# EDGAR Filing Document

**Accession Number:** 0001133421
**File Stem:** 0001133421-26-000002
**Filing Date:** 2026-1
**Character Count:** 61160
**Document Hash:** cbb0bb949745264584bc3a8bb103f9cc
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001133421-26-000002.hdr.sgml**: 20260127

**ACCESSION NUMBER**: 0001133421-26-000002

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20260127

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260127

**DATE AS OF CHANGE**: 20260127

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NORTHROP GRUMMAN CORP /DE/
- **CENTRAL INDEX KEY:** 0001133421
- **STANDARD INDUSTRIAL CLASSIFICATION:** SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 800640649
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-16411
- **FILM NUMBER:** 26562006

**BUSINESS ADDRESS:**
- **STREET 1:** 2980 FAIRVIEW PARK DRIVE
- **STREET 2:** C/O NORTHROP GRUMMAN CORP
- **CITY:** FALLS CHURCH
- **STATE:** VA
- **ZIP:** 22042
- **BUSINESS PHONE:** 703-280-2900

**MAIL ADDRESS:**
- **STREET 1:** 2980 FAIRVIEW PARK DRIVE
- **STREET 2:** C/O NORTHROP GRUMMAN CORP
- **CITY:** FALLS CHURCH
- **STATE:** VA
- **ZIP:** 22042

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NNG INC
- **DATE OF NAME CHANGE:** 20010129

?xml version='1.0' encoding='ASCII'? noc-20260127

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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| |
|:---|
| **FORM 8-K** |
| **CURRENT REPORT<br>Pursuant to Section 13 or 15(d) of the<br>Securities Exchange Act of 1934**<br>**Date of Report (Date of earliest event reported):** January 27, 2026 |

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**NORTHROP GRUMMAN CORPORATION** 

**(Exact name of registrant as specified in its charter)**

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| | | |
|:---|:---|:---|
| **Delaware** | **1-16411** | **80-0640649** |
| **(State or Other Jurisdiction**<br>**of Incorporation or Organization)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |

---

**2980 Fairview Park Drive, Falls Church, VA 22042** 

**(Address of principal executive offices)(Zip Code)**

**(703) 280-2900** 

**(Registrant's telephone number, including area code)**

**(Former name or former address, if changed since last report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐**&nbsp;&nbsp;&nbsp;&nbsp;**Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐**&nbsp;&nbsp;&nbsp;&nbsp;**Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐**&nbsp;&nbsp;&nbsp;&nbsp;**Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐**&nbsp;&nbsp;&nbsp;&nbsp;**Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered <br> <u>Common Stock</u> <u>NOC</u> <u>New York Stock Exchange</u>

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company **☐**

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. **☐**

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**ITEM 2.02. Results of Operations and Financial Condition.**

On January 27, 2026, Northrop Grumman Corporation issued an earnings release announcing its financial results for the quarter and year ended December 31, 2025, under the heading "Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results." The earnings release is furnished as Exhibit 99.

**ITEM 9.01. Financial Statements and Exhibits.**

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| | | |
|:---|:---|:---|
| (d) | Exhibits |  |
|  | **Exhibit Number** | **Description** |
|  | 99 | <u>[Earnings Release dated](noc-12312025xearningsrelea.htm)[January](noc-12312025xearningsrelea.htm)[2](noc-12312025xearningsrelea.htm)[7](noc-12312025xearningsrelea.htm)[, 202](noc-12312025xearningsrelea.htm)[6](noc-12312025xearningsrelea.htm)[(furnished)](noc-12312025xearningsrelea.htm)</u> |
|  | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | |
|:---|:---|
| NORTHROP GRUMMAN CORPORATION | NORTHROP GRUMMAN CORPORATION |
| **(Registrant)** | **(Registrant)** |
| By: | /s/ Jennifer C. McGarey |
|  | (Signature)<br>Jennifer C. McGarey<br>Corporate Vice President and Secretary |

---

Date: January 27, 2026

## Ex-99

**Exhibit 99**

![nocearningsreleasengclogoaa.jpg](nocearningsreleasengclogoaa.jpg)

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| | | |
|:---|:---|:---|
| **News Release** | Contact: | Katie Young (Media) |
| | | 908-520-9948 |
| | | <u>katherine.young@ngc.com</u> |
| | | Todd Ernst (Investors) |
| | | 703-280-4535 |
| | | <u>todd.ernst@ngc.com</u> |

---

**Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results**

• Backlog grows to new company record of $95.7 billion driven by full year book to bill of 1.10

• Q4 sales increase 10 percent to $11.7 billion; 2025 sales of $42.0 billion

• Q4 operating income increases 17 percent to $1.3 billion; OM rate of 10.9 percent

• Q4 segment operating income<sup>1</sup> increases 10 percent; segment OM rate<sup>1</sup> of 11.2 percent

• 2025 diluted earnings per share (EPS) of $29.08; MTM-adjusted EPS<sup>1</sup> of $26.34

• 2025 operating cash flow of $4.8 billion; free cash flow<sup>1</sup> of $3.3 billion

• 2026 financial guidance projects mid-single digit sales growth and continued strong performance and free cash flow<sup>1</sup> consistent with the outlook provided in October

FALLS CHURCH, Va. – January 27, 2026 – Northrop Grumman Corporation (NYSE: NOC) reported fourth quarter 2025 sales increased 10 percent to $11.7 billion, as compared with $10.7 billion in the fourth quarter of 2024. Sales increased 2 percent to $42.0 billion in 2025, as compared with $41.0 billion in 2024. Organic sales<sup>1</sup> increased 3 percent to $41.8 billion in 2025, as compared with $40.7 billion in 2024.

