | $ 2,625,000 | ||
Debt instrument, term (in years) | 8 years |
Long-term Debt - Minimum loan payments (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Minimum payments on outstanding long-term debt | ||
Remainder of 2016 | $ 10,000 | |
Calendar 2017 | 40,000 | |
Calendar 2018 | 40,000 | |
Calendar 2019 | 40,000 | |
Calendar 2020 | 765,000 | |
Thereafter | 700,000 | |
Total | $ 1,595,000 | $ 1,490,000 |
Long-term Debt - Covenants and Default Provisions (Details) |
9 Months Ended |
---|---|
Oct. 02, 2016
USD ($)
| |
Debt Instrument [Line Items] | |
Subsidiary guarantors percentage owned | 100.00% |
Senior Credit Facility | |
Debt Instrument [Line Items] | |
Restricted debt limit | $ 250,000,000 |
Restricted debt limit percent of net income | 50.00% |
Employee Benefit Plans (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Pension Benefits | ||||
Change in benefit obligation | ||||
Service cost | $ 4,556 | $ 4,815 | $ 13,645 | $ 14,445 |
Interest cost | 25,360 | 30,348 | 76,186 | 90,866 |
Expected return on plan assets | (40,578) | (40,117) | (121,733) | (119,867) |
Amortization of unrecognized net loss | 31,355 | 37,690 | 94,167 | 112,989 |
Amortization of unrecognized prior service cost | (5,151) | (5,213) | (15,453) | (15,638) |
Net periodic benefit cost | 15,542 | 27,523 | 46,812 | 82,795 |
Special termination benefit cost / curtailment | 0 | 0 | 1,673 | 0 |
Net periodic benefit cost (income) | 15,542 | 27,523 | 48,485 | 82,795 |
Other Postretirement Benefits | ||||
Change in benefit obligation | ||||
Service cost | 0 | 1 | 1 | 1 |
Interest cost | 841 | 1,126 | 2,523 | 3,446 |
Expected return on plan assets | (780) | (922) | (2,405) | (2,732) |
Amortization of unrecognized net loss | 364 | 495 | 1,091 | 1,393 |
Amortization of unrecognized prior service cost | (1,291) | (1,813) | (3,871) | (5,706) |
Net periodic benefit cost (income) | $ (866) | $ (1,113) | $ (2,661) | $ (3,598) |
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Oct. 02, 2016 |
Oct. 02, 2016 |
|
Defined Benefit Plans | ||
Increase in funded status | $ 36,444 | |
Supplemental (nonqualified) executive retirement plan | ||
Defined Benefit Plans | ||
Employer's contribution to retirees during the period | $ 4,776 | |
Estimated future employer contributions in current fiscal year | 692 | |
Other Postretirement Benefits | ||
Defined Benefit Plans | ||
Employer contributions directly to the pension trust for the period | 4,814 | |
Estimated future employer contributions in current fiscal year | 2,674 | |
Pension Benefits | ||
Defined Benefit Plans | ||
Contributions by employer | $ 39,500 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 18.00% | 33.90% | 25.90% | 39.90% |
Potential reduction of uncertain tax benefits over the next 12 months from audit settlements | $ 11,176,000 | $ 11,176,000 | ||
Minimum increase in earnings from settlement of unrecognized tax benefits based on current estimates | 0 | |||
Maximum increase in earnings from settlement of unrecognized tax benefits based on current estimates | $ 10,074,000 |
