x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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
|
DELAWARE
|
|
80-0640649
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
|
2980 Fairview Park Drive
Falls Church, Virginia
|
|
22042
|
(Address of principal executive offices)
|
|
(Zip code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, $1 par value
|
|
New York Stock Exchange
|
Yes
x
|
|
No
o
|
Yes
o
|
|
No
x
|
Yes
x
|
|
No
o
|
Yes
x
|
|
No
o
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Yes
o
|
|
No
x
|
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Page
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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($ in millions)
|
|
U.S.
Government
(1)
|
|
International
(2)
|
|
Other Customers
(3)
|
|
Total
|
|
Percentage
of Total Sales
|
|||||||||
Cost-type contracts
|
|
$
|
12,665
|
|
|
$
|
698
|
|
|
$
|
106
|
|
|
$
|
13,469
|
|
|
55
|
%
|
Fixed-price contracts
|
|
7,908
|
|
|
2,507
|
|
|
624
|
|
|
11,039
|
|
|
45
|
%
|
||||
Total sales
|
|
$
|
20,573
|
|
|
$
|
3,205
|
|
|
$
|
730
|
|
|
$
|
24,508
|
|
|
100
|
%
|
(1)
|
Sales to the
U.S.
Government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. Government. Each of the company's segments derives substantial revenue from the U.S. Government.
|
▪
|
We depend heavily on a single customer, the U.S. Government, for a substantial portion of our business. Changes in this customer’s priorities and spending could have a material adverse effect on our financial position, results of operations and/or cash flows.
|
▪
|
Significant delays or reductions in appropriations for our programs and U.S. Government funding more broadly may negatively impact our business and programs and could have a material adverse effect on our financial position, results of operations and/or cash flows.
|
▪
|
We are subject to various investigations, claims, disputes and litigation that could ultimately be resolved against us.
|
▪
|
Our international business exposes us to additional risks.
|
▪
|
Our reputation, our ability to do business and our financial position, results of operations and/or cash flows may be impacted by the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate.
|
▪
|
We use estimates when accounting for contracts. Contract cost growth or changes in estimated contract revenues and costs could affect our profitability and our overall financial position.
|
▪
|
Our earnings and profitability depend, in part, on subcontractor and supplier performance and financial viability as well as raw material and component availability and pricing.
|
▪
|
Our business could be negatively impacted by cyber and other security threats or disruptions.
|
▪
|
As a U.S. Government contractor, we and our partners are subject to various procurement and other laws and regulations applicable to our industry and we could be adversely affected by changes in such laws and regulations or any negative findings by the U.S. Government as to our compliance with them. We also may be adversely affected by changes in our customers' business practices globally.
|
▪
|
Competition within our markets and bid protests may affect our ability to win new contracts and result in reduced revenues and market share.
|
▪
|
Our ability to win new competitions and meet the needs of our customers depends, in part, on our ability to maintain a qualified workforce.
|
▪
|
Many of our contracts contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise or are dependent upon factors not wholly within our control. Failure to meet our contractual obligations could adversely affect our profitability, reputation and future prospects.
|
▪
|
Environmental matters, including unforeseen costs associated with compliance and remediation efforts, and government and third party claims, could have a material adverse effect on our reputation and our financial position, results of operations and/or cash flows.
|
▪
|
Our business is subject to disruption caused by natural and/or environmental disasters that could adversely affect our profitability and our overall financial position.
|
▪
|
Our insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of our significant risks or our insurers may deny coverage of or be unable to pay for material losses we incur, which could adversely affect our profitability and overall financial position.
|
▪
|
We provide products and services related to hazardous and high risk operations, which subjects us to various environmental, regulatory, financial, reputational and other risks.
|
▪
|
Pension and medical liabilities and related expenses recorded in our financial statements may fluctuate significantly depending upon future investment performance of plan assets, changes in actuarial assumptions, and legislative or other regulatory actions.
|
▪
|
Changes in future business conditions could cause business investments and/or recorded goodwill and other long-lived assets to become impaired, resulting in substantial losses and write-downs that would reduce our operating income.
|
▪
|
We may be unable fully to exploit or adequately to protect intellectual property rights, which could materially affect our ability to compete, our reputation and our financial position, results of operations and/or cash flows.
|
▪
|
Our future success depends, in part, on our ability to develop new products and new technologies and maintain technologies, facilities and equipment to win new competitions and meet the needs of our customers.
|
▪
|
Unanticipated changes in our tax provisions or exposure to additional tax liabilities could affect our profitability and cash flow.
|
Square feet (in thousands)
|
|
Owned
|
|
Leased
|
|
U.S. Government
Owned/Leased
|
|
Total
|
||||
Aerospace Systems
|
|
6,756
|
|
|
6,610
|
|
|
2,019
|
|
|
15,385
|
|
Mission Systems
|
|
8,783
|
|
|
5,583
|
|
|
—
|
|
|
14,366
|
|
Technology Services
|
|
414
|
|
|
2,845
|
|
|
1
|
|
|
3,260
|
|
Corporate
|
|
657
|
|
|
444
|
|
|
—
|
|
|
1,101
|
|
Total
|
|
16,610
|
|
|
15,482
|
|
|
2,020
|
|
|
34,112
|
|
|
|
2016
|
|
2015
|
|
|
Low - High
|
|
Low - High
|
First Quarter
|
|
$175.00 - $200.78
|
|
$141.58 - $172.30
|
Second Quarter
|
|
198.75 - 223.42
|
|
152.44 - 166.55
|
Third Quarter
|
|
206.69 - 224.12
|
|
152.31 - 176.83
|
Fourth Quarter
|
|
212.02 - 253.80
|
|
168.26 - 193.99
|
|
|
2016
|
|
2015
|
||||
First Quarter
|
|
$
|
0.80
|
|
|
$
|
0.70
|
|
Second Quarter
|
|
|
0.90
|
|
|
|
0.80
|
|
Third Quarter
|
|
|
0.90
|
|
|
|
0.80
|
|
Fourth Quarter
|
|
|
0.90
|
|
|
|
0.80
|
|
Total
|
|
$
|
3.50
|
|
|
$
|
3.10
|
|
Period
|
Total Number
of Shares
Purchased
|
|
Average
Price
Paid per
Share
(1)
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased under the
Plans or Programs
($ in millions)
|
||||||
October 1, 2016 - October 28, 2016
|
662,750
|
|
|
$
|
217.46
|
|
|
662,750
|
|
|
$
|
2,970
|
|
October 29, 2016 - November 25, 2016
|
464,130
|
|
|
237.83
|
|
|
464,130
|
|
|
2,860
|
|
||
November 26, 2016 - December 31, 2016
|
592,600
|
|
|
237.65
|
|
|
592,600
|
|
|
2,719
|
|
||
Total
|
1,719,480
|
|
|
$
|
229.92
|
|
|
1,719,480
|
|
|
$
|
2,719
|
|
(1)
|
Includes commissions paid.
|
(1)
|
Assumes $100 invested at the close of business on
December 31, 2011
, in Northrop Grumman Corporation common stock, Standard & Poor’s (S&P) 500 Index and the S&P Aerospace & Defense Index.
|
(2)
|
The cumulative total return assumes reinvestment of dividends.
|
(3)
|
The S&P Aerospace & Defense Index is comprised of Arconic, Inc., The Boeing Company, General Dynamics Corporation, L3 Technologies, Inc., Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Company, Rockwell Collins, Inc., Textron, Inc., TransDigm Group and United Technologies Corporation.
|
(4)
|
The total return is weighted according to market capitalization of each company at the beginning of each year.
|
(5)
|
This graph is not deemed to be filed
with the U.S. Securities and Exchange Commission (SEC) or subject to the liabilities of Section 18 of the Securities and Exchange Act of 1934 (the Exchange Act), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act.
|
|
|
Year Ended December 31
|
||||||||||||||||||
$ in millions, except per share amounts
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
(1)
|
|
$
|
20,573
|
|
|
$
|
19,458
|
|
|
$
|
20,085
|
|
|
$
|
21,278
|
|
|
$
|
22,268
|
|
International
(2)
|
|
3,205
|
|
|
3,339
|
|
|
3,045
|
|
|
2,493
|
|
|
2,085
|
|
|||||
Other Customers
(3)
|
|
730
|
|
|
729
|
|
|
849
|
|
|
890
|
|
|
865
|
|
|||||
Total sales
|
|
24,508
|
|
|
23,526
|
|
|
23,979
|
|
|
24,661
|
|
|
25,218
|
|
|||||
Operating income
|
|
3,193
|
|
|
3,076
|
|
|
3,196
|
|
|
3,123
|
|
|
3,130
|
|
|||||
Net earnings
|
|
2,200
|
|
|
1,990
|
|
|
2,069
|
|
|
1,952
|
|
|
1,978
|
|
|||||
Basic earnings per share
|
|
$
|
12.30
|
|
|
$
|
10.51
|
|
|
$
|
9.91
|
|
|
$
|
8.50
|
|
|
$
|
7.96
|
|
Diluted earnings per share
|
|
12.19
|
|
|
10.39
|
|
|
9.75
|
|
|
8.35
|
|
|
7.81
|
|
|||||
Cash dividends declared per common share
|
|
3.50
|
|
|
3.10
|
|
|
2.71
|
|
|
2.38
|
|
|
2.15
|
|
|||||
Year-End Financial Position
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(4)
|
|
$
|
25,614
|
|
|
$
|
24,424
|
|
|
$
|
26,545
|
|
|
$
|
26,351
|
|
|
$
|
26,527
|
|
Notes payable to banks and long-term debt
(4)
|
|
7,070
|
|
|
6,496
|
|
|
5,901
|
|
|
5,900
|
|
|
3,919
|
|
|||||
Other long-term obligations
(5)
|
|
7,667
|
|
|
7,059
|
|
|
7,520
|
|
|
4,018
|
|
|
7,043
|
|
|||||
Financial Metrics
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
2,813
|
|
|
$
|
2,162
|
|
|
$
|
2,593
|
|
|
$
|
2,483
|
|
|
$
|
2,640
|
|
Free cash flow
(6)
|
|
1,893
|
|
|
1,691
|
|
|
2,032
|
|
|
2,119
|
|
|
2,309
|
|
|||||
Other Information
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company-sponsored research and development expenses
|
|
$
|
705
|
|
|
$
|
712
|
|
|
$
|
569
|
|
|
$
|
507
|
|
|
$
|
520
|
|
Total backlog
|
|
45,339
|
|
|
35,923
|
|
|
38,199
|
|
|
37,033
|
|
|
40,809
|
|
|||||
Square footage at year-end (in thousands)
|
|
34,112
|
|
|
34,392
|
|
|
34,264
|
|
|
34,500
|
|
|
35,053
|
|
|||||
Number of employees at year-end
|
|
67,000
|
|
|
65,000
|
|
|
64,300
|
|
|
65,300
|
|
|
68,100
|
|
(1)
|
Sales to the
United States (U.S.)
Government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. Government. Each of the company's segments derives substantial revenue from the U.S. Government.
|
(2)
|
International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. Government, direct sales with governments outside the U.S. and commercial sales outside the U.S.
|
(3)
|
Sales to Other Customers include sales to U.S. state and local governments and commercial sales in the U.S.
|
(4)
|
Prior year amounts have been reclassified to conform to current year presentation due to our adoption of Accounting Standards Update 2015-03,
Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.
As a result, we now present capitalized debt issuance costs as a reduction in the carrying amount of long-term debt. This change resulted in a reclassification of other non-current assets to long-term debt, which reduced our previously reported total assets and total liabilities as of each period end date.
|
(5)
|
Other long-term obligations include pension and other post-retirement benefit plan liabilities, deferred compensation, unrecognized tax benefits, environmental liabilities and other long-term obligations.
|
(6)
|
Free cash flow is a non-GAAP measure defined as net cash
provided by
operating activities less capital expenditures, and may not be defined and calculated by other companies in the same manner. We use free cash flow as a key factor in our planning for, and consideration of, acquisitions, stock repurchases, and the payment of dividends. This measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with
accounting principles generally accepted in the United States of America (“U.S. GAAP” or “FAS”). See “Liquidity and Capital Resources” – “
Free Cash Flow
” in Management's Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) for more information on this measure, including a reconciliation of free cash flow to net cash
provided by
operating activities.
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions, except per share amounts
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Sales
|
$
|
24,508
|
|
|
$
|
23,526
|
|
|
$
|
23,979
|
|
|
4
|
%
|
|
(2
|
)%
|
Operating costs and expenses
|
21,315
|
|
|
20,450
|
|
|
20,783
|
|
|
4
|
%
|
|
(2
|
)%
|
|||
Operating income
|
3,193
|
|
|
3,076
|
|
|
3,196
|
|
|
4
|
%
|
|
(4
|
)%
|
|||
Operating margin rate
|
13.0
|
%
|
|
13.1
|
%
|
|
13.3
|
%
|
|
|
|
|
|||||
Federal and foreign income tax expense
|
723
|
|
|
800
|
|
|
868
|
|
|
(10
|
)%
|
|
(8
|
)%
|
|||
Effective income tax rate
|
24.7
|
%
|
|
28.7
|
%
|
|
29.6
|
%
|
|
|
|
|
|||||
Net earnings
|
2,200
|
|
|
1,990
|
|
|
2,069
|
|
|
11
|
%
|
|
(4
|
)%
|
|||
Diluted earnings per share
|
12.19
|
|
|
10.39
|
|
|
9.75
|
|
|
17
|
%
|
|
7
|
%
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Product costs
|
$
|
11,002
|
|
|
$
|
10,333
|
|
|
$
|
10,431
|
|
|
6
|
%
|
|
(1
|
)%
|
Service costs
|
7,729
|
|
|
7,551
|
|
|
7,947
|
|
|
2
|
%
|
|
(5
|
)%
|
|||
G&A
|
2,584
|
|
|
2,566
|
|
|
2,405
|
|
|
1
|
%
|
|
7
|
%
|
|||
Operating costs and expenses
|
$
|
21,315
|
|
|
$
|
20,450
|
|
|
$
|
20,783
|
|
|
4
|
%
|
|
(2
|
)%
|
Operating costs and expenses as a % of sales
|
87.0
|
%
|
|
86.9
|
%
|
|
86.7
|
%
|
|
|
|
|
|||||
G&A as a % of sales
|
10.5
|
%
|
|
10.9
|
%
|
|
10.0
|
%
|
|
|
|
|
Aerospace Systems
|
|
Mission Systems
|
|
Technology Services
|
Autonomous Systems
|
|
Sensors and Processing
|
|
Global Logistics and Modernization
|
Manned Aircraft
|
|
Cyber and ISR
|
|
Advanced Defense Services
|
Space
|
|
Advanced Capabilities
|
|
System Modernization and Services
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Segment operating income
|
$
|
2,935
|
|
|
$
|
2,920
|
|
|
$
|
3,099
|
|
|
1
|
%
|
|
(6
|
)%
|
Segment operating margin rate
|
12.0
|
%
|
|
12.4
|
%
|
|
12.9
|
%
|
|
|
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
||||||
Favorable EAC adjustments
|
$
|
765
|
|
|
$
|
924
|
|
|
$
|
922
|
|
Unfavorable EAC adjustments
|
(271
|
)
|
|
(344
|
)
|
|
(258
|
)
|
|||
Net EAC adjustments
|
$
|
494
|
|
|
$
|
580
|
|
|
$
|
664
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
||||||
Aerospace Systems
|
$
|
263
|
|
|
$
|
352
|
|
|
$
|
359
|
|
Mission Systems
|
191
|
|
|
169
|
|
|
295
|
|
|||
Technology Services
|
69
|
|
|
68
|
|
|
32
|
|
|||
Eliminations
|
(29
|
)
|
|
(9
|
)
|
|
(22
|
)
|
|||
Net EAC adjustments
|
$
|
494
|
|
|
$
|
580
|
|
|
$
|
664
|
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Sales
|
$
|
10,828
|
|
|
$
|
9,940
|
|
|
$
|
9,910
|
|
|
9
|
%
|
|
—
|
%
|
Operating income
|
1,236
|
|
|
1,205
|
|
|
1,285
|
|
|
3
|
%
|
|
(6
|
)%
|
|||
Operating margin rate
|
11.4
|
%
|
|
12.1
|
%
|
|
13.0
|
%
|
|
|
|
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Sales
|
$
|
10,928
|
|
|
$
|
10,674
|
|
|
$
|
11,001
|
|
|
2
|
%
|
|
(3
|
)%
|
Operating income
|
1,445
|
|
|
1,410
|
|
|
1,557
|
|
|
2
|
%
|
|
(9
|
)%
|
|||
Operating margin rate
|
13.2
|
%
|
|
13.2
|
%
|
|
14.2
|
%
|
|
|
|
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Sales
|
$
|
4,825
|
|
|
$
|
4,819
|
|
|
$
|
4,902
|
|
|
—
|
%
|
|
(2
|
)%
|
Operating income
|
512
|
|
|
514
|
|
|
461
|
|
|
—
|
%
|
|
11
|
%
|
|||
Operating margin rate
|
10.6
|
%
|
|
10.7
|
%
|
|
9.4
|
%
|
|
|
|
|
|
|
Year Ended December 31
|
||||||||||||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
Segment Information:
|
|
Sales
|
|
Operating Costs and Expenses
|
|
Sales
|
|
Operating Costs and Expenses
|
|
Sales
|
|
Operating Costs and Expenses
|
||||||||||||
Aerospace Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
|
$
|
8,868
|
|
|
$
|
7,837
|
|
|
$
|
7,976
|
|
|
$
|
7,025
|
|
|
$
|
7,970
|
|
|
$
|
6,906
|
|
Service
|
|
1,960
|
|
|
1,755
|
|
|
1,964
|
|
|
1,710
|
|
|
1,940
|
|
|
1,719
|
|
||||||
Mission Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
|
6,471
|
|
|
5,588
|
|
|
6,448
|
|
|
5,532
|
|
|
6,505
|
|
|
5,478
|
|
||||||
Service
|
|
4,457
|
|
|
3,895
|
|
|
4,226
|
|
|
3,732
|
|
|
4,496
|
|
|
3,966
|
|
||||||
Technology Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
|
320
|
|
|
292
|
|
|
358
|
|
|
339
|
|
|
329
|
|
|
356
|
|
||||||
Service
|
|
4,505
|
|
|
4,021
|
|
|
4,461
|
|
|
3,966
|
|
|
4,573
|
|
|
4,085
|
|
||||||
Segment Totals
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Product
|
|
$
|
15,659
|
|
|
$
|
13,717
|
|
|
$
|
14,782
|
|
|
$
|
12,896
|
|
|
$
|
14,804
|
|
|
$
|
12,740
|
|
Total Service
|
|
10,922
|
|
|
9,671
|
|
|
10,651
|
|
|
9,408
|
|
|
11,009
|
|
|
9,770
|
|
||||||
Intersegment eliminations
|
|
(2,073
|
)
|
|
(1,815
|
)
|
|
(1,907
|
)
|
|
(1,698
|
)
|
|
(1,834
|
)
|
|
(1,630
|
)
|
||||||
Total Segment
(1)
|
|
$
|
24,508
|
|
|
$
|
21,573
|
|
|
$
|
23,526
|
|
|
$
|
20,606
|
|
|
$
|
23,979
|
|
|
$
|
20,880
|
|
(1)
|
A reconciliation of segment operating income to total operating income, is included in “Segment Operating Results.”
