Northrop Grumman

Northrop Grumman's Shipbuilding Division, (NGSB), is made up of three major shipyards - the former Ingalls Shipbuilding, Avondale Industries and Newport News Shipbuilding. 

Ingalls Shipbuilding, in Pascagoula, Mississippi, was started by Ingalls Iron Works, of Decatur, Alabama, in 1938 and acquired by Litton Industries in 1961.  Avondale Industries, in New Orleans, Louisiana, was started in 1938, acquired by Ogden Corporation in the 1960s, spun off to Connell Partnership in 1985, spun off again in 1987, and finally acquired by Litton Industries in August, 1999.  Litton began the process of merging Avondale with Ingalls to form Litton Ship Systems but was acquired by Northrop Grumman in April 2001 and Litton Ship Systems was renamed Northrop Grumman Ship Systems.  Newport News Shipbuilding, in Newport News, Virginia, was started in 1891, acquired by Tenneco in 1968, spun off in 1996, and acquired by Northrop Grumman in November 2001.  Northrop Grumman Ship Systems was consolidated with Northrop Grumman Newport News to form Northrop Grumman Shipbuilding in January 2008.

The table below summarizes the financial performance of Northrop Grumman and its consolidated shipbuilding operations since 2001.  The data for 2001 are misleading, since they only include the results for the two Ship Systems yards from April and those for Newport News from November.  There are two columns of data for 2008: column A shows the figures as reported, while column B shows the figures as I think they would have been without the company's $3 billion write-off of "impaired goodwill".

Historical data for the three individual shipbuilders and the various pre-Northrop Grumman combinations, going back to 1985, follow this table.

NORTHROP GRUMMAN 2001 2002 2003 2004 2005 2006 2007 2008 A 2008 B 2009
  mm $ mm $ mm $ mm $ mm $ mm $ mm $ mm $ mm $ mm $
Net Sales 13,558 17,206 26,396 29,853 25,186 30,148 32,018 33,887 33,887 33,755
Operating Margin 1,004 1,391 1,468 2,006 2,178 2,454 3,006 (111) 2,949 2,483
Operating Margin (%) 7.4% 8.1% 5.6% 6.7% 8.6% 8.1% 9.4% (0.3%) 8.7% 7.4%
Net Income 427 64 866 1,084 1,400 1,567 1,803 (1,262) 1,798 1,686
Net Income (%) 3.1% 0.4% 3.3% 3.6% 5.6% 5.2% 5.6% (3.7%) 5.3% 5.0%
Total Assets 20,886 42,266 33,022 33,361 34,211 32,009 33,373 30,197 33,257 30,252
Stockholders' Equity 7,391 14,322 15,785 16,700 16,824 16,615 17,687 11,920 14,980 12,687
Property, Plant and Equipment 2,767 3,605 4,047 4,210 4,404 4,531 4,715 4,810 4,810 4,868
Depreciation 266 496 682 734 773 705 730 761 761 736
Capital Expenditure 393 521 637 672 824 737 685 681 681 654
Employees 96,800 117,300 123,400 125,400 123,600 122,200 122,600 123,600 123,600 120,700
Net Sales/Employee 140,000 146,000 214,000 238,000 204,000 246,700 246,700 274,200 274,200 279,660
Shipbuilding Unit                    
Net Sales 1,880 4,712 5,451 6,252 5,786 5,321 5,788 6,145 6,145 6,213
Operating Margin 19 306 295 389 241 393 538 (2,307) 183 299
Operating Margin (%) 1.0% 6.5% 5.4% 6.2% 4.2% 7.4% 9.3% (37.5%) 3.0% 4.8%
Total Assets 6,040 6,532 6,482 6,521 6,756 6,946 6,874 4,427 6,917 4,585
Depreciation 82 147 142 148 155 153 170 193 193 186
Capital Expenditure 44 76 136 220 266 287 247 218 218 181
Employees 32,500 34,000 38,000 39,200            
Net Sales/Employee n/a 138,600 143,400 159,500            
Shipbuilding Proportions                    
Net Sales 13.9% 27.4% 20.6% 20.9% 23.0% 17.6% 18.1% 18.1% 18.1% 18.4%
Operating Margin 1.9% 22.0% 20.1% 19.4% 11.1% 16.0% 17.9% n/a 6.2% 12.0%
Total Assets 28.9% 15.5% 19.6% 19.5% 19.7% 21.7% 20.6% 14.7% 20.8% 15.2%
Depreciation 30.8% 29.6% 20.8% 20.2% 20.1% 21.7% 23.3% 25.4% 25.4% 25.3%
Capital Expenditure 11.2% 14.6% 21.4% 32.7% 32.3% 38.9% 36.1% 32.0% 32.0% 27.7%
Employees 33.6% 27.7% 30.8% 31.3%            
Net Sales/Employee n/a 94.9% 67.0% 67.0%            

