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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, 2017
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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 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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Year Ended
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Nine Months Ended
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|||
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December 31, 2017
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December 31, 2016
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December 31, 2015
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Sales to:
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U.S. Army
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15
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%
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17
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%
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15
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%
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U.S. Navy
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11
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12
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11
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U.S. Air Force
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4
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4
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4
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NASA
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22
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27
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23
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Other U.S. Government customers
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21
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16
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17
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Total U.S. Government customers
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73
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76
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70
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Commercial and foreign customers
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27
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24
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30
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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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U.S. Government
Sales
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Percentage of
Sales
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|||
Year ended December 31, 2017
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$
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3,489
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73
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%
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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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International Sales
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Percentage of
Sales |
|||
Year ended December 31, 2017
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$
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878
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18
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%
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Year ended December 31, 2016
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$
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778
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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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Company-funded
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Customer-funded
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||||
Year ended December 31, 2017
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$
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115
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$
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536
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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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429
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Nine months ended December 31, 2015
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$
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83
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$
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376
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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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63
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President and Chief Executive Officer
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Blake E. Larson
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58
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Chief Operating Officer
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Garrett E. Pierce
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73
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Chief Financial Officer
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Antonio L. Elias
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68
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Executive Vice President and Chief Technical Officer
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Frank L. Culbertson, Jr.
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68
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Executive Vice President and President, Space Systems Group
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Michael A. Kahn
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58
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Executive Vice President and President, Defense Systems Group
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Scott L. Lehr
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57
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Executive Vice President and President, Flight Systems Group
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Thomas E. McCabe
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63
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Senior Vice President, General Counsel and Secretary
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Christine A. Wolf
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57
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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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36
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%
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Fixed-price contracts
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64
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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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5,237
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3,609
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536
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9,382
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Defense Systems Group
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655
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1,175
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4,766
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|
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6,596
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Space Systems Group
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270
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|
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1,141
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|
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23
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|
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1,434
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Corporate
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—
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46
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|
|
—
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46
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Total
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6,162
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|
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5,971
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|
|
5,325
|
|
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17,458
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Percentage of total
|
35
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%
|
|
34
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%
|
|
31
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%
|
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100
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%
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Period
|
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High
|
|
Low
|
||||
Year ended December 31, 2017
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||||
Quarter ended December 31, 2017
|
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$
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134.57
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|
|
$
|
131.50
|
|
Quarter ended October 1, 2017
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$
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133.16
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|
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$
|
99.79
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Quarter ended July 2, 2017
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$
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104.32
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|
|
$
|
95.31
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Quarter ended April 2, 2017
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|
$
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102.11
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|
|
$
|
86.82
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Year ended December 31, 2016
|
|
|
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||||
Quarter ended December 31, 2016
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|
$
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89.39
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|
|
$
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71.52
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Quarter ended October 2, 2016
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$
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89.43
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|
|
$
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67.04
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Quarter ended July 3, 2016
|
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$
|
90.98
|
|
|
$
|
82.11
|
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Quarter ended April 3, 2016
|
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$
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94.92
|
|
|
$
|
74.31
|
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Plan category
|
|
Number of securities to
be issued upon exercise of
outstanding options, warrants and rights (a)
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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:
|
|
|
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|
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|
||||
1990 Equity Incentive Plan
(1)
|
|
|
|
|
|
|
||||
Deferred Compensation
(2)
|
|
13,269
|
|
|
|
|
|
|||
Non-Employee Director Restricted Stock Plan
(1)
|
|
|
|
|
|
|
||||
Deferred Compensation
(2)
|
|
6,924
|
|
|
|
|
|
|||
2005 Stock Incentive Plan
(1)
|
|
|
|
|
|
|
||||
Stock Options
|
|
116,405
|
|
|
$
|
57.86
|
|
|
|
|
Performance Awards
(4)
|
|
151,656
|
|
|
|
|
|
|||
Deferred Compensation
(2)
|
|
55,309
|
|
|
|
|
|
|||
2015 Stock Incentive Plan
(3)
|
|
|
|
|
|
2,084,273
|
|
|||
Stock Options
|
|
129,464
|
|
|
$
|
85.79
|
|
|
|
|
Performance Awards
(4)
|
|
265,974
|
|
|
|
|
|
|||
Deferred Compensation
(2)
|
|
17,774
|
|
|
|
|
|
|||
2016 Employee Stock Purchase Plan
(5)
|
|
|
|
|
|
1,781,318
|
|
|||
Total
|
|
756,775
|
|
|
$
|
72.56
|
|
|
3,865,591
|
|
(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)
|
Under the 2016 Employee Stock Purchase Plan ("ESPP"), a total of 2,000,000 shares were authorized for issuance. In connection with the Merger, the ESPP was suspended as of October 1, 2017.
|
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
)
|
||||||
October 2 - October 29
|
319
|
|
|
$
|
133.21
|
|
|
—
|
|
|
|
||
October 30 - November 26
|
196
|
|
|
$
|
132.93
|
|
|
—
|
|
|
|
||
November 27 - December 31
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||
Quarter ended December 31, 2017
|
515
|
|
|
$
|
133.10
|
|
|
—
|
|
|
$
|
227
|
|
(1)
|
Represents 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 4.0 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 repurchased
230,918
shares for
$23 million
during the
year ended December 31, 2017
. In connection with the Merger, the Company halted its share repurchase program.
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|
Year Ended December 31,
|
Nine Months Ended
|
Year Ended March 31,
|
||||||||||||||||
(in millions, except per share data)
|
2017
|
|
2016
|
|
December 31, 2015
|
|
2015
|
|
2014
|
||||||||||
|
(1)
|
|
|
|
(2)
|
|
(3)
|
|
(4)
|
||||||||||
Results of Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
4,764
|
|
|
$
|
4,455
|
|
|
$
|
3,391
|
|
|
$
|
3,113
|
|
|
$
|
2,891
|
|
Gross profit
|
1,065
|
|
|
985
|
|
|
674
|
|
|
701
|
|
|
290
|
|
|||||
Income (loss) from continuing operations, before interest, income taxes and noncontrolling interest
|
529
|
|
|
472
|
|
|
333
|
|
|
223
|
|
|
(59
|
)
|
|||||
Income (loss) from continuing operations of Orbital ATK, Inc.
|
310
|
|
|
293
|
|
|
185
|
|
|
70
|
|
|
(64
|
)
|
|||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
1
|
|
|
125
|
|
|
181
|
|
|||||
Net income attributable to Orbital ATK, Inc.
|
$
|
310
|
|
|
$
|
293
|
|
|
$
|
186
|
|
|
$
|
195
|
|
|
$
|
117
|
|
Earnings per common share attributable to Orbital ATK, Inc.:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
5.39
|
|
|
$
|
5.05
|
|
|
$
|
3.12
|
|
|
$
|
1.96
|
|
|
$
|
(2.03
|
)
|
Income from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
3.53
|
|
|
$
|
5.73
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
5.34
|
|
|
$
|
5.01
|
|
|
$
|
3.09
|
|
|
$
|
1.93
|
|
|
$
|
(1.97
|
)
|
Income from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
3.46
|
|
|
$
|
5.55
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
1.28
|
|
|
$
|
1.20
|
|
|
$
|
0.78
|
|
|
$
|
1.28
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
5,666
|
|
|
$
|
5,418
|
|
|
$
|
5,324
|
|
|
$
|
5,478
|
|
|
$
|
5,925
|
|
Long-term debt (including current portion)
|
$
|
1,401
|
|
|
$
|
1,438
|
|
|
$
|
1,476
|
|
|
$
|
1,572
|
|
|
$
|
2,069
|
|
(1)
|
Calendar 2017 results included $10 million of acquisition transaction expenses related to the pending acquisition by Northrop Grumman.
|
(2)
|
The nine month 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-1 contract.
|
(3)
|
Fiscal 2015 results include
$35 million
of transaction fees for advisory, legal and accounting services in connection with the Distribution and the Orbital-ATK Merger and a
$25 million
litigation charge pertaining to a Raytheon lawsuit settlement.
|
(4)
|
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.
|
•
|
the risk that the pending acquisition by 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 pending acquisition on a timely basis, 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,
|
•
|
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,
|
•
|
laws, rules and regulations applicable to us, including procurement and import-export control,
|
•
|
reduction or change in demand and manufacturing costs for 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 markets,
|
•
|
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 current and 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, including as a result of the recent tax law legislation, the Tax Cuts and Jobs Act (the "Tax Act") signed into law in December 2017 and
|
•
|
the costs and ultimate outcome of litigation matters, government investigations and other legal proceedings, including those related to the restatement of our previously issued financial results.
|
•
|
Flight Systems Group develops launch vehicles 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 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 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 as well as specialized engineering and operations services to U.S. government agencies.
|
|
|
Year Ended
|
|
Nine Months Ended
|
||||||||
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||
Gross favorable adjustments
|
|
$
|
250
|
|
|
$
|
247
|
|
|
$
|
136
|
|
Gross unfavorable adjustments
|
|
(145
|
)
|
|
(166
|
)
|
|
(98
|
)
|
|||
Net adjustments
|
|
$
|
105
|
|
|
$
|
81
|
|
|
$
|
38
|
|
|
Projected
2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||
|
|
|
|
||||||||
Expected long-term rate of return on plan assets
|
7.00
|
%
|
|
7.00
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
Discount rate
|
3.65
|
%
|
|
4.14
|
%
|
|
4.40
|
%
|
|
3.90
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|
||||
Union
|
2.90
|
%
|
|
3.11
|
%
|
|
3.13
|
%
|
|
3.66
|
%
|
Salaried
|
3.51
|
%
|
|
3.56
|
%
|
|
3.60
|
%
|
|
3.14
|
%
|
|
Projected
2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||
|
|
|
|
||||||||
Expected long-term rate of return on Plan assets:
|
|
|
|
|
|
|
|
||||
Held solely in fixed income investments
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
5.00% / 6.25%
|
|
Held in pension master trust and fixed income investments
|
6.00
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
|
6.25
|
%
|
Discount rate
|
3.36
|
%
|
|
3.63
|
%
|
|
3.98
|
%
|
|
3.55
|
%
|
Weighted-average initial health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
6.10
|
%
|
|
6.10
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Flight Systems Group
|
|
$
|
1,681
|
|
|
$
|
1,496
|
|
|
$
|
185
|
|
|
12.4
|
%
|
Defense Systems Group
|
|
1,968
|
|
|
1,823
|
|
|
145
|
|
|
8.0
|
|
|||
Space Systems Group
|
|
1,284
|
|
|
1,238
|
|
|
46
|
|
|
3.7
|
|
|||
Corporate and Eliminations
|
|
(169
|
)
|
|
(102
|
)
|
|
(67
|
)
|
|
(65.7
|
)
|
|||
Total sales
|
|
$
|
4,764
|
|
|
$
|
4,455
|
|
|
$
|
309
|
|
|
6.9
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Flight Systems Group
|
|
$
|
1,292
|
|
|
$
|
1,117
|
|
|
$
|
175
|
|
|
15.7
|
%
|
Defense Systems Group
|
|
1,571
|
|
|
1,471
|
|
|
100
|
|
|
6.8
|
|
|||
Space Systems Group
|
|
1,048
|
|
|
1,010
|
|
|
38
|
|
|
3.8
|
|
|||
Corporate and Eliminations
|
|
(212
|
)
|
|
(128
|
)
|
|
(84
|
)
|
|
(65.6
|
)
|
|||
Total cost of sales
|
|
$
|
3,699
|
|
|
$
|
3,470
|
|
|
$
|
229
|
|
|
6.6
|
%
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
|
2017
|
|
As a % of Sales
|
|
2016
|
|
As a % of Sales
|
|
Change
|
||||||||
Research and development
|
|
$
|
115
|
|
|
2.4
|
%
|
|
$
|
116
|
|
|
2.6
|
%
|
|
$
|
(1
|
)
|
Selling
|
|
115
|
|
|
2.4
|
|
|
107
|
|
|
2.4
|
|
|
8
|
|
|||
General and administrative
|
|
306
|
|
|
6.4
|
|
|
290
|
|
|
6.5
|
|
|
16
|
|
|||
Total
|
|
$
|
536
|
|
|
11.2
|
%
|
|
$
|
513
|
|
|
11.5
|
%
|
|
$
|
23
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
|
2017
|
|
Effective Rate
|
|
2016
|
|
Effective Rate
|
|
Change
|
||||||||
Income taxes
|
|
$
|
152
|
|
|
33.0
|
%
|
|
$
|
111
|
|
|
27.5
|
%
|
|
$
|
41
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
(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
|
|||||||
|
|
|
|
(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
|
%
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
|
2016
|
|
As a % of Sales
|
|
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
|
)
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
|
2016
|
|
Effective Rate
|
|
2015
|
|
Effective Rate
|
|
Change
|
||||||||
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
||||||||
Income taxes
|
|
$
|
111
|
|
|
27.5
|
%
|
|
$
|
83
|
|
|
36.4
|
%
|
|
$
|
28
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
(unaudited)
|
||||||
Cash provided by operating activities of continuing operations
|
|
$
|
520
|
|
|
$
|
519
|
|
|
$
|
450
|
|
Cash (used in) provided by investing activities of continuing operations
|
|
(245
|
)
|
|
(183
|
)
|
|
280
|
|
|||
Cash used in financing activities of continuing operations
|
|
(129
|
)
|
|
(240
|
)
|
|
(748
|
)
|
|||
Net cash flows provided by (used in) continuing operations
|
|
$
|
146
|
|
|
$
|
96
|
|
|
$
|
(18
|
)
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Senior Credit Facility:
|
|
|
|
|
||||
Term Loan A due 2020
|
|
$
|
710
|
|
|
$
|
750
|
|
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
|
|
1,410
|
|
|
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
|
|
4
|
|
|
5
|
|
||
Unamortized debt issuance costs
|
|
9
|
|
|
12
|
|
||
Long-term debt less unamortized debt issuance costs
|
|
1,401
|
|
|
1,438
|
|
||
Less: Current portion of long-term debt
|
|
40
|
|
|
40
|
|
||
Long-term debt
|
|
$
|
1,361
|
|
|
$
|
1,398
|
|
|
|
Total Leverage
Ratio
(1)
|
|
Interest Coverage
Ratio
(2)
|
||
Requirement
|
|
4.00
|
|
|
3.00
|
|
Actual at December 31, 2017
|
|
1.86
|
|
|
11.92
|
|
(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
|
$
|
1,410
|
|
|
$
|
40
|
|
|
$
|
670
|
|
|
$
|
300
|
|
|
$
|
400
|
|
Interest on debt
(1)
|
219
|
|
|
47
|
|
|
90
|
|
|
60
|
|
|
22
|
|
|||||
Operating leases
|
400
|
|
|
85
|
|
|
148
|
|
|
107
|
|
|
60
|
|
|||||
Environmental remediation costs, net
|
20
|
|
|
2
|
|
|
1
|
|
|
4
|
|
|
13
|
|
|||||
Purchase obligations
(2)
|
75
|
|
|
40
|
|
|
34
|
|
|
1
|
|
|
—
|
|
|||||
Pension and other postretirement plan contributions
|
302
|
|
|
11
|
|
|
152
|
|
|
92
|
|
|
47
|
|
|||||
Total contractual obligations, net
|
$
|
2,426
|
|
|
$
|
225
|
|
|
$
|
1,095
|
|
|
$
|
564
|
|
|
$
|
542
|
|
Other commercial commitments - by expiration period:
|
|
|
|
|
|
|
|
|
|
||||||||||
Letters of credit
(3)
|
$
|
240
|
|
|
$
|
74
|
|
|
$
|
116
|
|
|
$
|
40
|
|
|
$
|
10
|
|
(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, 2017. Variable rate debt was
50%
of our total debt at
December 31, 2017
.
