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What Changed
Risk factors · Feb 14, 2025 → Feb 12, 2026
124 added · 102 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
The following table presents the components of G&A expenses: Fiscal Year (In millions) 2025 2024 Corporate: Acquisition-related intangibles $ (707) $ (779) LHX NeXt implementation costs (1) (167) (267) Change in fair value of deferred compensation plan liabilities (57) (40) Merger, acquisition, and divestiture-related expenses (57) (102) Business divestiture-related losses (2) (82) (19) Other unallocated corporate items (3) (146) (95) Segment: Company-funded R&D costs (536) (515) Selling and marketing (463) (445) Monetization of certain legacy end-of-life assets 184 62 Other (4) (1,399) (1,368) G&A expenses $ (3,430) $ (3,568) ______________ (1) Includes costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness, including third-party consulting, workforce optimization and incremental IT expenses for implementation of new systems.
G&A expenses decreased $138 million, or 4%, for fiscal 2025 compared with fiscal 2024 primarily due to an increase in gains recognized in connection with the monetization of certain legacy end-of-life assets, lower LHX NeXt implementation costs, including lower third-party consulting expenses of $59 million, lower amortization of acquisition-related intangibles and merger, acquisition, and divestiture-related expenses, partially offset by an increase in business divestiture-related losses.
In fiscal 2025, we recognized a $85 million non-cash charge for impairment of goodwill in connection with execution of the agreement to sell a newly established technology company, consisting of certain product lines of our SPPS sector (“SPPS business”), reported in our AR segment, and our Space Avionics & Communications division (“SA&C business”), reported in our IMS segment (collectively, the “Space Technology disposal group”), as discussed in Note 13: Acquisitions and Divestitures .
Fiscal Year (Dollars in millions) 2025 2024 % Inc/(Dec) Revenue $ 6,946 $ 6,869 1 % Operating income 852 812 5 % Operating margin 12.3 % 11.8 % Ending contractual backlog $ 11,384 $ 9,427 SAS revenue increased in fiscal 2025 compared with fiscal 2024 due to higher revenue of $375 million in Mission Networks from higher FAA volume, offset by lower revenues of $166 million in Space Systems from lower volume associated with program timing, $129 million in Intel & Cyber from lower classified program volume and $76 million in Airborne Combat Systems from the May 2024 Antenna disposal group divestiture.
Fiscal Year (In millions) 2025 2024 Amortization of acquisition-related intangibles (1) $ (769) $ (853) LHX NeXt implementation costs (2) (167) (267) Business divestiture-related (losses) gains and impairment of goodwill (3) (82) (33) Change in fair value of deferred compensation plan liabilities (57) (40) Merger, acquisition, and divestiture-related expenses (57) (102) Other (4) (124) (56) Total unallocated corporate items $ (1,256) $ (1,351) ______________ (1) Includes amortization of intangible assets acquired in connection with business combinations.
The $547 million increase in net cash provided by operating activities in fiscal 2025 compared with fiscal 2024 was primarily due to favorable impacts of tax planning strategies and tax reform and less cash used for merger, acquisition and severance related payments and CP program interest as a result of lower average outstanding CP notes in fiscal 2025.
During fiscal 2024, we closed the issuance and sale of $2.25 billion aggregate principal amount of long-term fixed-rate debt consisting of 5.05% notes, due June 2029, 5.25% notes, due June 2031 and 5.35% notes, due June 2034 and used the proceeds to repay the entire outstanding $2.25 billion, variable rate-term loan facility utilized to finance the fiscal 2023 acquisition of TDL.
AR operating income decreased primarily due to a $85 million non-cash charge for impairment of goodwill in connection with the Space Technology disposal group, partially offset by higher volume and LHX NeXt driven cost savings. _____________________________________________________________________ 26 Unallocated Corporate Items.
We completed our annual goodwill impairment assessment for all reporting units as of October 6, 2025 and concluded that no impairment existed for any of the reporting units.
If we determine it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, we measure any impairment loss by comparing the fair value of that reporting unit to its carrying amount, including goodwill.
The fair value for customer relationships is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows arising from the follow-on revenues expected from the customer relationships over the estimated lives, including the probability of expected future contract renewals and revenues, less a contributory assets charge, all of which is discounted to present value.
Based on the fiscal 2025 annual impairment testing, all of our reporting units had clearances above 30%.
No longer disclosed
The following table presents products revenue by segment, net of intersegment: Fiscal Year Ended (In millions) January 3, 2025 December 29, 2023 SAS $ 4,788 $ 4,879 IMS 4,270 4,006 CS 4,498 4,057 AR 1,578 752 Total products revenue $ 15,134 $ 13,694 Products revenue for fiscal 2024 increased $1,440 million , due to the inclusion of a full year of products revenue from AR, rather than a partial year of revenue in fiscal 2023 (“ the AR Partial Year ”) following the July 28, 2023 acquisition of Aerojet Rocketdyne Holdings, Inc.
