Northrop Grumman 2010 Annual Report Download - page 83

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Accumulated Other Comprehensive Loss – The components of accumulated other comprehensive loss are as follows:
$ in millions 2010 2009
December 31
Cumulative translation adjustment $ 41
Net unrealized gain on marketable securities and cash flow hedges, net of tax expense of $3
as of December 31, 2010, and 2009 $5 4
Unamortized benefit plan costs, net of tax benefit of $1,801 as of December 31, 2010, and
$1,984 as of December 31, 2009 (2,762) (3,059)
Total accumulated other comprehensive loss $(2,757) $(3,014)
2. ACCOUNTING STANDARDS UPDATES
Accounting Standards Updates Not Yet Effective
Accounting Standards Updates not effective until after December 31, 2010, are not expected to have a significant
effect on the company’s consolidated financial position or results of operations.
3. DIVIDENDS ON COMMON STOCK AND CONVERSION OF PREFERRED STOCK
Dividends on Common Stock – In May 2010, the company’s board of directors approved an increase to the
quarterly common stock dividend, from $0.43 per share to $0.47 per share, for stockholders of record as of
June 1, 2010.
In May 2009, the company’s board of directors approved an increase to the quarterly common stock dividend,
from $0.40 per share to $0.43 per share, for stockholders of record as of June 1, 2009.
In April 2008, the company’s board of directors approved an increase to the quarterly common stock dividend,
from $0.37 per share to $0.40 per share, for stockholders of record as of June 2, 2008.
Conversion of Preferred Stock – On February 20, 2008, the company’s board of directors approved the redemption
of the 3.5 million shares of mandatorily redeemable convertible preferred stock on April 4, 2008. Prior to the
redemption date, substantially all of the preferred shares were converted into common stock at the election of
stockholders. All remaining unconverted preferred shares were redeemed by the company on the redemption
date. As a result of the conversion and redemption, the company issued approximately 6.4 million shares of
common stock.
4. EARNINGS (LOSS) PER SHARE
Basic Earnings (Loss) Per Share – Basic earnings (loss) per share from continuing operations are calculated by
dividing earnings (loss) from continuing operations available to common stockholders by the weighted-average
number of shares of common stock outstanding during each period.
Diluted Earnings (Loss) Per Share – Diluted earnings per share include the dilutive effect of stock options and other
stock awards granted to employees under stock-based compensation plans. The dilutive effect of these securities
totaled 4.2 million and 4.1 million shares for the year ended December 31, 2010, and 2009. For the year ended
December 31, 2008, the potential dilutive effect of 7.1 million shares from these securities and the mandatorily
redeemable convertible preferred stock (see Note 3) were excluded from the computation of weighted-average
dilutive shares outstanding as the shares would have had an anti-dilutive effect on the loss per share computation.
The weighted-average diluted shares outstanding for the years ended December 31, 2010, 2009, and 2008,
exclude anti-dilutive stock options to purchase approximately 2.8 million shares, 8.1 million shares, and
2.1 million shares, respectively, because such options have exercise prices in excess of the average market price of
the company’s common stock during the year.
-73-
NORTHROP GRUMMAN CORPORATION