|
(2)
|
Purchase obligations are comprised primarily of open purchase order commitments to suppliers, primarily for materials, in which the commitment is binding and specifies all the significant terms including fixed or minimum quantities to be purchased.
|
(3)
|
Approximately $24 million of standby letters of credit in the "1 Year" category are expected to renew for additional periods until completion of the contractual obligation.
|
•
|
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.
|
|
|
As of December 31,
|
||||||
(Amounts in millions, except share data)
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
346
|
|
|
$
|
200
|
|
Net receivables
|
|
1,893
|
|
|
1,741
|
|
||
Net inventories
|
|
221
|
|
|
215
|
|
||
Other current assets
|
|
82
|
|
|
79
|
|
||
Total current assets
|
|
2,542
|
|
|
2,235
|
|
||
Net property, plant and equipment
|
|
934
|
|
|
816
|
|
||
Goodwill
|
|
1,832
|
|
|
1,832
|
|
||
Net intangibles
|
|
61
|
|
|
98
|
|
||
Deferred income taxes
|
|
155
|
|
|
254
|
|
||
Other noncurrent assets
|
|
142
|
|
|
183
|
|
||
Total assets
|
|
$
|
5,666
|
|
|
$
|
5,418
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
40
|
|
|
$
|
40
|
|
Accounts payable
|
|
216
|
|
|
175
|
|
||
Contract-related liabilities
|
|
375
|
|
|
394
|
|
||
Contract loss reserve
|
|
152
|
|
|
197
|
|
||
Contract advances and allowances
|
|
330
|
|
|
233
|
|
||
Accrued compensation
|
|
137
|
|
|
120
|
|
||
Other current liabilities
|
|
210
|
|
|
183
|
|
||
Total current liabilities
|
|
1,460
|
|
|
1,342
|
|
||
Long-term debt
|
|
1,361
|
|
|
1,398
|
|
||
Pension and postemployment benefits
|
|
693
|
|
|
744
|
|
||
Other noncurrent liabilities
|
|
107
|
|
|
117
|
|
||
Total liabilities
|
|
3,621
|
|
|
3,601
|
|
||
Commitments and contingencies (Notes 13, 15 and 16)
|
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
|
||||
Common stock—$.01 par value: authorized—180,000,000 shares; issued and outstanding— 57,686,214 shares held at December 31, 2017 and 57,487,466 shares held at December 31, 2016
|
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
|
2,175
|
|
|
2,175
|
|
||
Retained earnings
|
|
1,502
|
|
|
1,266
|
|
||
Accumulated other comprehensive loss
|
|
(780
|
)
|
|
(764
|
)
|
||
Common stock in treasury, at cost— 11,248,810 shares held at December 31, 2017 and 11,447,558 shares held at December 31, 2016
|
|
(864
|
)
|
|
(872
|
)
|
||
Total Orbital ATK, Inc. stockholders' equity
|
|
2,034
|
|
|
1,806
|
|
||
Noncontrolling interest
|
|
11
|
|
|
11
|
|
||
Total equity
|
|
2,045
|
|
|
1,817
|
|
||
Total liabilities and equity
|
|
$
|
5,666
|
|
|
$
|
5,418
|
|
(Amounts in millions, except per share data)
|
|
Year Ended
December 31, 2017 |
|
Year Ended December 31, 2016
|
|
Nine Months Ended
December 31, 2015
|
||||||
|
|
|
|
|
|
|
|
|
||||
Sales
|
|
$
|
4,764
|
|
|
$
|
4,455
|
|
|
$
|
3,391
|
|
Cost of sales
|
|
3,699
|
|
|
3,470
|
|
|
2,717
|
|
|||
Gross profit
|
|
1,065
|
|
|
985
|
|
|
674
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Research and development
|
|
115
|
|
|
116
|
|
|
83
|
|
|||
Selling
|
|
115
|
|
|
107
|
|
|
88
|
|
|||
General and administrative
|
|
306
|
|
|
290
|
|
|
220
|
|
|||
Gain on settlement
|
|
—
|
|
|
—
|
|
|
50
|
|
|||
Income from continuing operations, before interest, income taxes and noncontrolling interest
|
|
529
|
|
|
472
|
|
|
333
|
|
|||
Interest expense, net
|
|
(67
|
)
|
|
(68
|
)
|
|
(61
|
)
|
|||
Income from continuing operations, before income taxes and noncontrolling interest
|
|
462
|
|
|
404
|
|
|
272
|
|
|||
Income taxes
|
|
152
|
|
|
111
|
|
|
87
|
|
|||
Income from continuing operations, before noncontrolling interest
|
|
310
|
|
|
293
|
|
|
185
|
|
|||
Less net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income from continuing operations of Orbital ATK, Inc.
|
|
310
|
|
|
293
|
|
|
185
|
|
|||
Discontinued operations:
|
|
|
|
|
|
|
||||||
Income from discontinued operations, before income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income taxes
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
310
|
|
|
$
|
293
|
|
|
$
|
186
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per common share from:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
5.39
|
|
|
$
|
5.05
|
|
|
$
|
3.12
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
5.39
|
|
|
$
|
5.05
|
|
|
$
|
3.14
|
|
Weighted-average number of common shares outstanding
|
|
57
|
|
|
58
|
|
|
59
|
|
|||
Diluted earnings per common share from:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
5.34
|
|
|
$
|
5.01
|
|
|
$
|
3.09
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
|
$
|
5.34
|
|
|
$
|
5.01
|
|
|
$
|
3.11
|
|
Weighted-average number of diluted common shares outstanding
|
|
58
|
|
|
58
|
|
|
60
|
|
|||
Cash dividends per common share
|
|
$
|
1.28
|
|
|
$
|
1.20
|
|
|
$
|
0.78
|
|
(Amounts in millions)
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2016 |
|
Nine Months Ended
December 31, 2015 |
||||||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
310
|
|
|
$
|
293
|
|
|
$
|
186
|
|
Other comprehensive (loss) income
|
|
|
|
|
|
|
||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
||||||
Prior service credits for pension and postretirement benefit plans recorded to net income, net of taxes of $10, $10 and $8, respectively
|
|
(17
|
)
|
|
(17
|
)
|
|
(13
|
)
|
|||
Net actuarial loss for pension and postretirement benefit plans recorded to net income, net of taxes of$(51), $(48) and $(44), respectively
|
|
82
|
|
|
79
|
|
|
70
|
|
|||
Valuation adjustment for pension and postretirement benefit plans, net of taxes of $28, $30 and $(3), respectively
|
|
(83
|
)
|
|
(49
|
)
|
|
5
|
|
|||
Change in derivatives, net of taxes of $(1), $(4) and $1, respectively
|
|
2
|
|
|
8
|
|
|
(1
|
)
|
|||
Other, net of taxes of $0, $(1) and $0, respectively
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
Other comprehensive (loss) income, net of tax
|
|
(16
|
)
|
|
22
|
|
|
62
|
|
|||
Comprehensive income attributable to Orbital ATK, Inc.
|
|
294
|
|
|
315
|
|
|
248
|
|
|
|
Year Ended
|
|
Year Ended
|
|
Nine Months Ended
|
||||||
(Amounts in millions)
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||
Operating Activities
|
|
|
|
|
|
|
||||||
Continuing operations:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
310
|
|
|
$
|
293
|
|
|
$
|
186
|
|
Net income from discontinued operations
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Income from continuing operations
|
|
310
|
|
|
293
|
|
|
185
|
|
|||
Adjustments to reconcile income from continuing operations to cash provided by operating activities of continuing operations:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
118
|
|
|
116
|
|
|
89
|
|
|||
Amortization of intangible assets
|
|
37
|
|
|
43
|
|
|
33
|
|
|||
Amortization and write-off of deferred financing costs
|
|
2
|
|
|
2
|
|
|
13
|
|
|||
Fixed asset impairment
|
|
8
|
|
|
10
|
|
|
8
|
|
|||
Deferred income taxes
|
|
68
|
|
|
42
|
|
|
58
|
|
|||
Loss on disposal of property
|
|
2
|
|
|
6
|
|
|
11
|
|
|||
Share-based plans expense
|
|
23
|
|
|
21
|
|
|
19
|
|
|||
Excess tax benefits from share-based plans
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Other
|
|
5
|
|
|
4
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Net receivables
|
|
(122
|
)
|
|
(88
|
)
|
|
17
|
|
|||
Net inventories
|
|
18
|
|
|
(9
|
)
|
|
(16
|
)
|
|||
Income taxes receivable
|
|
—
|
|
|
50
|
|
|
(19
|
)
|
|||
Accounts payable
|
|
10
|
|
|
38
|
|
|
(29
|
)
|
|||
Contract advances and allowances
|
|
97
|
|
|
61
|
|
|
(1
|
)
|
|||
Contract loss reserve
|
|
(45
|
)
|
|
(26
|
)
|
|
(27
|
)
|
|||
Accrued compensation
|
|
18
|
|
|
(5
|
)
|
|
(10
|
)
|
|||
Contract-related liabilities
|
|
(19
|
)
|
|
39
|
|
|
(19
|
)
|
|||
Pension and postemployment benefits
|
|
(57
|
)
|
|
(71
|
)
|
|
(4
|
)
|
|||
Other assets and liabilities
|
|
47
|
|
|
(7
|
)
|
|
—
|
|
|||
Cash provided by operating activities of continuing operations
|
|
520
|
|
|
519
|
|
|
303
|
|
|||
Cash provided by operating activities of discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash provided by operating activities
|
|
520
|
|
|
519
|
|
|
303
|
|
|||
Investing Activities
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(245
|
)
|
|
(187
|
)
|
|
(105
|
)
|
|||
Cash dividend (refunded to) Vista Outdoor, net of cash transferred to Vista Outdoor in conjunction with the Distribution of Sporting Group
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||
Proceeds from the disposition of property, plant and equipment
|
|
—
|
|
|
4
|
|
|
—
|
|
|||
Cash used in investing activities
|
|
(245
|
)
|
|
(183
|
)
|
|
(111
|
)
|
|||
Financing Activities
|
|
|
|
|
|
|
||||||
Credit facility borrowings
|
|
505
|
|
|
930
|
|
|
745
|
|
|||
Credit facility payments
|
|
(505
|
)
|
|
(930
|
)
|
|
(745
|
)
|
|||
Payments made on bank debt
|
|
(40
|
)
|
|
(40
|
)
|
|
(25
|
)
|
|||
Payments made to extinguish debt
|
|
—
|
|
|
—
|
|
|
(1,274
|
)
|
|||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|||
Payments made for debt issuance costs
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Purchase of treasury shares
|
|
(32
|
)
|
|
(134
|
)
|
|
(81
|
)
|
|||
Dividends paid
|
|
(74
|
)
|
|
(70
|
)
|
|
(46
|
)
|
|||
Proceeds from employee stock compensation plans
|
|
17
|
|
|
4
|
|
|
4
|
|
|||
Excess tax benefits from share-based plans
|
|
—
|
|
|
—
|
|
|
5
|
|
|||
Cash used in financing activities
|
|
(129
|
)
|
|
(240
|
)
|
|
(227
|
)
|
Increase (decrease) in cash and cash equivalents
|
|
146
|
|
|
96
|
|
|
(35
|
)
|
|||
Cash and cash equivalents at beginning of period
|
|
200
|
|
|
104
|
|
|
139
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
346
|
|
|
$
|
200
|
|
|
$
|
104
|
|
|
|
|
|
|
|
|
||||||
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
|
||||||
Cash paid for interest, net
|
|
$
|
60
|
|
|
$
|
62
|
|
|
$
|
41
|
|
Cash paid for income taxes, net
|
|
$
|
24
|
|
|
$
|
36
|
|
|
$
|
26
|
|
Noncash investing activity:
|
|
|
|
|
|
|
||||||
Capital expenditures included in accounts payable of continuing operations
|
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
5
|
|
(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, 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 benefit related to share based plans and other
|
|
—
|
|
|
—
|
|
|
(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
|
|
|||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
294
|
|
|||||||
Exercise of stock options
|
|
84,544
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
3
|
|
|||||||
Restricted stock grants
|
|
156,675
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||||
Treasury stock purchased
|
|
(230,918
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||||||
Shares issued net of treasury stock withheld
|
|
247,977
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
10
|
|
|||||||
Dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||||
Employee benefit plans and other
|
|
(59,530
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Balance, December 31, 2017
|
|
57,686,214
|
|
|
$
|
1
|
|
|
$
|
2,175
|
|
|
$
|
1,502
|
|
|
$
|
(780
|
)
|
|
$
|
(864
|
)
|
|
$
|
11
|
|
|
$
|
2,045
|
|
|
|
December 31, 2017
|
||||||||||
|
|
Fair Value Measurements
Using Inputs Considered as |
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
|
December 31, 2016
|
||||||||||
|
|
Fair Value Measurements
Using Inputs Considered as
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Derivatives
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Fixed rate debt
|
$
|
700
|
|
|
$
|
732
|
|
|
$
|
700
|
|
|
$
|
727
|
|
Variable rate debt
|
$
|
710
|
|
|
$
|
706
|
|
|
$
|
750
|
|
|
$
|
746
|
|
|
|
Notional
|
|
Fair Value
|
|
Pay Fixed
|
|
Receive Floating
|
|
Maturity Date
|
||||||
Non-amortizing swap
|
|
$
|
100
|
|
|
$
|
—
|
|
|
1.69
|
%
|
|
1.57
|
%
|
|
August 2018
|
(Amounts in millions of pounds)
|
|
December 31,
|
||||
|
|
2017
|
|
2016
|
||
Copper
|
|
17
|
|
|
10
|
|
Zinc
|
|
6
|
|
|
3
|
|
(Amounts in millions of Euros)
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Euros Sold
|
|
€
|
7
|
|
|
€
|
33
|
|
Euros Purchased
|
|
36
|
|
|
45
|
|
|
|
Asset Derivatives
Fair Value
|
|
Liability Derivatives
Fair Value
|
||||||||||||
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||
Commodity forward contracts
(1)
|
|
$
|
11
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(1)
|
|
2
|
|
|
3
|
|
|
2
|
|
|
—
|
|
||||
Foreign currency forward contracts
(2)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap contracts
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total
|
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
|
Location
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||
Commodity forward contracts
|
|
Cost of sales
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
Interest rate swap contracts
|
|
Interest expense
|
|
(1
|
)
|
|
(3
|
)
|
||
Foreign currency forward contracts
|
|
Cost of sales
|
|
4
|
|
|
—
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Billed receivables
|
|
|
|
|
||||
U.S. Government contracts
|
|
$
|
159
|
|
|
$
|
132
|
|
Commercial and other
|
|
92
|
|
|
112
|
|
||
Unbilled receivables
|
|
|
|
|
||||
U.S. Government contracts
|
|
850
|
|
|
806
|
|
||
Commercial and other
|
|
793
|
|
|
691
|
|
||
Less allowance for doubtful accounts
|
|
(1
|
)
|
|
—
|
|
||
Net receivables
|
|
$
|
1,893
|
|
|
$
|
1,741
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Raw materials
|
|
$
|
89
|
|
|
$
|
93
|
|
Work/contracts in process
|
|
113
|
|
|
121
|
|
||
Finished goods
|
|
19
|
|
|
1
|
|
||
Net inventories
|
|
$
|
221
|
|
|
$
|
215
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Land
|
|
$
|
29
|
|
|
$
|
29
|
|
Buildings and other improvements
|
|
412
|
|
|
383
|
|
||
Machinery, equipment and other
|
|
1,432
|
|
|
1,313
|
|
||
Property not yet in service
|
|
280
|
|
|
212
|
|
||
Gross property, plant and equipment
|
|
2,153
|
|
|
1,937
|
|
||
Less accumulated depreciation
|
|
(1,219
|
)
|
|
(1,121
|
)
|
||
Net property, plant and equipment
|
|
$
|
934
|
|
|
$
|
816
|
|
|
|
Flight Systems Group
|
|
Defense Systems Group
|
|
Space Systems Group
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Balance, December 31, 2015
|
|
$
|
923
|
|
|
$
|
363
|
|
|
$
|
542
|
|
|
$
|
1,828
|
|
Measurement period adjustments
|
|
6
|
|
|
—
|
|
|
(2
|
)
|
|
4
|
|