|
|
|
2016
|
|
2015
|
|
|
|||||||||||||
$ in millions
|
|
Funded
|
|
Unfunded
|
|
Total
Backlog
|
|
Total
Backlog
|
|
% Change in 2016
|
|||||||||
Aerospace Systems
|
|
$
|
9,419
|
|
|
$
|
17,891
|
|
|
$
|
27,310
|
|
|
$
|
18,014
|
|
|
52
|
%
|
Mission Systems
|
|
9,301
|
|
|
4,414
|
|
|
13,715
|
|
|
13,254
|
|
|
3
|
%
|
||||
Technology Services
|
|
3,446
|
|
|
868
|
|
|
4,314
|
|
|
4,655
|
|
|
(7
|
)%
|
||||
Total backlog
|
|
$
|
22,166
|
|
|
$
|
23,173
|
|
|
$
|
45,339
|
|
|
$
|
35,923
|
|
|
26
|
%
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings
|
|
$
|
2,200
|
|
|
$
|
1,990
|
|
|
$
|
2,069
|
|
Non-cash items
(1)
|
|
585
|
|
|
1,035
|
|
|
731
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Trade working capital
|
|
(240
|
)
|
|
(564
|
)
|
|
(121
|
)
|
|||
Retiree benefits
|
|
393
|
|
|
(263
|
)
|
|
(17
|
)
|
|||
Other, net
|
|
(125
|
)
|
|
(36
|
)
|
|
(69
|
)
|
|||
Net cash provided by operating activities
|
|
$
|
2,813
|
|
|
$
|
2,162
|
|
|
$
|
2,593
|
|
(1)
|
Includes depreciation and amortization, stock based compensation expense (including related excess tax benefits in 2015 and 2014) and deferred income taxes.
|
|
|
Year Ended December 31
|
|
% Change in
|
||||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Net cash provided by operating activities
|
|
$
|
2,813
|
|
|
$
|
2,162
|
|
|
$
|
2,593
|
|
|
30
|
%
|
|
(17
|
)%
|
Less: Capital expenditures
|
|
(920
|
)
|
|
(471
|
)
|
|
(561
|
)
|
|
95
|
%
|
|
(16
|
)%
|
|||
Free cash flow
|
|
$
|
1,893
|
|
|
$
|
1,691
|
|
|
$
|
2,032
|
|
|
12
|
%
|
|
(17
|
)%
|
$ in millions
|
|
Total
|
|
2017
|
|
2018- 2019
|
|
2020- 2021
|
|
2022 and beyond
|
||||||||||
Long-term debt
|
|
$
|
7,097
|
|
|
$
|
12
|
|
|
$
|
1,420
|
|
|
$
|
834
|
|
|
$
|
4,831
|
|
Interest payments on long-term debt
|
|
4,039
|
|
|
296
|
|
|
585
|
|
|
509
|
|
|
2,649
|
|
|||||
Operating leases
|
|
892
|
|
|
257
|
|
|
317
|
|
|
158
|
|
|
160
|
|
|||||
Purchase obligations
(1)
|
|
8,748
|
|
|
5,009
|
|
|
2,398
|
|
|
1,271
|
|
|
70
|
|
|||||
Other long-term liabilities
(2)
|
|
1,096
|
|
|
289
|
|
|
342
|
|
|
144
|
|
|
321
|
|
|||||
Total contractual obligations
|
|
$
|
21,872
|
|
|
$
|
5,863
|
|
|
$
|
5,062
|
|
|
$
|
2,916
|
|
|
$
|
8,031
|
|
(1)
|
A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. These amounts are primarily comprised of open purchase order commitments to suppliers and subcontractors pertaining to funded contracts.
|
(2)
|
Other long-term liabilities, including their current portions, primarily consist of total accrued environmental reserves, deferred compensation and other miscellaneous liabilities, of which
$119 million
is related to environmental reserves recorded in other current liabilities. It excludes obligations for uncertain tax positions of
$142 million
, as the timing of such payments, if any, cannot be reasonably estimated.
|
$ increase/(decrease) in millions
|
25 Basis Point Decrease in Rate
|
|
25 Basis Point Increase in Rate
|
||||
Pension expense
|
$
|
96
|
|
|
$
|
(92
|
)
|
Other post-retirement benefit expense
|
1
|
|
|
(1
|
)
|
||
Pension obligation
|
1,027
|
|
|
(974
|
)
|
||
Other post-retirement benefit obligation
|
56
|
|
|
(53
|
)
|
$ increase/(decrease) in millions
|
25 Basis Point Decrease in Rate
|
|
25 Basis Point Increase in Rate
|
||||
Pension expense
|
$
|
(26
|
)
|
|
$
|
27
|
|
Pension obligation
|
(132
|
)
|
|
134
|
|
$ increase/(decrease) in millions
|
25 Basis Point Decrease
|
|
25 Basis Point Increase
|
||||
Pension expense
|
$
|
59
|
|
|
$
|
(59
|
)
|
Other post-retirement benefit expense
|
3
|
|
|
(3
|
)
|
/s/
|
Deloitte & Touche LLP
|
|
McLean, Virginia
|
|
January 30, 2017
|
|
|
Year Ended December 31
|
||||||||||
$ in millions, except per share amounts
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
$
|
14,738
|
|
|
$
|
13,966
|
|
|
$
|
14,015
|
|
Service
|
|
9,770
|
|
|
9,560
|
|
|
9,964
|
|
|||
Total sales
|
|
24,508
|
|
|
23,526
|
|
|
23,979
|
|
|||
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
11,002
|
|
|
10,333
|
|
|
10,431
|
|
|||
Service
|
|
7,729
|
|
|
7,551
|
|
|
7,947
|
|
|||
General and administrative expenses
|
|
2,584
|
|
|
2,566
|
|
|
2,405
|
|
|||
Operating income
|
|
3,193
|
|
|
3,076
|
|
|
3,196
|
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
|
(301
|
)
|
|
(301
|
)
|
|
(282
|
)
|
|||
Other, net
|
|
31
|
|
|
15
|
|
|
23
|
|
|||
Earnings before income taxes
|
|
2,923
|
|
|
2,790
|
|
|
2,937
|
|
|||
Federal and foreign income tax expense
|
|
723
|
|
|
800
|
|
|
868
|
|
|||
Net earnings
|
|
$
|
2,200
|
|
|
$
|
1,990
|
|
|
$
|
2,069
|
|
|
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share
|
|
$
|
12.30
|
|
|
$
|
10.51
|
|
|
$
|
9.91
|
|
Weighted-average common shares outstanding, in millions
|
|
178.9
|
|
|
189.4
|
|
|
208.8
|
|
|||
Diluted earnings per share
|
|
$
|
12.19
|
|
|
$
|
10.39
|
|
|
$
|
9.75
|
|
Weighted-average diluted shares outstanding, in millions
|
|
180.5
|
|
|
191.6
|
|
|
212.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net earnings (from above)
|
|
$
|
2,200
|
|
|
$
|
1,990
|
|
|
$
|
2,069
|
|
Other comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
|||
Change in unamortized benefit plan costs, net of tax benefit (expense) of $89 in 2016, ($45) in 2015 and $1,423 in 2014
|
|
(175
|
)
|
|
75
|
|
|
(2,316
|
)
|
|||
Change in cumulative translation adjustment
|
|
(50
|
)
|
|
(41
|
)
|
|
(59
|
)
|
|||
Other, net
|
|
(1
|
)
|
|
2
|
|
|
3
|
|
|||
Other comprehensive (loss) income, net of tax
|
|
(226
|
)
|
|
36
|
|
|
(2,372
|
)
|
|||
Comprehensive income (loss)
|
|
$
|
1,974
|
|
|
$
|
2,026
|
|
|
$
|
(303
|
)
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
2,541
|
|
|
$
|
2,319
|
|
Accounts receivable, net
|
|
3,299
|
|
|
2,841
|
|
||
Inventoried costs, net
|
|
816
|
|
|
807
|
|
||
Prepaid expenses and other current assets
|
|
200
|
|
|
367
|
|
||
Total current assets
|
|
6,856
|
|
|
6,334
|
|
||
Property, plant and equipment, net of accumulated depreciation of $4,831 in 2016 and $4,849 in 2015
|
|
3,588
|
|
|
3,064
|
|
||
Goodwill
|
|
12,450
|
|
|
12,460
|
|
||
Deferred tax assets
|
|
1,462
|
|
|
1,409
|
|
||
Other non-current assets
|
|
1,258
|
|
|
1,157
|
|
||
Total assets
|
|
$
|
25,614
|
|
|
$
|
24,424
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Trade accounts payable
|
|
$
|
1,554
|
|
|
$
|
1,282
|
|
Accrued employee compensation
|
|
1,342
|
|
|
1,195
|
|
||
Advance payments and amounts in excess of costs incurred
|
|
1,471
|
|
|
1,537
|
|
||
Other current liabilities
|
|
1,263
|
|
|
1,443
|
|
||
Total current liabilities
|
|
5,630
|
|
|
5,457
|
|
||
Long-term debt, net of current portion of $12 in 2016 and $110 in 2015
|
|
7,058
|
|
|
6,386
|
|
||
Pension and other post-retirement benefit plan liabilities
|
|
6,818
|
|
|
6,172
|
|
||
Other non-current liabilities
|
|
849
|
|
|
887
|
|
||
Total liabilities
|
|
20,355
|
|
|
18,902
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
|
||||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2016—175,068,263 and 2015—181,303,083
|
|
175
|
|
|
181
|
|
||
Retained earnings
|
|
10,630
|
|
|
10,661
|
|
||
Accumulated other comprehensive loss
|
|
(5,546
|
)
|
|
(5,320
|
)
|
||
Total shareholders’ equity
|
|
5,259
|
|
|
5,522
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
25,614
|
|
|
$
|
24,424
|
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
2,200
|
|
|
$
|
1,990
|
|
|
$
|
2,069
|
|
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
456
|
|
|
467
|
|
|
462
|
|
|||
Stock-based compensation
|
|
93
|
|
|
99
|
|
|
134
|
|
|||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
(103
|
)
|
|
(81
|
)
|
|||
Deferred income taxes
|
|
36
|
|
|
572
|
|
|
216
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
(461
|
)
|
|
(30
|
)
|
|
(105
|
)
|
|||
Inventoried costs, net
|
|
(15
|
)
|
|
(80
|
)
|
|
(24
|
)
|
|||
Prepaid expenses and other assets
|
|
(110
|
)
|
|
43
|
|
|
13
|
|
|||
Accounts payable and other liabilities
|
|
198
|
|
|
(632
|
)
|
|
(89
|
)
|
|||
Income taxes payable
|
|
148
|
|
|
135
|
|
|
84
|
|
|||
Retiree benefits
|
|
393
|
|
|
(263
|
)
|
|
(17
|
)
|
|||
Other, net
|
|
(125
|
)
|
|
(36
|
)
|
|
(69
|
)
|
|||
Net cash provided by operating activities
|
|
2,813
|
|
|
2,162
|
|
|
2,593
|
|
|||
|
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(920
|
)
|
|
(471
|
)
|
|
(561
|
)
|
|||
Other, net
|
|
115
|
|
|
40
|
|
|
(84
|
)
|
|||
Net cash used in investing activities
|
|
(805
|
)
|
|
(431
|
)
|
|
(645
|
)
|
|||
|
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
|
||||||
Common stock repurchases
|
|
(1,547
|
)
|
|
(3,182
|
)
|
|
(2,668
|
)
|
|||
Net proceeds from issuance of long-term debt
|
|
749
|
|
|
600
|
|
|
—
|
|
|||
Payments of long-term debt
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|||
Cash dividends paid
|
|
(640
|
)
|
|
(603
|
)
|
|
(563
|
)
|
|||
Payments of employee taxes withheld from share-based awards
|
|
(153
|
)
|
|
(186
|
)
|
|
(127
|
)
|
|||
Net proceeds from credit facilities
|
|
135
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(9
|
)
|
|
96
|
|
|
123
|
|
|||
Net cash used in financing activities
|
|
(1,786
|
)
|
|
(3,275
|
)
|
|
(3,235
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
|
222
|
|
|
(1,544
|
)
|
|
(1,287
|
)
|
|||
Cash and cash equivalents, beginning of year
|
|
2,319
|
|
|
3,863
|
|
|
5,150
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
2,541
|
|
|
$
|
2,319
|
|
|
$
|
3,863
|
|
|
|
Year Ended December 31
|
||||||||||
$ in millions, except per share amounts
|
|
2016
|
|
2015
|
|
2014
|
||||||
Common stock
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
$
|
181
|
|
|
$
|
199
|
|
|
$
|
218
|
|
Common stock repurchased
|
|
(7
|
)
|
|
(19
|
)
|
|
(21
|
)
|
|||
Shares issued for employee stock awards and options
|
|
1
|
|
|
1
|
|
|
2
|
|
|||
End of year
|
|
175
|
|
|
181
|
|
|
199
|
|
|||
Paid-in capital
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
—
|
|
|
—
|
|
|
848
|
|
|||
Common stock repurchased
|
|
—
|
|
|
—
|
|
|
(999
|
)
|
|||
Stock compensation
|
|
—
|
|
|
—
|
|
|
139
|
|
|||
Other
|
|
—
|
|
|
—
|
|
|
12
|
|
|||
End of year
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Retained earnings
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
10,661
|
|
|
12,392
|
|
|
12,538
|
|
|||
Common stock repurchased
|
|
(1,548
|
)
|
|
(3,154
|
)
|
|
(1,637
|
)
|
|||
Net earnings
|
|
2,200
|
|
|
1,990
|
|
|
2,069
|
|
|||
Dividends declared
|
|
(633
|
)
|
|
(596
|
)
|
|
(578
|
)
|
|||
Stock compensation
|
|
(50
|
)
|
|
29
|
|
|
—
|
|
|||
End of year
|
|
10,630
|
|
|
10,661
|
|
|
12,392
|
|
|||
Accumulated other comprehensive loss
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
(5,320
|
)
|
|
(5,356
|
)
|
|
(2,984
|
)
|
|||
Other comprehensive (loss) income, net of tax
|
|
(226
|
)
|
|
36
|
|
|
(2,372
|
)
|
|||
End of year
|
|
(5,546
|
)
|
|
(5,320
|
)
|
|
(5,356
|
)
|
|||
Total shareholders’ equity
|
|
$
|
5,259
|
|
|
$
|
5,522
|
|
|
$
|
7,235
|
|
Cash dividends declared per share
|
|
$
|
3.50
|
|
|
$
|
3.10
|
|
|
$
|
2.71
|
|
|
Year Ended December 31
|
||||||||||
$ in millions, except per share data
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Income
|
$
|
494
|
|
|
$
|
580
|
|
|
$
|
664
|
|
Net Earnings
(1)
|
321
|
|
|
377
|
|
|
432
|
|
|||
Diluted earnings per share
(1)
|
1.78
|
|
|
1.97
|
|
|
2.04
|
|
(1)
|
Based on statutory tax rates
|
|
|
Year Ended December 31
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
$ in millions
|
|
$
|
%
(4)
|
|
$
|
%
(4)
|
|
$
|
%
(4)
|
|||||||||
U.S. Government
(1)
|
|
$
|
20,573
|
|
84
|
%
|
|
$
|
19,458
|
|
83
|
%
|
|
$
|
20,085
|
|
84
|
%
|
International
(2)
|
|
3,205
|
|
13
|
%
|
|
3,339
|
|
14
|
%
|
|
3,045
|
|
13
|
%
|
|||
Other Customers
(3)
|
|
730
|
|
3
|
%
|
|
729
|
|
3
|
%
|
|
849
|
|
3
|
%
|
|||
Total Sales
|
|
$
|
24,508
|
|
|
|
$
|
23,526
|
|
|
|
$
|
23,979
|
|
|
(1)
|
Sales to the
U.S.
