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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the year ended December 31, 2016
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or other jurisdiction of
incorporation or organization)
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41-1672694
(I.R.S. Employer
Identification No.)
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45101 Warp Drive
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Dulles, Virginia
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20166
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01
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New York Stock Exchange
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Large Accelerated Filer
ý
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Accelerated Filer
o
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Non-Accelerated Filer
o
(Do not check if a
smaller reporting company)
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Smaller Reporting Company
o
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Emerging Growth Company
o
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Page
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•
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leading provider of small- and medium-class space launch vehicles for civil, military and commercial missions,
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•
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major supplier of interceptor boosters and target vehicles for missile defense applications,
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•
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premier producer of solid rocket propulsion systems and specialty energetic products, and
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•
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manufacturer of composite structures for commercial and military aircraft and launch vehicles.
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•
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leader in propulsion and controls for air-, sea- and land-based tactical missiles and missile defense interceptors, as well as fuzing and warheads for tactical missiles and munitions,
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•
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supplier of advanced defense electronics for next-generation strike weapon systems, missile-warning and aircraft survivability systems and special-mission aircraft,
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•
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leading producer of medium- and large-caliber ammunition, medium-caliber gun systems and precision munitions guidance kits, and
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•
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leading U.S. producer of small-caliber ammunition.
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•
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leading provider of small- and medium-class commercial satellites used for global communications and high-resolution Earth imaging,
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•
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leading provider of small- and medium-class spacecraft that perform scientific research and national security missions for government customers,
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•
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provider of commercial cargo delivery services to the International Space Station ("ISS") and developer of advanced space systems, and
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•
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premier provider of spacecraft components and subsystems and specialized technical services.
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Percentage of Sales
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|||||||
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Year Ended
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Nine Months Ended
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Year Ended
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|||
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December 31, 2016
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December 31, 2015
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March 31, 2015
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Sales to:
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U.S. Army
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17
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%
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15
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%
|
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26
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%
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U.S. Navy
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12
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|
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11
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|
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15
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NASA
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27
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23
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|
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13
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U.S. Air Force
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4
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4
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7
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Other U.S. Government customers
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16
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|
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17
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|
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14
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Total U.S. Government customers
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76
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70
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75
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Commercial and foreign customers
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24
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|
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30
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|
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25
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Total
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100
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%
|
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100
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%
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100
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%
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Period
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U.S. Government
Sales
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Percentage of
Sales
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|||
Year ended December 31, 2016
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$
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3,368
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76
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%
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Nine months ended December 31, 2015
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$
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2,359
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70
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%
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Year ended March 31, 2015
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$
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2,332
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75
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%
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International Sales
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Percentage of
Sales |
|||
Year ended December 31, 2016
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$
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778
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|
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17
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%
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Nine months ended December 31, 2015
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$
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766
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23
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%
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Year ended March 31, 2015
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$
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608
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20
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%
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Company-funded
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Customer-funded
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||||
Year ended December 31, 2016
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$
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116
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$
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396
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|
Nine months ended December 31, 2015
|
$
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83
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|
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$
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359
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Year ended March 31, 2015
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$
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49
|
|
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$
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499
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Name
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Age
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Title
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David W. Thompson
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62
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President and Chief Executive Officer
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Blake E. Larson
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57
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Chief Operating Officer
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Garrett E. Pierce
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72
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Chief Financial Officer
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Antonio L. Elias
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67
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Executive Vice President and Chief Technical Officer
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Frank L. Culbertson, Jr.
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67
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Executive Vice President and President, Space Systems Group
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Michael A. Kahn
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57
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Executive Vice President and President, Defense Systems Group
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Scott L. Lehr
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56
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Executive Vice President and President, Flight Systems Group
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Thomas E. McCabe
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62
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Senior Vice President, General Counsel and Secretary
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Christine A. Wolf
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56
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Senior Vice President, Human Resources
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•
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the creativity and effectiveness of our research and development programs,
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•
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our ability to offer better program performance and/or at a lower cost than our competitors,
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•
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the readiness of our facilities, equipment and personnel to undertake the programs for which we compete, and
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•
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our past performance and demonstrated capabilities.
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Cost-plus contracts
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32
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%
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Fixed-price contracts
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68
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%
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Total
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100
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%
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•
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the contractor is paid an amount agreed upon for completed and partially completed products and services accepted by the U.S. Government,
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•
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the U.S. Government is not liable for the contractor's costs for unaccepted items, and is entitled to repayment of any advance payments and progress payments related to the terminated portions of the contract, and
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•
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the contractor may be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source.
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•
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scarce technological skills and components,
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•
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the frequent need to bid on programs in advance of design completion, which may result in unforeseen technological difficulties and/or cost overruns,
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•
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the substantial time and effort required for design and development,
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•
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design complexity,
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•
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rapid obsolescence, and
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•
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the potential need for design improvement.
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•
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make it more difficult for us to satisfy obligations,
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•
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require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the amount of cash flow available for working capital, capital expenditures, acquisitions, share repurchases, dividends and other general corporate purposes,
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•
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limit our flexibility in planning for, or reacting to, changes in the defense and aerospace industries,
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•
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place us at a competitive disadvantage compared to competitors that have lower debt service obligations and significantly greater operating and financing flexibility,
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•
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limit, along with the financial and other restrictive covenants applicable to our indebtedness, among other things, our ability to borrow additional funds,
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•
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increase our vulnerability to general adverse economic and industry conditions, and
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•
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result in a default event upon a failure to comply with financial covenants contained in our senior credit facilities which, if not cured or waived, could have a material adverse effect on our business, financial condition or results of operations.
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•
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reducing or delaying expenditures for capital equipment and/or share repurchases,
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•
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seeking additional debt financing or equity capital,
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•
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foregoing attractive acquisition opportunities,
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•
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selling assets, or
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•
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restructuring or refinancing debt.
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Flight Systems Group
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Brigham City/Promontory, UT; Clearfield, UT; Magna, UT; Chandler, AZ; Dulles, VA; Iuka, MS; Dayton, OH; Vandenberg Air Force Base, CA; Wallops Island, VA; Huntsville, AL
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Defense Systems Group
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Mesa, AZ; Northridge, CA; Elkton, MD; Elk River, MN; Plymouth, MN; Independence, MO; Fort Worth, TX; Radford, VA; Rocket Center, WV
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Space Systems Group
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Dulles, VA; Beltsville, MD; Gilbert, AZ; Greenbelt, MD; Commerce, CA; Goleta, CA; San Diego, CA; Wallops Island, VA; Palestine, TX; Pasadena, CA
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Corporate
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Dulles, VA; Plymouth, MN; Minnetonka, MN
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Owned
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Leased
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Government
Owned
(1)
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Total
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||||
Flight Systems Group
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5,236
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3,593
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|
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590
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9,419
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Defense Systems Group
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647
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|
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793
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|
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4,365
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|
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5,805
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Space Systems Group
|
270
|
|
|
1,139
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|
|
37
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|
|
1,446
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Corporate
|
—
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|
|
80
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|
|
—
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|
|
80
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|
Total
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6,153
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|
|
5,605
|
|
|
4,992
|
|
|
16,750
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Percentage of total
|
37
|
%
|
|
33
|
%
|
|
30
|
%
|
|
100
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%
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Period
|
|
High
|
|
Low
|
||||
Year ended December 31, 2016
|
|
|
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||||
Quarter ended December 31, 2016
|
|
$
|
89.39
|
|
|
$
|
71.52
|
|
Quarter ended October 2, 2016
|
|
$
|
89.43
|
|
|
$
|
67.04
|
|
Quarter ended July 3, 2016
|
|
$
|
90.98
|
|
|
$
|
82.11
|
|
Quarter ended April 3, 2016
|
|
$
|
94.92
|
|
|
$
|
74.31
|
|
Nine months ended December 31, 2015
|
|
|
|
|
||||
Quarter ended December 31, 2015
|
|
$
|
92.99
|
|
|
$
|
74.50
|
|
Quarter ended October 4, 2015
|
|
$
|
81.06
|
|
|
$
|
56.06
|
|
Quarter ended July 5, 2015
|
|
$
|
78.06
|
|
|
$
|
71.78
|
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Plan category
|
|
Number of securities to
be issued upon exercise of
outstanding options, warrants and rights (a)
|
|
Weighted-average exercise price of outstanding
options, warrants
and rights (b)
|
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Number of securities
remaining available for
future issuance under equity
compensation plans (excluding securities reflected in column (a)) (c)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
||||
1990 Equity Incentive Plan
(1)
|
|
|
|
|
|
|
||||
Deferred Compensation
(2)
|
|
16,136
|
|
|
|
|
|
|||
Non-Employee Director Restricted Stock Plan
(1)
|
|
|
|
|
|
|
||||
Deferred Compensation
(2)
|
|
6,924
|
|
|
|
|
|
|||
2005 Stock Incentive Plan
(1)
|
|
|
|
|
|
|
||||
Stock Options
|
|
199,651
|
|
|
$
|
50.80
|
|
|
|
|
Restricted Stock Units
|
|
53,449
|
|
|
|
|
|
|||
Performance Awards
(4)
|
|
156,563
|
|
|
|
|
|
|||
Deferred Compensation
(2)
|
|
63,819
|
|
|
|
|
|
|||
2015 Stock Incentive Plan
(3)
|
|
|
|
|
|
2,811,466
|
|
|||
Stock Options
|
|
72,328
|
|
|
$
|
79.43
|
|
|
|
|
Performance Awards
(4)
|
|
154,418
|
|
|
|
|
|
|||
Deferred Compensation
(2)
|
|
16,220
|
|
|
|
|
|
|||
Equity compensation plans not approved by security holders:
|
|
|
|
|
|
|
||||
Orbital Sciences Amended and Restated 2005 Stock Incentive Plan
(1) (5)
|
|
|
|
|
|
|
||||
Restricted Stock Units
|
|
48,878
|
|
|
|
|
|
|||
Total
|
|
788,386
|
|
|
$
|
58.41
|
|
|
2,811,466
|
|
(1)
|
No additional awards may be granted under this plan.
|
(2)
|
Shares reserved for payment of deferred stock units in accordance with the terms of the plan.
|
(3)
|
Under the 2015 Stock Incentive Plan, a total of 3,750,000 shares were authorized for awards. However, the plan includes a fungible share counting provision, under which "full-value awards" (i.e., awards other than stock options and stock appreciation rights) are counted against the reserve of shares available for issuance under the plan as 2.5 shares for every one share actually issued in connection with the award. No more than 5% of the shares available for awards under the plan may be granted to our non-employee directors in the aggregate.
|
(4)
|
Shares reserved for issuance in connection with outstanding performance awards. The amount shown assumes the maximum payout of the performance shares based on achievement of the highest level of performance. The actual number of shares to be issued depends on the performance levels achieved for the respective performance periods.
|
(5)
|
This plan was approved by the stockholders of Orbital prior to the Merger. Pursuant to the Transaction Agreement relating to the Merger, we assumed the obligation to issue shares under the terms of this plan.
|
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 Additional Shares that May Be Purchased Under the Program
(3)
|
|||||
October 3 - October 30
|
290,072
|
|
|
$
|
75.05
|
|
|
290,000
|
|
|
|
|
October 31 - November 27
|
140,641
|
|
|
$
|
77.84
|
|
|
140,232
|
|
|
|
|
November 28 - December 31
|
36,990
|
|
|
$
|
86.55
|
|
|
35,590
|
|
|
|
|
Quarter ended December 31, 2016
|
467,703
|
|
|
$
|
76.80
|
|
|
465,822
|
|
|
1,144,998
|
|
(1)
|
Includes shares repurchased during the quarter (see (2) below) 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 the
year ended December 31, 2016
, the Board approved an increase to the stock repurchase program to authorize the repurchase of up to the lesser of $300 million or 4.0 million shares through March 31, 2017. On February 27, 2017, the Board of Directors further increased the amount authorized for repurchase to
$450 million
and extended the repurchase period through March 31, 2018. We repurchased
1,570,333
shares for
$124 million
during the
year ended December 31, 2016
.
|
(3)
|
The maximum number of shares that may yet be repurchased under the program was calculated using our closing stock price of
$87.73
on
December 31, 2016
.
|
|
Year Ended
|
Nine Months Ended
|
Year Ended March 31,
|
||||||||||||||||
(in millions, except per share data)
|
December 31, 2016
|
|
December 31, 2015
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
||||||||||
Results of Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
4,455
|
|
|
$
|
3,391
|
|
|
$
|
3,113
|
|
|
$
|
2,891
|
|
|
$
|
3,206
|
|
Gross profit
|
985
|
|
|
674
|
|
|
701
|
|
|
290
|
|
|
650
|
|
|||||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest
|
472
|
|
|
333
|
|
|
223
|
|
|
(59
|
)
|
|
303
|
|
|||||
Income (loss) from continuing operations of Orbital ATK, Inc.
|
293
|
|
|
185
|
|
|
70
|
|
|
(64
|
)
|
|
165
|
|
|||||
Income from discontinued operations
|
—
|
|
|
1
|
|
|
125
|
|
|
181
|
|
|
85
|
|
|||||
Net income attributable to Orbital ATK, Inc.
|
$
|
293
|
|
|
$
|
186
|
|
|
$
|
195
|
|
|
$
|
117
|
|
|
$
|
250
|
|
Earnings per common share attributable to Orbital ATK, Inc.:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
5.05
|
|
|
$
|
3.12
|
|
|
$
|
1.96
|
|
|
$
|
(2.03
|
)
|
|
$
|
5.10
|
|
Income from discontinued operations
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
3.53
|
|
|
$
|
5.73
|
|
|
$
|
2.62
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
5.01
|
|
|
$
|
3.09
|
|
|
$
|
1.93
|
|
|
$
|
(1.97
|
)
|
|
$
|
5.07
|
|
Income from discontinued operations
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
3.46
|
|
|
$
|
5.55
|
|
|
$
|
2.61
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
1.20
|
|
|
$
|
0.78
|
|
|
$
|
1.28
|
|
|
$
|
1.10
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
5,418
|
|
|
$
|
5,324
|
|
|
$
|
5,478
|
|
|
$
|
5,925
|
|
|
$
|
4,482
|
|
Long-term debt (including current portion)
|
$
|
1,438
|
|
|
$
|
1,476
|
|
|
$
|
1,572
|
|
|
$
|
2,069
|
|
|
$
|
1,061
|
|
(1)
|
The nine months period ended December 31, 2015 results include a
$50 million
gain on settlement of a dispute with a supplier pertaining to the Antares rocket used in the CRS I contract.
|
(2)
|
Fiscal 2015 results includes
$35 million
of transaction fees for advisory, legal and accounting services in connection with the Distribution and Merger and a
$25 million
litigation charge pertaining to a Raytheon lawsuit settlement.
|
(3)
|
Fiscal 2014 results include a
$342 million
forward loss contract reserve recorded in the second quarter related to our long-term contract (the "Lake City Contract") with the U.S. Army to manufacture and supply small caliber ammunition at the U.S. Army’s Lake City Army Ammunition Plant.
|
(4)
|
Fiscal 2013 results include a
$32 million
forward loss contract reserve recorded in the second quarter related to the Lake City Contract.
|
•
|
the effect of the restatements of our previously issued financial results for the first quarter 2016, the 2015 transition period, fiscal 2015 and fiscal 2014 and any actual or unasserted claims, investigations or proceedings as a result of the restatements,
|
•
|
our ability to remediate the material weaknesses in our internal control over financial reporting described in Item 9A, "Control and Procedures" of this Annual Report,
|
•
|
reductions or changes in programs administered by the National Aeronautics and Space Administration ("NASA") or in 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 we may not be able to react to due to the nature of our U.S. Government contracts,
|
•
|
changes in cost and revenue estimates and/or timing of programs,
|
•
|
the 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 us to adverse consequences,
|
•
|
government laws and other rules and regulations applicable to us, including procurement and import-export control,
|
•
|
reduction or change in demand and manufacturing costs for 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 our 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 cybersecurity 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 our subcontractors,
|
•
|
development of key technologies and retention of a qualified workforce,
|
•
|
the performance of our products,
|
•
|
fires or explosions at any of our facilities,
|
•
|
government investigations and audits,
|
•
|
environmental laws that govern past practices and rules and regulations, noncompliance with which may expose us to adverse consequences,
|
•
|
impacts of financial market disruptions or volatility to our customers and vendors,
|
•
|
unanticipated changes in the tax provision or exposure to additional tax liabilities, and
|
•
|
the 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. Additionally,
Flight Systems Group
operates in the military and commercial aircraft and launch structures markets. In addition, the group 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 commercial 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 ("ISS"). This group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. government agencies.
|
|
Projected
2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
||||
|
|
|
|
||||||||
Expected long-term rate of return on Plan assets
|
7.00
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
Discount rate
|
4.14
|
%
|
|
4.40
|
%
|
|
3.90
|
%
|
|
4.50
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|
||||
Union
|
3.11
|
%
|
|
3.13
|
%
|
|
3.66
|
%
|
|
3.22
|
%
|
Salaried
|
3.56
|
%
|
|
3.60
|
%
|
|
3.14
|
%
|
|
3.47
|
%
|
|
Projected
2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
||||
|
|
|
|
||||||||
Expected long-term rate of return on Plan assets:
|
|
|
|
|
|
|
|
||||
Held solely in fixed income investments
|
4.00
|
%
|
|
4.00
|
%
|
|
5.00% / 6.25%
|
|
|
5.00% / 6.25%
|
|
Held in pension master trust and fixed income investments
|
6.00
|
%
|
|
6.00
|
%
|
|
6.25
|
%
|
|
6.25
|
%
|
Discount rate
|
3.62
|
%
|
|
3.98
|
%
|
|
3.55
|
%
|
|
3.95
|
%
|
Weighted-average initial health care cost trend rate
|
N/A
|
|
|
6.10
|
%
|
|
6.10
|
%
|
|
6.10
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
(in millions)
|
|
|
|
(Unaudited)
|
|
|
|
|
|||||||
Flight Systems Group
|
|
$
|
1,496
|
|
|
$
|
1,470
|
|
|
$
|
26
|
|
|
1.8
|
%
|
Defense Systems Group
|
|
1,823
|
|
|
1,820
|
|
|
3
|
|
|
0.2
|
|
|||
Space Systems Group
|
|
1,238
|
|
|
1,165
|
|
|
73
|
|
|
6.3
|
|
|||
Corporate and Eliminations
|
|
(102
|
)
|
|
(92
|
)
|
|
(10
|
)
|
|
(10.9
|
)
|
|||
Total sales
|
|
$
|
4,455
|
|
|
$
|
4,363
|
|
|
$
|
92
|
|
|
2.1
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
(in millions)
|
|
|
|
(unaudited)
|
|
|
|
|
|||||||
Flight Systems Group
|
|
$
|
1,117
|
|
|
$
|
1,119
|
|
|
$
|
(2
|
)
|
|
(0.2
|
)%
|
Defense Systems Group
|
|
1,471
|
|
|
1,460
|
|
|
11
|
|
|
0.8
|
|
|||
Space Systems Group
|
|
1,010
|
|
|
969
|
|
|
41
|
|
|
4.2
|
|
|||
Corporate and Eliminations
|
|
(128
|
)
|
|
(83
|
)
|
|
(45
|
)
|
|
(54.2
|
)
|
|||
Total cost of sales
|
|
$
|
3,470
|
|
|
$
|
3,465
|
|
|
$
|
5
|
|
|
0.1
|
%
|
|
|
Years Ended
|
|
|
||||||||||||||
|
|
December 31, 2016
|
|
As a % of Sales
|
|
December 31, 2015
|
|
As a % of Sales
|
|
Change
|
||||||||
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
||||||||
Research and development
|
|
$
|
116
|
|
|
2.6
|
%
|
|
$
|
109
|
|
|
2.5
|
%
|
|
$
|
7
|
|
Selling
|
|
107
|
|
|
2.4
|
|
|
109
|
|
|
2.5
|
|
|
(2
|
)
|
|||
General and administrative
|
|
290
|
|
|
6.5
|
|
|
359
|
|
|
8.2
|
|
|
(69
|
)
|
|||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
34
|
|
|
0.8
|
|
|
(34
|
)
|
|||
Total
|
|
$
|
513
|
|
|
11.5
|
%
|
|
$
|
611
|
|
|
14.0
|
%
|
|
$
|
(98
|
)
|
|
|
Years Ended
|
|
|
||||||||||||||
|
|
December 31, 2016
|
|
Effective Rate
|
|
December 31, 2015
|
|
Effective Rate
|
|
Change
|
||||||||
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
||||||||
Income taxes
|
|
$
|
111
|
|
|
27.5
|
%
|
|
$
|
83
|
|
|
36.4
|
%
|
|
$
|
28
|
|
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
|
December 31, 2015
|
|
December 28, 2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
(unaudited)
|
|
|
|
|
|||||||
Flight Systems Group
|
|
$
|
1,142
|
|
|
$
|
766
|
|
|
$
|
376
|
|
|
49.1
|
%
|
Defense Systems Group
|
|
1,320
|
|
|
1,333
|
|
|
(13
|
)
|
|
(1.0
|
)
|
|||
Space Systems Group
|
|
977
|
|
|
223
|
|
|
754
|
|
|
338.8
|
|
|||
Corporate and Eliminations
|
|
(48
|
)
|
|
(180
|
)
|
|
132
|
|
|
73.3
|
|
|||
Total sales
|
|
$
|
3,391
|
|
|
$
|
2,142
|
|
|
$
|
1,249
|
|
|
58.4
|
%
|
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
|
December 31, 2015
|
|
December 28, 2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
(unaudited)
|
|
|
|
|
|||||||
Flight Systems Group
|
|
$
|
875
|
|
|
$
|
599
|
|
|
$
|
276
|
|
|
46.1
|
%
|
Defense Systems Group
|
|
1,068
|
|
|
1,079
|
|
|
(11
|
)
|
|
(1.0
|
)
|
|||
Space Systems Group
|
|
811
|
|
|
183
|
|
|
628
|
|
|
342.4
|
|
|||
Corporate and Eliminations
|
|
(37
|
)
|
|
(197
|
)
|
|
160
|
|
|
81.3
|
|
|||
Total cost of sales
|
|
$
|
2,717
|
|
|
$
|
1,664
|
|
|
$
|
1,053
|
|
|
63.3
|
%
|
|
|
Nine Months Ended
|
|
|
||||||||||||||
|
|
December 31, 2015
|
|
As a % of Sales
|
|
December 28, 2014
|
|
As a % of Sales
|
|
Change
|
||||||||
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
||||||||
Research and development
|
|
$
|
83
|
|
|
2.5
|
%
|
|
$
|
24
|
|
|
1.1
|
%
|
|
$
|
59
|
|
Selling
|
|
88
|
|
|
2.6
|
|
|
69
|
|
|
3.2
|
|
|
19
|
|
|||
General and administrative
|
|
220
|
|
|
6.5
|
|
|
165
|
|
|
7.8
|
|
|
55
|
|
|||
Total
|
|
$
|
391
|
|
|
11.6
|
%
|
|
$
|
258
|
|
|
12.1
|
%
|
|
$
|
133
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||
|
|
December 31, 2015
|
|
Effective Rate
|
|
December 28, 2014
|
|
Effective Rate
|
|
Change
|
||||||||
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
||||||||
Income taxes
|
|
$
|
87
|
|
|
31.9
|
%
|
|
$
|
42
|
|
|
27.5
|
%
|
|
$
|
45
|
|
|
|
Years Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2015
|
|
December 28, 2014
|
||||||||
Cash provided by operating activities of continuing operations
|
|
$
|
519
|
|
|
$
|
450
|
|
|
$
|
303
|
|
|
$
|
44
|
|
Cash (used in) provided by investing activities of continuing operations
|
|
(183
|
)
|
|
280
|
|
|
(111
|
)
|
|
(59
|
)
|
||||
Cash used in financing activities of continuing operations
|
|
(240
|
)
|
|
(748
|
)
|
|
(227
|
)
|
|
(216
|
)
|
||||
Net cash flows provided by (used in) continuing operations
|
|
$
|
96
|
|
|
$
|
(18
|
)
|
|
$
|
(35
|
)
|
|
$
|
(231
|
)
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Senior Credit Facility:
|
|
|
|
|
||||
Term Loan A due 2020
|
|
$
|
750
|
|
|
$
|
790
|
|
Revolving Credit Facility due 2020
|
|
—
|
|
|
—
|
|
||
5.25% Senior Notes due 2021
|
|
300
|
|
|
300
|
|
||
5.50% Senior Notes due 2023
|
|
400
|
|
|
400
|
|
||
Carrying amount of long-term debt
|
|
1,450
|
|
|
1,490
|
|
||
Unamortized debt issuance costs:
|
|
|
|
|
||||
Senior Credit Facility
|
|
5
|
|
|
6
|
|
||
5.25% Senior Notes due 2021
|
|
2
|
|
|
2
|
|
||
5.50% Senior Notes due 2013
|
|
5
|
|
|
6
|
|
||
Unamortized debt issuance costs
|
|
12
|
|
|
14
|
|
||
Long-term debt less unamortized debt issuance costs
|
|
1,438
|
|
|
1,476
|
|
||
Less: Current portion of long-term debt
|
|
40
|
|
|
40
|
|
||
Long-term debt
|
|
$
|
1,398
|
|
|
$
|
1,436
|
|
|
|
Total Leverage
Ratio
(1)
|
|
Interest Coverage
Ratio
(2)
|
||
Requirement
|
|
4.00
|
|
|
3.00
|
|
Actual at December 31, 2016
|
|
2.11
|
|
|
10.55
|
|
(1)
|
Not to exceed the required financial ratio.
