- Diluted Earnings per Share from Continuing Operations Increase to
$1.31 LOS ANGELES, July 24 /PRNewswire-FirstCall/ -- Northrop
Grumman Corporation (NYSE:NOC) reported that second quarter 2007
income from continuing operations rose 4 percent to $460 million,
or $1.31 per diluted share, from $442 million, or $1.26 per diluted
share, in the second quarter of 2006. Sales for the 2007 second
quarter increased 4 percent to $7.9 billion from $7.6 billion in
the 2006 second quarter. Cash provided by operations for the 2007
second quarter increased to $741 million from $638 million in the
prior year period. Operating Highlights Second Quarter Six Months
($ millions except per share data) 2007 2006 Change 2007 2006
Change Sales 7,929 7,601 4% 15,273 14,694 4% Operating margin 744
682 9% 1,425 1,286 11% as a % of sales 9.4% 9.0% 40 bps 9.3% 8.8%
50 bps Income from continuing operations 460 442 4% 847 804 5%
Diluted EPS from continuing operations 1.31 1.26 4% 2.41 2.29 5%
Net income 460 430 7% 847 787 8% Diluted EPS 1.31 1.23 7% 2.41 2.24
8% Cash from operations 741 638 16% 1,141 523 118% "Sales growth,
higher segment operating margin, and lower corporate expenses drove
this quarter's earnings increase. Information & Services led
the sales growth with a 15 percent increase, and all four of our
businesses contributed to higher segment operating margin. Cash
from operations also improved substantially," said Ronald D. Sugar,
Northrop Grumman chairman and chief executive officer.
"Year-to-date we are on track to generate higher sales, improved
margin, and higher earnings. And based on year-to-date results, we
expect both cash from operations and free cash flow to be in the
upper end of our 2007 guidance range," Sugar concluded. Operating
margin for the 2007 second quarter increased 9 percent to $744
million from $682 million for the 2006 second quarter. As a percent
of sales, operating margin increased 40 basis points to 9.4 percent
from 9 percent in the prior year period. The increase includes
higher segment operating margin, lower net pension expense and
higher unallocated & other expenses. Second quarter 2007
segment operating margin increased 5 percent, and as a percent of
sales, was comparable to the prior year period at 9.8 percent.
Second quarter 2007 net pension expense declined $40 million.
Unallocated & other expenses increased to $63 million and
include lower post retirement benefit expenses, which were more
than offset by a $50 million increase in provisions for various
legal and investigative matters. Unusual items, summarized below,
had a net negative effect of $4 million to segment operating margin
(approximately 5 basis points to segment operating margin rate) and
a negative net effect of $54 million to operating margin
(approximately 70 basis points to operating margin rate). In the
2006 second quarter unusual items had a $51 million net negative
impact to segment operating margin (approximately 70 basis points
to segment operating margin rate). Unusual Items included in Q2
2007 Operating Margin ($ millions) Aerospace Prior years overhead
cost settlement 27 Electronics F-16 Block 60 contract earnings
adjustment (27) Facility shutdown and closure costs (11) (38) Ships
Insurance recovery for lost profits 62 LHD 8 contract earnings
adjustment (55) 7 Net effect to segment operating margin(1) (4)
Unallocated Legal and investigative provisions (50) Net effect to
operating margin (54) (1) Segment operating margin is a non-GAAP
measure used as an internal measure of financial performance for
the four businesses. Federal and foreign income taxes for the 2007
second quarter increased to $192 million from $147 million in the
second quarter of 2006. The effective tax rate applied to income
from continuing operations for the 2007 second quarter was 29.4
percent compared with 25 percent in the 2006 second quarter. In the
2007 second quarter the company reached a favorable settlement with
the Internal Revenue Service regarding a portion of its audit for
the years 2001 through 2003. As a result, the company recognized
tax benefits totaling $16 million. In the second quarter of 2006
the company recognized tax benefits totaling $48 million due to
reversal of previously established expense provisions for audits of
the B-2 program in years 1997 through 2000. Net income for the 2007
second quarter increased 7 percent to $460 million, or $1.31 per
diluted share, from $430 million, or $1.23 per diluted share, for
the same period of 2006. Earnings per share are based on weighted
average diluted shares outstanding of 355.3 million for the second
quarter of 2007 and 350.1 million for the second quarter of 2006.