Government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. Government. Each of the company's segments derives substantial revenue from the U.S. Government.
|
(2)
|
International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. Government, direct sales with governments outside the U.S. and commercial sales outside the U.S.
|
(3)
|
Sales to Other Customers include sales to U.S. state and local governments and commercial sales in the U.S.
|
(4)
|
Percentage of total sales.
|
|
|
|
|
December 31
|
||||||
Useful life in years, $ in millions
|
|
Useful Life
|
|
2016
|
|
2015
|
||||
Land and land improvements
|
|
Up to 40
(1)
|
|
$
|
415
|
|
|
$
|
381
|
|
Buildings and improvements
|
|
Up to 45
|
|
1,798
|
|
|
1,618
|
|
||
Machinery and other equipment
|
|
Up to 20
|
|
4,711
|
|
|
4,610
|
|
||
Capitalized software costs
|
|
3-5
|
|
439
|
|
|
406
|
|
||
Leasehold improvements
|
|
Length of Lease
(2)
|
|
1,056
|
|
|
898
|
|
||
Property, plant and equipment, at cost
|
|
|
|
8,419
|
|
|
7,913
|
|
||
Accumulated depreciation
|
|
|
|
(4,831
|
)
|
|
(4,849
|
)
|
||
Property, plant and equipment, net
|
|
|
|
$
|
3,588
|
|
|
$
|
3,064
|
|
(1)
|
Land is not a depreciable asset.
|
(2)
|
Leasehold improvements are depreciated over the shorter of the useful life of the asset or the length of the lease.
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Unamortized benefit plan costs, net of tax benefit of $3,439 in 2016 and $3,350 in 2015
|
|
$
|
(5,416
|
)
|
|
$
|
(5,241
|
)
|
Cumulative translation adjustment
|
|
(132
|
)
|
|
(82
|
)
|
||
Net unrealized gain on marketable securities and cash flow hedges, net of tax
|
|
2
|
|
|
3
|
|
||
Total accumulated other comprehensive loss
|
|
$
|
(5,546
|
)
|
|
$
|
(5,320
|
)
|
Repurchase Program
Authorization Date |
|
Amount
Authorized (in millions) |
|
Total
Shares Retired (in millions) |
|
Average
Price Per Share (1) |
|
Date Completed
|
|
Shares Repurchased
(in millions) |
||||||||||||
|
||||||||||||||||||||||
Year Ended December 31
|
||||||||||||||||||||||
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
May 15, 2013
|
|
$
|
4,000
|
|
|
32.8
|
|
|
$
|
121.97
|
|
|
March 2015
|
|
—
|
|
|
2.7
|
|
|
21.4
|
|
December 4, 2014
|
|
$
|
3,000
|
|
|
18.0
|
|
|
$
|
166.70
|
|
|
March 2016
|
|
1.4
|
|
|
16.6
|
|
|
—
|
|
September 16, 2015
|
|
$
|
4,000
|
|
|
5.9
|
|
|
$
|
218.28
|
|
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
7.3
|
|
|
19.3
|
|
|
21.4
|
|
(1)
|
Includes commissions paid.
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
|
|
|
|
|
||||||
Aerospace Systems
|
|
$
|
10,828
|
|
|
$
|
9,940
|
|
|
$
|
9,910
|
|
Mission Systems
|
|
10,928
|
|
|
10,674
|
|
|
11,001
|
|
|||
Technology Services
|
|
4,825
|
|
|
4,819
|
|
|
4,902
|
|
|||
Intersegment eliminations
|
|
(2,073
|
)
|
|
(1,907
|
)
|
|
(1,834
|
)
|
|||
Total sales
|
|
24,508
|
|
|
23,526
|
|
|
23,979
|
|
|||
Operating income
|
|
|
|
|
|
|
||||||
Aerospace Systems
|
|
1,236
|
|
|
1,205
|
|
|
1,285
|
|
|||
Mission Systems
|
|
1,445
|
|
|
1,410
|
|
|
1,557
|
|
|||
Technology Services
|
|
512
|
|
|
514
|
|
|
461
|
|
|||
Intersegment eliminations
|
|
(258
|
)
|
|
(209
|
)
|
|
(204
|
)
|
|||
Total segment operating income
|
|
2,935
|
|
|
2,920
|
|
|
3,099
|
|
|||
Net FAS/CAS pension adjustment
|
|
316
|
|
|
348
|
|
|
269
|
|
|||
Unallocated corporate expenses
|
|
(53
|
)
|
|
(190
|
)
|
|
(169
|
)
|
|||
Other
|
|
(5
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||
Total operating income
|
|
$
|
3,193
|
|
|
$
|
3,076
|
|
|
$
|
3,196
|
|
|
|
Year Ended December 31
|
||||||||||||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
Sales
|
Operating
Income
|
|
Sales
|
Operating
Income
|
|
Sales
|
Operating
Income
|
|||||||||||||||
Intersegment sales and operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aerospace Systems
|
|
$
|
239
|
|
|
$
|
28
|
|
|
$
|
221
|
|
|
$
|
27
|
|
|
$
|
166
|
|
|
$
|
21
|
|
Mission Systems
|
|
875
|
|
|
136
|
|
|
781
|
|
|
97
|
|
|
842
|
|
|
115
|
|
||||||
Technology Services
|
|
959
|
|
|
94
|
|
|
905
|
|
|
85
|
|
|
826
|
|
|
68
|
|
||||||
Total
|
|
$
|
2,073
|
|
|
$
|
258
|
|
|
$
|
1,907
|
|
|
$
|
209
|
|
|
$
|
1,834
|
|
|
$
|
204
|
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
|
||||
Aerospace Systems
|
|
$
|
7,523
|
|
|
$
|
7,049
|
|
Mission Systems
|
|
9,991
|
|
|
9,475
|
|
||
Technology Services
|
|
3,082
|
|
|
3,047
|
|
||
Segment assets
|
|
20,596
|
|
|
19,571
|
|
||
Corporate assets
(1)
|
|
5,018
|
|
|
4,853
|
|
||
Total assets
|
|
$
|
25,614
|
|
|
$
|
24,424
|
|
(1)
|
Corporate assets principally consist of cash and cash equivalents and deferred tax assets.
|
|
|
Capital Expenditures
|
|
Depreciation and Amortization
(1)
|
||||||||||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Aerospace Systems
|
|
$
|
451
|
|
|
$
|
237
|
|
|
$
|
376
|
|
|
$
|
216
|
|
|
$
|
215
|
|
|
$
|
208
|
|
Mission Systems
|
|
372
|
|
|
141
|
|
|
131
|
|
|
140
|
|
|
153
|
|
|
158
|
|
||||||
Technology Services
|
|
6
|
|
|
3
|
|
|
3
|
|
|
37
|
|
|
36
|
|
|
36
|
|
||||||
Corporate
|
|
91
|
|
|
90
|
|
|
51
|
|
|
63
|
|
|
63
|
|
|
60
|
|
||||||
Total
|
|
$
|
920
|
|
|
$
|
471
|
|
|
$
|
561
|
|
|
$
|
456
|
|
|
$
|
467
|
|
|
$
|
462
|
|
(1)
|
Depreciation and amortization expense includes amortization of purchased intangible assets, as well as amortization of deferred and other outsourcing costs.
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Due from U.S. Government
|
|
|
|
|
||||
Billed
|
|
$
|
444
|
|
|
$
|
506
|
|
Unbilled
|
|
8,878
|
|
|
7,699
|
|
||
Progress and performance-based payments received
|
|
(7,123
|
)
|
|
(6,140
|
)
|
||
|
|
2,199
|
|
|
2,065
|
|
||
Due from International and Other Customers
(1)
|
|
|
|
|
||||
Billed
|
|
238
|
|
|
223
|
|
||
Unbilled
|
|
4,747
|
|
|
3,713
|
|
||
Progress and performance-based payments received
|
|
(3,822
|
)
|
|
(3,101
|
)
|
||
|
|
1,163
|
|
|
835
|
|
||
Total accounts receivable
|
|
3,362
|
|
|
2,900
|
|
||
Allowance for doubtful accounts
|
|
(63
|
)
|
|
(59
|
)
|
||
Total accounts receivable, net
|
|
$
|
3,299
|
|
|
$
|
2,841
|
|
(1)
|
Includes receivables due from the U.S. Government associated with foreign military sales.
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Production costs of contracts in process
|
|
$
|
1,574
|
|
|
$
|
1,218
|
|
G&A expenses
|
|
249
|
|
|
293
|
|
||
|
|
1,823
|
|
|
1,511
|
|
||
Progress and performance-based payments received
|
|
(1,107
|
)
|
|
(807
|
)
|
||
|
|
716
|
|
|
704
|
|
||
Product inventory and raw material
|
|
100
|
|
|
103
|
|
||
Total inventoried costs, net
|
|
$
|
816
|
|
|
$
|
807
|
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Federal income tax expense:
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
661
|
|
|
$
|
310
|
|
|
$
|
701
|
|
Deferred
|
|
49
|
|
|
472
|
|
|
155
|
|
|||
Total federal income tax expense
|
|
710
|
|
|
782
|
|
|
856
|
|
|||
Foreign income tax expense:
|
|
|
|
|
|
|
||||||
Current
|
|
14
|
|
|
21
|
|
|
10
|
|
|||
Deferred
|
|
(1
|
)
|
|
(3
|
)
|
|
2
|
|
|||
Total foreign income tax expense
|
|
13
|
|
|
18
|
|
|
12
|
|
|||
Total federal and foreign income tax expense
|
|
$
|
723
|
|
|
$
|
800
|
|
|
$
|
868
|
|
|
|
Year Ended December 31
|
||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax expense at statutory rate
|
|
$
|
1,023
|
|
|
$
|
976
|
|
|
$
|
1,028
|
|
Stock compensation - excess tax benefits
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|||
Research credit
|
|
(61
|
)
|
|
(119
|
)
|
|
(43
|
)
|
|||
Manufacturing deduction
|
|
(58
|
)
|
|
(31
|
)
|
|
(48
|
)
|
|||
Settlements with taxing authorities
|
|
(40
|
)
|
|
—
|
|
|
(51
|
)
|
|||
Repatriation of Non-U.S Earnings
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(23
|
)
|
|
(26
|
)
|
|
(18
|
)
|
|||
Total federal and foreign income taxes
|
|
$
|
723
|
|
|
$
|
800
|
|
|
$
|
868
|
|
|
|
December 31
|
||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized tax benefits at beginning of the year
|
|
$
|
223
|
|
|
$
|
210
|
|
|
$
|
241
|
|
Additions based on tax positions related to the current year
|
|
35
|
|
|
52
|
|
|
62
|
|
|||
Additions for tax positions of prior years
|
|
2
|
|
|
17
|
|
|
9
|
|
|||
Reductions for tax positions of prior years
|
|
(40
|
)
|
|
(10
|
)
|
|
(47
|
)
|
|||
Settlements with taxing authorities
|
|
(84
|
)
|
|
—
|
|
|
(14
|
)
|
|||
Other, net
|
|
(1
|
)
|
|
(46
|
)
|
|
(41
|
)
|
|||
Net change in unrecognized tax benefits
|
|
(88
|
)
|
|
13
|
|
|
(31
|
)
|
|||
Unrecognized tax benefits at end of the year
|
|
$
|
135
|
|
|
$
|
223
|
|
|
$
|
210
|
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Deferred Tax Assets
|
|
|
|
|
||||
Retiree benefits
|
|
$
|
2,814
|
|
|
$
|
2,549
|
|
Accrued employee compensation
|
|
349
|
|
|
316
|
|
||
Provisions for accrued liabilities
|
|
295
|
|
|
347
|
|
||
Inventory
|
|
287
|
|
|
227
|
|
||
Stock-based compensation
|
|
72
|
|
|
76
|
|
||
Other
|
|
72
|
|
|
68
|
|
||
Gross deferred tax assets
|
|
3,889
|
|
|
3,583
|
|
||
Less valuation allowance
|
|
(31
|
)
|
|
(34
|
)
|
||
Net deferred tax assets
|
|
3,858
|
|
|
3,549
|
|
||
Deferred Tax Liabilities
|
|
|
|
|
||||
Goodwill
|
|
798
|
|
|
788
|
|
||
Property, plant and equipment, net
|
|
321
|
|
|
297
|
|
||
Contract accounting differences
|
|
1,200
|
|
|
976
|
|
||
Other
|
|
77
|
|
|
79
|
|
||
Deferred tax liabilities
|
|
2,396
|
|
|
2,140
|
|
||
Total net deferred tax assets
|
|
$
|
1,462
|
|
|
$
|
1,409
|
|
$ in millions
|
|
Aerospace
Systems
|
|
Mission
Systems
|
|
Technology
Services
|
|
Total
|
||||||||
Balance as of December 31, 2014
|
|
$
|
3,742
|
|
|
$
|
6,706
|
|
|
$
|
2,018
|
|
|
$
|
12,466
|
|
Other
(1)
|
|
—
|
|
|
(2
|
)
|
|
(4
|
)
|
|
(6
|
)
|
||||
Balance as of December 31, 2015
|
|
$
|
3,742
|
|
|
$
|
6,704
|
|
|
$
|
2,014
|
|
|
$
|
12,460
|
|
Businesses sold and other
(1)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Balance as of December 31, 2016
|
|
$
|
3,742
|
|
|
$
|
6,694
|
|
|
$
|
2,014
|
|
|
$
|
12,450
|
|
(1)
|
Other consists primarily of adjustments for foreign currency translation.
