Company: NOC
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0001133421-25-000053
Chunk: 56

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-10-21
Form: 10-Q
Item: Part I, Item 1
Chunk 56
---
 rate principally driven by higher net EAC adjustments across Defense Systems and Aeronautics Systems service programs.

Year to Date

Year to date 2025 service sales decreased $136 million, or 2 percent, primarily due to lower service volume at Defense Systems due to the training services divestiture and lower restricted sales at Aeronautics Systems. 

Year to date 2025 service costs decreased $162 million, or 3 percent, reflecting a higher operating margin rate principally driven by higher net EAC adjustments across Aeronautics Systems, Mission Systems and Defense Systems service programs.

BACKLOG

Backlog consisted of the following as of September 30, 2025 and December 31, 2024:

 September 30, 2025December 31, 2024$ in millionsFundedUnfundedTotalBacklogTotalBacklog% Change in 2025Aeronautics Systems$10,912 $11,538 $22,450 $25,202 (11)%Defense Systems8,643 18,455 27,098 26,614 2 %Mission Systems12,311 5,886 18,197 16,443 11 %Space Systems7,100 16,603 23,703 23,209 2 %Total backlog$38,966 $52,482 $91,448 $91,468 — %

Third quarter and year to date 2025 net awards totaled $12.2 billion and $30.4 billion, respectively. Backlog totaled $91.4 billion and reflects a $150 million reduction to backlog in connection with the training services divestiture during the second quarter of 2025. Significant third quarter new awards include $4.5 billion for restricted programs (primarily at Space Systems, Mission Systems and Aeronautics Systems), $1.8 billion for Ground-Based Midcourse Defense Weapon System (GWS), $0.5 billion for F-35 (primarily at Aeronautics Systems and Mission Systems), and $0.4 billion for Virginia Class submarines.

LIQUIDITY AND CAPITAL RESOURCES

We are focused on the efficient conversion of operating income into cash to provide for the company’s material cash requirements, including working capital needs, satisfaction of contractual commitments, funding of our pension and OPB plans, investment in our business through capital expenditures, and shareholder return through dividend payments and share repurchases.

At September