due to federal acquisition regulation ( far ) rules that govern our u.s. government business and related cost accounting standards ( cas ) , most types of costs are allocable to u.s. government contracts . as such , we do not focus on individual cost groupings ( such as manufacturing , engineering and design labor costs , subcontractor costs , material costs , overhead costs and general and administrative ( g & a ) costs ) , as much as we do on total contract cost , which is the key driver of our sales and operating income . in evaluating our operating performance , we look primarily at changes in sales and operating income . where applicable , significant fluctuations in operating performance attributable to individual contracts or programs , or changes in a specific cost element across multiple contracts , are described in our analysis . based on this approach - 23 - northrop grumman corporation and the nature of our operations , the discussion of results of operations below first focuses on our three segments before distinguishing between products and services . changes in sales are generally described in terms of volume , deliveries or other indicators of sales activity . changes in margins are generally described in terms of performance and contract mix . for purposes of this discussion , volume generally refers to increases or decreases in sales or cost from production/service activity levels or delivery rates . performance generally refers to non-volume related changes in profitability . contract mix refers to changes in the ratio of contract type , lifecycle , customer or other non-performance impacts on contract profitability . consolidated operating results selected financial highlights are presented in the table below : replace_table_token_8_th sales 2016 – sales increased $ 982 million , or 4 percent , as compared with 2015 , primarily due to higher sales at aerospace systems and mission systems . 2015 – sales decreased $ 453 million , or 2 percent , as compared with 2014 , primarily due to lower sales on u.s. government contracts across the company , partially offset by an increase in international sales at aerospace systems . see “ revenue recognition ” in note 1 to the consolidated financial statements for further information on sales by customer category . see “ segment operating results ” for further information by segment and “ product and service analysis ” for product and service detail . operating costs and expenses and operating margin rate operating costs and expenses primarily include labor , material , subcontractor and overhead costs , and are generally allocated to contracts as incurred . operating margin rate is defined as operating income as a percentage of sales . in accordance with industry practice and the regulations that govern cost accounting requirements for government contracts , most general management and corporate expenses incurred at the segment and corporate locations are considered allowable and allocable costs . allowable and allocable g & a costs , including independent research and development ( ir & d ) and bid and proposal costs , are allocated on a systematic basis to contracts in progress . operating costs and expenses comprise the following : replace_table_token_9_th 2016 – operating costs and expenses as a percentage of sales increased slightly in 2016 as compared with 2015 , which reduced our operating margin rate to 13.0 percent from 13.1 percent in the prior year period . the decrease in - 24 - northrop grumman corporation operating margin rate was driven by lower segment margin rates , as described in “ segment operating results , ” and a $ 32 million decrease in our net fas/cas pension adjustment , partially offset by a $ 137 million reduction in unallocated corporate expenses , as described in note 3 to the consolidated financial statements . 2015 – operating costs and expenses as a percentage of sales increased in 2015 as compared with 2014 , which reduced our operating margin rate to 13.1 percent from 13.3 percent in the prior year period . the decrease in operating margin rate was driven by $ 179 million of lower segment operating income , as described in “ segment operating results , ” and $ 21 million in higher unallocated corporate expenses , partially offset by a $ 79 million increase in our net fas/cas pension adjustment , as described in note 3 to the consolidated financial statements . 2016 – g & a as a percentage of sales decreased to 10.5 percent in 2016 from 10.9 percent in 2015 , principally due to higher sales volume . 2015 – g & a as a percentage of sales increased to 10.9 percent in 2015 from 10.0 percent in 2014 , principally due to an increase in ir & d as we continue to invest in future business opportunities . for further information regarding product and service sales and costs , see the “ product and service analysis ” section that follows “ segment operating results . ” operating income we define operating income as sales less operating costs and expenses , which includes g & a . 