||||
Balance, December 31, 2016
|
|
929
|
|
|
363
|
|
|
540
|
|
|
1,832
|
|
||||
Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2017
|
|
$
|
929
|
|
|
$
|
363
|
|
|
$
|
540
|
|
|
$
|
1,832
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Total
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Contract backlog
|
$
|
173
|
|
|
$
|
(115
|
)
|
|
$
|
58
|
|
|
$
|
173
|
|
|
$
|
(79
|
)
|
|
$
|
94
|
|
Patented technology
|
11
|
|
|
(8
|
)
|
|
3
|
|
|
11
|
|
|
(7
|
)
|
|
4
|
|
||||||
Customer relationships and other
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
||||||
Net intangibles
|
$
|
184
|
|
|
$
|
(123
|
)
|
|
$
|
61
|
|
|
$
|
186
|
|
|
$
|
(88
|
)
|
|
$
|
98
|
|
|
|
Contract Backlog
|
|
Patented Technology
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
2018
|
|
$
|
25
|
|
|
$
|
1
|
|
|
$
|
26
|
|
2019
|
|
22
|
|
|
1
|
|
|
23
|
|
|||
2020
|
|
11
|
|
|
1
|
|
|
12
|
|
|||
2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
58
|
|
|
$
|
3
|
|
|
$
|
61
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Employee benefits and insurance
|
|
$
|
81
|
|
|
$
|
74
|
|
Deferred lease obligation
|
|
2
|
|
|
2
|
|
||
Interest
|
|
10
|
|
|
10
|
|
||
Accrued tax liabilities
|
|
26
|
|
|
28
|
|
||
Environmental liability
|
|
5
|
|
|
6
|
|
||
Other
|
|
86
|
|
|
63
|
|
||
Total other current liabilities
|
|
$
|
210
|
|
|
$
|
183
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Senior Credit Facility:
|
|
|
|
|
||||
Term Loan A due 2020
|
|
$
|
710
|
|
|
$
|
750
|
|
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
|
|
1,410
|
|
|
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
|
|
4
|
|
|
5
|
|
||
Unamortized debt issuance costs
|
|
9
|
|
|
12
|
|
||
Long-term debt less unamortized debt issuance costs
|
|
1,401
|
|
|
1,438
|
|
||
Less: Current portion of long-term debt
|
|
40
|
|
|
40
|
|
||
Long-term debt
|
|
$
|
1,361
|
|
|
$
|
1,398
|
|
|
|
Notional
|
|
Fair Value
|
|
Pay Fixed
|
|
Receive Floating
|
|
Maturity Date
|
||||||
|
|
(in millions)
|
|
|
|
|
|
|
||||||||
Non-amortizing swap
|
|
$
|
100
|
|
|
$
|
—
|
|
|
1.69
|
%
|
|
1.57
|
%
|
|
August 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||||||||
|
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
|
$
|
5
|
|
|
$
|
(771
|
)
|
|
$
|
2
|
|
|
$
|
(764
|
)
|
|
$
|
(3
|
)
|
|
$
|
(784
|
)
|
|
$
|
1
|
|
|
$
|
(786
|
)
|
Net increase in fair value of derivatives
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||
Net (gains) losses reclassified from AOCI, offsetting the price paid to suppliers
(1)
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||
Net actuarial losses reclassified from AOCI
(2)
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
||||||||
Prior service costs reclassified from AOCI
(2)
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
||||||||
Valuation adjustment for pension and postretirement benefit plans
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
End of period unrealized gain (loss) in AOCI
|
$
|
7
|
|
|
$
|
(789
|
)
|
|
$
|
2
|
|
|
$
|
(780
|
)
|
|
$
|
5
|
|
|
$
|
(771
|
)
|
|
$
|
2
|
|
|
$
|
(764
|
)
|
(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, 2017 |
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Income from continuing operations of Orbital ATK, Inc.
|
$
|
310
|
|
|
$
|
293
|
|
|
$
|
185
|
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
310
|
|
|
293
|
|
|
186
|
|
|||
Earnings allocated to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income available to common stockholders
|
$
|
310
|
|
|
$
|
293
|
|
|
$
|
186
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares of common stock
|
57.38
|
|
|
57.99
|
|
|
59.36
|
|
|||
Dilutive effect of stock-based awards
|
0.53
|
|
|
0.47
|
|
|
0.56
|
|
|||
Diluted weighted-average shares of common stock
|
57.91
|
|
|
58.46
|
|
|
59.92
|
|
|||
Anti-dilutive stock options and other stock awards excluded from the calculation of diluted earnings per share
|
0.10
|
|
|
0.31
|
|
|
0.10
|
|
|||
|
|
|
|
|
|
||||||
Net income per common share from:
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.39
|
|
|
$
|
5.05
|
|
|
$
|
3.12
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
$
|
5.39
|
|
|
$
|
5.05
|
|
|
$
|
3.14
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
5.34
|
|
|
$
|
5.01
|
|
|
$
|
3.09
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Net income attributable to Orbital ATK, Inc.
|
$
|
5.34
|
|
|
$
|
5.01
|
|
|
$
|
3.11
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
Year Ended
December 31, 2017 |
|
Year Ended December 31, 2016
|
|
Year Ended
December 31, 2017 |
|
Year Ended December 31, 2016
|
||||||||
|
|
(in millions)
|
||||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of period
|
|
$
|
2,926
|
|
|
$
|
2,953
|
|
|
$
|
69
|
|
|
$
|
114
|
|
Service cost
|
|
17
|
|
|
18
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
|
98
|
|
|
101
|
|
|
2
|
|
|
3
|
|
||||
Plan amendments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||
Actuarial loss (gain)
|
|
229
|
|
|
87
|
|
|
3
|
|
|
1
|
|
||||
Retiree contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Benefits paid
|
|
(218
|
)
|
|
(233
|
)
|
|
(7
|
)
|
|
(15
|
)
|
||||
Benefit obligation at end of period
|
|
3,052
|
|
|
2,926
|
|
|
67
|
|
|
69
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of period
|
|
2,208
|
|
|
2,190
|
|
|
61
|
|
|
60
|
|
||||
Actual return on plan assets
|
|
277
|
|
|
131
|
|
|
4
|
|
|
4
|
|
||||
Retiree contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Employer contributions
|
|
118
|
|
|
120
|
|
|
3
|
|
|
7
|
|
||||
Benefits paid
|
|
(218
|
)
|
|
(233
|
)
|
|
(7
|
)
|
|
(15
|
)
|
||||
Fair value of plan assets at end of period
|
|
2,385
|
|
|
2,208
|
|
|
61
|
|
|
61
|
|
||||
Unfunded status
|
|
$
|
(667
|
)
|
|
$
|
(718
|
)
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||
|
|
(in millions)
|
||||||||||||||
Noncurrent assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
17
|
|
Other current liabilities
|
|
(4
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Postretirement benefit liabilities
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
||||
Pension liabilities
|
|
(663
|
)
|
|
(715
|
)
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
|
$
|
(667
|
)
|
|
$
|
(718
|
)
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
Accumulated other comprehensive loss (income) related to:
|
|
|
|
|
|
|
|
|
||||||||
Unrecognized net actuarial losses
|
|
$
|
1,376
|
|
|
$
|
1,398
|
|
|
$
|
16
|
|
|
$
|
15
|
|
Unrecognized prior service benefits
|
|
(90
|
)
|
|
(110
|
)
|
|
(36
|
)
|
|
(43
|
)
|
||||
Accumulated other comprehensive loss (income)
|
|
$
|
1,286
|
|
|
$
|
1,288
|
|
|
$
|
(20
|
)
|
|
$
|
(28
|
)
|
|
|
Pension
|
|
Other
Postretirement
Benefits
|
||||
|
|
(in millions)
|
||||||
Recognized net actuarial losses
|
|
$
|
147
|
|
|
$
|
2
|
|
Amortization of prior service benefits
|
|
(20
|
)
|
|
(5
|
)
|
||
Total
|
|
$
|
127
|
|
|
$
|
(3
|
)
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
|
|
|
|
|
||||
Projected benefit obligation
|
|
$
|
3,052
|
|
|
$
|
2,926
|
|
Accumulated benefit obligation
|
|
$
|
3,052
|
|
|
$
|
2,926
|
|
Fair value of plan assets
|
|
$
|
2,385
|
|
|
$
|
2,208
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||||||||
|
|||||||||||||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
98
|
|
|
101
|
|
|
91
|
|
|
2
|
|
|
3
|
|
|
3
|
|
||||||
Expected return on plan assets
|
(157
|
)
|
|
(162
|
)
|
|
(120
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Amortization of unrecognized net loss
|
131
|
|
|
126
|
|
|
113
|
|
|
2
|
|
|
1
|
|
|
2
|
|
||||||
Amortization of unrecognized prior service benefit
|
(20
|
)
|
|
(21
|
)
|
|
(16
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||||
Net periodic benefit cost before special termination benefits cost/curtailment
|
69
|
|
|
62
|
|
|
82
|
|
|
(6
|
)
|
|
(5
|
)
|
|
(3
|
)
|
||||||
Special termination benefits cost/curtailment
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
69
|
|
|
$
|
64
|
|
|
$
|
82
|
|
|
$
|
(6
|
)
|
|
$
|
(5
|
)
|
|
$
|
(3
|
)
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||
|
|
|
|||||||||||||||
Weighted-average assumptions used to determine benefit obligations at the end of each period
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.65
|
%
|
|
4.14
|
%
|
|
4.40
|
%
|
|
3.36
|
%
|
|
3.62
|
%
|
|
3.98
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Union
|
2.90
|
%
|
|
3.11
|
%
|
|
3.13
|
%
|
|
|
|
|
|
|
|||
Salaried
|
3.51
|
%
|
|
3.56
|
%
|
|
3.62
|
%
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||
|
|
||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost for each period
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.14
|
%
|
|
4.40
|
%
|
|
3.90
|
%
|
|
3.63
|
%
|
|
3.98
|
%
|
|
3.55
|
%
|
Expected long-term rate of return on plan assets
|
7.00
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
4.00% / 6.00%
|
|
|
4.00% / 6.00%
|
|
|
5.00% / 6.25%
|
|
Rate of compensation increase:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Union
|
3.11
|
%
|
|
3.13
|
%
|
|
3.66
|
%
|
|
|
|
|
|
|
|||
Salaried
|
3.56
|
%
|
|
3.60
|
%
|
|
3.14
|
%
|
|
|
|
|
|
|
|
|
Anticipated 2018
|
|
Actual
|
||||||||
|
|
Low
|
|
High
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Asset category:
|
|
|
|
|
|
|
|
|
||||
Domestic equity
|
|
10.0
|
%
|
|
20.0
|
%
|
|
15.7
|
%
|
|
12.5
|
%
|
International equity
|
|
10.0
|
%
|
|
20.0
|
%
|
|
14.6
|
%
|
|
18.4
|
%
|
Fixed income
|
|
35.0
|
%
|
|
50.0
|
%
|
|
34.2
|
%
|
|
38.2
|
%
|
Real estate
|
|
2.0
|
%
|
|
6.0
|
%
|
|
3.6
|
%
|
|
3.5
|
%
|
Hedge funds/private equity
|
|
15.0
|
%
|
|
30.0
|
%
|
|
24.6
|
%
|
|
21.1
|
%
|
Other investments/cash
|
|
2.0
|
%
|
|
8.0
|
%
|
|
7.3
|
%
|
|
6.3
|
%
|
December 31, 2017
|
|
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
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Corporate debt
|
|
—
|
|
|
147
|
|
|
—
|
|
|
147
|
|
||||
Common stock
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||
Registered investment companies
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Value of funds in insurance company accounts
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||
Total assets in the fair value hierarchy
|
|
$
|
115
|
|
|
$
|
189
|
|
|
$
|
—
|
|
|
$
|
304
|
|
Investments measured at NAV
|
|
|
|
|
|
|
|
|
|
2,081
|
|
|||||
Total investments
|
|
|
|
|
|
|
|
$
|
2,385
|
|
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
|
|
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
|
|
|
|
|
|
|
|
$
|
2,208
|
|
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
|
|
(in millions)
|
||||||
2018
|
|
$
|
225
|
|
|
$
|
8
|
|
2019
|
|
197
|
|
|
7
|
|
||
2020
|
|
200
|
|
|
7
|
|
||
2021
|
|
203
|
|
|
7
|
|
||
2022
|
|
203
|
|
|
6
|
|
||
2023 through 2027
|
|
994
|
|
|
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, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||
|
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
75
|
|
|
$
|
63
|
|
|
$
|
28
|
|
State
|
|
9
|
|
|
2
|
|
|
2
|
|
|||
Non-US
|
|
—
|
|
|
4
|
|
|
—
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
72
|
|
|
39
|
|
|
55
|
|
|||
State
|
|
(4
|
)
|
|
3
|
|
|
2
|
|
|||
Income taxes
|
|
$
|
152
|
|
|
$
|
111
|
|
|
$
|
87
|
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
|||
Statutory federal income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal impact
|
|
3.3
|
|
|
2.8
|
|
|
2.1
|
|
Domestic manufacturing deduction
|
|
(1.9
|
)
|
|
(2.3
|
)
|
|
(1.5
|
)
|
True-up of prior year taxes
|
|
(3.2
|
)
|
|
(2.6
|
)
|
|
0.1
|
|
Research and development tax credit
|
|
(9.3
|
)
|
|
(12.6
|
)
|
|
(5.2
|
)
|
Change in prior year contingent tax liabilities
|
|
(1.3
|
)
|
|
0.1
|
|
|
1.0
|
|
Impacts related to the 2017 Tax Act
|
|
8.4
|
|
|
—
|
|
|
—
|
|
Other, net
|
|
(0.1
|
)
|
|
0.1
|
|
|
(1.2
|
)
|
Change in valuation allowance
|
|
2.1
|
|
|
7.0
|
|
|
1.6
|
|
Income tax provision
|
|
33.0
|
%
|
|
27.5
|
%
|
|
31.9
|
%
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Deferred income tax assets:
|
|
|
|
|
||||
Retirement benefits
|
|
$
|
169
|
|
|
$
|
271
|
|
Federal carryforwards
|
|
31
|
|
|
13
|
|
||
State carryforwards
|
|
73
|
|
|
50
|
|
||
Other
|
|
8
|
|
|
19
|
|
||
Other reserves
|
|
10
|
|
|
21
|
|
||
Accruals for employee benefits
|
|
25
|
|
|
40
|
|
||
Inventory
|
|
13
|
|
|
25
|
|
||
Contract method of revenue recognition
|
|
42
|
|
|
80
|
|
||
Total deferred income tax assets before valuation allowance
|
|
371
|
|
|
519
|
|
||
Valuation allowance
|
|
(62
|
)
|
|
(42
|
)
|
||
Total deferred income tax assets
|
|
309
|
|
|
477
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Intangible assets
|
|
(47
|
)
|
|
(86
|
)
|
||
Property, plant and equipment
|
|
(104
|
)
|
|
(127
|
)
|
||
Debt-related
|
|
(3
|
)
|
|
(10
|
)
|
||
Total deferred income tax liabilities
|
|
(154
|
)
|
|
(223
|
)
|
||
Net deferred income tax assets
|
|
$
|
155
|
|
|
$
|
254
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||
|
(in millions)
|
||||||||||
Beginning Balance
|
$
|
42
|
|
|
$
|
13
|
|
|
$
|
9
|
|
Additions, charged to expense
|
21
|
|
|
37
|
|
|
5
|
|
|||
Deductions
|
(1
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|||
Ending Balance
|
$
|
62
|
|
|
$
|
42
|
|
|
$
|
13
|
|
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2016 |
|
Nine Months Ended December 31, 2015
|
||||||
|
|
(in millions)
|
||||||||||
Unrecognized tax benefits, beginning of period
|
|
$
|
119
|
|
|
$
|
81
|
|
|
$
|
34
|
|
Gross increases—tax positions in prior periods
|
|
6
|
|
|
30
|
|
|
42
|
|
|||
Gross decreases—tax positions in prior periods
|
|
(2
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|||
Gross increases—current-period tax positions
|
|
21
|
|
|
18
|
|
|
6
|
|
|||
Settlements
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Lapse of statute of limitations
|
|
(10
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Unrecognized tax benefits, end of period
|
|
$
|
134
|
|
|
$
|
119
|
|
|
$
|
81
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Liability
|
|
Receivable
|
|
Liability
|
|
Receivable
|
||||||||
|
|
(in millions)
|
||||||||||||||
Current
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
3
|
|
Noncurrent
|
|
28
|
|
|
10
|
|
|
35
|
|
|
15
|
|
||||
Total
|
|
$
|
33
|
|
|
$
|
13
|
|
|
$
|
41
|
|
|
$
|
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.
