NOC » Topics » Federal and Foreign Income Taxes

This excerpt taken from the NOC 10-Q filed Apr 22, 2009.
Federal and Foreign Income Taxes
The company’s effective tax rate on earnings from continuing operations for the three months ended March 31, 2009, was 34.1 percent compared with 35.7 percent for the same period in 2008.
 
Discontinued Operations
Discontinued operations for the three months ended March 31, 2008, represents the net operating results of the Electro-Optical Systems business formerly reported in the Electronic Systems segment. See Note 5 to the condensed consolidated financial statements in Part I, Item 1.
 
This excerpt taken from the NOC 10-K filed Feb 10, 2009.
Federal and Foreign Income Taxes
2008 – The company’s effective tax rate on earnings from continuing operations for the year ended December 31, 2008, was 33.9 percent (excluding the non-cash, non-deductible goodwill impairment charge of $3.1 billion at Shipbuilding and Space Technology) as compared with 32.9 percent in 2007. During 2008, the company recognized net tax benefits of $35 million, primarily attributable to a settlement reached with the U.S. Internal Revenue Service (IRS) and the Congressional Joint Committee on Taxation with respect to the IRS audit of TRW tax returns for the years 1999-2002.
 
2007 – The company’s effective tax rate on earnings from continuing operations for the year ended December 31, 2007, was 32.9 percent compared with 31.2 percent in 2006. During 2007, the company reached a partial settlement agreement with the IRS regarding its audit of the company’s tax years ended 2001-2003 resulting in a tax benefit of $22 million.


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NORTHROP GRUMMAN CORPORATION
 
This excerpt taken from the NOC 10-Q filed Oct 22, 2008.
Federal and Foreign Income Taxes
The company’s effective tax rate on earnings from continuing operations for the three months ended September 30, 2008, was 31.4 percent compared with 32.9 percent for the same period in 2007. For the nine months ended September 30, 2008, the company’s effective tax rate on earnings from continuing operations was 33.6 percent compared with 32.3 percent for the same period in 2007. During the third quarter of 2008, the company recognized net tax benefits of $21 million, which were primarily attributable to a settlement agreement reached with the Internal Revenue Service’s Joint Committee on Taxation with respect to the audit of TRW 1999-2002 tax returns. During the second quarter of 2007, the company entered into a partial settlement agreement with the IRS regarding its audits of the company’s tax returns for the years ended December 31, 2001 through December 31, 2003. As a result of this settlement in 2007, the company recognized tax benefits of $16 million.
 
Discontinued Operations
Discontinued operations for the three and nine months ended September 30, 2008, and 2007, primarily represents the net operating results and after-tax gain on sale of the Electro-Optical Systems business formerly reported in the Electronics segment. The 2007 periods also include the net operating results of Interconnect Technologies. See Note 5 to the condensed consolidated financial statements in Part I, Item I.
 
This excerpt taken from the NOC 10-Q filed Jul 29, 2008.
Federal and Foreign Income Taxes
The company’s effective tax rate on earnings from continuing operations for the three months ended June 30, 2008, was 34.6 percent compared with 29.7 percent for the same period in 2007. For the six months ended June 30, 2008, the company’s effective tax rate on earnings from continuing operations was 35.0 percent compared with 31.9 percent for the same period in 2007. During the second quarter of 2007, the company entered into a partial settlement agreement with the Internal Revenue Service regarding its audits for the year ended December 31, 2001 through the year ended December 31, 2003. As a result of the settlement, the company recognized tax benefits of $16 million.
 
Discontinued Operations
Discontinued operations for the three and six months ended June 30, 2008, and 2007, primarily represents the net operating results and after-tax gain on sale of the Electro-Optical Systems business formerly reported in the Electronics segment. The 2007 periods also include the net operating results of Interconnect Technologies. See Note 5 to the Condensed Consolidated Financial Statements in Part I, Item I.
 
This excerpt taken from the NOC 10-Q filed Apr 24, 2008.
Federal and Foreign Income Taxes
The company’s effective tax rate on earnings from continuing operations for the three months ended March 31, 2008, was 35.7 percent compared with 34.3 percent for the same period in 2007.
 
Discontinued Operations
Discontinued operations for the three months ended March 31, 2008 and 2007, represents the net operating results of the Electro-Optical Systems business formerly reported in the Electronics segment. See Note 5 to the Consolidated Condensed Financial Statements in Part I, Item I.
 
