Earnings per Share from Continuing Operations $0.80 Income from Continuing Operations $288 Million Cash from Operations Increases to Approximately $900 Million 2005 Guidance for Earnings per Share Increased to $3.60 to $3.70 2006 Guidance for Earnings per Share of $4.10 to $4.30 Confirmed 2005 and 2006 Guidance for Sales and Cash from Operations Confirmed
LOS ANGELES, Oct. 25, 2005 (PRIMEZONE) -- Northrop Grumman Corporation (NYSE:NOC) reported third quarter 2005 income from continuing operations of $288 million, or $0.80 per diluted share, compared with $291 million, or $0.80 per diluted share, for the same period of 2004. Third quarter 2005 sales were unchanged at $7.4 billion.
As announced on Oct. 10, 2005, Northrop Grumman's third quarter 2005 consolidated sales and earnings were negatively impacted by hurricane damage to the company's Ship Systems facilities on the Gulf Coast. Hurricane-related impacts reduced Ships third quarter operating margin by $165 million and reduced consolidated third quarter earnings by $0.30 per diluted share. The hurricane-related impacts were partially offset by the sale of 2.1 million shares of Endwave Corporation (Nasdaq:ENWV) common stock, which resulted in a pre-tax gain of $81 million, or $0.15 per diluted share.
"We again demonstrated our ability to produce higher sales, margin and cash across our businesses," said Ronald D. Sugar, Northrop Grumman chairman, chief executive officer and president. "Although Hurricane Katrina impacted Ships, sales and operating margin rose in every other business, and we've generated $2 billion in operating cash year to date, 20 percent more than last year."
The company's third quarter 2005 consolidated operating margin includes higher operating margin in all of the company's segments, with the exception of Ships, and operating margin rate expansion in Mission Systems, Information Technology and Space Technology. Operating margin declined to $433 million from $538 million for the same period of 2004, due to the hurricane-related impacts in Ships.
Unallocated expenses for the 2005 third quarter declined to $42 million from $62 million in the same period of 2004 reflecting lower legal costs and lower mark-to-market stock compensation expense.
During the third quarter of 2005, the company sold 2.1 million shares of Endwave common stock, which generated $81 million in pre-tax earnings. This contributed to the increase in Other, net for the 2005 third quarter to $95 million from an expense of $6 million for the same period in 2004.
The effective tax rate applied to income from continuing operations for the 2005 third quarter was 33.8 percent compared with 34.2 percent in the 2004 third quarter.
Net income for the 2005 third quarter increased to $293 million, or $0.81 per diluted share, from $278 million, or $0.76 per diluted share, for the same period of 2004. Third quarter 2005 net income reflects a $5 million gain on disposal of discontinued operations, and third quarter 2004 results include a $13 million loss on disposal of discontinued operations.
Contract acquisitions increased to $5.2 billion in the third quarter of 2005 from $4.7 billion for the same period of 2004. Total backlog, which includes funded backlog and firm orders for which funding is not currently contractually obligated by the customer, was $56.2 billion at Sept. 30, 2005.
Cash Measurements and Debt
Net cash provided by operating activities for the 2005 third quarter increased to $891 million from $739 million for the third quarter of 2004. Capital spending in the 2005 third quarter totaled $173 million.
Northrop Grumman's total debt was $5.2 billion at Sept. 30, 2005, unchanged from Dec. 31, 2004. Net debt was $3.4 billion at Sept. 30, 2005, compared with $3.9 billion at Dec. 31, 2004.
2005 & 2006 Guidance
For 2005, the company expects sales to increase to between $30.5 and $31 billion, and earnings from continuing operations to increase to $3.60 to $3.70 per diluted share. The 2005 guidance includes estimated pension expense as determined in accordance with accounting principles generally accepted in the United States of $415 million, and government Cost Accounting Standards (CAS) pension expense of $395 million. Net cash provided by operating activities in 2005 is expected to range between $2.2 and $2.5 billion.