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
$ in millions
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Financial Assets (Liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trading
|
|
$
|
321
|
|
|
$
|
2
|
|
|
$
|
323
|
|
|
$
|
301
|
|
|
|
$ 2
|
|
|
$
|
303
|
|
Available-for-sale
|
|
7
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Derivatives
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
5
|
|
|
5
|
|
$ in millions
|
|
|
|
December 31
|
||||||
2016
|
|
2015
|
||||||||
Fixed-rate notes and debentures, maturing in
|
|
Interest rate
|
|
|
|
|
||||
2016
|
|
7.75%
|
|
$
|
—
|
|
|
$
|
107
|
|
2018
|
|
1.75%
|
|
850
|
|
|
1,050
|
|
||
2019
|
|
5.05%
|
|
500
|
|
|
500
|
|
||
2021
|
|
3.50%
|
|
700
|
|
|
700
|
|
||
2023
|
|
3.25%
|
|
1,050
|
|
|
1,050
|
|
||
2026
|
|
7.75% - 7.88%
|
|
527
|
|
|
527
|
|
||
2027
|
|
3.20%
|
|
750
|
|
|
—
|
|
||
2031
|
|
7.75%
|
|
466
|
|
|
466
|
|
||
2040
|
|
5.05%
|
|
300
|
|
|
300
|
|
||
2043
|
|
4.75%
|
|
950
|
|
|
950
|
|
||
2045
|
|
3.85%
|
|
600
|
|
|
600
|
|
||
Credit facilities
|
|
1.64%
|
|
135
|
|
|
—
|
|
||
Other
|
|
Various
|
|
273
|
|
|
276
|
|
||
Debt issuance costs
|
|
|
|
(31
|
)
|
|
(30
|
)
|
||
Total long-term debt
|
|
|
|
7,070
|
|
|
6,496
|
|
||
Less: current portion
|
|
|
|
12
|
|
|
110
|
|
||
Long-term debt, net of current portion
|
|
|
|
$
|
7,058
|
|
|
$
|
6,386
|
|
$ in millions
|
|
|
|
Year Ending December 31
|
|
||
2017
|
$
|
12
|
|
2018
|
853
|
|
|
2019
|
567
|
|
|
2020
|
94
|
|
|
2021
|
740
|
|
|
Thereafter
|
4,831
|
|
|
Total principal payments
|
7,097
|
|
|
Unamortized premium on long-term debt, net of discount
|
4
|
|
|
Debt issuance costs
|
(31
|
)
|
|
Total long-term debt
|
$
|
7,070
|
|
$ in millions
|
|
Range of Reasonably Possible Future Costs
(1)
|
|
Accrued Costs
(2)
|
|
Deferred Costs
(3)
|
||||
December 31, 2016
|
|
$379 - $774
|
|
$
|
385
|
|
|
$
|
195
|
|
December 31, 2015
|
|
353 - 812
|
|
370
|
|
|
186
|
|
(1)
|
Estimated remediation costs are not discounted to present value. The range of reasonably possible future costs does not take into consideration amounts expected to be recoverable through overhead charges on U.S. Government contracts.
|
(2)
|
As of
December 31, 2016
,
$119 million
is recorded in other current liabilities and
$266 million
is recorded in other non-current liabilities.
|
(3)
|
As of
December 31, 2016
,
$67 million
is deferred in inventoried costs and
$128 million
is deferred in other non-current assets. These amounts are evaluated for recoverability on a routine basis.
|
$ in millions
|
|
||
Year Ending December 31
|
|
||
2017
|
$
|
257
|
|
2018
|
186
|
|
|
2019
|
131
|
|
|
2020
|
92
|
|
|
2021
|
66
|
|
|
Thereafter
|
160
|
|
|
Total minimum lease payments
|
$
|
892
|
|
|
|
Year Ended December 31
|
||||||||||||||||||||||
|
|
Pension Benefits
|
|
Medical and
Life Benefits
|
||||||||||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
|
$
|
446
|
|
|
$
|
484
|
|
|
$
|
457
|
|
|
$
|
30
|
|
|
$
|
35
|
|
|
$
|
34
|
|
Interest cost
|
|
1,284
|
|
|
1,224
|
|
|
1,260
|
|
|
94
|
|
|
94
|
|
|
99
|
|
||||||
Expected return on plan assets
|
|
(1,853
|
)
|
|
(1,975
|
)
|
|
(1,871
|
)
|
|
(86
|
)
|
|
(89
|
)
|
|
(83
|
)
|
||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service credit
|
|
(60
|
)
|
|
(60
|
)
|
|
(59
|
)
|
|
(22
|
)
|
|
(28
|
)
|
|
(45
|
)
|
||||||
Net loss from previous years
|
|
714
|
|
|
682
|
|
|
327
|
|
|
16
|
|
|
27
|
|
|
13
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
|
$
|
531
|
|
|
$
|
355
|
|
|
$
|
115
|
|
|
$
|
32
|
|
|
$
|
39
|
|
|
$
|
18
|
|
$ in millions
|
|
Pension Benefits
|
|
Medical and
Life Benefits
|
|
Total
|
||||||
Changes in unamortized benefit plan costs
|
|
|
|
|
|
|
||||||
Change in net actuarial loss
|
|
$
|
3,833
|
|
|
$
|
234
|
|
|
$
|
4,067
|
|
Change in prior service cost
|
|
—
|
|
|
(92
|
)
|
|
(92
|
)
|
|||
Amortization of:
|
|
|
|
|
|
|
||||||
Prior service credit
|
|
59
|
|
|
45
|
|
|
104
|
|
|||
Net loss from previous years
|
|
(327
|
)
|
|
(13
|
)
|
|
(340
|
)
|
|||
Tax benefit related to above items
|
|
(1,357
|
)
|
|
(66
|
)
|
|
(1,423
|
)
|
|||
Change in unamortized benefit plan costs – 2014
|
|
2,208
|
|
|
108
|
|
|
2,316
|
|
|||
Change in net actuarial loss
|
|
626
|
|
|
(125
|
)
|
|
501
|
|
|||
Amortization of:
|
|
|
|
|
|
|
||||||
Prior service credit
|
|
60
|
|
|
28
|
|
|
88
|
|
|||
Net loss from previous years
|
|
(682
|
)
|
|
(27
|
)
|
|
(709
|
)
|
|||
Tax (benefit) expense related to above items
|
|
(1
|
)
|
|
46
|
|
|
45
|
|
|||
Change in unamortized benefit plan costs – 2015
|
|
3
|
|
|
(78
|
)
|
|
(75
|
)
|
|||
Change in net actuarial loss
|
|
1,003
|
|
|
(91
|
)
|
|
912
|
|
|||
Change in prior service cost
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of:
|
|
|
|
|
|
|
||||||
Prior service credit
|
|
60
|
|
|
22
|
|
|
82
|
|
|||
Net loss from previous years
|
|
(714
|
)
|
|
(16
|
)
|
|
(730
|
)
|
|||
Tax (benefit) expense related to above items
|
|
(121
|
)
|
|
32
|
|
|
(89
|
)
|
|||
Change in unamortized benefit plan costs – 2016
|
|
$
|
228
|
|
|
$
|
(53
|
)
|
|
$
|
175
|
|
|
|
Pension Benefits
|
|
Medical and
Life Benefits
|
||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amounts recorded in accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
|
$
|
(9,030
|
)
|
|
$
|
(8,741
|
)
|
|
$
|
(113
|
)
|
|
$
|
(220
|
)
|
Prior service credit
|
|
244
|
|
|
304
|
|
|
44
|
|
|
66
|
|
||||
Income tax benefits related to above items
|
|
3,407
|
|
|
3,286
|
|
|
32
|
|
|
64
|
|
||||
Unamortized benefit plan costs
|
|
$
|
(5,379
|
)
|
|
$
|
(5,151
|
)
|
|
$
|
(37
|
)
|
|
$
|
(90
|
)
|
|
|
Pension Benefits
|
|
Medical and
Life Benefits
|
||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Plan Assets
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
|
$
|
23,950
|
|
|
$
|
25,063
|
|
|
$
|
1,153
|
|
|
$
|
1,216
|
|
Net gain (loss) on plan assets
|
|
1,867
|
|
|
(258
|
)
|
|
97
|
|
|
(5
|
)
|
||||
Employer contributions
|
|
81
|
|
|
578
|
|
|
83
|
|
|
68
|
|
||||
Participant contributions
|
|
11
|
|
|
10
|
|
|
20
|
|
|
22
|
|
||||
Benefits paid
|
|
(1,480
|
)
|
|
(1,428
|
)
|
|
(146
|
)
|
|
(151
|
)
|
||||
Other
|
|
(45
|
)
|
|
(15
|
)
|
|
1
|
|
|
3
|
|
||||
Fair value of plan assets at end of year
|
|
24,384
|
|
|
23,950
|
|
|
1,208
|
|
|
1,153
|
|
||||
Projected Benefit Obligation
|
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation at beginning of year
|
|
29,182
|
|
|
30,525
|
|
|
2,181
|
|
|
2,398
|
|
||||
Service cost
|
|
446
|
|
|
484
|
|
|
30
|
|
|
35
|
|
||||
Interest cost
|
|
1,284
|
|
|
1,224
|
|
|
94
|
|
|
94
|
|
||||
Participant contributions
|
|
11
|
|
|
10
|
|
|
20
|
|
|
22
|
|
||||
Actuarial loss (gain)
|
|
1,026
|
|
|
(1,602
|
)
|
|
(80
|
)
|
|
(219
|
)
|
||||
Benefits paid
|
|
(1,480
|
)
|
|
(1,428
|
)
|
|
(146
|
)
|
|
(151
|
)
|
||||
Other
|
|
(60
|
)
|
|
(31
|
)
|
|
1
|
|
|
2
|
|
||||
Projected benefit obligation at end of year
|
|
30,409
|
|
|
29,182
|
|
|
2,100
|
|
|
2,181
|
|
||||
Funded status
|
|
$
|
(6,025
|
)
|
|
$
|
(5,232
|
)
|
|
$
|
(892
|
)
|
|
$
|
(1,028
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Classification of amounts recognized in the consolidated statements of financial position
|
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
|
$
|
2
|
|
|
$
|
18
|
|
|
$
|
87
|
|
|
$
|
79
|
|
Current liability
|
|
(146
|
)
|
|
(142
|
)
|
|
(42
|
)
|
|
(43
|
)
|
||||
Non-current liability
|
|
(5,881
|
)
|
|
(5,108
|
)
|
|
(937
|
)
|
|
(1,064
|
)
|
$ in millions
|
Pension Benefits
|
|
Medical and
Life Benefits |
|
Total
|
||||||
Amounts expected to be recognized in 2017 net periodic benefit cost
|
|
|
|
|
|
||||||
Net actuarial loss
|
$
|
712
|
|
|
$
|
9
|
|
|
$
|
721
|
|
Prior service credit
|
(58
|
)
|
|
(21
|
)
|
|
(79
|
)
|
|
|
December 31
|
||||||
$ in millions
|
|
2016
|
|
2015
|
||||
Projected benefit obligation
|
|
$
|
30,350
|
|
|
$
|
29,131
|
|
Accumulated benefit obligation
|
|
30,065
|
|
|
28,923
|
|
||
Fair value of plan assets
|
|
24,322
|
|
|
23,882
|
|
|
|
Pension Benefits
|
|
Medical and
Life Benefits
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Assumptions used to determine benefit obligation at December 31
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
4.19
|
%
|
|
4.53
|
%
|
|
4.13
|
%
|
|
4.47
|
%
|
Initial cash balance crediting rate assumed for the next year
|
|
3.10
|
%
|
|
3.00
|
%
|
|
|
|
|
||
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
|
|
3.60
|
%
|
|
3.75
|
%
|
|
|
|
|
||
Year that the cash balance crediting rate reaches the ultimate rate
|
|
2022
|
|
|
2021
|
|
|
|
|
|
||
Rate of compensation increase
|
|
3.00
|
%
|
|
3.00
|
%
|
|
|
|
|
||
Initial health care cost trend rate assumed for the next year
|
|
|
|
|
|
6.50
|
%
|
|
7.00
|
%
|
||
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate)
|
|
|
|
|
|
5.00
|
%
|
|
5.00
|
%
|
||
Year that the health care cost trend rate reaches the ultimate trend rate
|
|
|
|
|
|
2020
|
|
|
2020
|
|
||
Assumptions used to determine benefit cost for the year ended December 31
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
4.53
|
%
|
|
4.12
|
%
|
|
4.47
|
%
|
|
4.04
|
%
|
Initial cash balance crediting rate assumed for the next year
|
|
3.00
|
%
|
|
2.75
|
%
|
|
|
|
|
||
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
|
|
3.75
|
%
|
|
3.50
|
%
|
|
|
|
|
||
Year that the cash balance crediting rate reaches the ultimate rate
|
|
2021
|
|
|
2020
|
|
|
|
|
|
||
Expected long-term return on plan assets
|
|
8.00
|
%
|
|
8.00
|
%
|
|
7.70
|
%
|
|
7.58
|
%
|
Rate of compensation increase
|
|
3.00
|
%
|
|
3.00
|
%
|
|
|
|
|
||
Initial health care cost trend rate assumed for the next year
|
|
|
|
|
|
7.00
|
%
|
|
6.50
|
%
|
||
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate)
|
|
|
|
|
|
5.00
|
%
|
|
5.00
|
%
|
||
Year that the health care cost trend rate reaches the ultimate trend rate
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
|
Asset Allocation Ranges
|
|||
Cash and cash equivalents
|
|
0% - 12%
|
|||
U.S. equities
|
|
15% - 35%
|
|||
International equities
|
|
10% - 30%
|
|||
Fixed-income securities
|
|
20% - 55%
|
|||
Alternative investments
|
|
8% - 28%
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||||||||||
$ in millions
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Asset category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
|
|
$ 72
|
|
|
|
$ 37
|
|
|
|
$ 2,477
|
|
|
|
$ 1,457
|
|
|
|
|
|
|
|
$ 2,549
|
|
|
|
$ 1,494
|
|
||||
U.S. equities
|
|
3,686
|
|
|
4,043
|
|
|
—
|
|
|
—
|
|
|
$
|
3
|
|
|
|
$ 2
|
|
|
3,689
|
|
|
4,045
|
|
||||||
International equities
|
|
2,392
|
|
|
2,300
|
|
|
48
|
|
|
81
|
|
|
$
|
1
|
|
|
|
|
2,441
|
|
|
2,381
|
|
||||||||
Fixed-income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasuries
|
|
|
|
|
|
1,109
|
|
|
530
|
|
|
|
|
|
|
1,109
|
|
|
530
|
|
||||||||||||
U.S. Government Agency
|
|
|
|
|
|
424
|
|
|
717
|
|
|
|
|
|
|
424
|
|
|
717
|
|
||||||||||||
Non-U.S. Government
|
|
|
|
|
|
108
|
|
|
274
|
|
|
|
|
|
|
108
|
|
|
274
|
|
||||||||||||
Corporate debt
|
|
|
|
|
|
3,723
|
|
|
4,876
|
|
|
|
|
|
|
3,723
|
|
|
4,876
|
|
||||||||||||
Asset backed
|
|
|
|
|
|
296
|
|
|
392
|
|
|
1
|
|
|
1
|
|
|
297
|
|
|
393
|
|
||||||||||
High yield debt
|
|
|
|
|
|
1,844
|
|
|
1,678
|
|
|
|
|
|
|
1,844
|
|
|
1,678
|
|
||||||||||||
Bank loans
|
|
|
|
|
|
297
|
|
|
261
|
|
|
|
|
|
|
297
|
|
|
261
|
|
||||||||||||
Other Assets
|
|
(10
|
)
|
|
20
|
|
|
12
|
|
|
5
|
|
|
|
|
|
|
2
|
|
|
25
|
|
||||||||||
Investments valued using NAV as a practical expedient
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
700
|
|
|
593
|
|
||||||||||||||
International equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,329
|
|
|
2,470
|
|
||||||||||||||
Fixed-income funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99
|
|
|
133
|
|
||||||||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
|
219
|
|
||||||||||||||
Opportunistic investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
581
|
|
|
278
|
|
||||||||||||||
Private equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,801
|
|
|
1,850
|
|
||||||||||||||
Real estate funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,379
|
|
|
2,886
|
|
||||||||||||||
Fair value of plan assets at the end of the year
|
|
|
$6,140
|
|
|
|
$6,400
|
|
|
|
$10,338
|
|
|
|
$10,271
|
|
|
|
$5
|
|
|
|
$3
|
|
|
|
$25,592
|
|
|
|
$25,103
|
|
$ in millions
|
|
Pension Plans
|
|
Medical and
Life Plans
|
|
Total
|
||||||
Year Ending December 31
|
|
|
|
|
|
|
||||||
2017
|
|
$
|
1,531
|
|
|
$
|
150
|
|
|
$
|
1,681
|
|
2018
|
|
1,575
|
|
|
154
|
|
|
1,729
|
|
|||
2019
|
|
1,622
|
|
|
152
|
|
|
1,774
|
|
|||
2020
|
|
1,670
|
|
|
153
|
|
|
1,823
|
|
|||
2021
|
|
1,718
|
|
|
153
|
|
|
1,871
|
|
|||
2022 through 2026
|
|
9,251
|
|
|
731
|
|
|
9,982
|
|
|
|
Stock
Awards (in thousands) |
|
Weighted-
Average Grant Date Fair Value |
|
Weighted-