This excerpt taken from the NOC 10-K filed Feb 20, 2008.
Federal and Foreign Income Taxes
2007 – The company’s effective tax rate on income from continuing operations for the year ended December 31, 2007, was 33 percent compared with 31 percent in 2006. During 2007, the company reached a partial settlement agreement with the U.S. Internal Revenue Service (IRS) regarding its audit of the company’s tax years ended 2001 – 2003 resulting in a tax benefit of $22 million.
 
2006 – The company’s effective tax rate on income from continuing operations for 2006 and 2005 was 31 percent and 32 percent, respectively. During 2006, the company received final approval from the U.S. Congress Joint Committee on Taxation for the agreement previously reached with the IRS regarding its audits of the company’s B-2 program for the years ended December 31, 1997 through December 31, 2000. As a result of the agreement the company recognized tax benefits of $48 million, due to the reversal of previously established expense provisions. The company also recognized a net tax benefit of $18 million in 2006 related to tax credits associated with qualified wages paid to employees affected by Hurricane Katrina.
 
This excerpt taken from the NOC 10-Q filed Oct 24, 2007.
Federal and Foreign Income Taxes
The company’s effective tax rate on income from continuing operations for the three months ended September 30, 2007, was 33.0 percent compared with 35.4 percent for the same period in 2006.
 
The company’s effective tax rate on income from continuing operations for the nine months ended September 30, 2007, was 32.3 percent compared with 30.2 percent for the same period in 2006. During the nine months ended September 30, 2006, the company received final approval from the U.S. Congress Joint Committee on Taxation for the agreement previously reached with the IRS regarding its audit of the company’s B-2 program for the years ended December 31, 1997 through December 31, 2000. As a result, the company recognized a net tax benefit of $48 million due to the reversal of previously established expense provisions. The company recognized a net tax benefit of $18 million in 2006 related to tax credits associated with qualified wages paid to employees affected by Hurricane Katrina.
 
Discontinued Operations
Discontinued operations for the three and nine months ended September 30, 2007, is primarily comprised of a $1 million and $10 million after-tax loss, respectively, on the shutdown of the remaining Interconnect Technologies (ITD) business, formerly reported in the Electronics segment. See Note 5 to the consolidated condensed financial statements in Part I, Item I.
 
Discontinued operations for the three months ended September 30, 2006, is primarily comprised of a $4 million after-tax loss on the sale of the assembly business unit of ITD and a $3 million after-tax loss on the shutdown of the Enterprise Information Technology (EIT), formerly reported in the Information Technology segment. Discontinued operations for the nine months ended September 30, 2006, is primarily comprised of a $12 million after-tax loss on the shutdown of the remaining ITD business and a $14 million after-tax loss on the shutdown of EIT, partially offset by a $4 million after-tax gain on the sale of the assembly business of ITD, and a $2 million after-tax gain on the divestiture of Winchester Electronics. See Note 5 to the consolidated condensed financial statements in Part I, Item I.
 
This excerpt taken from the NOC 10-Q filed Jul 24, 2007.
Federal and Foreign Income Taxes
The company’s effective tax rate on income from continuing operations for the three months ended June 30, 2007, was 29.4 percent compared with 25 percent for the same period in 2006. During the three months ended June 30, 2007, the company entered into a partial settlement with the Internal Revenue Service (IRS) regarding its audits for the year ended December 31, 2001 through the year ended December 31, 2003. As a result of the favorable settlement, the company recognized tax benefits of $16 million during the second quarter of 2007. During the three months ended June 30, 2006, the company received final approval from the U.S. Congress Joint Committee on Taxation for the agreement previously reached with the IRS regarding its audit of the company’s B-2 program for the years ended December 31, 1997 through December 31, 2000. As a result of the agreement the company recognized tax benefits of $48 million during the second quarter of 2006.
 
The company’s effective tax rate on income from continuing operations for the six months ended June 30, 2007, was 31.8 percent compared with 27.9 percent for the same period in 2006. During the six months ended June 30, 2006, the company recognized a net tax benefit of $18 million with respect to tax credits associated with qualified wages paid to employees affected by Hurricane Katrina, in addition to the tax benefit disclosed above.
 
