|
x
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended October 1, 2017
|
||
|
||
OR
|
||
|
|
|
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the transition period from to
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
41-1672694
(I.R.S. Employer
Identification No.)
|
45101 Warp Drive
|
|
|
Dulles, Virginia
|
|
20166
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Large accelerated filer
|
x
|
|
|
|
|
Accelerated filer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
|
|
(Amounts in millions except share data)
|
October 1, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
119
|
|
|
$
|
200
|
|
Net receivables
|
1,939
|
|
|
1,741
|
|
||
Net inventories
|
267
|
|
|
215
|
|
||
Other current assets
|
90
|
|
|
79
|
|
||
Total current assets
|
2,415
|
|
|
2,235
|
|
||
Property, plant and equipment, net of accumulated depreciation of $1,191
at October 1, 2017 and $1,121 at December 31, 2016 |
858
|
|
|
816
|
|
||
Goodwill
|
1,832
|
|
|
1,832
|
|
||
Net intangibles
|
70
|
|
|
98
|
|
||
Other noncurrent assets
|
362
|
|
|
437
|
|
||
Total assets
|
$
|
5,537
|
|
|
$
|
5,418
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
40
|
|
|
$
|
40
|
|
Accounts payable
|
141
|
|
|
175
|
|
||
Contract loss reserve
|
160
|
|
|
197
|
|
||
Contract advances and allowances
|
274
|
|
|
233
|
|
||
Accrued compensation
|
142
|
|
|
120
|
|
||
Other current liabilities
|
536
|
|
|
577
|
|
||
Total current liabilities
|
1,293
|
|
|
1,342
|
|
||
Long-term debt
|
1,370
|
|
|
1,398
|
|
||
Pension and postemployment benefits
|
705
|
|
|
744
|
|
||
Other noncurrent liabilities
|
106
|
|
|
117
|
|
||
Total liabilities
|
3,474
|
|
|
3,601
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Common stock—$.01 par value: authorized—180,000,000 shares; issued and outstanding—57,685,462 shares at October 1, 2017 and 57,487,466 shares at December 31, 2016
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
2,169
|
|
|
2,175
|
|
||
Retained earnings
|
1,459
|
|
|
1,266
|
|
||
Accumulated other comprehensive loss
|
(714
|
)
|
|
(764
|
)
|
||
Common stock in treasury, at cost—11,249,562 shares held at October 1, 2017 and 11,447,558 shares held at December 31, 2016
|
(863
|
)
|
|
(872
|
)
|
||
Total Orbital ATK, Inc. stockholders' equity
|
2,052
|
|
|
1,806
|
|
||
Noncontrolling interest
|
11
|
|
|
11
|
|
||
Total equity
|
2,063
|
|
|
1,817
|
|
||
Total liabilities and equity
|
$
|
5,537
|
|
|
$
|
5,418
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
(Amounts in millions except per share data)
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Sales
|
|
$
|
1,216
|
|
|
$
|
1,043
|
|
|
$
|
3,416
|
|
|
$
|
3,183
|
|
Cost of sales
|
|
941
|
|
|
833
|
|
|
2,645
|
|
|
2,466
|
|
||||
Gross profit
|
|
275
|
|
|
210
|
|
|
771
|
|
|
717
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
|
24
|
|
|
25
|
|
|
78
|
|
|
81
|
|
||||
Selling
|
|
31
|
|
|
28
|
|
|
90
|
|
|
82
|
|
||||
General and administrative
|
|
78
|
|
|
66
|
|
|
214
|
|
|
195
|
|
||||
Income before interest, income taxes and noncontrolling interest
|
|
142
|
|
|
91
|
|
|
389
|
|
|
359
|
|
||||
Net interest expense
|
|
(17
|
)
|
|
(17
|
)
|
|
(51
|
)
|
|
(51
|
)
|
||||
Income before income taxes and noncontrolling interest
|
|
125
|
|
|
74
|
|
|
338
|
|
|
308
|
|
||||
Income taxes
|
|
31
|
|
|
14
|
|
|
90
|
|
|
80
|
|
||||
Income before noncontrolling interest
|
|
94
|
|
|
60
|
|
|
248
|
|
|
228
|
|
||||
Less net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
94
|
|
|
$
|
60
|
|
|
$
|
248
|
|
|
$
|
228
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share from:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
1.65
|
|
|
$
|
1.04
|
|
|
$
|
4.33
|
|
|
$
|
3.92
|
|
Weighted-average number of common shares outstanding
|
|
57
|
|
|
58
|
|
|
57
|
|
|
58
|
|
||||
Diluted earnings per common share from:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
1.64
|
|
|
$
|
1.04
|
|
|
$
|
4.29
|
|
|
$
|
3.89
|
|
Weighted-average number of diluted common shares outstanding
|
|
58
|
|
|
58
|
|
|
58
|
|
|
59
|
|
||||
Cash dividends per common share
|
|
$
|
0.32
|
|
|
$
|
0.30
|
|
|
$
|
0.96
|
|
|
$
|
0.90
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
(Amounts in millions)
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Net income
|
|
$
|
94
|
|
|
$
|
60
|
|
|
$
|
248
|
|
|
$
|
228
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
||||||||
