Northrop Grumman 2010 Annual Report Download - page 55

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sales volume on the E2-C as the program is nearing completion. The increase in S&SS was primarily due to
higher sales volume from the Global Hawk HALE Systems, F-35, F/A-18, and B-2 programs, partially offset by
decreased activity on the KEI program, which was terminated for convenience in 2009, and the ICBM program.
Segment Operating Income
2010 – Aerospace Systems operating income increased $185 million, or 17 percent, as compared with 2009. The
increase is primarily due to $128 million in net performance improvements across various programs, principally
within SS, and $57 million from the higher sales volume discussed above.
2009 – Aerospace Systems operating income increased $655 million, or 157 percent, as compared with 2008.
The increase was primarily due to a 2008 goodwill impairment charge of $570 million (see Note 12 to the
consolidated financial statements in Part II, Item 8), $61 million from the higher sales volume discussed above,
and $24 million in improved program performance. The $24 million in improved program performance was
principally due to $67 million in performance improvements in S&SS programs, primarily related to the ICBM
program and the Global Hawk HALE Systems, partially offset by $33 million in lower performance across
various programs in SS and BM&ES.
ELECTRONIC SYSTEMS
$ in millions 2010 2009 2008
Year Ended December 31
Sales and Service Revenues $7,613 $7,671 $7,048
Segment Operating Income 1,023 969 947
As a percentage of segment sales 13.4% 12.6% 13.4%
Sales and Service Revenues
2010 – Electronic Systems revenue decreased $58 million, or less than 1 percent, as compared with 2009. The
decrease is primarily due to $150 million lower sales in Land & Self Protection Systems, $84 million lower sales
in Intelligence, Surveillance & Reconnaissance (ISR) Systems and $82 million lower sales in Naval & Marine
Systems, partially offset by $186 million higher sales in Targeting Systems and $72 million higher sales in
Advanced Concepts & Technologies. The decrease in Land & Self Protection Systems is due to lower sales
volume on the Ground/Air Task Oriented Radar (G/ATOR) program as it transitions from the development
phase to the integration and test phase and lower unit deliveries on the Vehicular Intercommunications Systems
(VIS) program. The decrease in ISR Systems is due to lower sales volume on the Space Based Infrared Systems
(SBIRS) program as it transitions to follow-on production, postal automation programs and various international
programs. The decrease in Naval & Marine Systems is due to lower volume on the ship-board Cobra Judy
replacement radar program. The increase in Targeting Systems is due to higher sales volume on the F-35, various
laser systems and restricted programs and increased unit deliveries of the LITENING targeting pod system. The
increase in Advanced Concepts & Technologies is primarily due to volume on restricted programs.
2009 – Electronic Systems revenue increased $623 million, or 9 percent, as compared with 2008. The increase
was primarily due to $213 million higher sales in Targeting Systems, $188 million higher sales in ISR Systems,
$88 million higher sales in Land & Self Protection Systems, $80 million higher sales in Navigation Systems and
$30 million higher sales in Naval & Marine Systems. The increase in Targeting Systems was due to higher sales
volume on the F-35 and restricted programs. The increase in ISR Systems was due to higher sales volume on
SBIRS follow-on production and intercompany programs. The increase in Land & Self Protection Systems was
due to higher deliveries associated with the Large Aircraft Infrared Countermeasures (LAIRCM) program, higher
volume on the B-52 Sustainment and intercompany programs. The increase in Navigation Systems was due to
higher volume on Inertial and Fiber Optic Gyro navigation programs. The increase in Naval & Marine Systems
was due to higher volume on power and propulsion systems for the Virginia-class submarine program.
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NORTHROP GRUMMAN CORPORATION