v3.25.3
Segment Information
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
Segment Information Segment Information
Operating segments represent components of an enterprise for which separate financial information is available that is regularly reviewed by the CODM in determining how to allocate resources and assess performance. The Company’s operating and reportable segments consist of ASC and IMS. All other operations, which consists primarily of DRS corporate headquarters and certain non-operating subsidiaries of the Company, are grouped in Corporate & Eliminations.
Effective for the fourth quarter of 2024, the CODM primarily uses operating earnings to manage the Company and allocate resources. Operating earnings is used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business segments. Prior year information was revised to reflect operating earnings as the segment profit measure.
Certain information related to our segments for the periods ended September 30, 2025 and 2024 is presented in the following tables. Consistent accounting policies have been applied by all segments within the Company, within all reporting periods. Intersegment sales are generally transferred at cost to the buying segment, and the sourcing segment does not recognize a profit. Such intercompany operating income is eliminated in consolidation, so that the Company’s total revenues and operating earnings reflect only those transactions with external customers.
Revenues, expenses, and operating earnings by segment and the reconciliation to earnings before taxes for the periods ended September 30, 2025 and 2024 consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2025202420252024
Revenues
ASC$580 $533 $1,633 $1,458 
IMS383 285 964 812 
Corporate & Eliminations(3)(6)(9)(17)
Total revenues$960 $812 $2,588 $2,253 
Cost of revenues
ASC$437 $411 $1,237 $1,111 
IMS304 228 760 658 
Corporate & Eliminations(3)(6)(9)(17)
Total cost of revenues$738 $633 $1,988 $1,752 
General and administrative
ASC$63 $52 $196 $173 
IMS24 22 71 64 
Corporate & Eliminations— 1 — 5 
Total general and administrative$87 $75 $267 $242 
Company-funded research and development
ASC$29 $19 $76 $51 
IMS7 4 18 13 
Corporate & Eliminations— — — — 
Total company-funded research and development$36 $23 $94 $64 
Amortization of intangibles
ASC$5 $6 $16 $17 
IMS— — — — 
Corporate & Eliminations— — — — 
Total amortization of intangibles$5 $6 $16 $17 
Other segment items
ASC$1 $— $1 $5 
IMS— — — — 
Corporate & Eliminations— — — — 
Total other segment items(1)
$1 $— $1 $5 
Operating earnings
ASC$45 $45 $107 $101 
IMS48 31 115 77 
Corporate & Eliminations— (1)— (5)
Total operating earnings$93 $75 $222 $173 
Interest expense, net(4)(5)(7)(17)
Other, net(2)(1)(3)(3)
Earnings before taxes$87 $69 $212 $153 
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(1)Includes ASC restructuring costs for the periods presented.
Total intersegment revenues by segment for the periods ended September 30, 2025 and 2024 consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2025202420252024
ASC$3 $6 $9 $17 
IMS— — — — 
Total intersegment revenues $3 $6 $9 $17 
Depreciation by segment for the periods ended September 30, 2025 and 2024 consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2025202420252024
ASC$12 $12 $36 $36 
IMS6 5 17 15 
Total depreciation $18 $17 $53 $51 
Total assets by segment as of September 30, 2025 and December 31, 2024, consists of the following:
(Dollars in millions)September 30, 2025December 31, 2024
ASC$2,465 $2,249 
IMS1,344 1,225 
Corporate & Eliminations436 710 
Total assets $4,245 $4,184