Northrop Grumman 2014 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2014 Northrop Grumman annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

NORTHROP GRUMMAN CORPORATION
-30-
INFORMATION SYSTEMS
Year Ended December 31
$ in millions 2014 2013 2012
Sales $ 6,222 $ 6,596 $ 7,356
Operating income 611 633 761
Operating margin rate 9.8% 9.6% 10.3%
2014 - Information Systems sales for 2014 decreased $374 million, or 6 percent, as compared with 2013. Sales
principally declined as a result of lower volume of $294 million on C2 programs and $62 million on
Communications programs due to in-theater force reductions, reduced funding levels and the wind-down of various
programs.
Operating income for 2014 decreased $22 million, or 3 percent, and operating margin rate increased to 9.8 percent
from 9.6 percent. The lower operating income is primarily a result of the lower sales described above. The higher
operating margin rate reflects additional operating income resulting from improved performance.
2013 - Information Systems sales for 2013 decreased $760 million, or 10 percent, as compared with 2012. The sales
decline includes a $98 million impact for the transfer of intercompany efforts to our corporate shared services
organization. Excluding the transfer, 2013 sales declined 9 percent due to lower funding levels, including the
impacts of sequestration, and lower volume for programs impacted by in-theater force reductions and contract
completions.
Operating income for 2013 decreased $128 million, or 17 percent, as compared with 2012. Operating margin rate
decreased to 9.6 percent in 2013 from 10.3 percent in 2012. Lower operating income and operating margin rate were
primarily due to the lower sales volume described above and a $73 million reduction in net favorable adjustments
compared with the prior year.
TECHNICAL SERVICES
Year Ended December 31
$ in millions 2014 2013 2012
Sales $ 2,799 $ 2,843 $ 3,019
Operating income 261 262 268
Operating margin rate 9.3% 9.2% 8.9%
2014 - Technical Services sales for 2014 decreased $44 million, or 2 percent, as compared with 2013. The decrease
was primarily due to lower volume on the InterContinental Ballistic Missile (ICBM), Hunter and Combined Tactical
Training Range programs, which were partially offset by growth in international sales, principally as a result of the
acquisition of QDS in the first quarter of 2014.
Operating income and margin rate for 2014 were comparable to 2013.
2013 - Technical Services sales for 2013 decreased $176 million, or 6 percent, as compared with 2012. The decrease
was primarily due to lower sales of $127 million on the ICBM and integrated logistics and modernization programs,
as well as portfolio shaping efforts.
Operating income for 2013 decreased $6 million, or 2 percent, as compared with 2012. Operating margin rate
increased to 9.2 percent in 2013 from 8.9 percent in 2012. Lower operating income was driven by the lower sales
volume described above, partially offset by higher operating margin rate primarily due to improved performance
across a number of programs.