|
(2)
|
Not to be below the required financial ratio.
|
|
Total
|
|
1 Year
|
|
2 - 3 Years
|
|
4 - 5 Years
|
|
More than
5 Years |
||||||||||
Contractual obligations - by payment period:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
1,450
|
|
|
$
|
40
|
|
|
$
|
80
|
|
|
$
|
930
|
|
|
$
|
400
|
|
Interest on debt
(1)
|
268
|
|
|
50
|
|
|
93
|
|
|
81
|
|
|
44
|
|
|||||
Operating leases
|
385
|
|
|
77
|
|
|
136
|
|
|
106
|
|
|
66
|
|
|||||
Environmental remediation costs, net
|
24
|
|
|
2
|
|
|
—
|
|
|
5
|
|
|
17
|
|
|||||
Pension and other postretirement plan contributions
|
514
|
|
|
36
|
|
|
156
|
|
|
191
|
|
|
131
|
|
|||||
Total contractual obligations, net
|
$
|
2,641
|
|
|
$
|
205
|
|
|
$
|
465
|
|
|
$
|
1,313
|
|
|
$
|
658
|
|
Other commercial commitments - by expiration period:
|
|
|
|
|
|
|
|
|
|
||||||||||
Letters of credit
|
$
|
182
|
|
|
$
|
75
|
|
|
$
|
43
|
|
|
$
|
28
|
|
|
$
|
36
|
|
(1)
|
Includes interest on variable rate debt calculated based on the minimum required rate for LIBOR based loans under the Credit Agreement as of December 31, 2016. Variable rate debt was
52%
of our total debt at
December 31, 2016
.
|
•
|
the adoption, implementation and interpretation of new laws, regulations or cleanup standards,
|
•
|
advances in technologies,
|
•
|
outcomes of negotiations or litigation with regulatory authorities and other parties,
|
•
|
additional information about the ultimate remedy selected at new and existing sites,
|
•
|
adjustment of our share of the cost of such remedies,
|
•
|
changes in the extent and type of site utilization,
|
•
|
the discovery of new contamination,
|
•
|
the number of parties found liable at each site and their ability to pay,
|
•
|
more current estimates of liabilities for these contingencies, or
|
•
|
liabilities associated with resource restoration as a result of contamination from past practices.
|
(Amounts in millions, except per share data)
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended
December 31, 2015 |
|
Year Ended
March 31, 2015
|
||||||
|
|
|
|
|
|
|
|
|
||||
Sales
|
|
$
|
4,455
|
|
|
$
|
3,391
|
|
|
$
|
3,113
|
|
Cost of sales
|
|
3,470
|
|
|
2,717
|
|
|
2,412
|
|
|||
Gross profit
|
|
985
|
|
|
674
|
|
|
701
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Research and development
|
|
116
|
|
|
83
|
|
|
49
|
|
|||
Selling
|
|
107
|
|
|
88
|
|
|
90
|
|
|||
General and administrative
|
|
290
|
|
|
220
|
|
|
305
|
|
|||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
34
|
|
|||
Gain on settlement
|
|
—
|
|
|
50
|
|
|
—
|
|
|||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest
|
|
472
|
|
|
333
|
|
|
223
|
|
|||
Interest expense, net
|
|
(68
|
)
|
|
(61
|
)
|
|
(89
|
)
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|||
Income (loss) from continuing operations, before income taxes and noncontrolling interest
|
|
404
|
|
|
272
|
|
|
107
|
|
|||
Income taxes
|
|
111
|
|
|
87
|
|
|
37
|
|
|||
Income (loss) from continuing operations, before noncontrolling interest
|
|
293
|
|
|
185
|
|
|
70
|
|
|||
Less net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from continuing operations of Orbital ATK, Inc.
|
|
293
|
|
|
185
|
|
|
70
|
|
|||
Discontinued operations:
|
|
|
|
|
|
|
|
|||||
Income from discontinued operations, before income taxes
|
|
—
|
|
|
—
|
|
|
205
|
|
|||
Income taxes
|
|
—
|
|
|
(1
|
)
|
|
80
|
|
|||
Income from discontinued operations
|
|
—
|
|
|
1
|
|
|
125
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
293
|
|
|
$
|
186
|
|
|
$
|
195
|
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per common share from:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
5.05
|
|
|
$
|
3.12
|
|
|
$
|
1.96
|
|
Discontinued operations
|
|
—
|
|
|
0.02
|
|
|
3.53
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
5.05
|
|
|
$
|
3.14
|
|
|
$
|
5.49
|
|
Weighted-average number of common shares outstanding
|
|
58
|
|
|
59
|
|
|
35
|
|
|||
Diluted earnings (loss) per common share from:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
5.01
|
|
|
$
|
3.09
|
|
|
$
|
1.93
|
|
Discontinued operations
|
|
—
|
|
|
0.02
|
|
|
3.46
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
5.01
|
|
|
$
|
3.11
|
|
|
$
|
5.39
|
|
Weighted-average number of diluted common shares outstanding
|
|
58
|
|
|
60
|
|
|
36
|
|
|||
Cash dividends per common share
|
|
$
|
1.20
|
|
|
$
|
0.78
|
|
|
$
|
1.28
|
|
(Amounts in millions, except per share data)
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended
December 31, 2015 |
|
Year Ended
March 31, 2015
|
||||||
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
293
|
|
|
$
|
186
|
|
|
$
|
195
|
|
Other comprehensive income
|
|
|
|
|
|
|
||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
||||||
Prior service credits for pension and postretirement benefit plans recorded to net income
|
|
(27
|
)
|
|
(21
|
)
|
|
(30
|
)
|
|||
Net actuarial loss for pension and postretirement benefit plans recorded to net income
|
|
127
|
|
|
114
|
|
|
22
|
|
|||
Valuation adjustment for pension and postretirement benefit plans
|
|
(79
|
)
|
|
8
|
|
|
(364
|
)
|
|||
Change in fair value of derivatives
|
|
12
|
|
|
(2
|
)
|
|
5
|
|
|||
Other
|
|
2
|
|
|
1
|
|
|
—
|
|
|||
Realization of cumulative translation adjustment
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|||
Income tax expense (benefit)
|
|
(13
|
)
|
|
(38
|
)
|
|
141
|
|
|||
Other comprehensive income (loss), net of tax
|
|
22
|
|
|
62
|
|
|
(263
|
)
|
|||
Comprehensive income (loss)
|
|
315
|
|
|
248
|
|
|
(68
|
)
|
|||
Comprehensive income attributable to non-controlling interests in Orbital ATK, Inc.
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income (loss) attributable to Orbital ATK, Inc.
|
|
$
|
315
|
|
|
$
|
248
|
|
|
$
|
(68
|
)
|
|
As of December 31,
|
||||||
(Amounts in millions, except share data)
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
200
|
|
|
$
|
104
|
|
Net receivables
|
1,741
|
|
|
1,671
|
|
||
Net inventories
|
215
|
|
|
213
|
|
||
Income taxes receivable
|
—
|
|
|
51
|
|
||
Other current assets
|
79
|
|
|
90
|
|
||
Total current assets
|
2,235
|
|
|
2,129
|
|
||
Net property, plant and equipment
|
816
|
|
|
762
|
|
||
Goodwill
|
1,832
|
|
|
1,828
|
|
||
Net intangibles
|
98
|
|
|
147
|
|
||
Deferred income taxes
|
254
|
|
|
319
|
|
||
Other noncurrent assets
|
183
|
|
|
139
|
|
||
Total assets
|
$
|
5,418
|
|
|
$
|
5,324
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
40
|
|
|
$
|
40
|
|
Accounts payable
|
175
|
|
|
131
|
|
||
Contract-related liabilities
|
394
|
|
|
381
|
|
||
Contract loss reserve
|
197
|
|
|
236
|
|
||
Contract advances and allowances
|
233
|
|
|
172
|
|
||
Accrued compensation
|
120
|
|
|
128
|
|
||
Other current liabilities
|
183
|
|
|
166
|
|
||
Total current liabilities
|
1,342
|
|
|
1,254
|
|
||
Long-term debt
|
1,398
|
|
|
1,436
|
|
||
Pension and postemployment benefits
|
744
|
|
|
821
|
|
||
Other noncurrent liabilities
|
117
|
|
|
127
|
|
||
Total liabilities
|
3,601
|
|
|
3,638
|
|
||
Commitments and contingencies (Notes 13, 15 and 16)
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
||||
Common stock—$.01 par value: authorized—180,000,000 shares; issued and outstanding— 57,487,466 shares held at December 31, 2016 and 58,729,995 shares held at December 31, 2015
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
2,175
|
|
|
2,188
|
|
||
Retained earnings
|
1,266
|
|
|
1,043
|
|
||
Accumulated other comprehensive loss
|
(764
|
)
|
|
(786
|
)
|
||
Common stock in treasury, at cost— 11,447,558 shares held at December 31, 2016 and 10,205,029 shares held at December 31, 2015
|
(872
|
)
|
|
(771
|
)
|
||
Total Orbital ATK, Inc. stockholders' equity
|
1,806
|
|
|
1,675
|
|
||
Noncontrolling interest
|
11
|
|
|
11
|
|
||
Total equity
|
1,817
|
|
|
1,686
|
|
||
Total liabilities and equity
|
$
|
5,418
|
|
|
$
|
5,324
|
|
|
Year Ended
|
|
Nine Months Ended
|
|
Year Ended
|
||||||
(Amounts in millions)
|
December 31, 2016
|
|
December 31, 2015
|
|
March 31, 2015
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Continuing operations:
|
|
|
|
|
|
||||||
Net income
|
$
|
293
|
|
|
$
|
186
|
|
|
$
|
195
|
|
Net income from discontinued operations
|
—
|
|
|
(1
|
)
|
|
(125
|
)
|
|||
Income from continuing operations
|
293
|
|
|
185
|
|
|
70
|
|
|||
Adjustments to reconcile income from continuing operations to cash provided by operating activities of continuing operations:
|
|
|
|
|
|
||||||
Depreciation
|
116
|
|
|
89
|
|
|
73
|
|
|||
Amortization of intangible assets
|
43
|
|
|
33
|
|
|
9
|
|
|||
Amortization of debt discount
|
—
|
|
|
—
|
|
|
3
|
|
|||
Amortization and write-off of deferred financing costs
|
2
|
|
|
13
|
|
|
5
|
|
|||
Goodwill impairment
|
—
|
|
|
—
|
|
|
34
|
|
|||
Fixed asset impairment
|
10
|
|
|
8
|
|
|
17
|
|
|||
Loss on the extinguishment of debt
|
—
|
|
|
—
|
|
|
27
|
|
|||
Deferred income taxes
|
42
|
|
|
58
|
|
|
12
|
|
|||
Loss on disposal of property
|
6
|
|
|
11
|
|
|
2
|
|
|||
Share-based plans expense
|
21
|
|
|
19
|
|
|
25
|
|
|||
Excess tax benefits from share-based plans
|
—
|
|
|
(5
|
)
|
|
(7
|
)
|
|||
Other
|
4
|
|
|
—
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Net receivables
|
(88
|
)
|
|
17
|
|
|
10
|
|
|||
Net inventories
|
(9
|
)
|
|
(16
|
)
|
|
14
|
|
|||
Income taxes receivable
|
50
|
|
|
(19
|
)
|
|
(31
|
)
|
|||
Accounts payable
|
38
|
|
|
(29
|
)
|
|
56
|
|
|||
Contract advances and allowances
|
61
|
|
|
(1
|
)
|
|
(6
|
)
|
|||
Contract loss reserve
|
(26
|
)
|
|
(27
|
)
|
|
(74
|
)
|
|||
Accrued compensation
|
(5
|
)
|
|
(10
|
)
|
|
(31
|
)
|
|||
Contract-related liabilities
|
39
|
|
|
(19
|
)
|
|
95
|
|
|||
Pension and postemployment benefits
|
(71
|
)
|
|
(4
|
)
|
|
(42
|
)
|
|||
Other assets and liabilities
|
(7
|
)
|
|
—
|
|
|
(70
|
)
|
|||
Cash provided by operating activities of continuing operations
|
519
|
|
|
303
|
|
|
191
|
|
|||
Cash provided by operating activities of discontinued operations
|
—
|
|
|
—
|
|
|
120
|
|
|||
Cash provided by operating activities
|
519
|
|
|
303
|
|
|
311
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Continuing operations:
|
|
|
|
|
|
||||||
Capital expenditures
|
(187
|
)
|
|
(105
|
)
|
|
(113
|
)
|
|||
Cash acquired in Merger with Orbital
|
—
|
|
|
—
|
|
|
254
|
|
|||
Cash dividend (refunded to) received from Vista Outdoor, net of cash transferred to Vista Outdoor in conjunction with the Distribution of Sporting Group
|
—
|
|
|
(6
|
)
|
|
189
|
|
|||
Proceeds from the disposition of property, plant and equipment
|
4
|
|
|
—
|
|
|
2
|
|
|||
Cash (used in) provided by investing activities of continuing operations
|
(183
|
)
|
|
(111
|
)
|
|
332
|
|
|||
Cash used in investing activities of discontinued operations
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||
Cash (used in) provided by investing activities
|
(183
|
)
|
|
(111
|
)
|
|
301
|
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Continuing operations:
|
|
|
|
|
|
||||||
Credit facility borrowings
|
930
|
|
|
745
|
|
|
878
|
|
|||
Credit facility payments
|
(930
|
)
|
|
(745
|
)
|
|
(878
|
)
|
|||
Payments made on bank debt
|
(40
|
)
|
|
(25
|
)
|
|
(58
|
)
|
|||
Payments made to extinguish debt
|
—
|
|
|
(1,274
|
)
|
|
(777
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,200
|
|
|
150
|
|
|||
Payments made for debt issue costs
|
—
|
|
|
(10
|
)
|
|
(1
|
)
|
Purchase of treasury shares
|
(134
|
)
|
|
(81
|
)
|
|
(17
|
)
|
|||
Dividends paid
|
(70
|
)
|
|
(46
|
)
|
|
(41
|
)
|
|||
Proceeds from employee stock compensation plans
|
4
|
|
|
4
|
|
|
—
|
|
|||
Excess tax benefits from share-based plans
|
—
|
|
|
5
|
|
|
7
|
|
|||
Cash used in financing activities of continuing operations
|
(240
|
)
|
|
(227
|
)
|
|
(737
|
)
|
|||
Effect of foreign currency exchange rate fluctuations on cash
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||
Increase (Decrease) in cash and cash equivalents
|
96
|
|
|
(35
|
)
|
|
(128
|
)
|
|||
Cash and cash equivalents at beginning of period
|
104
|
|
|
139
|
|
|
267
|
|
|||
Cash and cash equivalents at end of period
|
$
|
200
|
|
|
$
|
104
|
|
|
$
|
139
|
|
|
|
|
|
|
|
||||||
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
||||||
Cash paid for interest, net
|
$
|
62
|
|
|
$
|
41
|
|
|
$
|
78
|
|
Cash paid for income taxes, net
|
$
|
36
|
|
|
$
|
26
|
|
|
$
|
143
|
|
Noncash financing activity:
|
|
|
|
|
|
||||||
Issuance of shares for noncash assets and liabilities of Orbital
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,504
|
|
Noncash investing activity:
|
|
|
|
|
|
||||||
Capital expenditures included in accounts payable of continuing operations
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
3
|
|
(Amounts in millions except share data)
|
|
Common Stock $.01 Par Value
|
|
Additional
Paid-in-capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive Loss
|
|
Treasury
Stock
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||
Balance, March 31, 2014
|
|
31,842,642
|
|
|
$
|
1
|
|
|
$
|
534
|
|
|
$
|
2,544
|
|
|
$
|
(681
|
)
|
|
$
|
(732
|
)
|
|
$
|
11
|
|
|
$
|
1,677
|
|
Comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|
(263
|
)
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|||||||
Restricted stock grants
|
|
128,316
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||||
Shares issued net of treasury stock withheld
|
|
150,658
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
(10
|
)
|
|||||||
Tax benefit related to share based plans and other
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|||||||
Employee benefit plans and other
|
|
(73,179
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(6
|
)
|
|||||||
Convertible debt premium, net of tax of $43
|
|
20,678
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|||||||
Distribution of Sporting Group
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,788
|
)
|
|
96
|
|
|
—
|
|
|
—
|
|
|
(1,692
|
)
|
|||||||
Merger with Orbital
|
|
27,358,827
|
|
|
—
|
|
|
1,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,758
|
|
|||||||
Balance, March 31, 2015
|
|
59,427,942
|
|
|
1
|
|
|
2,182
|
|
|
894
|
|
|
(848
|
)
|
|
(719
|
)
|
|
11
|
|
|
1,521
|
|
|||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|||||||
Exercise of stock options
|
|
121,477
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
4
|
|
|||||||
Restricted stock grants
|
|
67,529
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||||
Treasury stock purchased
|
|
(1,008,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
—
|
|
|
(76
|
)
|
|||||||
Shares issued net of treasury stock withheld
|
|
125,717
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
(5
|
)
|
|||||||
Tax benefit related to share based plans and other
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||||
Distribution of Sporting Group
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
Dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||||||
Employee benefit plans and other
|
|
(4,225
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance, December 31, 2015
|
|
58,729,995
|
|
|
1
|
|
|
2,188
|
|
|
1,043
|
|
|
(786
|
)
|
|
(771
|
)
|
|
11
|
|
|
1,686
|
|
|||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
315
|
|
|||||||
Exercise of stock options
|
|
32,175
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Restricted stock grants
|
|
176,800
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||||
Treasury stock purchased
|
|
(1,570,333
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
|
—
|
|
|
(124
|
)
|
|||||||
Shares issued net of treasury stock withheld
|
|
172,582
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Tax adjustments and benefit related to share based plans
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||||||
Employee benefit plans and other
|
|
(53,753
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||
Balance, December 31, 2016
|
|
57,487,466
|
|
|
$
|
1
|
|
|
$
|
2,175
|
|
|
$
|
1,266
|
|
|
$
|
(764
|
)
|
|
$
|
(872
|
)
|
|
$
|
11
|
|
|
$
|
1,817
|
|
|
|
December 31, 2016
|
||||||||||
|
|
Fair Value Measurements
Using Inputs Considered as |
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
December 31, 2015
|
||||||||||
|
|
Fair Value Measurements
Using Inputs Considered as
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Fixed rate debt
|
$
|
700
|
|
|
$
|
727
|
|
|
$
|
700
|
|
|
$
|
713
|
|
Variable rate debt
|
$
|
750
|
|
|
$
|
746
|
|
|
$
|
790
|
|
|
$
|
788
|
|
(Amounts in millions of pounds)
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||
Copper
|
|
10
|
|
|
8
|
|
Zinc
|
|
3
|
|
|
2
|
|
|
|
Notional
|
|
Fair Value
|
|
Pay Fixed
|
|
Receive Floating
|
|
Maturity Date
|
|||||
|
|
(in millions)
|
|
|
|
|
|
|
|||||||
Non-amortizing swap
|
|
$
|
100
|
|
|
—
|
|
|
1.29
|
%
|
|
0.77
|
%
|
|
August 2017
|
Non-amortizing swap
|
|
$
|
100
|
|
|
(1
|
)
|
|
1.69
|
%
|
|
0.77
|
%
|
|
August 2018
|
Non-amortizing swap
|
|
$
|
50
|
|
|
—
|
|
|
1.10
|
%
|
|
0.77
|
%
|
|
November 2017
|
(Amounts in millions of Euros)
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||
Euros Sold
|
|
33
|
|
68
|
|
|
Euros Purchased
|
|
45
|
|
|
13
|
|
|
|
|
|
Asset Derivatives
Fair Value
|
|
Liability Derivatives
Fair Value
|
||||||||||||
|
|
Location
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
|
|
|
|
(in millions)
|
||||||||||||||
Commodity forward contracts
|
|
Other current assets /
Other current liabilities |
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Foreign currency forward contracts
|
|
Other current assets /
Other current liabilities |
|
3
|
|
|
3
|
|
|
—
|
|
|
1
|
|
||||
Foreign currency forward contracts
|
|
Other noncurrent assets /
Other noncurrent liabilities |
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap contracts
|
|
Other noncurrent assets /
Other noncurrent liabilities |
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
||||
Total
|
|
|
|
$
|
9
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
|
Gain (Loss) Reclassified from AOCI
|
||||
|
|
Location
|
|
Amount
|
||
|
|
(in millions)
|
||||
Year Ended December 31, 2016
|
|
|
|
|
||
Commodity forward contracts
|
|
Cost of sales
|
|
$
|
(3
|
)
|
Interest rate swap contracts
|
|
Interest expense
|
|
(3
|
)
|
|
Foreign currency forward contracts
|
|
Cost of sales
|
|
—
|
|
|
Nine Months Ended December 31, 2015
|
|
|
|
|
||
Commodity forward contracts
|
|
Cost of sales
|
|
(3
|
)
|
|
Interest rate swap contracts
|
|
Interest expense
|
|
(3
|
)
|
|
Foreign currency forward contracts
|
|
Cost of sales
|
|
(2
|
)
|
Purchase Price:
|
|
(in millions)
|
||
Value of common shares issued to Orbital shareholders
(1)
|
|
$
|
1,749
|
|
Value of replacement equity-based awards to holders of Orbital equity-based awards
(2)
|
|
9
|
|
|
Total purchase price
|
|
$
|
1,758
|
|
Value of assets acquired and liabilities assumed:
|
|
|
|
|
Cash
|
|
$
|
254
|
|
Net receivables
|
|
559
|
|
|
Net inventories
|
|
75
|
|
|
Intangibles
|
|
173
|
|
|
Property, plant and equipment
|
|
277
|
|
|
Deferred tax assets, net
|
|
65
|
|
|
Other assets
|
|
37
|
|
|
Goodwill
|
|
826
|
|
|
Accounts payable
|
|
(52
|
)
|
|
Contract fair value liabilities
|
|
(131
|
)
|
|
Other liabilities
|
|
(325
|
)
|
|
Total purchase price
|
|
$
|
1,758
|
|
(1)
|
Equals
27 million
Orbital ATK shares issued to Orbital shareholders multiplied by the Company's Merger-date share price of
$63.94
.
