Northrop Grumman 2013 Annual Report Download - page 51

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NORTHROP GRUMMAN CORPORATION
-41-
OTHER MATTERS
Accounting Standards Updates
Accounting standards updates effective after December 31, 2013, are not expected to have a material effect on the
company’s financial position, annual results of operations and/or cash flows.
Business Dispositions
There were no material business dispositions in 2013 or 2012; however, in 2011 we completed the spin-off to our
shareholders of HII effective March 31, 2011. HII operates the business that was previously the Shipbuilding
segment (Shipbuilding) of the company prior to the spin-off. We made a pro rata distribution to our shareholders of
one share of HII common stock for every six shares of our common stock held on the record date of March 30, 2011,
or 48.8 million shares of HII common stock. There was no gain or loss recognized by the company as a result of the
spin-off transaction. In connection with the spin-off, HII issued senior notes and entered into a credit facility with
third-party lenders, and HII used a portion of the proceeds of the notes and credit facility to fund a $1.4 billion cash
contribution to us. The assets, liabilities and operating results of this business unit are reported as discontinued
operations in the consolidated financial statements for all periods presented.
Discontinued Operations – Results of operations for Shipbuilding, and an adjustment to the gain on a previous
divestiture, were as follows:
Year Ended
December 31,
$ in millions 2011
Sales $1,646
Earnings from discontinued operations 59
Income tax expense (28)
Earnings, net of tax 31
Gain on divestiture, net of income tax expense of $1 1
Earnings from discontinued operations, net of tax $ 32
Off-Balance Sheet Arrangements
As of December 31, 2013, we had no significant off-balance sheet arrangements other than operating leases. For a
description of our operating leases, see Note 12 to the consolidated financial statements in Part II, Item 8.