NORTHROP GRUMMAN CORP DE
For the period ended Sep 30, 2024. Filed Oct 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 24, 2024
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10. Segment Information
- SEGMENT INFORMATION
The following table presents sales and operating income by segment:
| Three Months Ended September 30 | Nine Months Ended September 30 | |||
|---|---|---|---|---|
| $ in millions | 2024 | 2023 | 2024 | 2023 |
| Sales | ||||
| Aeronautics Systems | $2,878 | $2,766 | $8,810 | $7,876 |
| Defense Systems | 2,084 | 2,050 | 6,227 | 6,058 |
| Mission Systems | 2,823 | 2,628 | 8,255 | 7,832 |
| Space Systems | 2,870 | 2,953 | 9,021 | 8,775 |
| Intersegment eliminations | (659) | (622) | (1,966) | (1,889) |
| Total sales | 9,996 | 9,775 | 30,347 | 28,652 |
| Operating income | ||||
| Aeronautics Systems | 298 | 283 | 890 | 798 |
| Defense Systems | 196 | 201 | 614 | 605 |
| Mission Systems | 390 | 386 | 1,129 | 1,147 |
| Space Systems | 345 | 302 | 979 | 840 |
| Intersegment eliminations | (83) | (83) | (261) | (247) |
| Total segment operating income | 1,146 | 1,089 | 3,351 | 3,143 |
| FAS/CAS operating adjustment | 20 | (20) | 32 | (62) |
| Unallocated corporate expense | (46) | (53) | (102) | (151) |
| Total operating income | $1,120 | $1,016 | $3,281 | $2,930 |
| Other (expense) income | ||||
| Interest expense | (161) | (141) | (461) | (417) |
| Non-operating FAS pension benefit | 168 | 132 | 503 | 397 |
| Other, net | 61 | 111 | 142 | 193 |
| Earnings before income taxes | $1,188 | $1,118 | $3,465 | $3,103 |
FAS/CAS Operating Adjustment
For financial statement purposes, we account for our employee pension plans in accordance with FAS. However, the cost of these plans is charged to our contracts in accordance with applicable Federal Acquisition Regulation (FAR) and CAS requirements. The FAS/CAS operating adjustment reflects the difference between CAS pension expense included as cost in segment operating income and the service cost component of FAS expense included in total operating income.
Unallocated Corporate Expense
Unallocated corporate expense includes the portion of corporate costs not considered allowable or allocable under the applicable FAR and CAS requirements, and therefore not allocated to the segments, such as changes in deferred state income taxes and a portion of management and administration, legal, environmental, compensation, retiree benefits, advertising and other corporate unallowable costs. Unallocated corporate expense also includes costs not considered part of management’s evaluation of segment operating performance, such as amortization of purchased intangible assets and the additional depreciation expense related to the step-up in fair value of property, plant and equipment acquired through business combinations, as well as certain compensation and other costs.