For both the second quarter and six months periods in 2007,
weighted average shares outstanding include the dilutive impact of
6.4 million shares of the company's Series B mandatorily redeemable
preferred stock. Funded contract acquisitions for the 2007 second
quarter totaled $6.6 billion compared with $8.1 billion for the
same period of 2006. Funded contract acquisitions for the 2006
second quarter included a $2.3 billion contract for the LPD program
in the Ships business. Total backlog, which includes funded backlog
and firm orders for which funding is not currently contractually
obligated by the customer, was $60.4 billion at June 30, 2007. Cash
Flow Highlights Second Quarter Six Months ($ millions) 2007 2006
Change 2007 2006 Change Cash from operations 741 638 103 1,141 523
618 Less: Capital expenditures 140 151 11 298 324 26 Outsourcing
contract & related software costs 50 (50) 80 (80) Free cash
flow(1) 551 487 64 763 199 564 (1) Free cash flow is a non-GAAP
measure defined as cash from operations less capital expenditures
and outsourcing contract & related software costs. Management
uses free cash flow as an internal measure of financial
performance. Cash provided by operations in the 2007 second quarter
totaled $741 million compared with $638 million in the prior year
period. The year-over- year improvement is primarily driven by
higher net income and also includes less cash expended for
discontinued operations, partially offset by an increase in cash
income taxes paid. Second quarter 2007 capital spending totaled
$140 million and included $31 million for Hurricane Katrina,
compared with capital spending of $151 million in the second
quarter of 2006, which included $42 million for Hurricane Katrina.
Second quarter 2007 free cash flow increased to $551 million from
$487 million. Year-to-date free cash flow increased to $763 million
from $199 million reflecting improved cash from operations and
reductions in cash used in discontinued operations. Cash
Measurements, Debt and Capital Deployment ($ millions) 6/30/2007
12/31/2006 Cash & cash equivalents 521 1,015 Total debt 4,048
4,162 Net debt(1) 3,527 3,147 Mandatorily redeemable preferred
stock 350 350 Net debt to total capital ratio(2) 17% 15% (1) Total
debt less cash and cash equivalents (2) Net debt divided by the sum
of shareholders' equity and total debt. Cash and cash equivalents
totaled $521 million at June 30, 2007 compared with $1 billion at
Dec. 31, 2006, and total debt declined to $4 billion at June 30,
2007 from $4.2 billion at Dec. 31, 2006. Changes in cash and cash
equivalents and total debt reflect the following cash deployment
and financing actions during 2007: * $584 million acquisition of
Essex Corporation in January 2007 * $592 million accelerated share
repurchase completed in June 2007 * $298 million capital
expenditures and $80 million for outsourcing contract and related
software costs * $254 million dividends paid * $196 million
proceeds from exercises of stock options and issuance of common
stock 2007 Guidance Updated ($ billions except per share amounts)
Prior Current Sales 31 - 32 ~31.5 +/- 250 Million Segment OM %(1)
Low 9% Mid 9% OM % Low 9% Low 9% Diluted EPS from continuing
operations 4.80 - 5.05 4.90 - 5.05 Cash from operations 2.5 - 2.8
Upper end of Range Free cash flow(2) 1.6 - 2.0 Upper end of Range
(1) Segment operating margin is a non-GAAP measure used as an
internal measure of financial performance for the four businesses.
(2) Free cash flow is a non-GAAP measure defined as cash from
operations less capital expenditures and outsourcing contract &
related software costs. Management uses free cash flow as an
internal measure of financial performance. Business Results
CONSOLIDATED SALES & SEGMENT OPERATING MARGIN(1) ($ millions
except per share data) Second Quarter Six Months 2007 2006 Change
2007 2006 Change Sales Information & Services 3,236 2,814 15%
6,156 5,466 13% Aerospace 1,994 2,121 (6%) 4,029 4,270 (6%)
Electronics 1,723 1,610 7% 3,314 3,114 6% Ships 1,359 1,437 (5%)
2,515 2,570 (2%) Intersegment eliminations (383) (381) (1%) (741)
(726) (2%) Sales 7,929 7,601 4% 15,273 14,694 4% Segment Operating
Margin(1) Information & Services 282 266 6% 515 495 4%
Aerospace 218 201 8% 437 407 7% Electronics 173 172 1% 354 348 2%
Ships 134 129 4% 213 197 8% Intersegment eliminations (28) (26)
(8%) (57) (52) (10%) Segment Operating Margin(1) 779 742 5% 1,462
1,395 5% as a % of sales 9.8% 9.8% 9.6% 9.5% 10 bps Reconciliation
to Operating Margin: Unallocated & other expenses (63) (48)
(31%) (98) (87) (13%) Net pension adjustment(2) 28 (12) 333% 61
(22) 377% Operating Margin 744 682 9% 1,425 1,286 11% as a % of
sales 9.4% 9.0% 40 bps 9.3% 8.8% 50 bps (1) Segment operating
margin is a non-GAAP measure used as an internal measure of
financial performance for the four businesses. (2) Net pension
adjustment includes pension expense determined in accordance with