2016 – operating income increased $ 117 million , or 4 percent , as compared with 2015 , primarily due to a $ 137 million reduction in unallocated corporate expenses and higher sales volume , partially offset by a $ 32 million decrease in our net fas/cas pension adjustment and lower segment margin rates . 2015 – operating income decreased $ 120 million , or 4 percent , as compared with 2014 , primarily due to the lower sales volume described above and the absence in 2015 of a $ 75 million benefit realized in 2014 in connection with agreements reached with the u.s. government to settle certain claims relating to use of the company 's intellectual property and a terminated program . story_separator_special_tag backlog consisted of the following at december 31 , 2016 and 2015 : replace_table_token_18_th approximately $ 18.2 billion of the $ 45.3 billion total backlog at december 31 , 2016 is expected to be converted into sales in 2017. story_separator_special_tag follows : replace_table_token_21_th ( 1 ) a “ purchase obligation ” is defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms , including : fixed or minimum quantities to be purchased ; fixed , minimum , or variable price provisions ; and the approximate timing of the transaction . these amounts are primarily comprised of open purchase order commitments to suppliers and subcontractors pertaining to funded contracts . ( 2 ) other long-term liabilities , including their current portions , primarily consist of total accrued environmental reserves , deferred compensation and other miscellaneous liabilities , of which $ 119 million is related to environmental reserves recorded in other current liabilities . it excludes obligations for uncertain tax positions of $ 142 million , as the timing of such payments , if any , can not be reasonably estimated . - 32 - northrop grumman corporation the table above excludes estimated minimum funding requirements for retirement and other post-retirement benefit plans , as set forth by the employee retirement income security act , as amended ( erisa ) . for further information about future minimum contributions for these plans , see note 12 to the consolidated financial statements . further details regarding long-term debt and operating leases can be found in notes 9 and 11 , respectively , to the consolidated financial statements . critical accounting policies , estimates , and judgments our consolidated financial statements are based on u.s. gaap , which require us to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements . we employ judgment in making our estimates in consideration of historical experience , currently available information and various other assumptions that we believe to be reasonable under the circumstances . actual results could differ from our estimates and assumptions , and any such differences could be material to our consolidated financial statements . we believe the following accounting policies are critical to the understanding of our consolidated financial statements and require the use of significant management judgment in their application . for a summary of our significant accounting policies , see note 1 to the consolidated financial statements . revenue recognition due to the long-term nature of our contracts , we generally recognize revenue using the percentage-of-completion method of accounting as work on our contracts progresses , which requires us to make reasonably dependable estimates regarding the design , manufacture and delivery of our products and services . in accounting for these contracts , we utilize either the cost-to-cost or the units-of-delivery method of percentage-of-completion accounting , with cost-to-cost being the predominant method . contract sales may include estimated amounts not contractually agreed to or yet funded by the customer , including cost or performance incentives ( such as award and incentive fees ) , un-priced change orders , contract claims and requests for equitable adjustment ( reas ) . further , as contracts are performed , change orders can be a regular occurrence and may be un-priced until negotiated with the customer . un-priced change orders , contract claims ( including change orders unapproved as to both scope and price ) and reas are included in estimated contract sales when management believes it is probable the un-priced change order , claim and or rea will result in additional contract revenue and the amount can be reliably estimated based on the facts and circumstances known to us at the time . our cost estimation process is based on the professional knowledge of our engineering , program management and financial professionals , and draws on their significant experience and judgment . we prepare eacs for our contracts and calculate an estimated contract operating margin based on estimated contract sales and cost . since contract costs are typically incurred over a period of several years , estimation of these costs requires the use of judgment . factors considered in estimating the cost of the work to be completed include our historical performance , the availability , productivity and cost of labor , the nature and complexity of work to be performed , the effect of change orders , availability and cost of materials , components and subcontracts , the effect of any delays in performance and the level of indirect cost allocations . we generally review and reassess our sales , cost and profit estimates for each significant contract at least annually or more frequently as determined by the occurrence of events , changes in circumstances and evaluations of contract performance to reflect the latest reliable information available . changes in estimates of contract sales and cost are frequent . the company performs on a broad portfolio of long-term contracts , including the development of complex and customized military platforms and systems , as well as advanced electronic equipment and software , that often include technology at the forefront of science . changes in estimates occur for a variety of reasons , including changes in contract scope , the resolution of risk at lower or higher cost than anticipated , unanticipated risks affecting contract costs , performance issues with our subcontractors or suppliers , changes in indirect cost allocations , such as overhead and g & a costs , and changes in estimated award and incentive fees . identified risks typically include technical , schedule and or performance risk based on our evaluation of the contract effort . similarly , the changes in estimates may include identified opportunities for operating margin improvement . for the impacts of changes in estimates on our consolidated statement of earnings and comprehensive income ( loss ) , see “ consolidated operating results ” and note 1 to the consolidated

liquidity and capital resources we endeavor to ensure the most efficient conversion of operating income into cash for deployment in our business and to maximize shareholder value through cash deployment activities . in addition to our cash position , we use various financial measures to assist in capital deployment decision-making , including cash provided by operating activities and free cash flow , a non-gaap measure described in more detail below . - 30 - northrop grumman corporation as of december 31 , 2016 , we had cash and cash equivalents of $ 2.5 billion , of which $ 182 million was held outside of the u.s. by foreign subsidiaries . cash and cash equivalents and cash generated from operating activities , supplemented by borrowings under credit facilities and or in the capital markets , if needed , are expected to be sufficient to fund our operations for at least the next 12 months . capital expenditure commitments were $ 657 million at december 31 , 2016 , and are expected to be paid with cash on hand . operating cash flow the table below summarizes the key components of cash flow provided by operating activities : replace_table_token_19_th ( 1 ) includes depreciation and amortization , stock based compensation expense ( including related excess tax benefits in 2015 and 2014 ) and deferred income taxes . 2016 – net cash provided by operating activities for 2016 increased by $ 651 million , or 30 percent , as compared with 2015 , principally due to a $ 500 million voluntary pre-tax pension contribution ( $ 325 million after-tax ) made in the first quarter of 2015 , changes in trade working capital and an increase in net earnings during 2016 , partially offset by an increase in net income tax payments .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources we endeavor to ensure the most efficient conversion of operating income into cash for deployment in our business and to maximize shareholder value through cash deployment activities . in addition to our cash position , we use various financial measures to assist in capital deployment decision-making , including cash provided by operating activities and free cash flow , a non-gaap measure described in more detail below . - 30 - northrop grumman corporation as of december 31 , 2016 , we had cash and cash equivalents of $ 2.5 billion , of which $ 182 million was held outside of the u.s. by foreign subsidiaries . cash and cash equivalents and cash generated from operating activities , supplemented by borrowings under credit facilities and or in the capital markets , if needed , are expected to be sufficient to fund our operations for at least the next 12 months . capital expenditure commitments were $ 657 million at december 31 , 2016 , and are expected to be paid with cash on hand . operating cash flow the table below summarizes the key components of cash flow provided by operating activities : replace_table_token_19_th ( 1 ) includes depreciation and amortization , stock based compensation expense ( including related excess tax benefits in 2015 and 2014 ) and deferred income taxes . 2016 – net cash provided by operating activities for 2016 increased by $ 651 million , or 30 percent , as compared with 2015 , principally due to a $ 500 million voluntary pre-tax pension contribution ( $ 325 million after-tax ) made in the first quarter of 2015 , changes in trade working capital and an increase in net earnings during 2016 , partially offset by an increase in net income tax payments .
