Company: NOC
Filing Date: 2025-07-22
Form Type: 10-Q
Source: 0001133421-25-000049
Chunk: 48

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-07-22
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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 actuarial assumptions as of December 31, 2024.

Unallocated Corporate (Income) Expense

Current Quarter

The change in second quarter 2025 unallocated corporate (income) expense is primarily due to a $231 million gain on the sale of our training services business, partially offset by $19 million of unallowable state taxes and transaction costs associated with the divestiture. Non-divestiture-related unallocated corporate expense increased primarily due to higher deferred state tax expense associated with research and development expenditures and the utilization of state tax credit carryforwards, as well as the prior year including a $26 million increase in our estimated recovery of certain environmental remediation costs.

Year to Date

The change in year to date 2025 unallocated corporate (income) expense is primarily due to a $231 million gain on the sale of our training services business, partially offset by $20 million of unallowable state taxes and transaction costs associated with the divestiture. Non-divestiture-related unallocated corporate expense increased primarily due to higher deferred state tax expense associated with research and development expenditures and the utilization of state tax credit carryforwards, as well as the prior year including a $26 million increase in our estimated recovery of certain environmental remediation costs.

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 June 30Six Months Ended June 30$ in millions2025202420252024Favorable EAC adjustments$404 $360 $728 $722 Unfavorable EAC adjustments(278)(322)(702)(590)Net EAC adjustments$126 $38 $26 $132 

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Table of ContentsNORTHROP GRUMMAN CORPORATION                        

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

Three Months Ended June 30Six Months Ended June 30$ in millions2025202420252024Aeronautics Systems$30 $41 $(159)$117 Defense Systems83 28 106 35 Mission Systems5 (21)42 (5)Space Systems13 (12)42 (10)Eliminations(5)2 (5)(5)Net EAC adjustments