Prior service credits for pension and postretirement benefit plans recorded to net income
|
|
(7
|
)
|
|
33
|
|
|
(21
|
)
|
|
20
|
|
||||
Net actuarial loss for pension and postretirement benefit plans recorded to net income
|
|
33
|
|
|
29
|
|
|
100
|
|
|
92
|
|
||||
Valuation adjustment for pension and postretirement benefit plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Change in fair value of derivatives
|
|
4
|
|
|
1
|
|
|
1
|
|
|
5
|
|
||||
Unrealized gain on available-for-sale securities
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Income tax expense
|
|
(12
|
)
|
|
(24
|
)
|
|
(31
|
)
|
|
(46
|
)
|
||||
Other comprehensive income, net of tax
|
|
19
|
|
|
40
|
|
|
50
|
|
|
75
|
|
||||
Comprehensive income
|
|
113
|
|
|
100
|
|
|
298
|
|
|
303
|
|
||||
Less comprehensive income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive income attributable to Orbital ATK, Inc.
|
|
$
|
113
|
|
|
$
|
100
|
|
|
$
|
298
|
|
|
$
|
303
|
|
|
|
Nine Months Ended
|
||||||
(Amounts in millions)
|
|
October 1, 2017
|
|
October 2, 2016
|
||||
Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
248
|
|
|
$
|
228
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
115
|
|
|
120
|
|
||
Fixed asset impairment
|
|
3
|
|
|
5
|
|
||
Deferred income taxes
|
|
13
|
|
|
(12
|
)
|
||
Stock-based plans expense
|
|
18
|
|
|
18
|
|
||
Other
|
|
4
|
|
|
11
|
|
||
Change in assets and liabilities:
|
|
|
|
|
||||
Net receivables
|
|
(168
|
)
|
|
(203
|
)
|
||
Net inventories
|
|
(25
|
)
|
|
(22
|
)
|
||
Income taxes receivable
|
|
—
|
|
|
50
|
|
||
Accounts payable
|
|
(58
|
)
|
|
39
|
|
||
Contract loss reserve
|
|
(36
|
)
|
|
(24
|
)
|
||
Contract advances and allowances
|
|
41
|
|
|
(18
|
)
|
||
Accrued compensation
|
|
22
|
|
|
(7
|
)
|
||
Pension and postemployment benefits
|
|
40
|
|
|
(8
|
)
|
||
Other assets and liabilities
|
|
(60
|
)
|
|
(70
|
)
|
||
Cash flows provided by operating activities
|
|
157
|
|
|
107
|
|
||
Investing Activities
|
|
|
|
|
||||
Capital expenditures
|
|
(138
|
)
|
|
(106
|
)
|
||
Cash flows used in investing activities
|
|
(138
|
)
|
|
(106
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Borrowings on revolving credit facilities
|
|
450
|
|
|
800
|
|
||
Payments on revolving credit facilities
|
|
(450
|
)
|
|
(665
|
)
|
||
Payment of long-term debt
|
|
(30
|
)
|
|
(30
|
)
|
||
Purchase of treasury shares
|
|
(32
|
)
|
|
(95
|
)
|
||
Dividends paid
|
|
(55
|
)
|
|
(53
|
)
|
||
Proceeds from employee stock compensation plans
|
|
17
|
|
|
—
|
|
||
Other
|
|
—
|
|
|
1
|
|
||
Cash flows used in financing activities
|
|
(100
|
)
|
|
(42
|
)
|
||
Decrease in cash and cash equivalents
|
|
(81
|
)
|
|
(41
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
200
|
|
|
104
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
119
|
|
|
$
|
63
|
|
|
|
|
|
|
||||
Supplemental Cash Flow Disclosures
|
|
|
|
|
||||
Noncash investing activity:
|
|
|
|
|
||||
Capital expenditures included in accounts payable
|
|
$
|
5
|
|
|
$
|
4
|
|
Noncash financing activity:
|
|
|
|
|
||||
Treasury shares purchased included in accounts payable
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Fixed-rate debt
|
|
$
|
700
|
|
|
$
|
739
|
|
|
$
|
700
|
|
|
$
|
727
|
|
Variable-rate debt
|
|
$
|
720
|
|
|
$
|
716
|
|
|
$
|
750
|
|
|
$
|
746
|
|
|
|
Notional
|
|
Fair Value
|
|
Pay Fixed
|
|
Receive Floating
|
|
Maturity Date
|
||||||
Non-amortizing swap
|
|
$
|
100
|
|
|
$
|
—
|
|
|
1.69
|
%
|
|
1.24
|
%
|
|
August 2018
|
Non-amortizing swap
|
|
$
|
50
|
|
|
$
|
—
|
|
|
1.10
|
%
|
|
1.24
|
%
|
|
November 2017
|
|
|
Number of Pounds
|
|
Copper
|
|
17
|
|
Zinc
|
|
6
|
|
|
|
Quantity Hedged
|
|
Euros sold
|
|
16
|
|
Euros purchased
|
|
52
|
|
|
|
Asset Derivatives
Fair Value
|
|
Liability Derivatives
Fair Value
|
||||||||||||
|
|
October 1, 2017
|
|
December 31, 2016
|
|
October 1, 2017
|
|
December 31, 2016
|
||||||||
Commodity forward contracts
(1)
|
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(1)
|
|
3
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||
Foreign currency forward contracts
(2)
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||
Interest rate swap contracts
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total
|
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
|
Quarters Ended
|
||||||
|
|
Location
|
|
October 1, 2017
|
|
October 2, 2016
|
||||
Commodity forward contracts
|
|
Cost of sales
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Foreign currency contracts