For 2006, the company expects sales to increase to approximately $32 billion, and earnings from continuing operations to increase to between $4.10 and $4.30 per diluted share, which assumes that pension expense as determined in accordance with accounting principles generally accepted in the United States and CAS pension expense are the same as estimates for 2005. Actual 2006 pension expense is subject to variation and will depend on plan asset returns in 2005 and discount rate and expected rate of return assumptions. Net cash provided by operating activities in 2006 is expected to range between $2.3 and $2.5 billion.
Segment Results
Effective Jan. 1, 2005, certain business areas within the Electronic Systems, Ships and Space Technology segments were realigned and some business areas have been renamed. Where applicable, all prior period information has been reclassified to reflect these realignments, as shown in Schedule 5 of this press release. In addition, the Air Combat Systems business area in the Integrated Systems segment has been renamed and is referred to as Integrated Systems Western Region in the discussion below.
ELECTRONIC SYSTEMS
($ in millions)
THIRD QUARTER
----------------------------
2005 2004
--------- ---------
Sales $1,594 $1,558
Operating Margin 182 178
% Operating margin to sales 11.4% 11.4%
Electronic Systems third quarter 2005 sales increased 2 percent from the third quarter of 2004 primarily due to increases in Government Systems and Defensive & Navigation Systems, which were partially offset by lower sales in Aerospace Systems. Government Systems sales increased 32 percent, and Defensive & Navigation Systems sales increased 11 percent. Electronic Systems third quarter 2005 operating margin increased 2 percent from the third quarter of 2004.
On Jan.1, 2005, the manufacturer of complex printed circuit boards and assemblies and the electronic connector manufacturer previously reported under "Other" were realigned to the company's Electronic Systems segment. The impact to prior year results for Electronic Systems is not significant and prior year results have not been reclassified.
SHIPS
($ in millions)
THIRD QUARTER
----------------------------
2005 2004
--------- ---------
Sales $1,222 $1,537
Operating Margin (68) 96
% Operating margin to sales -- 6.2%
Ships third quarter 2005 sales, which include the financial results of the Newport News and Ship Systems sectors, decreased 20 percent from the third quarter of 2004, due to hurricane impacts and lower DD(X) sales at the Ship Systems sector. Sales in Surface Combatants, Expeditionary Warfare and Commercial & Other declined due to hurricane-related work delays and the adjustment of prior sales to account for hurricane-related cost growth. The decrease in Surface Combatants also includes lower DD(X) sales than in the prior year period. Sales in Submarines and Aircraft Carriers increased 6 percent and 4 percent, respectively, over the prior year results.
The decline in Ships third quarter 2005 operating margin reflects a $150 million cumulative adjustment to account for hurricane-related cost growth at the Ship Systems sector, as well as a $15 million impact from hurricane-related work delays at Ship Systems. Third quarter 2005 results also include higher margin in Aircraft Carriers and Submarines due to higher sales volume and improved performance.
INTEGRATED SYSTEMS
($ in millions)
THIRD QUARTER
----------------------------
2005 2004
--------- ---------
Sales $1,426 $1,164
Operating Margin 112 105
% Operating margin to sales 7.9% 9.0%
Integrated Systems third quarter 2005 sales increased 23 percent from the third quarter of 2004 due to higher sales in Airborne Early Warning & Electronic Warfare Systems and Integrated Systems Western Region. Airborne Early Warning & Electronic Warfare Systems sales increased 42 percent due to higher volume from the E-2 Advanced Hawkeye and EA-18G programs, and Integrated Systems Western Region sales increased 18 percent due to higher sales in the Joint Unmanned Combat Air System (J-UCAS), Multi-Platform Radar Technology Insertion Program (MP-RTIP) and B-2 programs.