Fourth quarter 2025 net earnings totaled $1.4 billion, or $9.99 per diluted share, and 2025 net earnings were $4.2 billion, or $29.08 per diluted share. Excluding the after-tax mark-to-market (MTM) benefit of $394 million, fourth quarter 2025 MTM-adjusted net earnings<sup>1</sup> totaled $1.0 billion, or $7.23 per diluted share, and 2025 MTM-adjusted net earnings<sup>1</sup> totaled $3.8 billion, or $26.34 per diluted share.

"We delivered outstanding results in 2025 through strong performance and a laser focus on our customers' and stakeholders' highest priorities," said Kathy Warden, chair, chief executive officer and president. "Investments in anticipation of our customers' requirements and ability to deliver differentiating technology at speed and scale position us well to continue to meet the moment for our nation and our partners around the globe. Our record backlog supports our 2026 outlook of mid-single digit sales growth and we are confident in our ability to deliver continued strong performance."

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| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

---

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 2

**<u>MTM-adjusted Net Earnings and EPS</u>**<sup>1</sup>

Net earnings for the fourth quarter and full year 2025 were increased by a $394 million after-tax MTM benefit. The MTM benefit relates to pension and other post-retirement benefits (OPB) actuarial gains and losses, which the company recognizes immediately through earnings upon annual remeasurement of the assets and projected benefit obligations of our pension and OPB plans. MTM-adjusted earnings<sup>1</sup> and EPS<sup>1</sup> are the measures the company uses to compare performance to prior periods and for EPS guidance.

The table below reconciles net earnings and diluted EPS to MTM-adjusted net earnings<sup>1</sup> and MTM-adjusted diluted EPS<sup>1</sup>:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended December 31 | Three Months Ended December 31 | Year Ended December 31 | Year Ended December 31 |
| *$ in millions, except per share amounts* | **2025** | 2024 | **2025** | 2024 |
| **MTM-adjusted net earnings** | **MTM-adjusted net earnings** | **MTM-adjusted net earnings** | **MTM-adjusted net earnings** | **MTM-adjusted net earnings** |
| Net earnings | $**1427** | $1264 | $**4182** | $4174 |
| &nbsp;&nbsp;&nbsp;MTM benefit | **(527)** | (443) | **(527)** | (443) |
| &nbsp;&nbsp;MTM-related deferred state tax expense<sup>2</sup> | **28** | 23 | **28** | 23 |
| &nbsp;&nbsp;Federal tax expense of items above<sup>3</sup> | **105** | 88 | **105** | 88 |
| &nbsp;&nbsp;&nbsp;MTM benefit, net of tax | $**(394)** | $(332) | $**(394)** | $(332) |
| MTM-adjusted net earnings<sup>1</sup> | $**1033** | $932 | $**3788** | $3842 |
| **MTM-adjusted per share data** | **MTM-adjusted per share data** | **MTM-adjusted per share data** | **MTM-adjusted per share data** | **MTM-adjusted per share data** |
| Diluted EPS | $**9.99** | $8.66 | $**29.08** | $28.34 |
| &nbsp;&nbsp;&nbsp;MTM benefit per share | **(3.69)** | (3.03) | **(3.66)** | (3.02) |
| &nbsp;&nbsp;MTM-related deferred state tax expense per share<sup>2</sup> | **0.20** | 0.16 | **0.19** | 0.16 |
| &nbsp;&nbsp;Federal tax expense of items above per share<sup>3</sup> | **0.73** | 0.60 | **0.73** | 0.60 |
| &nbsp;&nbsp;&nbsp;MTM benefit, net of tax, per share | $**(2.76)** | $(2.27) | $**(2.74)** | $(2.26) |
| MTM-adjusted diluted EPS<sup>1</sup> | $**7.23** | $6.39 | $**26.34** | $26.08 |

---

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| | |
|:---|:---|
| 1 | Non-GAAP measure — see definitions at the end of this earnings release. |
| 2 | The deferred state tax impact in each period was calculated using the company's blended state tax rate of 5.25 percent. |
| 3 | The federal tax impact in each period was calculated by subtracting the deferred state tax impact from MTM benefit and applying the 21 percent federal statutory rate. |

