Northrop Grumman 2011 Annual Report Download - page 90

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NORTHROP GRUMMAN CORPORATION
The changes in the carrying amounts of goodwill for the years ended December 2011 and 2010, were as follows:
$ in millions
Aerospace
Systems
Electronic
Systems
Information
Systems
Technical
Services Total
Balance as of December 31, 2009 and 2010 $ 3,801 $ 2,402 $ 5,248 $925 $12,376
Goodwill related to businesses sold (2) (2)
Balance as of December 31, 2011 $3,801 $2,400 $5,248 $925 $12,374
Segment Realignments – In January 2009, the company realigned certain logistics, services, and technical support
programs and transferred assets from the Information Systems and Electronic Systems segments to the Technical
Services segment. As a result of this realignment, goodwill of approximately $123 million was reallocated among
these segments. Additionally during the first quarter of 2009, the company transferred certain optics and laser
programs from the Information Systems segment to the Aerospace Systems segment, resulting in the reallocation of
goodwill of approximately $41 million.
Purchased Intangible Assets
The table below summarizes the company’s aggregate purchased intangible assets:
December 31, 2011 December 31, 2010
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
$ in millions Amount Amortization Amount Amount Amortization Amount
Contract and program
intangibles $1,705 $(1,567) $138 $1,705 $(1,531) $174
Other purchased
intangibles 100 (83) 17 100 (82) 18
Total $1,805 $(1,650) $155 $1,805 $(1,613) $192
The company’s purchased intangible assets are subject to amortization and are being amortized on a straight-line
basis over an aggregate weighted-average period of 17 years. Aggregate amortization expense for 2011, 2010, and
2009, was $37 million, $71 million, and $74 million, respectively.
As of December 31, 2011, the expected future amortization of purchased intangibles for each of the next five years
is $36 million in 2012, $29 million in 2013, $16 million in 2014, $15 million in 2015, and $11 million in 2016.
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the fair value information for those assets and liabilities measured at fair value on a
recurring basis:
December 31, 2011 December 31, 2010
$ in millions
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Financial Assets (Liabilities)
Marketable Securities
Trading $ 219 $ 219 $ 320 $ 320
Available-for-Sale 4410 10
Held-to-Maturity time deposits 250 250
Derivatives 7711 11
Long-term debt, including current portion (3,940) (4,675) (4,724) (5,100)
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