Average Remaining Contractual Term (in years) |
|||
Outstanding at January 1, 2014
|
|
3,420
|
|
|
$
|
61
|
|
|
1.5
|
Granted
|
|
763
|
|
|
118
|
|
|
|
|
Vested
|
|
(1,217
|
)
|
|
58
|
|
|
|
|
Forfeited
|
|
(158
|
)
|
|
70
|
|
|
|
|
Outstanding at December 31, 2014
|
|
2,808
|
|
|
$
|
77
|
|
|
1.1
|
Granted
|
|
539
|
|
|
166
|
|
|
|
|
Vested
|
|
(1,691
|
)
|
|
62
|
|
|
|
|
Forfeited
|
|
(70
|
)
|
|
108
|
|
|
|
|
Outstanding at December 31, 2015
|
|
1,586
|
|
|
$
|
122
|
|
|
1.2
|
Granted
|
|
483
|
|
|
186
|
|
|
|
|
Vested
|
|
(872
|
)
|
|
97
|
|
|
|
|
Forfeited
|
|
(49
|
)
|
|
143
|
|
|
|
|
Outstanding at December 31, 2016
|
|
1,148
|
|
|
$
|
167
|
|
|
1.3
|
|
|
Year Ended December 31
|
||||||||
$ in millions
|
|
2016
|
2015
|
2014
|
||||||
Minimum aggregate payout amount
|
|
$
|
39
|
|
$
|
37
|
|
$
|
32
|
|
Maximum aggregate payout amount
|
|
199
|
|
194
|
|
179
|
|
2016
|
|
|
||||||||||||||
In millions, except per share amounts
|
|
1st Qtr
|
|
2nd Qtr
|
|
3rd Qtr
|
|
4th Qtr
|
||||||||
Sales
|
|
$
|
5,956
|
|
|
$
|
6,000
|
|
|
$
|
6,155
|
|
|
$
|
6,397
|
|
Operating income
|
|
739
|
|
|
797
|
|
|
826
|
|
|
831
|
|
||||
Net earnings
|
|
556
|
|
|
517
|
|
|
602
|
|
|
525
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
3.07
|
|
|
2.87
|
|
|
3.38
|
|
|
2.98
|
|
||||
Diluted earnings per share
|
|
3.03
|
|
|
2.85
|
|
|
3.35
|
|
|
2.96
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
181.3
|
|
|
180.1
|
|
|
178.1
|
|
|
176.0
|
|
||||
Weighted-average diluted shares outstanding
|
|
183.4
|
|
|
181.5
|
|
|
179.6
|
|
|
177.6
|
|
2015
|
|
|
||||||||||||||
In millions, except per share amounts
|
|
1st Qtr
|
|
2nd Qtr
|
|
3rd Qtr
|
|
4th Qtr
|
||||||||
Sales
|
|
$
|
5,957
|
|
|
$
|
5,896
|
|
|
$
|
5,979
|
|
|
$
|
5,694
|
|
Operating income
|
|
780
|
|
|
813
|
|
|
794
|
|
|
689
|
|
||||
Net earnings
|
|
484
|
|
|
531
|
|
|
516
|
|
|
459
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
2.45
|
|
|
2.77
|
|
|
2.78
|
|
|
2.52
|
|
||||
Diluted earnings per share
|
|
2.41
|
|
|
2.74
|
|
|
2.75
|
|
|
2.49
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
197.7
|
|
|
191.8
|
|
|
185.8
|
|
|
182.1
|
|
||||
Weighted-average diluted shares outstanding
|
|
200.5
|
|
|
193.7
|
|
|
187.9
|
|
|
184.2
|
|
Name
|
|
Age
|
|
Office Held
|
|
Since
|
|
Recent Business Experience
|
|
Wesley G. Bush
|
|
55
|
|
|
Chairman, Chief Executive Officer and President
|
|
2010
|
|
President and Chief Operating Officer (2007-2009)
|
Patrick M. Antkowiak
|
|
56
|
|
|
Corporate Vice President and Chief Technology Officer
|
|
2014
|
|
Vice President and General Manager, Advanced Concepts and Technologies Division, Former Electronic Systems Sector (2010-2014)
|
M. Sidney Ashworth
|
|
65
|
|
|
Corporate Vice President, Government Relations
|
|
2010
|
|
Vice President of Washington Operations, GE Aviation (a provider of aircraft engines, components and systems) (2010)
|
Kenneth L. Bedingfield
|
|
44
|
|
|
Corporate Vice President and Chief Financial Officer
|
|
2015
|
|
Vice President, Finance (2014-2015); Vice President, Business Management and Chief Financial Officer, Aerospace Systems Sector (2013-2014); Corporate Vice President, Controller and Chief Accounting Officer (2011-2013)
|
Mark A. Caylor
|
|
52
|
|
|
Corporate Vice President and President, Enterprise Services and Chief Strategy Officer
|
|
2013
|
|
Corporate Vice President and Treasurer (2011-2012)
|
Sheila C. Cheston
|
|
58
|
|
|
Corporate Vice President and General Counsel
|
|
2010
|
|
Executive Vice President and Director, BAE Systems, Inc. (an aerospace and defense company) (2009 -2010)
|
Lisa R. Davis
|
|
55
|
|
|
Corporate Vice President, Communications
|
|
2016
|
|
Vice President, Communications, Former Electronic Systems Sector (2014-2016); Vice President, Communications, AstraZeneca (a biopharmaceutical company) (2006-2013)
|
Gloria A. Flach
|
|
58
|
|
|
Corporate Vice President and Chief Operating Officer
|
|
2016
|
|
Corporate Vice President and President, Former Electronic Systems Sector (2013-2015); Corporate Vice President and President, Enterprise Shared Services (2010-2012)
|
Name
|
|
Age
|
|
Office Held
|
|
Since
|
|
Recent Business Experience
|
|
Michael A. Hardesty
|
|
45
|
|
|
Corporate Vice President, Controller, and Chief Accounting Officer
|
|
2013
|
|
Vice President and Chief Financial Officer, Former Information Systems Sector (2011-2013)
|
Christopher T. Jones
|
|
52
|
|
|
Corporate Vice President and President, Technology Services Sector
|
|
2016
|
|
Corporate Vice President and President, Former Technical Services Sector (2013-2015); Vice President and General Manager, Integrated Logistics and Modernization Division, Former Technical Services Sector (2010-2012)
|
Denise M. Peppard
|
|
60
|
|
|
Corporate Vice President and Chief Human Resources Officer
|
|
2011
|
|
Vice President and Chief Human Resources, Computer Sciences Corporation (an information technology services company) (2010-2011)
|
David T. Perry
|
|
52
|
|
|
Corporate Vice President and Chief Global Business Development Officer
|
|
2012
|
|
Vice President and General Manager of Naval and Marine Systems Division, Former Electronic Systems Sector (2009-2012)
|
Thomas E. Vice
|
|
54
|
|
|
Corporate Vice President and President, Aerospace Systems Sector
|
|
2013
|
|
Corporate Vice President and President, Former Technical Services Sector (2010-2012)
|
Kathy J. Warden
|
|
45
|
|
|
Corporate Vice President and President, Mission Systems Sector
|
|
2016
|
|
Corporate Vice President and President, Former Information Systems Sector (2013-2015); Vice President and General Manager, Cyber Intelligence Division (2011-2012)
|
(a)
|
1. Report of Independent Registered Public Accounting Firm
|
|
2(a)
|
Separation and Distribution Agreement dated as of March 29, 2011, among Titan II, Inc. (formerly Northrop Grumman Corporation), Northrop Grumman Corporation (formerly New P, Inc.), Huntington Ingalls Industries, Inc., Northrop Grumman Shipbuilding, Inc. and Northrop Grumman Systems Corporation (incorporated by reference to Exhibit 10.2 to Form 8-K filed April 4, 2011)
|
|
3(a)
|
Amended and Restated Certificate of Incorporation of Northrop Grumman Corporation dated May 29, 2012 (incorporated by reference to Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 2012, filed July 24, 2012)
|
|
3(b)
|
Amended and Restated Bylaws of Northrop Grumman Corporation dated February 17, 2016 (incorporated by reference to Exhibit 3.2 to Form 8-K filed February 22, 2016)
|
|
4(a)
|
Registration Rights Agreement dated as of January 23, 2001, by and among Northrop Grumman Corporation (now Northrop Grumman Systems Corporation), NNG, Inc. (now Northrop Grumman Corporation) and Unitrin, Inc. (incorporated by reference to Exhibit(d)(6) to Amendment No. 4 to Schedule TO filed January 31, 2001)
|
|
4(b)
|
Indenture dated as of October 15, 1994, between Northrop Grumman Corporation (now Northrop Grumman Systems Corporation) and The Chase Manhattan Bank (National Association), Trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed October 25, 1994)
|
|
4(c)
|
First Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation, The Bank of New York Mellon (successor trustee to JPMorgan Chase Bank and The Chase Manhattan Bank, N.A.), Titan II, Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Indenture dated as of October 15, 1994, between Northrop Grumman Corporation (now Northrop Grumman Systems Corporation) and The Chase Manhattan Bank, N.A., Trustee (incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(d)
|
Second Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation, The Bank of New York Mellon (successor trustee to JPMorgan Chase Bank and The Chase Manhattan Bank, N.A.), Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P, Inc.), to Indenture dated as of October 15, 1994, between Northrop Grumman Corporation (now Northrop Grumman Systems Corporation) and The Chase Manhattan Bank, N.A., Trustee (incorporated by reference to Exhibit 4.2 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(e)
|
Form of Officers’ Certificate (without exhibits) establishing the terms of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.75 percent Debentures due 2016 and 7.875 percent Debentures due 2026 (incorporated by reference to Exhibit 4-3 to Form S-4 Registration Statement No. 333-02653 filed April 19, 1996)
|
|
4(f)
|
Form of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.75 percent Debentures due 2016 (incorporated by reference to Exhibit 4-5 to Form S-4 Registration Statement No. 333-02653 filed April 19, 1996)
|
|
4(g)
|
Form of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.875 percent Debentures due 2026 (incorporated by reference to Exhibit 4-6 to Form S-4 Registration Statement No. 333-02653 filed April 19, 1996)
|
|
4(h)
|
Form of Officers’ Certificate establishing the terms of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.75 percent Debentures due 2031 (incorporated by reference to Exhibit 10.9 to Form 8-K filed April 17, 2001)
|
|
4(i)
|
Indenture dated as of April 13, 1998, between Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and The Bank of New York, as trustee, under which its 6.75 percent Senior Debentures due 2018 were issued (incorporated by reference to Exhibit 4.1 to the Form 10-Q of Litton Industries, Inc. for the quarter ended April 30, 1998, filed June 15, 1998)
|
|
4(j)
|
Supplemental Indenture with respect to Indenture dated April 13, 1998, dated as of April 3, 2001, among Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation), Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.5 to Form 10-Q for the quarter ended March 31, 2001, filed May 10, 2001)
|
|
4(k)
|
Supplemental Indenture with respect to Indenture dated April 13, 1998, dated as of December 20, 2002, among Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation), Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(q) to Form 10-K for the year ended December 31, 2002, filed March 24, 2003)
|
|
4(l)
|
Third Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York) as trustee, Titan II, Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Indenture dated April 13, 1998, between Litton Industries, Inc. and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.3 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(m)
|
Fourth Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York) as trustee, Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P., Inc.), to Indenture dated April 13, 1998, between Litton Industries, Inc. and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.4 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(n)
|
Senior Indenture dated as of December 15, 1991, between Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and The Bank of New York, as trustee, under which its 7.75 percent and 6.98 percent debentures due 2026 and 2036 were issued, and specimens of such debentures (incorporated by reference to Exhibit 4.1 to the Form 10-Q of Litton Industries, Inc. for the quarter ended April 30, 1996, filed June 11, 1996)
|
|
4(o)
|
Supplemental Indenture with respect to Indenture dated December 15, 1991, dated as of April 3, 2001, among Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation), Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.7 to Form 10-Q for the quarter ended March 31, 2001, filed May 10, 2001)
|
|
4(p)
|
Supplemental Indenture with respect to Indenture dated December 15, 1991, dated as of December 20, 2002, among Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation), Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(t) to Form 10-K for the year ended December 31, 2002, filed March 24, 2003)
|
|
4(q)
|
Third Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York), as trustee, Titan II, Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Senior Indenture dated December 15, 1991, among Litton Industries, Inc., Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.5 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(r)
|
Fourth Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York) as trustee, Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P, Inc.), to Senior Indenture dated December 15, 1991, among Litton Industries, Inc., Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.6 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(s)
|
Indenture between TRW Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and Mellon Bank, N.A., as trustee, dated as of May 1, 1986 (incorporated by reference to Exhibit 2 to the Form 8-A Registration Statement of TRW Inc. dated July 3, 1986)
|
|
4(t)
|
First Supplemental Indenture between TRW Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and Mellon Bank, N.A., as trustee, dated as of August 24, 1989 (incorporated by reference to Exhibit 4(b) to Form S-3 Registration Statement No. 33-30350 of TRW Inc.)
