Northrop Grumman 2011 Annual Report Download - page 55

Download and view the complete annual report

Please find page 55 of the 2011 Northrop Grumman annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

NORTHROP GRUMMAN CORPORATION
Segment Operating Income
2011 – Electronic Systems operating income increased $47 million, or 5 percent, as compared to 2010, and as a
percentage of sales increased 110 basis points. The higher operating income is primarily due to performance
improvements on several contracts nearing completion in Land & Self Protection Systems and Intelligence,
Surveillance & Reconnaissance programs. The improved program performance was partially offset by reserves
established in 2011 for reductions in workforce and a reserve on a program related to outstanding contractual
issues as the contract nears completion, and overall lower sales volume described above.
2010 – Electronic Systems operating income increased $54 million, or 6 percent, as compared with 2009. The
increase is primarily due to net performance improvements in land and self protection programs, higher volume in
Targeting Systems, and lower operating loss provisions in postal automation programs.
INFORMATION SYSTEMS
Year Ended December 31
$ in millions 2011 2010 2009
Sales and service revenues $7,921 $8,395 $8,536
Segment operating income 766 756 624
As a percentage of segment sales 9.7% 9.0% 7.3%
Sales and Service Revenues
2011 – Information Systems revenue decreased $474 million, or 6 percent, as compared with 2010. The decrease
is primarily due to $327 million lower sales in Defense Systems and $99 million lower sales in Civil Systems. The
decrease in Defense Systems is primarily due to lower sales volume from Force Protection Security System (FPS2),
Saudi Arabian American Oil Company (ARAMCO), Netcents DKO, F-22 and several other programs, partially
offset by higher volume on Encore II and Trailer Mounted Support System (TMSS) programs. The lower sales
volume in Civil Systems is primarily due to the sale of the County of San Diego contract, which reduced sales by
$70 million as compared to the same period in 2010, lower volume on the Enterprise Network Management
program, and completion of the Treasury Communications System program in 2010.
2010 – Information Systems revenue decreased $141 million, or 2 percent, as compared with 2009. The decrease is
primarily due to $130 million lower sales in Intelligence Systems and $57 million lower sales in Civil Systems,
partially offset by $55 million higher sales in Defense Systems. The decrease in Intelligence Systems is primarily due
to lower sales volume on restricted programs and the loss of the Navstar Global Positioning System Operational
Control Segment (GPS OCX) program. The decrease in Civil Systems is primarily due to lower sales volume on the
New York City Wireless (NYCWiN) and Armed Forces Health Longitudinal Technology Application (AHLTA)
programs. The increase in Defense Systems is primarily due to program growth on Battlefield Airborne
Communications Node (BACN), Joint National Integration Center Research and Development Contract (JRDC)
and Integrated Battle Command System (IBCS) activities, partially offset by lower sales volume on the TMSS
program as it nears completion, and decreased Systems and Software Engineer Support activities.
Segment Operating Income
2011 – Information Systems operating income increased $10 million, or 1 percent, as compared with 2010. The
increase is primarily driven by improved performance on several civil systems programs, including the Virginia IT
Outsource (VITA) contract and the effect of the sale of the County of San Diego contract, partially offset by the
lower sales volume primarily at Defense Systems described above.
2010 – Information Systems operating income increased $132 million, or 21 percent, as compared with 2009 and
as a percentage of sales increased 170 basis points. The increase is primarily due to performance improvements on
Civil Systems programs. In 2009, operating income included $37 million of non-recurring costs associated with
the sale of ASD.
-45-