0001628280-23-015776 | 10-Q | XBRL Viewer

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Cover - shares shares in Millions	3 Months Ended
Cover - shares shares in Millions	Mar. 31, 2023	May 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	333-253583
Entity Registrant Name	Leonardo DRS, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-2632319
Entity Address, Address Line One	2345 Crystal Drive
Entity Address, Address Line Two	Suite 1000
Entity Address, City or Town	Arlington
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22202
City Area Code	703
Local Phone Number	416-8000
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	DRS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		261
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001833756
Current Fiscal Year End Date	--12-31

Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Total revenues	$ 569	$ 612
Cost of revenues:
Total cost of revenues	(438)	(478)
Gross profit	131	134
General and administrative expenses	(100)	(76)
Amortization of intangibles	(6)	(2)
Other operating expenses, net	0	0
Operating earnings	25	56
Interest expense	(8)	(8)
Other, net	(1)	0
Earnings before taxes	16	48
Income tax provision	4	12
Net earnings	$ 12	$ 36
Net earnings per share from common stock:
Basic earnings per share (in dollars per share)	$ 0.05	$ 0.17
Diluted earnings per share (in dollars per share)	$ 0.05	$ 0.17
Products
Revenues:
Total revenues	$ 520	$ 541
Cost of revenues:
Total cost of revenues	(403)	(422)
Services
Revenues:
Total revenues	49	71
Cost of revenues:
Total cost of revenues	$ (35)	$ (56)

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net earnings	$ 12	$ 36
Other comprehensive income (loss):
Foreign currency translation gain, net of income taxes	0	1
Gain from pension settlements	0	3
Net unrecognized gain (loss) on postretirement obligations, net of income taxes	0	2
Other comprehensive income (loss), net of income tax	0	6
Total comprehensive income	$ 12	$ 42

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 174	$ 306
Accounts receivable, net	158	166
Contract assets	968	872
Inventories	364	319
Prepaid expenses	19	20
Other current assets	29	24
Total current assets	1,712	1,707
Noncurrent assets:
Property plant and equipment, net	402	404
Intangible assets, net	167	172
Goodwill	1,236	1,236
Deferred tax assets	72	66
Other noncurrent assets	92	92
Total noncurrent assets	1,969	1,970
Total assets	3,681	3,677
Liabilities, Current [Abstract]
Short-term borrowings and current portion of long-term debt	250	29
Accounts payable	258	457
Contract liabilities	247	233
Other current liabilities	264	323
Total current liabilities	1,019	1,042
Noncurrent liabilities:
Long-term debt	360	365
Pension and other postretirement benefit plan liabilities	42	45
Deferred tax liabilities	6	0
Other noncurrent liabilities	111	98
Total noncurrent liabilities	519	508
Commitments and contingencies (Note 14)
Shareholders' equity
Preferred stock,$0.01 par value: 10,000,000 shares authorized; none issued	0	0
Common stock, $0.01 par value: 350,000,000 shares authorized; 260,553,101 issued	3	3
Additional paid-in capital	5,151	5,147
Accumulated deficit	(2,962)	(2,974)
Accumulated other comprehensive loss	(49)	(49)
Total shareholders' equity	2,143	2,127
Total liabilities and shareholders' equity	$ 3,681	$ 3,677

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Shareholders' equity
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	350,000,000	350,000,000
Common stock, issued (in shares)	260,553,101	260,553,101

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net earnings	$ 12	$ 36
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization	22	15
Deferred income taxes	0	11
Other	4	0
Changes in assets and liabilities:
Accounts receivable	8	13
Contract assets	(96)	(80)
Inventories	(45)	(30)
Prepaid expenses	1	(1)
Other current assets	(5)	(3)
Other noncurrent assets	5	21
Defined benefit obligations	(3)	1
Other current liabilities	(59)	(14)
Other noncurrent liabilities	7	(21)
Accounts payable	(199)	(215)
Contract liabilities	14	12
Net cash used in operating activities	(334)	(255)
Investing activities
Capital expenditures	(15)	(13)
Proceeds from sales of assets	1	0
Net cash used in investing activities	(14)	(13)
Financing activities
Net (decrease) increase in third party borrowings (maturities of 90 days or less)	6	(9)
Repayment of third party debt	(128)	0
Borrowings of third party debt	340	0
Repayment of related party debt	0	(135)
Borrowings from related parties	0	285
Proceeds from stock issuance	1	0
Cash outlay to reacquire equity instruments	(1)	0
Other	(2)	0
Net cash provided by financing activities	216	141
Effect of exchange rate changes on cash and cash equivalents	0	0
Net decrease in cash and cash equivalents	(132)	(127)
Cash and cash equivalents at beginning of year	306	240
Cash and cash equivalents at end of period	$ 174	$ 113

Consolidated Statements of Shareholder's Equity (Unaudited) - USD ($) $ in Millions	Total	Common stock	Additional paid- in capital	Accumulated other comprehensive loss	Accumulated deficit
Balance at beginning of period at Dec. 31, 2021	$ 1,593	$ 1	$ 4,633	$ (58)	$ (2,983)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total comprehensive income	42			6	36
Balance at end of period at Mar. 31, 2022	1,635	1	4,633	(52)	(2,947)
Balance at beginning of period at Dec. 31, 2022	2,127	3	5,147	(49)	(2,974)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total comprehensive income	12			0	12
Stock compensation expense	4		4
Balance at end of period at Mar. 31, 2023	$ 2,143	$ 3	$ 5,151	$ (49)	$ (2,962)

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies A.Organization Leonardo DRS, Inc., together with its wholly owned subsidiaries (hereinafter, “DRS,” “the Company,” “us,” “our,” or “we”) is a supplier of defense electronics products, systems and military support services. The Company is controlled by Leonardo S.p.A (hereinafter, “Leonardo S.p.A.,”), an Italian multi-national aerospace, defense and security company headquartered in Rome, Italy, through its ultimate sole ownership of Leonardo US Holding. US Holding is the majority stockholder of the Company. DRS is a provider of defense products and technologies that are used across land, air, sea, space and cyber domains. Our diverse array of defense systems and solutions are offered to all branches of the U.S. military, major aerospace and defense prime contractors, government intelligence agencies, international military customers and industrial markets for deployment on a wide range of military platforms. We focus our capabilities in areas of critical importance to the U.S. military, such as advanced sensing, network computing, force protection and electrical power and propulsion. These capabilities directly align with our two reportable segments: Advanced Sensing and Computing and Integrated Mission Systems. The U.S. DoD is our largest customer and accounts for approximately 80% and 85% of our total revenues as an end-user for the periods ended March 31, 2023 and March 31, 2022, respectively. Specific international and commercial market opportunities exist within these segments and make up approximately 20% and 15% of our total revenues for the periods ended March 31, 2023 and March 31, 2022, respectively. Our two reportable segments reflect the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker (“CODM”). Advanced Sensing and Computing (“ASC”) The Advanced Sensing and Computing (“ASC”) segment designs, develops and manufactures sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution by our customers. Our leading sensing capabilities span applications including missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared (“EO/IR”), signals intelligence (“SIGINT”) and other intelligence systems, electronic warfare (“EW”), ground vehicle sensing, next generation active electronically scanned array (“AESA”) tactical radars, dismounted soldier sensing and space sensing. Across our offering, we are focused on advancing sensor distance, precision, clarity, definition, spectral depth and effectiveness. Furthermore, we seek to leverage our multi-decade experience to optimize size, weight, power and cost tailored to our customers’ specific mission requirements. Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network computing products. Our network computing offering is utilized across a broad range of mission applications including platform computing on ground and shipboard (both surface ship and submarine) for advanced battle management, combat systems, radar, command and control (“C2”), tactical networks, tactical computing and communications. Our network computing products support the DoD’s need for greater situational understanding at the tactical edge and permits data to be rapidly transmitted securely from command centers to forward-positioned defense assets. Integrated Mission Systems (“IMS”) Our Integrated Mission Systems (“IMS”) segment designs, develops, manufactures and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation and logistics systems for the U.S. and allied defense customers. Our naval power and propulsion systems are providing next-generation power capabilities for the future fleet. DRS is currently a leading provider of next-generation electrical propulsion systems for the U.S. Navy. We provide power conversion, control, distribution and propulsion systems for the Navy’s top priority shipbuilding programs, including the Columbia Class ballistic missile submarine, the first modern U.S. electric drive submarine. We believe DRS is well positioned to meet the needs of an increasingly electrified fleet with our high-efficiency, power dense permanent magnet motors, energy storage systems and associated efficient, rugged and compact power conversion, electrical actuation systems, and advanced cooling technologies. DRS has a long history of providing a number of other critical products to the U.S. Navy with a significant installed base on submarines, aircraft carriers and other surface ships including motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems for electronics and ship stores refrigeration. Our technologies and systems help protect U.S. forces and assets against increasingly sophisticated and proliferating threats. DRS is an integrator of systems in ground vehicles for short-range air defense, counter-UAS (“C-UAS”), and vehicle survivability and protection. This integrator role includes utilizing radars, EW equipment, reconnaissance and surveillance systems, modular combat vehicle turrets, and stabilized sensor suites, and kinetic countermeasures for short-range air defense. Our force protection systems, including solutions for counter-unmanned aerial systems (C-UAS), short-range air defense systems and active protection systems used to defend ground combat vehicles help protect personnel and defense assets from these growing threats. Other The Company separately presents the unallocable costs associated with corporate functions and certain non-operating subsidiaries of the Company as Corporate & Eliminations. See Note 16: Segment Information for further information regarding our business segments. B.Basis of presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of DRS, its wholly owned subsidiaries and its controlling interests and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the periods presented. Interests in ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts significant influence, the Company applies the equity method of accounting. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation. Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. GAAP to be condensed or omitted. These unaudited Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements as of and for the year ended December 31, 2022 included in our Annual Report on Form 10-K for the year end December 31, 2022, filed with the SEC on March 28, 2023. C.New Accounting Pronouncements Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on our financial statements.