|
|
4(u)
|
Fifth Supplemental Indenture between TRW Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and The Chase Manhattan Bank, as successor trustee, dated as of June 2, 1999 (incorporated by reference to Exhibit 4(f) to Form S-4 Registration Statement No. 333-83227 of TRW Inc. filed July 20, 1999)
|
|
4(v)
|
Ninth Supplemental Indenture dated as of December 31, 2009 among Northrop Grumman Space & Mission Systems Corp. (predecessor–in-interest to Northrop Grumman Systems Corporation); The Bank of New York Mellon, as successor trustee; Northrop Grumman Corporation; and Northrop Grumman Systems Corporation (incorporated by reference to Exhibit 4(p) to Form 10-K for the year ended December 31, 2009, filed February 9, 2010)
|
|
4(w)
|
Tenth Supplemental Indenture dated as of March 30, 2011, by and among Northrop Grumman Systems Corporation (successor-in-interest to Northrop Grumman Space & Mission Systems Corp. and TRW, Inc.), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank and to Mellon Bank, N.A., Titan II Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Indenture between TRW Inc. and Mellon Bank, N.A., as trustee, dated as of May 1, 1986 (incorporated by reference to Exhibit 4.7 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(x)
|
Eleventh Supplemental Indenture dated as of March 30, 2011, by and among Northrop Grumman Systems Corporation (successor-in-interest to Northrop Grumman Space & Mission Systems Corp. and TRW Inc.), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank and to Mellon Bank, N.A., Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P, Inc.) to Indenture between TRW Inc. and Mellon Bank, N.A., as trustee, dated as of May 1, 1986 (incorporated by reference to Exhibit 4.8 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(y)
|
Indenture dated as of November 21, 2001, between Northrop Grumman Corporation and JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed November 21, 2001)
|
|
4(z)
|
First Supplemental Indenture dated as of July 30, 2009, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4(a) to Form 8-K filed July 30, 2009)
|
|
4(aa)
|
Form of Northrop Grumman Corporation’s 5.05 percent Senior Note due 2019 (incorporated by reference to Exhibit 4(c) to Form 8-K filed July 30, 2009)
|
|
4(bb)
|
Second Supplemental Indenture dated as of November 8, 2010, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4(a) to Form 8-K filed November 8, 2010)
|
|
4(cc)
|
Form of Northrop Grumman Corporation’s 3.500% Senior Note due 2021 (incorporated by reference to Exhibit 4(a) to Form 8-K filed November 8, 2010)
|
|
4(dd)
|
Form of Northrop Grumman Corporation’s 5.050% Senior Note due 2040 (incorporated by reference to Exhibit 4(a) to Form 8-K filed November 8, 2010)
|
|
4(ee)
|
Third Supplemental Indenture dated as of March 30, 2011, by and among Titan II, Inc. (formerly known as Northrop Grumman Corporation), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, and Titan Holdings II, L.P., to Indenture dated as of November 21, 2001 between Northrop Grumman Corporation and JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.9 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(ff)
|
Fourth Supplemental Indenture dated as of March 30, 2011, by and among Titan Holdings II, L.P., The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, and Northrop Grumman Corporation (formerly known as New P., Inc.), to Indenture dated as of November 21, 2001 between Northrop Grumman Corporation and JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.10 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011)
|
|
4(gg)
|
Fifth Supplemental Indenture, dated as of May 31, 2013, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor to JPMorgan Chase Bank, Trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4(a) to Form 8-K filed May 31, 2013)
|
|
4(hh)
|
Form of 1.750% Senior Note due 2018 (incorporated by reference to Exhibit 4(a) to Form 8-K filed May 31, 2013)
|
|
4(ii)
|
Form of 3.250% Senior Note due 2023 (incorporated by reference to Exhibit 4(a) to Form 8-K filed May 31, 2013)
|
|
4(jj)
|
Form of 4.750% Senior Note due 2043 (incorporated by reference to Exhibit 4(a) to Form 8-K filed May 31, 2013)
|
|
4(kk)
|
Sixth Supplemental Indenture, dated as of February 6, 2015, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor to JPMorgan Chase Bank, Trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4.1 to Form 8-K filed February 6, 2015)
|
|
4(ll)
|
Form of 3.850% Senior Note due 2045 (incorporated by reference to Exhibit 4.1 to Form 8-K filed February 6, 2015)
|
|
4(mm)
|
Seventh Supplemental Indenture, dated as of December 1, 2016, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor to JPMorgan Chase Bank, Trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4.1 to Form 8-K filed December 1, 2016)
|
|
4(nn)
|
Form of 3.200% Senior Note due 2027 (incorporated by reference to Exhibit 4.1 to Form 8-K filed December 1, 2016)
|
|
10(a)
|
Amended and Restated Credit Agreement, dated as of July 8, 2015, among Northrop Grumman Corporation, as Borrower; Northrop Grumman Systems Corporation, as Guarantor; the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Form 8-K filed July 9, 2015)
|
|
10(b)
|
Form of Guarantee dated as of April 3, 2001, by Northrop Grumman Corporation of the indenture indebtedness issued by Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) (incorporated by reference to Exhibit 10.10 to Form 8-K filed April 17, 2001)
|
|
10(c)
|
Form of Guarantee dated as of April 3, 2001, by Northrop Grumman Corporation of Northrop Grumman Systems Corporation indenture indebtedness (incorporated by reference to Exhibit 10.11 to Form 8-K and filed April 17, 2001)
|
|
10(d)
|
Form of Guarantee dated as of March 27, 2003, by Northrop Grumman Corporation, as Guarantor, in favor of JP Morgan Chase Bank, as trustee, of certain debt securities issued by the former Northrop Grumman Space & Mission Systems Corp. (predecessor-in-interest to Northrop Grumman Systems Corporation) (incorporated by reference to Exhibit 4.2 to Form 10-Q for the quarter ended March 31, 2003, filed May 14, 2003)
|
|
+10(e)
|
Northrop Grumman Corporation 1993 Stock Plan for Non-Employee Directors (as Amended and Restated January 1, 2010) (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2009, filed July 23, 2009)
|
|
+10(f)
|
Northrop Grumman Corporation Non-Employee Directors Equity Participation Plan (Amended and Restated January 1, 2008) (incorporated by reference to Exhibit 10(q) to Form 10-K for the year ended December 31, 2007, filed February 20, 2008)
|
|
+10(g)
|
Northrop Grumman 2001 Long-Term Incentive Stock Plan (As amended through December 19, 2007) (incorporated by reference to Exhibit A to the Company’s Proxy Statement on Schedule 14A for the 2008 Annual Meeting of Shareholders filed April 21, 2008)
|
(i)
|
Form of Agreement for 2010 Stock Options (incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2010, filed April 28, 2010)
|
(ii)
|
Form of Agreement for 2011 Stock Options granted under the Northrop Grumman 2001 Long-Term Incentive Stock Plan (As amended through December 19, 2007) (incorporated by reference to Exhibit 10.1 of Form 8-K filed February 22, 2011)
|
|
+10(h)
|
Amended and Restated 2011 Long-Term Incentive Stock Plan (as amended and restated effective as of May 20, 2015) (incorporated by reference to Appendix B to the Northrop Grumman Corporation Proxy Statement on Schedule 14A for the 2015 Annual Meeting of Shareholders filed April 6, 2015, File No. 001-16411)
|
(i)
|
Northrop Grumman Corporation Equity Grant Program for Non-Employee Directors under the Northrop Grumman 2011 Long-Term Incentive Stock Plan, Amended and Restated Effective January 1, 2016 (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2015, filed October 28, 2015)
|
|
+10(i)
|
Northrop Grumman 2011 Long-Term Incentive Stock Plan (as Amended Through December 4, 2014) (incorporated by reference to Exhibit 10(h) to Form 10-K for the year ended December 31, 2014, filed February 2, 2015)
|
(i)
|
Summary of Non-Employee Director Award Terms Under the 2011 Long-Term Incentive Stock Plan effective December 21, 2011 (incorporated by reference to Exhibit 10(j)(ii) to Form 10-K for the year ended December 31, 2011, filed February 7, 2012)
|
(ii)
|
Northrop Grumman Corporation Equity Grant Program for Non-Employee Directors under the Northrop Grumman 2011 Long-Term Incentive Stock Plan, Amended and Restated Effective January 1, 2015 (incorporated by reference to Exhibit 10(h)(ii) to Form 10-K for the year ended December 31, 2014, filed February 2, 2015)
|
(iii)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2013 Restricted Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed February 21, 2013)
|
(iv)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2013 Restricted Performance Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed February 21, 2013)
|
(v)
|
Grant Certificate Specifying the Terms and Conditions Applicable to Special 2013 Restricted Stock Rights Granted to James F. Palmer Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed September 23, 2013)
|
(vi)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2014 Restricted Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed February 24, 2014)
|
(vii)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2014 Restricted Performance Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed February 24, 2014)
|
(viii)
|
Amended and Restated Grant Certificate Specifying the Terms and Conditions Applicable to 2014 Restricted Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended June 30, 2014, filed July 23, 2014)
|
(ix)
|
Amended and Restated Grant Certificate Specifying the Terms and Conditions Applicable to 2014 Restricted Performance Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended June 30, 2014, filed July 23, 2014)
|
(x)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2015 Restricted Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed February 20, 2015)
|
(xi)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2015 Restricted Performance Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed February 20, 2015)
|
(xii)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2016 Restricted Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2016 filed April 27, 2016)
|
(xiii)
|
Grant Certificate Specifying the Terms and Conditions Applicable to 2016 Restricted Performance Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2016 filed April 27, 2016)
|
|
+10(j)
|
Northrop Grumman Supplemental Plan 2 (Amended and Restated Effective as of January 1, 2014) (incorporated by reference to Exhibit 10(l) to Form 10-K for the year ended December 31, 2013, Filed February 3, 2014)
|
(i)
|
Appendix B to the Northrop Grumman Supplemental Plan 2: ERISA Supplemental Program 2 (Amended and Restated Effective as of January 1, 2014) (incorporated by reference to Exhibit 10(l)(i) to Form 10-K for the year ended December 31, 2013, filed February 3, 2014)
|
(ii)
|
Appendix F to the Northrop Grumman Supplemental Plan 2: CPC Supplemental Executive Retirement Program (Amended and Restated Effective as of January 1, 2012) (incorporated by reference to Exhibit 10(k)(iii) to Form 10-K for the year ended December 31, 2011, filed February 8, 2012)
|
(iii)
|
Appendix G to the Northrop Grumman Supplemental Plan 2: Officers Supplemental Executive Retirement Program (Amended and Restated Effective as of January 1, 2012) (incorporated by reference to Exhibit 10(k)(iv) to Form 10-K for the year ended December 31, 2011, filed February 8, 2012)
|
|
+10(k)
|
Northrop Grumman Supplementary Retirement Income Plan (formerly TRW Supplementary Retirement Income Plan) (Amended and Restated Effective January 1, 2014) (incorporated by reference to Exhibit 10(m) to Form 10-K for the year ended December 31, 2013, filed February 3, 2014)
|
|
+10(l)
|
Northrop Grumman Electronic Systems Executive Pension Plan (Amended and Restated Effective as of January 1, 2016) (incorporated by reference to Exhibit 10(m) to Form 10-K for the year ended December 31, 2015, filed February 1, 2016)
|
|
+10(m)
|
Severance Plan for Elected and Appointed Officers of Northrop Grumman Corporation (Amended and Restated Effective July 20, 2012) (incorporated by reference to Exhibit 10.4 to Form 10-Q for the quarter ended September 30, 2012, filed October 23, 2012)
|
|
+10(n)
|
Non-Employee Director Compensation Term Sheet, effective May 20, 2015 (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2015, filed July 29, 2015)
|
|
+10(o)
|
Non-Employee Director Compensation Term Sheet, effective May 18, 2016 (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2016, filed July 27, 2016)
|
|
+10(p)
|
Form of Indemnification Agreement between Northrop Grumman Corporation and its directors and executive officers (incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2012, filed April 24, 2012)
|
|
+10(q)
|
Northrop Grumman Deferred Compensation Plan (Amended and Restated Effective as of April 1, 2016) (incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2016, filed April 27, 2016)
|
|
+10(r)
|
The 2002 Incentive Compensation Plan of Northrop Grumman Corporation, As Amended and Restated effective January 1, 2009 (incorporated by reference to Exhibit 10.6 to Form 10-Q for the quarter ended March 31, 2009, filed April 22, 2009)
|
|
+10(s)
|
Northrop Grumman 2006 Annual Incentive Plan and Incentive Compensation Plan (for Non-Section 162(m) Officers), as amended and restated effective January 1, 2009 (incorporated by reference to Exhibit 10.7 to Form 10-Q for the quarter ended March 31, 2009, filed April 22, 2009)
|
|
+10(t)
|
Northrop Grumman Savings Excess Plan (Amended and Restated Effective as of January 1, 2016) (incorporated by reference to Exhibit 10(v) to Form 10-K for the year ended December 31, 2015, filed February 1, 2016)
|
|
+10(u)
|
Northrop Grumman Officers Retirement Account Contribution Plan (Amended and Restated Effective as of April 1, 2016) (incorporated by reference to Exhibit 10.4 to Form 10-Q for the quarter ended March 31, 2016, filed April 27, 2016)
|
|
+10(v)
|
Compensatory Arrangements of Certain Officers (incorporated by reference to Item 5.02(e) of Form 8-K filed February 20, 2015)
|
|
+10(w)
|
Offering letter dated February 1, 2007 from Northrop Grumman Corporation to James F. Palmer relating to position of Corporate Vice President and Chief Financial Officer (incorporated by reference to Exhibit 10(3) to Form 10-Q for the quarter ended March 31, 2007, filed April 24, 2007), as amended by Amendment to Letter Agreement between Northrop Grumman Corporation and James F. Palmer dated December 17, 2008 (incorporated by reference to Exhibit 10.3 to Form 8-K filed December 19, 2008)
|
|
+10(x)
|
Northrop Grumman Supplemental Retirement Replacement Plan, as Restated, dated January 1, 2008 between Northrop Grumman Corporation and James F. Palmer (incorporated by reference to Exhibit 10.4 to Form 8-K filed December 19, 2008)
|
|
(i)
|
First Amendment to the Northrop Grumman Supplemental Retirement Replacement Plan, dated October 25, 2011 (incorporated by reference to Exhibit 10(bb)(i) to Form 10-K for the year ended December 31, 2011, filed February 7, 2012)
|
|
+*10(y)
|
Northrop Grumman Corporation Special Officer Retiree Medical Plan (Amended and Restated Effective January 1, 2015)
|
|
+10(z)
|
Executive Life Insurance Policy (incorporated by reference to Exhibit 10(gg) to Form 10-K for the year ended December 31, 2004, filed March 4, 2005)
|
|
+10(aa)
|
Executive Accidental Death, Dismemberment and Plegia Insurance Policy Terms applicable to Executive Officers dated January 1, 2009 (incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2009, filed April 22, 2009)
|
|
+10(bb)
|
Executive Long-Term Disability Insurance Policy as amended by Amendment No. 2 dated June 19, 2008 and effective as of October 4, 2007 (incorporated by reference to Exhibit 10(2) to Form 10-Q for the quarter ended June 30, 2008, filed July 29, 2008)
|
|
+10(cc)
|
Executive Dental Insurance Policy Group Numbers 5134 and 5135 (incorporated by reference to Exhibit 10(m) to Form 10-K for the year ended December 31, 1995, filed February 22, 1996), as amended by action of the Compensation Committee of the Board of Directors of Northrop Grumman Corporation effective July 1, 2009 (incorporated by reference to Item 5.02(e) of Form 8-K filed May 26, 2009)
|
|
+*10(dd)
|
Group Personal Excess Liability Policy dated October 20, 2016 and effective as of January 1, 2017
|
|
+10(ee)
|
Letter dated December 16, 2009 from Northrop Grumman Corporation to Wesley G. Bush regarding compensation effective January 1, 2010 (incorporated by reference to Exhibit 10.2 to Form 8-K filed December 21, 2009)
|
|
+10(ff)
|
Northrop Grumman Corporation 1995 Stock Plan for Non-Employee Directors, as Amended as of May 16, 2007 (incorporated by reference to Exhibit A to the Company’s Proxy Statement on Schedule 14A for the 2007 Meeting of Shareholders filed April 12, 2007)
|
|
+10(gg)
|
Relocation Agreement between Northrop Grumman Corporation and Gloria A. Flach dated December 1, 2015 (incorporated by reference to Exhibit 10(ii) to Form 10-K for the year ended December 31, 2015, filed February 1, 2016)
|
|
+10(hh)
|
Relocation Agreement between Northrop Grumman Corporation and Kathy J. Warden dated December 1, 2015 (incorporated by reference to Exhibit 10(jj) to Form 10-K for the year ended December 31, 2015, filed February 1, 2016)
|
|
*12(a)
|
Computation of Ratio of Earnings to Fixed Charges
|
|
*21
|
Subsidiaries
|
|
*23
|
Consent of Independent Registered Public Accounting Firm
|
|
*24
|
Power of Attorney
|
|
*31.1
|
Certification of Wesley G. Bush pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
*31.2
|
Certification of Kenneth L. Bedingfield pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
**32.1
|
Certification of Wesley G. Bush pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
**32.2
|
Certification of Kenneth L. Bedingfield pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
*101
|
Northrop Grumman Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2016, formatted in XBRL (Extensible Business Reporting Language); (i) the Consolidated Statements of Earnings and Comprehensive Income (Loss), (ii) Consolidated Statements of Financial Position, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Changes in Shareholders’ Equity, and (v) Notes to Consolidated Financial Statements
|
|
+
|
Management contract or compensatory plan or arrangement
|
|
*
|
Filed with this Report
|
|
**
|
Furnished with this Report
|
|
|
|
|
NORTHROP GRUMMAN CORPORATION
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By:
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/s/ Michael A. Hardesty
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Michael A. Hardesty
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Corporate Vice President, Controller, and Chief Accounting Officer
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|
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(Principal Accounting Officer)
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Signature
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Title
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Wesley G. Bush*
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Chairman, Chief Executive Officer and President (Principal Executive Officer), and Director
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Kenneth L. Bedingfield*
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Corporate Vice President and Chief Financial Officer (Principal Financial Officer)
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Michael A. Hardesty
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Corporate Vice President, Controller and Chief Accounting Officer
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Marianne C. Brown*
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Director
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Victor H. Fazio*
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Director
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Donald E. Felsinger*
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Director
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Ann M. Fudge*
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Director
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Bruce S. Gordon*
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Director
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William H. Hernandez*
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Director
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Madeleine A. Kleiner*
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Director
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Karl J. Krapek*
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Director
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Richard B. Myers*
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Director
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Gary Roughead*
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Director
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Thomas M. Schoewe*
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Director
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James S. Turley*
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Director
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Mark A. Welsh III*
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Director
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*By:
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/s/ Jennifer C. McGarey
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Jennifer C. McGarey
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Corporate Vice President and Secretary
|
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Attorney-in-Fact
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pursuant to a power of attorney
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Group Personal Excess Liability Policy
|
|
continued
|
Form 10-02-0690 (Rev. 8-07)
|
Declarations
|
Page 1
|
Group Personal Excess Liability Policy
|
|
continued
|
Form 10-02-0690 (Rev. 8-07)
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Declarations
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Page 2
|
Group Personal Excess Liability Policy
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last page
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Form 10-02-0690 (Rev. 8-07)
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Declarations
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Page 3
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•
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We do not sell your personal information to anyone.
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•
|
We do not share your personal information with other companies that would use it for their own marketing purposes.
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•
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We use safeguards to protect your personal information from unauthorized access, use or disclosure.
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•
|
We require employees and service providers to maintain the confidentiality of your personal information.
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•
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We engage in limited information sharing practices that are permitted by law without requiring an opt out option to permit customers to limit personal information sharing and therefore no action is required by you.
|
What Personal Information Do We Collect?
|
Chubb collects personal information about you and the members of your household to conduct business operations, provide customer service, offer new products and satisfy legal and regulatory requirements. The type of personal information we collect depends on the financial product or service you have with us. We may collect the following categories of information about you:
- Information from you directly or from your agent, broker or automobile assigned risk plan, including information from applications, worksheets, questionnaires, claim forms or other documents (such as name, address, driver's license number, Social Security number and amount of coverage requested);
- Information about your transactions with us, our affiliates or others (such as products or services purchased, claims made, account balances and payment history);
- Information from a consumer reporting agency (such as motor vehicle reports);
- Information from other non-Chubb sources (such as prior loss information and demographic information);
- Information from visitors to our websites (such as that provided through online forms and collected through other website tools); and
- Information from an employer, benefit plan sponsor, benefit plan administrator or group master policyholder for any Chubb individual or group insurance product that you may have (such as name, address and amount of coverage requested).