Integrated Systems third quarter 2005 operating margin increased 7 percent from the third quarter of 2004 reflecting higher sales offset by a higher proportion of lower margin development program sales than in the prior year period.
MISSION SYSTEMS
($ in millions)
THIRD QUARTER
----------------------------
2005 2004
--------- ---------
Sales $1,405 $1,266
Operating Margin 100 82
% Operating margin to sales 7.1% 6.5%
Mission Systems third quarter 2005 sales increased 11 percent from the third quarter of 2004 due to higher sales in Missile Systems and Command, Control & Intelligence Systems. Missile Systems sales rose 31 percent primarily due to higher revenue in the Intercontinental Ballistic Missile program. Command, Control & Intelligence Systems revenue rose 5 percent.
Mission Systems third quarter 2005 operating margin increased 22 percent from the third quarter of 2004 primarily due to higher sales and improved performance in Missile Systems and Command, Control & Intelligence Systems.
INFORMATION TECHNOLOGY
($ in millions)
THIRD QUARTER
----------------------------
2005 2004
--------- ---------
Sales $1,311 $1,261
Operating Margin 93 80
% Operating margin to sales 7.1% 6.3%
Information Technology third quarter 2005 sales increased 4 percent from the third quarter of 2004 due to higher sales in Government Information Technology and Commercial Information Technology, partially offset by lower sales in Enterprise Information Technology. Government Information Technology sales rose 9 percent due to higher volume in existing programs, new program awards, and the acquisition of Integic. Commercial Information Technology sales rose 11 percent, primarily due to higher volume on existing programs and new program awards.
Information Technology third quarter 2005 operating margin increased 16 percent from the third quarter of 2004, primarily due to higher sales in Government Information Technology and Commercial Information Technology and improved performance in Commercial Information Technology and Technology Services, partially offset by lower performance in Enterprise Information Technology.
SPACE TECHNOLOGY
($ in millions)
THIRD QUARTER
----------------------------
2005 2004
--------- ---------
Sales $ 842 $ 823
Operating Margin 67 57
% Operating margin to sales 8.0% 6.9%
Space Technology third quarter 2005 sales increased 2 percent from the third quarter of 2004, primarily due to higher sales in Civil Space and Intelligence, Surveillance & Reconnaissance, which were partially offset by lower sales in Missile & Space Defense and Satellite Communications. Civil Space revenue increased 23 percent, due to higher volume from NASA and National Oceanic and Atmospheric Administration programs. Intelligence, Surveillance & Reconnaissance revenue rose 6 percent due to higher volume in restricted programs.
Space Technology third quarter 2005 operating margin increased 18 percent from the third quarter of 2004 primarily due to improved performance in Intelligence, Surveillance & Reconnaissance and higher sales volume in Civil Space.
Third Quarter 2005 Highlights
-- A Northrop Grumman-led team was awarded a contract by the Missile
Defense Agency to continue its prime contractor role for the Joint
National Integration Center (JNIC) Research and Development
Contract. The award is an indefinite delivery/indefinite quantity
contract potentially worth $1 billion over 10 years.
-- Northrop Grumman signed a contract with the United Kingdom for E-
3D AWACS support program valued at approximately $1 billion.
-- The U.S. Navy awarded Northrop Grumman a contract to provide
operations, maintenance and engineering support for the Navy and
U.S. Marine Corps East and West Coast training ranges. The
contract is valued at approximately $208 million over five years.
-- The U.S. Navy awarded Northrop Grumman a contract valued at $109.8
million for advanced planning, long-lead material and systems
engineering on the LHA(R) amphibious assault ship program. The
total contract value, if all options are exercised, will be $264
million.
-- Northrop Grumman was selected as the lead system integrator for
unmanned ground vehicles under the U.S. Army's Family of
Integrated Rapid Response Equipment (FIRRE) program. The
company's Remotec, Inc. subsidiary will provide its Tactical
Amphibious Ground Support (TAGS) vehicle as the main unmanned
ground platform to support the program.