Discontinued Operations
Discontinued operations for the three months ended June 30, 2006, is primarily comprised of a $7 million after-tax loss on the results of operations of several small divested entities, including the shutdown of the Enterprise Information Technology business (formerly reported in the Information Technology segment), and a $5 million after-tax loss on the divestiture of these businesses, which includes $6 million in transaction costs incurred during the quarter. Discontinued operations for the six months ended June 30, 2006, amounted to a loss of $17 million and is related to the divestiture of the entities above. See Note 5 to the consolidated condensed financial statements in Part I, Item I.
 
This excerpt taken from the NOC 10-Q filed Apr 24, 2007.
Federal and Foreign Income Taxes
The company’s effective tax rate on income from continuing operations for the three months ended March 31, 2007, was 34.4 percent compared with 31.2 percent for the same period in 2006. During the three months ended March 31, 2006, the company recognized a net tax benefit of $18 million with respect to tax credits associated with qualified wages paid to employees affected by hurricane Katrina.
 
This excerpt taken from the NOC 10-K filed Feb 21, 2007.
Federal and Foreign Income Taxes
2006 – The company’s effective tax rate on income from continuing operations for 2006 was 31 percent. During 2006, the company received final approval from the U.S. congress Joint Committee on Taxation for the agreement previously reached with the Internal Revenue Service (IRS) regarding its audits of the company’s B-2 program for the years ended December 31, 1997 through December 31, 2000. As a result of the agreement the company recognized tax benefits of $48 million, due to the reversal of previously established expense provisions. The company also recognized a net tax benefit of $18 million in 2006 related to tax credits associated with qualified wages paid to employees affected by Hurricane Katrina. The effective tax rate for 2007 is expected to be between 33 and 34 percent.
 
2005 – The company’s effective tax rate on income from continuing operations for 2005 and 2004 was 32 percent. During 2005, the company recognized a $20 million net tax benefit primarily related to the settlement of IRS appeals cases related to Alternative Minimum Tax credits for tax years 1981 through 1996.
 
Discontinued Operations
2006 – Discontinued operations is primarily comprised of a $19 million after-tax loss on the shutdown of EIT.
 
2005 – Discontinued operations is primarily comprised of a $14 million after-tax gain on the divestiture of Teldix, partially offset by a $9 million after-tax operating loss of EIT.
 
This excerpt taken from the NOC 10-Q filed Oct 24, 2006.
Federal and Foreign Income Taxes
The company’s effective tax rate on income from continuing operations for the three months ended September 30, 2006, was 35.4 percent as compared with 33.7 percent for the same period in 2005.
 
The company’s effective tax rate on income from continuing operations for the nine months ended September 30, 2006, was 30.1 percent as compared with 33.6 percent for the same period in 2005. During the second quarter of 2006, the company received final approval from the U.S. Congress Joint Committee on Taxation for the agreement previously reached with the Internal Revenue Service regarding its audits of the company’s B-2 program for the years ended December 31, 1997 through December 31, 2000. As a result of the agreement the company recognized tax benefits of $48 million during the second quarter of 2006, due to the reversal of previously established expense provisions. The company also recognized a net tax benefit of $18 million in the first quarter of 2006 related to tax credits associated with qualified wages paid to employees affected by Hurricane Katrina.
 
Discontinued Operations
Discontinued operations for the three months ended September 30, 2006, is primarily comprised of a $3 million after-tax loss on the shutdown of the Enterprise Information Technology (EIT) business (formerly reported in the Information Technology segment). Discontinued operations for the nine months ended September 30, 2006, is primarily comprised of a $14 million after-tax loss on the shutdown of EIT, partially offset by a $4 million after-tax gain on the divestiture of Interconnect, and a $2 million after-tax gain on the divestiture of Winchester.
 
Discontinued operations for the three months ended September 30, 2005, is primarily comprised of a $5 million after-tax gain on the divestiture of Teldix GmbH (Teldix), partially offset by a $3 million after-tax operating loss from the shutdown of EIT. See Note 5 to the Consolidated Condensed Financial Statements in Part I, Item 1. Discontinued operations for the nine months ended September 30, 2005, is primarily comprised of a $14 million after-tax gain on the divestiture of Teldix, partially offset by $6 million in after-tax operating losses from EIT. See Note 5 to the Consolidated Condensed Financial Statements in Part I, Item 1.
 
This excerpt taken from the NOC 10-Q filed Jul 27, 2006.