|
|
|
Performance Share
and TSR Awards |
|
Restricted Stock
Units |
|
Restricted Stock
Awards |
|
Combined
Weighted Average Grant Date Fair Value |
|||||
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
|
|
Granted
|
|
118,786
|
|
|
—
|
|
|
161,207
|
|
|
99.55
|
|
|
Canceled/forfeited
|
|
(12,137
|
)
|
|
(1,016
|
)
|
|
(9,356
|
)
|
|
84.74
|
|
|
Vested
|
|
—
|
|
|
(101,311
|
)
|
|
(156,190
|
)
|
|
92.80
|
|
|
Nonvested, December 31, 2017
|
|
417,630
|
|
|
—
|
|
|
306,910
|
|
|
$
|
88.54
|
|
•
|
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.
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
||||||
Risk-free rate
|
|
1.42
|
%
|
|
1.00
|
%
|
|
1.02
|
%
|
|||
Expected volatility
|
|
26.77
|
%
|
|
25.39
|
%
|
|
22.81
|
%
|
|||
Expected dividend yield
|
|
1.28
|
%
|
|
1.51
|
%
|
|
1.78
|
%
|
|||
Expected award life
|
|
2.8 years
|
|
|
2.8 years
|
|
|
2.8 years
|
|
|||
Weighted average grant date fair value
|
|
$
|
115.26
|
|
|
$
|
87.85
|
|
|
$
|
94.93
|
|
|
|
Shares
|
|
Weighted Average
Exercise Price |
|
Weighted Average
Remaining Contractual Life (in years) |
|
Aggregate Intrinsic
Value (per option) |
|||||
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
|
|
Granted
|
|
58,434
|
|
|
93.51
|
|
|
|
|
|
|||
Exercised
|
|
(84,544
|
)
|
|
41.52
|
|
|
|
|
|
|||
Outstanding, December 31, 2017
|
|
245,869
|
|
|
$
|
72.56
|
|
|
7.6
|
|
$
|
58.94
|
|
Options exercisable at:
|
|
|
|
|
|
|
|
|
|||||
December 31, 2017
|
|
114,364
|
|
|
$
|
59.07
|
|
|
6.6
|
|
$
|
72.43
|
|
Options expected to vest:
|
|
|
|
|
|
|
|
|
|||||
December 31, 2017
|
|
131,505
|
|
|
$
|
84.30
|
|
|
8.4
|
|
$
|
47.20
|
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Nine Months Ended December 31, 2015
|
Risk-free rate
|
|
1.96%
|
|
1.62%
|
|
1.99%
|
Expected volatility
|
|
28.19%
|
|
26.89%
|
|
27.91%
|
Expected dividend yield
|
|
1.35%
|
|
1.36%
|
|
1.17%
|
Expected option life
|
|
6 years
|
|
7 years
|
|
7 years
|
•
|
Flight Systems Group
develops launch vehicles 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 military 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 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 as well as specialized engineering and operations services to U.S. Government agencies.
|
|
|
U.S. Government Sales
|
|
Percentage of sales
|
|||
|
|
(in millions)
|
|
|
|||
Year ended December 31, 2017
|
|
$
|
3,489
|
|
|
73
|
%
|
Year ended December 31, 2016
|
|
$
|
3,368
|
|
|
76
|
%
|
Nine months ended December 31, 2015
|
|
$
|
2,359
|
|
|
70
|
%
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
|
Flight Systems Group
|
|
Defense Systems Group
|
|
Space Systems Group
|
|
Corporate
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
|
$
|
1,669
|
|
|
$
|
1,952
|
|
|
$
|
1,143
|
|
|
$
|
—
|
|
|
$
|
4,764
|
|
Intercompany
|
|
12
|
|
|
16
|
|
|
141
|
|
|
(169
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
1,681
|
|
|
$
|
1,968
|
|
|
$
|
1,284
|
|
|
$
|
(169
|
)
|
|
$
|
4,764
|
|
Income (loss) before interest, income taxes and noncontrolling interest
|
|
$
|
211
|
|
|
$
|
193
|
|
|
$
|
142
|
|
|
$
|
(17
|
)
|
|
$
|
529
|
|
Capital expenditures
|
|
$
|
73
|
|
|
$
|
34
|
|
|
$
|
34
|
|
|
$
|
104
|
|
|
$
|
245
|
|
Depreciation
|
|
$
|
59
|
|
|
$
|
18
|
|
|
$
|
36
|
|
|
$
|
5
|
|
|
$
|
118
|
|
Amortization of intangibles
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
37
|
|
Total assets
|
|
$
|
2,262
|
|
|
$
|
1,337
|
|
|
$
|
1,256
|
|
|
$
|
811
|
|
|
$
|
5,666
|
|
|
|
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) 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
|
|
|
Nine Months Ended
|
||||||
(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, 2017
|
||||||||||||||
|
|
Quarter Ended
|
||||||||||||||
(in millions, except per share data)
|
|
April 2,
|
|
July 2,
|
|
October 1,
|
|
December 31,
|
||||||||
Sales
|
|
$
|
1,085
|
|
|
$
|
1,115
|
|
|
$
|
1,216
|
|
|
$
|
1,348
|
|
Gross profit
|
|
$
|
229
|
|
|
$
|
267
|
|
|
$
|
275
|
|
|
$
|
294
|
|
Net income attributable to Orbital ATK, Inc.
|
|
$
|
66
|
|
|
$
|
88
|
|
|
$
|
94
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
(1)
|
|
$
|
1.16
|
|
|
$
|
1.52
|
|
|
$
|
1.65
|
|
|
$
|
1.07
|
|
Diluted earnings per common share
(1)
|
|
$
|
1.15
|
|
|
$
|
1.51
|
|
|
$
|
1.64
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
57.33
|
|
|
57.41
|
|
|
57.31
|
|
|
57.38
|
|
||||
Weighted-average diluted shares outstanding
|
|
57.78
|
|
|
57.73
|
|
|
57.76
|
|
|
57.97
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends per common share:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
Paid
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
|
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
|
|
|
$
|
1,084
|
|
|
$
|
1,043
|
|
|
$
|
1,272
|
|
Gross profit
|
|
$
|
227
|
|
|
$
|
280
|
|
|
$
|
210
|
|
|
$
|
268
|
|
Net income attributable to Orbital ATK, Inc.
|
|
$
|
77
|
|
|
$
|
91
|
|
|
$
|
60
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
(1)
|
|
$
|
1.33
|
|
|
$
|
1.56
|
|
|
$
|
1.04
|
|
|
$
|
1.12
|
|
Diluted earnings per common share
(1)
|
|
$
|
1.31
|
|
|
$
|
1.55
|
|
|
$
|
1.04
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
58.30
|
|
|
58.19
|
|
|
57.93
|
|
|
57.30
|
|
||||
Weighted-average diluted shares outstanding
|
|
58.88
|
|
|
58.64
|
|
|
58.26
|
|
|
57.69
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends per common share:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
Paid
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
Members:
|
|
Douglas L. Maine,
Chair
|
|
Ronald T. Kadish
|
|
|
Kevin P. Chilton
|
|
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
|
•
|
Michael A. Kahn, Executive Vice President and President, Defense Systems Group
|
•
|
In the Flight Systems Group, we completed a successful launch of our Antares rocket, which carried the Company’s Cygnus spacecraft on a resupply mission to the International Space Station (“ISS”), a Taurus rocket carrying ten commercial spacecraft, and a Minotaur IV rocket carrying a US Air Force satellite. The Company also conducted successful tests of its IRBM and Patriot target vehicles, and supported a number of additional rocket launches with its propulsion and composite structures products.
|
•
|
In the Defense Systems Group, Orbital ATK delivered its 100,000th Hellfire tactical missile motor and delivered over 1.3 billion small- and medium-caliber ammunition rounds.
|
•
|
In the Space Systems Group, we continued to meet our commitments to NASA for International Space Station cargo delivery, completing two Cygnus missions during the year, made progress on the development of the Company’s Mission Extension Vehicle, which will provide satellite extension services to customers, and delivered 20 Iridium NEXT satellites and its first GEOStar-3 commercial satellite, which was successfully launched in January 2018.
|
•
|
Flight Systems booked approximately $2.2 billion of orders and options, highlighted by major contracts for military aircraft structures, including for the F-35 fighter.
|
•
|
Defense Systems received approximately $3.7 billion of new contracts and options, including a significant contract to continue full-rate production of the advanced anti-radiation guided missile (AARGM), long-term
|
•
|
Space Systems won nearly $1.7 billion in new business, with contracts for government spacecraft and the Company’s second mission extension vehicle.
|
•
|
Modest Salary Increases
. Increases in 2017 salaries ranged from 1.50% to 4.65% for three of our NEOs, with salaries unchanged for two of our NEOs. The increases were designed to maintain market competitiveness and recognize individual performance and criticality to the Company.
|
•
|
Target Incentive Opportunity Adjustments.
Target annual cash incentive opportunities, expressed as a percentage of base salary were not increased in 2017 compared to 2016 levels.
Target long-term incentive opportunities were increased for Messrs. Thompson and Larson and decreased for Messrs. Culbertson and Kahn.
|
•
|
Above Target Payout of Annual Incentive Program.