-- Northrop Grumman received U.S. Department of Homeland Security
approval of its design for the Guardian(tm) protection system, the
company's Counter-MANPADS system intended to protect commercial
aircraft from attack by ground-based, shoulder-fired missiles.
-- The DD(X) national team led by Northrop Grumman has successfully
completed the initial critical design review for the overall
systems design for the DD(X) multi-mission destroyer. The event
demonstrated that the program was ready for the Flag level review
in September 2006 and that the DD(X) Flight 1 is complete, stable
and mature enough to enter detail design.
-- Northrop Grumman reached the first construction milestone in the
life of the new-generation aircraft carrier, CVN 21. The company
cut one of the first pieces of steel, a 15-ton plate for a side
shell unit of CVN 78, the first ship of the CVN 21 program.
-- The company announced that it will compete as the prime contractor
for the U.S. Air Force's next-generation air refueling tanker.
-- Stephen E. Frank, former chairman, president and chief executive
officer of Southern California Edison was elected to the company's
board of directors. Northrop Grumman's board now totals 11
members, 10 of whom are non-employee directors.
-- Jerry B. Agee was elected president of the company's Mission
Systems sector and lead executive for the company's missile
defense business.
-- James F. Pitts was elected president of the company's Electronic
Systems sector.
About Northrop Grumman
Northrop Grumman Corporation is a global defense company headquartered in Los Angeles, Calif. Northrop Grumman provides technologically advanced, innovative products, services and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding and space technology. With more than 125,000 employees, and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.
Northrop Grumman will webcast its earnings conference call at 12 p.m. ET on Oct. 25, 2005. 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 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," "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 becomes 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, and cash flow, 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 and appeals, hurricane recoveries, environmental remediation, divestitures of businesses, successful reduction of debt, 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, including recent hurricanes affecting the Company's Gulf Coast shipyards and the associated risks underlying the Company's assumptions regarding timely return of experienced workers with critical skills, achieving expected learning-curve progress, amounts and timing of recoveries under insurance contracts, availability of materials and supplies, reconstitution of the supply chain and other infrastructure within and outside Company facilities to enable efficient production, contractual performance relief and the application of cost sharing terms, 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 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.
NORTHROP GRUMMAN CORPORATION SCHEDULE 1
FINANCIAL HIGHLIGHTS
($ in millions, except per share)
(unaudited)
THIRD QUARTER FIRST NINE MONTHS
----------------- -----------------
2005 2004 (d) 2005 2004 (d)
------- ------- ------- -------
OPERATING RESULTS HIGHLIGHTS
Total contract
acquisitions (a) $ 5,233 $ 4,700 $18,630 $18,595
Total sales 7,446 7,408 22,861 22,007
Total operating
margin 433 538 1,644 1,469
Income from
continuing
operations 288 291 1,052 821
Net income 293 278 1,069 812
Diluted earnings
per share from
continuing
operations .80 .80 2.88 2.25
Diluted earnings
per share .81 .76 2.93 2.23
Net cash provided
by operating
activities 891 739 1,967 1,612
---------------------------------------------------------------------
SEPT 30, DEC 31,
BALANCE SHEET HIGHLIGHTS 2005 2004 (d)
------- -------
Cash and cash equivalents $ 1,712 $ 1,230
Accounts receivable, net 3,519 3,492
Inventoried costs, net 1,262 1,049
Property, plant, and
equipment, net 4,190 4,210
Total debt 5,150 5,158
Net debt (b) 3,438 3,928
Mandatorily redeemable
preferred stock 350 350
Shareholders' equity 16,949 16,700
Total assets 33,851 33,295
Net debt to capitalization
ratio (c) 16% 18%
---------------------------------------------------------------------
(a) Contract acquisitions represent orders received during the period
for which funding has been contractually obligated by the
customer.
