Leonardo DRS, Inc.DRS

Leonardo DRS, Inc. Segments Disclosure

10-KFiled Feb 27, 20263 min read
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. Our Chief Executive Officer is our CODM. 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. See Note 1: Summary of Significant Accounting Policies for a description of our reportable segments.
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.
Certain information related to our segments for the years ended December 31, 2025, 2024 and 2023, 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 earnings 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 years ended December 31, 2025, 2024 and 2023, consists of the following:
(Dollars in millions)202520242023
Revenues
ASC$2,355 $2,118 $1,831 
IMS1,307 1,138 1,021 
Corporate & Eliminations(14)(22)(26)
Total revenues
$3,648 $3,234 $2,826 
Cost of revenues
ASC
$1,727 $1,598 $1,370 
IMS
1,066 922 834 
Corporate & Eliminations
(14)(22)(26)
Total cost of revenues
$2,779 $2,498 $2,178 
General and administrative
ASC
$260 $234 $226 
IMS
101 81 79 
Corporate & Eliminations
7 7 (3)
Total general and administrative
$368 $322 $302 
Company-funded independent research and development
ASC
$104 $74 $66 
IMS
25 18 16 
Corporate & Eliminations
— — — 
Total company-funded independent research and development$129 $92 $82 
Amortization of acquired intangible assets
ASC
$22 $22 $22 
IMS
— — — 
Corporate & Eliminations
— — — 
Total amortization of acquired intangible assets$22 $22 $22 
Other segment items
ASC
$2 $7 $11 
IMS
— — — 
Corporate & Eliminations
— — — 
Total other segment items(1)
$2 $7 $11 
Operating earnings
ASC
$240 $183 $136 
IMS
115 117 92 
Corporate & Eliminations
(7)(7)3 
Total operating earnings
$348 $293 $231 
Interest expense
(8)(21)(36)
Other, net
(4)(8)(3)
Earnings before taxes
$336 $264 $192 
________________
(1)Includes ASC restructuring costs for the periods presented.
Total intersegment revenues by segment for the years ended December 31, 2025, 2024 and 2023, consists of the following:
(Dollars in millions)202520242023
ASC$12 $21 $25 
IMS2 1 1 
Total intersegment revenues
$14 $22 $26 
Depreciation by segment for the years ended December 31, 2025, 2024 and 2023, consists of the following:
(Dollars in millions)202520242023
ASC$49 $48 $44 
IMS22 21 19 
Total depreciation
$71 $69 $63 
Total assets by segment as of December 31, 2025 and 2024, consists of the following:
(Dollars in millions)20252024
ASC$2,451 $2,249 
IMS1,300 1,225 
Corporate & Eliminations735 710 
Total assets
$4,486 $4,184 

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Mar 3, 2025
2023Feb 28, 2024
2022Mar 28, 2023
2021Mar 28, 2022

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesDebtCommitmentsStock CompensationNew StandardsPay vs Performance