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Disaggregation of Revenue
| Sales by Customer Type · Three Months Ended September 30 · Nine Months Ended September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2024 · 2023 · 2024 · 2023 | ||||||||
| $ in millions | $%(3) | $%(3) | $%(3) | $%(3) | ||||
| Aeronautics Systems | ||||||||
| U.S. government(1) | $2,382 | 83% | $2,331 | 84% | $7,443 | 85% | $6,654 | 85% |
| International(2) | 430 | 15% | 377 | 14% | 1,174 | 13% | 1,016 | 13% |
| Other customers | 6 | —% | 4 | —% | 15 | —% | 23 | —% |
| Intersegment sales | 60 | 2% | 54 | 2% | 178 | 2% | 183 | 2% |
| Aeronautics Systems sales | 2,878 | 100% | 2,766 | 100% | 8,810 | 100% | 7,876 | 100% |
| Defense Systems | ||||||||
| U.S. government(1) | 1,541 | 74% | 1,476 | 72% | 4,633 | 74% | 4,351 | 72% |
| International(2) | 311 | 15% | 358 | 17% | 912 | 15% | 1,103 | 18% |
| Other customers | 15 | 1% | 19 | 1% | 55 | 1% | 55 | 1% |
| Intersegment sales | 217 | 10% | 197 | 10% | 627 | 10% | 549 | 9% |
| Defense Systems sales | 2,084 | 100% | 2,050 | 100% | 6,227 | 100% | 6,058 | 100% |
| Mission Systems | ||||||||
| U.S. government(1) | 2,093 | 74% | 1,917 | 73% | 6,033 | 73% | 5,729 | 73% |
| International(2) | 427 | 15% | 432 | 16% | 1,308 | 16% | 1,262 | 16% |
| Other customers | 28 | 1% | 16 | 1% | 65 | 1% | 58 | 1% |
| Intersegment sales | 275 | 10% | 263 | 10% | 849 | 10% | 783 | 10% |
| Mission Systems sales | 2,823 | 100% | 2,628 | 100% | 8,255 | 100% | 7,832 | 100% |
| Space Systems | ||||||||
| U.S. government(1) | 2,606 | 91% | 2,707 | 92% | 8,245 | 92% | 7,963 | 91% |
| International(2) | 50 | 2% | 72 | 2% | 171 | 2% | 226 | 3% |
| Other customers | 107 | 3% | 66 | 2% | 293 | 3% | 212 | 2% |
| Intersegment sales | 107 | 4% | 108 | 4% | 312 | 3% | 374 | 4% |
| Space Systems sales | 2,870 | 100% | 2,953 | 100% | 9,021 | 100% | 8,775 | 100% |
| Total | ||||||||
| U.S. government(1) | 8,622 | 86% | 8,431 | 86% | 26,354 | 87% | 24,697 | 86% |
| International(2) | 1,218 | 12% | 1,239 | 13% | 3,565 | 12% | 3,607 | 13% |
| Other customers | 156 | 2% | 105 | 1% | 428 | 1% | 348 | 1% |
| Total Sales | $9,996 | 100% | $9,775 | 100% | $30,347 | 100% | $28,652 | 100% |
(1)Sales to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. Each of the company’s segments derives substantial revenue from the U.S. government.
(2) International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. government.
(3) Percentages calculated based on total segment sales.
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| Sales by Contract Type · Three Months Ended September 30 · Nine Months Ended September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2024 · 2023 · 2024 · 2023 | ||||||||
| $ in millions | $%(1) | $%(1) | $%(1) | $%(1) | ||||
| Aeronautics Systems | ||||||||
| Cost-type | $1,296 | 46% | $1,370 | 51% | $3,990 | 46% | $3,920 | 51% |
| Fixed-price | 1,522 | 54% | 1,342 | 49% | 4,642 | 54% | 3,773 | 49% |
| Intersegment sales | 60 | 54 | 178 | 183 | ||||
| Aeronautics Systems sales | 2,878 | 2,766 | 8,810 | 7,876 | ||||
| Defense Systems | ||||||||
| Cost-type | 990 | 53% | 1,007 | 54% | 2,933 | 52% | 3,017 | 55% |
| Fixed-price | 877 | 47% | 846 | 46% | 2,667 | 48% | 2,492 | 45% |
| Intersegment sales | 217 | 197 | 627 | 549 | ||||
| Defense Systems sales | 2,084 | 2,050 | 6,227 | 6,058 | ||||
| Mission Systems | ||||||||
| Cost-type | 1,216 | 48% | 1,002 | 42% | 3,390 | 46% | 2,920 | 41% |
| Fixed-price | 1,332 | 52% | 1,363 | 58% | 4,016 | 54% | 4,129 | 59% |
| Intersegment sales | 275 | 263 | 849 | 783 | ||||
| Mission Systems sales | 2,823 | 2,628 | 8,255 | 7,832 | ||||
| Space Systems | ||||||||
| Cost-type | 1,750 | 63% | 1,882 | 66% | 5,429 | 62% | 5,717 | 68% |
| Fixed-price | 1,013 | 37% | 963 | 34% | 3,280 | 38% | 2,684 | 32% |
| Intersegment sales | 107 | 108 | 312 | 374 | ||||
| Space Systems sales | 2,870 | 2,953 | 9,021 | 8,775 | ||||
| Total | ||||||||
| Cost-type | 5,252 | 53% | 5,261 | 54% | 15,742 | 52% | 15,574 | 54% |
| Fixed-price | 4,744 | 47% | 4,514 | 46% | 14,605 | 48% | 13,078 | 46% |
| Total Sales | $9,996 | $9,775 | $30,347 | $28,652 | ||||
(1)Percentages calculated based on external customer sales.