---

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 3

**<u>Consolidated Operating Results and Cash Flows</u>**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended December 31 | Three Months Ended December 31 | | Year Ended December 31 | Year Ended December 31 | |
| *$ in millions, except per share amounts* | **2025** | 2024 | **Change** | **2025** | 2024 | **Change** |
| **Sales** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aeronautics Systems | $**3922** | $3331 | **18%** | $**12992** | $12396 | **5%** |
| &nbsp;&nbsp;&nbsp;Defense Systems | **2147** | 2003 | **7%** | **8002** | 7399 | **8%** |
| &nbsp;&nbsp;&nbsp;Mission Systems | **3449** | 3144 | **10%** | **12506** | 11399 | **10%** |
| &nbsp;&nbsp;&nbsp;Space Systems | **2859** | 2710 | **5%** | **10771** | 11731 | **(8)%** |
| &nbsp;&nbsp;&nbsp;Intersegment eliminations | **(665)** | (502) |  | **(2317)** | (1892) |  |
| Total sales | **11712** | 10686 | **10%** | **41954** | 41033 | **2%** |
| **Operating income** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aeronautics Systems | **370** | 309 | **20%** | **813** | 1236 | **(34)%** |
| &nbsp;&nbsp;&nbsp;Defense Systems | **205** | 209 | **(2)%** | **871** | 716 | **22%** |
| &nbsp;&nbsp;&nbsp;Mission Systems | **510** | 469 | **9%** | **1827** | 1598 | **14%** |
| &nbsp;&nbsp;&nbsp;Space Systems | **322** | 275 | **17%** | **1183** | 1254 | **(6)%** |
| &nbsp;&nbsp;&nbsp;Intersegment eliminations | **(94)** | (69) |  | **(317)** | (260) |  |
| Segment operating income<sup>1</sup> | **1313** | 1193 | **10%** | **4377** | 4544 | **(4)%** |
| *Segment operating margin rate*<sup>1</sup> | ***11.2*** *%*** | *11.2 %* | ***— bps*** | ***10.4*** *%*** | *11.1 %* | ***(70) bps*** |
| &nbsp;&nbsp;&nbsp;FAS/CAS operating adjustment | **65** | 8 | **713%** | **258** | 40 | **545%** |
| &nbsp;&nbsp;Unallocated corporate expense: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of business | **—** |  | **— %** | **231** |  | **NM** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Training services divestiture - unallowable state taxes and transaction costs | **—** | (3) | **NM** | **(20)** | (5) | **300%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible asset amortization and PP&E step-up depreciation | **(21)** | (25) | **(16)%** | **(84)** | (97) | **(13)%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MTM-related deferred state tax expense | **(28)** | (23) | **22%** | **(28)** | (23) | **22%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other unallocated corporate expense | **(58)** | (61) | **(5)%** | **(223)** | (89) | **151%** |
| &nbsp;&nbsp;&nbsp;Unallocated corporate expense | **(107)** | (112) | **(4)%** | **(124)** | (214) | **(42)%** |
| **Total operating income** | $**1271** | $1089 | **17%** | $**4511** | $4370 | **3%** |
| *Operating margin rate* | ***10.9*** *%*** | *10.2 %* | ***70 bps*** | ***10.8*** *%*** | *10.6 %* | ***20 bps*** |
| &nbsp;&nbsp;&nbsp;Interest expense | **(175)** | (160) | **9%** | **(665)** | (621) | **7%** |
| &nbsp;&nbsp;&nbsp;Non-operating FAS pension benefit | **138** | 153 | **(10)%** | **541** | 656 | **(18)%** |
| &nbsp;&nbsp;Mark-to-market pension and OPB benefit | **527** | 443 | **19%** | **527** | 443 | **19%** |
| &nbsp;&nbsp;&nbsp;Other, net | **(21)** | 26 | **NM** | **154** | 168 | **(8)%** |
| Earnings before income taxes | **1740** | 1551 | **12%** | **5068** | 5016 | **1%** |
| Federal and foreign income tax expense | **313** | 287 | **9%** | **886** | 842 | **5%** |
| *Effective income tax rate* | ***18.0*** *%*** | *18.5 %* | ***(50) bps*** | ***17.5*** *%*** | *16.8 %* | ***70 bps*** |
| **Net earnings** | $**1427** | $1264 | **13%** | $**4182** | $4174 | **— %** |
| **Diluted earnings per share** | **9.99** | 8.66 | **15%** | **29.08** | 28.34 | **3%** |
| Weighted-average diluted shares outstanding, in millions | **142.9** | 145.9 | **(2)%** | **143.8** | 147.3 | **(2)%** |
| **Net cash provided by operating activities** | $**3897** | $2578 | **51%** | $**4757** | $4388 | **8%** |
| Capital expenditures | **(662)** | (816) | **(19)%** | **(1450)** | (1767) | **(18)%** |
| **Free cash flow**<sup>1</sup> | $**3235** | $1762 | **84%** | $**3307** | $2621 | **26%** |

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| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