Business Acquisitions and Dispositions	3 Months Ended
Business Acquisitions and Dispositions	Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]
Business Acquisitions and Dispositions	Business Acquisitions and Dispositions Acquisitions On June 21, 2022, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RADA Electronic Industries, Ltd (“RADA”), a leading Israel-based provider of small-form tactical radar, for an all-stock merger, with RADA surviving as a wholly owned subsidiary of the Company. The Company acquired RADA as part of the Company’s goal to become a market leader in advanced sensing and force protection. The acquisition of RADA has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with the Company as the accounting acquirer, which requires the assets acquired and liabilities assumed be recognized at their acquisition date fair value. The acquisition was completed on November 28, 2022, when each issued and outstanding ordinary share of RADA was converted and exchanged for one share of common stock of the Company. The total purchase consideration for RADA was $511 million and is comprised of the Company’s shares of common stock issued in exchange for all issued and outstanding ordinary shares of RADA, as well $20 million of replacement stock compensation awards’ fair value attributable to pre-combination services. The preliminary fair value estimates of the net assets acquired and liabilities assumed are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date). The Company has not yet finalized the determination of fair values allocated to the acquired assets and liabilities, including but not limited to the valuation of contract related assets and liabilities and related tax impacts of the opening balance sheet adjustments. The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Identifiable intangibles assets of $131 million consist of $90 million of technology related assets while the remaining $41 million consists of customer and contractual relationships. The goodwill of $284 million arising from the acquisition is primarily attributable to the growth opportunities related to the RADA business. None of the goodwill resulting from the acquisition is deductible for tax purposes. All of the goodwill recognized related to the RADA acquisition was assigned to the ASC segment. Dispositions On March 21, 2022, the Company entered into a definitive agreement to sell its Global Enterprise Solutions (“GES”) business to SES Government Solutions, Inc., a wholly-owned subsidiary of SES S.A., for $450 million subject to certain working capital adjustments. The transaction was completed on August 1, 2022 and resulted in cash proceeds of $427 million after net working capital adjustments. In February 2022, the Company’s Board of Directors approved the strategic initiative to divest the Company’s interest in Advanced Acoustic Concepts (“AAC”). On April 19, 2022, we entered into a definitive sales agreement to divest our share of our equity investment in AAC for $56 million to Thales Defense & Security, Inc., the minority partner in AAC. The transaction was completed on July 8, 2022 and resulted in proceeds of $56 million.

Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with CustomersThe Company recognizes revenue for each separately identifiable performance obligation in a contract representing an obligation to transfer a distinct good or service to a customer. In most cases, goods and services provided under the Company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the Company provides multiple distinct goods or services to a customer. In those cases, the Company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using cost plus a reasonable margin. We classify

revenues as products or services on our Consolidated Statements of Earnings based on the predominant attributes of the performance obligations. While the Company provides warranties on certain contracts, we typically do not provide for services beyond standard assurances and therefore do not consider warranties to be separate performance obligations. Typically we enter into three types of contracts: fixed-price contracts, cost-plus contracts and time and material (“T&M”) contracts (cost-plus contracts and T&M contracts are aggregated below as flexibly priced contracts). The majority of our total revenues are derived from fixed-price contracts; refer to the revenue disaggregation disclosures that follow.

For fixed-price contracts, customers agree to pay a fixed amount, negotiated in advanced for a specified scope of work.

For cost-plus contracts, typically we are reimbursed for allowable or otherwise defined total costs (defined as cost of revenues plus allowable general and administrative expenses) incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness and cost-effectiveness. In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract.

T&M contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs. The fixed labor rates on T&M contracts include amounts for the cost of direct labor, indirect contract costs and profit.

Revenue from contracts with customers is recognized when the performance obligations are satisfied through the transfer of control over the good or service to the customer, which may occur either over time or at a point in time.

Revenues for the majority of our contracts are measured using the over time, percentage of completion cost-to-cost method of accounting to calculate percentage of completion. We believe this is an appropriate measure of progress toward satisfaction of performance obligations as this measure most accurately depicts the progress of our work and transfer of control to our customers. Due to the long-term nature of many of our contracts, developing the estimated total cost at completion and total transaction price often requires judgment. Factors that must be considered in estimating the cost of the work to be completed include the nature and complexity of the work to be performed, subcontractor performance and the risk and impact of delayed performance.

After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts on a routine basis. Adjustments to original estimates for a contract's revenue, estimated costs at completion and estimated profit or loss often are required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change and are also required if contract modifications occur. When adjustments in estimated total costs at completion or in estimated total transaction price are determined, the related impact on revenue and operating income are recognized using the cumulative catch-up method, which recognizes in the current period the cumulative effect of such adjustments for all prior periods. Any anticipated losses on these contracts are fully recognized in the period in which the losses become evident.

EAC adjustments had the following impacts to revenue for the periods presented:


	Three Months Ended March 31,
(Dollars in millions)	2023			2022
Revenue	$	(9)		$	(1)
Total % of Revenue	2		%	—		%

The impacts noted above are attributed primarily to changes in our firm-fixed-price development type programs. As changes happen in the design required to achieve contractual specifications, those changes often result in the programs’ estimate and related profitability.

Conversely, if the requirements for the recognition of contracts over time are not met, revenue is recognized at a point in time when control transfers to the customer, which is generally upon transfer of title. In such cases, the

production that is in progress and costs that will be recognized at a future point in time are reported within “inventories”.

Costs to obtain a contract are incremental direct costs incurred to obtain a contract with a customer, including sales commissions and dealer fees, and are capitalized if material. Costs to fulfill a contract include costs directly related to a contract or specific anticipated contract (e.g., certain design costs) that generate or enhance our ability to satisfy our performance obligations under these contracts. These costs are capitalized to the extent they are expected to be recovered from the associated contract.

Contract Assets and Liabilities

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities.


(Dollars in millions)	March 31, 2023		December 31, 2022
Contract assets	$	968	$	872
Contract liabilities	247		233
Net contract assets	$	721	$	639

Revenue recognized in the periods ending March 31, 2023 and March 31, 2022, that was included in the contract liability balance at the beginning of each period was $84 million and $74 million, respectively.

Contract assets related to amounts withheld by customers until contract completion are not considered a significant financing component of our contracts because the intent is to protect the customers from our failure to satisfactorily complete our performance obligations. Payments received from customers in advance of revenue recognition (contract liabilities) are not considered a significant financing component of our contracts because they are utilized to pay for contract costs within a one-year period or are requested by us to ensure the customers meet their payment obligations.

Value of Remaining Performance Obligations

The value of remaining performance obligations, which we also refer to as total backlog, includes the following components:

•Funded - Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.

•Unfunded - Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts.

The following table summarizes the value of our total backlog as of March 31, 2023, incorporating both funded and unfunded components:


Backlog:
(Dollars in millions)	March 31, 2023
Funded	$	2,947
Unfunded	$	1,325
Total Backlog	$	4,272

We expect to recognize approximately 39% of our March 31, 2023 backlog as revenue over the next nine months, with the remainder to be recognized thereafter.