The 2017 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 150% of target performance, the Space Systems Group President achieved 154% of target performance, and the Defense Systems Group President achieved 154% of target performance.
|
•
|
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, over half 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.
|
Financial and Operational Measures
|
Weightings
|
Overall Target
Incentive Achieved
(Mr. Culbertson)
|
Overall Target
Incentive Achieved
(Mr. Kahn)
|
||
Company EBIT
|
10.5%
|
146
|
%
|
146
|
%
|
Company Revenue
|
10.5%
|
162
|
%
|
162
|
%
|
Company Free Cash Flow
|
10.5%
|
175
|
%
|
175
|
%
|
Company Orders
|
3.5%
|
175
|
%
|
175
|
%
|
Business Group EBIT
|
12%
|
175
|
%
|
175
|
%
|
Business Group Revenue
|
12%
|
172
|
%
|
170
|
%
|
Business Group Free Cash Flow
|
12%
|
175
|
%
|
175
|
%
|
Business Group Orders
|
4%
|
175
|
%
|
175
|
%
|
Operational Milestones
|
25%
|
111
|
%
|
112
|
%
|
Overall Performance Level Achieved
|
|
154
|
%
|
154
|
%
|
|
Annual Cash Incentive Amounts
|
Actual
|
||||||||||||||||||||||||||
|
Threshold
|
Target
|
Maximum
|
Incentive
|
||||||||||||||||||||||||
Mr. Thompson
|
|
$
|
405,006
|
|
|
|
|
|
$
|
1,080,017
|
|
|
|
|
$
|
1,728,028
|
|
|
|
|
|
$
|
1,619,054
|
|
|
|||
Mr. Pierce
|
|
$
|
227,813
|
|
|
|
|
|
$
|
607,500
|
|
|
|
|
$
|
972,000
|
|
|
|
|
|
$
|
910,703
|
|
|
|||
Mr. Larson
|
|
$
|
227,813
|
|
|
|
|
|
$
|
607,500
|
|
|
|
|
$
|
972,000
|
|
|
|
|
|
$
|
910,703
|
|
|
|||
Mr. Culbertson
|
|
$
|
150,000
|
|
|
|
|
|
$
|
400,000
|
|
|
|
|
$
|
640,000
|
|
|
|
|
|
$
|
616,680
|
|
|
|||
Mr. Kahn
|
|
$
|
156,000
|
|
|
|
|
|
$
|
416,000
|
|
|
|
|
$
|
665,600
|
|
|
|
|
|
$
|
641,306
|
|
|
Executive Officer Long-Term Incentive Program
|
|||
|
|||
|
|
|
|
Type of Award
|
Value*
|
Objectives
|
Key Terms
|
Performance Shares (to be paid out in shares of Orbital ATK common stock upon the achievement of pre-determined metrics)
|
40% of long-term incentive opportunity
|
Aligned with long-term stockholder interests by focusing on total shareholder return, top-line growth, profitability, and capital
|
Measured over a three fiscal-year period:
(1) relative total stockholder return: relative three-year return compared to aerospace and defense companies with revenue >$1 billion in the S&P Composite 1500 Index (50% weighting);
(2) absolute revenue growth (25% weighting);
(3) return on invested capital (25% weighting)
|
Restricted Stock
|
40% of long-term incentive opportunity
|
Retention, with underlying value based on stock-price performance
|
Equal annual installment vesting over a three-year period
|
Stock Options
|
20% of long-term incentive opportunity
|
Long-term stock price appreciation
|
Exercise price equal to fair market value of Orbital ATK stock on the date of grant; equal annual installment vesting over a three-year period; 10-year term
|
•
|
The median of the annual total compensation of all employees of our Company other than the CEO was $86,079; and
|
•
|
The annual total compensation of our CEO, as reported in the Summary Compensation Table included in Item 11 of Part III of this Form 10-K, was $4,963,326.
|
Name and Principal Position
|
Year (1)
|
Salary
($)(2) |
Bonus
($) |
Stock Awards
($)(3)(4)(5) |
Option Awards
($)(6) |
Non-equity Incentive Plan Compensation
($)(7) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)(8) |
All Other Compensation
($)(9) |
Total
($)
|
||||||||||||||||
David W. Thompson
|
2017
|
$
|
934,630
|
|
$
|
—
|
|
$
|
1,777,044
|
|
$
|
419,979
|
|
$
|
1,619,054
|
|
$
|
—
|
|
$
|
212,619
|
|
$
|
4,963,326
|
|
President &
|
2016
|
$
|
945,688
|
|
$
|
—
|
|
$
|
1,970,864
|
|
$
|
479,991
|
|
$
|
1,246,016
|
|
$
|
—
|
|
$
|
226,673
|
|
$
|
4,869,232
|
|
Chief Executive Officer
|
2015T
|
$
|
669,049
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,485,669
|
|
$
|
—
|
|
$
|
44,064
|
|
$
|
2,198,782
|
|
|
FY2015
|
$
|
111,539
|
|
$
|
—
|
|
$
|
2,072,304
|
|
$
|
480,004
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,187
|
|
$
|
2,678,034
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Garrett E. Pierce
|
2017
|
$
|
698,655
|
|
$
|
—
|
|
$
|
846,183
|
|
$
|
199,993
|
|
$
|
910,703
|
|
$
|
—
|
|
$
|
129,172
|
|
$
|
2,784,706
|
|
Chief Financial Officer
|
2016
|
$
|
702,121
|
|
$
|
—
|
|
$
|
821,057
|
|
$
|
199,983
|
|
$
|
690,494
|
|
$
|
—
|
|
$
|
138,488
|
|
$
|
2,552,143
|
|
|
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
|
2017
|
$
|
681,635
|
|
$
|
—
|
|
$
|
1,057,877
|
|
$
|
249,986
|
|
$
|
910,703
|
|
$
|
254,873
|
|
$
|
77,689
|
|
$
|
3,232,763
|
|
Chief Operating Officer
|
2016
|
$
|
654,231
|
|
$
|
286,808
|
|
$
|
944,338
|
|
$
|
229,998
|
|
$
|
703,209
|
|
$
|
225,798
|
|
$
|
67,615
|
|
$
|
3,111,997
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Frank L. Culbertson
|
2017
|
$
|
514,235
|
|
$
|
—
|
|
$
|
422,992
|
|
$
|
99,984
|
|
$
|
616,680
|
|
$
|
—
|
|
$
|
89,932
|
|
$
|
1,743,823
|
|
Executive Vice President &
|
2016
|
$
|
495,980
|
|
$
|
—
|
|
$
|
472,088
|
|
$
|
114,989
|
|
$
|
477,330
|
|
$
|
—
|
|
$
|
91,322
|
|
$
|
1,651,709
|
|
President, Space Systems Group
|
2015T
|
$
|
359,667
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
532,022
|
|
$
|
—
|
|
$
|
16,190
|
|
$
|
907,879
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Michael A. Kahn
|
2017
|
$
|
530,000
|
|
$
|
—
|
|
$
|
422,992
|
|
$
|
99,984
|
|
$
|
641,306
|
|
$
|
369,772
|
|
$
|
39,163
|
|
$
|
2,103,217
|
|
Executive Vice President &
|
2016
|
$
|
527,885
|
|
$
|
—
|
|
$
|
472,088
|
|
$
|
114,989
|
|
$
|
187,221
|
|
$
|
202,130
|
|
$
|
44,649
|
|
$
|
1,548,962
|
|
President, Defense Systems
|
2015T
|
$
|
392,459
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
347,759
|
|
$
|
12,073
|
|
$
|
41,057
|
|
$
|
793,348
|
|
|
FY2015
|
$
|
455,496
|
|
$
|
156,435
|
|
$
|
496,376
|
|
$
|
114,994
|
|
$
|
362,484
|
|
$
|
379,887
|
|
$
|
82,255
|
|
$
|
2,047,927
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The years reported are the Company's fiscal year ending December 31, 2017, the Company's fiscal year ending December 31, 2016, the nine-month transition period ending December 31, 2015, and the fiscal year ending March 31, 2015.
|
(2)
|
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. Also includes payments to executive officers for vacation sold under the Company's vacation buy/sell benefit program: Mr. Thompson, $34,616, Mr. Pierce, $25,577, Mr. Larson, $12,404, Mr. Culbertson, $18,462, and Mr. Kahn, $10,000.
|
(3)
|
This column shows the aggregate grant date fair value computed in accordance with generally accepted accounting principles in the United States. For 2017, 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
|
|
|
|
|
2017 - 2019 Performance Shares
|
|||||||
Name
|
|
Restricted Stock
|
|
At Target
|
At Maximum
|
||||||
Mr. Thompson
|
|
$
|
839,907
|
|
|
$
|
937,137
|
|
$
|
1,874,274
|
|
Mr. Pierce
|
|
$
|
399,942
|
|
|
$
|
446,241
|
|
$
|
892,482
|
|
Mr. Larson
|
|
$
|
499,998
|
|
|
$
|
557,879
|
|
$
|
1,115,758
|
|
Mr. Culbertson
|
|
$
|
199,924
|
|
|
$
|
223,068
|
|
$
|
446,136
|
|
Mr. Kahn
|
|
$
|
199,924
|
|
|
$
|
223,068
|
|
$
|
446,136
|
|
(4)
|
For fiscal year 2016, the amounts in this column were calculated as noted above in footnote 3.
|
|
|
|
|
2016 - 2018 Performance Shares
|
|||||||
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. Kahn
|
|
$
|
229,950
|
|
|
$
|
242,138
|
|
$
|
484,276
|
|
(5)
|
For fiscal year 2015 (FY2015), the amounts in this column were calculated as noted above in footnote 3.
|
|
|
|
|
2015 - 2017 Performance Shares
|
|||||||
Name
|
|
Restricted Stock
|
|
At Target
|
At Maximum
|
||||||
Mr. Thompson
|
|
$
|
959,983
|
|
|
$
|
1,112,320
|
|
$
|
2,224,641
|
|
Mr. Pierce
|
|
$
|
399,933
|
|
|
$
|
463,397
|
|
$
|
926,795
|
|
Mr. Larson
|
|
$
|
459,959
|
|
|
$
|
532,949
|
|
$
|
1,065,897
|
|
Mr. Kahn
|
|
$
|
229,943
|
|
|
$
|
266,433
|
|
$
|
532,865
|
|
(6)
|
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.
|
(7)
|
The amounts in this column represent payment of annual incentive compensation for the periods noted. The annual incentive compensation program and payments for 2017 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.
|
(8)
|
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.
|
(9)
|
"All Other Compensation" amounts for 2017 consist of the following:
|
Name
|
Dividends (1)
|
401(k) Plan Contributions
|
DC SERP Plan Allocations
|
||||||
Mr. Thompson
|
$
|
30,206
|
|
$
|
22,950
|
|
$
|
159,463
|
|
Mr. Pierce
|
$
|
13,268
|
|
$
|
22,950
|
|
$
|
92,954
|
|
Mr. Larson
|
$
|
15,929
|
|
$
|
12,150
|
|
$
|
49,610
|
|
Mr. Culbertson
|
$
|
7,218
|
|
$
|
22,950
|
|
$
|
59,764
|
|
Mr. Kahn
|
$
|
7,338
|
|
$
|
12,150
|
|
$
|
19,675
|
|
(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)
|
Incentive Award
Type |
Threshold
($) |
Target
($) |
Maximum
($) |
|
Threshold
(#) |
Target
(#) |
Maximum
(#) |
|||||||||||||||||||
David W. Thompson
|
2/27/2017
|
Annual (2)
|
$
|
405,006
|
|
$
|
1,080,017
|
|
$
|
1,728,028
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2/27/2017
|
Long-Term Stock (3)
|
|
|
|
|
2,245
|
|
8,982
|
|
17,964
|
|
|
|
|
$
|
937,137
|
|
||||||||||
|
2/27/2017
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
8,982
|
|
|
|
$
|
839,907
|
|
||||||||||||
|
2/27/2017
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
17,163
|
|
$
|
93.51
|
|
$
|
419,979
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Garrett E. Pierce
|
2/27/2017
|
Annual (2)
|
$
|
227,813
|
|
$
|
607,500
|
|
$
|
972,000
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2/27/2017
|
Long-Term Stock (3)
|
|
|
|
|
1,069
|
|
4,277
|
|
8,554
|
|
|
|
|
$
|
446,241
|
|
||||||||||
|
2/27/2017
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
4,277
|
|
|
|
$
|
399,942
|
|
||||||||||||
|
2/27/2017
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
8,173
|
|
$
|
93.51
|
|
$
|
199,993
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Blake E. Larson
|
2/27/2017
|
Annual (2)
|
$
|
227,813
|
|
$
|
607,500
|
|
$
|
972,000
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2/27/2017
|
Long-Term Stock (3)
|
|
|
|
|
1,336
|
|
5,347
|
|
10,694
|
|
|
|
|
$
|
557,879
|
|
||||||||||
|
2/27/2017
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
5,347
|
|
|
|
$
|
499,998
|
|
||||||||||||
|
2/27/2017
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
10,216
|
|
$
|
93.51
|
|
$
|
249,986
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Frank L. Culbertson
|
2/27/2017
|
Annual (2)
|
$
|
150,000
|
|
$
|
400,000
|
|
$
|
640,000
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2/27/2017
|
Long-Term Stock (3)
|
|
|
|
|
534
|
|
2,138
|
|
4,276
|
|
|
|
|
$
|
223,068
|
|
||||||||||
|
2/27/2017
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
2,138
|
|
|
|
$
|
199,924
|
|
||||||||||||
|
2/27/2017
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
4,086
|
|
$
|
93.51
|
|
$
|
99,984
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Michael A. Kahn
|
2/27/2017
|
Annual (2)
|
$
|
156,000
|
|
$
|
416,000
|
|
$
|
665,600
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2/27/2017
|
Long-Term Stock (3)
|
|
|
|
|
534
|
|
2,138
|
|
4,276
|
|
|
|
|
$
|
223,068
|
|
||||||||||
|
2/27/2017
|
Restricted Stock (4)
|
|
|
|
|
|
|
|
2,138
|
|
|
|
$
|
199,924
|
|
||||||||||||
|
2/27/2017
|
Stock Options (5)
|
|
|
|
|
|
|
|
|
4,086
|
|
$
|
93.51
|
|
$
|
99,984
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The grant date is the date the Compensation and Human Resources Committee of the Board of Directors met and approved the awards.
|
(2)
|
The amounts reflect the potential cash payout for the annual incentive program for the fiscal year ending December 31, 2017 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 2017.
