Item 6. Selected Financial Data

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Item 6. Selected Financial Data

The data presented in the following table is derived from the audited consolidated financial statements and other information.

SELECTED FINANCIAL DATA



	Year Ended December 31
$ in millions, except per share amounts	2017		2016		2015		2014		2013
Sales
U.S. Government(1)	$	21,837	$	20,573	$	19,458	$	20,085	$	21,278
International(2)	3,302		3,205		3,339		3,045		2,493
Other Customers	664		730		729		849		890
Total sales	25,803		24,508		23,526		23,979		24,661
Operating income	3,299		3,193		3,076		3,196		3,123
Net earnings	2,015		2,200		1,990		2,069		1,952
Basic earnings per share	$	11.55	$	12.30	$	10.51	$	9.91	$	8.50
Diluted earnings per share	11.47		12.19		10.39		9.75		8.35
Cash dividends declared per common share	3.90		3.50		3.10		2.71		2.38
Year-End Financial Position
Total assets	$	34,917	$	25,614	$	24,424	$	26,545	$	26,351
Notes payable to banks and long-term debt	15,266		7,070		6,496		5,901		5,900
Other long-term obligations(3)	6,505		7,667		7,059		7,520		4,018
Financial Metrics
Net cash provided by operating activities	$	2,613	$	2,813	$	2,162	$	2,593	$	2,483
Free cash flow(4)	1,685		1,893		1,691		2,032		2,119
Other Information
Company-sponsored research and development expenses	$	639	$	705	$	712	$	569	$	507
Total backlog	42,878		45,339		35,923		38,199		37,033
Square footage at year-end (in thousands)	35,379		34,112		34,392		34,264		34,500
Number of employees at year-end	70,000		67,000		65,000		64,300		65,300


(1)	Sales to the United States (U.S.) Government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. Government. Each of the company’s segments derives substantial revenue from the U.S. Government.


(2)	International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. Government, direct sales with governments outside the U.S. and commercial sales outside the U.S.


(3)	Other long-term obligations include pension and other post-retirement benefit plan liabilities, deferred compensation, unrecognized tax benefits, environmental liabilities and other long-term obligations.


(4)	Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less capital expenditures, and may not be defined and calculated by other companies in the same manner. We use free cash flow as a key factor in our planning for, and consideration of, acquisitions, stock repurchases, and the payment of dividends. This measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”). See “Liquidity and Capital Resources” – “Free Cash Flow” in Management’s Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) for more information on this measure, including a reconciliation of free cash flow to net cash provided by operating activities.

(4)

Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less capital expenditures, and may not be defined and calculated by other companies in the same manner. We use free cash flow as a key factor in our planning for, and consideration of, acquisitions, stock repurchases, and the payment of dividends. This measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”). See “Liquidity and Capital Resources” – “Free Cash Flow” in Management’s Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) for more information on this measure, including a reconciliation of free cash flow to net cash provided by operating activities.

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NORTHROP GRUMMAN CORPORATION

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