The following table presents the components of G&A expenses : Fiscal Year Ended (In millions) January 3, 2025 December 29, 2023 Amortization of acquisition-related intangibles $ (779) $ (687) LHX NeXt implementation costs (1) (267) (115) Merger, acquisition, and divestiture-related expenses (102) (174) Business divestiture-related losses, net (2) (19) (51) Company-funded R&D costs (515) (480) Selling and marketing (445) (450) Other G&A expenses (3) (1,441) (1,356) G&A expenses $ (3,568) $ (3,313) ______________ (1) Costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness, including third-party consulting, workforce optimization and incremental IT expenses for implementation of new systems.
In fiscal 2023 , we recognized a $296 million non-cash charge for impairment of goodwill in connection with the pending divestiture of our CAS disposal group and $78 million of other asset impairments associated with in-process R&D, customer contracts and a facility closure. _____________________________________________________________________ 25 Non-service FAS Pension Income and Other, Net.
Our net interest expense increased $132 million in fiscal 2024 compared with fiscal 2023 primarily due to a full year of interest on the $3.25 billion aggregate principal amount of fixed-rate debt issued in July 2023 in connection with the AJRD acquisition, the issuance of $2.25 billion aggregate principal amount of long- term fixed-rate debt in March 2024 and higher average outstanding notes under our commercial paper program (“ CP Program ”) during fiscal 2024 , partially offset by repayment of the entire outstanding $2.25 billion , three-year senior unsecured term loan facility (“ Term Loan 2025 ”) in March 2024.
Diluted EPS increased 22% in fiscal 2024 compared with fiscal 2023 primarily due to higher net income from the combined effects of reasons noted in the sections above, notably the absence of a prior year CAS disposal group goodwill impairment and an increase in fiscal 2024 gross margin, partially offset by increases in G&A expenses and interest expense, net .
Fiscal Year Ended (Dollars in millions) January 3, 2025 December 29, 2023 % Inc/(Dec) Revenue $ 6,869 $ 6,856 —% Operating income 812 756 7% Operating margin 11.8 % 11.0 % SAS segment revenue remained flat in fiscal 2024 compared with fiscal 2023 due to higher revenues of $138 million in Intel & Cyber , primarily from program growth and $82 million in Mission Networks from higher volumes, offset by lower revenues of $217 million in Airborne Combat Systems , from lower revenue of $115 million associated with the divestiture of the Antenna disposal group and the remaining decrease primarily from lower F-35 related volume as TR-3 development transitions from development to a more gradual production ramp .
SAS segment operating income increased in fiscal 2024 compared with fiscal 2023 , primarily due to LHX NeXt driven cost savings realized during fiscal 2024 , higher volume in Mission Networks and $46 million f rom the monetization of legacy end of life assets, aligned with our transformation and value creation priorities, in addition to the impact of a $27 million non-cash charge for impairment of other assets which occurred during fiscal 2023 .
IMS segment operating income increased in fiscal 2024 compared with fiscal 2023 primarily due to a $296 million non-cash charge for impairment of goodwill associated with the CAS disposal group in fiscal 2023 , in addition to improved program performance of $69 million , higher overall revenue volumes and LHX NeXt driven cost savings realized in fiscal 2024 .
Fiscal Year Ended (Dollars in millions) January 3, 2025 December 29, 2023 Unallocated corporate department expense (1) (123) (62) Amortization of acquisition-related intangibles (2) (853) (779) Additional cost of revenue related to the fair value step-up in inventory sold — (30) Merger, acquisition, and divestiture-related expenses (102) (174) Business divestiture-related losses, net (3) (19) (51) Impairment of goodwill and other assets (4) (14) (39) LHX NeXt implementation costs (5) (267) (115) FAS/CAS operating adjustment (6) 28 110 Total unallocated corporate expense $ (1,350) $ (1,140) _______________ (1) The increase in unallocated corporate department expense is primarily from increases related to corporate-led initiatives and a $15 million legal reserve.
During fiscal 2023 , we drew $2.25 billion in long-term debt on Term Loan 2025 and utilized the proceeds to fund the TDL acquisition, including a portion of associated transaction and integration costs, and to repay the entire outstanding $250 million aggregate principal amount of our Floating Rate Notes due March 2023 .
Based on the fiscal 2023 annual impairment testing, our Broadband reporting unit had clearance of approximately 20% and goodwill of $2,656 million and our ISR and Electro Optical reporting units had clearances of approximately 6% and goodwill of $3,186 million and $2,193 million , respectively.
For fiscal 2023 , includes a $21 million non-cash charge for impairment of in-process R&D associated with a facility closure and an $18 million non-cash charge for impairment of a customer contract.