10-KPeriod: FY2013

NORTHROP GRUMMAN CORP /DE/ Annual Report, Year Ended Dec 31, 2013

Filed February 3, 2014For Securities:NOC

Summary

Northrop Grumman Corporation's 2013 10-K report highlights a year of stable performance, underscored by its primary reliance on U.S. government contracts, which constituted over 86% of its revenue. The company operates across four segments: Aerospace Systems, Electronic Systems, Information Systems, and Technical Services, delivering a wide range of defense and security solutions. Despite ongoing U.S. government budget pressures and sequestration, Northrop Grumman managed its operations effectively, with total sales slightly declining to $24.66 billion from $25.22 billion in the prior year. Operating income remained strong at $3.12 billion. The company continued its commitment to shareholder returns through dividends and share repurchases, authorized a new $4.0 billion repurchase program, and maintained a healthy free cash flow from continuing operations of $2.12 billion. Key risk factors identified include heavy dependence on U.S. government funding, potential contract terminations, and regulatory compliance.

Financial Highlights

51 data points
Beta

Revenue

$24.66B

56.9% Gross Margin

Net Income

$1.95B

7.9% Net Margin

EPS (Diluted)

$8.35

Total Assets

$26.38B

Cash & Equivalents

$5.15B

Free Cash Flow

$2.12B

Financial Statements
Beta
Revenue$24.66B
Cost of Revenue$10.62B
Gross Profit$14.04B
R&D Expenses$507.00M
Operating Income$3.12B
Net Income$1.95B
EPS (Basic)$8.50
EPS (Diluted)$8.35
Shares Outstanding (Basic)229.60M
Shares Outstanding (Diluted)233.90M

Key Highlights

  • 1Significant reliance on U.S. Government contracts, accounting for over 86% of total revenue in 2013.
  • 2Total sales slightly decreased to $24.66 billion in 2013 from $25.22 billion in 2012, reflecting ongoing U.S. defense budget pressures.
  • 3Operating income remained robust at $3.12 billion for 2013, with an operating margin rate of 12.7%.
  • 4The company initiated a new share repurchase program authorizing up to $4.0 billion of common stock.
  • 5Free cash flow from continuing operations was $2.12 billion in 2013.
  • 6Northrop Grumman operates through four main segments: Aerospace Systems, Electronic Systems, Information Systems, and Technical Services.
  • 7The company is subject to significant risks related to U.S. government spending, program funding, and regulatory compliance.

Frequently Asked Questions

Northrop Grumman's primary source of revenue is from the U.S. Government, which accounted for over 86% of its total revenue in 2013. This includes contracts with the Department of Defense and intelligence community.

In 2013, Northrop Grumman saw a slight decrease in total sales to $24.66 billion from $25.22 billion in 2012. Operating income remained stable at $3.12 billion. The company also continued to return capital to shareholders, authorizing a significant new share repurchase program.

Northrop Grumman is organized into four operating segments: Aerospace Systems, Electronic Systems, Information Systems, and Technical Services.

Key risks include heavy dependence on U.S. government funding and potential changes in defense budgets, the ability to win and retain government contracts, and compliance with numerous government regulations. Sequestration and budget uncertainties are also significant concerns.