Federal and Foreign Income Taxes

The company’s effective tax rate on income from continuing operations for the three months ended June 30, 2006, was 25.0 percent as compared with 34.0 percent for the same period in 2005. During the second quarter of 2006, the company received final approval from the U.S. Congress Joint Committee on Taxation for the agreement previously reached with the Internal Revenue Service regarding its audits of the company’s B-2 program for the years ended December 31, 1997 through December 31, 2000. As a result of the agreement the company recognized tax benefits of $48 million during the second quarter of 2006, due to the reversal of previously established expense provisions.

 

The company’s effective tax rate on income from continuing operations for the six months ended June 30, 2006, was 27.9 percent as compared with 33.6 percent for the same period in 2005. The decrease was primarily due to the recognition of the tax benefit discussed above.

 

Discontinued Operations

Discontinued operations for the three months ended June 30, 2006, is primarily comprised of a $5 million after-tax loss on the shutdown of the Enterprise Information Technology (EIT) business (formerly reported in the Information Technology segment), partially offset by a $2 million after-tax gain on the divestiture of Winchester Electronics (Winchester). Discontinued operations for the three months ended June 30, 2005, is primarily comprised of a $3 million after-tax operating loss from the shutdown of EIT. See Note 5 to the Consolidated Condensed Financial Statements in Part I, Item 1.

 

Discontinued operations for the six months ended June 30, 2006, is primarily comprised of an $11 million after-tax loss on the shutdown of EIT, partially offset by a $5 million after-tax gain on the divestiture of Interconnect, and a $2 million after-tax gain on the divestiture of Winchester. Discontinued operations for the six months ended June 30, 2005, is primarily comprised of an $11 million after-tax gain on the divestiture of Teldix GmbH (Teldix), partially offset by $3 million in after-tax operating losses from EIT. See Note 5 to the Consolidated Condensed Financial Statements in Part I, Item 1.

 

This excerpt taken from the NOC 10-Q filed Apr 25, 2006.

Federal and Foreign Income Taxes

The company’s effective tax rate on income from continuing operations for the three months ended March 31, 2006, was 30.9 percent as compared with 33.2 percent for the same period in 2005. During the three months

 

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NORTHROP GRUMMAN CORPORATION

 

ended March 31, 2006, the company recognized a net tax benefit of $18 million with respect to tax credits associated with qualified wages paid to employees affected by Hurricane Katrina.

 

Discontinued Operations

Discontinued operations for the three months ended March 31, 2006, is comprised of a $5 million after-tax gain on the divestiture of the assembly business of Interconnect Technologies (Interconnect). See Note 3 to the Consolidated Condensed Financial Statements in Part I, Item 1. Discontinued operations for the three months ended March 31, 2005, is comprised of an $11 million after-tax gain on the divestiture of Teldix GmbH (Teldix).

 

This excerpt taken from the NOC 10-K filed Feb 17, 2006.

Federal and Foreign Income Taxes

2005 – The company’s effective tax rate on income from continuing operations for 2005 and 2004 was 32 percent. During 2005, the company recognized a $20 million net tax benefit primarily related to the settlement of Internal Revenue Service (IRS) appeals cases related to Alternative Minimum Tax credits for tax years 1981 through 1996. The effective tax rate for 2006 is expected to be approximately 33 percent.

 

2004 – The company’s effective tax rate on income from continuing operations for 2004 was 32 percent compared to 28 percent for 2003. The higher rate in 2004 is primarily due to the reduced effect of research and development credits as well as increased foreign earnings that have a higher effective rate. During 2004, the company completed studies and recognized additional tax credits of approximately $31 million related to research and development and extraterritorial income exclusion for the years 1997 through 2003. During 2003, the company recognized $51 million in research and development tax credits for the years 1981 through 1990.

 

Discontinued Operations

2005 – There was no income from discontinued operations in 2005, compared to after-tax income of $3 million in 2004. The gain on disposal of discontinued operations of $17 million in 2005 is primarily due to the divestiture of Teldix.

 

2004 – The company reported after-tax income from discontinued operations of $3 million for 2004, compared to after-tax income of $64 million for the same period of 2003. The income for the 2003 period was primarily attributable to Auto operating results, which were included in discontinued operations until Auto was sold in February 2003. The loss from the disposal of discontinued operations of $12 million in 2004 was primarily due to the resolution of indemnities and other contractual issues from previously disposed entities.

 

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