Ingalls Shipbuilding (1985-1999)

Data Extracted from the Company's 10-K ($mm)

Other Interesting Data

Year

Revenue

Operating Profit

Total Assets

Property, Plant & Equipment

Annual Dep'n

Cum. Dep'n

Cap Ex

Number of Employees

Revenue per Employee

Profit as a % of Revenue

Asset Turnover

Cap Ex per Employee

1985

975

94

146

N/A

15

N/A

17

11,550

84

9.6%

6.68

1,470

1986

1,193

118

193

N/A

16

N/A

17

12,700

94

9.9%

6.18

1,340

1987

1,130

121

245

N/A

17

N/A

12

11,850

95

10.7%

4.61

1,010

1988

920

114

284

N/A

17

N/A

39

11,650

79

12.4%

3.20

3,350

1989

1,049

127

281

N/A

17

N/A

12

10,600

99

12.1%

3.73

1,130

1990

1,125

140

271

N/A

18

N/A

24

13,300

85

12.4%

4.15

1,850

1991

1,240

130

353

N/A

17

N/A

27

15,800

78

10.5%

3.51

1,740

1992

1,485

138

347

N/A

17

N/A

23

15,700

95

9.3%

4.28

1,430

1993

1,393

130

327

N/A

18

N/A

23

15,300

91

9.3%

4.26

1,500

1994

1,484

141

330

N/A

19

N/A

22

14,400

103

9.5%

4.50

1,490

1995

1,396

132

392

N/A

18

N/A

26

13,700

102

9.4%

3.60

1,900

1996

1,295

143

361

N/A

19

N/A

19

11,900

109

11.0%

3.60

1,600

1997

1,112

135

327

N/A

19

N/A

29

10,800

103

12.1%

3.40

2,685

1998

1,034

134

338

N/A

20

N/A

34

10,800

96

13.0%

3.06

3,148

1999

1,085

161

361

N/A

21

N/A

37

11,100

97

14.8%

3.01

3,333

Avondale Industries (1985-1998)

Avondale did not publish an annual report for 1999.

Data Extracted from the Company's 10-K ($mm)

Other Interesting Data

Year

Revenue

Operating Profit

Total Assets

Property, Plant and Equipment

Annual Dep'n

Cum. Dep'n

Cap Ex

Number of Employees

Revenue per Employee ($000)

Profit as a % of Revenue

Asset Turnover

Cap Ex per Employee ($)

1985

436

5.3

302

190

10.4

16.1

27.0

4,600

95

1.2%

1.4

5,870

1986

483

22.1

485

196

22.5

26.4

5.3

6,250

77

4.6%

1.0

848

1987

521

36.4

349

202

19.2

45.2

6.0

7,000

74

7.0%

1.5

857

1988

570

39.8

419

217

18.9

63.3

5.6

8,500

56

7.0%

1.4

659

1989

708

32.1

477

222

12.2

63.4

14.0

8,500

83

4.5%

1.5

1,647

1990

752

(4.0)

491

235

12.2

75.9

13.1

8,500

88

(0.5%)

1.5

1,541

1991

777

(58.2)

384

240

12.9

86.5

4.6

8,200

95

(7.5%)

2.0

561

1992

576

7.5

346

241

12.3

97.5

2.2

7,500

77

1.3%

1.7

293

1993

457

3.4

302

229

11.8

103.4

2.9

6,700

68

0.7%

1.5

433

1994

476

16.9

273

232

11.6

112.8

5.1

6,200

77

3.6%

1.7

823

1995

576

26.5

317

252

9.8

121.7

21.3

5,300

109

4.6%

1.8

4,019

1996

625

36.8

363

255

10.8

127.0

13.8

5,600

112

5.9%

1.7

2,464

1997

614

43.6

376

265

10.5

134.5

13.6

6,850

90

7.1%

1.6

1,985

1998

749

36.9

397

290

8.9

141.2

27.7

5,550

135

4.9%

1.9

4,991

Litton Ship Systems

In 2000, Litton published the first results for Litton Ship Systems that included both Ingalls and Avondale.

