Northrop Grumman 2014 Annual Report Download - page 60

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NORTHROP GRUMMAN CORPORATION
-51-
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 3.3 million, 4.3 million and 4.8 million shares for
the years ended December 31, 2014, 2013 and 2012, respectively. We had no anti-dilutive stock options outstanding
for the years ended December 31, 2014 and 2013, respectively. The weighted-average diluted shares outstanding for
the year ended December 31, 2012, excludes stock options to purchase 1.8 million shares because such options had
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(3) Date Completed
Shares Repurchased
(in millions)
Year Ended
December 31
2014 2013 2012
June 16, 2010 $ 5,350 83.7 $ 63.86 September 2013 —18.6 20.9
May 15, 2013(1) $ 4,000 30.1 $ 118.30 21.4 8.7 —
December 4, 2014(2) $ 3,000 — $ — —— —
21.4 27.3 20.9
(1) On May 15, 2013, the company's board of directors authorized a share repurchase program of up to $4.0
billion of the company’s common stock ("2013 Repurchase Program"). Repurchases under the 2013
Repurchase Program commenced in September 2013. As of December 31, 2014, repurchases under the
2013 Repurchase Program totaled $3.6 billion; $447 million remained under this share repurchase
authorization. By its terms, the 2013 Repurchase Program will expire when we have used all authorized
funds for repurchases.
(2) On December 4, 2014, the company's board of directors authorized a new share repurchase program of up
to an additional $3.0 billion of the company's common stock ("2014 Repurchase Program"). By its terms,
repurchases under the 2014 Repurchase Program will commence upon completion of the 2013 Repurchase
Program and will expire when we have used all authorized funds for repurchases.
(3) Includes commissions paid.
Share repurchases take place from time to time, subject to market conditions and management's discretion, in the
open market or in privately negotiated transactions. The company retires its common stock upon repurchase and has
not made any purchases of common stock other than in connection with these publicly announced repurchase
programs.
Dividends on Common Stock
In May 2014, the company increased the quarterly common stock dividend 15 percent to $0.70 per share from the
previous amount of $0.61 per share.
In May 2013, the company increased the quarterly common stock dividend 11 percent to $0.61 per share from the
previous amount of $0.55 per share.
In May 2012, the company increased the quarterly common stock dividend 10 percent to $0.55 per share from the
previous amount of $0.50 per share.
3. 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 our 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