Northrop Grumman 2011 Annual Report Download - page 79

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NORTHROP GRUMMAN CORPORATION
gains or losses on plan assets due to variations in the fair market value of the underlying assets and changes in the
benefit obligation due to changes in actuarial assumptions. Net actuarial gains or losses are amortized to expense
when they exceed ten percent of the greater of the plan assets or projected benefit obligations by benefit plan. The
excess of gains or losses over the ten percent threshold are subject to amortization over ten years, which represents
the approximate average future service period of employees.
2. ACCOUNTING STANDARDS UPDATES
Accounting standards updates effective after December 31, 2011, are not expected to have a material effect on the
company’s consolidated financial position or results of operations.
3. DIVIDENDS ON COMMON STOCK
Dividends on Common Stock – In April 2011, the company’s board of directors approved an increase to the quarterly
common stock dividend from $0.47 per share to $0.50 per share, for shareholders of record as of May 31, 2011.
In May 2010, the company’s board of directors approved an increase to the quarterly common stock dividend,
from $0.43 per share to $0.47 per share, for stockholders of record as of June 1, 2010.
In May 2009, the company’s board of directors approved an increase to the quarterly common stock dividend,
from $0.40 per share to $0.43 per share, for stockholders of record as of June 1, 2009.
4. EARNINGS PER SHARE
Basic Earnings Per Share – Basic earnings per share amounts from both continuing and discontinued operations are
calculated by dividing the respective earnings by the weighted-average number of shares of common stock
outstanding during each period.
Diluted Earnings Per Share – Diluted earnings per share amounts include the dilutive effect of stock options and
other stock awards granted to employees under stock-based compensation plans. The dilutive effect of these
securities totaled 4.8 million, 4.2 million, and 4.1 million shares for the years ended December 31, 2011, 2010 and
2009, respectively. The weighted-average diluted shares outstanding for the years ended December 31, 2011,
2010, and 2009, exclude anti-dilutive stock options to purchase approximately 2.8 million, 2.8 million, and
8.1 million shares, respectively, because such options have exercise prices in excess of the average market price of
the company’s common stock during the year.
Share Repurchases – The table below summarizes the company’s share repurchases beginning January 1, 2009:
Amount Average Total Shares Shares Repurchased
Repurchase Program Authorized Price Retired Date (in millions)
Authorization Date (in millions) Per Share (2) (in millions) Completed 2011 2010 2009
December 19, 2007 $3,600 $59.82 60.2 August 2010 15.7 23.1
June 16, 2010 (1) 4,245 57.42 44.2 40.2 4.0
40.2 19.7 23.1
(1) On June 16, 2010, the company’s board of directors authorized a share repurchase program of up to $2
billion of the company’s common stock. On April 25, 2011, after the company had repurchased shares
totaling $245 million, the company’s board of directors authorized an increase to the remaining share
repurchase authorization to $4.0 billion. As of December 31, 2011, the company had $1.7 billion remaining
under this authorization for share repurchases.
(2) Includes commissions paid and calculated as the average price per share under the respective repurchase
program.
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