|
(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, 2017 and ending December 31, 2019 if all performance metrics are satisfied at the applicable level. The payout will be determined after the fiscal year ending December 31, 2019. The material terms of the award are described above in the "Compensation Discussion and Analysis" under the subheading "2017 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 February 27, 2017. 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 February 27, 2017. 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 ($) |
Option
Expiration Date |
|
Number of
Shares or Units of Stock That Have Not Vested (#)(3) |
Market
Value of Shares or Units of Stock That Have Not Vested ($)(4) |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) |
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4)(5) |
|||||||
David W. Thompson
|
3/10/2015
|
15,594
|
|
7,798
|
|
—
|
|
$
|
72.06
|
|
3/10/2025
|
|
4,441
|
$583,992
|
—
|
|
—
|
|
|
|
3/17/2016
|
7,793
|
|
15,587
|
|
—
|
|
$
|
79.43
|
|
3/17/2026
|
|
8,058
|
$1,059,627
|
24,172
|
(6)
|
$
|
3,178,618
|
|
|
2/27/2017
|
—
|
|
17,163
|
|
—
|
|
$
|
93.51
|
|
2/27/2027
|
|
8,982
|
$1,181,133
|
17,964
|
(7)
|
$
|
2,362,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Garrett E. Pierce
|
3/10/2015
|
6,498
|
|
3,249
|
|
—
|
|
$
|
72.06
|
|
3/10/2025
|
|
1,850
|
$243,275
|
—
|
|
—
|
|
|
|
3/17/2016
|
3,247
|
|
6,494
|
|
—
|
|
$
|
79.43
|
|
3/17/2026
|
|
3,357
|
$441,446
|
10,070
|
(6)
|
$
|
1,324,205
|
|
|
2/27/2017
|
—
|
|
8,173
|
|
—
|
|
$
|
93.51
|
|
2/27/2027
|
|
4,277
|
$562,426
|
8,554
|
(7)
|
$
|
1,124,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
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
|
2,764
|
|
—
|
|
—
|
|
$
|
61.65
|
|
3/11/2024
|
|
—
|
—
|
—
|
|
—
|
|
|
|
3/10/2015
|
7,472
|
|
3,737
|
|
—
|
|
$
|
72.06
|
|
3/10/2025
|
|
2,128
|
$279,832
|
—
|
|
—
|
|
|
|
3/17/2016
|
3,734
|
|
7,469
|
|
—
|
|
$
|
79.43
|
|
3/17/2026
|
|
3,861
|
$507,722
|
11,582
|
(6)
|
$
|
1,523,033
|
|
|
2/27/2017
|
—
|
|
10,216
|
|
—
|
|
$
|
93.51
|
|
2/27/2027
|
|
5,347
|
$703,131
|
10,694
|
(7)
|
$
|
1,406,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Frank L. Culbertson
|
3/10/2015
|
3,736
|
|
1,868
|
|
—
|
|
$
|
72.06
|
|
3/10/2025
|
|
1,064
|
$139,916
|
—
|
|
—
|
|
|
|
3/17/2016
|
1,867
|
|
3,734
|
|
—
|
|
$
|
79.43
|
|
3/17/2026
|
|
1,930
|
$253,795
|
5,790
|
(6)
|
$
|
761,385
|
|
|
2/27/2017
|
—
|
|
4,086
|
|
—
|
|
$
|
93.51
|
|
2/27/2027
|
|
2,138
|
$281,147
|
4,276
|
(7)
|
$
|
562,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Michael A. Kahn
|
3/6/2012
|
6,822
|
|
—
|
|
—
|
|
$
|
26.25
|
|
3/6/2022
|
|
—
|
—
|
—
|
|
—
|
|
|
|
3/5/2013
|
6,094
|
|
—
|
|
—
|
|
$
|
30.40
|
|
3/5/2023
|
|
—
|
—
|
—
|
|
—
|
|
|
|
3/11/2014
|
2,764
|
|
—
|
|
—
|
|
$
|
61.65
|
|
3/11/2024
|
|
—
|
—
|
—
|
|
—
|
|
|
|
3/10/2015
|
3,736
|
|
1,868
|
|
—
|
|
$
|
72.06
|
|
3/10/2025
|
|
1,064
|
$139,916
|
—
|
|
—
|
|
|
|
3/17/2016
|
1,867
|
|
3,734
|
|
—
|
|
$
|
79.43
|
|
3/17/2026
|
|
1,930
|
$253,795
|
5,790
|
(6)
|
$
|
761,385
|
|
|
2/27/2017
|
—
|
|
4,086
|
|
—
|
|
$
|
93.51
|
|
2/27/2027
|
|
2,138
|
$281,147
|
4,276
|
(7)
|
$
|
562,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For a better understanding of this table, we have included an additional column showing the grant dates of stock options, restricted stock awards, and performance share awards.
|
(2)
|
Stock option grants vest in three equal annual installments beginning on the first anniversary of the grant date.
|
(3)
|
Restricted stock awards vest in three equal annual installments beginning on the first anniversary of the grant date.
|
(4)
|
The amounts in this column were calculated using a per share value of $131.50, the closing price of Company common stock as reported on the NYSE on December 29, 2017, the last trading day of the fiscal year.
|
(5)
|
The amounts shown reflect the payout of the performance shares based on achievement at the maximum level of performance. The vesting and payout of any performance shares for the respective performance periods ending on December 31 will be determined, based on the actual achievement of specified performance goals.
|
(6)
|
These shares correspond to a long-term incentive award relating to performance growth measures (relative TSR, absolute revenue growth, and return on invested capital) for the period of January 1, 2016 through December 31, 2018.
|
(7)
|
These shares correspond to a long-term incentive award relating to performance growth measures (relative TSR, absolute revenue growth, and return on invested capital) for the period of January 1, 2017 through December 31, 2019.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||
Name
|
|
Number of Shares Acquired on Exercise (#)
|
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#)(1)(2)
|
|
Value Realized on Vesting
($)(1)(2)
|
|||||
David W. Thompson
|
—
|
|
|
—
|
|
|
35,139
|
|
|
$
|
4,175,867
|
|
|
Garrett E. Pierce
|
—
|
|
|
—
|
|
|
16,323
|
|
|
$
|
1,913,552
|
|
|
Blake E. Larson
|
—
|
|
|
—
|
|
|
18,037
|
|
|
$
|
2,102,062
|
|
|
Frank L. Culbertson
|
—
|
|
|
—
|
|
|
9,797
|
|
|
$
|
1,142,744
|
|
|
Michael A. Kahn
|
—
|
|
|
—
|
|
|
11,232
|
|
|
$
|
1,268,212
|
|
(1)
|
Includes the vesting of restricted stock awards and 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. 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
|
3/10/2017
|
4,441
|
|
|
3/17/2017
|
4,028
|
|
|
7/21/2017
|
6,735
|
|
|
|
|
|
Mr. Pierce
|
3/10/2017
|
1,850
|
|
|
3/17/2017
|
1,678
|
|
|
7/21/2017
|
4,490
|
|
|
|
|
|
Mr. Larson
|
3/10/2017
|
2,128
|
|
|
3/11/2017
|
375
|
|
|
3/17/2017
|
1,930
|
|
|
3/31/2017
|
4,053
|
|
|
|
|
|
Mr. Culbertson
|
3/10/2017
|
1,064
|
|
|
3/17/2017
|
965
|
|
|
7/21/2017
|
2,993
|
|
|
|
|
|
Mr. Kahn
|
3/10/2017
|
1,064
|
|
|
3/11/2017
|
375
|
|
|
3/17/2017
|
965
|
|
|
3/31/2017
|
4,053
|
|
|
|
|
(2)
|
Includes the payment of performance shares which vested on December 31, 2017 upon subsequent confirmation of the Compensation and Human Resources Committee that performance goals had been achieved, as described in the “Compensation Discussion and Analysis” section of this Form 10-K under the subheading “Long-Term Incentive Compensation Payouts.” The value realized was determined by multiplying the number of vested shares by the closing market price of Orbital ATK common stock on February 21, 2018, the payment date, which was $131.80. The number of performance shares that vested for each of the officers is as follows:
|
Name
|
Number of Shares
|
|
Mr. Thompson
|
19,935
|
|
|
|
|
Mr. Pierce
|
8,305
|
|
|
|
|
Mr. Larson
|
9,551
|
|
|
|
|
Mr. Culbertson
|
4,775
|
|
|
|
|
Mr. Kahn
|
4,775
|
|
|
|
•
|
Mr. Larson - the old Cash Balance formula under the Pension Plan,
|
•
|
Mr. Kahn - the Thiokol Pension Plan formula under the Thiokol Plan.
|
Years of Service
|
|
Percentage
of
Pension
Earnings
|
|
Additional
Percentage
for Earnings
in Excess of
Social Security
Wage Base
|
Less than 5
|
|
3.5%
|
|
3.5%
|
5 to 9
|
|
4.5%
|
|
4.5%
|
10 to 14
|
|
5.5%
|
|
5.5%
|
15 to 19
|
|
6.5%
|
|
5.5%
|
20 to 24
|
|
7.5%
|
|
5.5%
|
25 or more
|
|
8.5%
|
|
5.5%
|
•
|
1.23% of final average earnings multiplied by years of credited service; plus
|
•
|
0.75% of final average earnings in excess of social security covered compensation, multiplied by years of credited service (up to a maximum of 35 years).
|
Name
|
Plan Name
|
Number of
Years Pension Service (1)
|
Present Value
of Accumulated
Benefits ($)
|
Payments
During Last
Fiscal Year ($)
|
||
Blake E. Larson
|
Pension Plan
|
36.500
|
680,347
|
|
—
|
|
|
DB SERP
|
36.500
|
2,837,997
|
|
—
|
|
Michael A. Kahn
|
Thiokol Plan
|
29.167
|
1,088,474
|
|
—
|
|
|
DB SERP
|
29.167
|
1,976,035
|
|
—
|
|
Name
|
Plan Name
|
Executive Contributions in Last Fiscal Year
($)(1)
|
Registrant Contributions in Last Fiscal Year
($)
|
Aggregate Earnings in Last Fiscal Year
($)
|
Aggregate Withdrawals/ Distributions in Last Fiscal Year
($)
|
Aggregate Balance at Last Fiscal Year End
($)(2)
|
||||||||||
David W. Thompson
|
Deferred Compensation Plan
|
$
|
588,408
|
|
$
|
—
|
|
$
|
72,414
|
|
$
|
—
|
|
$
|
850,702
|
|
|
Orbital Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
596,544
|
|
$
|
—
|
|
$
|
6,094,449
|
|
|
DC SERP
|
$
|
—
|
|
$
|
159,463
|
|
$
|
17,185
|
|
$
|
—
|
|
$
|
357,928
|
|
Garrett E. Pierce
|
Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Orbital Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
29,030
|
|
$
|
—
|
|
$
|
195,244
|
|
|
DC SERP
|
$
|
—
|
|
$
|
92,954
|
|
$
|
8,136
|
|
$
|
—
|
|
$
|
207,526
|
|
Blake E. Larson
|
Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
87,012
|
|
$
|
—
|
|
$
|
909,509
|
|
|
DC SERP
|
$
|
—
|
|
$
|
49,610
|
|
$
|
17,577
|
|
$
|
—
|
|
$
|
193,743
|
|
Frank L. Culbertson
|
Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Orbital Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
2,221
|
|
$
|
—
|
|
$
|
22,686
|
|
|
DC SERP
|
$
|
—
|
|
$
|
59,764
|
|
$
|
4,840
|
|
$
|
—
|
|
$
|
127,923
|
|
Michael A. Kahn
|
Deferred Compensation Plan
|
$
|
—
|
|
$
|
—
|
|
$
|
62,817
|
|
$
|
—
|
|
$
|
845,352
|
|
|
DC SERP
|
$
|
—
|
|
$
|
19,675
|
|
$
|
13,928
|
|
$
|
—
|
|
$
|
131,474
|
|
(1)
|
This column does not include the deferral by Mr. Thompson of the portion of his performance award earned for the 2015-2017 performance period ended December 31, 2017 because that amount was not actually credited to his account until fiscal year 2018.
|
(2)
|
For Messrs. Larson and Kahn, 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, 2017. 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, 2017.
|
|
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
|
$
|
770,815
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
23,882
|
|
$
|
340,742
|
|
$
|
1,242,248
|
|
$
|
—
|
|
$
|
7,303,079
|
|
Mr. Pierce
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
16,964
|
|
$
|
199,390
|
|
$
|
47,755
|
|
$
|
—
|
|
$
|
402,770
|
|
Mr. Larson
|
$
|
—
|
|
$
|
308,888
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
174,994
|
|
$
|
619,370
|
|
$
|
—
|
|
$
|
1,103,252
|
|
Mr. Culbertson
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
4,269
|
|
$
|
123,082
|
|
$
|
7,704
|
|
$
|
—
|
|
$
|
150,609
|
|
Mr. Kahn
|
$
|
10,209
|
|
$
|
363,269
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
113,132
|
|
$
|
490,216
|
|
$
|
—
|
|
$
|
976,826
|
|
•
|
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, as of December 31, 2017, were 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, as of December 31, 2017, were all other "executive officers" and any employee selected by the Committee to participate in the plan for the 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 was eligible for the fiscal year in which the termination occurred, calculated based on (a) the target level of performance if the termination occurred within the first three quarters of the fiscal year or (b) the greater of projected performance or target performance if the termination occurred 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 was 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
|
•
|
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
|
Michael A. Kahn
|
||||||||||||||||
Payments Upon Death
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Payment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Restricted Stock
|
$
|
2,824,752
|
|
(1)
|
$
|
1,247,146
|
|
(1)
|
$
|
1,490,684
|
|
(1)
|
$
|
674,858
|
|
(1)
|
$
|
674,858
|
|
(1)
|
|
Performance Awards
|
$
|
363,203
|
|
(2)
|
$
|
157,011
|
|
(2)
|
$
|
185,284
|
|
(2)
|
$
|
86,790
|
|
(2)
|
$
|
86,790
|
|
(2)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total
|
$
|
3,187,955
|
|
|
$
|
1,404,157
|
|
|
$
|
1,675,968
|
|
|
$
|
761,648
|
|
|
$
|
761,648
|
|
|
|
Payments Upon Disability
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Payment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Restricted Stock
|
$
|
2,824,752
|
|
(1)
|
$
|
1,247,146
|
|
(1)
|
$
|
1,490,684
|
|
(1)
|
$
|
674,858
|
|
(1)
|
$
|
674,858
|
|
(1)
|
|
Performance Awards
|
$
|
2,906,413
|
|
(3)
|
$
|
1,257,666
|
|
(3)
|
$
|
1,483,978
|
|
(3)
|
$
|
694,978
|
|
(3)
|
$
|
694,978
|
|
(3)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total
|
$
|
5,731,165
|
|
|
$
|
2,504,812
|
|
|
$
|
2,974,662
|
|
|
$
|
1,369,836
|
|
|
$
|
1,369,836
|
|
|
|
Payments Upon Termination Without Cause - Layoff
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Payment
|
$
|
925,014
|
|
(4)
|
$
|
700,000
|
|
(4)
|
$
|
700,000
|
|
(4)
|
$
|
525,000
|
|
(4)
|
$
|
545,000
|
|
(4)
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Restricted Stock
|
$
|
2,824,752
|
|
(1)
|
$
|
1,247,146
|
|
(1)
|
$
|
1,490,684
|
|
(1)
|
$
|
674,858
|
|
(1)
|
$
|
674,858
|
|
(1)
|
|
Performance Awards
|
$
|
2,906,413
|
|
(3)
|
$
|
1,257,666
|
|
(3)
|
$
|
1,483,978
|
|
(3)
|
$
|
694,978
|
|
(3)
|
$
|
694,978
|
|
(3)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total
|
$
|
6,656,179
|
|
|
$
|
3,204,812
|
|
|
$
|
3,674,662
|
|
|
$
|
1,894,836
|
|
|
$
|
1,914,836
|
|
|
|
Payments Upon Termination following a Change in Control
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Severance Payment
|
$
|
5,940,095
|
|
|
$
|
3,847,500
|
|
|
$
|
3,847,500
|
|
|
$
|
1,800,000
|
|
|
$
|
1,872,000
|
|
|
|
Payment Reduction
|
$
|
(324,235
|
)
|
(5)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock Options
|
$
|
1,927,151
|
|
(6)
|
$
|
841,755
|
|
(6)
|
$
|
999,144
|
|
(6)
|
$
|
460,690
|
|
(6)
|
$
|
460,690
|
|
(6)
|
|
Restricted Stock
|
$
|
2,824,752
|
|
(1)
|
$
|
1,247,146
|
|
(1)
|
$
|
1,490,684
|
|
(1)
|
$
|
674,858
|
|
(1)
|
$
|
674,858
|
|
(1)
|
|
Performance Awards
|
$
|
2,770,442
|
|
(7)
|
$
|
1,224,528
|
|
(7)
|
$
|
1,464,647
|
|
(7)
|
$
|
661,840
|
|
(7)
|
$
|
661,840
|
|
(7)
|
|
Health and Welfare Benefits
|
$
|
47,021
|
|
(8)
|
$
|
33,341
|
|
(8)
|
$
|
33,341
|
|
(8)
|
$
|
1,109
|
|
(8)
|
$
|
31,348
|
|
(8)
|
|
Retirement (401(k), DB SERP and/or DC SERP benefit)
|
$
|
514,838
|
|
|
$
|
315,801
|
|
|
$
|
390,334
|
|
|
$
|
144,546
|
|
|
$
|
421,714
|
|
|
|
Total
|
$
|
13,700,064
|
|
|
$
|
7,510,071
|
|
|
$
|
8,225,650
|
|
|
$
|
3,743,043
|
|
|
$
|
4,122,450
|
|
|
(1)
|
Values are determined by multiplying the number of shares of restricted stock by $131.50, the closing market price of Company common stock as reported on the NYSE on December 29, 2017, the last trading day of the fiscal year.
