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

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-07-22
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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TR, and we do not currently expect Pillar Two to significantly impact our ETR going forward.Subsequent EventOn July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. The company is evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025. We currently expect the impact of the OBBBA will be to increase the company’s effective tax rate and to favorably impact the timing of cash taxes, subject to the federal corporate alternative minimum tax. For 2025, we currently expect the OBBBA will increase our 2025 effective tax rate to the high 17 percent range and provide a current year cash tax benefit of $200 million to $250 million.

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Table of ContentsNORTHROP GRUMMAN CORPORATION                        

5.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The company holds a portfolio of marketable securities including investments to partially fund non-qualified employee benefit plans as well as investments in companies that are advancing or developing technologies applicable to our business. A portion of these securities are held in common/collective trust funds and are measured at fair value using net asset value (NAV) per share as a practical expedient; therefore, they are not categorized in the fair value hierarchy table below. Marketable securities are included in Other non-current assets in the unaudited condensed consolidated statements of financial position. The company’s derivative portfolio consists primarily of foreign currency forward contracts. Where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value using internal models based on observable market inputs.The following table presents the financial assets and liabilities the company records at fair value on a recurring basis identified by the level of inputs used to determine fair value: June 30, 2025December 31, 2024$ in millionsLevel 1Level 2Level 3TotalLevel 1Level 2Level 3TotalFinancial AssetsMarketable securities$343 $— $64 $407 $325 $— $14 $339 Marketable securities valued using NAV6 8 Total marketable securities343 — 64