---

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 4

**Sales**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended December 31 | Three Months Ended December 31 | **%** | Year Ended December 31 | Year Ended December 31 | **%** |
| *$ in millions* | **2025** | 2024 | **Change** | **2025** | 2024 | **Change** |
| Sales | $**11712** | $10686 | **10%** | $**41954** | $41033 | **2%** |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Training services sales | **—** | (78) |  | **(112)** | (304) |  |
| Organic sales<sup>1</sup> | $**11712** | $10608 | **10%** | $**41842** | $40729 | **3%** |

---

Fourth quarter 2025 sales increased $1.0 billion, or 10 percent, due to higher sales of $591 million at Aeronautics Systems, $305 million at Mission Systems, $149 million at Space Systems and $144 million at Defense Systems, net of a $78 million reduction related to the training services divestiture, partially offset by $163 million of higher intercompany eliminations.

2025 sales increased $921 million, or 2 percent, due to higher sales of $1.1 billion at Mission Systems, $603 million at Defense Systems, net of a $192 million reduction related to the training services divestiture, and $596 million at Aeronautics Systems. These increases were partially offset by $960 million of lower sales at Space Systems, largely due to a $738 million sales reduction associated with wind-down of work on the restricted space and NGI programs, and $425 million of higher intercompany eliminations.

**Operating Income and Margin Rate**

Fourth quarter 2025 operating income increased $182 million, or 17 percent, primarily due to a $120 million increase in segment operating income and a $57 million increase in the FAS/CAS operating adjustment. Operating margin rate increased to 10.9 percent from 10.2 percent reflecting the items above.

2025 operating income increased $141 million, or 3 percent, primarily due to a $231 million pre-tax gain on sale for the training services divestiture and a $218 million increase in the FAS/CAS operating adjustment. These increases were partially offset by a $167 million decrease in segment operating income, primarily driven by $423 million of lower operating income at Aeronautics Systems reflecting the first quarter B-21 loss provision, and a $126 million increase in non-divestiture-related unallocated corporate expense largely driven by higher deferred state tax expense. 2025 operating margin rate increased to 10.8 percent from 10.6 percent reflecting the items above.

**Segment Operating Income and Margin Rate**<sup>1</sup>

Fourth quarter 2025 segment operating income<sup>1</sup> increased $120 million, or 10 percent, primarily due to higher operating income of $61 million at Aeronautics Systems, $47 million at Space Systems and $41 million at Mission Systems. Segment operating margin rate<sup>1</sup> of 11.2 percent was comparable to the prior year and reflects a higher operating margin rate at Space Systems, partially offset by a lower operating margin rate at Defense Systems.

2025 segment operating income<sup>1</sup> decreased $167 million, or 4 percent, primarily due to the $423 million of lower operating income at Aeronautics Systems described above and $71 million of lower operating income at Space Systems, partially offset by higher operating income of $229 million at Mission Systems and $155 million at Defense Systems. Segment operating margin rate<sup>1</sup> decreased to 10.4 percent primarily due to the B-21 loss provision at Aeronautics Systems, partially offset by higher operating margin rates at Defense Systems, Mission Systems and Space Systems.

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| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 5

**Federal and Foreign Income Taxes**

In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. The company recognized the income tax effects of the OBBBA in its 2025 financial statements.

Fourth quarter 2025 income tax expense increased $26 million, or 9 percent, due to higher earnings before taxes, partially offset by a lower effective tax rate (ETR). The fourth quarter 2025 ETR decreased to 18.0 percent from 18.5 percent primarily due to lower interest expense on unrecognized tax benefits and higher benefits from foreign derived intangible income, partially offset by lower research credits, principally due to enactment of the OBBBA, and a larger ETR impact associated with the MTM adjustment. The 2025 MTM benefit increased the fourth quarter 2025 ETR by 1.2 percentage points, whereas the prior year MTM benefit increased the fourth quarter 2024 ETR by 0.9 percentage points.

2025 income tax expense increased $44 million, or 5 percent, due to a higher ETR and higher earnings before income taxes. The 2025 ETR increased to 17.5 percent from 16.8 percent in 2024 primarily due to a net reduction in tax reserves in the prior year, lower research credits principally due to enactment of the OBBBA, and additional income tax expense related to nondeductible goodwill in the divested training services business. These increases were partially offset by lower interest expense on unrecognized tax benefits. The MTM benefit in both 2025 and 2024 increased each respective year's ETR by 0.4 percentage points.

**Net Earnings**

Fourth quarter 2025 net earnings increased $163 million, or 13 percent, primarily due to the $182 million increase in operating income described above and an $84 million increase in our MTM benefit, partially offset by a $47 million decrease in Other, net driven by lower returns on our marketable securities and a $26 million increase in income tax expense.

2025 net earnings were comparable to the prior year and reflect the $141 million increase in operating income described above and an $84 million increase in our MTM benefit, partially offset by a $115 million decrease in the non-operating FAS pension benefit, $44 million of higher interest expense and a $44 million increase in income tax expense.