(b) Total debt less cash and cash equivalents.
(c) Net debt divided by the sum of shareholders' equity and total debt.
(d) Certain prior year amounts have been reclassified to conform to
the 2005 presentation.
NORTHROP GRUMMAN CORPORATION SCHEDULE 2
OPERATING RESULTS
($ in millions, except per share)
(unaudited)
THIRD QUARTER FIRST NINE MONTHS
-------------------- --------------------
2005 2004 (a) 2005 2004 (a)
-------- -------- -------- --------
Sales
Electronic Systems $ 1,594 $ 1,558 $ 4,902 $ 4,687
Ships 1,222 1,537 4,323 4,538
Integrated Systems 1,426 1,164 4,129 3,444
Mission Systems 1,405 1,266 4,030 3,747
Information
Technology 1,311 1,261 3,871 3,716
Space Technology 842 823 2,580 2,465
Other 9 58 31 178
Intersegment
Eliminations (363) (259) (1,005) (768)
-------- -------- -------- --------
$ 7,446 $ 7,408 $ 22,861 $ 22,007
======== ======== ======== ========
Operating margin
Electronic Systems $ 182 $ 178 $ 541 $ 474
Ships (68) 96 137 282
Integrated Systems 112 105 356 311
Mission Systems 100 82 290 244
Information
Technology 93 80 267 224
Space Technology 67 57 198 169
Other (5) 1 (11) 6
-------- -------- -------- --------
Total segment
operating margin (b) 481 599 1,778 1,710
Reconciliation to
operating margin
Unallocated expenses (42) (62) (111) (216)
Pension expense (102) (87) (308) (263)
Reversal of CAS
pension expense
included above 98 90 295 247
Reversal of royalty
income included
above (2) (2) (10) (9)
-------- -------- -------- --------
Operating margin 433 538 1,644 1,469
Interest income 5 20 44 52
Interest expense (98) (110) (287) (335)
Other, net 95 (6) 184 7
-------- -------- -------- --------
Income from continuing
operations before
income taxes 435 442 1,585 1,193
Federal and foreign
income taxes 147 151 533 372
-------- -------- -------- --------
Income from
continuing
operations 288 291 1,052 821
Income from
discontinued
operations, net of
tax 1
Gain from disposal of
discontinued
operations, net of
tax 5 (13) 17 (10)
-------- -------- -------- --------
Net income $ 293 $ 278 $ 1,069 $ 812
======== ======== ======== ========
Weighted average
diluted shares
outstanding,
in millions 362.2 364.0 364.7 364.2
Diluted earnings per share
Continuing
operations $ .80 $ .80 $ 2.88 $ 2.25
Disposal of
discontinued
operations .01 (.04) .05 (.02)
-------- -------- -------- --------
Diluted earnings per
share $ .81 $ .76 $ 2.93 $ 2.23
======== ======== ======== ========
(a) Certain prior year amounts have been reclassified to conform to
the 2005 presentation.
(b) Non-GAAP measure. Management uses segment operating margin as an
internal measure of financial performance for the individual
business segments.
Pension expense is included in determining segment operating
margin to the extent that the cost is currently
recognized under U.S. Government Cost Accounting Standards (CAS).
In order to reconcile from segment operating margin to total
company operating margin, these amounts are reported under the
caption "Reversal of CAS pension expense included above." Total
pension expense or income determined in accordance with
accounting principles generally accepted in the United States is
reported separately as a reconciling item under the caption
"Pension expense." The reconciling item captioned "Unallocated
expenses" includes the portion of corporate, legal,
environmental, other retiree benefits, stock compensation, and
other expenses not allocated to the segments.