(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.
|
(amounts in millions)
|
|
Year Ended
March 31, 2015
|
||
Sales
|
|
$
|
4,167
|
|
Income (loss) from continuing operations
|
|
155
|
|
|
Basic earnings (loss) per common share from continuing operations
|
|
$
|
2.46
|
|
Diluted earnings (loss) per common share from continuing operations
|
|
2.43
|
|
(amounts in millions)
|
|
Year Ended
March 31, 2015 |
|
||
Amortization of acquired Orbital intangible assets
(1)
|
|
$
|
27
|
|
|
Interest expense adjustment
(2)
|
|
(26
|
)
|
|
|
Transaction fees for advisory, legal and accounting services
(3)
|
|
(37
|
)
|
|
(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)
|
Added transaction fees for advisory, legal and accounting services to the first quarter of fiscal 2014. Costs were recorded in general and administrative expense.
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Billed receivables
|
|
|
|
|
||||
U.S. Government contracts
|
|
$
|
132
|
|
|
$
|
122
|
|
Commercial and other
|
|
112
|
|
|
96
|
|
||
Unbilled receivables
|
|
|
|
|
||||
U.S. Government contracts
|
|
806
|
|
|
808
|
|
||
Commercial and other
|
|
691
|
|
|
646
|
|
||
Less allowance for doubtful accounts
|
|
—
|
|
|
(1
|
)
|
||
Net receivables
|
|
$
|
1,741
|
|
|
$
|
1,671
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Raw materials
|
|
$
|
93
|
|
|
$
|
88
|
|
Work/contracts in process
|
|
121
|
|
|
124
|
|
||
Finished goods
|
|
1
|
|
|
1
|
|
||
Net inventories
|
|
$
|
215
|
|
|
$
|
213
|
|
Balance, March 31, 2015
|
|
$
|
17
|
|
Expense
|
|
3
|
|
|
Write-offs
|
|
—
|
|
|
Other adjustments
|
|
4
|
|
|
Balance, December 31, 2015
|
|
$
|
24
|
|
Expense
|
|
—
|
|
|
Write-offs
|
|
(1
|
)
|
|
Other adjustments
|
|
1
|
|
|
Balance, December 31, 2016
|
|
$
|
24
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Land
|
|
$
|
29
|
|
|
$
|
34
|
|
Buildings and other improvements
|
|
383
|
|
|
370
|
|
||
Machinery, equipment and other
|
|
1,313
|
|
|
1,290
|
|
||
Property not yet in service
|
|
212
|
|
|
134
|
|
||
Gross property, plant and equipment
|
|
1,937
|
|
|
1,828
|
|
||
Less accumulated depreciation
|
|
(1,121
|
)
|
|
(1,066
|
)
|
||
Net property, plant and equipment
|
|
$
|
816
|
|
|
$
|
762
|
|
|
|
Flight Systems Group
|
|
Defense Systems Group
|
|
Space Systems Group
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Balance, March 31, 2015
|
|
$
|
798
|
|
|
$
|
363
|
|
|
$
|
701
|
|
|
$
|
1,862
|
|
Measurement period adjustments
|
|
125
|
|
|
—
|
|
|
(159
|
)
|
|
(34
|
)
|
||||
Balance, December 31, 2015
|
|
923
|
|
|
363
|
|
|
542
|
|
|
1,828
|
|
||||
Measurement period adjustments
|
|
6
|
|
|
—
|
|
|
(2
|
)
|
|
4
|
|
||||
Balance, December 31, 2016
|
|
$
|
929
|
|
|
$
|
363
|
|
|
$
|
540
|
|
|
$
|
1,832
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Total
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Contract Backlog
|
$
|
173
|
|
|
$
|
(79
|
)
|
|
$
|
94
|
|
|
$
|
179
|
|
|
$
|
(37
|
)
|
|
$
|
142
|
|
Patented technology
|
11
|
|
|
(7
|
)
|
|
4
|
|
|
11
|
|
|
(6
|
)
|
|
5
|
|
||||||
Customer relationships and other
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
24
|
|
|
(24
|
)
|
|
—
|
|
||||||
Net intangibles
|
$
|
186
|
|
|
$
|
(88
|
)
|
|
$
|
98
|
|
|
$
|
214
|
|
|
$
|
(67
|
)
|
|
$
|
147
|
|
|
|
Contract Backlog
|
|
Patents and Customer Relationships
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
2017
|
|
$
|
36
|
|
|
$
|
1
|
|
|
$
|
37
|
|
2018
|
|
25
|
|
|
1
|
|
|
26
|
|
|||
2019
|
|
22
|
|
|
1
|
|
|
23
|
|
|||
2020
|
|
11
|
|
|
1
|
|
|
12
|
|
|||
2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
94
|
|
|
$
|
4
|
|
|
$
|
98
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Parts inventory
|
$
|
2
|
|
|
$
|
10
|
|
Environmental remediation receivable
|
15
|
|
|
15
|
|
||
Derivative contracts
|
1
|
|
|
1
|
|
||
Tax refund receivable
|
81
|
|
|
43
|
|
||
Other noncurrent assets
|
84
|
|
|
70
|
|
||
Total other noncurrent assets
|
$
|
183
|
|
|
$
|
139
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Employee benefits and insurance
|
|
$
|
74
|
|
|
$
|
62
|
|
Deferred lease obligation
|
|
2
|
|
|
12
|
|
||
Interest
|
|
10
|
|
|
10
|
|
||
Other
|
|
97
|
|
|
82
|
|
||
Total other current liabilities
|
|
$
|
183
|
|
|
$
|
166
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Senior Credit Facility:
|
|
|
|
|
||||
Term Loan A due 2020
|
|
$
|
750
|
|
|
$
|
790
|
|
Revolving Credit Facility due 2020
|
|
—
|
|
|
—
|
|
||
5.25% Senior Notes due 2021
|
|
300
|
|
|
300
|
|
||
5.50% Senior Notes due 2023
|
|
400
|
|
|
400
|
|
||
Carrying amount of long-term debt
|
|
1,450
|
|
|
1,490
|
|
||
Unamortized debt issuance costs:
|
|
|
|
|
||||
Senior Credit Facility
|
|
5
|
|
|
6
|
|
||
5.25% Senior Notes due 2021
|
|
2
|
|
|
2
|
|
||
5.50% Senior Notes due 2023
|
|
5
|
|
|
6
|
|
||
Unamortized debt issuance costs
|
|
12
|
|
|
14
|
|
||
Long-term debt less unamortized debt issuance costs
|
|
1,438
|
|
|
1,476
|
|
||
Less: Current portion of long-term debt
|
|
40
|
|
|
40
|
|
||
Long-term debt
|
|
$
|
1,398
|
|
|
$
|
1,436
|
|
|
|
Notional
|
|
Fair Value
|
|
Pay Fixed
|
|
Receive Floating
|
|
Maturity Date
|
||||||
|
|
(in millions)
|
|
|
|
|
|
|
||||||||
Non-amortizing swap
|
|
$
|
100
|
|
|
$
|
—
|
|
|
1.29
|
%
|
|
0.77
|
%
|
|
August 2017
|
Non-amortizing swap
|
|
$
|
100
|
|
|
$
|
(1
|
)
|
|
1.69
|
%
|
|
0.77
|
%
|
|
August 2018
|
Non-amortizing swap
|
|
$
|
50
|
|
|
$
|
—
|
|
|
1.10
|
%
|
|
0.77
|
%
|
|
November 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||||||||||||||||||||||||
|
Derivatives
|
|
Pension and Other Post-
retirement Benefits |
|
Available-for-sale Securities
|
|
Total
|
|
Derivatives
|
|
Pension and Other Post-
retirement Benefits |
|
Available-for-sale Securities
|
|
Total
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Beginning of period unrealized gain (loss) in AOCI
|
$
|
(3
|
)
|
|
$
|
(784
|
)
|
|
$
|
1
|
|
|
$
|
(786
|
)
|
|
$
|
(2
|
)
|
|
$
|
(847
|
)
|
|
$
|
1
|
|
|
$
|
(848
|
)
|
Net increase (decrease) in fair value of derivatives
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||||
Net losses reclassified from AOCI, offsetting the price paid to suppliers
(1)
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||||
Net actuarial losses reclassified from AOCI
(2)
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||||||
Prior service costs reclassified from AOCI
(2)
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
||||||||
Valuation adjustment for pension and postretirement benefit plans
(2)
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
End of period unrealized gain (loss) in AOCI
|
$
|
5
|
|
|
$
|
(771
|
)
|
|
$
|
2
|
|
|
$
|
(764
|
)
|
|
$
|
(3
|
)
|
|
$
|
(784
|
)
|
|
$
|
1
|
|
|
$
|
(786
|
)
|
(1)
|
Amounts related to derivative instruments that were reclassified from AOCI and recorded as a component of cost of sales or interest expense for each period presented.
|
(2)
|
Amounts related to pension and other postretirement benefits that were reclassified from AOCI and recorded as a component of net periodic benefit cost for each period presented (Note 13,
Employee Benefit Plans
).
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended
December 31, 2015 |
|
Year Ended
March 31, 2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Income from continuing operations of Orbital ATK, Inc.
|
$
|
293
|
|
|
$
|
185
|
|
|
$
|
70
|
|
Income from discontinued operations
|
—
|
|
|
1
|
|
|
125
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
293
|
|
|
186
|
|
|
195
|
|
|||
Earnings allocated to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income available to common stockholders
|
$
|
293
|
|
|
$
|
186
|
|
|
$
|
195
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares of common stock
|
57.99
|
|
|
59.36
|
|
|
35.47
|
|
|||
Dilutive effect of stock-based awards
|
0.47
|
|
|
0.56
|
|
|
0.67
|
|
|||
Diluted weighted-average of common stock
|
58.46
|
|
|
59.92
|
|
|
36.14
|
|
|||
|
|
|
|
|
|
||||||
Net income per common share from:
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.05
|
|
|
$
|
3.12
|
|
|
$
|
1.96
|
|
Discontinued operations
|
—
|
|
|
0.02
|
|
|
3.53
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
$
|
5.05
|
|
|
$
|
3.14
|
|
|
$
|
5.49
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
5.01
|
|
|
$
|
3.09
|
|
|
$
|
1.93
|
|
Discontinued operations
|
—
|
|
|
0.02
|
|
|
3.46
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
$
|
5.01
|
|
|
$
|
3.11
|
|
|
$
|
5.39
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended December 31, 2015
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended December 31, 2015
|
||||||||
|
|
(in millions)
|
||||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of period
|
|
$
|
2,953
|
|
|
$
|
3,199
|
|
|
$
|
114
|
|
|
$
|
132
|
|
Service cost
|
|
18
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
|
101
|
|
|
91
|
|
|
3
|
|
|
3
|
|
||||
Plan Amendments
|
|
—
|
|
|
(2
|
)
|
|
(39
|
)
|
|
—
|
|
||||
Actuarial loss (gain)
(1)
|
|
87
|
|
|
(211
|
)
|
|
1
|
|
|
(13
|
)
|
||||
Retiree contributions
|
|
—
|
|
|
—
|
|
|
5
|
|
|
3
|
|
||||
Benefits paid
|
|
(233
|
)
|
|
(138
|
)
|
|
(15
|
)
|
|
(11
|
)
|
||||
Benefit obligation at end of period
|
|
2,926
|
|
|
2,953
|
|
|
69
|
|
|
114
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of period
|
|
2,190
|
|
|
2,349
|
|
|
60
|
|
|
64
|
|
||||
Actual return on plan assets
|
|
131
|
|
|
(95
|
)
|
|
4
|
|
|
(2
|
)
|
||||
Retiree contributions
|
|
—
|
|
|
—
|
|
|
5
|
|
|
3
|
|
||||
Employer contributions
|
|
120
|
|
|
74
|
|
|
7
|
|
|
6
|
|
||||
Benefits paid
|
|
(233
|
)
|
|
(138
|
)
|
|
(15
|
)
|
|
(11
|
)
|
||||
Fair value of plan assets at end of period
|
|
2,208
|
|
|
2,190
|
|
|
61
|
|
|
60
|
|
||||
Funded status
|
|
$
|
(718
|
)
|
|
$
|
(763
|
)
|
|
$
|
(8
|
)
|
|
$
|
(54
|
)
|
(1)
|
The mortality projection scale was updated from MP-2014 to MP-2015 at December 31, 2015. This change resulted in an actuarial gain of
$50 million
and
$4 million
for the Pension Benefits and Other Postretirement Benefits, respectively.
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
|
|
(in millions)
|
||||||||||||||
Noncurrent assets
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
—
|
|
Other current liabilities
|
|
(3
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Postretirement benefit liabilities
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(51
|
)
|
||||
Pension liabilities
|
|
(715
|
)
|
|
(762
|
)
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
|
(718
|
)
|
|
(763
|
)
|
|
(8
|
)
|
|
(54
|
)
|
||||
Accumulated other comprehensive loss (income) related to:
|
|
|
|
|
|
|
|
|
||||||||
Unrecognized net actuarial losses
|
|
1,398
|
|
|
1,408
|
|
|
15
|
|
|
16
|
|
||||
Unrecognized prior service benefits
|
|
(110
|
)
|
|
(131
|
)
|
|
(43
|
)
|
|
(10
|
)
|
||||
Accumulated other comprehensive loss (income)
|
|
$
|
1,288
|
|
|
$
|
1,277
|
|
|
$
|
(28
|
)
|
|
$
|
6
|
|
|
|
Pension
|
|
Other
Postretirement
Benefits
|
||||
|
|
(in millions)
|
||||||
Recognized net actuarial losses
|
|
$
|
126
|
|
|
$
|
2
|
|
Amortization of prior service benefits
|
|
(20
|
)
|
|
(7
|
)
|
||
Total
|
|
$
|
106
|
|
|
$
|
(5
|
)
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
|
|
|
|
|
||||
Projected benefit obligation
|
|
$
|
2,926
|
|
|
$
|
2,953
|
|
Accumulated benefit obligation
|
|
$
|
2,926
|
|
|
$
|
2,953
|
|
Fair value of plan assets
|
|
$
|
2,208
|
|
|
$
|
2,190
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
||||||||||||
|
|||||||||||||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
101
|
|
|
91
|
|
|
129
|
|
|
3
|
|
|
3
|
|
|
5
|
|
||||||
Expected return on plan assets
|
(162
|
)
|
|
(120
|
)
|
|
(166
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||||
Amortization of unrecognized net loss
|
126
|
|
|
113
|
|
|
118
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||||
Amortization of unrecognized prior service benefit
|
(21
|
)
|
|
(16
|
)
|
|
(22
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|
(8
|
)
|
||||||
Net periodic benefit cost before special termination benefits cost/curtailment
|
62
|
|
|
82
|
|
|
83
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||||
Special termination benefits cost/curtailment
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
64
|
|
|
82
|
|
|
85
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||||
Amounts reported in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
64
|
|
|
82
|
|
|
81
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||||
Discontinued operations
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
64
|
|
|
$
|
82
|
|
|
$
|
85
|
|
|
$
|
(5
|
)
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
||||||
|
|
|
|||||||||||||||
Weighted-average assumptions used to determine benefit obligations at the end of each period
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.14
|
%
|
|
4.40
|
%
|
|
3.90
|
%
|
|
3.62
|
%
|
|
3.98
|
%
|
|
3.55
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Union
|
3.11
|
%
|
|
3.13
|
%
|
|
3.66
|
%
|
|
|
|
|
|
|
|||
Salaried
|
3.56
|
%
|
|
3.62
|
%
|
|
3.14
|
%
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended March 31, 2015
|
||||||
|
|
||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost for each period
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.40
|
%
|
|
3.90
|
%
|
|
4.50
|
%
|
|
3.98
|
%
|
|
3.55
|
%
|
|
3.95
|
%
|
Expected long-term rate of return on plan assets
|
7.25
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
4.00% / 6.00%
|
|
|
5.00% / 6.25%
|
|
|
5.00% / 6.25%
|
|
Rate of compensation increase:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Union
|
3.13
|
%
|
|
3.66
|
%
|
|
3.22
|
%
|
|
|
|
|
|
|
|||
Salaried
|
3.60
|
%
|
|
3.14
|
%
|
|
3.47
|
%
|
|
|
|
|
|
|
|
|
December 31,
|
|||
|
|
2017
|
|
2016
|
|
Weighted average health care cost trend rate
|
|
N/A
|
|
6.10
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
|
N/A
|
|
4.50
|
%
|
Fiscal year that the rate reaches the ultimate trend rate
|
|
N/A
|
|
2027
|
|
|
|
Anticipated 2017
|
|
Actual
|
||||||||
|
|
Low
|
|
High
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Asset Category:
|
|
|
|
|
|
|
|
|
||||
Domestic equity
|
|
10.0
|
%
|
|
20.0
|
%
|
|
12.5
|
%
|
|
19.9
|
%
|
International equity
|
|
10.0
|
%
|
|
20.0
|
%
|
|
18.4
|
%
|
|
13.1
|
%
|
Fixed income
|
|
35.0
|
%
|
|
50.0
|
%
|
|
38.2
|
%
|
|
40.5
|
%
|
Real estate
|
|
2.0
|
%
|
|
6.0
|
%
|
|
3.5
|
%
|
|
5.0
|
%
|
Hedge funds/private equity
|
|
15.0
|
%
|
|
30.0
|
%
|
|
21.1
|
%
|
|
16.8
|
%
|
Other investments/cash
|
|
2.0
|
%
|
|
8.0
|
%
|
|
6.3
|
%
|
|
4.7
|
%
|
December 31, 2016
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Interest-bearing cash
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
U.S. Government securities
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Corporate debt
|
|
—
|
|
|
138
|
|
|
—
|
|
|
138
|
|
||||
Common stock
|
|
62
|
|
|
1
|
|
|
—
|
|
|
63
|
|
||||
Registered investment companies\Collective investment trust
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||
Value of funds in insurance company accounts
|
|
—
|
|
|
39
|
|
|
1
|
|
|
40
|
|
||||
Total Assets in the Fair Value Hierarchy
|
|
$
|
121
|
|
|
$
|
180
|
|
|
$
|
1
|
|
|
$
|
302
|
|
Investments measured at NAV
|
|
|
|
|
|
|
|
|
|
1,906
|
|
|||||
Total Investments, excluding Plan Interest in Master Trust at fair value
|
|
|
|
|
|
|
|
$
|
2,208
|
|
December 31, 2015
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Interest-bearing cash
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
U.S. Government securities
|
|
62
|
|
|
6
|
|
|
—
|
|
|
68
|
|
||||
Corporate debt
|
|
—
|
|
|
406
|
|
|
—
|
|
|
406
|
|
||||
Common stock
|
|
89
|
|
|
7
|
|
|
—
|
|
|
96
|
|
||||
Registered investment companies\Collective investment trust
|
|
59
|
|
|
165
|
|
|
—
|
|
|
224
|
|
||||
Value of funds in insurance company accounts
|
|
—
|
|
|
40
|
|
|
1
|
|
|
41
|
|
||||
Total Assets in the Fair Value Hierarchy
|
|
$
|
210
|
|
|
$
|
657
|
|
|
$
|
1
|
|
|
$
|
868
|
|
Investments measured at NAV
|
|
|
|
|
|
|
|
|
|
|
1,322
|
|
||||
Total Investments, excluding Plan interest in Master Trust at fair value
|
|
|
|
|
|
|
|
$
|
2,190
|
|
(amounts in millions)
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
2017
|
|
$
|
219
|
|
|
$
|
9
|
|
2018
|
|
194
|
|
|
8
|
|
||
2019
|
|
199
|
|
|
8
|
|
||
2020
|
|
201
|
|
|
7
|
|
||
2021
|
|
205
|
|
|
6
|
|
||
2022 through 2026
|
|
1,014
|
|
|
24
|
|
•
|
a matching contribution of
100%
of the first
3%
of the participant's contributed pay plus
50%
of the next
3%
of the participant's contributed pay for most employees (subject to one-year vesting), or
|
•
|
a matching contribution of
100%
of the first
6%
of the participant's contributed pay for Technical Services Division employees (subject to one-year vesting), or
|
•
|
a non-elective contribution based on the recognized compensation, age and service for most employees who are not earning a pension benefit (subject to three-year vesting).
