Northrop Grumman 2011 Annual Report Download - page 52

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NORTHROP GRUMMAN CORPORATION
SEGMENT OPERATING RESULTS
Basis of Presentation
We are aligned into four reportable segments: Aerospace Systems, Electronic Systems, Information Systems and
Technical Services. See Note 7 in Part II, Item 8 for more information about our segments.
In January 2010, we transferred our internal information technology services unit from the Information Systems
segment to our corporate shared services group. The intersegment sales and operating income for this unit that
were previously recognized in the Information Systems segment are immaterial and have been eliminated for the
years presented.
Year ended December 31
$ in millions 2011 2010 2009
Sales and Service Revenues
Aerospace Systems $10,458 $10,910 $10,419
Electronic Systems 7,372 7,613 7,671
Information Systems 7,921 8,395 8,536
Technical Services 2,699 3,230 2,776
Intersegment eliminations (2,038) (2,005) (1,752)
Total sales and service revenues $26,412 $28,143 $27,650
Year ended December 31
$ in millions 2011 2010 2009
Operating Income
Aerospace Systems $1,261 $1,256 $1,071
Electronic Systems 1,070 1,023 969
Information Systems 766 756 624
Technical Services 216 206 161
Intersegment eliminations (258) (231) (190)
Total Segment Operating Income 3,055 3,010 2,635
Non-segment factors affecting operating income
Unallocated corporate expenses (166) (182) (100)
Net pension adjustment 400 10 (237)
Royalty income adjustment (13) (11) (24)
Total operating income $3,276 $2,827 $2,274
KEY SEGMENT FINANCIAL MEASURES
Sales and Service Revenues
Period-to-period sales reflect performance under new and ongoing contracts. Changes in sales and service
revenues are typically expressed in terms of volume. Unless otherwise described, volume generally refers to
increases (or decreases) in reported revenues incurred due to varying production activity levels, delivery rates, or
service levels on individual contracts. Volume changes will typically carry a corresponding operating income
change based on the margin rate for a particular contract.
Segment Operating Income
Segment operating income reflects the aggregate performance results of contracts within a business area or
segment. Excluded from this measure are certain costs not directly associated with contract performance, including
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