Company: NOC
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0001133421-25-000053
Chunk: 22

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-10-21
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 $34 million for FDII, partially offset by $53 million of interest expense on unrecognized tax benefits and $17 million of tax expense related to nondeductible goodwill in the divested business. The year to date 2024 ETR included benefits of $280 million for research credits, partially offset by $110 million of interest expense on unrecognized tax benefits and $11 million in tax expense related to FDII.Taxes receivable, which are included in Prepaid expenses and other current assets in the unaudited condensed consolidated statements of financial position, were $786 million as of September 30, 2025 and $517 million as of December 31, 2024. Enactment of the OBBBA resulted in an increase of $346 million to taxes receivable and a decrease of $383 million to deferred tax assets as of September 30, 2025.During 2025, we increased our unrecognized tax benefits by approximately $180 million principally in connection with state apportionment matters and research credits. It is reasonably possible that within the next 12 months the company’s unrecognized tax benefits may increase by approximately $90 million.

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Table of ContentsNORTHROP GRUMMAN CORPORATION                        

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. During the fourth quarter of 2024, the company entered into an agreed Revenue Agent’s Report (“RAR”) for certain matters related to the company’s 2018-2020 federal income tax returns, resulting in a $766 million reduction to our unrecognized tax benefits and an immaterial impact to income tax expense. The matters not addressed by the agreed RAR related to the company’s 2018-2020 federal income tax returns are currently under Internal Revenue Service (IRS) examination. Certain matters related to the 2014-2017 federal income tax returns and refund claims related to its 2007-2016 federal tax returns are currently under review by the IRS Appeals Office.The Organization for Economic Co-operation and Development issued Pillar Two model rules for a global minimum tax of 15% effective January 1, 2024. Pillar Two had no impact on our third quarter or year to date 2025 or 2024 ETR, and we do not currently expect Pillar Two to significantly impact our ETR going forward.

5.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The company holds