Northrop Grumman 2011 Annual Report Download - page 83

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NORTHROP GRUMMAN CORPORATION
Assets – Substantially all of the company’s operating assets are located or maintained in the U.S.
Results of Operations By Segment
The following table presents sales and service revenues and operating income by segment:
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
Unallocated Corporate Expenses – Unallocated corporate expenses generally include the portion of corporate
expenses not considered allowable or allocable under applicable U.S. Government Cost Accounting Standards
(CAS) regulations and the Federal Acquisition Regulation (FAR), and therefore not allocated to the segments.
Such costs consist of management and administration, legal, environmental, certain compensation costs, retiree
benefits, and other expenses.
Net Pension Adjustment – The net pension adjustment reflects the difference between pension expense determined
in accordance with GAAP and pension expense allocated to the operating segments determined in accordance
with CAS. For the years ended December 31, 2011 and 2010, the net pension adjustment resulted in income of
$400 million and $10 million, respectively. The increase in the net pension adjustment for the year ended
December 31, 2011, is primarily due to decreased GAAP pension expense from higher investment income and
greater plan investment assets.
Royalty Income Adjustment – Royalty income is included in segment operating income and reclassified to other
income for financial reporting purposes.
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