**Cash Flows**

Fourth quarter 2025 net cash provided by operating activities increased $1.3 billion as compared with the same period in 2024 primarily due to a $1.1 billion decrease in net tax payments. Fourth quarter 2025 free cash flow<sup>1</sup> increased $1.5 billion, or 84 percent, due to an increase in net cash provided by operating activities and lower capital expenditures. Fourth quarter 2025 capital expenditures totaled 5.7 percent of sales.

2025 cash provided by operating activities increased $369 million, or 8 percent, primarily due to $149 million of lower net cash tax payments and improvements in trade working capital. 2025 free cash flow<sup>1</sup> increased $686 million, or 26 percent, due to higher net cash provided by operating activities as well as lower capital expenditures. 2025 capital expenditures totaled 3.5 percent of sales.

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| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 6

**Awards and Backlog**

Fourth quarter 2025 and year to date 2025 net awards totaled $15.9 billion and $46.3 billion, respectively, and backlog totaled $95.7 billion. Significant fourth quarter new awards include $4.0 billion for restricted programs (primarily at Aeronautics Systems, Space Systems and Mission Systems), $1.3 billion for F-35 (at Aeronautics Systems and Mission Systems), $2.5 billion for Graphite Epoxy Motor 63 (GEM 63), $0.9 billion for Virginia Class submarines and $0.8 billion for Space Development Agency (SDA) Tranche 3 Tracking Layer.

Significant 2025 new awards include $14.8 billion for restricted programs (primarily at Aeronautics Systems, Space Systems, and Mission Systems), $3.3 billion for F-35 (at Mission Systems and Aeronautics Systems), $2.5 billion for GEM 63, $1.8 billion for Ground-based Midcourse Defense Weapon System (GWS), and $1.3 billion for Virginia Class submarines.

**<u>Segment Operating Results</u>**

Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. This realignment is reflected in the financial information contained in this report.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **AERONAUTICS SYSTEMS** | Three Months Ended December 31 | Three Months Ended December 31 | **%** | Year Ended December 31 | Year Ended December 31 | **%** |
| *$ in millions* | **2025** | 2024 | **Change** | **2025** | 2024 | **Change** |
| Sales | $**3922** | $3331 | **18%** | $**12992** | $12396 | **5%** |
| Operating income | **370** | 309 | **20%** | **813** | 1236 | **(34)%** |
| *Operating margin rate* | ***9.4*** *%*** | *9.3 %* |  | ***6.3*** *%*** | *10.0 %* |  |

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**Sales**

Fourth quarter 2025 sales increased $591 million, or 18 percent, primarily due to a $274 million increase on the F-35 program largely driven by materials volume, a $153 million increase on the E-130J TACAMO ("TACAMO") program as it ramps up, and higher volume on the B-21 and E-2 programs.

2025 sales increased $596 million, or 5 percent, primarily due to a $385 million increase on F-35 largely driven by material volume, a $379 million increase on TACAMO as that program ramps, and higher volume on the E-2 and B-21 programs. These increases were partially offset by lower sales on other restricted programs and a $106 million decrease on F/A-18 as final production deliveries were completed.

**Operating Income**

Fourth quarter 2025 operating income increased $61 million, or 20 percent, primarily due to higher sales. Operating margin rate of 9.4 percent was comparable to the prior year. Each of the fourth quarters in 2025 and 2024 include operating margin rate impacts from higher B-21 sales related to the exercise of LRIP contract options.

2025 operating income decreased $423 million and operating margin rate decreased to 6.3 percent primarily due to a $477 million loss provision recorded on the LRIP phase of the B-21 program in the first quarter of 2025. This was partially offset by higher net EAC adjustments across the portfolio.

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| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

---

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 7

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **DEFENSE SYSTEMS** | Three Months Ended December 31 | Three Months Ended December 31 | **%** | Year Ended December 31 | Year Ended December 31 | **%** |
| *$ in millions* | **2025** | 2024 | **Change** | **2025** | 2024 | **Change** |
| Sales | $**2147** | $2003 | **7%** | $**8002** | $7399 | **8%** |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Training services sales | **—** | (78) |  | **(112)** | (304) |  |
| Organic sales<sup>1</sup> | $**2147** | $1925 | **12%** | $**7890** | $7095 | **11%** |
| *Operating income* | $**205** | $209 | **(2)%** | $**871** | $716 | **22%** |
| *Operating margin rate* | ***9.5*** *%*** | *10.4 %* |  | ***10.9*** *%*** | *9.7 %* |  |

---

**Sales**

Fourth quarter 2025 sales increased $144 million, or 7 percent, primarily due to higher volume due to the timing of materials on the Guided Multiple Launch Rocket System (GMLRS), increased volume from new awards across the Integrated Battle Command System (IBCS) program portfolio, higher volume on Sentinel as that program continues to ramp, and higher volume on armament programs, including military ammunition programs. These increases were partially offset by a reduction in sales related to the divested training services business.