Disaggregation of Revenue

ASC: ASC revenue is primarily derived from U.S. government development and production contracts and is generally recognized using the over time, percentage of completion cost-to-cost method of accounting. We disaggregate ASC revenue by geographical region, customer relationship and contract type. We believe these categories best depict how the nature, amount, timing and uncertainty of ASC revenue and cash flows are affected by economic factors:


	Three Months Ended March 31,
(Dollars in millions)	2023		2022
Revenue by Geographical Region
United States	$	330	$	372
International	50		22
Intersegment Sales	11		2
Total	$	391	$	396
Revenue by Customer Relationship
Prime contractor	$	162	$	232
Subcontractor	218		162
Intersegment Sales	11		2
Total	$	391	$	396
Revenue by Contract Type
Firm Fixed Price	$	324	$	342
Flexibly Priced(1)	56		52
Intersegment Sales	11		2
Total	$	391	$	396

________________

(1)Includes revenue derived from time-and-materials contracts.

IMS: IMS revenue is primarily derived from U.S. government development and production contracts and is generally recognized over time using the over time, percentage of completion cost-to-cost method of accounting We disaggregate IMS revenue by geographical region, customer relationship and contract type. We believe these

categories best depict how the nature, amount, timing and uncertainty of IMS revenue and cash flows are affected by economic factors:


	Three Months Ended March 31,
(Dollars in millions)	2023		2022
Revenue by Geographical Region
United States	$	186	$	212
International	3		6
Intersegment Sales	—		—
Total	$	189	$	218
Revenue by Customer Relationship
Prime contractor	$	46	$	33
Subcontractor	143		185
Intersegment Sales	—		—
Total	$	189	$	218
Revenue by Contract Type
Firm Fixed Price	$	155	$	193
Flexibly Priced(1)	34		25
Intersegment Sales	—		—
Total	$	189	$	218

________________

(1)Includes revenue derived from time-and-materials contracts.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

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+ Details

Accounts Receivable

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Accounts Receivable

Accounts receivable represent amounts billed and currently due from customers. Payment is typically received from our customers either at periodic intervals (e.g., biweekly, or monthly) or upon achievement of contractual milestones.

Accounts receivable consist of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Accounts receivable	$	159	$	168
Less allowance for credit losses	(1)		(2)
Accounts receivable, net	$	158	$	166

The Company maintains certain agreements with financial institutions to sell certain trade receivables. Receivables are derecognized in their entirety when sold, and the Company’s continuing involvement in the sold receivables is limited to their servicing, for which the Company receives a fee commensurate with the service provided. Pursuant to the servicing agreements, the Company collected approximately $15 million and $10 million at March 31, 2023 and December 31, 2022, respectively, of these sold receivables that had not yet been remitted to the financial institutions. These unremitted amounts collected on behalf of the financial institutions are included within short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheet.

Sale of Receivables

3 Months Ended

Mar. 31, 2023

Transfers and Servicing [Abstract]

Sale of Receivables

Sale of ReceivablesThe Company is party to factoring facilities with various financial institutions with an aggregate capacity of $325 million. The receivables sold under the factoring facilities are without recourse for any customer credit risk and result in a true sale. Receivables are derecognized in their entirety when sold, and the Company’s continuing involvement is limited to their servicing, for which the Company receives a fee commensurate with the service provided and therefore no servicing asset or liability related to these receivables was recognized for any period

presented. The fair value of the sold receivables approximated their book value due to their short-term nature. Proceeds from the sold receivables are reflected in operating cash flows on the statement of cash flows.

During the periods ended March 31, 2023 and March 31, 2022, the Company incurred immaterial purchase discount fees which are presented in other general and administrative expenditures, net on the consolidated statements of earnings.


	Three months ended March 31,
(Dollars in millions)	2023		2022
Beginning balance	$	243	$	215
Sales of receivables	30		44
Cash returned to purchaser	192		164
Outstanding balance sold to purchasers(1)	81		95
Cash collected, not remitted to purchaser(2)	15		9
Remaining sold receivables	$	(66)	$	(86)

________________

(1)For the period ended March 31, 2023, the Company recorded a net decrease to cash flows from operating activities of $162 million and for the period ended March 31, 2022 a decrease to cash flow from operating activities of $120 million.

(2)Represents cash collected on behalf of purchasers and not yet remitted.

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

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+ Details

Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories consists of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Raw materials	$	80	$	83
Work in progress	272		224
Finished goods	12		12
Total	$	364	$	319

Property, Plant and Equipment

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment by major asset class consists of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Land, buildings and improvements	$	333	$	321
Plant and machinery	192		190
Equipment and other	329		335
Total property, plant and equipment, at cost	854		846
Less accumulated depreciation	(452)		(442)
Total property, plant and equipment, net	$	402	$	404

Depreciation expense related to property, plant and equipment was $16 million and $13 million for the periods ended March 31, 2023 and March 31, 2022, respectively.

Other Liabilities

3 Months Ended

Mar. 31, 2023

Other Liabilities Disclosure [Abstract]

Other Liabilities

A summary of significant other liabilities by balance sheet caption follows:


(Dollars in millions)	March 31, 2023		December 31, 2022
Salaries, wages and accrued bonuses	$	53	$	63
Fringe benefits	63		76
Litigation	10		10
Restructuring costs	4		4
Provision for contract losses	51		54
Operating lease liabilities	27		25
Taxes Payable	10		31
Other(1)	46		60
Total other current liabilities	$	264	$	323
Operating lease liabilities	$	68	$	68
Taxes Payable	23		21
Other	20		9
Total other noncurrent liabilities	$	111	$	98

________________

(1)Consists primarily of environmental remediation reserves and warranty reserves. See Note 14: Commitments and Contingencies for more information regarding the warranty provision.

Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Other intangible assets mainly refer to the fair value of existing customer contractual relationships attributable to the acquired business and patents which are being amortized over their respective lives. The fair value of intangible assets typically is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows (including cash flows for working capital) arising from backlog and follow-on sales to the customer over their estimated lives, including the probability of expected future contract renewals and sales, less a contributory assets charge, all of which is discounted to present value.

The following disclosure presents certain information regarding the Company's intangible assets as of March 31, 2023 and December 31, 2022. All intangible assets are being amortized over their estimated useful lives, as indicated below, with no estimated residual values.


	March 31, 2023						December 31, 2022
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired Intangible Assets	$	1,087	$	(923)	$	164	$	1,087	$	(918)	$	169
Patents and licenses	9		(6)		3		9		(6)		3
Total intangible assets	$	1,096	$	(929)	$	167	$	1,096	$	(924)	$	172

Amortization expense related to intangible assets was $6 million for the periods ended March 31, 2023 and $2 million for the three months ended March 31, 2022.

Customer relationships are amortized on a straight-line basis over their estimated useful lives of 10 to 15 years. Patents and licenses are amortized on a straight-line basis over their estimated useful lives of 5 to 10 years.

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2023 and December 31, 2022 is as follows:


(Dollars in millions)	March 31, 2023		December 31, 2022

Deferred tax assets	$	208	$	208
Less valuation allowance	17		17
Deferred tax assets	191		191
Deferred tax liabilities	125		125
Net deferred tax asset	$	66	$	66

Our deferred tax balance associated with our retirement benefit plans includes a deferred tax asset of $8 million and $8 million as March 31, 2023 and December 31, 2022 respectively, that are recorded in accumulated other comprehensive earnings to recognize the funded status of our retirement plans. See Note 12: Pension and Other Postretirement Benefits for additional details.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

The Company’s debt consists of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Term loan A	$	222	$	225
Outstanding revolver	215		—
Finance lease and other	160		161
Short-term borrowings	15		10
Total debt principal	612		396
Less unamortized debt issuance costs and discounts	(2)		(2)
Total debt, net	610		394
Less short-term borrowings and current portion of long-term debt	(250)		(29)
Total long-term debt	$	360	$	365

Term Loans

In November 2022, the Company entered into a senior unsecured credit agreement with Bank of America in the amount of $500 million (the “2022 Credit Agreement”) with a maturity of November 29, 2027. The 2022 Credit Agreement provides for a term loan of $225 million bearing interest at a variable rate generally based on the Secured Overnight Financing Rate, (“SOFR”), plus a spread ranging from 1.48% to 2.10% depending on the leverage ratio, as defined in the 2022 Credit Agreement, or an alternative variable rate based on the higher of the Bank of America prime rate, the federal funds rate, or a rate generally based on SOFR, in each case subject to additional basis point spread as defined in the 2022 Credit Agreement, (“2022 Term Loan A”). Interest is payable quarterly in arrears. The outstanding balance of the 2022 Term Loan A at March 31, 2023 was $222 million. The fair value of Term Loan A at March 31, 2023 was approximately $222 million, however the Company has the ability to prepay the outstanding principal balance without penalty.