|
|
Cost of sales
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Nine Months Ended
|
||||||
|
|
Location
|
|
October 1, 2017
|
|
October 2, 2016
|
||||
Commodity forward contracts
|
|
Cost of sales
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
Interest rate contracts
|
|
Interest expense
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
Foreign currency contracts
|
|
Cost of sales
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
Derivatives
|
|
$
|
5
|
|
|
$
|
5
|
|
Pension and other postretirement benefits
|
|
(721
|
)
|
|
(771
|
)
|
||
Available-for-sale securities
|
|
2
|
|
|
2
|
|
||
Total Accumulated Other Comprehensive Loss
|
|
$
|
(714
|
)
|
|
$
|
(764
|
)
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
|
$
|
149
|
|
|
$
|
93
|
|
Work / contracts in process
|
|
94
|
|
|
121
|
|
||
Finished goods
|
|
24
|
|
|
1
|
|
||
Net inventories
|
|
$
|
267
|
|
|
$
|
215
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Service cost
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
13
|
|
|
$
|
14
|
|
Interest cost
|
|
24
|
|
|
25
|
|
|
73
|
|
|
76
|
|
||||
Expected return on plan assets
|
|
(39
|
)
|
|
(41
|
)
|
|
(118
|
)
|
|
(122
|
)
|
||||
Amortization of unrecognized net loss
(1)
|
|
32
|
|
|
31
|
|
|
98
|
|
|
94
|
|
||||
Amortization of unrecognized prior service cost
(1)
|
|
(5
|
)
|
|
(5
|
)
|
|
(15
|
)
|
|
(16
|
)
|
||||
Net periodic benefit cost
|
|
17
|
|
|
15
|
|
|
51
|
|
|
46
|
|
||||
Special termination benefit cost / curtailment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net periodic benefit cost
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
51
|
|
|
$
|
48
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Interest cost
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Expected return on plan assets
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||
Amortization of unrecognized net loss
(1)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Amortization of unrecognized prior service cost
(1)
|
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||
Net periodic benefit income
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
(3
|
)
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
Senior Credit Facility:
|
|
|
|
|
||||
Term Loan A due 2020
|
|
$
|
720
|
|
|
$
|
750
|
|
Revolving Credit Facility due 2020
|
|
—
|
|
|
—
|
|
||
5.25% Senior Notes due 2021
|
|
300
|
|
|
300
|
|
||
5.50% Senior Notes due 2023
|
|
400
|
|
|
400
|
|
||
Principal amount of long-term debt
|
|
1,420
|
|
|
1,450
|
|
||
Unamortized debt issuance costs:
|
|
|
|
|
||||
Senior Credit Facility
|
|
4
|
|
|
5
|
|
||
5.25% Senior Notes due 2021
|
|
1
|
|
|
2
|
|
||
5.50% Senior Notes due 2023
|
|
5
|
|
|
5
|
|
||
Unamortized debt issuance costs
|
|
10
|
|
|
12
|
|
||
Long-term debt less unamortized debt issuance costs
|
|
1,410
|
|
|
1,438
|
|
||
Less: Current portion of long-term debt
|
|
40
|
|
|
40
|
|
||
Long-term debt
|
|
$
|
1,370
|
|
|
$
|
1,398
|
|
Remainder of 2017
|
|
$
|
10
|
|
2018
|
|
40
|
|
|
2019
|
|
40
|
|
|
2020
|
|
630
|
|
|
2021
|
|
300
|
|
|
Thereafter
|
|
400
|
|
|
Total
|
|
$
|
1,420
|
|
•
|
up to
58,506
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, 2017 and ending December 31, 2019; and
|
•
|
up to
71,074
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
79,235
will become payable upon achievement of financial performance goals relating to absolute earnings per share growth and absolute sales growth for the performance period beginning April 1, 2015 and ending December 31, 2017.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||
Basic weighted-average number of shares outstanding
|
|
57.31
|
|
|
57.93
|
|
|
57.37
|
|
|
58.21
|
|
Dilutive common share equivalents - share-based equity awards
|
|
0.45
|
|
|
0.33
|
|
|
0.49
|
|
|
0.43
|
|
Diluted weighted-average number of shares outstanding
|
|
57.76
|
|
|
58.26
|
|
|
57.86
|
|
|
58.64
|
|
Anti-dilutive stock options and other stock awards excluded from the calculation of diluted shares
|
|
0.15
|
|
|
0.15
|
|
|
0.22
|
|
|
0.15
|
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Liability
|
|
Receivable
|
|
Liability
|
|
Receivable
|
||||||||
Current
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
3
|
|
Noncurrent
|
|
32
|
|
|
14
|
|
|
35
|
|
|
15
|
|
||||
Total
|
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
41
|
|
|
$
|
18
|
|
•
|
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.
