Northrop Grumman 2010 Annual Report Download - page 90

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Accounts receivable consisted of the following:
$ in millions 2010 2009
December 31
Due From U.S. Government
Amounts billed $1,095 $1,078
Recoverable costs and accrued profit on progress completed – unbilled 2,242 1,701
3,337 2,779
Due From Other Customers
Amounts billed 289 318
Recoverable costs and accrued profit on progress completed – unbilled 462 342
751 660
Total accounts receivable 4,088 3,439
Allowance for doubtful accounts (31) (45)
Total accounts receivable, net $4,057 $3,394
10. INVENTORIED COSTS, NET
Inventoried costs consisted of the following:
$ in millions 2010 2009
December 31
Production costs of contracts in process $ 2,197 $ 2,698
General and administrative expenses 198 175
2,395 2,873
Progress payments received (1,443) (1,909)
952 964
Product inventory 233 206
Total inventoried costs, net $ 1,185 $ 1,170
11. INCOME TAXES
The company’s effective tax rate on earnings from continuing operations for the year ended December 31, 2010
was 21.5 percent, as compared with 30.6 percent and 33.8 percent in 2009 and 2008, respectively (excluding for
2008 the non-cash, non-deductible goodwill impairment charge of $3.1 billion at Aerospace Systems and
Shipbuilding). The company’s effective tax rates reflect tax credits, manufacturing deductions and the impact of
settlements with the Internal Revenue Service (IRS).
In 2010, the company received final approval from the IRS and the U.S. Congressional Joint Committee on
Taxation (Joint Committee) of the IRS’ examination of the company’s tax returns for the years 2004 through
2006. As a result of the settlement, the company recognized net tax benefits of approximately $296 million (of
which $66 million was in cash), which were recorded as a reduction to the company’s provision for income
taxes.
During 2009, the company reached a final settlement with the IRS regarding its audit of the company’s tax
returns for the years ended December 31, 2001 through 2003 and recognized $75 million of net benefit upon
settlement, including $20 million of interest. During 2008, the company reached a final settlement with the IRS
regarding its audit of the TRW tax returns for the years ended 1999 through 2002 and recognized $35 million of
benefit upon settlement, including $4 million of interest.
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NORTHROP GRUMMAN CORPORATION