2025 sales increased $603 million, or 8 percent, primarily due to a $224 million increase on Sentinel as that program continues to ramp, a $185 million increase on armament programs, including military ammunition programs, a $153 million increase in sales from new awards across the IBCS program portfolio, and higher volume due to material timing on the GMLRS program. These increases were partially offset by a $192 million reduction in sales related to the divested training services business.

**Operating Income**

Fourth quarter 2025 operating income decreased $4 million, or 2 percent, due to a lower operating margin rate, partially offset by higher sales. Operating margin rate decreased to 9.5 percent from 10.4 percent principally due to lower net EAC adjustments.

2025 operating income increased $155 million, or 22 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 10.9 percent from 9.7 percent primarily due to higher net EAC adjustments, including a $76 million favorable EAC adjustment on the Sentinel program during the second quarter of 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **MISSION SYSTEMS** | Three Months Ended December 31 | Three Months Ended December 31 | **%** | Year Ended December 31 | Year Ended December 31 | **%** |
| *$ in millions* | **2025** | 2024 | **Change** | **2025** | 2024 | **Change** |
| Sales | $**3449** | $3144 | **10%** | $**12506** | $11399 | **10%** |
| Operating income | **510** | 469 | **9%** | **1827** | 1598 | **14%** |
| *Operating margin rate* | ***14.8*** *%*** | *14.9 %* |  | ***14.6*** *%*** | *14.0 %* |  |

---

**Sales**

Fourth quarter 2025 sales increased $305 million, or 10 percent, primarily due to ramp-up on restricted airborne radar programs, as well as higher volume on F-35, the Surface Electronic Warfare Improvement Program (SEWIP) and international ground-based radar programs. These increases were partially offset by lower sales on restricted advanced microelectronics programs.

2025 sales increased $1.1 billion, or 10 percent, primarily due to continued ramp-up on restricted airborne radar programs, as well as higher sales of $161 million on marine systems programs, $141 million on international ground-based radar programs and $105 million on communications programs, as several programs ramp up following new awards.

---

| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

---

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 8

**Operating Income**

Fourth quarter 2025 operating income increased $41 million, or 9 percent, primarily due to higher sales. Operating margin rate of 14.8 percent was comparable to the prior year. Lower net EAC adjustments were largely offset by favorable changes in contract mix driven by sales growth on programs with accretive margin rates.

2025 operating income increased $229 million, or 14 percent, due to higher sales and a higher operating margin rate. Operating margin rate increased to 14.6 percent from 14.0 percent primarily due to higher net EAC adjustments, including a $68 million favorable EAC adjustment recorded in the third quarter of 2025 in the restricted advanced microelectronics portfolio, partially offset by investments made by the sector in connection with restricted business opportunities during the first quarter of 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **SPACE SYSTEMS** | Three Months Ended December 31 | Three Months Ended December 31 | **%** | Year Ended December 31 | Year Ended December 31 | **%** |
| *$ in millions* | **2025** | 2024 | **Change** | **2025** | 2024 | **Change** |
| Sales | $**2859** | $2710 | **5%** | $**10771** | $11731 | **(8)%** |
| Operating income | **322** | 275 | **17%** | **1183** | 1254 | **(6)%** |
| *Operating margin rate* | ***11.3*** *%*** | *10.1 %* |  | ***11.0*** *%*** | *10.7 %* |  |

---

**Sales**

Fourth quarter 2025 sales increased $149 million, or 5 percent, primarily due to production ramp-up on the GEM 63 program, increased sales from new program awards in the restricted space portfolio, and higher volume on the Habitation and Logistics Outpost (HALO) program, partially offset by wind-down of work on the Next Generation Interceptor (NGI) program.

2025 sales decreased $960 million, or 8 percent, primarily due to wind-down of work on the restricted space and NGI programs, which reduced sales by $738 million, as well as a $172 million decrease for the SDA satellite programs due to the timing of materials and a $102 million decrease driven by lower volume on the SLS Booster program. These decreases were partially offset by a $168 million increase on GEM 63 and higher volume on HALO as those programs continue to ramp.

**Operating Income**

Fourth quarter 2025 operating income increased $47 million, or 17 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 11.3 percent from 10.1 percent principally due to higher net EAC adjustments and more favorable contract mix.

2025 operating income decreased $71 million, or 6 percent, due to lower sales, partially offset by a higher operating margin rate. Operating margin rate increased to 11.0 percent from 10.7 percent principally due to more favorable contract mix.