GAAP less pension expense allocated to the business segments under
U.S. Government Cost Accounting Standards. As previously announced,
beginning in the 2007 first quarter, Radio Systems is reported as
part of Mission Systems. Schedule 5 provides previously reported
quarterly financial results and realigned results reflecting the
transfer of Radio Systems. Information & Services Second
Quarter ($ Millions) 2007 2006 Operating % of Operating % of Sales
Margin Sales Sales Margin Sales Mission Systems $1,542 $160 10.4%
$1,407 $144 10.2% Information Technology 1,143 90 7.9% 976 84 8.6%
Technical Services 551 32 5.8% 431 38 8.8% $3,236 $282 8.7% $2,814
$266 9.5% Information & Services second quarter 2007 sales
increased 15 percent from the prior year period due to double-digit
revenue increases for Information Technology and Technical
Services. Operating margin for Information & Services rose 6
percent in the 2007 second quarter. As a percent of sales,
operating margin declined to 8.7 percent from 9.5 percent in the
prior year period. The increase in operating margin is due to
higher volume, and the decline in operating margin rate reflects a
higher percentage of lower margin state and local business for
Information Technology and the impact of the lower margin Nevada
Test Site program in Technical Services. Mission Systems sales
increased nearly 10 percent due to the acquisition of Essex
Corporation, higher volume for the Kinetic Energy Interceptor
program, and higher volume for several command, control &
communications programs. Operating margin rose 11 percent, and as a
percent of sales, increased to 10.4 percent from 10.2 percent in
the prior year period. The increases in operating margin and rate
are due to higher volume, including the Essex acquisition, and
improved program performance. Information Technology sales rose 17
percent due to newly commenced state and local programs, including
Virginia IT and San Diego County outsourcing and New York City
Wireless programs, as well as higher volume for Intelligence
programs. Operating margin rose 7 percent. As a percent of sales,
operating margin declined to 7.9 percent from 8.6 percent in the
prior year period. The increase in operating margin and the lower
rate reflect the impact of newly commenced state and local
programs. Technical Services sales rose 28 percent due to the
Nevada Test Site program. Operating margin decreased 16 percent
from the prior year period, and as a percent of sales, declined to
5.8 percent from 8.8 percent in the prior year period. The
comparison to prior year's results reflect favorable performance
adjustments on several programs in the 2006 second quarter as well
as the impact of the lower margin Nevada Test Site program.
Aerospace Second Quarter ($ Millions) 2007 2006 Operating % of
Operating % of Sales Margin Sales Sales Margin Sales Integrated
Systems $1,225 $149 12.2% $1,383 $141 10.2% Space Technology 769 69
9.0% 738 60 8.1% $1,994 $218 10.9% $2,121 $201 9.5% Aerospace
second quarter 2007 sales declined 6 percent from the prior year
period due to lower volume in Integrated Systems, partially offset
by higher sales in Space Technology. Aerospace second quarter 2007
operating margin increased 8 percent from the prior year period,
and as a percent of sales, increased to 10.9 percent from 9.5
percent in the prior year period. Integrated Systems sales declined
11 percent primarily due to lower volume for the E-2D Advanced
Hawkeye, F-35 and EA-18G programs, as these programs transition
from development to production, as well as lower volume for the J-
UCAS program as it nears completion, and significant
customer-directed scope reductions associated with the E-10A
platform and related MP-RTIP efforts. Integrated Systems operating
margin rose 6 percent, and as a percent of sales, increased to 12.2
percent from 10.2 percent in the prior year period. The operating
margin increase includes a $27 million adjustment related to the
settlement of prior years overhead costs, which more than offset
the impact of lower sales volume. Space Technology sales increased
4 percent, primarily due to higher volume for restricted, James
Webb Space Telescope, and Space Radar programs. Increases in these
programs were partially offset by lower volume in the Advanced
Extremely High Frequency and NPOESS programs. Space Technology
operating margin increased 15 percent, and as a percent of sales
increased to 9 percent from 8.1 percent, reflecting higher sales
volume and improved program performance. Electronics Second Quarter
($ Millions) 2007 2006 Operating % of Operating % of Sales Margin
Sales Sales Margin Sales $1,723 $173 10.0% $1,610 $172 10.7%
Electronics second quarter 2007 sales increased 7 percent from the
prior year period principally due to higher sales for Army programs
and a restricted program. These sales increases were partially
offset by declining volume on fixed price development programs.
