Company: NOC
Filing Date: 2025-04-22
Form Type: 10-Q
Source: 0001133421-25-000023
Chunk: 42

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-04-22
Form: 10-Q
Item: Part I, Item 1
Chunk 42
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63)(6)950 %Intangible asset amortization and PP&E step-up depreciation21 25 (16)%Other unallocated corporate expense37 14 164 %Unallocated corporate expense58 39 49 %Segment operating income$568 $1,104 (49)%Segment operating margin rate6.0 %10.9 %

First quarter 2025 segment operating income decreased $536 million, or 49 percent, primarily due to the $477 million B-21 loss provision described above and lower operating income at Space Systems and Mission Systems, partially offset by higher operating income at Defense Systems. Segment operating margin rate decreased to 6.0 percent from 10.9 percent, primarily due to the B-21 loss provision and a lower operating margin rate at Mission Systems, partially offset by higher operating margin rates at Defense Systems and Space Systems.

FAS/CAS Operating Adjustment 

The first quarter 2025 FAS/CAS operating adjustment increased primarily due to higher CAS pension expense largely driven by plan asset returns in prior years and changes in certain CAS actuarial assumptions as of December 31, 2024.

Unallocated Corporate Expense

The increase in first quarter 2025 unallocated corporate expense is primarily due to higher deferred state tax expense associated with research and development expenditures and the utilization of state tax credit carryforwards.

Net EAC Adjustments - We record changes in estimated contract earnings at completion (net EAC adjustments) using the cumulative catch-up method of accounting. Net EAC adjustments can have a significant effect on segment operating income and margin rate.

The aggregate favorable and unfavorable EAC adjustments are presented in the table below:

Three Months Ended March 31$ in millions20252024Favorable EAC adjustments$324 $362 Unfavorable EAC adjustments(424)(268)Net EAC adjustments$(100)$94 

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Table of ContentsNORTHROP GRUMMAN CORPORATION                        

Net EAC adjustments by segment are presented in the table below:

Three Months Ended March 31$ in millions20252024Aeronautics Systems$(189)$76 Defense Systems23 7 Mission Systems37 16 Space Systems29 2 Eliminations— (7)Net EAC adjustments$(100)$94 

AERONAUTICS SYSTEMSThree Months Ended March 31%$ in millions20252024ChangeSales$2,814 $3,044 (8)%Operating (loss)