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 Suspicious Activity Report : due to federal acquisition regulation ( far ) rules that govern our u.s. government business and related cost accounting standards ( cas ) , most types of costs are allocable to u.s. government contracts . as such , we do not focus on individual cost groupings ( such as manufacturing , engineering and design labor costs , subcontractor costs , material costs , overhead costs and general and administrative ( g & a ) costs ) , as much as we do on total contract cost , which is the key driver of our sales and operating income . in evaluating our operating performance , we look primarily at changes in sales and operating income . where applicable , significant fluctuations in operating performance attributable to individual contracts or programs , or changes in a specific cost element across multiple contracts , are described in our analysis . based on this approach - 23 - northrop grumman corporation and the nature of our operations , the discussion of results of operations below first focuses on our three segments before distinguishing between products and services . changes in sales are generally described in terms of volume , deliveries or other indicators of sales activity . changes in margins are generally described in terms of performance and contract mix . for purposes of this discussion , volume generally refers to increases or decreases in sales or cost from production/service activity levels or delivery rates . performance generally refers to non-volume related changes in profitability . contract mix refers to changes in the ratio of contract type , lifecycle , customer or other non-performance impacts on contract profitability . consolidated operating results selected financial highlights are presented in the table below : replace_table_token_8_th sales 2016 – sales increased $ 982 million , or 4 percent , as compared with 2015 , primarily due to higher sales at aerospace systems and mission systems . 2015 – sales decreased $ 453 million , or 2 percent , as compared with 2014 , primarily due to lower sales on u.s. government contracts across the company , partially offset by an increase in international sales at aerospace systems . see “ revenue recognition ” in note 1 to the consolidated financial statements for further information on sales by customer category . see “ segment operating results ” for further information by segment and “ product and service analysis ” for product and service detail . operating costs and expenses and operating margin rate operating costs and expenses primarily include labor , material , subcontractor and overhead costs , and are generally allocated to contracts as incurred . operating margin rate is defined as operating income as a percentage of sales . in accordance with industry practice and the regulations that govern cost accounting requirements for government contracts , most general management and corporate expenses incurred at the segment and corporate locations are considered allowable and allocable costs . allowable and allocable g & a costs , including independent research and development ( ir & d ) and bid and proposal costs , are allocated on a systematic basis to contracts in progress . operating costs and expenses comprise the following : replace_table_token_9_th 2016 – operating costs and expenses as a percentage of sales increased slightly in 2016 as compared with 2015 , which reduced our operating margin rate to 13.0 percent from 13.1 percent in the prior year period . the decrease in - 24 - northrop grumman corporation operating margin rate was driven by lower segment margin rates , as described in “ segment operating results , ” and a $ 32 million decrease in our net fas/cas pension adjustment , partially offset by a $ 137 million reduction in unallocated corporate expenses , as described in note 3 to the consolidated financial statements . 2015 – operating costs and expenses as a percentage of sales increased in 2015 as compared with 2014 , which reduced our operating margin rate to 13.1 percent from 13.3 percent in the prior year period . the decrease in operating margin rate was driven by $ 179 million of lower segment operating income , as described in “ segment operating results , ” and $ 21 million in higher unallocated corporate expenses , partially offset by a $ 79 million increase in our net fas/cas pension adjustment , as described in note 3 to the consolidated financial statements . 2016 – g & a as a percentage of sales decreased to 10.5 percent in 2016 from 10.9 percent in 2015 , principally due to higher sales volume . 2015 – g & a as a percentage of sales increased to 10.9 percent in 2015 from 10.0 percent in 2014 , principally due to an increase in ir & d as we continue to invest in future business opportunities . for further information regarding product and service sales and costs , see the “ product and service analysis ” section that follows “ segment operating results . ” operating income we define operating income as sales less operating costs and expenses , which includes g & a . 2016 – operating income increased $ 117 million , or 4 percent , as compared with 2015 , primarily due to a $ 137 million reduction in unallocated corporate expenses and higher sales volume , partially offset by a $ 32 million decrease in our net fas/cas pension adjustment and lower segment margin rates . 