Data Extracted from the Company's 10-K ($mm)

Other Interesting Data

Year

Revenue

Operating Profit

Total Assets

Property, Plant & Equipment

Annual Dep'n

Cum. Dep'n

Cap Ex

Number of Employees

Revenue per Employee ($000)

Profit as a % of Revenue

Asset Turnover

Cap Ex per Employee

2000

1,983

279

1,136

N/A

49

N/A

110

18,100

110

14.1%)

1.75

6,077

Newport News Shipbuilding (1985-2000)

Data Extracted from the Company's 10-Ks ($mm)

Other Interesting Data

Year

Revenue

Operating Profit

Total Assets

Property, Plant & Equipment

Annual Dep'n

Cum. Dep'n

Cap Ex

Number of Employees

Revenue per Employee

Profit as a % of Revenue

Asset Turnover

Cap Ex per Employee

1985

1,801

285

963

1,084

36

287

152

30,000

60

15.8%

1.87

5,070

1986

1,641

246

1,083

1,190

43

325

109

28,500

58

15.0%

1.52

2,250

1987

1,659

175

1,294

1,306

48

374

102

28,500

58

10.5%

1.28

3,580

1988

1,671

175

1,451

1,361

53

400

85

29,000

58

10.5%

1.15

2,930

1989

1,949

200

1,469

1,412

59

449

73

28,000

70

10.3%

1.33

2,610

1990

2,113

225

1,499

1,491

65

504

85

29,000

73

10.6%

1.41

2,930

1991

2,216

225

1,412

1,536

72

566

64

28,000

79

10.2%

1.45

2,290

1992

2,265

249

1,450

1,555

74

627

35

24,500

92

11.0%

1.54

1,430

1993

1,861

225

1,235

1,527

72

659

36

22,000

85

12.1%

1.46

1,640

1994

1,753

200

1,263

1,525

70

729

29

20,000

88

11.4%

1.30

1,450

1995

1,756

160

1,380

1,616

67

796

77

18,200

96

9.1%

1.30

4,224

1996

1,870

140

1,489

1,697

65

861

74

17,900

104

7.5%

1.30

4,126

1997

1,707

(19)

1,476

1,634

57

818

31

18,400

93

(1.1%)

1.16

1,685

1998

1,862

175

1,600

1,608

62

845

26

18,000

103

9.4%

1.16

1,444

1999

1,863

218

1,512

1,600

66

884

29

17,300

108

11.7%

1.23

1,676

2000

2,072

206

1,476

1,601

55

909

35

18,000

115

9.9%

 1.29

1,944

 

Comparative Financial Data for Litton Industries (1996-2000)

 

The following tables present the data for the past five years in the same format as those for the major foreign shipbuilders.

 

LITTON INDUSTRIES 1996 1997 1998 1999 2000
  mm USD mm USD mm USD mm USD mm USD
Net Sales 4,236       4,789       5,149       5,607     5,588
Operating Margin        357          414          457          387        562
Operating Margin (%) 8.4% 8.6% 8.9% 6.9% 10.1%
Net Income        182          189          218          149        221
Net Income (%) 4.3% 3.9% 4.2% 2.7% 4.0%
Total Assets     3,817       3,921       4,511       4,653     4,836
Stockholders' Equity     1,099       1,248       1,397       1,518     1,496
Property, Plant and Equipment        708          785          763          780        851
Depreciation        125          147          157          170        189
Capital Expenditure        105          127          144          160        183
Employees   39,100     38,300     40,500     40,300   40,300
Net Sales/Employee  108,338    125,039    127,136    139,132  138,660
Shipbuilding Unit          
Net Sales     1,920       1,726       1,783       1,865     1,983
Operating Margin        180          179          181          209        279
Operating Margin (%) 9.4% 10.4% 10.2% 11.2% 14.1%
Total Assets        724          703          735          754     1,136
Depreciation          30  29            29            30          49
Capital Expenditure          33            43            62            72        110
Employees   17,500     16,400     16,400     16,600   18,100
Net Sales/Employee  109,714    105,244    108,720    112,349  109,558
Shipbuilding Proportions          
Net Sales 45.3% 36.0% 34.6% 33.3% 35.5%
Operating Margin 50.4% 43.2% 39.6% 54.0% 49.6%
Total Assets 19.0% 17.9% 16.3% 16.2% 23.5%
Depreciation 24.0% 19.7% 18.5% 17.6% 25.9%
Capital Expenditure 31.4% 33.9% 43.1% 45.0% 60.1%
Employees 44.8% 42.8% 40.5% 41.2% 44.9%
Net Sales/Employee 101.3% 84.2% 85.5% 80.8% 79.0%

 

Comparative Financial Data for Newport News (1996-2000)

 

The following tables present the data for the past five years in the same format as those for the major foreign shipbuilders.

 

NEWPORT NEWS 1996 1997 1998 1999 2000
  mm USD mm USD mm USD mm USD mm USD
Net Sales     1,870     1,707     1,862     1,863     2,072
Operating Margin        140        (19)        175        218        206
Operating Margin (%) 7.5% -1.1% 9.4% 11.7% 9.9%
Net Income          55        (48)          66          97          90
Net Income (%) 2.9% -2.8% 3.5% 5.2% 4.3%
Total Assets     1,489     1,515     1,600     1,512     1,476
Stockholders' Equity        232        183        232        273        258
Property, Plant and Equipment        836        816        763        716        692
Depreciation          65          57          62          66          55
Capital Expenditure          74          31          26          29          35
Employees   17,937   18,400