XML 33 R22.htm IDEA: XBRL DOCUMENT v3.21.2
Segment Information
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
Operating 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. The Company’s operating and reportable segments consist of AST, NC&C and IMS. 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 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, 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 three- and nine-month periods ended September 30, 2021 and September 30, 2020 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 September 30, 2021 and September 30, 2020 has been included in Note 1: Summary of Significant Accounting Policies. Transactions between segments generally are negotiated and accounted for under terms and conditions that are similar to other government and commercial contracts; however, these intercompany transactions are eliminated in consolidation.
Total revenues and intersegment revenues by segment for the three- and nine-month periods ended September 30, 2021 and, September 30, 2020 consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2021202020212020
AST$279 $263 $743 $668 
NC&C239 267 747 749 
IMS209 194 584 553 
Corporate & Eliminations(7)(4)(15)(18)
Total revenue$720 $719 $2,059 $1,952 
(Dollars in millions)2021202020212020
AST$2 $2 $5 $10 
NC&C5 2 10 7 
IMS— — — 1 
Total intersegment revenue$7 $4 $15 $18 
Depreciation by segment for the three- and nine-month periods ended September 30, 2021 and September 30, 2020 consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2021202020212020
AST$5 $5 $15 $14 
NC&C4 3 10 9 
IMS4 3 12 10 
Total depreciation$13 $11 $37 $33 
Total assets by segment as of September 30, 2021 and December 31, 2020 consist of the following:
(Dollars in millions)September 30, 2021December 31, 2020
AST$944 $862 
NC&C651 691 
IMS1,001 963 
Corporate & Eliminations290 440 
Total assets$2,886 $2,956 
Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2021202020212020
Adjusted EBITDA
AST$34 $38 $99 $80 
NC&C22 19 72 60 
IMS14 3 39 15 
Corporate & Eliminations— 2 — 2 
Total Adjusted EBITDA70 61 210 157 
Amortization of intangibles(3)(3)(7)(7)
Depreciation(13)(11)(37)(33)
Restructuring costs(1)(2)(1)(4)
Interest expense(9)(17)(27)(49)
Transaction costs related to an anticipated offering of securities— — (4)— 
Acquisition and divestiture related expenses— — — — 
Foreign exchange— 1 (1)1 
COVID-19 response costs(1)(9)(6)(11)
Non-service pension expense— — (2)
Other one-time non-operational events— (1)(3)
Income tax (provision) benefit(8)(4)(31)(11)
Net earnings (loss)$35 $15 $96 $38