|
•
|
Defense Systems Group develops and produces small-, medium- and large-caliber ammunition, propulsion systems for tactical missiles and missile defense applications, strike weapons, precision weapons and munitions, high-performance gun systems, aircraft survivability systems, fuzes and warheads, energetic materials and special mission aircraft.
|
•
|
Space Systems Group develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting, conduct space-related scientific research and perform other activities related to national security. In addition, Space Systems Group develops and produces human-rated space systems for Earth-orbit and deep-space exploration, including cargo delivery to the International Space Station. This group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. Government agencies.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Sales to external customers:
|
|
|
|
|
|
|
|
|
||||||||
Flight Systems Group
|
|
$
|
423
|
|
|
$
|
360
|
|
|
$
|
1,214
|
|
|
$
|
1,081
|
|
Defense Systems Group
|
|
511
|
|
|
451
|
|
|
1,378
|
|
|
1,326
|
|
||||
Space Systems Group
|
|
282
|
|
|
232
|
|
|
824
|
|
|
776
|
|
||||
Total external sales
|
|
1,216
|
|
|
1,043
|
|
|
3,416
|
|
|
3,183
|
|
||||
Intercompany sales:
|
|
|
|
|
|
|
|
|
||||||||
Flight Systems Group
|
|
3
|
|
|
3
|
|
|
8
|
|
|
10
|
|
||||
Defense Systems Group
|
|
4
|
|
|
5
|
|
|
12
|
|
|
15
|
|
||||
Space Systems Group
|
|
32
|
|
|
16
|
|
|
93
|
|
|
37
|
|
||||
Corporate
|
|
(39
|
)
|
|
(24
|
)
|
|
(113
|
)
|
|
(62
|
)
|
||||
Total intercompany sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total sales
|
|
$
|
1,216
|
|
|
$
|
1,043
|
|
|
$
|
3,416
|
|
|
$
|
3,183
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income before interest, income taxes and noncontrolling interest:
|
|
|
|
|
|
|
|
|
||||||||
Flight Systems Group
|
|
$
|
61
|
|
|
$
|
44
|
|
|
$
|
161
|
|
|
$
|
152
|
|
Defense Systems Group
|
|
48
|
|
|
33
|
|
|
133
|
|
|
126
|
|
||||
Space Systems Group
|
|
40
|
|
|
20
|
|
|
98
|
|
|
96
|
|
||||
Corporate
|
|
(7
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(15
|
)
|
||||
Total income before interest, income taxes and noncontrolling interest
|
|
$
|
142
|
|
|
$
|
91
|
|
|
$
|
389
|
|
|
$
|
359
|
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
Total assets:
|
|
|
|
|
||||
Flight Systems Group
|
|
$
|
2,293
|
|
|
$
|
2,208
|
|
Defense Systems Group
|
|
1,358
|
|
|
1,228
|
|
||
Space Systems Group
|
|
1,276
|
|
|
1,280
|
|
||
Corporate
|
|
610
|
|
|
702
|
|
||
Total assets
|
|
$
|
5,537
|
|
|
$
|
5,418
|
|
•
|
the risk that the proposed transaction with Northrop Grumman may not be completed in a timely manner or at all, which may adversely affect our business and the price of our common stock;
|
•
|
the failure to satisfy any of the conditions to the consummation of the proposed transaction, including the receipt of certain governmental and regulatory approvals;
|
•
|
the occurrence of any circumstance that could give rise to the termination of the Merger Agreement;
|
•
|
the outcome of any legal proceedings related to the Merger Agreement or the proposed transaction, and the costs and ultimate outcome of litigation matters, government investigations and other legal proceedings;
|
•
|
the effect of the recent restatement of our previously issued financial results (the "Restatement") and any claims, investigations or proceedings as a result of the Restatement;
|
•
|
our ability to remediate the material weakness in our internal control over financial reporting described in Part I, Item 4, "Controls and Procedures," of this Form 10-Q;
|
•
|
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 the Company may not be able to react to due to the nature of its U.S. Government contracts;
|
•
|
changes in cost and revenue estimates and/or timing of programs;
|
•
|
potential termination of U.S. Government contracts and the potential inability to recover termination costs;
|
•
|
other risks associated with U.S. Government contracts that might expose the Company to adverse consequences;