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| Sales by Geographic Region · Three Months Ended September 30 · Nine Months Ended September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2024 · 2023 · 2024 · 2023 | ||||||||
| $ in millions | $%(2) | $%(2) | $%(2) | $%(2) | ||||
| Aeronautics Systems | ||||||||
| United States | $2,388 | 85% | $2,335 | 86% | $7,458 | 86% | $6,677 | 87% |
| Asia/Pacific | 195 | 7% | 163 | 6% | 495 | 6% | 448 | 6% |
| Europe | 224 | 8% | 204 | 8% | 653 | 8% | 543 | 7% |
| All other(1) | 11 | —% | 10 | —% | 26 | —% | 25 | —% |
| Intersegment sales | 60 | 54 | 178 | 183 | ||||
| Aeronautics Systems sales | 2,878 | 2,766 | 8,810 | 7,876 | ||||
| Defense Systems | ||||||||
| United States | 1,556 | 83% | 1,495 | 81% | 4,688 | 84% | 4,406 | 80% |
| Asia/Pacific | 79 | 4% | 93 | 5% | 243 | 4% | 324 | 6% |
| Europe | 179 | 10% | 146 | 8% | 536 | 10% | 406 | 7% |
| All other(1) | 53 | 3% | 119 | 6% | 133 | 2% | 373 | 7% |
| Intersegment sales | 217 | 197 | 627 | 549 | ||||
| Defense Systems sales | 2,084 | 2,050 | 6,227 | 6,058 | ||||
| Mission Systems | ||||||||
| United States | 2,121 | 83% | 1,933 | 82% | 6,098 | 82% | 5,787 | 83% |
| Asia/Pacific | 98 | 4% | 98 | 4% | 346 | 5% | 310 | 4% |
| Europe | 246 | 10% | 246 | 10% | 727 | 10% | 712 | 10% |
| All other(1) | 83 | 3% | 88 | 4% | 235 | 3% | 240 | 3% |
| Intersegment sales | 275 | 263 | 849 | 783 | ||||
| Mission Systems sales | 2,823 | 2,628 | 8,255 | 7,832 | ||||
| Space Systems | ||||||||
| United States | 2,713 | 98% | 2,773 | 97% | 8,538 | 98% | 8,175 | 97% |
| Asia/Pacific | 6 | —% | 22 | 1% | 30 | 1% | 67 | 1% |
| Europe | 36 | 1% | 44 | 2% | 112 | 1% | 127 | 2% |
| All other(1) | 8 | 1% | 6 | —% | 29 | —% | 32 | —% |
| Intersegment sales | 107 | 108 | 312 | 374 | ||||
| Space Systems sales | 2,870 | 2,953 | 9,021 | 8,775 | ||||
| Total | ||||||||
| United States | 8,778 | 88% | 8,536 | 87% | 26,782 | 88% | 25,045 | 87% |
| Asia/Pacific | 378 | 4% | 376 | 4% | 1,114 | 4% | 1,149 | 4% |
| Europe | 685 | 7% | 640 | 7% | 2,028 | 7% | 1,788 | 7% |
| All other(1) | 155 | 1% | 223 | 2% | 423 | 1% | 670 | 2% |
| Total Sales | $9,996 | $9,775 | $30,347 | $28,652 | ||||
(1)All other is principally comprised of the Middle East.
(2)Percentages calculated based on external customer sales.
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