|
(2)
|
Estimates for the performance awards for the fiscal year 2016-2018 and fiscal year 2017-2019 performance periods assume payout at the threshold performance level consistent with the terms of the Award Agreements. The value represents a prorated number of shares based on the period of active employment during the respective performance periods. The value was determined by multiplying the number of shares payable by $131.50, the closing market price of Company common stock as reported on the NYSE on December 29, 2017, the last trading day of the fiscal year.
|
(3)
|
Estimates for the performance awards for the fiscal year 2016-2018 and fiscal year 2017-2019 performance periods assume payout at the maximum performance level and are prorated based on the period of active employment during the respective performance periods. The value was determined by multiplying the number of shares payable by $131.50, the closing market price of Company common stock as reported on the NYSE on December 29, 2017, the last trading day of the fiscal year. The prorated performance awards would be paid at the end of the performance period based on the actual performance measured following the end of the performance period.
|
(4)
|
The cash payment includes 12 months of base salary and an additional $25,000 to defray health care costs.
|
(5)
|
Under the terms of the Income Security Plan, benefits in excess of the limit established under Section 280G of the Internal Revenue Code are reduced such that the total severance benefit equals the Section 280G limit, beginning with the cash severance payment.
|
(6)
|
Values are determined by multiplying the number of unvested options by the spread between the option price and $131.50, the closing market price of a share of Company common stock as reported on the NYSE on December 29, 2017, the last trading day of the fiscal year.
|
(7)
|
Estimates for the performance awards for the fiscal year 2016-2018 and 2017-2019 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 $131.50, the closing market price of a share of Company common stock as reported on the NYSE on December 29, 2017, the last trading day of the fiscal year.
|
(8)
|
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)
|
$1,350,000
|
$1,821,406
|
$46,615
|
$3,765,219
|
$6,983,240
|
(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, 2017 for the next 24-month period.
|
(2)
|
Reflects the value of 9,484 shares of restricted stock and 9,312 performance shares, which would continue to vest as scheduled for the next 24-month period, based on the $131.50 closing price of Company common stock on December 29, 2017. Also includes the value of (i) 9,747 stock options, determined based on the difference between the closing price of $131.50 and the exercise price for the options of $72.06, (ii) 9,741 stock options, determined based on the difference between the closing price of $131.50 and the exercise price for the options of $79.43, and (iii) 5,448 stock options, determined based on the difference between the closing price of $131.50 and the exercise price for the options of $93.51.
|
(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 $120,000 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;
|
•
|
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 $2,500 for each member of the special subcommittee of the Markets and Technology Committee.
|
Name
|
|
Fees Earned or
Paid in Cash
($)
|
|
Stock
Awards(1)
($)
|
|
All Other
Compensation(2)
($)
|
|
Total
($)
|
||||||||||
Kevin P. Chilton
|
|
$
|
98,500
|
|
|
$
|
119,917
|
|
|
$
|
3,528
|
|
|
|
$
|
221,945
|
|
|
Roxanne J. Decyk
|
|
$
|
105,000
|
|
|
$
|
119,917
|
|
|
$
|
9,741
|
|
|
|
$
|
234,658
|
|
|
Lennard A. Fisk
|
|
$
|
97,500
|
|
|
$
|
119,917
|
|
|
$
|
1,092
|
|
|
|
$
|
218,509
|
|
|
Ronald R. Fogleman
|
|
$
|
185,000
|
|
|
$
|
119,917
|
|
|
$
|
18,098
|
|
|
|
$
|
323,015
|
|
|
Ronald T. Kadish
|
|
$
|
98,500
|
|
|
$
|
119,917
|
|
|
$
|
1,092
|
|
|
|
$
|
219,509
|
|
|
Tig H. Krekel
|
|
$
|
90,000
|
|
|
$
|
119,917
|
|
|
$
|
11,356
|
|
|
|
$
|
221,273
|
|
|
Douglas L. Maine
|
|
$
|
121,000
|
|
|
$
|
119,917
|
|
|
$
|
1,092
|
|
|
|
$
|
242,009
|
|
|
Roman Martinez IV
|
|
$
|
88,500
|
|
|
$
|
119,917
|
|
|
$
|
19,199
|
|
|
|
$
|
227,616
|
|
|
Janice I. Obuchowski
|
|
$
|
97,500
|
|
|
$
|
119,917
|
|
|
$
|
1,092
|
|
|
|
$
|
218,509
|
|
|
James G. Roche
|
|
$
|
100,000
|
|
|
$
|
119,917
|
|
|
$
|
1,092
|
|
|
|
$
|
221,009
|
|
|
Harrison H. Schmitt
|
|
$
|
100,000
|
|
|
$
|
119,917
|
|
|
$
|
1,092
|
|
|
|
$
|
221,009
|
|
|
Scott L. Webster
|
|
$
|
90,000
|
|
|
$
|
119,917
|
|
|
$
|
27,528
|
|
|
|
$
|
237,445
|
|
|
Martin C. Faga (former director)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,001
|
|
|
|
$
|
6,001
|
|
|
Robert M. Hanisee (former director)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
367
|
|
|
|
$
|
367
|
|
|
(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
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Roxanne J. Decyk
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Lennard A. Fisk
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Ronald R. Fogleman
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Ronald T. Kadish
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Tig H. Krekel
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Douglas L. Maine
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Roman Martinez IV
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Janice I. Obuchowski
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
James G. Roche
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Harrison H. Schmitt
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Scott L. Webster
|
|
8/10/2017
|
|
1,133
|
|
|
$105.84
|
|
Name
|
|
Shares of
Restricted Stock
(#)
|
|
Deferred
Stock Units
(#)
|
|
Phantom
Stock Units (#) |
|||
Kevin P. Chilton
|
|
—
|
|
|
3,323
|
|
|
—
|
|
Roxanne J. Decyk
|
|
—
|
|
|
8,177
|
|
|
—
|
|
Lennard A. Fisk
|
|
1,133
|
|
|
—
|
|
|
—
|
|
Ronald R. Fogleman
|
|
1,133
|
|
|
13,286
|
|
|
1,845
|
|
Ronald T. Kadish
|
|
1,133
|
|
|
—
|
|
|
—
|
|
Tig H. Krekel
|
|
—
|
|
|
9,438
|
|
|
—
|
|
Douglas L. Maine
|
|
1,133
|
|
|
—
|
|
|
—
|
|
Roman Martinez IV
|
|
—
|
|
|
15,566
|
|
|
7,597
|
|
Janice I. Obuchowski
|
|
1,133
|
|
|
—
|
|
|
—
|
|
James G. Roche
|
|
1,133
|
|
|
—
|
|
|
—
|
|
Harrison H. Schmitt
|
|
1,133
|
|
|
—
|
|
|
—
|
|
Scott L. Webster
|
|
1,133
|
|
|
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 (the "2015 Director Stock Program"); dividend equivalents paid in cash on deferred stock units under the 2015 Director Stock Program and 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); 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 total payments of $24,000 for the creation of leadership and honorary awards for Company employees and directors.
|
Name
|
Annual Retainer
|
Units as of
December 31, 2017
|
||
Ronald R. Fogleman
|
Cash account-50%
|
N/A
|
|
|
|
Share account-50%
|
1,845
|
|
|
Roman Martinez IV
|
Share account-100%
|
7,597
|
|
|
•
|
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.
|
Name
|
|
Date First
Elected to
Board
|
|
Common
Stock
|
|
Restricted
Common
Stock
|
|
Deferred
Stock
Units(1)
|
Phantom
Stock
Units(2)
|
|
|
|
Total
Securities |
|
|
||||||||||||
Kevin P. Chilton
|
|
2/9/2015
|
|
3,023
|
|
|
—
|
|
|
|
|
|
|
3,323
|
|
|
|
|
—
|
|
|
|
|
6,346
|
|
|
|
Roxanne J. Decyk
|
|
8/3/2010
|
|
1,261
|
|
|
—
|
|
|
|
|
|
|
8,177
|
|
|
|
|
—
|
|
|
|
|
9,438
|
|
|
|
Lennard A. Fisk
|
|
2/9/2015
|
|
17,300
|
|
|
1,133
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
18,433
|
|
|
|
Ronald R. Fogleman
|
|
5/4/2004
|
|
1,147
|
|
|
1,133
|
|
|
|
|
|
|
13,286
|
|
|
|
|
1,845
|
|
|
|
|
17,411
|
|
|
|
Ronald T. Kadish
|
|
2/9/2015
|
|
15,932
|
|
|
1,133
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
17,065
|
|
|
|
Tig H. Krekel
|
|
3/1/2010
|
|
1,054
|
|
|
—
|
|
|
|
|
|
|
9,438
|
|
|
|
|
—
|
|
|
|
|
10,492
|
|
|
|
Douglas L. Maine
|
|
1/1/2006
|
|
15,125
|
|
|
1,133
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
16,258
|
|
|
|
Roman Martinez IV
|
|
5/4/2004
|
|
4,000
|
(3)
|
|
—
|
|
|
|
|
|
|
15,566
|
|
|
|
|
7,597
|
|
|
|
|
27,163
|
|
(3)
|
|
Janice I. Obuchowski
|
|
2/9/2015
|
|
13,150
|
|
|
1,133
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
14,283
|
|
|
|
James G. Roche
|
|
2/9/2015
|
|
15,291
|
|
|
1,133
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
16,424
|
|
|
|
Harrison H. Schmitt
|
|
2/9/2015
|
|
10,452
|
|
|
1,133
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
11,585
|
|
|
|
Scott L. Webster
|
|
2/9/2015
|
|
13,177
|
|
|
1,133
|
|
|
|
|
|
|
2,190
|
|
|
|
|
—
|
|
|
|
|
16,500
|
|
|
(1)
|
Deferred stock units are settled in shares of Orbital ATK common stock.
|
(2)
|
Phantom stock units are settled in cash based on the share price of Orbital ATK common stock at the time of payment.
|
(3)
|
Mr. Martinez disclaims ownership of 1,000 shares of common stock owned by his spouse.
|
(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 Stock Ownership Guideline for Non-Employee Directors in Item 11, “Executive Compensation” of Part III of 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 February 16, 2018 (and therefore are not required to be reported in the table): stock options, 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 Stock Ownership Guideline for Non-Employee Directors in Item 11, “Executive Compensation” of Part III of this Form 10-K.
|
|||||||||||
(6)
|
Based on a Schedule 13G/A filed with the Securities and Exchange Commission on January 23, 2018, reporting beneficial ownership as of December 31, 2017. The amended Schedule 13G reported that BlackRock, Inc. ("BlackRock") has sole voting power over 5,415,168 shares and sole dispositive power over 5,567,694 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.
|
|||||||||||
(7)
|
Based on a Schedule 13 G/A filed with the Securities and Exchange Commission on February 9, 2018, reporting beneficial ownership as of December 31, 2017. The amended Schedule 13G reported that the Vanguard Group ("Vanguard"), an investment adviser, has sole voting power over 30,491 shares, shared voting power over 3,835 shares, sole dispositive power over 4,852,773 shares, and shared dispositive power over 29,806 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, beneficially owns 25,971 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 8,355 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.
|
|||||||||||
(8)
|
Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 8, 2018, reporting beneficial ownership as of December 31, 2017. The amended Schedule 13G reported that First Eagle Investment Management, LLC ("FEIM"), a registered investment adviser, has sole voting power over 4,279,168 shares and sole dispositive power over 4,512,118 shares. FEIM is deemed to be the beneficial owner of the 4,512,118 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.
|
|||||||||||
(9)
|
Based on a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2018, reporting beneficial ownership as of December 31, 2017. The Schedule 13G reported that FMR LLC, a parent holding company, has sole voting power over 3,361,625 shares and sole dispositive power over 3,934,558 shares. Members of the Johnson family, including Abigail P. Johnson (a Director, the Chairman and the President of FMR LLC), are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement, under which all Series B voting common shares will be voted in accordance with the majority vote of the Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Ms. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (the "Fidelity Funds") advised by Fidelity Management & Research Company ("FMR Co"), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds' Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by the Fidelity Funds' Boards of Trustees. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
|
|||||||||||
(10)
|
Includes 1,000 shares owned by Mr. Martinez's wife. Mr. Martinez disclaims beneficial ownership of these 1,000 shares.
