Northrop Grumman 2009 Annual Report Download - page 75

NORTHROP GRUMMAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations – Northrop Grumman Corporation and its subsidiaries (Northrop Grumman or the
company) provide technologically advanced, innovative products, services, and solutions in aerospace, electronics,
information systems, shipbuilding and technical services. In January 2009, the company streamlined its
organizational structure by reducing the number of operating segments from seven to five. The five segments are
Aerospace Systems, which combines the former Integrated Systems and Space Technology segments; Electronic
Systems; Information Systems, which combines the former Information Technology and Mission Systems
segments; Shipbuilding; and Technical Services. Creation of the Aerospace Systems and Information Systems
segments is intended to strengthen alignment with customers, improve the company’s ability to execute on
programs and win new business, and enhance cost competitiveness. Product sales are predominantly generated in
the Aerospace Systems, Electronic Systems and Shipbuilding segments, while the majority of the company’s
service revenues are generated by the Information Systems and Technical Services segments.
Certain amounts in these financial statements have been reclassified to reflect the new organizational structure
and segment realignments (see Notes 6 and 10).
Aerospace Systems is a premier developer, integrator, producer and supporter of manned and unmanned aircraft,
spacecraft, high-energy laser systems, microelectronics and other systems and subsystems critical to maintaining
the nation’s security and leadership in technology. These systems are used, primarily by U.S. government
customers, in many different mission areas including intelligence, surveillance and reconnaissance;
communications; battle management; strike operations; electronic warfare; missile defense; earth observation;
space science; and space exploration.
Electronic Systems is a leading designer, developer, manufacturer and integrator of a variety of advanced electronic
and maritime systems for national security and select non-defense applications. Electronic Systems provides
systems to U.S. and international customers for such applications as airborne surveillance, aircraft fire control,
precision targeting, electronic warfare, automatic test equipment, inertial navigation, integrated avionics, space
sensing, intelligence processing, air and missile defense, communications, mail processing, biochemical detection,
ship bridge control, and shipboard components.
Information Systems is a leading global provider of advanced solutions for Department of Defense (DoD), national
intelligence, federal civilian, state and local agencies, and commercial customers. Products and services are
focused on the fields of command, control, communications, computers and intelligence; air and missile defense;
airborne reconnaissance; intelligence processing; decision support systems; cybersecurity; information technology;
and systems engineering and integration.
Shipbuilding is the nation’s sole industrial designer, builder, and refueler of nuclear-powered aircraft carriers and
one of only two companies capable of designing and building nuclear-powered submarines for the U.S. Navy.
Shipbuilding is also one of the nation’s leading full service systems providers for the design, engineering,
construction, and life cycle support of major surface ships for the U.S. Navy, U.S. Coast Guard, and international
navies.
Technical Services is a leading provider of logistics, infrastructure, and sustainment support, while also providing a
wide array of technical services, including training and simulation.
As prime contractor, principal subcontractor, partner, or preferred supplier, Northrop Grumman participates in
many high-priority defense and non-defense technology programs in the U.S. and abroad. Northrop Grumman
conducts most of its business with the U.S. Government, principally the DoD. The company is therefore affected
by, among other things, the federal budget process. The company also conducts business with local, state, and
foreign governments and makes domestic and international commercial sales.
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