As used in this notice, the term "personal information" means any personally identifiable information about you that is not publicly available and that we obtain in connection with providing a financial product or service to you.
|
How Do We Use and Disclose Personal Information?
|
Chubb may use and disclose the personal information we collect to:
- Service, process or administer our business operations such as underwriting and claims;
- Market our products or services;
- Detect or prevent fraud; or
- Comply with regulatory requirements.
The types of affiliated and non-affiliated third parties to whom we may disclose information for processing and servicing transactions include reinsurers, insurance agents or brokers, property and automobile appraisers, auditors, claim adjusters, third party administrators and, in the case of group insurance, employers, benefit plan sponsors, benefit plan administrators and group master policyholders. We may share personal information with our affiliates for their everyday business
|
•
|
you or a family member;
|
•
|
any person using a vehicle or watercraft covered under this policy with permission from you or a family member with respect to their legal responsibility arising out of its use;
|
•
|
any other person who is a covered person under your Required Primary Underlying Insurance;
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•
|
any person or organization with respect to their legal responsibility for covered acts or omissions of you or a family member; or
|
•
|
any combination of the above.
|
•
|
bodily injury;
|
•
|
shock, mental anguish, or mental injury;
|
•
|
false arrest, false imprisonment, or wrongful detention;
|
•
|
wrongful entry or eviction;
|
•
|
malicious prosecution or humiliation; and
|
•
|
libel, slander, defamation of character, or invasion of privacy.
|
•
|
any motorized land vehicle not designed for or required to be registered for use on public roads;
|
•
|
any motorized land vehicle which is in dead storage at your residence;
|
•
|
any motorized land vehicle used solely on and to service your residence premises;
|
•
|
any motorized land vehicle used to assist the disabled that is not designed for or required to be registered for use on public roads; or
|
•
|
golf carts.
|
•
|
$250,000/$500,000 bodily injury and $100,000 property damage;
|
•
|
$300,000/$300,000 bodily injury and $100,000 property damage; or
|
•
|
$300,000 single limit each occurrence.
|
•
|
$250,000/$500,000 bodily injury and $100,000 property damage;
|
•
|
$300,000/$300,000 bodily injury and $100,000 property damage; or
|
•
|
$300,000 single limit each occurrence.
|
•
|
$250,000/$500,000 bodily injury and $100,000 property damage;
|
•
|
$300,000/$300,000 bodily injury and $100,000 property damage; or
|
•
|
$300,000 single limit each occurrence.
|
•
|
in excess of damages covered by the underlying insurance; or
|
•
|
from the first dollar of damage where no underlying insurance is required under this policy and no underlying insurance exists; or
|
•
|
from the first dollar of damage where underlying insurance is required under this policy but no coverage is provided by the underlying insurance for a particular occurrence
|
•
|
not covered by any underlying insurance; or
|
•
|
covered by an underlying policy. This will apply to each Defense Coverage as it has been exhausted by payment of claims.
|
•
|
all premiums on appeal bonds required in any suit we defend;
|
•
|
all premiums on bonds to release attachments for any amount up to the amount of coverage (but we are not obligated to apply for or furnish any bond);
|
•
|
all expenses incurred by us;
|
•
|
all costs taxed against a covered person;
|
•
|
all interest accruing after a judgment is entered in a suit we defend on only that part of the judgment we are responsible for paying. We will not pay interest accruing after we have paid the judgment up to the amount of coverage;
|
•
|
all prejudgment interest awarded against a covered person on that part of the judgment we pay or offer to pay. We will not pay any prejudgment interest based on that period of time after we make an offer to pay the amount of coverage;
|
•
|
all earnings lost by each covered person at our request, up to $25,000;
|
•
|
other reasonable expenses incurred by a covered person at our request; and
|
•
|
the cost of bail bonds required of a covered person because of a covered loss.
|
•
|
the costs for notarizing affidavits or similar documents for law enforcement agencies, financial institutions or similar credit grantors, and credit agencies;
|
•
|
the costs for sending certified mail to law enforcement agencies, financial institutions or similar credit grantors, and credit agencies;
|
•
|
the loan application fees for reapplying for loan(s) due to the rejection of the original application because the lender received incorrect credit information;
|
•
|
the telephone expenses for calls to businesses, law enforcement agencies, financial institutions or similar credit grantors, and credit agencies;
|
•
|
earnings lost by you or a family member as a result of time off from work to complete fraud affidavits, meet with law enforcement agencies, credit agencies, merchants, or legal counsel;
|
•
|
the reasonable attorney fees incurred with prior notice to us for:
|
•
|
the defense of you or a family member against any suit(s) by businesses or their collection agencies;
|
•
|
the removal of any criminal or civil judgements wrongly entered against you or a family member;
|
•
|
any challenge to the information in your or a family member's consumer credit report; and
|
•
|
the reasonable fees incurred with prior notice to us by an identity fraud mitigation entity to:
|
•
|
provide services for the activities described above;
|
•
|
restore accounts or credit standing with financial institutions or similar credit grantors and credit agencies; and
|
•
|
monitor for up to one year the effectiveness of the fraud mitigation and to detect additional identity fraud activity after the first identify fraud occurrence.
|
•
|
you or a family member; or
|
•
|
a covered relative who witnessed the occurrence.
|
•
|
you;
|
•
|
one or more family members; or
|
•
|
one or more covered relatives while visiting or legally traveling with you or a family member;
|
•
|
a professional negotiator;
|
•
|
a professional security consultant;
|
•
|
professional security guard services;
|
•
|
a professional public relations consultant;
|
•
|
travel, meals, lodging and phone expenses incurred by you or a family member;
|
•
|
advertising, communications and recording equipment;
|
•
|
related medical, cosmetic, psychiatric and dental expenses incurred by a kidnapped person within 12 months from that person's release;
|
•
|
attorneys fees;
|
•
|
a professional forensic analyst;
|
•
|
earnings lost by you or a family member, up to $25,000.
|
•
|
you or a family member;
|
•
|
a covered relative;
|
•
|
any guardian, or former guardian of you, a family member or covered relative;
|
•
|
any estranged spouse or domestic partner, or former spouse or domestic partner of you or a family member;
|
•
|
any person unrelated to you or a family member who lives with you or a family member or has ever lived with you or a family member for 6 or more months, other than a domestic employee, residential staff, or a person employed by you or a family member for farm work; or
|
•
|
a civil authority,
|
•
|
children, their children or other descendents of theirs;
|
•
|
parents, grandparents or other ancestors of theirs; or
|
•
|
siblings, their children or other descendents of theirs;
|
•
|
the reputational injury is reported to us as soon as reasonably possible but not later than 30 days after the personal injury or property damage occurrence; and
|
•
|
you obtain approval of the reputation management firm from us before incurring any fees or expenses, unless stated otherwise or an exclusion applies.There is no deductible for this coverage.
|
•
|
during any instruction, practice, preparation for, or participation in, any competitive, prearranged or organized racing, speed contest, rally, gymkhana. sports event, stunting activity, or timed event of any kind; or
|
•
|
on a racetrack, test track or other course of any kind.
|
•
|
required to provide; or
|
•
|
voluntarily provides
|
•
|
workers' compensation;
|
•
|
disability benefits;
|
•
|
unemployment compensation; or
|
•
|
other similar laws.
|
•
|
homeowner, condominium or cooperative association; or
|
•
|
not-for-profit corporation or organization for which he or she is not compensated; unless another exclusion applies.
|
•
|
is made a condition of employment of any residential staff;
|
•
|
is used as a basis for employment decisions;
|
•
|
interferes with performance of any residential staff's duties; or
|
•
|
creates an intimidating, hostile, or offensive working environment.
|
•
|
the actual or constructive termination of employment of any residential staff by you or a family member in violation of applicable employment law; or
|
•
|
breach of duty and care when you or a family member terminates an employment relationship with any residential staff.
|
•
|
employed by you or a family member, or through a firm under an agreement with you or a family member, to perform duties related only to a covered person's domestic, personal, or business pursuits covered under this part of your policy;
|
•
|
compensated for labor or services directed by you or a family member; and
|
•
|
employed regularly to work 15 or more hours per week.
|
•
|
employed by you or a family member, or through a firm under an agreement with you or a family member, to perform duties related only to a covered person's domestic, personal, or business pursuits covered under this part of your policy;
|
•
|
compensated for labor or services directed by you or a family member; and
|
•
|
employed to work 15 or more hours per week to substitute for any residential staff on leave or to meet seasonal or short term workload demands for 30 consecutive days or longer during a 6 month period.
|
•
|
sexual molestation;
|
•
|
sexual misconduct or harassment; or
|
•
|
abuse.
|
•
|
not yield gross revenues in excess of $15,000 in any year;
|
•
|
have no employees subject to worker's compensation or other similar disability laws;
|
•
|
conform to local, state, and federal laws.
|
•
|
not yield gross revenues in excess of $15,000, in any year, except for the business activity of managing one's own personal investments;
|
•
|
have no employees subject to worker's compensation or other similar disability laws;
|
•
|
conform to local, state, and federal laws.
|
•
|
a residence of yours or a family member's that is occasionally rented and that is used exclusively as a residence; or
|
•
|
part of a residence of yours or a family member's by one or two roomers or boarders; or
|
•
|
part of a residence of yours or a family member's as an office, school, studio, or private garage.
|
•
|
is incidental to your or a family member's use of the premises as a residence;
|
•
|
does not involve employment of others for more than 1,500 hours of farm work during the policy period;
|
•
|
does not produce more than $25,000 in gross annual revenue from agricultural operations;
|
•
|
and with respect to the raising or care of animals:
|
•
|
does not produce more than $50,000 in gross annual revenues;
|
•
|
does not involve more than 25 sales transactions during the policy period;
|
•
|
does not involve the sale of more than 50 animals during the policy period.
|
•
|
you or a family member do not have any employees involved in your business or professional activities who are subject to workers' compensation or other similar disability laws; or, if you or a family member are a doctor or dentist, you do not have more than two employees subject to such laws;
|
•
|
you or a family member do not earn annual gross revenues in excess of $5,000, if you or a family member are a home day care provider.
|
•
|
extract pollutants from land or water;
|
•
|
remove, restore or replace polluted or contaminated land or water; or
|
•
|
test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants, or in any way respond to or assess the effects of pollutants.
|
•
|
are written specifically to cover excess over the amount of coverage that applies in this policy; and
|
•
|
schedule this policy as underlying insurance.
|
•
|
to physical exams by physicians we select, which we will pay for; and
|
•
|
to examination under oath and subscribe the same; and authorize us to obtain:
|
•
|
medical reports; and
|
•
|
other pertinent records.
|
•
|
the Sponsoring Organization must notify us in advance of the requested cancellation date; and
|
•
|
the Sponsoring Organization must provide proof of notification to each member of the Defined Group covered under this policy.
|
•
|
Within 60 days
, When this policy or any part of it bas been in effect for less than 60 days, we may cancel with 30 days notice for any reason.
|
•
|
Non-payment of premium
. We may cancel this policy or any part of it with 10 days notice if the Sponsoring Organization or you fail to pay the premium by the due date, regardless of whether the premium is payable to us, to our agent, or under any financial credit.
|
•
|
Misrepresentation
. We may cancel this policy or any part of it with 30 days notice if the coverage was obtained through misrepresentation, fraudulent statements, or omissions or concealment of a fact that is relevant to the acceptance of the risk or to the hazard we assumed.
|
•
|
Increase in hazard
. We may cancel this policy or any part of it with 30 days notice if there bas been a substantial change in the risk which increases the chance of loss after insurance coverage bas been issued or renewed, including but not limited to an increase in exposure due to rules, legislation, or court decision.
|
•
|
Procedure
. To cancel this policy or any part of it, we must notify you in writing. This notice will be mailed to the Sponsoring Organization at the mailing address shown in the Coverage Summary and we will obtain a certificate of mailing. This notice will include the date the cancellation is to take effect.
|
PRIVACY NOTICE - GROUP MASTER POLICY
|
10-02-1058
|
(03/15)
|
IMPORTANT NOTICE - OFAC
|
99-10-0796
|
(09/04)
|
COVERAGE SUMMARY/DECLARATIONS
|
10-02-0690
|
(08/07)
|
GROUP PERSONAL EXCESS - CONTRACT/POLICY TERMS
|
10-02-0691
|
(08/07)
|
ANNUAL PREMIUM ADJUSTMENT CLAUSE
|
10-02-0692
|
(08/96)
|
UNDERLYING LIMITS ENDORSEMENT
|
10-02-0692
|
(08/96)
|
NAMED INSURED ENDORSEMENT
|
10-02-0692
|
(08/96)
|
1.01
|
Purpose
. The purpose of the Northrop Grumman Corporation Special Officer Retiree Medical Plan (“Plan”) is to provide lifetime retiree medical and life insurance benefits to eligible elected officers of Northrop Grumman Corporation (“the Company”) and their eligible dependents as described in the Plan. The Plan provides for the continuation of welfare benefits to a select group of management or highly compensated employees within the meaning of Department of Labor Regulation 29 CFR section 2520.104-24 and Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974 ("ERISA"). This amendment and restatement is effective January 1, 2015 and reflects administrative clarifications necessitated by the Company’s termination of medical benefit coverage for actively employed executives under the Northrop Grumman Executive Medical Plan (“Executive Medical Plan”).
|
1.02
|
Substantive Benefits
. This document describes the standard eligibility provisions and terms of coverage under the Plan. The actual medical benefit coverage will be provided pursuant to the terms of the insurance contract or contracts issued by an insurance carrier or carriers selected by the Company. The actual life insurance coverage will be provided through an insurance contract or contracts issued by an insurance carrier or carriers selected by the Company.
|
2.01
|
Board
. The Company’s Board of Directors.
|
2.02
|
Committee
. The Compensation and Management Development Committee of the Board.
|
2.03
|
Continuation Coverage
. Continued medical coverage under the Plan after a Qualifying Event has occurred. Such medical coverage is identical to the medical coverage as provided under the Plan to similarly situated persons with respect to whom a Qualifying Event has not occurred.
|
2.04
|
Continuation Coverage Election Period.
The period beginning on the date of the Qualifying Event and ending sixty (60) days after the later of (a) the date the Qualified Beneficiary would lose medical coverage on account of the Qualifying Event, or (b) the date that the Qualified Beneficiary is provided with notice of his or her right to elect Continuation Coverage.
|
2.05
|
Grandfathered Participants
. Participants who were actively employed by the Company on September 30, 2003.
|
2.06
|
Participant
. An elected officer of the Company who is designated by the Board or the Committee as eligible to participate in the Plan.
|
2.07
|
Prior Plan
. The Northrop Grumman Special Officer Retiree Medical Plan as in effect prior to October 1, 2003.
|
2.08
|
Qualified Beneficiary
. A retired Vested Participant’s spouse or dependent who, on the day before a Qualifying Event, has medical coverage under the Plan. In the case of a Qualifying Event described in subsection 2.09(iv) below, Qualified Beneficiary means a retired Vested Participant who had retired on or before the date of substantial elimination of medical coverage and any person who on the day before the Qualifying Event is the spouse or Surviving Spouse of the retired Vested Participant or a covered dependent child of the retired Vested Participant or Surviving Spouse.
|
2.09
|
Qualifying Event
. Any of: (i) the death of a retired Vested Participant, but only with respect to a beneficiary who is not the Surviving Spouse of the retired Vested Participant; (ii) the divorce or legal separation of a retired Vested Participant from his spouse; (iii) a dependent child ceasing to be eligible for medical coverage as a dependent child of a retired Vested Participant under the dependent eligibility provisions of the insurance contract through which coverage is provided; or (iv) a proceeding in a case under Title 11 of the United States Code with respect to the Company; provided, however, that any such event will be a Qualifying Event only if it will cause the Qualified Beneficiary an immediate or deferred loss of medical coverage under the Plan. For purposes of this subsection, a loss of medical coverage means to cease to be eligible for medical benefits under the Plan under the same terms and conditions as in effect immediately before the Qualifying Event. A loss of medical coverage will be considered a deferred loss of medical coverage for purposes of this provision if the loss of medical coverage does not occur at the time of the Qualifying Event but occurs before the end of what would be the maximum period of Continuation Coverage under section 8.04 below. In the case of a Qualifying Event described in (iv), a loss of medical coverage includes a substantial elimination of medical coverage with respect to a Qualified Beneficiary within one year before or after the date of commencement of the bankruptcy proceeding.
|
2.10
|
Surviving Spouse
. The individual to whom the retired Vested Participant was legally married under applicable State law both at the time of the retired Vested Participant’s retirement and at the time of the retired Vested Participant's death.
|
2.11
|
Vested Participant
. A Participant with either five years of service as an elected officer of the Company or 30 years of total service with the Company and its affiliates.
