Northrop Grumman 2010 Annual Report Download - page 88

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for costs related to management and administration, legal, environmental, certain compensation and 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.
Royalty Income Adjustment – Royalty income is included in segment operating income and reclassified to other
income for financial reporting purposes. The royalty income adjustment for the year ended December 31, 2008,
includes $60 million related to patent infringement settlements at Electronic Systems.
Intersegment Sales and Margin
To encourage commerce between operating units, sales between segments are recorded at values that include a
hypothetical margin for the performing segment based on that segment’s estimated margin rate for external sales.
Such hypothetical margins are eliminated in consolidation. Intersegment sales and operating income were as
follows:
Sales
Operating
Income Sales
Operating
Income Sales
Operating
Income
$ in millions 2010 2009 2008
Year Ended December 31
Intersegment Sales and Operating Income
Aerospace Systems $ 132 $ 13 $ 1 21 $ 13 $ 129 $ 8
Electronic Systems 781 126 749 108 554 69
Information Systems 623 61 474 44 354 28
Shipbuilding 81991
Technical Services 566 39 507 30 366 19
Total intersegment sales and operating income $2,110 $240 $1,860 $195 $1,412 $125
Other Financial Information
$ in millions 2010 2009 2008
December 31
Assets
Aerospace Systems $ 6,548 $ 6,291 $ 6,199
Electronic Systems 4,893 4,950 5,024
Information Systems 7,467 7,422 9,029
Shipbuilding 4,768 4,585 4,427
Technical Services 1,381 1,295 1,184
Segment assets 25,057 24,543 25,863
Corporate 6,364 5,709 4,334
Total assets $31,421 $30,252 $30,197
Corporate assets principally consists of cash and cash equivalents and deferred tax assets.
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NORTHROP GRUMMAN CORPORATION