|
|
|
Fiscal Year Ended 12/31/2017
|
|
Fiscal Year Ended 12/31/2016
|
|||||
Audit Fees
|
|
$
|
5,016,750
|
|
|
|
$
|
8,037,450
|
|
Audit-Related Fees
|
|
50,000
|
|
|
|
5,000
|
|
||
Tax Fees
|
|
527,376
|
|
|
|
1,475,457
|
|
||
All Other Fees
|
|
3,790
|
|
|
|
3,832
|
|
||
Total Fees
|
|
$
|
5,597,916
|
|
|
|
$
|
9,521,739
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
2.1*
|
|
|
|
|
|
2.2*
|
|
|
|
|
|
3(i).1*
|
|
|
|
|
|
3(ii).1*
|
|
|
|
|
|
4.1.1*
|
|
|
|
|
|
4.1.2*
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
|
|
|
4.1.3*
|
|
|
|
|
|
4.1.4*
|
|
|
|
|
|
4.1.5*
|
|
|
|
|
|
4.2.1*
|
|
|
|
|
|
4.2.2*
|
|
|
|
|
|
4.2.3*
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
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*
|
|
|
|
|
|
10.5.2*
|
|
|
|
|
|
10.6*#
|
|
|
|
|
|
10.7*#
|
|
|
|
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
10.8*#
|
|
|
|
|
|
10.9.1*#
|
|
|
|
|
|
10.9.2*#
|
|
|
|
|
|
10.10*#
|
|
|
|
|
|
10.11*#
|
|
|
|
|
|
10.12*#
|
|
|
|
|
|
10.13.1*#
|
|
|
|
|
|
10.13.2*#
|
|
|
|
|
|
10.13.3*#
|
|
|
|
|
|
10.13.4*#
|
|
|
|
|
|
10.13.5#
|
|
|
|
|
|
10.13.6*#
|
|
|
|
|
|
10.13.7#
|
|
|
|
|
|
10.14.1*#
|
|
|
|
|
|
10.14.2*#
|
|
|
|
|
|
10.14.3*#
|
|
|
|
|
|
10.14.4*#
|
|
|
|
|
|
10.14.5*#
|
|
|
|
|
|
10.14.6*#
|
|
|
|
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
10.14.7#
|
|
|
|
|
|
10.15.1*#
|
|
|
|
|
|
10.15.2*#
|
|
|
|
|
|
10.15.3*#
|
|
|
|
|
|
10.15.4*#
|
|
|
|
|
|
10.15.5*#
|
|
|
|
|
|
10.16.1*#
|
|
|
|
|
|
10.16.2*#
|
|
|
|
|
|
10.17*#
|
|
|
|
|
|
10.18*#
|
|
|
|
|
|
10.19.1*#
|
|
|
|
|
|
10.19.2*#
|
|
|
|
|
|
10.20*#
|
|
|
|
|
|
10.21*#
|
|
|
|
|
|
10.22.1*#
|
|
|
|
|
|
10.22.2*#
|
|
|
|
|
|
10.23*#
|
|
|
|
|
|
10.24.1*#
|
|
|
|
|
|
10.24.2*#
|
|
|
|
|
|
21
|
|
|
|
|
|
23.1
|
|
|
|
|
|
23.2
|
|
|
|
|
|
Exhibit
Number |
|
Description of Exhibit (and document from which incorporated by reference, if applicable)
|
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)
|
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/ Lennard A. Fisk
|
|
|
Lennard A. Fisk
|
|
Director
|
|
|
|
/s/ Ronald R. Fogleman
|
|
|
Ronald R. Fogleman
|
|
Chairman of the Board
|
|
|
|
/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
|
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Roman Martinez IV
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Director
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/s/ Janice I. Obuchowski
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Janice I. Obuchowski
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Director
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/s/ James G. Roche
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James G. Roche
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Director
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/s/ Harrison H. Schmitt
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Harrison H. Schmitt
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Director
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/s/ Scott L. Webster
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Scott L. Webster
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Director
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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, 2018
.
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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.
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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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13.
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Northrop Grumman Merger Agreement.
Notwithstanding any other provision of this Agreement, a Change in Control for purposes of this Agreement shall not result from the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of September 17, 2017, among Northrop Grumman Corporation, Neptune Merger, Inc., and the Company (the “Merger Agreement”). In the event of the consummation of the transactions contemplated by the Merger Agreement, the Performance Shares shall vest, become payable, and become forfeited to the extent set forth in the Merger Agreement, which among other things provides that at the Effective Time of the Merger (as such terms are defined in the Merger Agreement), the number of Performance Shares determined by (a) deemed achievement at the target performance level and (b) the “2018 Award Pro Rata Percentage” shall become vested, and the remaining Performance Shares shall be forfeited. The “2018 Award Pro Rata Percentage” means a fraction, (i) the numerator of which is the number of days that have elapsed from the beginning of the Measuring Period through and including the Closing Date (as defined in the Merger Agreement) and (ii) the denominator of which is the total number of days in the Measuring Period.
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ORBITAL ATK, INC.
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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:
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i.
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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,
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ii.
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You willfully engage in gross misconduct demonstrably injurious to the Company, monetarily or otherwise,
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iii.
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You engage in fraud, misappropriation or embezzlement of funds or property of the Company,
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iv.
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You are convicted of a felony or enter a plea of guilty or nolo contendere to a felony, or
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v.
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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.
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“
Change in Control
” means the occurrence of any of the following:
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i.
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the acquisition by any Person of Beneficial Ownership of 40% or more of the outstanding shares of the Company’s Voting Securities;
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ii.
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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;
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iii.
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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;
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iv.
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approval by the stockholders of the Company of a complete liquidation or dissolution of the Company; or
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v.
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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.
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E.
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“
Change Event
” means either of the following:
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i.
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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
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ii.
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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.
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F.
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“
Beneficial Owner
” or “
Beneficial Ownership
” will have the meaning given to such term in Rule 13d‑3 under the Exchange Act.
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G.
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“
Board
” or “
Board of Directors
” means the Board of Directors of the Company.
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H.
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“
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)).
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I.
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“
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.
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2.
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Restricted Period.
The Shares are subject to the restrictions contained in this Agreement and the Plan for a period (the “Restricted Period”) commencing on the Award Date and vesting in three equal annual installments commencing on the first anniversary of the Award Date or, if earlier, upon (a) a Change in Control, as provided in Paragraph 4 below, or (b) your death, Disability (as defined in Appendix A to this Agreement), or involuntary termination without Cause (as defined in Appendix A to this Agreement), as provided in Paragraph 5 below.
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3.
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Restrictions.
The Shares shall be subject to the following restrictions during the Restricted Period:
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(a)
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The Shares shall be subject to forfeiture to the Company as provided in this Agreement and the Plan.
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(b)
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You may not sell, transfer, pledge or otherwise encumber the Shares during the Restricted Period. Neither the right to receive the Shares nor any interest under the Plan may be transferred by you, and any attempted transfer shall be void.
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(c)
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The Company will issue the Shares in your name, either by book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company. The Shares shall be restricted from transfer and shall be subject to an appropriate stop- transfer order. If any certificate is issued, the certificate shall bear an appropriate legend referring to the restrictions applicable to the Shares. If any certificate is issued, you shall be required to execute and deliver to the Company a stock power relating to the Shares as a condition to the receipt of this Award of Restricted Stock (as defined in the Plan).
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(d)
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Any securities or property (other than cash) that may be issued with respect to the Shares as a result of any stock dividend, stock split, business combination or other event shall be subject to the restrictions and other terms and conditions contained in this Agreement.
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(e)
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You shall not be entitled to receive any Shares prior to the completion of any registration or qualification of the Shares under any federal or state law or governmental rule or regulation that the Company, in its sole discretion, determines to be necessary or advisable.
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4.
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Change in Control.
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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5.
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Forfeiture.
In the event of your termination of employment, other than by reason of death, Disability or involuntary termination without Cause prior to the end of the Restricted Period, your rights to all of the Shares shall be immediately and irrevocably forfeited. In the event of your termination of employment by reason of death, Disability or involuntary termination without Cause prior to the end of the Restricted Period, the restrictions with respect to all of the Shares shall lapse and the Shares shall vest as of the date of such termination of employment; provided, however, in the case 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.
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6.
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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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7.
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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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8.
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Rights.
Upon issuance of the Shares, you shall, subject to the restrictions of this Agreement and the Plan, have all of the rights of a stockholder with respect to the Shares, including the right to vote the Shares and receive any cash dividends and any other distributions thereon, unless and until you forfeit the Shares.
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9.
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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 Restricted Stock, the vesting 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 the vesting of the Shares, the Company will pay your required minimum statutory withholding taxes by withholding Shares otherwise to be delivered upon the vesting of the 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 vesting date of the Shares, you may elect to pay all or a portion of the minimum statutory withholding taxes by (a) delivering to the Company Shares other than the Shares vesting pursuant to this Agreement 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 vesting date of the Shares, the Company will pay your required minimum statutory withholding taxes by withholding Shares otherwise to be delivered upon the vesting of the Shares with a Fair Market Value equal to the amount of such taxes.
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10.
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Acknowledgment.
This Award of Restricted Stock shall not be effective until you (a) 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, and (b) if the Company requests it, execute and deliver the stock power required by Paragraph 3 above.
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11.
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Northrop Grumman Merger Agreement.
Notwithstanding any other provision of this Agreement, a Change in Control for purposes of this Agreement shall not result from the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of September 17, 2017, among Northrop Grumman Corporation, Neptune Merger, Inc., and the Company (the “Merger Agreement”). In the event of the consummation of the transactions contemplated by the Merger Agreement, the Shares shall vest, become payable, and become forfeited to the extent set forth in the Merger Agreement, which among other things provides that at the Effective Time of the Merger (as such terms are defined in the Merger Agreement), the number of Shares determined by the “2018 Award Pro Rata Percentage” shall become vested, and the remaining Shares shall be forfeited. The “2018 Award Pro Rata Percentage” means a fraction, (i) the numerator of which is the number of days that have elapsed from the Award Date through and including the Closing Date (as defined in the Merger Agreement) and (ii) the denominator of which is the total number of days from the Award Date through the final regularly scheduled vesting date of the Shares.
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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
|
i.
|
being eligible for disability for Social Security purposes, or
|
ii.
|
being totally and permanently disabled under the Company’s long-term disability plan.
|
B.
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“Cause” means the occurrence of any of the following:
|
i.
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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.
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You engage in fraud, misappropriation or embezzlement of funds or property of the Company,
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iv.
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You are convicted of a felony or enter a plea of guilty or nolo contendere to a felony, or
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v.
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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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2.
|
Restricted Period.
The Shares are subject to the restrictions contained in this Agreement and the Plan for a period (the “Restricted Period”) commencing on the Award Date and vesting in three equal annual installments commencing on the first anniversary of the Award Date or, if earlier, upon (a) a Change in Control, as provided in Paragraph 4 below, or (b) your death, Disability (as defined in Appendix A to this Agreement), or involuntary layoff, as provided in Paragraph 5 below.
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3.
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Restrictions.
The Shares shall be subject to the following restrictions during the Restricted Period:
|
(a)
|
The Shares shall be subject to forfeiture to the Company as provided in this Agreement and the Plan.
|
(b)
|
You may not sell, transfer, pledge or otherwise encumber the Shares during the Restricted Period. Neither the right to receive the Shares nor any interest under the Plan may be transferred by you, and any attempted transfer shall be void.
|
(c)
|
The Company will issue the Shares in your name, either by book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company. The Shares shall be restricted from transfer and shall be subject to an appropriate stop- transfer order. If any certificate is issued, the certificate shall bear an appropriate legend referring to the restrictions applicable to the Shares. If any certificate is issued, you shall be required to execute and deliver to the Company a stock power relating to the Shares as a condition to the receipt of this Award of Restricted Stock (as defined in the Plan).
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(d)
|
Any securities or property (other than cash) that may be issued with respect to the Shares as a result of any stock dividend, stock split, business combination or other event shall be subject to the restrictions and other terms and conditions contained in this Agreement.
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(e)
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You shall not be entitled to receive any Shares prior to the completion of any registration or qualification of the Shares under any federal or state law or governmental rule or regulation that the Company, in its sole discretion, determines to be necessary or advisable.
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4.
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Change in Control.
After a Change in Control (as defined in Appendix A to this Agreement), the Shares shall immediately vest. However, if you are or become a participant in the Company’s Income Security Plan or any successor or substitute plan (the “ISP”), the terms of the vesting of the Shares shall be governed by the provisions of the ISP.
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5.
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Forfeiture.
In the event of your termination of employment, other than by reason of death, Disability or involuntary layoff prior to the end of the Restricted Period, your rights to all of the Shares shall be immediately and irrevocably forfeited. In the event of your termination of employment by reason of death, Disability or involuntary layoff prior to the end of the Restricted Period, the restrictions with respect to all of the Shares shall lapse and the Shares shall vest as of the date of such termination of employment; provided, however, in the case of an involuntary layoff, the Shares shall not vest unless at least one year has elapsed from the Award Date. The Personnel and Compensation Committee of the Company’s Board of Directors (the “Committee”) reserves the right to recoup Awards, or the value of Awards, from you in the event there is a material restatement of the Company’s financial results. If the Committee determines a recoupment is appropriate in the exercise of its discretion, considering all the facts and circumstances, you shall forfeit and pay back such portion, or all, of the outstanding or previously awarded Awards as determined by the Committee in its sole discretion.
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6.
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Holding Requirement.
You will be required to retain at least 50% of the net number of Shares earned under the terms of this Agreement until you cease to be an executive officer of the Company. See the Stock Holding Policy for additional information.
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7.
|
Rights.
Upon issuance of the Shares, you shall, subject to the restrictions of this Agreement and the Plan, have all of the rights of a stockholder with respect to the Shares, including the right to vote the Shares and receive any cash dividends and any other distributions thereon, unless and until you forfeit the Shares.
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8.
|
Income Taxes.
You are liable for any federal, state and local income or other taxes applicable upon the grant of the Restricted Stock, the vesting 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 the vesting of the Shares, the Company will pay your required minimum statutory withholding taxes by withholding Shares otherwise to be delivered upon the vesting of the 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 vesting date of the Shares, you may elect to pay all or a portion of the minimum statutory withholding taxes by (a) delivering to the Company Shares other than the Shares vesting pursuant to this Agreement 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 vesting date of the Shares, the Company will pay your required minimum statutory withholding taxes by withholding Shares otherwise to be delivered upon the vesting of the Shares with a Fair Market Value equal to the amount of such taxes.
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9.
|
Acknowledgment.
This Award of Restricted Stock shall not be effective until you (a) 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, and (b) if the Company requests it, execute and deliver the stock power required by Paragraph 3 above.
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•
|
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 Grant Date set forth in the Award Agreement 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.
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•
|
“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.
|
•
|
being eligible for disability for Social Security purposes, or
|
•
|
being totally and permanently disabled under the Company’s long-term disability plan.
|
Subsidiaries of Orbital ATK, Inc.
as of December 31 , 2017
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||
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All subsidiaries listed below are 100% owned except joint ventures.
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||
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Subsidiaries
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State or Other Jurisdiction of Incorporation or Organization
|
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Alliant Techsystems Operations LLC
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Delaware
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Alliant Techsystems Operations Saudi Arabia Ltd. (joint venture)
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Saudi Arabia
|
|
ATK Launch Systems Inc.
|
Delaware
|
|
ATK Space Systems Inc.
|
Delaware
|
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COI Ceramics, Inc. (joint venture)
|
California
|
|
Orbital ATK Middle East L.L.C. (joint venture)
|
United Arab Emirates
|
|
Orbital ATK Pte. Ltd.
|
Singapore
|
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Orbital ATK UK Ltd.
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United Kingdom
|
|
Orbital Sciences Corporation
|
Delaware
|
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Space Logistics LLC
|
Delaware
|
Date: February 21, 2018
|
By:
|
|
/s/ David W. Thompson
|
|
Name:
|
|
David W. Thompson
|
|
Title:
|
|
President and Chief Executive Officer
|
Date: February 21, 2018
|
By:
|
|
/s/ Garrett E. Pierce
|
|
Name:
|
|
Garrett E. Pierce
|
|
Title:
|
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Chief Financial Officer
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Date: February 21, 2018
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By:
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/s/ David W. Thompson
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Name:
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David W. Thompson
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Title:
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President and Chief Executive Officer
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By:
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/s/ Garrett E. Pierce
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Name:
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Garrett E. Pierce
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Title:
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Chief Financial Officer
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