|
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended December 31, 2015
|
|
Year Ended
March 31, 2015 |
||||||
|
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
63
|
|
|
$
|
28
|
|
|
$
|
21
|
|
State
|
|
2
|
|
|
2
|
|
|
4
|
|
|||
Non-US
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
39
|
|
|
55
|
|
|
17
|
|
|||
State
|
|
3
|
|
|
2
|
|
|
(5
|
)
|
|||
Income taxes
|
|
$
|
111
|
|
|
$
|
87
|
|
|
$
|
37
|
|
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended December 31, 2015
|
|
Year Ended
March 31, 2015 |
|||
Statutory federal income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal impact
|
|
2.8
|
|
|
2.1
|
|
|
(0.1
|
)
|
Domestic manufacturing deduction
|
|
(2.3
|
)
|
|
(1.5
|
)
|
|
(5.6
|
)
|
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
11.2
|
|
Research and development tax credit
|
|
(12.6
|
)
|
|
(5.2
|
)
|
|
(3.2
|
)
|
Change in prior year contingent tax liabilities
|
|
0.1
|
|
|
1.0
|
|
|
(3.7
|
)
|
Nondeductible transaction costs
|
|
—
|
|
|
—
|
|
|
7.2
|
|
Other
|
|
(2.5
|
)
|
|
(1.1
|
)
|
|
(3.3
|
)
|
Change in valuation allowance
|
|
7.0
|
|
|
1.6
|
|
|
(2.7
|
)
|
Income tax provision
|
|
27.5
|
%
|
|
31.9
|
%
|
|
34.8
|
%
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Deferred income tax assets:
|
|
|
|
|
||||
Retirement benefits
|
|
$
|
271
|
|
|
$
|
306
|
|
Federal carryforwards
|
|
13
|
|
|
36
|
|
||
State carryforwards
|
|
50
|
|
|
9
|
|
||
Other
|
|
19
|
|
|
33
|
|
||
Other reserves
|
|
21
|
|
|
26
|
|
||
Accruals for employee benefits
|
|
40
|
|
|
42
|
|
||
Inventory
|
|
25
|
|
|
14
|
|
||
Contract method of revenue recognition
|
|
80
|
|
|
109
|
|
||
Total deferred income tax assets before valuation allowance
|
|
519
|
|
|
575
|
|
||
Valuation allowance
|
|
(42
|
)
|
|
(13
|
)
|
||
Total deferred income tax assets
|
|
477
|
|
|
562
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Intangible assets
|
|
(86
|
)
|
|
(98
|
)
|
||
Property, plant and equipment
|
|
(127
|
)
|
|
(129
|
)
|
||
Debt-related
|
|
(10
|
)
|
|
(16
|
)
|
||
Total deferred income tax liabilities
|
|
(223
|
)
|
|
(243
|
)
|
||
Net deferred income tax assets
|
|
$
|
254
|
|
|
$
|
319
|
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended
December 31, 2015 |
|
Year Ended
March 31, 2015 |
||||||
|
(in millions)
|
||||||||||
Beginning Balance
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
3
|
|
Additions, charged to expense
|
37
|
|
|
5
|
|
|
—
|
|
|||
Additions, due to the Merger
|
—
|
|
|
—
|
|
|
7
|
|
|||
Deductions
|
(8
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Ending Balance
|
$
|
42
|
|
|
$
|
13
|
|
|
$
|
9
|
|
|
|
Year Ended
December 31, 2016 |
|
Nine Months Ended December 31, 2015
|
|
Year Ended
March 31, 2015 |
||||||
|
|
(in millions)
|
||||||||||
Unrecognized tax benefits, beginning of period
|
|
$
|
81
|
|
|
$
|
34
|
|
|
$
|
32
|
|
Gross increases—tax positions in prior periods
|
|
30
|
|
|
42
|
|
|
22
|
|
|||
Gross decreases—tax positions in prior periods
|
|
(4
|
)
|
|
(1
|
)
|
|
(16
|
)
|
|||
Gross increases—current-period tax positions
|
|
18
|
|
|
6
|
|
|
1
|
|
|||
Settlements
|
|
(5
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Lapse of statute of limitations
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Unrecognized tax benefits, end of period
|
|
$
|
119
|
|
|
$
|
81
|
|
|
$
|
34
|
|
|
(in millions)
|
||
2017
|
$
|
77
|
|
2018
|
71
|
|
|
2019
|
65
|
|
|
2020
|
55
|
|
|
2021
|
51
|
|
|
Thereafter
|
66
|
|
|
Total
|
$
|
385
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Liability
|
|
Receivable
|
|
Liability
|
|
Receivable
|
||||||||
|
|
(in millions)
|
||||||||||||||
Amounts (payable) receivable
|
|
$
|
(43
|
)
|
|
$
|
19
|
|
|
$
|
(42
|
)
|
|
$
|
18
|
|
Unamortized discount
|
|
2
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
||||
Present value amounts (payable) receivable
|
|
$
|
(41
|
)
|
|
$
|
18
|
|
|
$
|
(40
|
)
|
|
$
|
18
|
|
•
|
As part of its acquisition of the Hercules Aerospace Company in fiscal 1995, the Company generally assumed responsibility for environmental compliance at the facilities acquired from Hercules ("the Hercules Facilities"). The Company believes that a portion of the compliance and remediation costs associated with the Hercules Facilities will be recoverable under U.S. Government contracts. If the Company were unable to recover those environmental remediation costs under these contracts, the Company believes that these costs will be covered by Hercules Incorporated, a subsidiary of Ashland Inc., ("Hercules") under environmental agreements entered into in connection with the Hercules acquisition. Under these agreements, Hercules has agreed to indemnify the Company for environmental conditions relating to releases or hazardous waste activities occurring prior to the Company's purchase of the Hercules Facilities as long as they were identified in accordance with the terms of the agreement; fines relating to pre-acquisition environmental compliance; and environmental claims arising out of breaches of Hercules' representations and warranties. Hercules is not required to indemnify the Company for any individual claims below
$50 thousand
. Hercules is obligated to indemnify the Company for the lowest cost response of remediation required at the facility that is acceptable to the applicable regulatory agencies. The Company is not responsible for conducting any remedial activities with respect to the Clearwater, FL facility. In accordance with its agreement with Hercules, the Company notified Hercules of all known contamination on non-federal lands on or before March 31, 2000, and on federal lands on or before March 31, 2005.
|
•
|
The Company generally assumed responsibility for environmental compliance at the Thiokol Facilities acquired from Alcoa Inc. ("Alcoa") in fiscal 2002. The Company expects that a portion of the compliance and remediation costs associated with the acquired Thiokol Facilities will be recoverable under U.S. Government contracts. In accordance with its agreement with Alcoa, the Company notified Alcoa of all known environmental remediation issues at January 30, 2004. Of these known issues, the Company is responsible for any costs not recovered through U.S. Government contracts at the Thiokol Facilities up to
$14 million
, the Company and Alcoa have agreed to split evenly any amounts between
$14 million
and
$34 million
, and the Company is responsible for any payments in excess of
$34 million
. At this time, the Company believes that costs not recovered through U.S. Government contracts will be immaterial.
|
|
(in millions)
|
||
2017
|
$
|
2
|
|
2018
|
—
|
|
|
2019
|
—
|
|
|
2020
|
3
|
|
|
2021
|
2
|
|
|
Thereafter
|
17
|
|
|
Total
|
$
|
24
|
|
|
|
Performance Share
and TSR Awards |
|
Restricted Stock
Units |
|
Restricted Stock
Awards |
|
Combined
Weighted Average Grant Date Fair Value |
|||||
Nonvested, March 31, 2014
|
|
308,092
|
|
|
—
|
|
|
282,944
|
|
|
$
|
83.91
|
|
Granted
|
|
161,661
|
|
|
—
|
|
|
139,094
|
|
|
81.88
|
|
|
Converted in conjunction with the Merger
|
|
—
|
|
|
647,436
|
|
|
—
|
|
|
71.29
|
|
|
Canceled/forfeited
|
|
(309,223
|
)
|
|
—
|
|
|
(13,521
|
)
|
|
87.05
|
|
|
Vested
|
|
—
|
|
|
(146,497
|
)
|
|
(195,882
|
)
|
|
72.50
|
|
|
Nonvested, March 31, 2015
|
|
160,530
|
|
|
500,939
|
|
|
212,635
|
|
|
$
|
77.02
|
|
Granted
|
|
2,976
|
|
|
—
|
|
|
86,108
|
|
|
74.88
|
|
|
Canceled/forfeited
|
|
(5,374
|
)
|
|
(10,908
|
)
|
|
(9,914
|
)
|
|
80.88
|
|
|
Vested
|
|
(333
|
)
|
|
(191,084
|
)
|
|
(17,806
|
)
|
|
43.87
|
|
|
Nonvested, December 31, 2015
|
|
157,799
|
|
|
298,947
|
|
|
271,023
|
|
|
$
|
75.57
|
|
Granted
|
|
153,888
|
|
|
—
|
|
|
176,800
|
|
|
80.14
|
|
|
Canceled/forfeited
|
|
(706
|
)
|
|
(2,933
|
)
|
|
(7,720
|
)
|
|
78.73
|
|
|
Vested
|
|
—
|
|
|
(193,687
|
)
|
|
(128,854
|
)
|
|
64.68
|
|
|
Nonvested, December 31, 2016
|
|
310,981
|
|
|
102,327
|
|
|
311,249
|
|
|
$
|
82.31
|
|
•
|
up to
73,802
will become payable upon achievement of financial performance goals relating to absolute sales growth and return on investment of capital for the performance period beginning January 1, 2016 and ending December 31, 2018; and
|
•
|
up to
81,689
will become payable upon achievement of financial performance goal relating to absolute earnings and absolute sales growth for performance beginning April 1, 2015 and ending December 31, 2017.
|
|
|
Year Ended
December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended
March 31, 2015 |
|||
Risk-free rate
|
|
1.00
|
%
|
|
1.02
|
%
|
|
1.02
|
%
|
Expected volatility
|
|
25.39
|
%
|
|
22.81
|
%
|
|
22.81
|
%
|
Expected dividend yield
|
|
1.51
|
%
|
|
1.78
|
%
|
|
1.78
|
%
|
Expected award life
|
|
2.8 years
|
|
|
2.8 years
|
|
|
2.8 years
|
|
|
|
Shares
|
|
Weighted Average
Exercise Price |
|
Weighted Average
Remaining Contractual Life (in years) |
|
Aggregate Intrinsic
Value (per option) |
|||||
Outstanding, March 31, 2014
|
|
270,405
|
|
|
$
|
74.11
|
|
|
8.3
|
|
$
|
68.04
|
|
Granted
|
|
73,100
|
|
|
72.06
|
|
|
|
|
|
|||
Converted in conjunction with the Merger
|
|
11,225
|
|
|
27.45
|
|
|
|
|
|
|||
Outstanding, March 31, 2015
|
|
354,730
|
|
|
$
|
41.83
|
|
|
7.8
|
|
$
|
34.80
|
|
Granted
|
|
1,443
|
|
|
73.13
|
|
|
|
|
|
|
||
Exercised
|
|
(122,893
|
)
|
|
30.90
|
|
|
|
|
|
|
||
Outstanding, December 31, 2015
|
|
233,280
|
|
|
$
|
47.79
|
|
|
7.7
|
|
$
|
41.55
|
|
Granted
|
|
72,328
|
|
|
79.43
|
|
|
|
|
|
|||
Exercised
|
|
(33,629
|
)
|
|
29.93
|
|
|
|
|
|
|||
Outstanding, December 31, 2016
|
|
271,979
|
|
|
$
|
58.41
|
|
|
7.6
|
|
$
|
29.32
|
|
Options exercisable at:
|
|
|
|
|
|
|
|
|
|||||
December 31, 2016
|
|
138,403
|
|
|
$
|
42.25
|
|
|
6.5
|
|
$
|
45.48
|
|
December 31, 2015
|
|
109,509
|
|
|
$
|
32.43
|
|
|
6.6
|
|
$
|
56.91
|
|
March 31, 2015
|
|
230,715
|
|
|
$
|
64.32
|
|
|
7.0
|
|
$
|
44.99
|
|
|
|
Year Ended
December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended
March 31, 2015 |
Risk-free rate
|
|
1.62%
|
|
1.99%
|
|
1.82%
|
Expected volatility
|
|
26.89%
|
|
27.91%
|
|
27.67%
|
Expected dividend yield
|
|
1.36%
|
|
1.17%
|
|
0.99%
|
Expected option life
|
|
7 years
|
|
7 years
|
|
7 years
|
|
|
Termination
Benefits |
|
Remaining Lease Rentals
|
|
Asset
Impairment |
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Balance, March 31, 2015
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Expense
|
|
4
|
|
|
18
|
|
|
6
|
|
|
28
|
|
||||
Payments
|
|
(9
|
)
|
|
(2
|
)
|
|
—
|
|
|
(11
|
)
|
||||
Noncash settlements
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||
Balance, December 31, 2015
|
|
4
|
|
|
26
|
|
|
—
|
|
|
30
|
|
||||
Expense
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Payments
|
|
(2
|
)
|
|
(7
|
)
|
|
—
|
|
|
(9
|
)
|
||||
Noncash settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, December 31, 2016
|
|
$
|
1
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
20
|
|
•
|
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. Additionally,
Flight Systems Group
operates in the military and commercial aircraft and launch structures markets. Other products include illuminating flares and aircraft countermeasures.
|
•
|
Defense Systems Group
develops and produces military small-, medium- and large-caliber ammunition, small-caliber commercial 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 re-supplying the ISS. This group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. Government agencies.
|
|
|
U.S. Government Sales
|
|
Percentage of sales
|
|||
|
|
(in millions)
|
|
|
|||
Year ended December 31, 2016
|
|
$
|
3,368
|
|
|
76
|
%
|
Nine months ended December 31, 2015
|
|
$
|
2,359
|
|
|
70
|
%
|
Year ended March 31, 2015
|
|
$
|
2,332
|
|
|
75
|
%
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
|
Flight Systems Group
|
|
Defense Systems Group
|
|
Space Systems Group
|
|
Corporate
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
|
$
|
1,483
|
|
|
$
|
1,804
|
|
|
$
|
1,168
|
|
|
$
|
—
|
|
|
$
|
4,455
|
|
Intercompany
|
|
13
|
|
|
19
|
|
|
70
|
|
|
(102
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
1,496
|
|
|
$
|
1,823
|
|
|
$
|
1,238
|
|
|
$
|
(102
|
)
|
|
$
|
4,455
|
|
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest
|
|
$
|
204
|
|
|
$
|
172
|
|
|
$
|
129
|
|
|
$
|
(33
|
)
|
|
$
|
472
|
|
Capital expenditures
|
|
$
|
78
|
|
|
$
|
44
|
|
|
$
|
56
|
|
|
$
|
9
|
|
|
$
|
187
|
|
Depreciation
|
|
$
|
54
|
|
|
$
|
18
|
|
|
$
|
31
|
|
|
$
|
13
|
|
|
$
|
116
|
|
Amortization of intangibles
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
43
|
|
Total assets
|
|
$
|
2,208
|
|
|
$
|
1,228
|
|
|
$
|
1,280
|
|
|
$
|
702
|
|
|
$
|
5,418
|
|
|
|
Nine Months Ended December 31, 2015
|
||||||||||||||||||
|
|
Flight Systems Group
|
|
Defense Systems Group
|
|
Space Systems Group
|
|
Corporate
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
|
$
|
1,115
|
|
|
$
|
1,314
|
|
|
$
|
962
|
|
|
$
|
—
|
|
|
$
|
3,391
|
|
Intercompany
|
|
27
|
|
|
6
|
|
|
15
|
|
|
(48
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
1,142
|
|
|
$
|
1,320
|
|
|
$
|
977
|
|
|
$
|
(48
|
)
|
|
$
|
3,391
|
|
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest
|
|
$
|
197
|
|
|
$
|
126
|
|
|
$
|
67
|
|
|
$
|
(57
|
)
|
|
$
|
333
|
|
Capital expenditures
|
|
$
|
48
|
|
|
$
|
23
|
|
|
$
|
31
|
|
|
$
|
3
|
|
|
$
|
105
|
|
Depreciation
|
|
$
|
39
|
|
|
$
|
15
|
|
|
$
|
24
|
|
|
$
|
11
|
|
|
$
|
89
|
|
Amortization of intangibles
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
33
|
|
Total assets
|
|
$
|
2,224
|
|
|
$
|
1,184
|
|
|
$
|
1,273
|
|
|
$
|
643
|
|
|
$
|
5,324
|
|
|
|
Year Ended March 31, 2015
|
||||||||||||||||||
|
|
Flight Systems Group
|
|
Defense Systems Group
|
|
Space Systems Group
|
|
Corporate
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
|
$
|
1,064
|
|
|
$
|
1,655
|
|
|
$
|
394
|
|
|
$
|
—
|
|
|
$
|
3,113
|
|
Intercompany
|
|
29
|
|
|
178
|
|
|
17
|
|
|
(224
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
1,093
|
|
|
$
|
1,833
|
|
|
$
|
411
|
|
|
$
|
(224
|
)
|
|
$
|
3,113
|
|
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest
|
|
$
|
145
|
|
|
$
|
185
|
|
|
$
|
(6
|
)
|
|
$
|
(101
|
)
|
|
$
|
223
|
|
Capital expenditures
|
|
$
|
49
|
|
|
$
|
44
|
|
|
$
|
6
|
|
|
$
|
14
|
|
|
$
|
113
|
|
Depreciation
|
|
$
|
35
|
|
|
$
|
20
|
|
|
$
|
11
|
|
|
$
|
7
|
|
|
$
|
73
|
|
Amortization of intangibles
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
9
|
|
Total assets
|
|
$
|
2,044
|
|
|
$
|
1,173
|
|
|
$
|
1,455
|
|
|
$
|
806
|
|
|
$
|
5,478
|
|
|
Nine Months Ended
|
||||||
(Amounts in millions except per share data)
|
December 31, 2015
|
|
December 28, 2014
|
||||
|
|
|
(unaudited)
|
||||
Sales
|
$
|
3,391
|
|
|
$
|
2,142
|
|
Gross profit
|
$
|
674
|
|
|
$
|
478
|
|
Income from continuing operations
|
$
|
185
|
|
|
$
|
109
|
|
Income from discontinued operations
|
$
|
1
|
|
|
$
|
108
|
|
Net income attributable to Orbital ATK, Inc.
|
$
|
186
|
|
|
$
|
217
|
|
Basic earnings per common share
|
|
|
|
||||
Income from continuing operations
|
$
|
3.12
|
|
|
$
|
3.44
|
|
Income from discontinued operations
|
0.02
|
|
|
3.42
|
|
||
Net income attributable to Orbital ATK, Inc.
|
$
|
3.14
|
|
|
$
|
6.86
|
|
Diluted earnings per common share
|
|
|
|
||||
Income from continuing operations
|
$
|
3.09
|
|
|
$
|
3.37
|
|
Income from discontinued operations
|
0.02
|
|
|
3.34
|
|
||
Net income attributable to Orbital ATK, Inc.
|
$
|
3.11
|
|
|
$
|
6.71
|
|
|
|
For the Year Ended December 31, 2016
|
||||||||||||||
|
|
Quarter Ended
|
||||||||||||||
(in millions, except per share data)
|
|
April 3,
|
|
July 3,
|
|
October 2,
|
|
December 31,
|
||||||||
Sales
|
|
$
|
1,056
|
|
|
$
|
1,083
|
|
|
$
|
1,044
|
|
|
$
|
1,272
|
|
Gross profit
|
|
$
|
227
|
|
|
$
|
280
|
|
|
$
|
210
|
|
|
$
|
268
|
|
Income from continuing operations
|
|
$
|
77
|
|
|
$
|
91
|
|
|
$
|
60
|
|
|
$
|
65
|
|
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
77
|
|
|
$
|
91
|
|
|
$
|
60
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share from:
(1)
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
1.33
|
|
|
$
|
1.56
|
|
|
$
|
1.04
|
|
|
$
|
1.12
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
1.33
|
|
|
$
|
1.56
|
|
|
$
|
1.04
|
|
|
$
|
1.12
|
|
Diluted earnings per common share from:
(1)
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
1.31
|
|
|
$
|
1.55
|
|
|
$
|
1.04
|
|
|
$
|
1.11
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
1.31
|
|
|
$
|
1.55
|
|
|
$
|
1.04
|
|
|
$
|
1.11
|
|
Cash dividends per common share:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
Paid
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
|
For the Nine Months Ended December 31, 2015
|
||||||||||
|
|
Quarter Ended
|
||||||||||
(in millions, except per share data)
|
|
July 5,
|
|
October 4,
|
|
December 31,
|
||||||
Sales
|
|
$
|
1,104
|
|
|
$
|
1,143
|
|
|
$
|
1,145
|
|
Gross profit
|
|
$
|
223
|
|
|
$
|
209
|
|
|
$
|
242
|
|
Income from continuing operations
|
|
$
|
58
|
|
|
$
|
74
|
|
|
$
|
53
|
|
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
58
|
|
|
$
|
74
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per common share from:
(1)
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.98
|
|
|
$
|
1.26
|
|
|
$
|
0.90
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
0.98
|
|
|
$
|
1.26
|
|
|
$
|
0.92
|
|
Diluted earnings per common share from:
(1)
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.97
|
|
|
$
|
1.25
|
|
|
$
|
0.89
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
0.97
|
|
|
$
|
1.25
|
|
|
$
|
0.91
|
|
Cash dividends per common share:
|
|
|
|
|
|
|
||||||
Declared
|
|
$
|
—
|
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
Paid
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
•
|
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 calendar 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 during the quarter ended December 31, 2016.
|
•
|
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.
|
•
|
We evaluated our Small Caliber Systems Division Team responsible for oversight and control of the division and have augmented our team with additional professionals with the appropriate level of experience to provide oversight and accounting and controls knowledge. As a result of this evaluation we have hired 16 people for these roles. In addition, certain members of the Defense Systems Group leadership will receive appropriate training, adverse compensation action and additional supervision.
|
•
|
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 during the quarter ended December 31, 2016.
|
•
|
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.
|
Members:
|
|
Douglas L. Maine,
Chair
|
|
Robert M. Hanisee
|
|
|
Kevin P. Chilton
|
|
Ronald T. Kadish
|
|
|
Martin C. Faga
|
|
Roman Martinez IV
|
•
|
David W. Thompson, President and Chief Executive Officer
|
•
|
Blake E. Larson, Chief Operating Officer
|
•
|
Garrett E. Pierce, Chief Financial Officer
|
•
|
Frank L. Culbertson, Executive Vice President and President, Space Systems Group
|
•
|
Scott L. Lehr, Executive Vice President and President, Flight Systems Group
|
•
|
In Flight Systems, we successfully returned our Antares space launcher to flight status in October 2016, carried out another in the long line of successful Pegasus missions, and conducted 13 interceptor and target vehicle launches. In addition, we provided major propulsion systems and structures that supported 19 other space launches and strategic missile flights. The Company also produced over 55 strategic and space launch rocket motors and more than 68,000 advanced composite structures for military and commercial aircraft.
|
•
|
In Defense Systems, Orbital ATK manufactured 140 advanced tactical missiles and conducted six successful test flights. We also built more than 21,000 tactical rocket motors and 70,000 warheads and fuses. We produced in excess of 6,500 precision weapons and medium-caliber gun systems and delivered over 1.5 billion small- and medium-caliber ammunition rounds.
|
•
|
In Space Systems, we continued to meet our commitments to NASA for International Space Station cargo delivery, completing three Cygnus missions during the year. The Company also successfully launched and deployed three additional military and commercial satellites, and built and tested more than 25 other satellites for future launches. In addition, we conducted 20 research rocket and scientific balloon flights and delivered more than 1,500 separate space components and subsystems to commercial and government customers.
|
•
|
Flight Systems booked approximately $3.6 billion of orders and options, highlighted by major contracts for military aircraft structures, large solid rocket motors, missile defense targets and space launch vehicles;
|
•
|
Defense Systems received approximately $2.3 billion of new contracts and options, including orders for tactical missiles, rocket motors, precision weapons, and military and commercial small-caliber ammunition; and
|
•
|
Space Systems won nearly $2.6 billion in new business, with large contracts for space station cargo missions, military spacecraft, space components and technical services.
|
Capital Returns to Shareholders
|
|||
|
2015
|
2016
|
Growth
|
Share Repurchases
|
$76 million
|
$124 million
|
63%
|
Dividend Payments
|
$56 million
|
$70 million
|
25%
|
Total
|
$132 million
|
$194 million
|
47%
|
•
|
Modest Salary Increases
. Increases in 2016 salaries ranged from 0.76% to 5.75% for our NEOs. The increases were designed to maintain market competitiveness and recognize individual performance and criticality to the Company.
|
•
|
Target Cash Incentive Opportunity Stayed the Same.
