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Actionable news in NOC: NORTHROP GRUMMAN Corp,

Northrop Grumman: Million Shares Repurchased For $

The following excerpt is from the company's SEC filing.

Million in Q3;

Million Shares Repurchased Year to Date for $


2015 EPS Guidance Range Increased to $9.70 - $9.80

FALLS CHURCH, Va. – Oct. 28, 2015 – Northrop Grumman Corporation (NYSE: NOC) reported


net earnings increased

9 percent

$516 million

per diluted share, from

$473 million

per diluted share in the

quarter of

diluted earnings per share are based on

187.9 million

weighted average shares outstanding compared with

209.2 million

shares in the prior year period . The company repurchased

5.6 million

shares of its common stock for $

944 million

. The company has now completed the 60 million share repurchase goal announced in May 2013. As of Sept. 30, 2015, $4.6 billion remained on the company's share repurchase authorizations.

“We continue to position Northrop Grumman for innovation and affordability and remain focused on creating value through our strong performance, outstanding portfolio and value-creating cash deployment. Our opportunity set offers the potential for long-term profitable growth and value creation for our shareholders, customers and employees,” said Wes Bush, chairman, chief executive officer and president.

2980 Fairview Park Drive • Falls Church, VA 22042-4511

Northrop Grumman Reports Third Quarter 2015 Financial Results

Table 1 — Financial Highlights

Nine Months

($ in millions, except per share amounts)



Segment operating income

Segment operating margin rate

Operating income

Operating margin rate

Net earnings

Diluted EPS

Net cash provided by operating activities

Free cash flow

Pension-adjusted Operating Highlights

Net FAS/CAS pension adjustment

Pension-adjusted operating income

Pension-adjusted operating margin rate

Pension-adjusted Per Share Data

After-tax net pension adjustment per share

Pension-adjusted diluted EPS

Weighted average shares outstanding — Basic

Dilutive effect of stock awards and options

Weighted average shares outstanding — Diluted

Non-GAAP metric — see definitions at the end of this press release.

segment operating income declined to

$726 million

, and segment operating margin rate


190 basis points

12.1 percent

. Last year's third quarter results included the benefit of

$75 million

realized for settlements of certain legal claims and

$37 million

of additional margin resulting from lower CAS pension cost due to passage of the Highway and Transportation Funding Act of 2014 (HATFA). Operating income

3 percent

and operating margin rate

40 basis points

13.3 percent

due to higher net FAS/CAS pension adjustment and lower unallocated corporate expenses. Last year's third quarter net FAS/CAS pension adjustment was an expense of

$20 million

due to a

$132 million

cumulative reduction in 2014 CAS pension expense resulting from the HATFA legislation.

Total backlog as of Sept. 30, 2015, was

$35.9 billion

$38.2 billion

new awards totaled

$4.8 billion

, and new awards for the first

months totaled

$15.5 billion

Table 2 — Cash Flow Highlights

($ millions)

Cash provided by operating activities before after-tax discretionary pension contributions

After-tax discretionary pension pre-funding impact

Capital expenditures

Free cash flow before after-tax discretionary pension contributions

cash provided by operating activities before after-tax discretionary pension contributions totaled

$557 million

and free cash flow totaled

$455 million

. The declines in cash from operations and free cash flow from the prior year period are principally due to changes in trade working capital.

Changes in cash and cash equivalents include the following for cash from operating, investing and financing activities through Sept. 30, 2015:

$529 million

provided by operations after $500 million discretionary pension contribution


$334 million

used for capital expenditures


$2.9 billion

used for repurchase of common stock

$600 million

net proceeds from issuance of long-term debt

$458 million

used for dividends

2015 Guidance

The company's 2015 financial guidance is based on the spending levels provided for in the Bipartisan Budget Act of 2013 and the Consolidated and Further Appropriations Act of 2015. The guidance assumes no disruption or cancellation of any of our significant programs and no disruption or shutdown of government operations resulting from expiration of a continuing resolution. Guidance for 2015 also assumes adequate appropriations, funding and payments for the company's programs in the first quarter of the U.S. government's fiscal year 2016 and no breach of the federal government's debt ceiling.

Prior - 7/29/15





Segment operating margin %

Unallocated corporate expense

Operating margin %


Effective tax rate %




Non-GAAP metric - see definitions at the end of this press release.

Guidance for 2015 incorporates year-to-date results and the outlook for the remainder of the year, including the effects of an anticipated change in tax methods. The company previously anticipated a tax methods change would impact third quarter 2015 results. The change was accepted by the Internal Revenue Service this month. This and other state tax items will increase fourth quarter 2015 unallocated corporate expense and effective federal tax rate. The company expects 2015 unallocated corporate expense of approximately $200 million and a 2015 effective tax rate of approximately 31.5 percent.

Table 3 — Business Results

Consolidated Sales & Segment Operating Income

Aerospace Systems

Electronic Systems

Information Systems

Technical Services

Intersegment eliminations



(190) bps

(70) bps

Reconciliation to operating income

Unallocated corporate expenses

40 bps

(20) bps

Interest expense

Other, net

Earnings before income taxes

Federal and foreign income tax expense

operating income increased 3 percent due to a

$117 million

in net FAS/CAS pension adjustment and a

$21 million

in unallocated corporate expense, which more than offset lower segment operating income. Last year's third quarter net FAS/CAS pension adjustment was an expense of

For the

, federal and foreign income tax expense

$213 million

$221 million

, and the company's effective tax rate

29.2 percent

31.8 percent

. This quarter's lower effective tax rate reflects a

benefit for additional research credits claimed on the company's prior year tax return.

Aerospace Systems ($...