Share Repurchases (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
Feb. 27, 2017 |
Nov. 01, 2016 |
Oct. 29, 2015 |
Aug. 04, 2015 |
Mar. 11, 2015 |
|
Class of Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 250,000,000 | $ 100,000,000 | $ 75,000,000 | ||||||
Stock repurchase program, number of shares authorized to be repurchased | 3,250,000.00 | 1,400,000.0 | 1,000,000 | ||||||
Treasury stock purchased (in shares) | 576,407 | 497,145 | 1,104,511 | 825,986 | |||||
Treasury stock purchased | $ 43,750,000 | $ 36,275,000 | $ 87,991,000 | $ 60,777,000 | |||||
Subsequent Event | |||||||||
Class of Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 450,000,000 | $ 300,000,000 | |||||||
Stock repurchase program, number of shares authorized to be repurchased | 4,000,000.0 |
Changes in Estimates (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 02, 2016 |
Oct. 04, 2015 |
Oct. 02, 2016 |
Oct. 04, 2015 |
Dec. 31, 2015 |
|
Changes in Estimates [Abstract] | |||||
Operating income adjustments under percentage of completion method | $ 6,000 | $ 27,000 | $ 92,000 | $ 81,000 | |
Estimated costs to complete on loss contracts | $ 1,248,549 | $ 1,248,549 | $ 1,392,218 |
Restructuring Costs (Details) - USD ($) $ in Thousands |
Oct. 02, 2016 |
Dec. 31, 2015 |
---|---|---|
Termination Benefits | ||
Realignment liability activity | ||
Restructuring liabilities | $ 400 | $ 3,589 |
Remaining Lease Rentals | ||
Realignment liability activity | ||
Restructuring liabilities | $ 19,570 | $ 26,154 |
Q,P%QEH_ER8H2(TV63P!/]//G\45
M2&*[J-0J*C5%::GDJ>5@97J?3!#4BE-8_(!,_\R8H.P?3 @&U]=N#V^OI+4^!5?T\
MIF3YKRC^ E!+ P04 " #DA8=*;R:LB;@! #2 P &0 'AL+W=O C I[*Y\B/4
M^ \V&PHJ%XXW_FS&,1L-A]WT@]C\C?._4$L#!!0 ( .2%ATI^NDD'QP$
M #<$ 9 >&PO=V]R:W-H965TV >>WN1W^#CMGX5MI''DBCZ\;.I_C>@A
M2-G
(?>:\D3GK-K(%IB3G,,W\0D:P1#]C4%WTMQXO_ ^3X\
MW5681GCZA\)TGR#;)<@B0?;?$O=BLK^2L$U/-=@V3I,CE1G[.,D;[SJP]_$1
MV>_P>=J_"-O*WI&+\?BRL?^-,1Y0RN$&1ZC##[8:"AH?CN_Q;.[PS$-^ CXT\%H5V<2*CDC/@?C>Y73
M)"0$$DH7%(3?+O 4@8AG\;+K$F7D(&X/K^I?XVU^UK.PL(#RJ>N62BPHRD;OV@HMBI%
M5HV'[00@8=DJ*?8S!6](02P4V,\TN");;%2*C'J6[3F(QK;>8C=3\)X4-I]A
M-]/XBH\L;%4&7"@&%EI D&7O8MBJ#%A56'90ALW KOFDM'Q3@M?;>;8(-.RM
M=W) :$Z=WY)RDQ:5\Z)J?=9H3P1KI6JI"?V)7M=;?= ]#C*YKIO;4-^7W6FO
M&]1J9TZRWO$X/?\+4$L#!!0 ( .2%ATHA-U'X+P, $<- 9 >&PO
M=V]R:W-H965T
&?"
M.9FV=IB4_*#;86K&LNOMNHD63=^W!D/SO/D+4$L#!!0 ( .2%ATK(0U"^
M$0( )0% 9 >&PO=V]R:W-H965T
FJ^B7!/]&%>S:0].[NFTTH]^RBB-,W1PQA-FN.H
MP0L-?J\X;17I;I8@#3!38"<%MO5D41_N(K<*M&7PI(/5^B*=DL_8-2U7T0-)N#*-+F3E:B
MU%]VLBY2I8?U/FBJ6J3;SJC( X(0#XHT*_W5HIM[KE<+>51Y5HKGVFN.19'6
M_]8BE^>EC_WWB1_9_J#:B6"UJ-*]^"G4K^JYUJ-@\++-"E$VF2R]6NR6_B=\
M_T1X:] A?F?BW(S>O3:4%RE?V\'7[=)'+2.1BXUJ7:3Z<1(/(L];3YK'7^/4
M']9L#E'_O>5NS28ZY^R/,780)BOF>B_R9.
M(M?PEHE>8R/SIOOU-L=&R<)XT52*]*U_9F7W//=?HLB8P0;$&)#! -.+!J$Q
M"*\UH,: 7FO C &S#((^]BZ9CZE*5XM:GKVZWP]5VFX[?,]TN3;M9%>=[IO.
M9Z-G3RL:XT5P:AT9S+K'D!&&3!$/+B)*II!'%T)CR\T3A D'3* #&:(A8#2D
M
GH,5&'*3L,9@E#"%E) 7 T06/,@".1BP..4R(@X2X0RBQ
MUEES9QV*W%I]A)IPB4 ND