Target annual cash incentive opportunities, expressed as a percentage of base salary, and target annual equity award opportunities, expressed as a dollar value, were not increased in 2016 compared to 2015 levels.
|
•
|
Above Target Payout of Annual Incentive Program.
The 2016 annual cash incentive plan was based on earnings before interest and taxes (“EBIT”), revenue, free cash flow, orders, and operations and integration milestones. Group presidents were assessed on performance at both the corporate and group level, and corporate executives were assessed on performance at the corporate level. Due to solid financial and operational performance, corporate executives achieved 115% of target performance, the Space Systems Group President achieved 124% of target performance, and the Flight Systems Group President achieved 116% of target performance.
|
•
|
Added Emphasis on ROIC in the Long-Term Incentive Plan.
The Compensation Committee replaced earnings per share (“EPS”) with return on invested capital (“ROIC”) in the performance share program. The Committee believes that ROIC in conjunction with revenue and relative total shareholder return (“relative TSR”) provide an appropriate balance between growth, return to shareholders and capital management in the performance share plan. Performance shares are balanced with restricted stock and stock options in the long-term incentive plan.
|
•
|
A stock holding requirement for executive officers
|
•
|
A policy prohibiting hedging and pledging of Company stock by our directors and officers
|
•
|
No stock options granted with an exercise price below market value on the date of grant
|
•
|
No repricing or buybacks of stock options
|
•
|
Caps on annual and long-term incentives
|
•
|
Limited perquisites
|
•
|
Double-trigger provisions for a change in control
|
•
|
A recoupment (clawback) policy
|
•
|
Use of an independent compensation consultant to provide third-party advice on executive compensation
|
1.
|
Performance-Based
- Incentive compensation is designed to motivate behavior that will drive strong financial performance and create stockholder value. Executive compensation varies in relation to the Company's financial performance and stock price performance. The Committee sets target performance levels in line with the Company's annual and long-term business and strategic plans and, accordingly, the Company must achieve superior performance in order for executive officers to receive payments in excess of the target amounts.
|
2.
|
Aligned with Stockholder Interests
- The Company will achieve the best results for its stockholders when its executives act and are rewarded as owners of the business.
|
•
|
On an ongoing basis, a significant portion of our total direct compensation is provided through equity-based incentives - generally, 55% of the total opportunity for our Chief Executive Officer and, on average, approximately 40% of the total opportunity for our other executive officers.
|
•
|
Executive officers are required to retain at least 50% of the net shares (remaining after payment of withholding taxes and, in the case of options, exercise price) received as compensation and to hold such shares until the executive leaves the Company.
|
3.
|
Quality of Talent
- Orbital ATK requires highly-skilled executives to drive long-term success - executives whose abilities are essential to the creation of long-term value for stockholders. To ensure we remain competitive in attracting and retaining talented executives, we conduct an annual market analysis for both direct and indirect compensation.
|
•
|
Total direct compensation (base salary, annual incentive, long-term incentive) is benchmarked against a peer group of industry companies of comparable size. In addition, the Committee references survey-reported information from the aerospace and defense industry and manufacturing industries to obtain a broader market perspective. The determination of compensation is described in more detail below.
|
|
Annual Cash Incentive Targets
(% of Base Salary)
|
|||||
|
Threshold
|
Target
|
Maximum
|
|||
Mr. Thompson
|
45
|
%
|
120
|
%
|
192
|
%
|
Mr. Pierce
|
33.8
|
%
|
90
|
%
|
144
|
%
|
Mr. Larson
|
33.8
|
%
|
90
|
%
|
144
|
%
|
Mr. Culbertson
|
30
|
%
|
80
|
%
|
128
|
%
|
Mr. Lehr
|
30
|
%
|
80
|
%
|
128
|
%
|
Goals
(in millions)
|
Threshold
Performance
Goal
|
|
Target
Performance
Goal
|
|
Maximum
Performance
Goal
|
|
Reported
Results
|
|
Adjusted
Results
|
||||||||||
Company EBIT
|
$
|
464
|
|
|
$
|
515
|
|
|
$
|
567
|
|
|
$
|
472
|
|
|
$
|
518
|
|
Company Revenue
|
$
|
4,369
|
|
|
$
|
4,600
|
|
|
$
|
4,830
|
|
|
$
|
4,455
|
|
|
$
|
4,455
|
|
Company Free Cash Flow*
|
$
|
250
|
|
|
$
|
295
|
|
|
$
|
339
|
|
|
$
|
335
|
|
|
$
|
365
|
|
Company Orders
|
$
|
3,824
|
|
|
$
|
4,500
|
|
|
$
|
5,176
|
|
|
$
|
5,698
|
|
|
$
|
5,698
|
|
*As described above, free cash flow is defined to as cash provided from operations less capital expenditures plus asset sales.
|
Financial and Operational Measures
|
Weightings
|
Overall Target
Incentive Achieved
(Mr. Culbertson)
|
Overall Target
Incentive Achieved
(Mr. Lehr)
|
Company EBIT
|
10.5%
|
104%
|
104%
|
Company Revenue
|
10.5%
|
69%
|
69%
|
Company Free Cash Flow
|
10.5%
|
175%
|
175%
|
Company Orders
|
3.5%
|
175%
|
175%
|
Business Group EBIT
|
12%
|
173%
|
101%
|
Business Group Revenue
|
12%
|
74%
|
75%
|
Business Group Free Cash Flow
|
12%
|
175%
|
175%
|
Business Group Orders
|
4%
|
175%
|
175%
|
Operational Milestones
|
25%
|
96%
|
98%
|
Overall Performance Level Achieved
|
|
124%
|
116%
|
|
Annual Cash Incentive Amounts
|
Actual
|
||||||||||||||||||||||
|
Threshold
|
Target
|
Maximum
|
Incentive
|
||||||||||||||||||||
Mr. Thompson
|
|
$
|
405,000
|
|
|
|
|
$
|
1,080,000
|
|
|
|
|
$
|
1,728,000
|
|
|
|
|
$
|
1,246,016
|
|
|
|
Mr. Pierce
|
|
$
|
224,438
|
|
|
|
|
$
|
598,500
|
|
|
|
|
$
|
957,600
|
|
|
|
|
$
|
690,494
|
|
|
|
Mr. Larson
|
|
$
|
217,688
|
|
|
|
|
$
|
580,500
|
|
|
|
|
$
|
928,800
|
|
|
|
|
$
|
703,209*
|
|
||
Mr. Culbertson
|
|
$
|
144,000
|
|
|
|
|
$
|
384,000
|
|
|
|
|
$
|
614,400
|
|
|
|
|
$
|
477,330
|
|
|
|
Mr. Lehr
|
|
$
|
138,000
|
|
|
|
|
$
|
368,000
|
|
|
|
|
$
|
588,800
|
|
|
|
|
$
|
428,021
|
|
|
|
Officer
|
Base Salary at Time of Award
|
Award as a Percentage of Base Salary
|
Total Cash Award
|
2016 Installment Paid
|
||||||
Mr. Larson
|
$
|
458,892
|
|
125%
|
$
|
573,615
|
|
$
|
286,808
|
|
Name and Principal Position
|
Year (1)
|
Salary
($)(2) |
Bonus
($)(3) |
Stock Awards
($)(4)(5)(6)(7) |
Option Awards
($)(8) |
Non-equity Incentive Plan Compensation
($)(9) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)(10) |
All Other Compensation
($)(11) |
Total
($)
|
||||||||||||||||
David W. Thompson
|
2016
|
$
|
945,688
|
|
$
|
—
|
|
$
|
1,970,864
|
|
$
|
479,991
|
|
$
|
1,246,016
|
|
$
|
—
|
|
$
|
226,673
|
|
$
|
4,869,232
|
|
President &
|
2015T
|
$
|
669,049
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,485,669
|
|
$
|
—
|
|
$
|
44,064
|
|
$
|
2,198,782
|
|
Chief Executive Officer
|
FY2015
|
$
|
111,539
|
|
$
|
—
|
|
$
|
2,072,304
|
|
$
|
480,004
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,187
|
|
$
|
2,678,034
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Garrett E. Pierce
|
2016
|
$
|
702,121
|
|
$
|
—
|
|
$
|
821,057
|
|
$
|
199,983
|
|
$
|
690,494
|
|
$
|
—
|
|
$
|
138,488
|
|
$
|
2,552,143
|
|
Chief Financial Officer
|
2015T
|
$
|
509,262
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
840,457
|
|
$
|
—
|
|
$
|
28,678
|
|
$
|
1,378,397
|
|
|
FY2015
|
$
|
96,925
|
|
$
|
—
|
|
$
|
863,330
|
|
$
|
200,008
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,976
|
|
$
|
1,171,239
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Blake E. Larson
|
2016
|
$
|
654,231
|
|
$
|
286,808
|
|
$
|
944,338
|
|
$
|
229,998
|
|
$
|
703,209
|
|
$
|
225,798
|
|
$
|
67,615
|
|
$
|
3,111,997
|
|
Chief Operating Officer
|
2015T
|
$
|
489,836
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
604,434
|
|
$
|
108,714
|
|
$
|
119,939
|
|
$
|
1,322,923
|
|
|
FY2015
|
$
|
467,659
|
|
$
|
286,808
|
|
$
|
992,908
|
|
$
|
230,009
|
|
$
|
465,737
|
|
$
|
1,772,466
|
|
$
|
125,926
|
|
$
|
4,341,513
|
|
|
FY2014
|
$
|
462,662
|
|
$
|
—
|
|
$
|
417,867
|
|
$
|
99,974
|
|
$
|
579,184
|
|
$
|
52,164
|
|
$
|
66,402
|
|
$
|
1,678,253
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Frank L. Culbertson
|
2016
|
$
|
495,980
|
|
$
|
—
|
|
$
|
472,088
|
|
$
|
114,989
|
|
$
|
477,330
|
|
$
|
—
|
|
$
|
91,322
|
|
$
|
1,651,709
|
|
Executive Vice President &
|
2015T
|
$
|
359,667
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
532,022
|
|
$
|
—
|
|
$
|
16,190
|
|
$
|
907,879
|
|
President, Space Systems Group
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scott L. Lehr
|
2016
|
$
|
463,558
|
|
$
|
105,000
|
|
$
|
410,447
|
|
$
|
99,981
|
|
$
|
428,021
|
|
$
|
157,865
|
|
$
|
40,848
|
|
$
|
1,705,720
|
|
Executive Vice President &
|
2015T
|
$
|
318,321
|
|
$
|
50,000
|
|
$
|
167,793
|
|
$
|
29,986
|
|
$
|
317,991
|
|
$
|
(35,295
|
)
|
$
|
49,603
|
|
$
|
898,399
|
|
President, Flight Systems Group
|
|
|
|
|
|
|
|
|
|
(1)
|
The years reported are the Company's fiscal year ending December 31, 2016, the nine-month transition period ending December 31, 2015, and the fiscal years ending March 31, 2015 and March 31, 2014, respectively.
|
(2)
|
Includes amounts, if any, deferred at the direction of the executive officer pursuant to a Company 401(k) Plan or Nonqualified Deferred Compensation Plan. Also includes payments to executive officers for fiscal year 2016 in the amounts specified as follows for an additional week of pay in order to align the payroll practices of both legacy companies as follows: Mr. Thompson, $16,827 and Mr. Pierce, $12,692 and for vacation sold under the Company's vacation buy/sell benefit program: Mr. Thompson, $33,654, Mr. Pierce, $25,385, Mr. Larson, $12,115, Mr. Culbertson, $18,078, and Mr. Lehr, $8,366.
|
(3)
|
The amounts in this column represent the following: for Mr. Larson, the second and final installment of a Merger-related transaction bonus and for Mr. Lehr, the payment of a cash award which was originally granted as a performance-based cash award. In conjunction with the Merger, the performance-based cash award was converted to a time-vested cash award based on the target level of payout for the performance period.
|
(4)
|
This column shows the aggregate grant date fair value computed in accordance with generally accepted accounting principles in the United States. For 2016, the amounts in this column for restricted stock awards and the component of the performance share awards subject to financial performance measures are calculated based on the number of shares awarded multiplied by the closing price of Orbital ATK common stock on the date of grant. The number of performance shares used to determine this aggregate fair value of the component of the award subject to revenue and return on invested capital financial metrics (50% of the total award) is based on the target payout level for the award. The fair value of the component of the awards of performance shares subject to a relative total stockholder return ("relative TSR") measure (50% of the total award) is determined by an integrated Monte Carlo simulation model. The number of performance shares used to determine the aggregate fair value of the relative TSR component of the award is based on the target payout level (amounts do not reflect the actual amounts that may vest or be earned by the executive officer). The assumptions used in calculating the aggregate grant date fair value of the awards are disclosed in Note 17 to the consolidated financial statements in this Form 10-K.
|
|
|
|
|
2016 - 2018 Performance Share
|
|||||||
Name
|
|
Restricted Stock
|
|
At Target
|
At Maximum
|
||||||
Mr. Thompson
|
|
$
|
959,991
|
|
|
$
|
1,010,873
|
|
$
|
2,021,746
|
|
Mr. Pierce
|
|
$
|
399,930
|
|
|
$
|
421,127
|
|
$
|
842,255
|
|
Mr. Larson
|
|
$
|
459,979
|
|
|
$
|
484,359
|
|
$
|
968,718
|
|
Mr. Culbertson
|
|
$
|
229,950
|
|
|
$
|
242,138
|
|
$
|
484,276
|
|
Mr. Lehr
|
|
$
|
199,925
|
|
|
$
|
210,522
|
|
$
|
421,044
|
|
(5)
|
For the 2015 transition period, the amounts in this column were calculated as noted above in footnote 4, except that the number of performance shares used to determine this aggregate fair value of the component of the award subject to revenue and earnings per share financial metrics (50% of the total award) was based on the target payout level for the award and the number of performance shares used to determine the aggregate fair value of the relative TSR component of the award was based on the maximum payout level.
|
|
|
|
|
2015-2017 Performance Shares
|
|||||||
Name
|
|
Restricted Stock
|
|
At Target
|
At Maximum
|
||||||
Mr. Lehr
|
|
$
|
59,967
|
|
|
$
|
68,905
|
|
$
|
137,809
|
|
(6)
|
For fiscal year 2015, the amounts in this column were calculated as noted above in footnote 4.
|
Name
|
|
Restricted Stock
|
|
2015 - 2017 Performance Shares
|
||||
Mr. Thompson
|
|
$
|
959,983
|
|
|
$
|
1,112,320
|
|
Mr. Pierce
|
|
$
|
399,933
|
|
|
$
|
463,397
|
|
Mr. Larson
|
|
$
|
459,959
|
|
|
$
|
532,949
|
|
(7)
|
For fiscal year 2014, the amounts in this column were calculated as noted above in footnote 4. The performance shares were converted to restricted stock units in connection with the spin-off of the Company's Sporting Group on February 9, 2015.
|
Name
|
|
Restricted Stock
|
|
FY2015 - 2017 Performance Shares
|
||||
Mr. Larson
|
|
$
|
149,908
|
|
|
$
|
267,959
|
|
(8)
|
The amount in this column shows the aggregate grant date fair value computed in accordance with generally accepted accounting principles in the United States. The amount is based on the fair value of the stock option award as estimated using the Black-Scholes option-pricing model multiplied by the number of shares subject to the option award. The assumptions used to arrive at the Black-Scholes value are disclosed in Note 17 to the consolidated financial statements in this Form 10-K.
|
(9)
|
The amounts in this column represent payment of annual incentive compensation for the periods noted. The annual incentive compensation program and payments for 2016 are described in the "Compensation Discussion and Analysis" in this Form 10-K. Includes amounts, if any, deferred at the direction of the executive officer pursuant to the Company's 401(k) Plan or Nonqualified Deferred Compensation Plan.
|
(10)
|
The amounts in this column represent the aggregate change in the actuarial present value of the officer's accumulated retirement benefits under the Company's Pension and Retirement Plan and Defined Benefit Supplemental Executive Retirement Plan. Mr. Thompson, Mr. Pierce, and Mr. Culbertson do not participate in a defined benefit retirement plan. See the "Pension Benefits" section in this Form 10-K for additional information. No above-market or preferential earnings on any nonqualified deferred compensation was paid to the officers during the last fiscal year and, accordingly, no such amounts are reflected above.
|
(11)
|
"All Other Compensation" amounts for 2016 consist of the following:
|
Name
|
Dividends
(1)
|
401(k) Plan Contributions
|
DC SERP Plan Allocations
|
||||||
Mr. Thompson
|
$
|
22,868
|
|
$
|
22,525
|
|
$
|
181,280
|
|
Mr. Pierce
|
$
|
9,527
|
|
$
|
22,525
|
|
$
|
106,436
|
|
Mr. Larson
|
$
|
11,520
|
|
$
|
11,925
|
|
$
|
44,170
|
|
Mr. Culbertson
|
$
|
5,478
|
|
$
|
22,525
|
|
$
|
63,319
|
|
Mr. Lehr
|
$
|
6,055
|
|
$
|
11,925
|
|
$
|
22,868
|
|
(1)
|
This amount represents cash dividend payments made to the named executive officers on unvested restricted stock awards.
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
All Other Stock Awards: Number of Shares of Stock or Units
(#) |
All Other Option Awards: Number of Securities Underlying Options
(#) |
|
Grant Date Fair Value of Stock and Option Awards
($)(6 ) |
|||||||||||||||||||
|
|
|
|
Exercise or Base Price of Option Awards
($/Share) |
|||||||||||||||||||||||||
Name
|
Grant Date (1)
|
Approval Date (1)
|
Incentive Award
Type |
Threshold
($) |
Target
($) |
Maximum
($) |
|
Threshold
(#) |
Target
(#) |
Maximum
(#) |
|||||||||||||||||||
David W. Thompson
|
2/2/2016
|
2/2/2016
|
Annual (2)
|
$
|
405,000
|
|
$
|
1,080,000
|
|
$
|
1,728,000
|
|
|
|
|
|
|
|
|
|
|||||||||
|
3/17/2016
|
2/29/2016
|
Long-Term Stock (3)
|
|
|
|
|
3,021
|
|
12,086
|
|
24,172
|
|
|
|
|
$
|
1,010,873
|
|
||||||||||
|
3/17/2016
|
2/29/2016
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
12,086
|
|
|
|
$
|
959,991
|
|
||||||||||||
|
3/17/2016
|
2/29/2016
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
23,380
|
|
$
|
79.43
|
|
$
|
479,991
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Garrett E. Pierce
|
2/2/2016
|
2/2/2016
|
Annual (2)
|
$
|
224,438
|
|
$
|
598,500
|
|
$
|
957,600
|
|
|
|
|
|
|
|
|
|
|||||||||
|
3/17/2016
|
2/29/2016
|
Long-Term Stock (3)
|
|
|
|
|
1,258
|
|
5,035
|
|
10,070
|
|
|
|
|
$
|
421,127
|
|
||||||||||
|
3/17/2016
|
2/29/2016
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
5,035
|
|
|
|
$
|
399,930
|
|
||||||||||||
|
3/17/2016
|
2/29/2016
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
9,741
|
|
$
|
79.43
|
|
$
|
199,983
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Blake E. Larson
|
2/2/2016
|
2/2/2016
|
Annual (2)
|
$
|
217,688
|
|
$
|
580,500
|
|
$
|
928,800
|
|
|
|
|
|
|
|
|
|
|||||||||
|
3/17/2016
|
2/29/2016
|
Long-Term Stock (3)
|
|
|
|
|
1,447
|
|
5,791
|
|
11,582
|
|
|
|
|
$
|
484,359
|
|
||||||||||
|
3/17/2016
|
2/29/2016
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
5,791
|
|
|
|
$
|
459,979
|
|
||||||||||||
|
3/17/2016
|
2/29/2016
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
11,203
|
|
$
|
79.43
|
|
$
|
229,998
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Frank L. Culbertson
|
2/2/2016
|
2/2/2016
|
Annual (2)
|
$
|
144,000
|
|
$
|
384,000
|
|
$
|
614,400
|
|
|
|
|
|
|
|
|
|
|||||||||
|
3/17/2016
|
2/29/2016
|
Long-Term Stock (3)
|
|
|
|
|
723
|
|
2,895
|
|
5,790
|
|
|
|
|
$
|
242,138
|
|
||||||||||
|
3/17/2016
|
2/29/2016
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
2,895
|
|
|
|
$
|
229,950
|
|
||||||||||||
|
3/17/2016
|
2/29/2016
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
5,601
|
|
$
|
79.43
|
|
$
|
114,989
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Scott L. Lehr
|
2/2/2016
|
2/2/2016
|
Annual (2)
|
$
|
138,000
|
|
$
|
368,000
|
|
$
|
588,800
|
|
|
|
|
|
|
|
|
|
|||||||||
|
3/17/2016
|
2/29/2016
|
Long-Term Stock (3)
|
|
|
|
|
629
|
|
2,517
|
|
5,034
|
|
|
|
|
$
|
210,522
|
|
||||||||||
|
3/17/2016
|
2/29/2016
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
2,517
|
|
|
|
$
|
199,925
|
|
||||||||||||
|
3/17/2016
|
2/29/2016
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
4,870
|
|
$
|
79.43
|
|
$
|
99,981
|
|
(1)
|
The Compensation and Human Resources Committee of the Board of Directors met on February 2, 2016 to approve the estimated future payouts under the annual incentive plan and on February 29, 2016 to approve the award of long-term
|
(2)
|
The amounts reflect the potential cash payout for the annual incentive program for the fiscal period beginning on January 1, 2016 and ending on December 31, 2016 if all performance measures are satisfied at the applicable level. The material terms of the award are described above in the "Compensation Discussion and Analysis" under the subheading "Annual Incentive Performance Results" See the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table above for the amount actually earned for 2016.
|
(3)
|
Each column in this row shows the number of shares of common stock that may be paid out for the three fiscal-year performance period beginning January 1, 2016 and ending December 31, 2018 if all performance metrics are satisfied at the applicable level. The payout will be determined after the fiscal year ending December 31, 2018. The material terms of the award are described above in the "Compensation Discussion and Analysis" under the subheading "2016 Long-Term Incentive Compensation."
|
(4)
|
The number of shares of restricted stock shown in this row represents the actual number of shares of restricted stock granted to the named executive officers on March 17, 2016. The restricted stock shown in this row vests in three equal annual installments beginning on the first anniversary of the grant date.
|
(5)
|
The number of stock options shown in this row represents the actual number of options granted to the named executive officers on March 17, 2016. The option exercise price is the closing sale price of a share of Orbital ATK common stock on the NYSE on the date of grant. The stock options vest in three equal annual installments starting on the first anniversary of the grant date. The options may also vest in the event of a qualifying termination of employment following a change in control of the Company.
|
(6)
|
This column shows the full grant date fair value of the equity awards under FASB ASC Topic 718. Generally, for the long-term stock incentive awards relating to performance metrics, the full grant date fair value is the amount the Company could expense in its financial statements over the awards' performance period assuming performance is achieved at the target level. Assumptions made in the calculations of these amounts may be found in Note 17 to the consolidated financial statements in this Form 10-K.