NORTHROP GRUMMAN CORPORATION SCHEDULE 3
ADDITIONAL SEGMENT INFORMATION
($ in millions)
(unaudited)
CONTRACT FUNDED
ACQUISITIONS(a) BACKLOG(b)
---------------------------------- ----------------
THIRD QUARTER FIRST NINE MONTHS September 30,
---------------- ---------------- ----------------
2005 2004 (c) 2005 2004 (d) 2005 2004 (c)
------- ------- ------- ------- ------- -------
Electronic
Systems $ 1,470 $ 1,288 $ 4,535 $ 4,549 $ 6,411 $ 6,330
Ships 445 614 1,932 2,724 6,774 7,935
Integrated
Systems 801 420 3,407 3,008 3,969 3,862
Mission Systems 1,094 987 3,506 3,313 2,643 2,471
Information
Technology 1,344 1,156 4,155 3,557 2,852 2,160
Space Technology 362 411 1,972 2,096 1,141 1,189
Other 14 47 41 177 38 62
Intersegment
Eliminations (297) (223) (918) (829) (497) (493)
------- ------- ------- ------- ------- -------
Total $ 5,233 $ 4,700 $18,630 $18,595 $23,331 $23,516
======= ======= ======= ======= ======= =======
TOTAL BACKLOG, September 30, 2005
---------------------------------
TOTAL
FUNDED UNFUNDED(d) BACKLOG
------- ------- -------
Electronic
Systems $ 6,411 $ 1,917 $ 8,328
Ships 6,774 3,484 10,258
Integrated
Systems 3,969 9,499 13,468
Mission Systems 2,643 7,828 10,471
Information
Technology 2,852 3,098 5,950
Space Technology 1,141 7,016 8,157
Other 38 38
Intersegment
Eliminations (497) (497)
------- ------- -------
Total $23,331 $32,842 $56,173
======= ======= =======
(a) Contract acquisitions represent orders received during the
period for which funding has been contractually obligated by
the customer.
(b) Funded backlog represents unfilled orders for which funding
has been contractually obligated by the customer.
(c) Certain prior year amounts have been reclassified to conform to
the 2005 presentation.
(d) Unfunded backlog represents firm orders for which funding is not
currently contractually obligated by the customer. Unfunded
backlog excludes unexercised contract options and unfunded
Indefinite Delivery Indefinite Quantity (IDIQ) orders.
NORTHROP GRUMMAN CORPORATION SCHEDULE 4
SALES BY BUSINESS AREA WITHIN SEGMENTS
($ in millions)
(unaudited)
THIRD QUARTER FIRST NINE MONTHS
-------------------- --------------------
2005 2004 (a) 2005 2004 (a)
-------- -------- -------- --------
Electronic Systems
Defensive &
Navigation Systems $ 482 $ 433 $ 1,490 $ 1,338
Aerospace Systems 376 417 1,240 1,187
Naval & Marine
Systems 216 207 628 617
Government Systems 208 158 607 466
C4ISR & Space Systems 162 155 482 483
Defense Other 150 188 455 596
-------- -------- -------- --------
1,594 1,558 4,902 4,687
-------- -------- -------- --------
Ships
Aircraft Carriers 484 466 1,411 1,381
Surface Combatants 280 486 1,132 1,434
Expeditionary Warfare 235 344 1,033 996
Submarines 191 180 571 520
Coast Guard & Coastal
Defense 32 29 114 75
Services 13 19 68 73
Commercial & Other (1) 38 33 119
Intrasegment
Eliminations (12) (25) (39) (60)
-------- -------- -------- --------
1,222 1,537 4,323 4,538
-------- -------- -------- --------
Integrated Systems
Integrated Systems
Western Region (b) 836 706 2,432 2,088
Airborne Early
Warning & Electronic
Warfare Systems 439 309 1,251 907
Airborne Ground
Surveillance &
Battle Management
Systems 156 149 455 452
Intrasegment
Eliminations (5) (9) (3)
-------- -------- -------- --------
1,426 1,164 4,129 3,444
-------- -------- -------- --------
Mission Systems
Command, Control &
