Northrop Grumman 2013 Annual Report Download - page 66

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NORTHROP GRUMMAN CORPORATION
-56-
Discontinued Operations
Earnings for the former shipbuilding business and an adjustment to the gain from a previous divestiture, are reported
as discontinued operations, as presented in the following table:
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
Tax rates on discontinued operations vary from the company’s effective tax rate generally due to the non-
deductibility of goodwill for tax purposes and the effects, if any, of capital loss carryforwards.
There were no assets or liabilities related to these discontinued operations included in the consolidated statements of
financial position as of December 31, 2013, 2012 or 2011.
4. SEGMENT INFORMATION
The company is aligned into four segments: Aerospace Systems, Electronic Systems, Information Systems, and
Technical Services.
The company, from time to time, acquires or disposes of businesses and realigns contracts, programs or business
areas among and within its operating segments. Portfolio shaping and internal realignments are designed to more
fully leverage existing capabilities and enhance development and delivery of products and services.
U.S. Government Sales
Sales to the U.S. Government include sales from contracts for which Northrop Grumman is the prime contractor, as
well as those for which the company is a subcontractor and the ultimate customer is the U.S. Government. Each of
the company’s segments derives substantial revenue from the U.S. Government. Sales to the U.S. Government
amounted to $21.3 billion, $22.3 billion and $23.4 billion, or 86 percent, 88 percent and 89 percent, of total sales for
the years ended December 31, 2013, 2012 and 2011, respectively.
International Sales
International sales (which include foreign military sales) amounted to $2.5 billion, $2.1 billion and $2.1 billion, or
10 percent, 8 percent and 8 percent, of total sales for the years ended December 31, 2013, 2012 and 2011,
respectively.
Discontinued Operations
The company’s discontinued operations are excluded from the amounts in the following tables.
Assets
Substantially all of the company’s operating assets are located or maintained in the U.S.