|
3.01
|
Eligibility
. Eligibility for the Plan is limited to those elected officers of the Company who are designated as eligible to participate in the Plan by the Board or the Committee. The eligible spouse and dependents of a Vested Participant will be eligible for medical benefits under the Plan commencing at the same time the Vested Participant’s medical benefits commence. Spouse and dependent eligibility will be determined in accordance with the terms of the insurance contract through which coverage is provided.. A Vested Participant’s eligibility for life insurance coverage will be subject to the terms of the life insurance contract
|
3.02
|
Revocation of Eligibility
. The Board or Committee may revoke a non-Vested Participant’s Plan eligibility without the Participant’s consent. The Board or Committee may revoke a Vested Participant’s or Surviving Spouse’s Plan eligibility, provided that the Vested Participant or, after the Vested Participant’s death, his or her Surviving Spouse, consents to the revocation.
|
3.03
|
Automatic Cessation of Eligibility
. A Participant who is not a Vested Participant will automatically cease to be a Participant under the Plan upon the earlier of the following: (i) the date the Participant terminates employment with the Company; or (ii) the date the Participant ceases to be an elected officer of the Company. However, the Board or the Committee may make provision for a Participant who ceases to be an elected officer of the Company, but does not terminate employment with the Company, to continue to accrue service credited toward becoming a Vested Participant. The spouse or dependent of a Participant will cease to be eligible for medical benefits under the Plan upon the earlier of the following: (i) the date the Participant ceases to be a Participant under the Plan; or (ii) the date the spouse or dependent ceases to be eligible in accordance with the terms of the insurance contract through which coverage is provided.
|
3.04
|
Plan Freeze
. No elected officer whose date of election is effective after March 21, 2007
shall be designated as eligible to participate in the Plan. An elected officer who is a Participant as of March 21, 2007 may continue to earn service toward becoming a Vested Participant after that date in accordance with the terms of the Plan.
|
4.01
|
Commencement of Benefits
. A Vested Participant may elect to commence benefits under the Plan coincident with retirement from the Company under the terms of the supplemental executive retirement plan in which the Vested Participant participates. If the election to commence is not made at the time of retirement, the Vested Participant and his or her dependents cease to be eligible for the Plan. No subsequent election to commence benefits will be allowed.
|
4.02
|
Duration of Benefits
. Subject to the Company's right to amend or terminate the Plan (as limited by subsection 6.01(b)), life insurance coverage will be provided for the life of the Vested Participant and medical coverage will be provided for the life of the Vested Participant and the life of his or her Surviving Spouse, if any. Eligible dependent medical coverage will only be available during the life of the Vested Participant and the life of his or her Surviving Spouse, if any, subject to ARTICLE 8.
|
4.03
|
Coverage Provided
. Medical coverage will be provided pursuant to the terms of the insurance contract issued by the insurance carrier selected by the Company, as such contract is modified from time to time. Life insurance coverage will be provided through an insurance contract or contracts issued by an insurance carrier or carriers selected by the Company. Life
|
4.04
|
Medicare
. A Vested Participant, spouse or Surviving Spouse must enroll in Medicare Parts A and B when first eligible in order to receive benefits under this Plan. If he or she fails to enroll, medical benefit coverage under this Plan will cease upon the date the Vested Participant, spouse or Surviving Spouse first becomes eligible for Medicare Parts A and B.
|
4.05
|
Costs of Coverage
.
|
(a)
|
Medical Coverage.
|
i.
|
The Vested Participant (or Surviving Spouse, following the death of a Vested Participant) will be responsible for any participant cost items, such as coinsurance, copayments, and deductibles, as determined by the Company in its discretion and described in the insurance contract through which coverage is provided. Subject to subsection (a)(ii) below, the level of participant (or Surviving Spouse) contributions toward the cost of coverage (i.e., premiums) will be frozen at the amount of the required participant contribution in effect under the Executive Medical Plan as of the date the Vested Participant commenced benefits under this Plan. For a Vested Participant who commences benefits under this Plan on or after July 1, 2014, the level of participant (or Surviving Spouse) contributions toward the cost of coverage will be frozen at the amount of the required participant contribution under the Executive Medical Plan as of June 30, 2014, subject to adjustment as described in subsection (a)(ii) below.
|
ii.
|
A Vested Participant’s or Surviving Spouse’s contribution toward the cost of coverage may vary based on the level of coverage (one-person, two or more persons, etc.) in effect.
|
(b)
|
Life Insurance Coverage. The cost of life insurance coverage will be paid in full by the Company.
|
4.06
|
Cessation of Medical Coverage
. Eligibility for the continuation of medical benefits pursuant to the Plan will cease if any payment required to be made by the Vested Participant or dependent (for example, participant contributions, copayments or deductibles) is not timely paid in accordance with procedures established by the Company.
|
5.01
|
Grandfathered Participants
. Grandfathered Participants have the right, if otherwise eligible for the Plan at the time of retirement, to elect to be covered: (i) under the terms of the Prior Plan as in effect as of September 30, 2003
;
or (ii) the Plan as in effect at the time of such
|
6.01
|
Effect of Change in Control
. Upon the occurrence of a “change in control” as defined in the Company’s Change-In-Control Severance Plan (as in effect at the time of the event), each of the following will occur:
|
(a)
|
Each Participant will become a “Vested Participant.”
|
(b)
|
The Plan may not be terminated or amended in any manner that adversely affects the benefits of a Participant without his or her consent.
|
(c)
|
All Participant contributions, co-pays, deductibles and any other participant or dependent cost items will be frozen as of the date of the change in control.
|
7.01
|
Claim for Medical or Life Insurance Benefit
. A claim or appeal relating to medical benefits under the Plan will be subject to the claims and appeals procedures set forth in the insurance contract through which coverage is provided or the applicable coverage certificate relating to such insurance contract. A claim or appeal relating to life insurance benefits under the Plan will be subject to the claims and appeals procedures set forth in the insurance contract through which such coverage is provided or the applicable coverage certificate relating to such insurance contract.
|
(a)
|
Notice of decision on any Administrative Claim will be furnished to the claimant within 90 days after receipt of the Administrative Claim by the claims administrator. The claims administrator may take one 90 day extension if circumstances warrant.
|
(b)
|
A claimant whose Administrative Claim is denied in whole or in part will receive written notice of the denial within the timeframe specified in subsection 7.02(a) above setting forth: (i) the specific reasons for the denial; (ii) reference to the specific Plan provisions on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the Administrative Claim and an explanation of why such material or information is necessary; and (iv) information as to the steps the claimant must take to submit his or her claim for review, including the time limit for submitting the claim for review.
|
(c)
|
A claimant whose Administrative Claim is denied in whole or in part may request review of the denied Administrative Claim not later than 60 days after receipt of written notification of the denial. A claimant’s request for review must be in writing. The claimant may submit written comments, documents, records and other information relating to the Administrative Claim and the claimant will be provided upon request with reasonable access to and copies of documents, records and other information relevant to his or her Administrative Claim. The claims administrator, in his or her sole discretion, will determine whether a document, record or other information is relevant to a claimant’s Administrative Claim.
|
(d)
|
Notice of decision on review of an Administrative Claim will be furnished to the claimant within 60 days after receipt of the request for review by the claims administrator. The claims administrator may take one 60 day extension if circumstances warrant.
|
(e)
|
A claimant whose Administrative Claim is denied upon review will be furnished with written notice of the denial within the timeframe specified in subsection 7.02(d) above setting forth: (i) the specific reasons for the denial; (ii) reference to the specific Plan provisions on which the denial is based; (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of documents, records and other information relevant to his or her Administrative Claim; and (iv) a statement of the claimant’s right to bring an action under section 502(a) of ERISA. The claims administrator, in his or her sole discretion, will determine whether a document, record or other information is relevant to a claimant’s Administrative Claim. The decision of the claims administrator on a claimant’s request for review shall be final and conclusive.
|
8.01
|
General
. In addition to the Surviving Spouse medical coverage described above, Continuation Coverage under the Plan may be purchased after the date medical coverage would ordinarily terminate under the Plan as a result of a Qualifying Event.
|
8.02
|
Participant/Beneficiary Notice Requirements
. In the case of the Qualifying Events described in subsections 2.09(ii) and (iii) above, the retired Vested Participant or his or her spouse or dependent must provide notice of the occurrence of the Qualifying Event not later than 60 days after the occurrence. Such notice must be provided to the COBRA administrator for the Plan.
|
8.03
|
Availability of Continuation Coverage
. Upon the occurrence of a Qualifying Event, each Qualified Beneficiary will be offered an opportunity to purchase Continuation Coverage under the Plan. The election to purchase Continuation Coverage must be made during the Continuation Coverage Election Period in such form and manner as the Company prescribes. A Qualified Beneficiary who fails to elect Continuation Coverage during the Continuation Coverage Election Period following a Qualifying Event will not be entitled to elect Continuation Coverage with respect to such Qualifying Event.
|
8.04
|
Period of Continuation Coverage
. Continuation Coverage as elected by the Qualified Beneficiary will extend for the period beginning on the date of loss of coverage as a result of the Qualifying Event and ending on the earliest of the following dates:
|
(a)
|
If the Qualifying Event was divorce or legal separation, death of the retired Vested Participant, or loss of dependent child status, 36 months after the date Continuation Coverage began;
|
(b)
|
If the Qualifying Event was a proceeding in a case under Title 11 of the United States Code: (i) for a Qualified Beneficiary who is the retired Vested Participant, the retired Vested Participant's date of death; (ii) for a Qualified Beneficiary who is the surviving spouse (determined without regard to whether such spouse was married to the Vested Participant at the time of his or her termination of employment with the Company and its affiliates) or dependent child of the retired Vested Participant, 36 months after the date of death of the retired Vested Participant;
|
(c)
|
The first day for which timely payment for Continuation Coverage is not made with respect to the Qualified Beneficiary as provided in section 8.05 below;
|
(d)
|
The date upon which the Company ceases to maintain any group health plan;
|
(e)
|
The date upon which the Qualified Beneficiary first becomes covered under another group health plan after the date Continuation Coverage is elected; provided, Continuation Coverage will not terminate if the other group health plan contains an exclusion or limitation with respect to any preexisting condition that affects the Qualified Beneficiary, unless that limitation or exclusion does not apply to the Qualified Beneficiary because of the requirements of the Health Insurance Portability and Accountability Act of 1996;
|
(f)
|
The date that the Qualified Beneficiary first becomes entitled to Medicare benefits under Title XVIII of the Social Security Act after the date Continuation Coverage is elected.
|
8.05
|
Payment for Continuation Coverage.
|
(a)
|
Each Qualified Beneficiary who has elected to purchase Continuation Coverage will make a monthly payment to the Company in an amount up to 102% of the applicable premium determined by the Company in accordance with Internal Revenue Code Section 4980B(f)(4).
|
(b)
|
The payment for the period of Continuation Coverage beginning on the date a Qualified Beneficiary would otherwise lose coverage as a result of a Qualifying Event and ending on the last day of the month during which the Qualified Beneficiary elects Continuation Coverage will be due on the date the Qualified Beneficiary elects Continuation Coverage and payment made within forty-five (45) days of such date will be deemed timely payment. The monthly payments for the remainder of the period of Continuation Coverage will be due as of the first day of the month for which the coverage is provided and payment made within thirty (30) days of the due date for each monthly installment will be deemed timely payment.
|
9.01
|
Amendment and Plan Termination
. Except as provided in ARTICLE 6, the Company may amend or terminate the Plan at any time for any reason.
|
9.02
|
Assignment of Benefits
. A Vested Participant or dependent may not, either voluntarily or involuntarily, assign, anticipate, alienate, commute, sell, transfer, pledge or encumber any benefits to which he or she is or may become entitled under the Plan, nor may Plan benefits be subject to attachment or garnishment by any of his or her creditors or to legal process.
|
9.03
|
Nonduplication of Benefits
. This Section applies if the Company is required to make payments under this Plan to a person or entity other than the payees described in the Plan. In such a case, any coverage due the Participant (or his or her dependent) under the Plan will be reduced by the actuarial value of the coverage extended or payments made to such other person or entity.
|
9.04
|
Medicare Primary
. Medicare coverage is primary to medical coverage offered pursuant to the Plan. Plan coverage will be secondary to Medicare to the maximum extent permissible under law.
|
9.05
|
Funding
. Participants have the status of general unsecured creditors of the Company and the Plan constitutes a mere promise by the Company to continue eligibility for executive medical and life insurance coverage pursuant to the terms of the Plan.
|
9.06
|
Construction
. The Committee will have full and sole discretionary authority to determine eligibility, construe and interpret the terms of the Plan, and determine factual issues, including the power to remedy possible ambiguities, inconsistencies or omissions.
|
9.07
|
Governing Law
. This Plan will be governed by the law of the State of California, except to the extent superseded by federal law.
|
9.08
|
Non-Standard Provisions
. The Board or Committee may in their discretion apply eligibility requirements or terms of coverage other than the standard provisions with respect to an individual.
|
By:
|
|
/s/ Denise Peppard
|
|
|
Denise Peppard
|
|
|
Corporate Vice President and
|
|
|
Chief Human Resources Officer
|
|
|
|
|
|
|
Date:
|
|
October 13, 2015
|
|
|
|
$ in millions
|
Year Ended December 31
|
||||||||||||||
Earnings:
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||
Earnings from continuing operations before income taxes
|
$
|
2,923
|
|
$
|
2,790
|
|
$
|
2,937
|
|
$
|
2,863
|
|
$
|
2,965
|
|
Fixed Charges:
|
|
|
|
|
|
||||||||||
Interest expense, including amortization of debt premium
|
301
|
|
301
|
|
282
|
|
257
|
|
212
|
|
|||||
Portion of rental expenses on operating leases deemed to be representative of the interest factor
|
99
|
|
101
|
|
101
|
|
99
|
|
116
|
|
|||||
Earnings from continuing operations before income taxes and fixed charges
|
$
|
3,323
|
|
$
|
3,192
|
|
$
|
3,320
|
|
$
|
3,219
|
|
$
|
3,293
|
|
Fixed Charges:
|
$
|
400
|
|
$
|
402
|
|
$
|
383
|
|
$
|
356
|
|
$
|
328
|
|
Ratio of earnings to fixed charges
|
8.3
|
|
7.9
|
|
8.7
|
|
9.0
|
|
10.0
|
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
Ownership Percentage
|
Northrop Grumman Systems Corporation
|
Delaware
|
100%
|
|
|
|
|
/s/ Marianne C. Brown
|
Director
|
|
|
Marianne C. Brown
|
|
|
|
/s/ Victor H. Fazio
|
Director
|
|
|
Victor H. Fazio
|
|
|
|
/s/ Donald E. Felsinger
|
Director
|
|
|
Donald E. Felsinger
|
|
|
|
/s/ Ann M. Fudge
|
Director
|
|
|
Ann M. Fudge
|
|
|
|
/s/ Bruce S. Gordon
|
Director
|
|
|
Bruce S. Gordon
|
|
|
|
/s/ William H. Hernandez
|
Director
|
|
|
William H. Hernandez
|
|
|
|
/s/ Madeleine A. Kleiner
|
Director
|
|
|
Madeleine A. Kleiner
|
|
|
|
/s/ Karl J. Krapek
|
Director
|
|
|
Karl J. Krapek
|
|
|
|
/s/ Richard B. Myers
|
Director
|
|
|
Richard B. Myers
|
|
|
|
/s/ Gary Roughead
|
Director
|
|
|
Gary Roughead
|
|
|
|
/s/ Thomas M. Schoewe
|
Director
|
|
|
Thomas M. Schoewe
|
|
|
|
/s/ James S. Turley
|
Director
|
|
|
James S. Turley
|
|
|
|
/s/ Mark A. Welsh, III
|
Director
|
|
|
Mark A. Welsh, III
|
|
|
/s/ Wesley G. Bush
|
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
Wesley G. Bush
|
|
|
|
/s/ Kenneth L. Bedingfield
|
Corporate Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
Kenneth L. Bedingfield
|
|
|
1.
|
I have reviewed this report on Form 10-K of Northrop Grumman Corporation (“company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the company's most recent fiscal quarter (the company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
/s/ Wesley G. Bush
|
Wesley G. Bush
|
Chairman, Chief Executive Officer and President
|
1.
|
I have reviewed this report on Form 10-K of Northrop Grumman Corporation (“company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the company's most recent fiscal quarter (the company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
/s/ Kenneth L. Bedingfield
|
Kenneth L. Bedingfield
|
Corporate Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.
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/s/ Wesley G. Bush
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Wesley G. Bush
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Chairman, Chief Executive Officer and President
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.
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/s/ Kenneth L. Bedingfield
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Kenneth L. Bedingfield
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Corporate Vice President and Chief Financial Officer
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