Northrop Grumman 2012 Annual Report Download - page 66

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NORTHROP GRUMMAN CORPORATION
-56-
Results of Operations By Segment
The following table presents sales and operating income by segment:
Year Ended December 31
$ in millions 2012 2011 2010
Sales
Aerospace Systems $ 9,977 $ 9,964 $10,436
Electronic Systems 6,950 7,372 7,613
Information Systems 7,356 7,921 8,395
Technical Services 3,019 3,193 3,705
Intersegment eliminations (2,084)(2,038)(2,006)
Total sales 25,218 26,412 28,143
Operating income
Aerospace Systems 1,218 1,217 1,213
Electronic Systems 1,187 1,070 1,023
Information Systems 761 766 756
Technical Services 268 260 249
Intersegment eliminations (258)(258)(231)
Total segment operating income 3,176 3,055 3,010
Reconciliation to operating income:
Unallocated corporate expenses (168)(166)(182)
Net FAS/CAS pension adjustment 132 400 10
Other (10)(13)(11)
Total operating income $ 3,130 $ 3,276 $ 2,827
Unallocated Corporate Expenses
Unallocated corporate expenses include the portion of corporate expenses not considered allowable or allocable
under applicable U.S. government Cost Accounting Standards (CAS) regulations and the Federal Acquisition
Regulation, and therefore not allocated to the segments. Such costs consist of a portion of management and
administration, legal, environmental, compensation costs, retiree benefits, as well as certain unallowable costs such
as for lobbying activities, among others.
Net FAS/CAS Pension Adjustment
The net FAS (GAAP Financial Accounting Standards)/CAS pension adjustment is the difference between pension
expense determined in accordance with GAAP and pension expense allocated to the operating segments determined
in accordance with CAS. For the years ended December 31, 2012, 2011, and 2010, the net FAS/CAS pension
adjustment resulted in income of $132 million, $400 million, and $10 million, respectively. The decrease in the 2012
net FAS/CAS pension adjustment is primarily due to increased GAAP pension expense resulting from amortization
of prior year actuarial losses and reduced CAS pension expense resulting from a plan amendment in 2011.