---

| |
|:---|
| <sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release. |
| **Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com |

---

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 9

**<u>Guidance</u>**

**&nbsp;&nbsp;&nbsp;&nbsp;**Financial guidance, as well as outlook, trends, expectations and other forward-looking statements provided by the company for 2026 and beyond, reflect the company's judgment based on the information available to the company at the time of this release. The company's financial guidance and outlook for 2026 and beyond reflect what the company currently anticipates will be the impacts on the company from, among other factors, the global macroeconomic, security, and political/budget environments, including the impacts from inflationary pressures and labor and supply chain challenges; changes in the threat environment; changes in government budget, appropriations and procurement priorities and processes; changes in the regulatory environment, including trade policy and tax policy; and changes in support for our programs. We are not assuming, and the company's financial guidance and outlook for 2026 and beyond do not reflect impacts on the company from, a prolonged government shutdown, or application of spending limits or other spending cuts. However, the company cannot predict how these factors will evolve or what impacts they will have, and there can be no assurance that the company's current expectations or underlying assumptions are correct. These factors can affect the company's ability to achieve guidance or meet expectations.

For additional factors that may impact the company's ability to achieve guidance or meet expectations, please see the "Forward-Looking Statements" section in this release and our Form 10-K.

---

| | | | |
|:---|:---|:---|:---|
| **2026 Guidance** | **2026 Guidance** |  |  |
| ***($ in millions, except per share amounts)*** | **As of 1/27/2026** |  |  |
| **Sales** | **$43500 — $44000** |  |  |
| **Sales** | **$43500 — $44000** | **Segment operating income**<sup>1</sup> | **$4850 — $5000** |
| **MTM-adjusted EPS**<sup>1</sup> | **$27.40 — $27.90** | **Segment operating income**<sup>1</sup> | **$4850 — $5000** |
| **MTM-adjusted EPS**<sup>1</sup> | **$27.40 — $27.90** | **Free cash flow**<sup>1</sup> | **$3100 — $3500** |
| **Free cash flow**<sup>1</sup> | **$3100 — $3500** |  |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2026 Segment Guidance** | **2026 Segment Guidance** | **2026 Segment Guidance** |  |  |  |
|  | **As of 1/27/2026** | **As of 1/27/2026** |  |  |  |
|  | **Sales ($B)** | **OM Rate %** |  |  |  |
| **Aeronautics Systems** | **Mid $13** | **Low to Mid 9%** |  |  |  |
| **Aeronautics Systems** | **Mid $13** | **Low to Mid 9%** | **Defense Systems** | **Mid to High $8** | **~10%** |
| **Mission Systems** | **High $12** | **High 14%** | **Defense Systems** | **Mid to High $8** | **~10%** |
| **Mission Systems** | **High $12** | **High 14%** | **Space Systems** | **~$11** | **~11%** |
| **Intersegment Eliminations** | **~($2.4)** | **High 13%** | **Space Systems** | **~$11** | **~11%** |
| **Intersegment Eliminations** | **~($2.4)** | **High 13%** |  |  |  |

---

<sup>1</sup> Non-GAAP measure - see definitions at the end of this earnings release.

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 10

**<u>About Northrop Grumman</u>**

Northrop Grumman will webcast its earnings conference call at 9:30 a.m. Eastern Time on January 27, 2026. A live audio broadcast of the conference call will be available on the investor relations page of the company's website at <u>www.northropgrumman.com</u>.

Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers' toughest problems, our employees define possible every day.

###

**<u>Forward-Looking Statements and Projections</u>**

This earnings release and the information we are incorporating by reference, and statements to be made on the earnings conference call, contain or may contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "will," "expect," "anticipate," "intend," "may," "could," "should," "plan," "strategy," "project," "forecast," "achieve," "believe," "estimate," "guidance," "outlook," "trends," "goals," "confident," "on track" and similar expressions generally identify these forward-looking statements.

Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and/or cash flows, including financial guidance, outlook, trends, expectations and other forward-looking statements for 2026 and beyond. Forward-looking statements are based upon assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward-looking statements include, but are not limited to, those identified and discussed more fully in the section entitled "Risk Factors" in the Form 10-K for the year ended December 31, 2025, and from time to time in our other filings with the Securities and Exchange Commission (SEC). They include:

Industry and Economic Risks

• our dependence on the U.S. government for a substantial portion of our business

• significant delays or reductions in appropriations and/or for our programs, and U.S. government funding and program support more broadly, including as a result of a prolonged continuing resolution and/or government shutdown, and/or related to the global security environment or other global events

• significant delays or reductions in payments as a result of or related to a breach of the debt ceiling or a prolonged government shutdown

• the use of estimates when accounting for our contracts and the effect of contract cost growth and our efforts to recover or offset such costs and/or changes in estimated contract costs and revenues, including as a result of inflationary pressures, labor shortages, supply chain challenges, changes in trade policies and/or other macroeconomic factors, and risks related

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 11

to management's judgments and assumptions in estimating and/or projecting contract revenue and performance which may be inaccurate

• increased competition within our markets and bid protests

• continued pressures from macroeconomic trends, including on costs, schedules, performance and ability to meet expectations

Legal and Regulatory Risks

• investigations, claims, disputes, enforcement actions, litigation (including criminal, civil and administrative) and/or other legal proceedings