Intelligence Systems 829 792 2,408 2,306
Missile Systems 419 319 1,141 941
Technical &
Management Services 168 172 509 545
Intrasegment
Eliminations (11) (17) (28) (45)
-------- -------- -------- --------
1,405 1,266 4,030 3,747
-------- -------- -------- --------
Information Technology
Government Information
Technology 816 750 2,416 2,243
Commercial Information
Technology 178 160 528 492
Technology Services 177 163 525 476
Enterprise Information
Technology 177 220 506 598
Intrasegment
Eliminations (37) (32) (104) (93)
-------- -------- -------- --------
1,311 1,261 3,871 3,716
-------- -------- -------- --------
Space Technology
Intelligence,
Surveillance &
Reconnaissance 298 281 883 781
Civil Space 187 152 598 470
Software Defined
Radios 137 138 408 423
Missile & Space
Defense 89 121 321 368
Satellite
Communications 118 127 332 396
Technology 26 15 88 74
Intrasegment
Eliminations (13) (11) (50) (47)
-------- -------- -------- --------
842 823 2,580 2,465
-------- -------- -------- --------
Other 9 58 31 178
Intersegment
Eliminations (363) (259) (1,005) (768)
-------- -------- -------- --------
Total Sales $ 7,446 $ 7,408 $ 22,861 $ 22,007
======== ======== ======== ========
(a) Certain prior year amounts have been reclassified to conform to
the 2005 presentation.
(b) Formerly known as Air Combat Systems.
SCHEDULE 5
NORTHROP GRUMMAN CORPORATION
SEGMENT SALES RESULTS -- AFTER REALIGNMENT
($ IN MILLIONS)
(unaudited)
Electronic Systems
Pro-Forma Sales -- After
Realignment 2004
------------------------ ------------------------------------------
Three Months Ended Total
Mar 31 Jun 30 Sep 30 Dec 31 Year
---------------------------------- ------
Defensive & Navigation
Systems $ 440 $ 465 $ 433 $ 497 $1,835
Aerospace Systems 403 367 417 422 1,609
Naval & Marine Systems 205 205 207 240 857
Government Systems 128 180 158 223 689
C4ISR & Space Systems 161 167 155 169 652
Defense Other 201 207 188 179 775
---------------------------------- ------
TOTAL SALES $1,538 $1,591 $1,558 $1,730 $6,417
================================== ======
Ships
Pro-Forma Sales -- After
Realignment 2004
------------------------ ------------------------------------------
Three Months Ended Total
Mar 31 Jun 30 Sep 30 Dec 31 Year
---------------------------------- ------
Surface Combatants $ 462 $ 486 $ 486 $ 487 $1,921
Aircraft Carriers 440 475 466 520 1,901
Expeditionary Warfare 306 346 344 440 1,436
Submarines 162 178 180 210 730
Coast Guard & Coastal
Defense 16 30 29 39 114
Services 30 24 19 26 99
Commercial & Other 41 40 38 23 142
Intrasegment
Eliminations (13) (22) (25) (31) (91)
---------------------------------- ------
TOTAL SALES $1,444 $1,557 $1,537 $1,714 $6,252
================================== ======
Space Technology
Pro-Forma Sales --
After Realignment 2004
------------------------ ------------------------------------------
Three Months Ended Total
Mar 31 Jun 30 Sep 30 Dec 31 Year
---------------------------------- ------
Intelligence,
Surveillance &
Reconnaissance $ 237 $ 263 $ 281 $ 260 $1,041
Civil Space 155 163 152 168 638
Software Defined Radios 143 142 138 123 546
Missile & Space Defense 119 128 121 119 487
Satellite Communications 138 131 127 113 509
Technology 27 32 15 26 100
Intrasegment Eliminations (13) (23) (11) (5) (52)
---------------------------------- ------
TOTAL SALES $ 806 $ 836 $ 823 $ 804 $3,269
================================== ======