|
•
|
government laws and other rules and regulations applicable to the Company, including procurement and import-export control;
|
•
|
reduction or change in demand and manufacturing costs for military and commercial ammunition;
|
•
|
the manufacture and sale of products that create exposure to potential product liability, warranty liability or personal injury claims and litigation;
|
•
|
risks associated with expansion into new and adjacent commercial markets;
|
•
|
results of acquisitions or other transactions, including our ability to successfully integrate acquired businesses and realize anticipated synergies, cost savings and other benefits, and costs incurred for pursuits and proposed acquisitions;
|
•
|
greater risk associated with international business, including foreign currency exchange rates and fluctuations in those rates;
|
•
|
federal and state regulation of defense products and ammunition;
|
•
|
costs of servicing the Company's debt, including cash requirements and interest rate fluctuations;
|
•
|
actual pension and other postretirement plan asset returns and assumptions regarding future returns, discount rates, service costs, mortality rates and health care cost trend rates;
|
•
|
security threats, including cyber-security and other industrial and physical security threats, and other disruptions;
|
•
|
supply, availability and costs of raw materials and components, including commodity price fluctuations;
|
•
|
performance of the Company's subcontractors;
|
•
|
development of key technologies and retention of a qualified workforce;
|
•
|
performance of our products;
|
•
|
fires or explosions at any of the Company's facilities;
|
•
|
government investigations and audits;
|
•
|
environmental laws that govern current and past practices and rules and regulations, noncompliance with which may expose the Company to adverse consequences;
|
•
|
impacts of financial market disruptions or volatility to the Company's customers and vendors;
|
•
|
unanticipated changes in income taxes or exposure to additional tax liabilities, including as a result of recent proposals for U.S. corporate income tax reform, and
|
•
|
costs and ultimate outcome of litigation matters, government investigations and other legal proceedings.
|
•
|
Flight Systems Group develops rockets that are used as small- and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories, interceptor and target vehicles for missile defense systems and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories. The group also develops and produces medium- and large-class rocket propulsion systems for human and cargo
|
•
|
Defense Systems Group develops and produces small-, medium- and large-caliber military ammunition, propulsion systems for tactical missiles and missile defense applications, strike weapons, precision weapons and munitions, high-performance gun systems, aircraft survivability systems, fuzes and warheads, energetic materials and special mission aircraft.
|
•
|
Space Systems Group develops and produces small- and medium-class satellites that are used to enable global and regional communications and broadcasting, conduct space-related scientific research and perform other activities related to national security. In addition, Space Systems Group develops and produces human-rated space systems for Earth-orbit and deep-space exploration, including cargo delivery to the International Space Station. This group is also a provider of spacecraft components and subsystems and specialized engineering and operations services to U.S. government agencies.
|
•
|
Quarterly sales of
$1.22 billion
.
|
•
|
Diluted earnings per share of
$1.64
.
|
•
|
New firm and option contract bookings of
$1.4 billion
and option exercises of $0.4 billion under existing contracts.
|
•
|
Total backlog of
$15.7 billion
, at
October 1, 2017
.
|
•
|
Income before interest, income taxes and noncontrolling interest as a percentage of sales of
11.7%
.
|
•
|
Effective income tax rate of
24.4%
.