Electronics second quarter 2007 operating margin was comparable to
the prior year period, and as a percent of sales, declined to 10
percent from 10.7 percent. Operating margin for the 2007 second
quarter includes pre-tax facility shutdown and closure costs of $11
million and a $27 million negative pre-tax contract earnings
adjustment for the F-16 Block 60 fixed price development program,
which more than offset the impact of higher sales volume. Second
quarter 2006 operating margin included pre-tax negative contract
earnings adjustments of $28 million for the ASPIS II program and
$23 million for the MESA radar program. Ships Second Quarter ($
Millions) 2007 2006 Operating % of Operating % of Sales Margin
Sales Sales Margin Sales $1,359 $134 9.9% $1,437 $129 9.0% Ships
second quarter 2007 sales declined 5 percent from the prior year
period due to lower volume in the DDG 51 and LHD programs (due to a
now- concluded labor strike at the company's Pascagoula, Miss.
shipyard), lower volume for aircraft carrier and submarine
programs, and lower volume for the DDG 1000 program as it
transitions from development to detail design and production. Ships
second quarter 2007 operating margin increased 4 percent from the
prior year period, and as a percent of sales, increased to 9.9
percent from 9 percent in the prior year period. Second quarter
2007 operating margin includes a $62 million pre-tax insurance
recovery for losses under its contracts ("lost profits") related to
the impact of Hurricane Katrina on the company's Gulf Coast
shipyards and improved performance for the company's LHA 6 program.
These positive impacts to operating margin and rate were partially
offset by a negative $55 million pre-tax contract adjustment on the
LHD 8 program due to schedule extension and subsystems cost growth.
Second quarter operating margin was also impacted by lower volume
on the strike-impacted programs. The second quarter of 2006
included Virginia-class Block II material incentives and favorable
performance adjustments. Second Quarter Highlights * The U.S. Navy
awarded Northrop Grumman a $2.4 billion fixed-price incentive
contract for the detail design and construction of the amphibious
assault ship LHA 6. * The U.S. Navy awarded the company a $191
million contract modification for procurement of long-lead time
material and production readiness for activities leading to the
construction of Ships' first Zumwalt-class destroyer, DDG 1000. *
Northrop Grumman began work on a 62-month, $171 million system
development and demonstration contract for the first increment of a
new extremely high frequency satellite communications system for
the U.S. Air Force's B-2 stealth bomber. * Northrop Grumman
announced a U.S. Naval Facilities Engineering Command contract
potentially valued at $100 million to provide Anti-Terrorism Force
Protection systems and capabilities to Navy installations around
the world. * Northrop Grumman was selected to outfit U.S. Marine
Corp CH-53E helicopters with the company's Directional Infrared
Countermeasures (DIRCM) systems. The $19.7 million inaugural
contract with the U.S. Marine Corps represents the first
application of Northrop Grumman's DIRCM suite for protection of the
Marines' CH-53E helicopter. * The U.S. Army awarded Northrop
Grumman one of 16 indefinite delivery/indefinite quantity (ID/IQ)
contracts for the Information Technology Enterprise Solutions 2
Services (ITES-2S) program. ITES-2S is a nine-year, $20 billion,
ID/IQ program that will provide the Army with a full range of
information technology services and solutions to support enterprise
infrastructure goals worldwide, including command, control,
communications, computers, and information management. * Northrop
Grumman will serve as a subcontractor to AT&T Government
Solutions on the Networx Universal contract. AT&T was one of
three companies selected by the General Services Administration for
the Networx Universal indefinite delivery/indefinite quantity
contract, which has a potential value of $20 billion, collectively,
over the next ten years. * Northrop Grumman's first KC-30 Tanker
began final assembly, reflecting the industrial team's commitment
to the U.S. Air Force's KC-135 replacement program. * The Navy
christened the fourth submarine of the Virginia-class, North
Carolina (SSN 777). * The Navy christened Northrop Grumman's Aegis
guided missile destroyer, Truxtun (DDG 103). * The Kinetic Energy
Interceptor (KEI) program team fired a powerful Stage 1 rocket
motor, marking the third consecutive successful ground-fire test
leading up to the program's first booster flight in 2008. Northrop
Grumman is the KEI prime contractor. * The first Northrop Grumman
E-2D Advanced Hawkeye, being built for the U.S. Navy by prime
contractor Northrop Grumman, made its first public appearance at
rollout ceremonies. Subsequent to the end of the second quarter,
the company received a $408 million contract for three production
E-2D Advanced Hawkeyes for the U.S. Navy. * Northrop Grumman
delivered the center/aft fuselage section for the first
production-configured development model of the EA-18G Growler, the
U.S. Navy's next-generation electronic attack aircraft. * Northrop
Grumman achieved a key milestone with the delivery of the 100th
active electronically scanned array production radar for the U.S.