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||||||||||||||||||||||
Name
|
|
Grant
Date (1) |
|
Number of
Securities Underlying Unexercised Options (#) Exercisable (2) |
|
Number of
Securities Underlying Unexercised Options (#) Unexercisable (2) |
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
|
Option
Exercise Price ($) |
|
Option
Expiration Date |
|
Number of
Shares or Units of Stock That Have Not Vested (#)(3)(4) |
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)(5) |
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) |
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5)(6) |
||||||||||||||
David W. Thompson
|
7/21/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
6,735
|
|
|
$
|
590,862
|
|
|
—
|
|
|
$
|
—
|
|
|||
|
|
3/10/2015
|
|
7,797
|
|
|
15,595
|
|
|
—
|
|
|
$
|
72.06
|
|
|
3/10/2025
|
|
|
8,882
|
|
|
$
|
779,218
|
|
|
3,330
|
|
$
|
(7
|
)
|
$
|
292,141
|
|
|
|
3/17/2016
|
|
—
|
|
|
23,380
|
|
|
—
|
|
|
$
|
79.43
|
|
|
3/17/2026
|
|
|
12,086
|
|
|
$
|
1,060,305
|
|
|
3,021
|
|
(8
|
)
|
$
|
265,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Garrett E. Pierce
|
7/21/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,490
|
|
|
$
|
393,908
|
|
|
—
|
|
|
$
|
—
|
|
||||
|
|
3/10/2015
|
|
3,249
|
|
|
6,498
|
|
|
—
|
|
|
$
|
72.06
|
|
|
3/10/2025
|
|
|
3,700
|
|
|
$
|
324,601
|
|
|
1,387
|
|
$
|
(7
|
)
|
$
|
121,682
|
|
|
|
3/17/2016
|
|
—
|
|
|
9,741
|
|
|
—
|
|
|
$
|
79.43
|
|
|
3/17/2026
|
|
|
5,035
|
|
|
$
|
441,721
|
|
|
1,258
|
|
$
|
(8
|
)
|
$
|
110,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Blake E. Larson
|
3/6/2012
|
|
7,597
|
|
|
—
|
|
|
—
|
|
|
$
|
26.25
|
|
|
3/6/2022
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|||
|
|
3/5/2013
|
|
6,094
|
|
|
—
|
|
|
—
|
|
|
$
|
30.40
|
|
|
3/5/2023
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
||
|
|
3/11/2014
|
|
1,842
|
|
|
922
|
|
|
—
|
|
|
$
|
61.65
|
|
|
3/11/2024
|
|
|
4,428
|
|
|
$
|
388,468
|
|
|
—
|
|
|
$
|
—
|
|
||
|
|
3/10/2015
|
|
3,736
|
|
|
7,473
|
|
|
—
|
|
|
$
|
72.06
|
|
|
3/10/2025
|
|
|
4,256
|
|
|
$
|
373,379
|
|
|
1,595
|
|
$
|
(7
|
)
|
$
|
139,929
|
|
|
|
3/17/2016
|
|
—
|
|
|
11,203
|
|
|
—
|
|
|
$
|
79.43
|
|
|
3/17/2026
|
|
|
5,791
|
|
|
$
|
508,044
|
|
|
1,447
|
|
$
|
(8
|
)
|
$
|
126,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Frank L. Culbertson
|
7/21/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
2,993
|
|
|
$
|
262,576
|
|
|
—
|
|
|
$
|
—
|
|
|||
|
|
3/10/2015
|
|
1,868
|
|
|
3,736
|
|
|
—
|
|
|
$
|
72.06
|
|
|
3/10/2025
|
|
2,128
|
|
|
$
|
186,689
|
|
|
797
|
|
$
|
(7
|
)
|
$
|
69,921
|
|
|
|
|
3/17/2016
|
|
—
|
|
|
5,601
|
|
|
—
|
|
|
$
|
79.43
|
|
|
3/17/2026
|
|
|
2,895
|
|
|
$
|
253,978
|
|
|
723
|
|
$
|
(8
|
)
|
$
|
63,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Scott L. Lehr
|
3/11/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,730
|
|
|
$
|
151,773
|
|
|
—
|
|
|
$
|
—
|
|
|||
|
|
3/10/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,943
|
|
|
$
|
170,459
|
|
|
485
|
|
(7
|
)
|
$
|
42,549
|
|
|
|
|
7/1/2015
|
|
481
|
|
|
962
|
|
|
—
|
|
|
$
|
73.13
|
|
|
7/1/2025
|
|
|
547
|
|
|
$
|
47,988
|
|
|
205
|
|
(7
|
)
|
$
|
17,985
|
|
|
|
|
3/17/2016
|
|
—
|
|
|
4,870
|
|
|
—
|
|
|
$
|
79.43
|
|
|
3/17/2026
|
|
|
2,517
|
|
|
$
|
220,816
|
|
|
629
|
|
(8
|
)
|
$
|
55,182
|
|
(1)
|
For a better understanding of this table, we have included an additional column showing the grant dates of stock options, restricted stock awards, restricted stock units and performance share awards.
|
(2)
|
Stock option grants vest in three equal annual installments beginning on the first anniversary of the grant date.
|
(3)
|
The amounts shown for the grants to Mr. Thompson, Mr. Pierce and Mr. Culbertson in 2014 are for time-vesting restricted stock units granted by Orbital prior to the Merger and assumed by the Company in connection with the Merger. The restricted stock units will be settled in shares of Orbital ATK common stock, subject to the officer's continued employment with the Company through the applicable vesting date. Grants made on July 21, 2014 vest on July 21, 2017. All restricted stock units vest in full in the event of the officer's death or disability.
|
(4)
|
The amounts shown for the grants made on March 11, 2014 include restricted stock awards and restricted stock units that vest in three equal annual installments beginning on the first anniversary of the grant date.
|
Name
|
|
Restricted Stock Awards
|
|
Restricted Stock Units
|
||
Mr. Larson
|
|
375
|
|
|
4,053
|
|
Mr. Lehr
|
|
231
|
|
|
1,499
|
|
(5)
|
The amounts in this column were calculated using a per share value of $87.73, the closing price of Company common stock as reported on the NYSE on December 30, 2016, the last trading day of the fiscal year.
|
(6)
|
The amounts shown reflect the payout of the performance shares based on achievement at the threshold level of performance. The vesting and payout of any performance shares for the respective performance periods ending on December 31 will be determined, based on the actual achievement of specified performance goals.
|
(7)
|
These shares correspond to a long-term incentive award relating to performance growth measures (relative TSR, absolute earnings per share growth, and absolute revenue growth) for the period of April 1, 2015 through December 31, 2017.
|
(8)
|
These shares correspond to a long-term incentive award relating to performance growth measures (relative TSR, absolute earnings per share growth, and absolute revenue growth) for the period of January 1, 2016 through December 31, 2018.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||
Name
|
|
Number of Shares Acquired on Exercise (#)
|
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#)(1)(2)
|
|
Value Realized on Vesting ($)(1)(2)
|
|||
David W. Thompson
|
|
|
|
|
26,881
|
|
|
$
|
2,277,378
|
|
|
Garrett E. Pierce
|
|
|
|
|
17,932
|
|
|
$
|
1,527,355
|
|
|
Blake E. Larson
|
|
|
|
|
9,180
|
|
|
$
|
769,538
|
|
|
Frank L. Culbertson
|
|
|
|
|
10,786
|
|
|
$
|
921,834
|
|
|
Scott L. Lehr
|
|
|
|
|
1,830
|
|
|
$
|
145,231
|
|
(1)
|
Includes the vesting of restricted stock units. Value realized was determined by multiplying the number of vested shares or units by the closing market price of the Company's common stock on the date of vesting. If the vesting date fell on a weekend or holiday, the closing market price of the common stock on the business day immediately preceding the vesting date was used to determine the value realized.
|
(2)
|
The number of shares of restricted stock awards and restricted stock units that vested for each of the officers is as follows:
|
Name
|
|
Vesting Date
|
Number of Shares
|
|
Mr. Thompson
|
|
2/10/2016
|
6,735
|
|
|
|
3/10/2016
|
4,440
|
|
|
|
7/21/2016
|
6,735
|
|
|
|
7/25/2016
|
8,971
|
|
Mr. Pierce
|
|
2/10/2016
|
5,612
|
|
|
|
3/10/2016
|
1,850
|
|
|
|
7/21/2016
|
4,490
|
|
|
|
7/25/2016
|
5,980
|
|
Mr. Larson
|
|
3/5/2016
|
892
|
|
|
|
3/10/2016
|
2,127
|
|
|
|
3/11/2016
|
375
|
|
|
|
3/31/2016
|
5,786
|
|
Mr. Culbertson
|
|
2/10/2016
|
2,245
|
|
|
|
3/10/2016
|
1,063
|
|
|
|
7/21/2016
|
2,993
|
|
|
|
7/25/2016
|
4,485
|
|
Mr. Lehr
|
|
3/5/2016
|
355
|
|
|
|
3/10/2016
|
971
|
|
|
|
3/11/2016
|
231
|
|
|
|
7/1/2016
|
273
|
|
•
|
Mr. Larson - the old Cash Balance formula under the Pension Plan,
|
•
|
Mr. Lehr - the Aerospace Plan formula under the Pension Plan.
|
Years of Service
|
|
Percentage
of
Pension
Earnings
|
|
Additional
Percentage
for Earnings
in Excess of
Social Security
Wage Base
|
Less than 5
|
|
3.5%
|
|
3.5%
|
5 to 9
|
|
4.5%
|
|
4.5%
|
10 to 14
|
|
5.5%
|
|
5.5%
|
15 to 19
|
|
6.5%
|
|
5.5%
|
20 to 24
|
|
7.5%
|
|
5.5%
|
25 or more
|
|
8.5%
|
|
5.5%
|
•
|
1.2% of final average earnings up to one-half of the social security wage base (as in effect for the 12 months prior to July 1, 2013) multiplied by years of credited service; plus
|
•
|
1.6% of final average earnings in excess of one-half of the social security wage base (as in effect for the 12 months prior to July 1, 2013), multiplied by years of credited service.
|
Name
|
Plan Name
|
Number of
Years Pension Service (1)
|
Present Value
of Accumulated
Benefits ($)
|
Payments
During Last
Fiscal Year ($)
|
|||
Blake E. Larson
|
Pension Plan
|
35.5
|
|
624,877
|
|
—
|
|
|
DB SERP
|
35.5
|
|
2,638,594
|
|
—
|
|
Scott L. Lehr
|
Pension Plan
|
32.667
|
|
1,397,514
|
|
—
|
|
|
DB SERP
|
32.667
|
|
790,841
|
|
—
|
|
Name
|
Plan Name
|
Executive Contributions in Last Fiscal Year
($)
|
Registrant Contributions in Last Fiscal Year
($)
|
Aggregate Earnings in Last Fiscal Year
($)
|
Aggregate Withdrawals/ Distributions in Last Fiscal Year
($)
|
Aggregate Balance at Last Fiscal Year End
($)(1)
|
David W. Thompson
|
Deferred Compensation Plan
|
$182,407
|
$—
|
$7,473
|
$—
|
$189,880
|
|
Orbital Deferred Compensation Plan
|
$—
|
$—
|
$313,956
|
$—
|
$5,497,906
|
|
DC SERP
|
$—
|
$181,280
|
$—
|
$—
|
$181,280
|
Garrett E. Pierce
|
Deferred Compensation Plan
|
$—
|
$—
|
$—
|
$—
|
$—
|
|
Orbital Deferred Compensation Plan
|
$—
|
$—
|
$8,834
|
$—
|
$166,214
|
|
DC SERP
|
$—
|
$106,436
|
$—
|
$—
|
$106,436
|
Blake E. Larson
|
Deferred Compensation Plan
|
$—
|
$—
|
$45,766
|
$—
|
$822,497
|
|
DC SERP
|
$—
|
$44,170
|
$5,369
|
$—
|
$126,557
|
Frank L. Culbertson
|
Deferred Compensation Plan
|
$—
|
$—
|
$—
|
$—
|
$—
|
|
Orbital Deferred Compensation Plan
|
$—
|
$—
|
$1,047
|
$—
|
$20,466
|
|
DC SERP
|
$—
|
$63,319
|
$—
|
$—
|
$63,319
|
Scott L. Lehr
|
Deferred Compensation Plan
|
$—
|
$—
|
$—
|
$—
|
$—
|
|
DC SERP
|
$—
|
$22,868
|
$1,871
|
$—
|
$53,283
|
(1)
|
For Messrs. Larson and Lehr, the amounts in the following table represent aggregate contributions made by the executive officer or by the Company for the benefit of the executive officer, since the officer's commencement of participation in the plan(s) through December 31, 2016. Deferrals and contributions in prior years were previously reported as compensation in the Summary Compensation Table in the Company's proxy statement for the applicable years for those officers who were named in the Summary Compensation Table in those years. For Messrs. Thompson, Pierce and Culbertson, amounts in the following table represent aggregate contributions since the beginning of their employment with the Company on February 9, 2015. The aggregate earnings represent the cumulative earnings on the original deferred amounts. There have been no distributions/withdrawals made to the named executive officers through December 31, 2016.
|
|
Executive Contributions
|
|
Registrant Contributions
|
|
|
|
|||
Name
|
Salary Deferrals
($) |
Annual Cash Incentive Deferrals
($) |
Performance Share Deferrals
($) |
|
Allocations to Orbital Deferred Compensation Plan ($)
|
Allocations to DC SERP ($)
|
Aggregate Earnings
($) |
Withdrawals
($) |
Balance
($) |
Mr. Thompson
|
$182,407
|
$—
|
$—
|
|
$23,882
|
$181,280
|
$556,105
|
$—
|
$5,869,066
|
Mr. Pierce
|
$—
|
$—
|
$—
|
|
$16,964
|
$106,436
|
$10,589
|
$—
|
$272,650
|
Mr. Larson
|
$—
|
$308,888
|
$—
|
|
$—
|
$125,384
|
$514,782
|
$—
|
$949,054
|
Mr. Culbertson
|
$—
|
$—
|
$—
|
|
$4,269
|
$63,319
|
$643
|
$—
|
$83,785
|
Mr. Lehr
|
$—
|
$—
|
$—
|
|
$—
|
$51,703
|
$1,580
|
$—
|
$53,283
|
•
|
A prorated amount of the executive officer's annual incentive award, payable at the end of the performance period. The payment would be based on actual performance measured following the end of the performance period and would be prorated for the period of employment, provided the officer completed at least 90 days of employment in the performance period.
|
•
|
Stock options generally are exercisable for three years to the extent exercisable on the date of retirement, but may not be exercised later than the expiration date of the stock options.
|
•
|
Any outstanding performance share awards would be paid at the end of the performance period based on the actual performance measured following the end of the performance period and would be prorated for the period of active service during the performance period.
|
•
|
Shares of restricted stock and restricted stock units would be forfeited.
|
•
|
A lump sum payout equal to 12 months base salary.
|
•
|
A prorated amount of the executive officer's annual incentive award, payable at the end of the performance period. The payment would be based on actual performance measured following the end of the performance period and would be prorated for the period of employment, provided the officer completed at least 90 days of employment in the performance period.
|
•
|
An additional $25,000 to defray health care costs.
|
•
|
Stock options generally are exercisable for three years following such termination of employment to the extent exercisable on the date of termination, but may not be exercised later than the expiration date of the stock options.
|
•
|
Shares of restricted stock and restricted stock units would immediately vest.
|
•
|
Any outstanding performance share awards would be paid at the end of the performance period based on the actual performance measured following the end of the performance period and would be prorated for the period of active service during the performance period.
|
•
|
A prorated amount of the executive officer's annual incentive award, payable at the end of the performance period would be paid based on actual performance measured following the end of the performance period and prorated for the period of employment, provided the officer completed at least 90 days of employment in the performance period.
|
•
|
Stock options generally are exercisable for three years following such termination of employment to the extent exercisable on the date of termination, but may not be exercised later than the expiration date of the stock options.
|
•
|
Shares of restricted stock and restricted stock units would immediately vest.
|
•
|
Any outstanding performance share awards would be paid at the end of the performance period based on the actual performance measured following the end of the performance period and would be prorated for the period of active service during the performance period.
|
•
|
An acquisition of 40% or more of the voting power of securities entitled to vote in the election of directors;
|
•
|
The consummation of a reorganization, merger, asset sale, or other transaction that results in existing stockholders owning less than 60% of the Company's outstanding voting securities;
|
•
|
A change in a majority of the incumbent directors (including directors approved by a majority of the incumbents);
|
•
|
Approval by the stockholders of a complete liquidation or dissolution of the Company; or
|
•
|
Any other circumstance which the Board determines to be a change in control for purposes of this plan after giving due consideration to the nature of the circumstances then presented.
|
•
|
"Tier 1 Participants," who are Orbital ATK's President and Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and Senior Vice President and General Counsel; and
|
•
|
"Tier 2 Participants," who are all other "executive officers" and any employee selected by the Committee to participate in the plan for the current fiscal year.
|
•
|
Base salary and other compensation earned through the date of termination to the extent not already paid;
|
•
|
A prorated portion of the annual cash incentive payment for which the participant is eligible for the fiscal year in which the termination occurs, calculated based on (a) the target level of performance if the termination occurs within the first three quarters of the fiscal year or (b) the greater of projected performance or target performance if the termination occurs within the fourth quarter of the fiscal year;
|
•
|
Immediate full vesting of any outstanding stock awards, other than performance vesting stock awards;
|
•
|
Payment of outstanding performance vesting stock awards and long-term cash incentive plan awards at the target level of performance; and
|
•
|
Payment for reasonable legal fees and expenses incurred in good faith by the participant to obtain benefits if Orbital ATK does not pay benefits under the plan.
|
•
|
A cash payment equal to three times the participant's annual base salary and current annual cash incentive opportunity for which the participant is eligible, assuming the target level of performance had been achieved;
|
•
|
A cash payment equal to three times the maximum 401(k) plan match the participant would have received for the calendar year in which the termination occurs;
|
•
|
A cash payment equal to the value of benefits that Orbital ATK would have provided to the participant under Orbital ATK's group health plan for a period of three years following termination; and
|
•
|
An additional supplemental retirement benefit equal to the increased benefit that the participant would have received under the DB SERP and/or DC SERP that would have occurred if: (1) the additional age and service would have been credited during the three-year period following the date of the termination, based on the current base salary and payments received under any annual incentive plan during the year preceding termination for the purpose of calculating recognizable compensation, and (2) the participant had contributed the maximum amounts allowable for before-tax or Roth 401(k) contributions to the 401(k) plan during the three-year period following the date of termination.
|
•
|
A cash payment equal to two times the participant's annual base salary and current annual cash incentive amount opportunity for which the participant is eligible, assuming the target level of performance had been achieved;
|
•
|
A cash payment equal to two times the maximum 401(k) plan match the participant would have received for the calendar year in which the termination occurs;
|
•
|
A cash payment equal to the value of benefits that Orbital ATK would have provided to the participant under Orbital ATK's group health plan for a period of two years following termination; and
|
•
|
An additional supplemental retirement benefit equal to the increased benefit that the participant would have received under the DB SERP and/or DC SERP that would have occurred if: (1) the additional age and service would have been credited during the two-year period following the date of termination, based on the current base salary and payments received under any annual incentive plan during the year preceding termination for the purpose of calculating recognizable compensation, and (2) the participant had contributed the maximum amounts allowable for before-tax or Roth 401(k) contributions to the 401(k) plan during the two-year period following the date of termination.
|
•
|
A cash payment equal to two times the participant's annual base salary and current annual cash incentive amount opportunity for which the participant is eligible, assuming the target level of performance had been achieved;
|
•
|
A prorated portion of the annual cash incentive payment for which the participant is eligible for the fiscal year in which the termination occurs, calculated based on the target level of performance;
|
•
|
A cash payment equal to the cash amount the participant would receive under any Long-Term Cash Incentive Plan assuming target performance had been achieved;
|
•
|
Immediate full vesting of any outstanding stock awards, other than performance vesting stock awards;
|
•
|
Payment of outstanding performance vesting stock awards and long-term cash incentive plan awards at the target level of performance; and
|
•
|
A cash payment equal to the value of benefits that Orbital ATK would have provided to the participant under Orbital ATK's group health plan for a period of two years following termination.
|
|
David W. Thompson
|
Garrett E. Pierce
|
Blake E. Larson
|
Frank L. Culbertson
|
Scott L. Lehr
|
|||||||||||||||||||||
Payments Upon Death
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Payment
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Restricted Stock and Restricted Stock Units
|
|
$
|
2,430,384
|
|
(1)
|
|
$
|
1,160,229
|
|
(1)
|
|
$
|
914,322
|
|
(1)
|
|
$
|
703,244
|
|
(1)
|
|
$
|
459,530
|
|
(1)
|
|
Performance Awards
|
|
$
|
274,252
|
|
(2)
|
|
$
|
114,222
|
|
(2)
|
|
$
|
212,826
|
|
(2)
|
|
$
|
65,638
|
|
(2)
|
|
$
|
86,992
|
|
(2)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Total
|
|
$
|
2,704,636
|
|
|
|
$
|
1,274,451
|
|
|
|
$
|
1,127,148
|
|
|
|
$
|
768,882
|
|
|
|
$
|
546,522
|
|
|
|
Payments Upon Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Payment
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Restricted Stock and Restricted Stock Units
|
|
$
|
2,430,384
|
|
(1)
|
|
$
|
1,160,229
|
|
(1)
|
|
$
|
914,322
|
|
(1)
|
|
$
|
703,244
|
|
(1)
|
|
$
|
459,530
|
|
(1)
|
|
Performance Awards
|
|
$
|
274,252
|
|
(2)
|
|
$
|
114,222
|
|
(2)
|
|
$
|
212,826
|
|
(2)
|
|
$
|
65,638
|
|
(2)
|
|
$
|
86,992
|
|
(2)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Total
|
|
$
|
2,704,636
|
|
|
|
$
|
1,274,451
|
|
|
|
$
|
1,127,148
|
|
|
|
$
|
768,882
|
|
|
|
$
|
546,522
|
|
|
|
Payments Upon Termination Without Cause - Layoff
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Payment
|
|
$
|
925,000
|
|
(3)
|
|
$
|
690,000
|
|
(3)
|
|
$
|
670,000
|
|
(3)
|
|
$
|
505,000
|
|
(3)
|
|
$
|
485,000
|
|
(3)
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Restricted Stock and Restricted Stock Units
|
|
$
|
1,839,523
|
|
(1)
|
|
$
|
766,322
|
|
(1)
|
|
$
|
914,322
|
|
(1)
|
|
$
|
440,668
|
|
(1)
|
|
$
|
459,530
|
|
(1)
|
|
Performance Awards
|
|
$
|
274,252
|
|
(2)
|
|
$
|
114,222
|
|
(2)
|
|
$
|
486,931
|
|
(2)
|
|
$
|
65,638
|
|
(2)
|
|
$
|
188,423
|
|
(2)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Total
|
|
$
|
3,038,775
|
|
|
|
$
|
1,570,544
|
|
|
|
$
|
2,071,253
|
|
|
|
$
|
1,011,306
|
|
|
|
$
|
1,132,953
|
|
|
|
Payments Upon Termination following a Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Severance Payment
|
|
$
|
5,940,000
|
|
|
|
$
|
3,790,500
|
|
|
|
$
|
3,676,500
|
|
|
|
$
|
1,728,000
|
|
|
|
$
|
1,656,000
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
|
$
|
438,428
|
|
(4)
|
|
$
|
182,674
|
|
(4)
|
|
$
|
234,129
|
|
(4)
|
|
$
|
105,031
|
|
(4)
|
|
$
|
54,466
|
|
(4)
|
|
Restricted Stock and Restricted Stock Units
|
|
$
|
2,430,384
|
|
(1)
|
|
$
|
1,160,229
|
|
(1)
|
|
$
|
914,322
|
|
(1)
|
|
$
|
703,244
|
|
(1)
|
|
$
|
459,530
|
|
(1)
|
|
Performance Awards
|
|
$
|
2,229,044
|
|
(5)
|
|
$
|
928,622
|
|
(5)
|
|
$
|
1,423,595
|
|
(5)
|
|
$
|
533,925
|
|
(5)
|
|
$
|
594,634
|
|
(5)
|
|
Health and Welfare Benefits
|
|
$
|
45,258
|
|
(6)
|
|
$
|
32,097
|
|
(6)
|
|
$
|
31,707
|
|
(6)
|
|
$
|
1,066
|
|
(6)
|
|
$
|
30,215
|
|
(6)
|
|
Retirement (401(k) Match, DB SERP and/or DC SERP)
|
|
$
|
576,546
|
|
|
|
$
|
352,091
|
|
|
|
$
|
348,559
|
|
|
|
$
|
150,844
|
|
|
|
$
|
—
|
|
|
|
Total
|
|
$
|
11,659,660
|
|
|
|
$
|
6,446,213
|
|
|
|
$
|
6,628,812
|
|
|
|
$
|
3,222,110
|
|
|
|
$
|
2,794,845
|
|
|
(1)
|
Values are determined by multiplying the number of shares of restricted stock by $87.73, the closing market price of Company common stock as reported on the NYSE on December 30, 2016. The awards for Mr. Thompson, Mr. Pierce and Mr. Culbertson include time vesting restricted stock units that were granted to them by Orbital prior to the Merger.