|
•
|
Paid quarterly dividend of $0.32 on September 21, 2017, to stockholders of record on September 6, 2017.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Gross favorable adjustments
|
|
$
|
79
|
|
|
$
|
106
|
|
|
$
|
212
|
|
|
$
|
251
|
|
Gross unfavorable adjustments
|
|
(34
|
)
|
|
(100
|
)
|
|
(131
|
)
|
|
(159
|
)
|
||||
Net adjustments
|
|
$
|
45
|
|
|
$
|
6
|
|
|
$
|
81
|
|
|
$
|
92
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
|
Percent Change
|
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
|
Percent Change
|
||||||||||||||
Flight Systems Group
|
|
$
|
426
|
|
|
$
|
363
|
|
|
$
|
63
|
|
|
17.4
|
%
|
|
$
|
1,222
|
|
|
$
|
1,091
|
|
|
$
|
131
|
|
|
12.0
|
%
|
Defense Systems Group
|
|
515
|
|
|
456
|
|
|
59
|
|
|
12.9
|
%
|
|
1,390
|
|
|
1,341
|
|
|
49
|
|
|
3.7
|
%
|
||||||
Space Systems Group
|
|
314
|
|
|
248
|
|
|
66
|
|
|
26.6
|
%
|
|
917
|
|
|
813
|
|
|
104
|
|
|
12.8
|
%
|
||||||
Corporate and Eliminations
|
|
(39
|
)
|
|
(24
|
)
|
|
(15
|
)
|
|
(62.5
|
)%
|
|
(113
|
)
|
|
(62
|
)
|
|
(51
|
)
|
|
(82.3
|
)%
|
||||||
Total sales
|
|
$
|
1,216
|
|
|
$
|
1,043
|
|
|
$
|
173
|
|
|
16.6
|
%
|
|
$
|
3,416
|
|
|
$
|
3,183
|
|
|
$
|
233
|
|
|
7.3
|
%
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
|
Percent Change
|
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
|
Percent Change
|
||||||||||||||
Flight Systems Group
|
|
$
|
326
|
|
|
$
|
278
|
|
|
$
|
48
|
|
|
17.3
|
%
|
|
$
|
931
|
|
|
$
|
813
|
|
|
$
|
118
|
|
|
14.5
|
%
|
Defense Systems Group
|
|
414
|
|
|
379
|
|
|
35
|
|
|
9.2
|
%
|
|
1,112
|
|
|
1,087
|
|
|
25
|
|
|
2.3
|
%
|
||||||
Space Systems Group
|
|
250
|
|
|
208
|
|
|
42
|
|
|
20.2
|
%
|
|
752
|
|
|
647
|
|
|
105
|
|
|
16.2
|
%
|
||||||
Corporate and Eliminations
|
|
(49
|
)
|
|
(32
|
)
|
|
(17
|
)
|
|
(53.1
|
)%
|
|
(150
|
)
|
|
(81
|
)
|
|
(69
|
)
|
|
(85.2
|
)%
|
||||||
Total cost of sales
|
|
$
|
941
|
|
|
$
|
833
|
|
|
$
|
108
|
|
|
13.0
|
%
|
|
$
|
2,645
|
|
|
$
|
2,466
|
|
|
$
|
179
|
|
|
7.3
|
%
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||||||
|
|
October 1, 2017
|
|
Percent of Sales
|
|
October 2, 2016
|
|
Percent of Sales
|
|
Change
|
|
October 1, 2017
|
|
Percent of Sales
|
|
October 2, 2016
|
|
Percent of Sales
|
|
Change
|
||||||||||||||||
Research and development
|
|
$
|
24
|
|
|
2.0
|
%
|
|
$
|
25
|
|
|
2.4
|
%
|
|
$
|
(1
|
)
|
|
$
|
78
|
|
|
2.3
|
%
|
|
$
|
81
|
|
|
2.5
|
%
|
|
$
|
(3
|
)
|
Selling
|
|
31
|
|
|
2.5
|
%
|
|
28
|
|
|
2.7
|
%
|
|
3
|
|
|
90
|
|
|
2.6
|
%
|
|
82
|
|
|
2.6
|
%
|
|
8
|
|
||||||
General and administrative
|
|
78
|
|
|
6.4
|
%
|
|
66
|
|
|
6.3
|
%
|
|
12
|
|
|
214
|
|
|
6.3
|
%
|
|
195
|
|
|
6.1
|
%
|
|
19
|
|
||||||
Total operating expenses
|
|
$
|
133
|
|
|
10.9
|
%
|
|
$
|
119
|
|
|
11.4
|
%
|
|
$
|
14
|
|
|
$
|
382
|
|
|
11.2
|
%
|
|
$
|
358
|
|
|
11.2
|
%
|
|
$
|
24
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||||||
|
|
October 1, 2017
|
|
Effective Rate
|
|
October 2, 2016
|
|
Effective Rate
|
|
Change
|
|
October 1, 2017
|
|
Effective Rate
|
|
October 2, 2016
|
|
Effective Rate
|
|
Change
|
||||||||||||||||
Income taxes
|
|
$
|
31
|
|
|
24.4
|
%
|
|
$
|
14
|
|
|
18.0
|
%
|
|
$
|
17
|
|
|
$
|
90
|
|
|
26.5
|
%
|
|
$
|
80
|
|
|
25.9
|
%
|
|
$
|
10
|
|
|
|
Nine Months Ended
|
||||||
|
|
October 1, 2017
|
|
October 2, 2016
|
||||
Cash provided by operating activities
|
|
$
|
157
|
|
|
$
|
107
|
|
Cash used in investing activities
|
|
(138
|
)
|
|
(106
|
)
|
||
Cash used in financing activities
|
|
(100
|
)
|
|
(42
|
)
|
||
Net cash flows
|
|
$
|
(81
|
)
|
|
$
|
(41
|
)
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
Senior Credit Facility:
|
|
|
|
|
||||
Term Loan A due 2020
|
|
$
|
720
|
|
|
$
|
750
|
|
Revolving Credit Facility due 2020
|
|
—
|
|
|
—
|
|
||
5.25% Senior Notes due 2021
|
|
300
|
|
|
300
|
|
||
5.50% Senior Notes due 2023
|
|
400
|
|
|
400
|
