Company: NOC
Filing Date: 2025-04-04
Form Type: DEF 14A
Source: 0001133421-25-000016
Chunk: 94

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-04-04
Form: DEF 14A
Chunk 94
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 approved by the Compensation and Human Capital Committee, the 2024 metric has been adjusted to exclude CAS pension recovery. As approved by the Compensation and Human Capital Committee, the 2023 metric has been adjusted to exclude CAS pension recovery, cash received from certain federal and state tax settlements, and the federal and state tax impacts of

#### 104Northrop Grumman

### Appendix A – Use of Non-GAAP Financial Measures
the sale of a minority investment in an international business. As approved by the Compensation and Human Capital Committee, the 2022 metric has been adjusted to exclude CAS pension recovery, assumptions regarding tax legislation related to research credits at the time of grant setting, unanticipated costs related to a Space Systems program due to international trade restrictions, and certain delayed costs related to the IT services divestiture.

Pension-Adjusted Metrics : For financial statement purposes, we account for our employee pension plans in accordance with GAAP (FAS). However, the cost of these plans is charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS) that govern such plans. We use pension-adjusted metrics as internal measures of financial performance and for performance-based compensation decisions.

The FAS/CAS operating adjustment referred to below reflects the difference between CAS pension expense included as cost in segment operating income and the service cost component of FAS expense included in total operating income. The total net FAS/CAS pension adjustment referred to below reflects the combined FAS/CAS operating adjustment and Non-operating FAS pension benefit. The following pension-adjusted measures may be useful to investors and other users of our financial statements in evaluating our performance based upon the pension costs charged to our contracts. All pension-adjusted metrics are reconciled below.

Pension-Adjusted Operating Income : Operating income before the FAS/CAS operating adjustment as defined above and excluding unallocated state tax impacts reflected within unallocated corporate income (expense). As approved by the Compensation and Human Capital Committee, this metric has been adjusted to exclude Orbital ATK intangible asset amortization and property, plant and equipment (PP&E) step-up depreciation.

Pension-Adjusted Operating Margin (OM) Rate : Pension-Adjusted Operating Income as defined above, divided by sales.

Segment Operating Income and Segment Operating Margin Rate: Segment Operating Income and Segment Operating Margin Rate (Segment Operating Income divided by sales) reflect the combined operating income of our four segments less the operating income associated with intersegment sales. Segment Operating Income includes pension expense