Air Force's F-22 Raptor. About Northrop Grumman Northrop Grumman
Corporation is a $30 billion global defense and technology company
whose 120,000 employees provide innovative systems, products, and
solutions in information and services, electronics, aerospace and
shipbuilding to government and commercial customers worldwide.
Northrop Grumman will webcast its earnings conference call at 12
p.m. EDT on July 24, 2007. A live audio broadcast of the conference
call along with a supplemental presentation will be available on
the investor relations page of the company's Web site at
http://www.northropgrumman.com/. Note: Certain statements and
assumptions in this release contain or are based on
"forward-looking" information that Northrop Grumman Corporation
(the "Company") believes to be within the definition in the Private
Securities Litigation Reform Act of 1995 and involve risks and
uncertainties, and include, among others, statements in the future
tense, and all statements accompanied by terms such as "project,"
"expect," "estimate," "assume," "believe," "plan," "guidance" or
variations thereof. This information reflects the Company's best
estimates when made, but the Company expressly disclaims any duty
to update this information if new data become available or
estimates change after the date of this release. Such
"forward-looking" information includes, among other things,
financial guidance regarding sales, segment operating margin,
pension expense, employer contributions under pension plans and
medical and life benefits plans, cash flow, and earnings per share,
and is subject to numerous assumptions and uncertainties, many of
which are outside the Company's control. These include the
Company's assumptions with respect to future revenues; expected
program performance and cash flows; returns on pension plan assets
and variability of pension actuarial and related assumptions; the
outcome of litigation, appeals and investigations;
hurricane-related insurance recoveries; environmental remediation;
acquisitions and divestitures of businesses; successful reduction
of debt; performance issues with key suppliers and subcontractors;
product performance and the successful execution of internal plans;
successful negotiation of contracts with labor unions; effective
tax rates and timing and amounts of tax payments; the results of
any audit or appeal process with the Internal Revenue Service; and
anticipated costs of capital investments, among other things. The
Company's operations are subject to various additional risks and
uncertainties resulting from its position as a supplier, either
directly or as subcontractor or team member, to the U.S. government
and its agencies as well as to foreign governments and agencies;
actual outcomes are dependent upon various factors, including,
without limitation, the Company's successful performance of
internal plans; government customers' budgetary constraints;
customer changes in short-range and long-range plans; domestic and
international competition in both the defense and commercial areas;
product performance; continued development and acceptance of new
products and, in connection with any fixed-price development
programs, controlling cost growth in meeting production
specifications and delivery rates; performance issues with key
suppliers and subcontractors; government import and export
policies; acquisition or termination of government contracts; the
outcome of political and legal processes and of the assertion or
prosecution of potential substantial claims by or on behalf of a
U.S. government customer; natural disasters, amounts and timing of
recoveries under insurance contracts, availability of materials and
supplies, continuation of the supply chain, contractual performance
relief and the application of cost sharing terms, allowability and
allocability of costs under U.S. Government contracts, impacts of
timing of cash receipts and the availability of other mitigating
elements; terrorist acts; legal, financial, and governmental risks
related to international transactions and global needs for military
aircraft, military and civilian electronic systems and support,
information technology, naval vessels, space systems, technical
services and related technologies, as well as other economic,
