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43
Non-GAAP Measures
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
Our Consolidated Financial Statements are prepared in accordance with accounting principles generally
accepted in the United States (GAAP) which we supplement with certain non-GAAP financial information.
These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP
measures, and other companies may define such measures differently. We encourage investors to review
our financial statements and publicly-filed reports in their entirety and not to rely on any single financial
measure. Core operating earnings, core operating margin and core earnings per share exclude the impact
of unallocated pension and other postretirement benefit expenses which represent costs not attributable
to business segments - see Note 21 to our Consolidated Financial Statements. Management uses core
operating earnings, core operating margin and core earnings per share for purposes of evaluating and
forecasting underlying business performance. Management believes these core earnings measures
provide investors additional insights into operational performance as unallocated pension and other
postretirement benefit cost primarily represent costs driven by market factors and costs not allocable to
U.S. government contracts.
Reconciliation of GAAP Measures to Non-GAAP Measures
The table below reconciles the non-GAAP financial measures of core operating earnings, core operating
margin and core earnings per share with the most directly comparable GAAP financial measures of earnings
from operations, operating margins and diluted earnings per share.
(Dollars in millions, except per share data)
2013 2012 2011
Revenues $86,623 $81,698 $68,735
Earnings from operations, as reported $6,562 $6,290 $5,823
Operating margins 7.6% 7.7% 8.5%
Unallocated pension and other postretirement benefit expense $1,314 $899 $517
Core operating earnings (non-GAAP) $7,876 $7,189 $6,340
Core operating margins (non-GAAP) 9.1% 8.8% 9.2%
Diluted earnings per share, as reported $5.96 $5.11 $5.34
Unallocated pension and other postretirement benefit expense(1) $1.11 $0.77 $0.45
Core earnings per share (non-GAAP) $7.07 $5.88 $5.79
Weighted average diluted shares (in millions) 769.5 763.8 753.1
(1) Earnings per share impact is presented net of the federal statutory rate of 35.0%.