|
||
Principal amount of long-term debt
|
|
1,420
|
|
|
1,450
|
|
||
Unamortized debt issuance costs:
|
|
|
|
|
||||
Senior Credit Facility
|
|
4
|
|
|
5
|
|
||
5.25% Senior Notes due 2021
|
|
1
|
|
|
2
|
|
||
5.50% Senior Notes due 2023
|
|
5
|
|
|
5
|
|
||
Unamortized debt issuance costs
|
|
10
|
|
|
12
|
|
||
Long-term debt less unamortized debt issuance costs
|
|
1,410
|
|
|
1,438
|
|
||
Less: Current portion of long-term debt
|
|
40
|
|
|
40
|
|
||
Long-term debt
|
|
$
|
1,370
|
|
|
$
|
1,398
|
|
|
|
Total Leverage Ratio
(1)
|
|
Interest Coverage Ratio
(2)
|
||
Requirement
|
|
4.00
|
|
|
3.00
|
|
Actual at October 1, 2017
|
|
1.98
|
|
|
11.16
|
|
(i)
|
Designing and maintaining controls related to the preparation, review and approval of costs incurred and contract estimates used to determine revenue at the Small Caliber Systems Division.
|
Period
|
Total Number
of Shares
Purchased
(1)
|
|
Average
Price Paid
per Share
|
|
Total Number
of Shares
Purchased
as Part of
Publicly
Announced
Program
(2)
|
|
Amount
Available for
Future Share
Repurchases
Under the Plans
or Programs
(in millions)
|
||||||
July 3 - July 30
|
67,187
|
|
|
$
|
102.13
|
|
|
49,957
|
|
|
|
|
|
July 31 - August 27
|
14,602
|
|
|
$
|
103.82
|
|
|
14,532
|
|
|
|
|
|
August 28 - October 1
|
109
|
|
|
$
|
132.80
|
|
|
—
|
|
|
|
|
|
Quarter ended October 1, 2017
|
81,898
|
|
|
$
|
102.48
|
|
|
64,489
|
|
|
$
|
227
|
|
(1)
|
The
81,898
shares purchased include shares withheld to pay taxes upon vesting of shares of restricted stock and restricted stock units or payment of performance shares that were granted under our incentive compensation plans.
|
(2)
|
During 2015, the Board of Directors approved a stock repurchase program that authorized the repurchase of up to the lesser of $250 million or 3.25 million shares through December 31, 2016, which was subsequently increased during 2016 to the lesser of $300 million or 4 million shares through March 2017. In February 2017, the Board of Directors further increased the amount authorized for repurchase to $450 million, removed the share quantity limitation and extended the repurchase period through March 31, 2018. We purchased
64,489
shares for
$7 million
during the quarter ended
October 1, 2017
. In connection with the Merger, the Company halted its share repurchase program.
|
Exhibit
Number
|
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
|
|
|
|
|
|
2.1
|
|
|
|
|
|
3(ii).1
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
ORBITAL ATK, INC.
|
||||
|
By:
|
|
/s/ David W. Thompson
|
||
|
Name:
|
|
David W. Thompson
|
||
|
Title:
|
|
President and Chief Executive Officer
|
||
|
|
|
(
duly authorized and principal executive officer)
|
||
|
|
|
|
|
By:
|
|
/s/ Garrett E. Pierce
|
||
|
Name:
|
|
Garrett E. Pierce
|
||
|
Title:
|
|
Chief Financial Officer
|
||
|
|
|
(principal financial officer)
|
||
|
|
|
|
•
|
an award of restricted stock valued at $110,000 at the time of grant upon initial election to the Board and upon re-election at each subsequent annual meeting of stockholders (increased from $100,000);
|
•
|
an annual cash retainer of $75,000, with no additional fees paid for Board and committee meetings attended (no change to the previously-approved amount);
|
•
|
an annual cash retainer of $100,000 for the independent non-executive Chairman of the Board (Ronald R. Fogleman; increased from $90,000);
|
•
|
an annual cash retainer of $25,000 for the chair of the Audit Committee (increased from $18,500);
|
•
|
an annual cash retainer of $15,000 for the chair of the Compensation and Human Resources Committee, $15,000 for the chair of the Governance Committee and $15,000 for the chair of the Markets and Technology Committee (each retainer increased from $12,500); 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 (no changes to the previously-approved amounts).
