Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division from Space Systems to Defense Systems. Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems.

The company entered into a definitive agreement to sell substantially all of the Immersive Mission Solutions (IMS) operating unit of Defense Systems for $327 million in cash, with an expected after-tax gain of approximately $150 million upon closing.

During the first quarter of 2025, the company recognized an additional $477 million loss across the five LRIP options on the B-21 program, largely related to higher manufacturing costs primarily resulting from a process change.

The company has seen positive progress in the supply chain as on-time deliveries and quality have improved. In remaining areas of pressure, they are proactively working with suppliers to meet contract commitments.

In July 2024, the Sentinel program was certified for continuation by the DoD upon completion of the Nunn-McCurdy breach review. The DoD directed that the program be restructured, including plans for infrastructure related to the command and launch segment.

Management states that they are focused on competing and winning programs that enable continued growth, performing on commitments and affordably delivering capability customers need.

The company identifies continued pressures from macroeconomic trends, including on costs, schedules, performance and ability to meet expectations, as a risk factor.

The company notes that it expects continued uncertainty in the U.S. political, budget and regulatory environment, with potential impacts from budgetary priorities, debt ceiling action, and government policy positions.

The company acknowledges that it is a party to various investigations, lawsuits, arbitration, claims, enforcement actions and other legal proceedings, including government investigations and claims, that arise in the ordinary course of business.

The company believes that the current global security environment highlights the significant national security threats to the U.S. and its allies, and the need for strong deterrence and robust defense capabilities.

The company believes its capabilities, particularly in space, C4ISR, missile defense, battle management, advanced weapons, strategic deterrence, and survivable aircraft and mission systems should help customers defend against current and future threats.

The company identifies increased competition within its markets and bid protests as a risk factor.

The additional $477 million loss on the B-21 program largely relates to higher manufacturing costs primarily resulting from a process change made by the company to enable an accelerated production ramp.

The company states that it is focused on the efficient conversion of operating income into cash to provide for material cash requirements.

First quarter 2025 G&A costs as a percentage of sales of 10.6 percent was comparable with the prior year period.

The company highlights its investments in advanced technologies, combined with its talented workforce and digital transformation capabilities.

The company identifies its ability to innovate, develop new products and technologies, progress and benefit from digital transformation and maintain technologies to meet the needs of its customers as a risk factor.

The company identifies its ability appropriately to protect and exploit intellectual property rights as a risk factor.

The company repurchased 1,015,734 shares of common stock at an average price of $470.62 per share during the three months ended March 31, 2025.

The company has approximately $3.655 billion of shares that may yet be purchased under publicly announced plans or programs.

Our 2024 cash from operations was reduced by approximately $350 million for federal estimated tax payments we made related to Section 174. In the future, Congress may consider legislation that would defer the amortization requirement to later years, possibly with retroactive effect.

The company identifies environmental matters, including climate change, unforeseen environmental costs and government and third-party claims as a risk factor.

The company identifies the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate, including the impact on our reputation and our ability to do business as a risk factor.

The company identifies its ability to attract and retain a qualified and talented workforce with the necessary security clearances to meet our performance obligations as a risk factor.

The company states that the U.S. and its allies continue to face a global security environment of heightened tensions and instability, and that it is actively evaluating both opportunities and risks associated with this environment.

The company identifies economic tensions and changes in international trade policies, including tariffs, as a risk factor.

The company highlights the U.S. political environment and potential impacts on defense budgets and priorities as a key consideration.