Northrop Grumman 2012 Annual Report Download - page 63

NORTHROP GRUMMAN CORPORATION
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Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss are as follows:
December 31
$ in millions 2012 2011
Unamortized benefit plan costs, net of tax benefit of $3,149 in 2012 and $2,289 in
2011 ($4,790)($3,487)
Cumulative translation adjustment 4(4)
Net unrealized (loss) gain on marketable securities and cash flow hedges, net of tax
expense of $0 in both 2012 and 2011 (1)1
Total accumulated other comprehensive loss ($4,787)($3,490)
The changes in unamortized benefit plan costs, net of tax, resulted in other comprehensive loss of $1.3 billion and
$1.2 billion for the years ended December 31, 2012 and 2011, respectively, in the consolidated statements of
earnings and comprehensive income. Unamortized benefit plan costs consist primarily of net after-tax actuarial loss
amounts totaling $5.1 billion and $3.9 billion as of December 31, 2012 and 2011, respectively. Net actuarial gains or
losses are re-determined annually and principally arise from changes in the rate used to discount the benefit
obligations and differences in expected and actual returns on plan assets. Net actuarial gains or losses are amortized
to expense in future periods when they exceed 10 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 the average future service period of employees of approximately 10 years.
2. EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK
Basic Earnings Per Share
Basic earnings per share 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 includes the dilutive effect of awards granted to employees under stock-based
compensation plans. The dilutive effect of these securities totaled 4.8 million, 4.8 million, and 4.2 million shares for
the years ended December 31, 2012, 2011, and 2010, respectively. The weighted-average diluted shares outstanding
for the years ended December 31, 2012, 2011, and 2010, excludes anti-dilutive stock options to purchase
approximately 1.8 million, 2.8 million, and 2.8 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:
Repurchase Program
Authorization Date
Amount
Authorized
(in millions)
Total
Shares Retired
(in millions)
Average
Price
Per Share(2) Date Completed
Shares Repurchased
(in millions)
2012 2011 2010
December 19, 2007 $3,600 60.2 $59.82 August 2010 —— 15.7
June 16, 2010(1) $5,350 65.1 $59.42 20.9 40.2 4.0
20.9 40.2 19.7
(1) On June 16, 2010, the company’s board of directors authorized a share repurchase program of up to $2.0
billion of the company’s common stock. Following this initial authorization, the board of directors
increased the remaining repurchase authorization to $4.0 billion in April 2011. After further repurchases
reduced the remaining authorization to less than $1 billion, the board of directors again increased the
remaining authorization to $2.0 billion in September 2012. As of December 31, 2012, repurchases under
the program totaled $3.9 billion, and $1.5 billion remained under this share repurchase authorization. The
repurchase program will expire when we have used all authorized funds for repurchase.
(2) Includes commissions paid.