Credit Facilities

The 2022 Credit Agreement provides for a revolving credit facility available for working capital needs of the Company, (“the 2022 Revolving Credit Facility”). As of March 31, 2023 and December 31, 2022, the 2022 Revolving Credit Facility had a limit of $275 million. Loans under the 2022 Revolving Credit Facility bear interest at a variable rate generally based on the SOFR, plus a spread ranging from 1.48% to 2.10% depending on the

leverage ratio, as defined in the 2022 Credit Agreement, or an alternative variable rate based on the higher of the Bank of America prime rate, the federal funds rate, or a rate generally based on SOFR, in each case subject to additional basis point spread as defined in the 2022 Credit Agreement. The Company also pays a commitment fee ranging between 0.20% and 0.35% depending on the Company’s leverage ratio applied to the unused balance of the 2022 Revolving Credit Facility. The outstanding balance as of March 31, 2023 was $215 million and there was no outstanding balance on the 2022 Revolving Credit Facility as of December 31, 2022. The weighted average interest rate on the 2022 Revolving Credit Facility as of March 31, 2023 was 5.06%.

The Company also maintains uncommitted working capital credit facilities with certain financial institutions in an aggregate of $65 million at March 31, 2023 and December 31, 2022, respectively (the “Financial Institution Credit Facilities”). The Financial Institution Credit Facilities are guaranteed by Leonardo S.p.A. The primary purpose of the Financial Institution Credit Facilities is to support standby letter of credit issuances on contracts with customers and the Financial Institution Credit Facilities also included a revolving facility with a maximum borrowing limit of $15 million, which bore interest at LIBOR plus 0.5%. The revolving facility was eliminated from the Financial Institution Credit Facilities as of March 31, 2023. As of December 31, 2022, there was no balance outstanding on the revolving facility of the Financial Institution Credit Facilities. The Company had letters of credit outstanding of approximately $41 million and $36 million as of March 31, 2023 and December 31, 2022, which reduces the available capacity of the Financial Institution Credit Facilities by an equal amount.

Short-term Borrowings

As of March 31, 2023 and December 31, 2022, the Company recognized $15 million and $10 million, respectively, collected on behalf of the buyers of our trade receivables pursuant to our factoring arrangements as short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheet, which approximates its fair value. Refer to Note 4: Accounts Receivable and Note 5: Sale of Receivables for more information.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Pension and Other Postretirement Benefits

3 Months Ended

Mar. 31, 2023

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Retirement Plan Summary Information

The Company maintains multiple pension plans, both contributory and non-contributory, covering employees at certain locations. Eligibility requirements for participation in the plans vary, and benefits generally are based on the participant's compensation and years of service, as defined in the respective plan. The Company's funding policy generally is to contribute in accordance with cost accounting standards that affect government contractors, subject to the Tax Code and regulations thereunder. For all periods presented, the Company made no discretionary pension contributions. Plan assets are invested primarily in equities, bonds (both corporate and U.S. government), U.S. government-sponsored entity instruments, cash and cash equivalents and real estate.

The Company also provides postretirement medical benefits for certain retired employees and dependents at certain locations. Participants are eligible for these benefits when they retire from active service and meet the eligibility requirements for the Company's postretirement benefit plans. The Company's contractual arrangements with the U.S. government provide for the recovery of contributions to a Voluntary Employees' Beneficiary Association trust and, for non-funded plans, recovery of claims on a pay-as-you-go basis, subject to the Tax Code and regulations thereunder, with the retiree generally paying a portion of the costs through contributions, deductibles and coinsurance provisions.

The Company also maintains certain non-contributory and unfunded supplemental retirement plans. Eligibility for participation in the supplemental retirement plans is limited, and benefits generally are based on the participant's compensation and/or years of service.

The following tables provide certain information regarding the Company's pension, postretirement and supplemental retirement plans as of for the three months ended March 31,:


	Defined Benefit Pension Plans				Postretirement Benefit Plan				Supplemental Retirement Plans
(Dollars in millions)	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	2		2		—		—		—		—
Less Expected return on plan assets	(1)		(2)		—		—		—		—
Amortization of net actuarial loss (gain)	—		—		—		—		—		—
Amortization of prior service cost	—		—		—		—		—		—
Settlement expense (income)	—		1		—		—		—		—
Net periodic benefit cost	$	1	$	1	$	—	$	—	$	—	$	—

The expected long-term return on plan assets assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company's benefit plans, including those from dividends, interest income and capital appreciation. The assumption has been determined based on expectations regarding future rates of return for the plans' investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class.

Pension related expenses are reflected in the Total costs of revenues and General and administrative expenses on the Consolidated Statement of Earnings (unaudited).

A one percentage increase or decrease in healthcare trend rates in the table above would have an insignificant impact to our service and interest cost and the postretirement medical obligations.

Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share


	March 31,
(Dollars in millions, except per share amounts; shares in millions	2023		2022
Net earnings attributable to common shareholders	$	12	$	36
Basic weighted average number of shares outstanding	260		210
Impact of dilutive share-based awards	2		—
Diluted weighted average number of shares outstanding	262		210
Earnings per share attributable to common shareholders - basic	$	0.05	$	0.17
Earnings per share attributable to common shareholders - diluted	$	0.05	$	0.17

For the period ended March 31, 2023, potential dilutive common shares primarily consisted of employee stock options, restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), however, the amount of dilutive securities included in the diluted weighted average number of shares outstanding was immaterial. For the period ended March 31, 2022, the basic and diluted weighted average number of shares outstanding were equal as there were no dilutive securities.

The computation of diluted earnings per share (“EPS”) excludes the effect of the potential exercise of stock awards when the average market price of the common stock is lower than the exercise price of the stock awards during the period because the effect would be anti-dilutive. In addition, the computation of diluted EPS excludes

stock awards whose issuance is contingent upon the satisfaction of certain performance vesting conditions. During the period ended March 31, 2023, there were $1.4 million stock awards excluded from the computation. During the period ended March 31, 2022 there were no anti-dilutive securities.

Commitment and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments

The Company’s commitments are primarily related to our lease agreements, purchase obligations, and credit agreements.

Contingencies

From time to time we are subject to certain legal proceedings and claims in the ordinary course of business. These matters are subject to many uncertainties and it is possible that some of these matters ultimately could be decided, resolved or settled in a manner adverse to us. Although the precise amount of liability that may result from these matters is not ascertainable, the Company believes that any amounts exceeding the Company's recorded accruals should not materially adversely affect the Company's financial condition or liquidity. It is possible, however, that the ultimate resolution of those matters could result in a material adverse effect on the Company's results of operations and/or cash flows from operating activities for a particular reporting period. We establish reserves for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.

Some environmental laws, such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (also known as “CERCLA” or the “Superfund law”) and similar state statutes, can impose liability upon former owners or operators for the entire cost of investigating and remediating contaminated sites regardless of the lawfulness of the original activities that led to the contamination. In July 2000, an entity which later became a subsidiary of the Company received a Section 104(e) Request for Information (“RFI”) from the National Park Service (“NPS”), pursuant to CERCLA, regarding the presence of radioactive material at a site within a national park, which site was operated by an alleged predecessor to our subsidiary over 50 years ago. Following the subsidiary’s response to the RFI, the NPS directed it and another alleged former operator to perform an Engineering Evaluation and Cost Analysis (“EE/CA”) of a portion of the site. The Company’s subsidiary made a good faith offer to conduct an alternative EE/CA work plan, but the NPS rejected this offer and opted to perform the EE/CA itself. The NPS previously posted its intention to open a formal public comment period regarding the EE/CA at the end of 2019. To the Company’s knowledge, the EE/CA has not been released and a public comment period has yet to be opened.

Following completion of the EE/CA, the NPS may seek reimbursement for its investigative and remedial efforts to date, or direct one or more of the potentially responsible parties to perform any remediation that may be required by CERCLA or may enter an alternative dispute resolution proceeding to attempt to resolve each party’s share. In addition, the NPS may seek to recover damages for loss of use of certain natural resources. The Company believes that it has legitimate defenses to its subsidiary’s potential liability and that there are other potentially responsible parties for the environmental conditions at the site, including the U.S. government as owner, operator and arranger at the site. The potential liability associated with this matter could change substantially due to such factors as additional information on the nature or extent of contamination, methods of remediation that might be recommended or required, changes in the apportionment of costs among the responsible parties, whether the NPS seeks to recover additional damages, whether the NPS’s plans to investigate additional areas to identify a need for further remedial action for which the Company may be identified as a potentially responsible party and other actions by governmental agencies or private parties.

The Company has recorded its best estimate of damages and its share of remediation costs related to the site to reflect what we and our advisors reasonably believe we would be liable for based on the current information and circumstances of the claim, exclusive of other potential liabilities that may be asserted in the future.