|
(2)
|
The performance awards for the fiscal year 2015-2017 performance periods were converted to restricted stock units at the target level of performance on the date of Merger. All performance awards assume payout at the threshold performance level in the event of death, disability and termination without cause with the exception of performance awards for the
|
(3)
|
The cash payment includes 12 months of base salary and an additional $25,000 to defray health care costs.
|
(4)
|
Values are determined by multiplying the number of unvested options by the spread between the option price and $87.73, the closing market price of a share of Company common stock as reported on the NYSE on December 30, 2016.
|
(5)
|
Estimates for the performance awards for the fiscal year 2015-2017, April 1, 2015 through December 31, 2017 and 2016-2018 performance periods assume payout at the target performance level, consistent with the terms of the Income Security Plan. The value was determined by multiplying the number of shares payable by $87.73, the closing market price of a share of Orbital ATK common stock as reported on the NYSE on December 31, 2016.
|
(6)
|
For purposes of quantifying health and welfare benefits, Orbital ATK's annual premium cost was multiplied by three for each of Mr. Thompson, Mr. Pierce and Mr. Larson and by two for each of the other named executive officers.
|
Salary
|
Bonus
|
Insurance Benefits
(1)
|
Equity Awards
(2)
|
Total
(3)
|
$1,330,000
|
$1,380,988
|
$46,322
|
$2,295,487
|
$5,052,797
|
(1)
|
Reflects the gross premiums to be paid to provide Mr. Pierce with life, disability, accident and health insurance benefits substantially similar to those he was receiving as of December 31, 2016 for the next 24-month period. Assumes annual increases in premiums based on historical percentage increases.
|
(2)
|
Reflects the value of 4,490 RSUs, 8,735 shares of restricted stock and 10,585 performance shares, which would continue to vest as scheduled for the next 24-month period, based on the $87.73 closing price of Company common stock on December 30, 2016. Also includes the value of (i) 9,747 stock options, determined based on the difference between the closing price of $87.73 and the exercise price for the options of $72.06, and (ii) 6,494 stock options, determined based on the difference between the closing price of $87.73 and the exercise price for the options of $79.43.
|
(3)
|
Estimated legal fees and expenses incurred by Mr. Pierce in connection with a termination are not included in the total.
|
•
|
an award of restricted stock valued at $100,000 at the time of grant upon initial election to the Board and upon re-election at each subsequent annual meeting of stockholders;
|
•
|
an annual cash retainer of $75,000, with no additional fees paid for Board and committee meetings attended;
|
•
|
an annual cash retainer of $90,000 for the independent non-executive Chairman of the Board (Ronald R. Fogleman);
|
•
|
an annual cash retainer of $18,500 for the chair of the Audit Committee, $12,500 for the chair of the Compensation and Human Resources Committee, $12,500 for the chair of the Governance Committee and $12,500 for the chair of the Markets and Technology Committee; and
|
•
|
an annual cash retainer of $13,500 for each member of the Audit Committee, $7,500 for each member of the Compensation and Human Resources Committee, $7,500 for each member of the Governance Committee, $7,500 for each member of the Markets and Technology Committee and $2,500 for each member of the special subcommittee of the Markets and Technology Committee.
|
Name
|
|
Fees Earned or
Paid in Cash
($)
|
|
|
Stock
Awards(1)
($)
|
|
All Other
Compensation(2)
($)
|
|
Total
($)
|
||||||||||||
Kevin P. Chilton
|
|
$
|
98,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
2,284
|
|
|
|
$
|
200,722
|
|
|
Roxanne J. Decyk
|
|
$
|
102,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
8,109
|
|
|
|
$
|
210,547
|
|
|
Martin C. Faga
|
|
$
|
98,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
10,907
|
|
|
|
$
|
209,345
|
|
|
Lennard A. Fisk
|
|
$
|
90,000
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
191,596
|
|
|
Ronald R. Fogleman
|
|
$
|
175,000
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
16,976
|
|
|
|
$
|
291,914
|
|
|
Robert M. Hanisee
|
|
$
|
96,000
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
197,596
|
|
|
Ronald T. Kadish
|
|
$
|
96,000
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
197,596
|
|
|
Tig H. Krekel
|
|
$
|
90,000
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
9,622
|
|
|
|
$
|
199,560
|
|
|
Douglas L. Maine
|
|
$
|
114,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
216,096
|
|
|
Roman Martinez IV
|
|
$
|
88,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
16,976
|
|
|
|
$
|
205,414
|
|
|
Janice I. Obuchowski
|
|
$
|
90,000
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
191,596
|
|
|
James G. Roche
|
|
$
|
97,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
199,096
|
|
|
Harrison H. Schmitt
|
|
$
|
97,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
1,658
|
|
|
|
$
|
199,096
|
|
|
Scott L. Webster
|
|
$
|
82,500
|
|
|
|
|
$
|
99,938
|
|
|
|
$
|
16,284
|
|
|
|
$
|
198,722
|
|
|
Mark W. DeYoung (former director)
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
313
|
|
|
|
$
|
313
|
|
|
(1)
|
This column shows the grant date fair value computed in accordance with generally accepted accounting principles in the United States. The amounts represent restricted stock awards and grants of deferred stock units that are paid in shares of Company common stock and calculated based on the number of shares granted multiplied by the closing price per share of common stock on the date of grant (the amounts do not reflect the actual amounts that may be realized by the directors). A discussion of the assumptions used in calculating these values may be found in Note 17 to the audited financial statements in this Form 10-K.
|
Name
|
|
Grant Date
|
|
Number of
Shares of Stock or Units |
|
Closing Price on
Grant Date |
||
Kevin P. Chilton
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Roxanne J. Decyk
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Martin C. Faga
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Lennard A. Fisk
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Ronald R. Fogleman
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Robert M. Hanisee
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Ronald T. Kadish
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Tig H. Krekel
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Douglas L. Maine
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Roman Martinez IV
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Janice I. Obuchowski
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
James G. Roche
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Harrison H. Schmitt
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Scott L. Webster
|
|
5/4/2016
|
|
1,147
|
|
|
$87.13
|
|
Name
|
|
Shares of
Restricted Stock (#) |
|
Restricted Stock
Units (#) |
|
Deferred
Stock Units (#) |
|
Phantom
Stock Units (#) |
|
Stock
Options (#) |
|||||
Kevin P. Chilton
|
|
—
|
|
|
—
|
|
|
2,190
|
|
|
—
|
|
|
—
|
|
Roxanne J. Decyk
|
|
—
|
|
|
—
|
|
|
7,044
|
|
|
—
|
|
|
—
|
|
Martin C. Faga
|
|
—
|
|
|
—
|
|
|
9,376
|
|
|
—
|
|
|
—
|
|
Lennard A. Fisk
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Ronald R. Fogleman
|
|
1,147
|
|
|
—
|
|
|
13,286
|
|
|
1,824
|
|
|
—
|
|
Robert M. Hanisee
|
|
—
|
|
|
—
|
|
|
1,147
|
|
|
1,759
|
|
|
—
|
|
Ronald T. Kadish
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tig H. Krekel
|
|
—
|
|
|
—
|
|
|
8,305
|
|
|
—
|
|
|
—
|
|
Douglas L. Maine
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Roman Martinez IV
|
|
—
|
|
|
—
|
|
|
14,433
|
|
|
7,512
|
|
|
—
|
|
Janice I. Obuchowski
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
James G. Roche
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Harrison H. Schmitt
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Scott L. Webster
|
|
—
|
|
|
—
|
|
|
2,190
|
|
|
—
|
|
|
—
|
|
(2)
|
Except for Mr. Webster, the "All Other Compensation" column consists solely of the aggregate amount of: cash dividends paid on unvested restricted stock awarded under the Non-Employee Director Stock Program under the Company's 2015 Stock Incentive Plan or the Non-Employee Director Restricted Stock and Stock Deferral Program under the Company's 2005 Stock Incentive Plan (the "Director Stock Programs"), dividend equivalents paid in cash on deferred stock units under the Director Stock Programs, and the dollar value of dividend equivalents credited in the form of additional phantom stock units under the Company's Deferred Fee Plan for Non-Employee Directors. Dividend equivalents are paid or credited at the same rate as cash dividends paid on the Company's common stock. For Mr. Webster, "All Other Compensation" also includes a $14,000 payment for the creation of leadership awards for Company employees.
|
|
|
|
|
|
Name
|
Annual Retainer
|
Units as of
December 31, 2016 |
||
Ronald R. Fogleman
|
Cash account—50%
|
N/A
|
|
|
|
Share account—50%
|
1,824
|
|
|
Robert M. Hanisee
|
Cash account—50% for deferrals before 2016
|
N/A
|
|
|
|
Share account—50% for deferrals before 2016 and 100% for deferrals starting in 2016
|
1,759
|
|
|
Roman Martinez IV
|
Share account—100%
|
7,512
|
|
|
•
|
the first anniversary of the award date;
|
•
|
the retirement of the director from the Board in compliance with the Board's retirement policy as then in effect;
|
•
|
the termination of the director's service on the Board because of disability or death; or
|
•
|
the termination of the director's service on the Board following a change in control of Orbital ATK.
|
•
|
indemnify the directors to the fullest extent permitted by law;
|
•
|
advance to the directors all related expenses, subject to reimbursement if it is subsequently determined that indemnification is not permitted;
|
•
|
indemnify and advance all expenses incurred by directors seeking to enforce their rights under the indemnification agreements; and
|
•
|
cover directors under our directors' and officers' liability insurance.
|
(2)
|
Includes shares of restricted common stock with voting rights held by certain directors and executive officers. Except for Mr. Hanisee, excludes deferred stock units without voting rights under our Non-Employee Director Stock Program under the Company's 2015 Stock Incentive Plan, or its predecessor plans (the Non-Employee Director Restricted Stock Award and Stock Deferral Program under the Company's 2005 Stock Incentive Plan and the Non-Employee Director Restricted Stock Plan). Additional information regarding Orbital ATK securities held by each director is shown in the table under the heading "Corporate Governance—Stock Ownership Guideline for Non-Employee Directors" in this Form 10-K. As of April 21, 2017, all directors and executive officers as a group (23 persons) held 77,869 shares of restricted stock. Excludes deferred stock units without voting rights under our Nonqualified Deferred Compensation Plan because none of the executive officers has a payment scheduled within 60 days. Excludes restricted stock units without voting rights under the Orbital Sciences Corporation 2005 Stock Incentive Plan, under which the Company assumed the obligation to issue Orbital ATK shares pursuant to the terms of the Transaction Agreement relating to the merger of Alliant Techsystems Inc. (formerly known as ATK and now named Orbital ATK, Inc.) and Orbital Sciences Corporation ("Orbital") on February 9, 2015 (the "Merger"), because none of the executive officers has restricted stock units under that plan scheduled to vest within 60 days. Includes shares allocated, as of April 21, 2017, under a 401(k) plan to the accounts of the following beneficial owners: Mr. Culbertson, 1,044 shares; Mr. Pierce, 2,187 shares; Mr. Thompson, 2,355 shares; and all directors and executive officers as a group (23 persons), 9,168 shares.
|
|||||||||||||||
(3)
|
Excludes phantom stock units to be settled in cash that are credited to the accounts of directors who participate in our Deferred Fee Plan for Non-Employee Directors (which are shown in the table under the heading "Corporate Governance—Stock Ownership Guideline for Non-Employee Directors" in this Form 10-K) or were credited prior to January 1, 2005 to the accounts of officers who participate in our Nonqualified Deferred Compensation Plan (described under the heading "Executive Compensation" in this Form 10-K).
|
|||||||||||||||
(4)
|
Assumes the issuance of the shares covered by the exercisable stock options and restricted stock units scheduled to vest within 60 days that are held by each person or the group, as applicable.
|
|||||||||||||||
(5)
|
Sets forth the total amount of Company stock-based holdings for the person or entity, including shares beneficially owned and reported on this table and the following stock-based holdings that will not vest or be payable within 60 days following April 21, 2017 (and therefore are not required to be reported in the table): stock options, restricted stock units, deferred stock units and phantom stock units. This supplemental information is being provided for our current Named Executive Officers to provide additional information regarding their equity holdings, and is described in greater detail under "Executive Compensation" below. Additional information regarding Orbital ATK securities held by each director is shown in the table under the heading "Corporate Governance—Stock Ownership Guideline for Non-Employee Directors" in this Form 10-K.
|
|||||||||||||||
(6)
|
Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 7, 2017, reporting beneficial ownership as of December 31, 2016. The amended Schedule 13G reported that First Eagle Investment Management, LLC ("FEIM"), a registered investment adviser, has sole voting power over 4,531,848 shares and sole dispositive power over 4,729,130 shares. FEIM is deemed to be the beneficial owner of the 4,729,130 shares as a result of acting as investment adviser to various clients. The address of FEIM is 1345 Avenue of the Americas, New York, New York 10105.
|
|||||||||||||||
(7)
|
Based on a Schedule 13G/A filed with the Securities and Exchange Commission on January 25, 2017, reporting beneficial ownership as of December 31, 2016. The amended Schedule 13G reported that BlackRock, Inc. ("BlackRock") has sole voting power over 4,570,816 shares and sole dispositive power over 4,717,486 shares. The shares beneficially owned by BlackRock, a parent holding company, were acquired by various BlackRock subsidiaries, none of which beneficially owns more than 5% of the outstanding shares of Orbital ATK common stock. The address of BlackRock is 55 East 52nd Street, New York, New York 10055.
|
|||||||||||||||
(8)
|
Based on a Schedule 13 G/A filed with the Securities and Exchange Commission on February 10, 2017, reporting beneficial ownership as of December 31, 2016. The amended Schedule 13G reported that the Vanguard Group ("Vanguard"), an investment adviser, has sole voting power over 35,041 shares, shared voting power over 3,435 shares, sole dispositive power over 4,489,719 shares, and shared dispositive power over 35,204 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, beneficially owns 31,769 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, beneficially owns 6,707 shares as a result of its serving as investment manager of Australian investment offerings. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
|
(9)
|
Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2017, reporting beneficial ownership as of December 31, 2016. The amended Schedule 13G reported that The London Company, an investment adviser, has sole voting and dispositive power over 2,142,847 shares and shared dispositive power over 744,529 shares. The London Company is deemed to be a beneficial owner of the shares due to its discretionary power to make investment decisions over these shares for its clients and/or its ability to vote these shares. In all cases, persons other than The London Company have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds of the sale of the shares. No individual client holds more than 5% of the outstanding shares of Orbital ATK common stock. The address of The London Company is 1800 Bayberry Court, Suite 301, Richmond, Virginia 23226.
|
|||||||||||||||
(10)
|
Includes 1,000 shares owned by Mr. Martinez's wife. Mr. Martinez disclaims beneficial ownership of these 1,000 shares.
|
|
|
Fiscal Year Ended 12/31/2016
|
|
|
Transition Period Ended 12/31/2015
|
|
||
Audit Fees
|
|
$
|
8,037,450
|
|
|
$
|
10,737,561
|
|
Audit-Related Fees
|
|
5,000
|
|
|
122,568
|
|
||
Tax Fees
|
|
1,475,457
|
|
|
820,176
|
|
||
All Other Fees
|
|
3,832
|
|
|
1,800
|
|
||
Total Fees
|
|
$
|
9,521,739
|
|
|
$
|
11,682,105
|
|
|
|
ORBITAL ATK, INC.
|
||||
|
|
By:
|
|
/s/ David W. Thompson
|
||
|
|
|
|
Name:
|
|
David W. Thompson
|
|
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
(
duly authorized and principal executive officer)
|
Signature
|
|
Title
|
|
|
|
/s/ David W. Thompson
|
|
|
David W. Thompson
|
|
President and Chief Executive Officer, Director (Principal Executive Officer)
|
|
|
|
/s/ Garrett E. Pierce
|
|
|
Garrett E. Pierce
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
/s/ Kenneth P. Sharp
|
|
|
Kenneth P. Sharp
|
|
Senior Vice President, Finance
|
/s/ Christopher A. Voci
|
|
|
Christopher A. Voci
|
|
Vice President and Controller (Principal Accounting Officer)
|
|
|
|
/s/ Kevin P. Chilton
|
|
|
Kevin P. Chilton
|
|
Director
|
|
|
|
/s/ Roxanne J. Decyk
|
|
|
Roxanne J. Decyk
|
|
Director
|
|
|
|
/s/ Martin C. Faga
|
|
|
Martin C. Faga
|
|
Director
|
|
|
|
/s/ Lennard A. Fisk
|
|
|
Lennard A. Fisk
|
|
Director
|
|
|
|
/s/ Ronald R. Fogleman
|
|
|
Ronald R. Fogleman
|
|
Chairman of the Board
|
|
|
|
/s/ Robert M. Hanisee
|
|
|
Robert M. Hanisee
|
|
Director
|
|
|
|
/s/ Ronald T. Kadish
|
|
|
Ronald T. Kadish
|
|
Director
|
|
|
|
/s/ Tig H. Krekel
|
|
|
Tig H. Krekel
|
|
Director
|
|
|
|
/s/ Douglas L. Maine
|
|
|
Douglas L. Maine
|
|
Director
|
|
|
|
/s/ Roman Martinez IV
|
|
|
Roman Martinez IV
|
|
Director
|
|
|
|
/s/ Janice I. Obuchowski
|
|
|
Janice I. Obuchowski
|
|
Director
|
|
|
|
/s/ James G. Roche
|
|
|
James G. Roche
|
|
Director
|
|
|
|
/s/ Harrison H. Schmitt
|
|
|
Harrison H. Schmitt
|
|
Director
|
|
|
|
/s/ Scott L. Webster
|
|
|
Scott L. Webster
|
|
Director
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
2.1*
|
|
Transaction Agreement, dated at April 28, 2014 among ATK, Vista SpinCo Inc., Vista Merger Sub Inc. and Orbital Sciences (Exhibit 2.1 to Form 8-K dated April 28, 2014).
|
|
|
|
3(i).1*
|
|
Restated Certificate of Incorporation of the Registrant, effective August 3, 2016 (Exhibit 3(i).1 to Form 10-Q for the quarter ended October 2, 2016).
|
|
|
|
3(ii).1*
|
|
Amended and Restated Bylaws of the Registrant, Effective May 3, 2016 (Exhibit 3(ii).1 to Form 10-Q for the quarter ended July 3, 2016).
|
|
|
|
4.1.1*
|
|
Indenture, dated at November 1, 2013, among the Registrant, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1 to Form 8-K dated November 1, 2013).
|
|
|
|
4.1.2*
|
|
Supplemental Indenture, dated at November 1, 2013, among the Registrant, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.2 to Form 8-K dated November 1, 2013).
|
|
|
|
4.1.3*
|
|
Second Supplemental Indenture, dated at February 20, 2015, among the Registrant, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1.3 to the Form 10-K for the year ended March 31, 2015 (the "Fiscal 2015 Form 10-K")).
|
|
|
|
4.1.4*
|
|
Form of 5.25% Senior Notes due 2021 (Exhibit A to Exhibit 4.1 to Form 8-K dated November 1, 2013).
|
|
|
|
4.1.5*
|
|
Registration Rights Agreement, dated November 1, 2013, by and among the Registrant, the subsidiaries of the Registrant party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers named therein (Exhibit 4.4 to Form 8-K dated November 1, 2013).
|
|
|
|
4.2.1*
|
|
Indenture, dated as of September 29, 2015, among the Registrant, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1 to Form 8-K dated September 29, 2015).
|
|
|
|
4.2.2*
|
|
Form of 5.50% Senior Notes due 2023 (Exhibit A to Exhibit 4.1 to Form 8-K dated September 29, 2015).
|
|
|
|
4.2.3*
|
|
Registration Rights Agreement, dated September 29, 2015, by and among the Registrant, the subsidiaries of the Registrant party thereto and Wells Fargo Securities, LLC, as representative of the several initial purchasers named therein (Exhibit 4.3 to Form 8-K dated September 29, 2015).
|
|
|
|
10.1*
|
|
Credit Agreement, dated as of September 29, 2015, by and among the Registrant, as Borrower, the subsidiaries of the Borrower party thereto as Guarantors, the Lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, Wells Fargo Bank, National Association, Citibank, N.A., Bank of America, N.A., JPMorgan Chase Bank, N.A., U.S. Bank, National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Issuing Lenders, Wells Fargo Bank, National Association and U.S. Bank, National Association, as Swingline Lenders, Wells Fargo Securities, LLC, CitiGroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, U.S. Bank, National Association, The Bank of Tokyo-Mitsubishi UFJ, Ltd., and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Joint Bookrunners, CitiGroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as Co-Syndication Agents, and U.S. Bank, National Association, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and SunTrust Bank, as Co-Documentation Agents (Exhibit 10.1 to Form 8-K dated September 29, 2015).
|
|
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
10.2*
|
|
Security and Pledge Agreement, dated as of September 29, 2015, among the Registrant, the other Obligors party thereto and Wells Fargo Bank, National Association, as Administrative Agent (Exhibit 10.2 to Form 8-K dated September 29, 2015).
|
|
|
|
10.3*
|
|
Tax Matters Agreement, dated at February 9, 2015, between the Registrant and Vista Outdoor Inc (Exhibit 10.1 to Form 8-K dated February 9, 2015).