political and technological risks and uncertainties and other risk
factors set out in the Company's filings from time to time with the
Securities and Exchange Commission, including, without limitation,
Company reports on Form 10-K and Form 10-Q. Members of the news
media may receive our releases via e-mail by registering at:
http://www.northropgrumman.com/cgi-bin/regist_form.cgi LEARN MORE
ABOUT US: Northrop Grumman news releases, product information,
photos and video clips are available on the Internet at:
http://www.northropgrumman.com/ 0707-328 SCHEDULE 1 NORTHROP
GRUMMAN CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited) Three months ended Six months ended June 30 June 30 $
in millions, except per share 2007 2006 2007 2006 Sales and Service
Revenues Product sales $4,638 $4,772 $8,778 $9,169 Service revenues
3,291 2,829 6,495 5,525 Total sales and service revenues 7,929
7,601 15,273 14,694 Cost of Sales and Service Revenues Cost of
product sales 3,696 3,691 6,934 7,137 Cost of service revenues
2,665 2,464 5,375 4,830 General and administrative expenses 824 764
1,539 1,441 Operating margin 744 682 1,425 1,286 Other Income
(Expense) Interest income 6 3 13 16 Interest expense (83) (87)
(172) (177) Other, net (15) (9) (24) (10) Income from continuing
operations before income taxes 652 589 1,242 1,115 Federal and
foreign income taxes 192 147 395 311 Income from continuing
operations 460 442 847 804 Loss from discontinued operations, net
of tax - (12) - (17) Net income $460 $430 $847 $787 Basic Earnings
(Loss) Per Share Continuing operations $1.34 $1.28 $2.46 $2.33
Discontinued operations - (.03) - (.05) Basic earnings per share
$1.34 $1.25 $2.46 $2.28 Weighted average common shares outstanding,
in millions 343.3 344.0 344.3 345.6 Diluted Earnings (Loss) Per
Share Continuing operations $1.31 $1.26 $2.41 $2.29 Discontinued
operations - (.03) - (.05) Diluted earnings per share $1.31 $1.23
$2.41 $2.24 Weighted average diluted shares outstanding, in
millions 355.3 350.1 356.8 351.8 SCHEDULE 2 NORTHROP GRUMMAN
CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(unaudited) June 30, December 31, $ in millions 2007 2006 Assets:
Cash and cash equivalents $521 $1,015 Accounts receivable, net of
progress payments of $36,978 in 2007 and $34,085 in 2006 3,685
3,566 Inventoried costs, net of progress payments of $1,353 in 2007
and $1,226 in 2006 1,157 1,178 Deferred income taxes 654 706
Prepaid expenses and other current assets 244 254 Total current
assets 6,261 6,719 Property, plant, and equipment, net of
accumulated depreciation of $3,230 in 2007 and $3,015 in 2006 4,539
4,531 Goodwill 17,639 17,219 Other purchased intangibles, net of
accumulated amortization of $1,621 in 2007 and $1,555 in 2006 1,139
1,139 Pension and postretirement benefits asset 1,298 1,349 Other
assets 1,152 1,052 Total assets $32,028 $32,009 Liabilities: Notes
payable to banks $32 $95 Current portion of long-term debt 141 75
Trade accounts payable 1,506 1,686 Accrued employees' compensation
1,160 1,177 Advance payments and billings in excess of costs
incurred 1,583 1,571 Income taxes payable 45 535 Other current
liabilities 1,655 1,614 Total current liabilities 6,122 6,753
Long-term debt, net of current portion 3,875 3,992 Mandatorily
redeemable preferred stock 350 350 Pension and postretirement
benefits liability 3,336 3,302 Other long-term liabilities 1,565
997 Total liabilities 15,248 15,394 Shareholders' Equity: Common
stock, $1 par value; 800,000,000 shares authorized; issued and
outstanding: 2007 - 343,683,664; 2006 - 345,921,809 344 346 Paid-in
capital 11,020 11,346 Retained earnings 6,703 6,183 Accumulated
other comprehensive loss (1,287) (1,260) Total shareholders' equity
16,780 16,615 Total liabilities and shareholders' equity $32,028
$32,009 SCHEDULE 3 NORTHROP GRUMMAN CORPORATION CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (unaudited) Six months ended
June 30 $ in millions 2007 2006 Operating Activities Sources of
Cash - Continuing Operations Cash received from customers Progress
payments $3,342 $3,451 Collections on billings 12,089 10,961
Proceeds from insurance carriers related to operations 125 35 Other
cash receipts 32 52 Total sources of cash-continuing operations
15,588 14,499 Uses of Cash - Continuing Operations Cash paid to
