NORTHROP GRUMMAN CORP /DE/ Annual Report, Year Ended Dec 31, 2011

Northrop Grumman Corporation reported revenues of $26.4 billion for the fiscal year ended December 31, 2011. The company experienced a revenue decrease of 6% compared to the prior year, primarily driven by lower sales volumes in its Aerospace Systems and Electronic Systems segments, as well as the deconsolidation of its National Security Technologies (NSTec) joint venture. A significant event during the year was the spin-off of its Shipbuilding business (Huntington Ingalls Industries, Inc.), which is now reported as discontinued operations. Despite the revenue decline, operating income saw an increase of 15.8% to $3.3 billion, attributed to improved program performance and cost management initiatives across its segments. The company ended the year with a strong backlog of $39.5 billion, though this was impacted by a $3 billion adjustment to backlog measurement criteria. Northrop Grumman continues to be heavily reliant on U.S. government contracts, which accounted for over 90% of its revenue. Looking ahead, the company anticipates continued scrutiny on defense spending due to U.S. government deficit reduction efforts. However, Northrop Grumman believes its portfolio is well-aligned with the Department of Defense's future capability requirements, particularly in areas like intelligence, surveillance, reconnaissance (ISR), cyber warfare, and advanced electronics. The company also repurchased approximately $2.3 billion of its common stock and increased its quarterly dividend, demonstrating a commitment to returning value to shareholders.