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Segment Information
 6 Months Ended 12 Months Ended
Jun. 30, 2022
Dec. 31, 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. 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 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 six-month periods ended June 30, 2022 and June 30, 2021 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 June 30, 2022 and June 30, 2021 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 six-month periods ended June 30, 2022 and, June 30, 2021 consists of the following:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)2022202120222021
ASC$444 $489 $840 $971 
IMS187 174 405 375 
Corporate & Eliminations(4)(4)(6)(7)
Total revenue
$627 $658 $1,239 $1,339 
(Dollars in millions)2022202120222021
ASC$3 $4 $5 $7 
IMS1 — 1 — 
Total intersegment revenue
$4 $4 $6 $7 
Depreciation by segment for the three- and six-month periods ended June 30, 2022 and June 30, 2021 consists of the following:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)2022202120222021
ASC$9 $8 $18 $16 
IMS5 4 9 8 
Total depreciation
$14 $12 $27 $24 
Total assets by segment as of June 30, 2022 and December 31, 2021 consist of the following:
(Dollars in millions)June 30, 2022December 31, 2021
ASC$1,619 $1,545 
IMS1,124 1,145 
Corporate & Eliminations126 379 
Held for Sale174 — 
Total assets
$3,043 $3,069 
Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)2022202120222021
Adjusted EBITDA
ASC$57 $61 $89 $115 
IMS10 7 51 25 
Corporate & Eliminations— 1 — — 
Total Adjusted EBITDA
67 69 140 140 
Amortization of intangibles(2)(2)(4)(4)
Depreciation(14)(12)(27)(24)
Restructuring costs— — — — 
Interest expense(10)(9)(18)(18)
Deal related transaction costs(8)— (10)(4)
Acquisition and divestiture related expenses— — — — 
Foreign exchange— (1)— (1)
COVID-19 response costs— (2)— (5)
Non-service pension expense(1)— (1)— 
Other one-time non-operational events— — — — 
Income tax (provision) benefit(7)(11)(19)(23)
Net earnings
$25 $32 $61 $61 
 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 ASC 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, deal related transaction costs , 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 years ended December 31, 2021, 2020 and 2019, 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 December 31, 2021 and 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 years ended December 31, 2021, 2020 and 2019 consists of the following:
(Dollars in millions)202120202019
ASC$1,940 $1,958 $1,810 
IMS959 834 917 
Corporate & Eliminations(20)(14)(13)
Total revenue
$2,879 $2,778 $2,714 
(Dollars in millions)202120202019
ASC$19 $13 $12 
IMS1 1 1 
Total intersegment revenue
$20 $14 $13 
Depreciation by segment as of December 31, 2021, 2020 and 2019 consists of the following:
(Dollars in millions)202120202019
ASC$33 $30 $29 
IMS16 1413 
Total depreciation
$49 $44 $42 
Total assets by segment as of December 31, 2021 and 2020 consist of the following:
(Dollars in millions)2021
2020(1)
ASC$1,545 $1,563 
IMS1,145 1,018 
Corporate & Eliminations379 375 
Total assets
$3,069 $2,956 
__________________
(1)The 2020 amounts have been adjusted to reflect the correction of the allocation of certain assets within each segment.
Reconciliation of reportable segment Adjusted EBITDA to Net Earnings (loss) consists of the following:
(Dollars in millions)202120202019
Adjusted EBITDA
ASC$220 $213 $169 
IMS90 55 63 
Corporate & Eliminations— — 2 
Total Adjusted EBITDA
$310 $268 $234 
Amortization of intangibles(9)(9)(9)
Depreciation(49)(44)(42)
Restructuring costs(5)(12)(20)
Interest expense(35)(64)(65)
Deal related transaction costs (5)(9)— 
Acquisition and divestiture related expenses— — — 
Foreign exchange(1)(1)— 
COVID-19 response costs(6)(12)— 
Non-service pension expense— (5)(3)
Other one-time non-operational events— — — 
Income tax provision(46)(27)(20)
Net earnings
$154 $85 $75