suppliers and employees (13,718) (13,223) Interest paid (190) (192)
Income taxes paid (466) (397) Excess tax benefits from stock-based
compensation (61) (47) Other cash payments (12) (16) Total uses of
cash-continuing operations (14,447) (13,875) Cash provided by
continuing operations 1,141 624 Cash used in discontinued
operations (101) Net cash provided by operating activities 1,141
523 Investing Activities Proceeds from sale of businesses, net of
cash divested 43 Payment for businesses purchased, net of cash
acquired (584) Proceeds from sale of property, plant, and equipment
10 10 Additions to property, plant, and equipment (298) (324)
Payments for outsourcing contract and related software costs (80)
Proceeds from insurance carriers related to capital expenditures 3
71 Payment for purchase of investment (35) Decrease in restricted
cash 34 Other investing activities, net (2) (16) Net cash used in
investing activities (917) (251) Financing Activities Net
(payments) borrowings under lines of credit (63) 29 Principal
payments of long-term debt (66) (521) Proceeds from exercises of
stock options and issuance of common stock 196 338 Dividends paid
(254) (194) Excess tax benefits from stock-based compensation 61 47
Common stock repurchases (592) (825) Net cash used in financing
activities (718) (1,126) Decrease in cash and cash equivalents
(494) (854) Cash and cash equivalents, beginning of period 1,015
1,605 Cash and cash equivalents, end of period $521 $751 SCHEDULE 4
NORTHROP GRUMMAN CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS (unaudited) Six months ended June 30 $ in millions 2007
2006 Reconciliation of Net Income to Net Cash Provided by Operating
Activities Net Income $847 $787 Adjustments to reconcile to net
cash provided by operating activities Depreciation 276 278
Amortization of assets 69 73 Stock-based compensation 78 107 Excess
tax benefits from stock-based compensation (61) (47) Loss on
disposals of property, plant, and equipment 12 5 Amortization of
long-term debt premium (6) (8) Loss on investments 13 Decrease
(increase) in Accounts receivable (2,949) (2,711) Inventoried costs
(106) (124) Prepaid expenses and other current assets 10 (32)
Increase (decrease) in Progress payments 3,020 2,354 Accounts
payable and accruals (161) (147) Deferred income taxes 10 31 Income
taxes payable (20) (96) Retiree benefits 98 114 Other non-cash
transactions, net 24 27 Cash provided by continuing operations
1,141 624 Cash used in discontinued operations (101) Net cash
provided by operating activities $1,141 $523 Non-Cash Investing and
Financing Activities Sale of businesses Liabilities assumed by
purchaser $18 Purchase of business Fair value of assets acquired,
including goodwill $688 Consideration given for businesses
purchased (584) Liabilities assumed $104 SCHEDULE 5 NORTHROP
GRUMMAN CORPORATION FUNDED CONTRACT ACQUISITIONS AND TOTAL BACKLOG
($ in millions) (unaudited) FUNDED CONTRACT ACQUISITIONS(1) SECOND
QUARTER SIX MONTHS 2007 2006(4) 2007 2006(4) Information &
Services Mission Systems $1,205 $1,217 $2,901 $3,042 Information
Technology 979 924 1,959 2,132 Technical Services 575 631 1,037
1,176 Total Information & Services 2,759 2,772 5,897 6,350
Aerospace Integrated Systems 702 848 2,447 3,555 Space Technology
396 617 1,190 2,126 Total Aerospace 1,098 1,465 3,637 5,681
Electronics 1,857 1,520 4,578 3,299 Ships 1,290 2,741 2,266 5,795
Intersegment Eliminations (383) (382) (741) (734) Total $6,621
$8,116 $15,637 $20,391 TOTAL BACKLOG JUNE 30, 2007 December 31,
2006 TOTAL TOTAL FUNDED UNFUNDED BACKLOG FUNDED UNFUNDED BACKLOG
(2) (3) (2) (3) Information & Services Mission Systems $3,116
$8,379 $11,495 $3,119 $8,488 $11,607 Information Technology 2,445
1,733 4,178 2,667 1,840 4,507 Technical Services 1,341 3,390 4,731
1,375 3,973 5,348 Total Information & Services 6,902 13,502
20,404 7,161 14,301 21,462 Aerospace Integrated Systems 4,226 4,243
8,469 4,285 4,934 9,219 Space Technology 1,290 6,605 7,895 1,623
7,138 8,761 Total Aerospace 5,516 10,848 16,364 5,908 12,072 17,980
Electronics 7,849 1,655 9,504 6,585 1,583 8,168 Ships 10,605 3,473
14,078 10,854 2,566 13,420 Total $30,872 $29,478 $60,350 $30,508
$30,522 $61,030 (1) Funded contract acquisitions represent amounts