2015 – operating income decreased $ 120 million , or 4 percent , as compared with 2014 , primarily due to the lower sales volume described above and the absence in 2015 of a $ 75 million benefit realized in 2014 in connection with agreements reached with the u.s. government to settle certain claims relating to use of the company 's intellectual property and a terminated program . story_separator_special_tag backlog consisted of the following at december 31 , 2016 and 2015 : replace_table_token_18_th approximately $ 18.2 billion of the $ 45.3 billion total backlog at december 31 , 2016 is expected to be converted into sales in 2017. story_separator_special_tag follows : replace_table_token_21_th ( 1 ) a “ purchase obligation ” is defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms , including : fixed or minimum quantities to be purchased ; fixed , minimum , or variable price provisions ; and the approximate timing of the transaction . these amounts are primarily comprised of open purchase order commitments to suppliers and subcontractors pertaining to funded contracts . ( 2 ) other long-term liabilities , including their current portions , primarily consist of total accrued environmental reserves , deferred compensation and other miscellaneous liabilities , of which $ 119 million is related to environmental reserves recorded in other current liabilities . it excludes obligations for uncertain tax positions of $ 142 million , as the timing of such payments , if any , can not be reasonably estimated . - 32 - northrop grumman corporation the table above excludes estimated minimum funding requirements for retirement and other post-retirement benefit plans , as set forth by the employee retirement income security act , as amended ( erisa ) . for further information about future minimum contributions for these plans , see note 12 to the consolidated financial statements . further details regarding long-term debt and operating leases can be found in notes 9 and 11 , respectively , to the consolidated financial statements . critical accounting policies , estimates , and judgments our consolidated financial statements are based on u.s. gaap , which require us to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements . we employ judgment in making our estimates in consideration of historical experience , currently available information and various other assumptions that we believe to be reasonable under the circumstances . actual results could differ from our estimates and assumptions , and any such differences could be material to our consolidated financial statements . we believe the following accounting policies are critical to the understanding of our consolidated financial statements and require the use of significant management judgment in their application . for a summary of our significant accounting policies , see note 1 to the consolidated financial statements . revenue recognition due to the long-term nature of our contracts , we generally recognize revenue using the percentage-of-completion method of accounting as work on our contracts progresses , which requires us to make reasonably dependable estimates regarding the design , manufacture and delivery of our products and services . in accounting for these contracts , we utilize either the cost-to-cost or the units-of-delivery method of percentage-of-completion accounting , with cost-to-cost being the predominant method . contract sales may include estimated amounts not contractually agreed to or yet funded by the customer , including cost or performance incentives ( such as award and incentive fees ) , un-priced change orders , contract claims and requests for equitable adjustment ( reas ) . further , as contracts are performed , change orders can be a regular occurrence and may be un-priced until negotiated with the customer . un-priced change orders , contract claims ( including change orders unapproved as to both scope and price ) and reas are included in estimated contract sales when management believes it is probable the un-priced change order , claim and or rea will result in additional contract revenue and the amount can be reliably estimated based on the facts and circumstances known to us at the time . our cost estimation process is based on the professional knowledge of our engineering , program management and financial professionals , and draws on their significant experience and judgment . we prepare eacs for our contracts and calculate an estimated contract operating margin based on estimated contract sales and cost . since contract costs are typically incurred over a period of several years , estimation of these costs requires the use of judgment . factors considered in estimating the cost of the work to be completed include our historical performance , the availability , productivity and cost of labor , the nature and complexity of work to be performed , the effect of change orders , availability and cost of materials , components and subcontracts , the effect of any delays in performance and the level of indirect cost allocations . we generally review and reassess our sales , cost and profit estimates for each significant contract at least annually or more frequently as determined by the occurrence of events , changes in circumstances and evaluations of contract performance to reflect the latest reliable information available . changes in estimates of contract sales and cost are frequent . the company performs on a broad portfolio of long-term contracts , including the development of complex and customized military platforms and systems , as well as advanced electronic equipment and software , that often include technology at the forefront of science . changes in estimates occur for a variety of reasons , including changes in contract scope , the resolution of risk at lower or higher cost than anticipated , unanticipated risks affecting contract costs , performance issues with our subcontractors or suppliers , changes in indirect cost allocations , such as overhead and g & a costs , and changes in estimated award and incentive fees . identified risks typically include technical , schedule and or performance risk based on our evaluation of the contract effort . similarly , the changes in estimates may include identified opportunities for operating margin improvement . for the impacts of changes in estimates on our consolidated statement of earnings and comprehensive income ( loss ) , see “ consolidated operating results ” and note 1 to the consolidated