|
|
|
|
10.4.1*
|
|
Purchase and Sale Agreement, dated at October 28, 1994, between the Registrant and Hercules Incorporated (the "Purchase Agreement"), including certain exhibits and certain schedules and a list of schedules and exhibits omitted (Exhibit 2 to Form 8-K dated October 28, 1994).
|
|
|
|
10.4.2*
|
|
Master Amendment to Purchase Agreement, dated at March 15, 1995, between the Registrant and Hercules Incorporated, including exhibits (Exhibit 2.2 to Form 8-K dated March 15, 1995).
|
|
|
|
10.5.1*
|
|
Environmental Agreement, dated at October 28, 1994, between the Registrant and Hercules Incorporated (Exhibit 10.2.1 to the Form 10-K for the year ended March 31, 2003 (the "Fiscal 2003 Form 10-K")).
|
|
|
|
10.5.2*
|
|
Amendment to Environmental Agreement, dated March 15, 1995 (Exhibit 10.2.2 to the Fiscal 2003 Form 10-K).
|
|
|
|
10.6*#
|
|
Form of Indemnification Agreement between the Registrant and its directors and officers (Exhibit 10.5 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.7*#
|
|
Description of non-employee Directors' cash and equity compensation ("Director Compensation—Summary Compensation Information" on page 23 of Schedule 14A filed on March 25, 2016).
|
|
|
|
10.8*#
|
|
Non-Employee Director Stock Program under the Orbital ATK, Inc. 2015 Stock Incentive Plan (Exhibit 10.4 to Form 10-Q for the quarter ended October 4, 2015).
|
|
|
|
10.9.1*#
|
|
Non-Employee Director Restricted Stock Award and Stock Deferral Program (as amended and restated October 30, 2007) Under the Alliant Techsystems Inc. 2005 Stock Incentive Plan (Exhibit 10.1 to Form 8-K dated October 29, 2007).
|
10.9.2*#
|
|
Amendment No. 1 (effective July 31, 2013) to Non-Employee Director Restricted Stock Award and Stock Deferral Program (as amended and restated October 30, 2007) Under the Alliant Techsystems Inc. 2005 Stock Incentive Plan (Exhibit 10.1 to the Form 10-Q for the quarter ended June 30, 2013).
|
|
|
|
10.10*#
|
|
Amended and Restated Non-Employee Director Restricted Stock Plan, Amended and Restated at October 30, 2007 (Exhibit 10.3 to Form 8-K dated October 29, 2007).
|
|
|
|
10.11*#
|
|
Deferred Fee Plan for Non-Employee Directors, as amended and restated October 30, 2007 (Exhibit 10.2 to Form 8-K dated October 29, 2007).
|
|
|
|
10.12*#
|
|
Orbital ATK Inc. Executive Officer Incentive Plan (as of May 3, 2016) (Exhibit 10.1 to Form 8-K dated May 3, 2016).
|
|
|
|
10.13.1*#
|
|
Orbital ATK, Inc. 2015 Stock Incentive Plan (Exhibit 4.2 to the Registration Statement on Form S-8 (File No. 333-206123 filed August 6, 2015).
|
|
|
|
10.13.2*#
|
|
Form of Non-Qualified Stock Option Award Agreement (Installment Vesting) under the Orbital ATK, Inc. 2015 Stock Incentive Plan (Exhibit 10.14.2 to the Form 10-K for the nine-month transition period ended December 31, 2015 (the "2015 Transition Period Form 10-K").
|
|
|
|
10.13.3*#
|
|
Form of Performance Share Award Agreement under the Orbital ATK, Inc. 2015 Stock Incentive Plan for the three-fiscal-year period beginning January 1, 2016 (Exhibit 10.14.3 to the 2015 Transition Period Form 10-K).
|
|
|
|
10.13.4#
|
|
Form of Performance Share Award Agreement under the Orbital ATK, Inc. 2015 Stock Incentive Plan for the three-fiscal-year period beginning January 1, 2017.
|
|
|
|
10.13.5*#
|
|
Form of Restricted Stock Award Agreement (Installment Vesting) under the Orbital ATK, Inc. 2015 Stock Incentive Plan (Exhibit 10.14.3 to the 2015 Transition Period Form 10-K).
|
|
|
|
10.14.1*#
|
|
Alliant Techsystems Inc. 2005 Stock Incentive Plan (As Amended and Restated Effective August 7, 2012) (Exhibit 10.1 to Form 8-K dated August 7, 2012).
|
|
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
10.14.2*#
|
|
Form of Non-Qualified Stock Option Award Agreement (Installment Vesting) under the Alliant Techsystems Inc. 2005 Stock Incentive Plan, for option grants in the years ended March 31, 2012 and March 31, 2013 (Exhibit 10.13.3 to the Form 10-K for the year ended March 31, 2012).
|
|
|
|
10.14.3*#
|
|
Form of Non-Qualified Stock Option Award Agreement (Installment Vesting) under the Alliant Techsystems Inc. 2005 Stock Incentive Plan, for option grants in the year ended March 31, 2014 (Exhibit 10.12.4 to the Form 10-K for the year ended March 31, 2014 (the "Fiscal 2014 Form 10-K")).
|
|
|
|
10.14.4*#
|
|
Amendment to ATK Non-Qualified Stock Option Award Agreement (applicable to options outstanding at February 9, 2015) (Exhibit 10.13.5 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.14.5*#
|
|
Form of Non-Qualified Stock Option Award Agreement (Installment Vesting) under the Alliant Techsystems Inc. 2005 Stock Incentive Plan, for option grants in the year ended March 31, 2015 (Exhibit 10.13.6 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.14.6*#
|
|
Form of Performance Growth Award Agreement under the Alliant Techsystems Inc. 2005 Stock Incentive Plan for the Fiscal Year 2015-2017 Performance Period (Exhibit 10.12.8 to the Fiscal 2014 Form 10-K).
|
|
|
|
10.14.7*#
|
|
Amendment to ATK Performance Growth Award Agreement (for certain corporate officers remaining with Orbital ATK, Inc.) (Exhibit 10.13.9 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.14.8*#
|
|
Amendment to ATK Performance Growth Award Agreement (for Michael A. Kahn and Blake E. Larson) (Exhibit 10.13.10 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.14.9*#
|
|
Form of Performance Growth Award Agreement under the Alliant Techsystems Inc. 2005 Stock Incentive Plan for the three-fiscal-year period beginning April 1, 2015 (Exhibit 10.13.11 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.14.10*#
|
|
Form of Restricted Stock Award Agreement (Installment Vesting) under the Alliant Techsystems Inc. 2005 Stock Incentive Plan, for restricted stock grants in the year ended March 31, 2014 (Exhibit 10.12.11 to the Fiscal 2014 Form 10-K).
|
|
|
|
10.14.11*#
|
|
Amendment to ATK Restricted Stock Award Agreement (for restricted stock awards outstanding as of February 9, 2015) (Exhibit 10.13.14 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.14.12*#
|
|
Form of Restricted Stock Award Agreement (Installment Vesting) under the Alliant Techsystems Inc. 2005 Stock Incentive Plan, for restricted stock grants in the year ended March 31, 2015 (Exhibit 10.13.15 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.15.1*#
|
|
Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan (Exhibit 10.16.1 to the Form 10-K for the year ended March 31, 2007).
|
|
|
|
10.15.2*#
|
|
Amendment No. 1 to Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan effective May 8, 2001 (Exhibit 10.7.2 to the Form 10-K for the year ended March 31, 2002 (the "Fiscal 2002 Form 10-K")).
|
|
|
|
10.15.3*#
|
|
Amendment No. 2 to Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan effective March 19, 2002 (Exhibit 10.7.3 to the Fiscal 2002 Form 10-K).
|
|
|
|
10.15.4*#
|
|
Amendment No. 3 to Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan effective October 29, 2002 (Exhibit 10.6.4 to the Form 10-K for the year ended March 31, 2004).
|
|
|
|
10.15.5*#
|
|
Amendment No. 4 to Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan effective October 29, 2002 (Exhibit 10.3 to Form 8-K dated January 30, 2007).
|
|
|
|
10.16.1*#
|
|
Orbital ATK, Inc. Nonqualified Deferred Compensation Plan, as Amended and Restated February 16, 2016 (Exhibit 10.17.1 to the 2015 Transition Period Form 10-K).
|
|
|
|
10.16.2*#
|
|
Trust Agreement for Nonqualified Deferred Compensation Plan effective January 1, 2003 (Exhibit 10.9.2 to the Fiscal 2003 Form 10-K).
|
|
|
|
10.17*#
|
|
Alliant Techsystems Inc. Executive Severance Plan as amended effective October 29, 2007 (Exhibit 10.7 to Form 8-K dated October 29, 2007).
|
|
|
|
10.18*#
|
|
Alliant Techsystems Inc. Defined Benefit Supplemental Executive Retirement Plan, as Amended and Restated effective February 9, 2015 (Exhibit 10.17 to the Fiscal 2015 Form 10-K).
|
|
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
10.19.1*#
|
|
Alliant Techsystems Inc. Defined Contribution Supplemental Executive Retirement Plan, as Amended and Restated effective July 1, 2013 (Exhibit 10.2 to Form 8-K dated January 31, 2013).
|
|
|
|
10.19.2*#
|
|
First Amendment, effective at February 9, 2015, to the Alliant Techsystems Inc. Defined Contribution Supplemental Executive Retirement Plan, as Amended and Restated effective July 1, 2013 (Exhibit 10.18.2 to the Fiscal 2015 Form 10-K).
|
|
|
|
10.20*#
|
|
Orbital ATK, Inc. Income Security Plan Effective May 5, 2015 (Exhibit 10.21 to the 2015 Transition Period Form 10-K).
|
|
|
|
10.21*#
|
|
Alliant Techsystems Inc. Income Security Plan, As Amended and Restated, Effective July 1, 2013 (Exhibit 10.1 to Form 8-K dated July 30, 2013).
|
|
|
|
10.23.1*#
|
|
Trust Under Income Security Plan dated May 4, 1998 (effective March 2, 1998), by and between the Registrant and U.S. Bank National Association (Exhibit 10.20.1 to the Form 10-K for the fiscal year ended March 31, 1998).
|
|
|
|
10.22.2*#
|
|
First Amendment to the Trust Under the Income Security Plan effective December 4, 2001, by and between the Registrant and U.S. Bank National Association (Exhibit 10.17.2 to the Fiscal 2002 Form 10-K).
|
|
|
|
10.23*#
|
|
Executive Severance Agreement, dated November 30, 2007, between Orbital Sciences Corporation and Garrett E. Pierce (Exhibit 10.5 to Form 8-K dated February 9, 2015).
|
|
|
|
10.24.1*#
|
|
Orbital Sciences Corporation Amended and Restated 2005 Stock Incentive Plan, assumed by the Registrant in the Merger (Exhibit 99.2 to the Registrant's Registration Statement on Form S-8 dated February 9, 2015).
|
|
|
|
10.24.2*#
|
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2012 Form of Restricted Stock Unit Agreement of Orbital Sciences Corporation under the Orbital Sciences Corporation Amended and Restated 2005 Stock Incentive Plan, assumed by the Registrant in the Merger (Exhibit 10.22.2 to the Fiscal 2015 Form 10-K).
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10.24.3*#
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2014 Form of Restricted Stock Unit Agreement of Orbital Sciences Corporation under the Orbital Sciences Corporation Amended and Restated 2005 Stock Incentive Plan, assumed by the Registrant in the Merger (Exhibit 10.22.3 to the Fiscal 2015 Form 10-K).
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10.25.1*#
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Orbital Sciences Corporation Nonqualified Management Deferred Compensation Plan, assumed by the Registrant in the Merger (Exhibit 10.13 to Orbital Sciences Corporation's Annual Report on Form 10-K for the year ended December 31, 2006).
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10.25.2*#
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Amendment Number One to the Orbital Sciences Corporation Nonqualified Management Deferred Compensation Plan, effective January 1, 2011 (Exhibit 10.26.2 to the 2015 Transition Period Form 10-K).
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14*
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The Registrant's Code of Ethics and Business Conduct is available on the Corporate Governance page of the Registrant's website at http://phx.corporate-ir.net/phoenix.zhtml?c=81036&p=irol-govHighlights by selecting the Code of Conduct link.
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18
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Letter from PricewaterhouseCoopers LLP, regarding change in evaluating goodwill impairment
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21
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Subsidiaries of the Registrant as of December 31, 2016.
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23.1
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Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
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23.2
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Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
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31.1
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Certification of Chief Executive Officer.
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31.2
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Certification of Chief Financial Officer.
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32
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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.
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document.
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Exhibit
Number |
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Description of Exhibit (and document from which incorporated by reference, if applicable)
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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1.
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The Grant.
Orbital ATK, Inc., a Delaware corporation (the “Company”), hereby grants to you, on the terms and conditions set forth in this Performance Award Agreement (this “Agreement”) and in the Orbital ATK, Inc. 2015 Stock Incentive Plan (the “Plan”), a Performance Award as of the date, and for the number of Shares (the “Performance Shares”), which the Company or its agent provided to you separately in writing through an electronic notice and on-line award acceptance web page (the “Electronic Notice and On-Line Award Acceptance”).
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2.
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Measuring Period.
The Measuring Period for purposes of determining whether the Company will pay you the Performance Shares shall be
the three-fiscal-year period beginning January 1, 2017
.
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3.
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Performance Goals.
The Performance Goals for purposes of determining whether the Company will pay you the Performance Shares are set forth in the Performance Accountability Chart, which the Company provided to you separately in writing.
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4.
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Payment
. The Company will pay you the Performance Shares if and to the extent that the Performance Goals are achieved, as set forth in the Performance Accountability Chart and as determined by the Compensation and Human Resources Committee of the Company’s Board of Directors (the “Committee”) in its sole discretion. Notwithstanding the foregoing, the Committee has the discretion to adjust the payment level downward from the level of performance actually achieved.
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5.
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Form and Timing of Payment.
The Company will pay you any shares payable pursuant to this Agreement in shares of common stock of the Company (the “Shares”), with one Share issued for each Performance Share earned. The Company will pay you the Performance Shares as soon as practicable after the Committee determines, in its sole discretion, after the end of the Measuring Period, whether, and the extent to which, the Performance Goals have been achieved, but in no event later than 2 ½ months after the end of the Measuring Period.
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6.
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Change in Control.
If you are involuntarily terminated without Cause in connection with a Change in Control (as defined in Appendix A to this Agreement), the Performance Shares shall immediately be payable at the target performance level, but prorated for your active service time with the Company during the Measuring Period, provided, however, that you have signed a general release and non-competition/non-solicitation agreement provided to you by the Company at that time. However, if you are or become a participant in the Company’s applicable Income Security Plan or any successor or substitute plan (the “ISP”), then, in the event of a Change in Control (as defined in the ISP), the provisions of the ISP shall govern and take precedence over the terms of this Agreement.
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7.
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Forfeiture.
In the event of your termination of employment prior to the end of the Measuring Period, other than by reason of death, Disability (as defined in Appendix A to this Agreement), Retirement (as defined in Appendix A to this Agreement), or involuntary termination without Cause (as defined in Appendix A to this Agreement), all of your Performance Shares and rights to payment of any Shares shall be immediately and irrevocably forfeited. In the event of your termination of employment prior to the end of the Measuring Period by reason of Disability, Retirement, or involuntary termination without Cause, you shall be entitled to receive, after the end of the Measuring Period, the number of Shares determined by the Committee pursuant to this Agreement, but prorated for your active service time with the Company during the Measuring Period, provided, however, in the event of your involuntary termination without Cause, that you have signed a general release and non-competition/non-solicitation agreement provided to you by the Company at that time. In the event of your death prior to the end of the Measuring Period, your estate shall be entitled to receive, within a practicable time after your death, payment of the Performance Shares at the threshold performance level, but prorated for your active service time with the Company during the Measuring Period.
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8.
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Recoupment
. If you are or become an “Executive Officer” as defined in the Company’s Executive Compensation Recoupment Policy (the “Recoupment Policy”), you will be subject to the Recoupment Policy.
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9.
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Holding Requirement.
If you are or become an officer of the Company subject to the Stock Holding Policy for Executive Officers and Certain Members of Senior Management (the “Stock Holding Policy”), you will be required to comply with the Stock Holding Policy.
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10.
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Rights.
Nothing herein shall be deemed to grant you any rights as a holder of Shares unless and until the Company actually issues the Shares to you as provided herein.
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11.
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Income Taxes.
You are liable for any federal, state and local income or other taxes applicable upon the grant of the Performance Shares, the receipt of the Shares, or subsequent disposition of the Shares, and you acknowledge that you should consult with your own tax advisor regarding the applicable tax consequences. Upon payment of the Performance Shares and/or issuance of the Shares to you, the Company will pay your required minimum statutory withholding taxes by withholding Shares otherwise to be delivered upon the payment of the Performance Shares with a Fair Market Value (as defined in the Plan) equal to the amount of such taxes. Alternatively, if you notify the Company prior to the end of the Measuring Period, you may elect to pay all or a portion of the minimum statutory withholding taxes by (a) delivering to the Company Shares other than Shares issuable upon the payment of the Performance Shares with a Fair Market Value equal to the amount of such taxes or (b) paying cash, provided that if you do not deliver such Shares or cash to the Company by the second business day after the payment date of the Performance Shares, the Company will pay your required minimum statutory withholding taxes by withholding Shares otherwise to be delivered upon the payment of the Performance Shares with a Fair Market Value equal to the amount of such taxes.
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12.
|
Acknowledgment.
This Award of Performance Shares shall not be effective until you agree to the terms and conditions of this Agreement and the Plan, and acknowledge receipt of a copy of the Prospectus relating to the Plan, by accepting this Award in writing or electronically as specified by the Company or its agent in the Electronic Notice and On-Line Award Acceptance.
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ORBITAL ATK, INC.
David W. Thompson
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President & Chief Executive Officer
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A.
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“Disability” means that you have been determined to have a total and permanent disability either by
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i.
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being eligible for disability for Social Security purposes, or
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ii.
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being totally and permanently disabled under the Company’s long-term disability plan.
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B.
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“Retirement” means
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i.
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if you are a current participant in a Company defined benefit plan, then “Retirement” is defined by that defined benefit plan, or
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ii.
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if you are not a current participant in a Company defined benefit plan, then “Retirement” means that you have reached age 55 and have at least five years of “vesting service” as defined in the Company’s 401(k) Plan.
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C.
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“Cause” means the occurrence of any of the following:
|
i.
|
You willfully and repeatedly fail to substantially perform your duties with the Company in accordance with the instructions of your manager (other than any such failure resulting from your incapacity due to physical or mental illness), which failure continues for 30 days unabated after a demand for substantial performance is delivered to you by your manager that specifically identifies the manner in which your manager believes that you have not substantially performed your duties,
|
ii.
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You willfully engage in gross misconduct demonstrably injurious to the Company, monetarily or otherwise,
|
iii.
|
You engage in fraud, misappropriation or embezzlement of funds or property of the Company,
|
iv.
|
You are convicted of a felony or enter a plea of guilty or nolo contendere to a felony, or
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v.
|
You are convicted of any crime involving fraud, embezzlement, or moral turpitude or the entrance of a plea of guilty or nolo contendere to such a crime.
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D.
|
“
Change in Control
” means the occurrence of any of the following:
|
i.
|
the acquisition by any Person of Beneficial Ownership of 40% or more of the outstanding shares of the Company’s Voting Securities;
|
ii.
|
the consummation of a reorganization, merger or consolidation of the Company or sale or other disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”), unless such Corporate Transaction is a transaction pursuant to which all or substantially all of the Persons who are the Beneficial Owners of the Company immediately prior to the Corporate Transaction will beneficially own, directly or indirectly, 60% or more of the outstanding shares of Voting Securities of the resulting or combined entity;
|
iii.
|
individuals who, as of May 5, 2015, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided
,
however
, that (A) any individual who becomes a member of the Board subsequent to May 5, 2015, whose election (or nomination for election by the Company’s stockholders) was approved by the vote of at least a majority of the directors then comprising the Incumbent Board, will be deemed a member of the Incumbent Board and (B) any individual who is initially elected as a member of the Board as a result of any actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board will not be deemed a member of the Incumbent Board;
|
iv.
|
approval by the stockholders of the Company of a complete liquidation or dissolution of the Company; or
|
v.
|
any other circumstances (whether or not following a Change Event) which the Board determines to be a Change in Control for purposes of this Plan after giving due consideration to the nature of the circumstances then presented and the purposes of this Plan. Any such determination made by the Board will be irrevocable except by vote of a majority of the members of the Board who voted in favor of making such determination.
|
E.
|
“
Change Event
” means either of the following:
|
i.
|
the acquisition by any Person (other than the Company or a subsidiary or an employee benefit plan (including its trustee) of the Company) of Beneficial Ownership, directly or indirectly, of shares of Voting Securities of the Company directly or indirectly representing 15% or more of the total number of the then outstanding shares of the Company’s Voting Securities (excluding the sale or issuance of any Voting Securities directly by the Company, or any transaction in which the acquisition of such Voting Securities is made by such Person from five or fewer stockholders in a transaction or transactions approved in advance by the Board); or
|
ii.
|
the agreement, or the public announcement of an intention, by any Person or Persons, to take any action, which if completed, would constitute a Change in Control.
|
F.
|
“
Beneficial Owner
” or “
Beneficial Ownership
” will have the meaning given to such term in Rule 13d‑3 under the Exchange Act.
|
G.
|
“
Board
” or “
Board of Directors
” means the Board of Directors of the Company.
|
H.
|
“
Person
” will have the meaning given to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof (including a “group” as defined in Section 13(d)).
|
I.
|
“
Voting Securities
” means any shares of capital stock of any entity that are generally entitled to vote in elections for members of the board of directors.
|
Subsidiaries of Orbital ATK, Inc.
as of December 31 , 2016
|
||
|
|
|
All subsidiaries listed below are 100% owned except joint ventures.
|
||
|
|
|
Subsidiaries
|
State or Other Jurisdiction of Incorporation or Organization
|
|
Alliant Techsystems Operations LLC
|
Delaware
|
|
Alliant Techsystems Operations Saudi Arabia Ltd. (joint venture)
|
Saudi Arabia
|
|
ATK Launch Systems Inc.
|
Delaware
|
|
ATK Space Systems Inc.
|
Delaware
|
|
COI Ceramics, Inc. (joint venture)
|
California
|
|
Orbital ATK Middle East L.L.C. (joint venture)
|
United Arab Emirates
|
|
Orbital ATK Pte. Ltd.
|
Singapore
|
|
Orbital ATK UK Ltd.
|
United Kingdom
|
|
Orbital Sciences Corporation
|
Delaware
|
|
Space Logistics LLC
|
Delaware
|
Date: April 28, 2017
|
By:
|
|
/s/ David W. Thompson
|
|
Name:
|
|
David W. Thompson
|
|
Title:
|
|
President and Chief Executive Officer
|
Date: April 28, 2017
|
By:
|
|
/s/ Garrett E. Pierce
|
|
Name:
|
|
Garrett E. Pierce
|
|
Title:
|
|
Chief Financial Officer
|
Date: April 28, 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
|