funded during the period on customer contractually obligated
orders. (2) Funded backlog represents unfilled orders for which
funding has been contractually obligated by the customer. (3)
Unfunded backlog represents firm orders for which funding is not
currently contractually obligated by the customer. Unfunded backlog
excludes unexercised contract options and unfunded Indefinite
Delivery Indefinite Quantity contract awards. (4) Certain prior
period amounts have been reclassified to conform to the 2007
presentation. SCHEDULE 6 NORTHROP GRUMMAN CORPORATION REALIGNED
SEGMENT OPERATING RESULTS ($ in millions) (unaudited) AS REPORTED
2006 Year Ended Three Months Ended Total NET SALES 2004 2005 Mar 31
Jun 30 Sep 30 Dec 31 Year Information & Services Mission
Systems $4,586 $5,017 $1,232 $1,295 $1,234 $1,313 $5,074
Information Technology 3,462 3,771 948 993 1,039 1,051 4,031
Technical Services 1,492 1,533 351 402 535 501 1,789 Total
Information & Services 9,540 10,321 2,531 2,690 2,808 2,865
10,894 Aerospace Integrated Systems 4,610 5,489 1,416 1,383 1,317
1,384 5,500 Space Technology 3,269 3,395 855 865 782 849 3,351
Total Aerospace 7,879 8,884 2,271 2,248 2,099 2,233 8,851
Electronics 6,390 6,602 1,504 1,610 1,669 1,795 6,578 Ships 6,252
5,786 1,133 1,437 1,238 1,513 5,321 Other 230 42 Intersegment
Eliminations (1,291) (1,568) (346) (384) (381) (385) (1,496) Total
Sales and Service Revenue $29,000 $30,067 $7,093 $7,601 $7,433
$8,021 $30,148 SEGMENT OPERATING MARGIN Information & Services
Mission Systems $314 $374 $113 $125 $119 $113 $471 Information
Technology 246 328 84 86 95 87 352 Technical Services 71 89 19 33
35 22 110 Total Information & Services 631 791 216 244 249 222
933 Aerospace Integrated Systems 431 499 148 141 137 125 551 Space
Technology 236 274 71 81 73 68 293 Total Aerospace 667 773 219 222
210 193 844 Electronics 661 702 176 172 195 201 744 Ships 395 249
68 129 76 120 393 Other (3) (17) Intersegment Eliminations (59)
(84) (26) (25) (34) (30) (117) Total Segment Operating Margin (1)
$2,292 $2,414 $653 $742 $696 $706 $2,797 (1) Non-GAAP measure.
Management uses segment operating margin as an internal measure of
financial performance for the individual business segments.
NORTHROP GRUMMAN CORPORATION REALIGNED SEGMENT OPERATING RESULTS ($
in millions) (unaudited) REALIGNED 2006 Year Ended Three Months
Ended Total NET SALES 2004 2005 Mar 31 Jun 30 Sep 30 Dec 31 Year
Information & Services Mission Systems $5,087 $5,494 $1,340
$1,407 $1,340 $1,407 $5,494 Information Technology 3,462 3,736 929
976 1,023 1,034 3,962 Technical Services 1,534 1,617 383 431 526
518 1,858 Total Information & Services 10,083 10,847 2,652
2,814 2,889 2,959 11,314 Aerospace Integrated Systems 4,610 5,489
1,416 1,383 1,317 1,384 5,500 Space Technology 2,723 2,866 733 738
699 753 2,923 Total Aerospace 7,333 8,355 2,149 2,121 2,016 2,137
8,423 Electronics 6,390 6,602 1,504 1,610 1,669 1,795 6,578 Ships
6,252 5,786 1,133 1,437 1,238 1,513 5,321 Other 230 42 Intersegment
Eliminations (1,288) (1,565) (345) (381) (379) (383) (1,488) Total
Sales and Service Revenue $29,000 $30,067 $7,093 $7,601 $7,433
$8,021 $30,148 SEGMENT OPERATING MARGIN Information & Services
Mission Systems $364 $424 $125 $144 $131 $119 $519 Information
Technology 246 322 80 84 92 86 342 Technical Services 75 100 24 38
34 24 120 Total Information & Services 685 846 229 266 257 229
981 Aerospace Integrated Systems 431 499 148 141 137 125 551 Space
Technology 182 219 58 60 66 61 245 Total Aerospace 613 718 206 201
203 186 796 Electronics 661 702 176 172 195 201 744 Ships 395 249
68 129 76 120 393 Other (3) (17) Intersegment Eliminations (59)
(84) (26) (26) (35) (30) (117) Total Segment Operating Margin(1)
$2,292 $2,414 $653 $742 $696 $706 $2,797 (1) Non-GAAP measure.
Management uses segment operating margin as an internal measure of
financial performance for the individual business segments.
DATASOURCE: Northrop Grumman Corporation CONTACT: Media, Dan
McClain, +1-310-201-3335, or Investors, Gaston Kent,
+1-310-201-3423, both of Northrop Grumman Corporation Web site:
http://www.northropgrumman.com/
Copyright
Northrop Grumman (NYSE:NOC)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Northrop Grumman (NYSE:NOC)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024