In the performance of our contracts we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we

are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (“REAs”) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.

As a government contractor, with customers including the U.S. government as well as various state and local government entities, the Company may be subject to audits, investigations and claims with respect to its contract performance, pricing, costs, cost allocations and procurement practices. Additionally, amounts billed under such contracts, including direct and indirect costs, are subject to potential adjustments before final settlement.

Management believes that adequate provisions for such potential audits, investigations, claims and contract adjustments, if any, have been made in the financial statements.

Product Warranties

Product warranty costs generally are accrued in proportion to product revenue realized in conjunction with our over-time revenue recognition policy. Product warranty expense is recognized based on the term of the product warranty, generally one year to three years, and the related estimated costs, considering historical claims expense. Accrued warranty costs are reduced as these costs are incurred and as the warranty period expires, and otherwise may be modified as specific product performance issues are identified and resolved. The following is a summary of changes in the product warranty balances during the period ended March 31, 2023:


(Dollars in millions)
Balance at December 31, 2022	$	18
Additional provision	8
Reversal and utilization	(3)
Balance at Balance at March 31, 2023	23

Related Party Transactions	3 Months Ended
Related Party Transactions	Mar. 31, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company has related-party sales with the ultimate majority stockholder and its other affiliates that occur in the regular course of business. Related-party sales for these transactions are included in revenues and were $6 million and $1 million for the periods ended March 31, 2023 and March 31, 2022, respectively. The Company has related-party purchases with the ultimate majority stockholder and its other affiliates that occur in the regular course of business. Related-party purchases for these transactions are included in cost of revenues and were $0 million and $0 million for the periods ended March 31, 2023 and March 31, 2022, respectively. The receivables related to these transactions with the ultimate majority stockholder and its other affiliates of $10 million and $14 million, respectively, and payables of $1 million and $1 million, respectively, are included in accounts receivable and accounts payable in our Consolidated Balance Sheet as of March 31, 2023 and December 31, 2022. In addition, there was a related-party balance in contract assets of $4 million and $5 million at March 31, 2023 and December 31, 2022, respectively.

Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment InformationOperating segments represent components of an enterprise for which separate financial information is available that is regularly reviewed by the CODM in determining how to allocate resources and assess performance. Our Chief Executive Officer is our CODM and he uses a variety of measures to assess the performance of the Company as a whole, depending on the nature of the activity. Beginning in the first quarter of 2022, the Company’s operating and reportable segments were revised into two reportable segments, ASC and IMS, to align our market strategy and capital allocation decision making with our operating structure. Prior year information was revised to reflect the new segment structure. All other operations, which consists primarily of DRS corporate headquarters and certain non-operating subsidiaries of the Company, are grouped in Corporate & Eliminations.

We primarily use Adjusted EBITDA, a non-GAAP financial measure, to manage the Company and allocate resources. Adjusted EBITDA of our business segments includes our net earnings before income taxes, amortization of acquired intangible assets, depreciation, restructuring costs, interest, transaction costs related to an anticipated offering of securities, acquisition and divestiture related expenses, foreign exchange, the coronavirus pandemic (“COVID-19”) response costs, non-service pension expenditures and other one-time non-operational events. Adjusted EBITDA is used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business segments. This measure assists the CODM in assessing segment operating performance consistently over time without the impact of our capital structure, asset base and items outside the control of the management team and expenses that do not relate to our core operations.

Certain information related to our segments for the periods ended March 31, 2023 and March 31, 2022 is presented in the following tables. Consistent accounting policies have been applied by all segments within the Company, within all reporting periods. A description of our reportable segments as of March 31, 2023 and March 31, 2022 has been included in Note 1: Summary of Significant Accounting Policies. Intersegment sales are generally transferred at cost to the buying segment, and the sourcing segment does not recognize a profit. Such intercompany operating income is eliminated in consolidation, so that the Company’s total revenues and operating earnings reflect only those transactions with external customers.

Total revenues and intersegment revenues by segment for the periods ended March 31, 2023 and, March 31, 2022 consists of the following:


	Three Months Ended March 31,
(Dollars in millions)	2023		2022
ASC	$	391	$	396
IMS	189		218
Corporate & Eliminations	(11)		(2)
Total revenue	$	569	$	612


(Dollars in millions)	2023		2022
ASC	$	11	$	2
IMS	—		—
Total intersegment revenue	$	11	$	2

Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following:


(Dollars in millions)	March 31, 2023		March 31, 2022
Adjusted EBITDA
ASC	$	37	$	32
IMS	12		41
Corporate & Eliminations	—		—
Total Adjusted EBITDA	49		73
Amortization of intangibles	(6)		(2)
Depreciation	(16)		(13)

Interest expense	(8)		(8)
Deal related transaction costs	(2)		(2)