|
(i)
|
the retirement of the Director from the Board in compliance with the Board’s retirement policy as then in effect;
|
(ii)
|
the death of the Director;
|
(iii)
|
the termination of the Director’s service on the Board because the Director has been determined to be eligible for Social Security disability benefits (“Disability”); or
|
(iv)
|
the termination of the Director’s service on the Board following a Change in Control of the Company.
|
TO:
|
Orbital ATK, Inc.
|
1.
|
Deferral Election:
I hereby irrevocably:
|
|
(a) elect to defer 100% of my Restricted Stock Awards that would otherwise be granted to me after the end of this calendar year (or, if newly elected to the Board, after the date of this Deferral Election) and until rescinded by me for Restricted Stock Awards in future calendar years in accordance with the Program; and
|
|
(b) agree that such Restricted Stock Awards shall be waived.
|
2.
|
Time of Payment:
I hereby irrevocably elect to have my Deferred Restricted Stock Unit Account paid out at the following time:
|
|
___ as soon as administratively practicable after I cease to be a Director of the Company; or
|
•
|
The acquisition by any “person” or group of persons (a “Person”), as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company or a “Subsidiary” (as defined below) or any Company employee benefit plan (including its trustee)) of “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act) (“Beneficial Ownership”), directly or indirectly, of securities of the Company representing, directly or indirectly, more than 50% of the total number of shares of the Company’s then outstanding “Voting Securities” (as defined below);
|
•
|
consummation of a reorganization, merger or consolidation of the Company, or the sale or other disposition of all or substantially all of the Company’s assets (a “Business Combination”), in each case, unless, following such Business Combination, the individuals and entities who were the beneficial owners of the total number of shares of the Company’s outstanding Voting Securities immediately prior to both (1) such Business Combination and (2) any “Change Event” (as defined below) occurring within 12 months prior to such Business Combination, beneficially own, directly or indirectly, more than 50% of the total number of shares of the outstanding Voting Securities of the resulting corporation, or the acquiring corporation, as the case may be, immediately following such Business Combination (including, without limitation, the outstanding Voting Securities of any corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the total number of shares of the Company’s outstanding Voting Securities; or
|
•
|
any other circumstances (whether or not following a Change Event) which the Company’s Board of Directors (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 represented and the purposes of this Plan. Any such determination made by the Board shall be irrevocable except by vote of a majority of the members of the Board who voted in favor of making such determination.
|
•
|
“Change Event” means
|
(1)
|
the acquisition by any Person (other than the Company or a Subsidiary or any Company employee benefit plan (including its trustee)) of Beneficial Ownership, directly or indirectly, of securities of the Company directly or indirectly representing 15% or more of the total number of shares of the Company’s then outstanding Voting Securities (excluding the sale or issuance of such securities directly by the Company, or where the acquisition of such securities is made by such Person from five or fewer stockholders in a transaction or transactions approved in advance by the Board);
|
(2)
|
the public announcement by any Person of an intention to acquire the Company through a tender offer, exchange offer, or other unsolicited proposal; or
|
(3)
|
the individuals who are members of the Board (the “Incumbent Board”) as of the Award Date set forth in the Program cease for any reason to constitute at least a majority of the Board; provided, however, that if the nomination for election of any new director was approved by a vote of a majority of the Incumbent Board, such new director shall, for purposes of this definition, be considered a member of the Incumbent Board.
|
•
|
“Subsidiary” means a corporation as defined in Section 424(f) of the Internal Revenue Code with the Company being treated as the employer corporation for purposes of this definition.
|
•
|
“Voting Securities” means any shares of the capital stock or other securities of the Company that are generally entitled to vote in elections for directors.
|
I, David W. Thompson, certify that:
|
||
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Orbital ATK, Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 2, 2017
|
By:
|
|
/s/ David W. Thompson
|
|
Name:
|
|
David W. Thompson
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
|
|
I, Garrett E. Pierce, certify that:
|
||
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Orbital ATK, Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 2, 2017
|
By:
|
|
/s/ Garrett E. Pierce
|
|
Name:
|
|
Garrett E. Pierce
|
|
Title:
|
|
Chief Financial Officer
|
|
|
|
|
(1)
|
the Quarterly Report on Form 10-Q for the period ended
October 1, 2017
as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
November 2, 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
|
|
|
|
|