Other one-time non-operational events	(1)		—



Income tax (provision) benefit	(4)		(12)
Net earnings	$	12	$	36

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Segment Reporting	Advanced Sensing and Computing (“ASC”) The Advanced Sensing and Computing (“ASC”) segment designs, develops and manufactures sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution by our customers. Our leading sensing capabilities span applications including missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared (“EO/IR”), signals intelligence (“SIGINT”) and other intelligence systems, electronic warfare (“EW”), ground vehicle sensing, next generation active electronically scanned array (“AESA”) tactical radars, dismounted soldier sensing and space sensing. Across our offering, we are focused on advancing sensor distance, precision, clarity, definition, spectral depth and effectiveness. Furthermore, we seek to leverage our multi-decade experience to optimize size, weight, power and cost tailored to our customers’ specific mission requirements. Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network computing products. Our network computing offering is utilized across a broad range of mission applications including platform computing on ground and shipboard (both surface ship and submarine) for advanced battle management, combat systems, radar, command and control (“C2”), tactical networks, tactical computing and communications. Our network computing products support the DoD’s need for greater situational understanding at the tactical edge and permits data to be rapidly transmitted securely from command centers to forward-positioned defense assets. Integrated Mission Systems (“IMS”) Our Integrated Mission Systems (“IMS”) segment designs, develops, manufactures and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation and logistics systems for the U.S. and allied defense customers. Our naval power and propulsion systems are providing next-generation power capabilities for the future fleet. DRS is currently a leading provider of next-generation electrical propulsion systems for the U.S. Navy. We provide power conversion, control, distribution and propulsion systems for the Navy’s top priority shipbuilding programs, including the Columbia Class ballistic missile submarine, the first modern U.S. electric drive submarine. We believe DRS is well positioned to meet the needs of an increasingly electrified fleet with our high-efficiency, power dense permanent magnet motors, energy storage systems and associated efficient, rugged and compact power conversion, electrical actuation systems, and advanced cooling technologies. DRS has a long history of providing a number of other critical products to the U.S. Navy with a significant installed base on submarines, aircraft carriers and other surface ships including motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems for electronics and ship stores refrigeration. Our technologies and systems help protect U.S. forces and assets against increasingly sophisticated and proliferating threats. DRS is an integrator of systems in ground vehicles for short-range air defense, counter-UAS (“C-UAS”), and vehicle survivability and protection. This integrator role includes utilizing radars, EW equipment, reconnaissance and surveillance systems, modular combat vehicle turrets, and stabilized sensor suites, and kinetic countermeasures for short-range air defense. Our force protection systems, including solutions for counter-unmanned aerial systems (C-UAS), short-range air defense systems and active protection systems used to defend ground combat vehicles help protect personnel and defense assets from these growing threats. Other The Company separately presents the unallocable costs associated with corporate functions and certain non-operating subsidiaries of the Company as Corporate & Eliminations.
Basis of Presentation	Basis of presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of DRS, its wholly owned subsidiaries and its controlling interests and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the periods presented. Interests in ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts significant influence, the Company applies the equity method of accounting. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation. Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. GAAP to be condensed or omitted. These unaudited Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements as of and for the year ended December 31, 2022 included in our Annual Report on Form 10-K for the year end December 31, 2022, filed with the SEC on March 28, 2023.
New Accounting Pronouncements	New Accounting Pronouncements Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on our financial statements.
Revenue from Contracts with Customers	The Company recognizes revenue for each separately identifiable performance obligation in a contract representing an obligation to transfer a distinct good or service to a customer. In most cases, goods and services provided under the Company’s contracts are accounted for as single performance obligations due to the complex and integrated nature of our products and services. These contracts generally require significant integration of a group of goods and/or services to deliver a combined output. In some contracts, the Company provides multiple distinct goods or services to a customer. In those cases, the Company accounts for the distinct contract deliverables as separate performance obligations and allocates the transaction price to each performance obligation based on its relative standalone selling price, which is generally estimated using cost plus a reasonable margin. We classify revenues as products or services on our Consolidated Statements of Earnings based on the predominant attributes of the performance obligations. While the Company provides warranties on certain contracts, we typically do not provide for services beyond standard assurances and therefore do not consider warranties to be separate performance obligations. Typically we enter into three types of contracts: fixed-price contracts, cost-plus contracts and time and material (“T&M”) contracts (cost-plus contracts and T&M contracts are aggregated below as flexibly priced contracts). The majority of our total revenues are derived from fixed-price contracts; refer to the revenue disaggregation disclosures that follow. For fixed-price contracts, customers agree to pay a fixed amount, negotiated in advanced for a specified scope of work. For cost-plus contracts, typically we are reimbursed for allowable or otherwise defined total costs (defined as cost of revenues plus allowable general and administrative expenses) incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness and cost-effectiveness. In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract. T&M contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs. The fixed labor rates on T&M contracts include amounts for the cost of direct labor, indirect contract costs and profit. Revenue from contracts with customers is recognized when the performance obligations are satisfied through the transfer of control over the good or service to the customer, which may occur either over time or at a point in time. Revenues for the majority of our contracts are measured using the over time, percentage of completion cost-to-cost method of accounting to calculate percentage of completion. We believe this is an appropriate measure of progress toward satisfaction of performance obligations as this measure most accurately depicts the progress of our work and transfer of control to our customers. Due to the long-term nature of many of our contracts, developing the estimated total cost at completion and total transaction price often requires judgment. Factors that must be considered in estimating the cost of the work to be completed include the nature and complexity of the work to be performed, subcontractor performance and the risk and impact of delayed performance. After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts on a routine basis. Adjustments to original estimates for a contract's revenue, estimated costs at completion and estimated profit or loss often are required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change and are also required if contract modifications occur. When adjustments in estimated total costs at completion or in estimated total transaction price are determined, the related impact on revenue and operating income are recognized using the cumulative catch-up method, which recognizes in the current period the cumulative effect of such adjustments for all prior periods. Any anticipated losses on these contracts are fully recognized in the period in which the losses become evident. Conversely, if the requirements for the recognition of contracts over time are not met, revenue is recognized at a point in time when control transfers to the customer, which is generally upon transfer of title. In such cases, the production that is in progress and costs that will be recognized at a future point in time are reported within “inventories”. Costs to obtain a contract are incremental direct costs incurred to obtain a contract with a customer, including sales commissions and dealer fees, and are capitalized if material. Costs to fulfill a contract include costs directly related to a contract or specific anticipated contract (e.g., certain design costs) that generate or enhance our ability to satisfy our performance obligations under these contracts. These costs are capitalized to the extent they are expected to be recovered from the associated contract. Contract Assets and Liabilities The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities. Contract assets related to amounts withheld by customers until contract completion are not considered a significant financing component of our contracts because the intent is to protect the customers from our failure to satisfactorily complete our performance obligations. Payments received from customers in advance of revenue recognition (contract liabilities) are not considered a significant financing component of our contracts because they are utilized to pay for contract costs within a one-year period or are requested by us to ensure the customers meet their payment obligations. Value of Remaining Performance Obligations The value of remaining performance obligations, which we also refer to as total backlog, includes the following components: •Funded - Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. •Unfunded - Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts.
Intangible Assets	Other intangible assets mainly refer to the fair value of existing customer contractual relationships attributable to the acquired business and patents which are being amortized over their respective lives. The fair value of intangible assets typically is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows (including cash flows for working capital) arising from backlog and follow-on sales to the customer over their estimated lives, including the probability of expected future contract renewals and sales, less a contributory assets charge, all of which is discounted to present value.
Pension and Other Postretirement Benefits	The Company maintains multiple pension plans, both contributory and non-contributory, covering employees at certain locations. Eligibility requirements for participation in the plans vary, and benefits generally are based on the participant's compensation and years of service, as defined in the respective plan. The Company's funding policy generally is to contribute in accordance with cost accounting standards that affect government contractors, subject to the Tax Code and regulations thereunder. For all periods presented, the Company made no discretionary pension contributions. Plan assets are invested primarily in equities, bonds (both corporate and U.S. government), U.S. government-sponsored entity instruments, cash and cash equivalents and real estate. The Company also provides postretirement medical benefits for certain retired employees and dependents at certain locations. Participants are eligible for these benefits when they retire from active service and meet the eligibility requirements for the Company's postretirement benefit plans. The Company's contractual arrangements with the U.S. government provide for the recovery of contributions to a Voluntary Employees' Beneficiary Association trust and, for non-funded plans, recovery of claims on a pay-as-you-go basis, subject to the Tax Code and regulations thereunder, with the retiree generally paying a portion of the costs through contributions, deductibles and coinsurance provisions. The Company also maintains certain non-contributory and unfunded supplemental retirement plans. Eligibility for participation in the supplemental retirement plans is limited, and benefits generally are based on the participant's compensation and/or years of service. The expected long-term return on plan assets assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company's benefit plans, including those from dividends, interest income and capital appreciation. The assumption has been determined based on expectations regarding future rates of return for the plans' investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class.Pension related expenses are reflected in the Total costs of revenues and General and administrative expenses on the Consolidated Statement of Earnings (unaudited).

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 17
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130561-203045

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Revenue from Contracts with Customers (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Change in Estimate at Completion Adjustments

EAC adjustments had the following impacts to revenue for the periods presented:


	Three Months Ended March 31,
(Dollars in millions)	2023			2022
Revenue	$	(9)		$	(1)
Total % of Revenue	2		%	—		%

Schedule of Contract Assets and Contract Liabilities


(Dollars in millions)	March 31, 2023		December 31, 2022
Contract assets	$	968	$	872
Contract liabilities	247		233
Net contract assets	$	721	$	639

Schedule of Remaining Performance Obligations, Expected Timing of Satisfaction

The following table summarizes the value of our total backlog as of March 31, 2023, incorporating both funded and unfunded components:


Backlog:
(Dollars in millions)	March 31, 2023
Funded	$	2,947
Unfunded	$	1,325
Total Backlog	$	4,272

Schedule of Disaggregation of Revenue

We believe these categories best depict how the nature, amount, timing and uncertainty of ASC revenue and cash flows are affected by economic factors:


	Three Months Ended March 31,
(Dollars in millions)	2023		2022
Revenue by Geographical Region
United States	$	330	$	372
International	50		22
Intersegment Sales	11		2
Total	$	391	$	396
Revenue by Customer Relationship
Prime contractor	$	162	$	232
Subcontractor	218		162
Intersegment Sales	11		2
Total	$	391	$	396
Revenue by Contract Type
Firm Fixed Price	$	324	$	342
Flexibly Priced(1)	56		52
Intersegment Sales	11		2
Total	$	391	$	396

________________

(1)Includes revenue derived from time-and-materials contracts.

We believe these

categories best depict how the nature, amount, timing and uncertainty of IMS revenue and cash flows are affected by economic factors:


	Three Months Ended March 31,
(Dollars in millions)	2023		2022
Revenue by Geographical Region
United States	$	186	$	212
International	3		6
Intersegment Sales	—		—
Total	$	189	$	218
Revenue by Customer Relationship
Prime contractor	$	46	$	33
Subcontractor	143		185
Intersegment Sales	—		—
Total	$	189	$	218
Revenue by Contract Type
Firm Fixed Price	$	155	$	193
Flexibly Priced(1)	34		25
Intersegment Sales	—		—
Total	$	189	$	218

________________

(1)Includes revenue derived from time-and-materials contracts.

Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Accounts Receivable

Accounts receivable consist of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Accounts receivable	$	159	$	168
Less allowance for credit losses	(1)		(2)
Accounts receivable, net	$	158	$	166

Sale of Receivables (Tables)

3 Months Ended

Mar. 31, 2023

Transfers and Servicing [Abstract]

Schedule of Sale of Receivables


	Three months ended March 31,
(Dollars in millions)	2023		2022
Beginning balance	$	243	$	215
Sales of receivables	30		44
Cash returned to purchaser	192		164
Outstanding balance sold to purchasers(1)	81		95
Cash collected, not remitted to purchaser(2)	15		9
Remaining sold receivables	$	(66)	$	(86)

________________

(2)Represents cash collected on behalf of purchasers and not yet remitted.

Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories consists of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Raw materials	$	80	$	83
Work in progress	272		224
Finished goods	12		12
Total	$	364	$	319

Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment by major asset class consists of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Land, buildings and improvements	$	333	$	321
Plant and machinery	192		190
Equipment and other	329		335
Total property, plant and equipment, at cost	854		846
Less accumulated depreciation	(452)		(442)
Total property, plant and equipment, net	$	402	$	404

Other Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Other Liabilities Disclosure [Abstract]

Other Liabilities

A summary of significant other liabilities by balance sheet caption follows:


(Dollars in millions)	March 31, 2023		December 31, 2022
Salaries, wages and accrued bonuses	$	53	$	63
Fringe benefits	63		76
Litigation	10		10
Restructuring costs	4		4
Provision for contract losses	51		54
Operating lease liabilities	27		25
Taxes Payable	10		31
Other(1)	46		60
Total other current liabilities	$	264	$	323
Operating lease liabilities	$	68	$	68
Taxes Payable	23		21
Other	20		9
Total other noncurrent liabilities	$	111	$	98

________________

(1)Consists primarily of environmental remediation reserves and warranty reserves. See Note 14: Commitments and Contingencies for more information regarding the warranty provision.

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets


	March 31, 2023						December 31, 2022
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired Intangible Assets	$	1,087	$	(923)	$	164	$	1,087	$	(918)	$	169
Patents and licenses	9		(6)		3		9		(6)		3
Total intangible assets	$	1,096	$	(929)	$	167	$	1,096	$	(924)	$	172

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2023 and December 31, 2022 is as follows:


(Dollars in millions)	March 31, 2023		December 31, 2022

Deferred tax assets	$	208	$	208
Less valuation allowance	17		17
Deferred tax assets	191		191
Deferred tax liabilities	125		125
Net deferred tax asset	$	66	$	66

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s debt consists of the following:


(Dollars in millions)	March 31, 2023		December 31, 2022
Term loan A	$	222	$	225
Outstanding revolver	215		—
Finance lease and other	160		161
Short-term borrowings	15		10
Total debt principal	612		396
Less unamortized debt issuance costs and discounts	(2)		(2)
Total debt, net	610		394
Less short-term borrowings and current portion of long-term debt	(250)		(29)
Total long-term debt	$	360	$	365

Pension and Other Postretirement Benefits (Tables)

3 Months Ended

Mar. 31, 2023

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The following tables provide certain information regarding the Company's pension, postretirement and supplemental retirement plans as of for the three months ended March 31,:


	Defined Benefit Pension Plans				Postretirement Benefit Plan				Supplemental Retirement Plans
(Dollars in millions)	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	2		2		—		—		—		—
Less Expected return on plan assets	(1)		(2)		—		—		—		—
Amortization of net actuarial loss (gain)	—		—		—		—		—		—
Amortization of prior service cost	—		—		—		—		—		—
Settlement expense (income)	—		1		—		—		—		—
Net periodic benefit cost	$	1	$	1	$	—	$	—	$	—	$	—

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted


	March 31,
(Dollars in millions, except per share amounts; shares in millions	2023		2022
Net earnings attributable to common shareholders	$	12	$	36
Basic weighted average number of shares outstanding	260		210
Impact of dilutive share-based awards	2		—
Diluted weighted average number of shares outstanding	262		210
Earnings per share attributable to common shareholders - basic	$	0.05	$	0.17
Earnings per share attributable to common shareholders - diluted	$	0.05	$	0.17

Commitment and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

The following is a summary of changes in the product warranty balances during the period ended March 31, 2023:


(Dollars in millions)
Balance at December 31, 2022	$	18
Additional provision	8
Reversal and utilization	(3)
Balance at Balance at March 31, 2023	23

Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Total Revenues and Intersegment Revenues by Segment

Total revenues and intersegment revenues by segment for the periods ended March 31, 2023 and, March 31, 2022 consists of the following:


	Three Months Ended March 31,
(Dollars in millions)	2023		2022
ASC	$	391	$	396
IMS	189		218
Corporate & Eliminations	(11)		(2)
Total revenue	$	569	$	612


(Dollars in millions)	2023		2022
ASC	$	11	$	2
IMS	—		—
Total intersegment revenue	$	11	$	2

Schedule of Depreciation, Assets by Segment and EBITDA Reconciliation to Net Earnings

Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following:


(Dollars in millions)	March 31, 2023		March 31, 2022
Adjusted EBITDA
ASC	$	37	$	32
IMS	12		41
Corporate & Eliminations	—		—
Total Adjusted EBITDA	49		73
Amortization of intangibles	(6)		(2)
Depreciation	(16)		(13)

Interest expense	(8)		(8)
Deal related transaction costs	(2)		(2)

Other one-time non-operational events	(1)		—



Income tax (provision) benefit	(4)		(12)
Net earnings	$	12	$	36

Summary of Significant Accounting Policies - Concentration Risk (Details)	3 Months Ended
	Mar. 31, 2023 reporting_unit	Mar. 31, 2023	Mar. 31, 2023 segment	Mar. 31, 2022
Concentration Risk [Line Items]
Number of reportable segments	2		2
U.S. Department Of Defense \| Revenue from Contract with Customer Benchmark \| Government Contracts Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage		80.00%		85.00%
International And Commercial Customers \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage		20.00%		15.00%

Business Acquisitions and Dispositions - Narrative (Details) $ in Millions	Nov. 28, 2022 USD ($)	Aug. 01, 2022 USD ($)	Jul. 08, 2022 USD ($)	Mar. 21, 2022 USD ($)
Advanced Acoustic Concepts
Business Acquisition [Line Items]
Proceeds from sale of equity method investments			$ 56
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Global Enterprise Solutions
Business Acquisition [Line Items]
Sale of business, consideration to be received				$ 450
Proceeds from divestiture of businesses		$ 427
RADA
Business Acquisition [Line Items]
Share exchange ratio	1
Preliminary aggregate purchase consideration	$ 511
Replacement share-based payment awards pre-combination vesting expense	20
Intangible Assets	131
Goodwill, acquired in business combination	284
RADA \| Technology Related Assets
Business Acquisition [Line Items]
Intangible Assets	90
RADA \| Acquired Intangible Assets
Business Acquisition [Line Items]
Intangible Assets	$ 41

Revenue from Contracts with Customers - Estimate at Completion Adjustments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Change in Accounting Estimate [Line Items]
Total revenues	$ 569	$ 612
Contracts Accounted for under Percentage of Completion
Change in Accounting Estimate [Line Items]
Total revenues	$ (9)	$ (1)
Total % of Revenue	2.00%	0.00%

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 968	$ 872
Contract liabilities	247	233
Net contract assets	$ 721	$ 639

Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract with customer, liability, revenue recognized	$ 84	$ 74

Revenue from Contracts with Customers - Remaining Performance Obligations, Backlog Schedule (Details) $ in Millions	Mar. 31, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Funded	$ 2,947
Unfunded	1,325
Total Backlog	$ 4,272

Revenue from Contracts with Customers - Remaining Performance Obligations, Narrative (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01	Mar. 31, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	39.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	9 months

Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 569	$ 612
Intersegment Sales
Disaggregation of Revenue [Line Items]
Total revenues	(11)	(2)
ASC \| Prime contractor
Disaggregation of Revenue [Line Items]
Total revenues	162	232
ASC \| Subcontractor
Disaggregation of Revenue [Line Items]
Total revenues	218	162
ASC \| Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total revenues	324	342
ASC \| Flexibly Priced
Disaggregation of Revenue [Line Items]
Total revenues	56	52
ASC \| Intersegment Sales
Disaggregation of Revenue [Line Items]
Total revenues	11	2
ASC \| Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	391	396
IMS \| Prime contractor
Disaggregation of Revenue [Line Items]
Total revenues	46	33
IMS \| Subcontractor
Disaggregation of Revenue [Line Items]
Total revenues	143	185
IMS \| Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total revenues	155	193
IMS \| Flexibly Priced
Disaggregation of Revenue [Line Items]
Total revenues	34	25
IMS \| Intersegment Sales
Disaggregation of Revenue [Line Items]
Total revenues	0	0
IMS \| Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	189	218
United States \| ASC
Disaggregation of Revenue [Line Items]
Total revenues	330	372
United States \| IMS
Disaggregation of Revenue [Line Items]
Total revenues	186	212
International \| ASC
Disaggregation of Revenue [Line Items]
Total revenues	50	22
International \| IMS
Disaggregation of Revenue [Line Items]
Total revenues	$ 3	$ 6

Accounts Receivable - Summary (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Accounts receivable	$ 159	$ 168
Less allowance for credit losses	(1)	(2)
Accounts receivable, net	$ 158	$ 166

Accounts Receivable - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Collection of sold receivables	$ 15	$ 10

Sale of Receivables - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($)
Transfers and Servicing [Abstract]
Sale of receivable, aggregate capacity	$ 325

Sale of Receivables - Schedule of Sale of Receivables (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Transfer Of Financial Assets Accounted For As Sales [Roll Forward]
Beginning balance	$ 243	$ 215
Sales of receivables	30	44
Cash returned to purchaser	192	164
Outstanding balance sold to purchasers	81	95
Cash collected, not remitted to purchaser	15	9
Remaining sold receivables	(66)	(86)
Increase (decrease) to cash flows from operating activities, attributable to transfer of financial assets accounted for as sales	$ (162)	$ (120)

Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 80	$ 83
Work in progress	272	224
Finished goods	12	12
Total	$ 364	$ 319

Property, Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 854	$ 846
Less accumulated depreciation	(452)	(442)
Total property, plant and equipment, net	402	404
Land, buildings and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	333	321
Plant and machinery
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	192	190
Equipment and other
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 329	$ 335

Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 16	$ 13

Other Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Salaries, wages and accrued bonuses	$ 53	$ 63
Fringe benefits	63	76
Litigation	10	10
Restructuring costs	4	4
Provision for contract losses	51	54
Operating lease liabilities	27	25
Taxes Payable	10	31
Other	$ 46	$ 60
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Total other current liabilities	Total other current liabilities
Total other current liabilities	$ 264	$ 323
Operating lease liabilities	68	68
Taxes Payable	23	21
Other	$ 20	$ 9
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Total other noncurrent liabilities	Total other noncurrent liabilities
Total other noncurrent liabilities	$ 111	$ 98

Intangible Assets - Summary (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,096	$ 1,096
Accumulated Amortization	(929)	(924)
Net Carrying Amount	167	172
Acquired Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,087	1,087
Accumulated Amortization	(923)	(918)
Net Carrying Amount	164	169
Patents and licenses
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	9	9
Accumulated Amortization	(6)	(6)
Net Carrying Amount	$ 3	$ 3

Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 6	$ 2
Minimum \| Acquired Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	10 years
Minimum \| Patents and licenses
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	5 years
Maximum \| Acquired Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	15 years
Maximum \| Patents and licenses
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	10 years

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Deferred tax assets	$ 208	$ 208
Less valuation allowance	17	17
Deferred tax assets	191	191
Deferred tax liabilities	125	125
Net deferred tax asset	$ 66	$ 66

Income Taxes - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Tax deferred asset	$ 8	$ 8

Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Finance lease and other	$ 160	$ 161
Short-term borrowings	15	10
Total debt principal	612	396
Less unamortized debt issuance costs and discounts	(2)	(2)
Total debt, net	610	394
Less short-term borrowings and current portion of long-term debt	(250)	(29)
Total long-term debt	360	365
Term loan A \| Notes Payable, Other Payables
Debt Instrument [Line Items]
Long-term debt, gross	222	225
Outstanding revolver \| Notes Payable, Other Payables
Debt Instrument [Line Items]
Long-term debt, gross	$ 215	$ 0

Debt - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended
Debt - Narrative (Details) - USD ($)	Nov. 30, 2022	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Collection of sold receivables		$ 15,000,000	$ 10,000,000
2022 Credit Agreement \| Notes Payable, Other Payables
Debt Instrument [Line Items]
Credit limit	$ 500,000,000
Term loan A \| Notes Payable, Other Payables
Debt Instrument [Line Items]
Principal amount	$ 225,000,000
Long-Term Debt		222,000,000
Fair value of long-term debt		222,000,000
Long-term debt, gross		222,000,000	225,000,000
Term loan A \| Notes Payable, Other Payables \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Minimum
Debt Instrument [Line Items]
Variable rate percentage	1.48%
Term loan A \| Notes Payable, Other Payables \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Maximum
Debt Instrument [Line Items]
Variable rate percentage	2.10%
Outstanding revolver \| Notes Payable, Other Payables
Debt Instrument [Line Items]
Credit limit		275,000,000	275,000,000
Long-term debt, gross		$ 215,000,000	0
Debt, weighted average interest rate		5.06%
Outstanding revolver \| Notes Payable, Other Payables \| Minimum
Debt Instrument [Line Items]
Commitment fee percentage		0.20%
Outstanding revolver \| Notes Payable, Other Payables \| Maximum
Debt Instrument [Line Items]
Commitment fee percentage		0.35%
Outstanding revolver \| Notes Payable, Other Payables \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Minimum
Debt Instrument [Line Items]
Variable rate percentage		1.48%
Outstanding revolver \| Notes Payable, Other Payables \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Maximum
Debt Instrument [Line Items]
Variable rate percentage		2.10%
Financial Institution Credit Facilities \| Line of Credit
Debt Instrument [Line Items]
Credit limit		$ 65,000,000	65,000,000
Letters of credit outstanding		41,000,000	36,000,000
Financial Institution Credit Facilities \| Line of Credit \| Outstanding revolver
Debt Instrument [Line Items]
Credit limit		$ 15,000,000
Line of credit outstanding			$ 0
Financial Institution Credit Facilities \| Line of Credit \| Outstanding revolver \| LIBOR
Debt Instrument [Line Items]
Variable rate percentage		0.50%

Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 0
Interest cost	2	2
Less Expected return on plan assets	(1)	(2)
Amortization of net actuarial loss (gain)	0	0
Amortization of prior service cost	0	0
Settlement expense (income)	0	1
Net periodic benefit cost	1	1
Other Postretirement Benefits Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	0	0
Less Expected return on plan assets	0	0
Amortization of net actuarial loss (gain)	0	0
Amortization of prior service cost	0	0
Settlement expense (income)	0	0
Net periodic benefit cost	0	0
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	0	0
Less Expected return on plan assets	0	0
Amortization of net actuarial loss (gain)	0	0
Amortization of prior service cost	0	0
Settlement expense (income)	0	0
Net periodic benefit cost	$ 0	$ 0

Earnings Per Share - Narrative (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	1.4	0.0

Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net earnings attributable to common shareholders, basic	$ 12	$ 36
Net earnings attributable to common shareholders, diluted	$ 12	$ 36
Basic weighted average number of shares outstanding (in shares)	260	210
Impact of dilutive share-based awards (in shares)	2	0
Diluted weighted average number of shares outstanding (in shares)	262	210
Earnings per share attributable to common shareholders - basic (in dollars per share)	$ 0.05	$ 0.17
Earnings per share attributable to common shareholders - diluted (in dollars per share)	$ 0.05	$ 0.17

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
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-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

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Commitment and Contingencies (Details) $ in Millions	3 Months Ended
Commitment and Contingencies (Details) $ in Millions	Mar. 31, 2023 USD ($)
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at December 31, 2022	$ 18
Additional provision	8
Reversal and utilization	(3)
Balance at March 31, 2023	$ 23
Minimum
Product Warranty Liability [Line Items]
Product warranty term	1 year
Maximum
Product Warranty Liability [Line Items]
Product warranty term	3 years

Related Party Transactions (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Contract assets	$ 968		$ 872
Affiliated Entity \| Hoverfly
Related Party Transaction [Line Items]
Revenue from related parties	6	$ 1
Affiliated Entity \| Leonardo S.p.A.
Related Party Transaction [Line Items]
Related parties amount in cost of sales	0	$ 0
Receivables	10		14
Payables	1		1
Contract assets	$ 4		$ 5

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

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Segment Information - Narrative (Details) - 3 months ended Mar. 31, 2023	reporting_unit	segment
Segment Reporting [Abstract]
Number of reportable segments	2	2

Segment Information - Revenues and Intersegment Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Revenue	$ 569	$ 612
Operating Segments \| ASC
Segment Reporting Information [Line Items]
Revenue	391	396
Operating Segments \| IMS
Segment Reporting Information [Line Items]
Revenue	189	218
Corporate & Eliminations
Segment Reporting Information [Line Items]
Revenue	(11)	(2)
Corporate & Eliminations \| ASC
Segment Reporting Information [Line Items]
Revenue	11	2
Corporate & Eliminations \| IMS
Segment Reporting Information [Line Items]
Revenue	$ 0	$ 0

- Definition

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Segment Information - EBITDA Reconciliation to Net Earnings (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Adjusted EBITDA
Adjusted EBITDA	$ 49	$ 73
Amortization of intangibles	(6)	(2)
Depreciation	(16)	(13)
Interest expense	(8)	(8)
Deal related transaction costs	(2)	(2)
Other one-time non-operational events	(1)	0
Income tax (provision) benefit	(4)	(12)
Net earnings	12	36
Operating Segments \| ASC
Adjusted EBITDA
Adjusted EBITDA	37	32
Operating Segments \| IMS
Adjusted EBITDA
Adjusted EBITDA	12	41
Corporate & Eliminations
Adjusted EBITDA
Adjusted EBITDA	$ 0	$ 0