• changes in procurement and other laws, SEC, U.S. Department of War (DoW) and other rules and regulations, including changes through executive orders, contract terms and practices applicable to our industry, findings by the U.S. government as to our compliance with such requirements, more aggressive enforcement of such requirements and changes in our customers' business practices and preferences globally

• the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate, including the impact on our reputation and our ability to do business

• environmental matters, unforeseen environmental costs and government and third-party claims

• unanticipated changes in our tax provisions or exposure to additional tax liabilities

Business and Operational Risks

• cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners, and changes in related regulations

• the performance and viability of our subcontractors and suppliers and the availability and pricing of raw materials, chemicals, parts and components, particularly with inflationary pressures, increased costs, shortages in labor and financial resources, supply chain disruptions, and extended material lead times

• our ability to attract and retain a qualified and talented workforce with the necessary security clearances to meet our performance obligations

• our exposure to additional risks as a result of our international business, including risks related to global security, geopolitical and economic factors, misconduct, suppliers, laws and regulations

• our ability to innovate, develop new products and technologies, progress and benefit from digital transformation and maintain technologies to meet the needs of our customers

• natural disasters, epidemics, pandemics and similar outbreaks and other significant disruptions

• products and services we provide related to hazardous and high risk operations, including the production and use of such products, which subject us to various environmental, regulatory, financial, reputational and other risks

• our ability appropriately to protect and exploit intellectual property rights

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 12

General and Other Risk Factors

• the adequacy and availability of, and ability to obtain, insurance coverage, customer indemnifications or other liability protections

• the future investment performance of plan assets, gains or losses associated with changes in valuation of marketable securities related to our non-qualified benefit plans, changes in actuarial assumptions associated with our pension and other postretirement benefit plans and legislative or other regulatory actions impacting our pension and postretirement benefit obligations

• changes in business conditions that could impact business investments and/or recorded goodwill or the value of other long-lived assets, and other potential future liabilities

You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of forward-looking statements. These forward-looking statements speak only as of the date this earnings release is first issued or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

This release and the attachments also contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the company's use of these measures are included in this release or the attachments.

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 13

**SCHEDULE 1**

**NORTHROP GRUMMAN CORPORATION**

**CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| | Year Ended December 31 | Year Ended December 31 | Year Ended December 31 |
| *$ in millions, except per share amounts* | **2025** | 2024 | 2023 |
| **Sales** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Product | $**33741** | $32726 | $30897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Service | **8213** | 8307 | 8393 |
| Total sales | **41954** | 41033 | 39290 |
| **Operating costs and expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Product | **27280** | 26188 | 26226 |
| &nbsp;&nbsp;&nbsp;&nbsp;Service | **6361** | 6483 | 6513 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | **4033** | 3992 | 4014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating costs and expenses | **37674** | 36663 | 36753 |
| Gain on sale of business | **231** |  |  |
| **Operating income** | **4511** | 4370 | 2537 |
| Other (expense) income |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | **(665)** | (621) | (545) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-operating FAS pension benefit | **541** | 656 | 530 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mark-to-market pension and OPB benefit (expense) | **527** | 443 | (422) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other, net | **154** | 168 | 246 |
| Earnings before income taxes | **5068** | 5016 | 2346 |
| Federal and foreign income tax expense | **886** | 842 | 290 |
| **Net earnings** | $**4182** | $4174 | $2056 |
| **Basic earnings per share** | $**29.14** | $28.39 | $13.57 |
| Weighted-average common shares outstanding, in millions | **143.5** | 147.0 | 151.5 |
| **Diluted earnings per share** | $**29.08** | $28.34 | $13.53 |
| Weighted-average diluted shares outstanding, in millions | **143.8** | 147.3 | 152.0 |
| Net earnings (from above) | $**4182** | $4174 | $2056 |
| Other comprehensive income (loss), net of tax |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in cumulative translation adjustment | **9** | (2) | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in other, net | **17** | (22) | 2 |
| Other comprehensive income (loss), net of tax | **26** | (24) | 25 |
| **Comprehensive income** | $**4208** | $4150 | $2081 |

---

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 14

**SCHEDULE 2**

**NORTHROP GRUMMAN CORPORATION**

**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION** 

**(Unaudited)** 

---

| | | |
|:---|:---|:---|
| *$ in millions, except par value* | **December 31, 2025** | December 31, 2024 |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**4403** | $4353 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | **1375** | 1272 |
| &nbsp;&nbsp;&nbsp;Unbilled receivables, net | **6544** | 5908 |
| &nbsp;&nbsp;&nbsp;Inventoried costs, net | **1309** | 1455 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | **1656** | 1286 |
| Total current assets | **15287** | 14274 |
| &nbsp;&nbsp;Property, plant and equipment, net of accumulated depreciation of $9,648 for 2025 and $8,733 for 2024 | **10972** | 10536 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | **1859** | 1770 |
| &nbsp;&nbsp;&nbsp;Goodwill | **17437** | 17512 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | **1051** | 1599 |
| &nbsp;&nbsp;&nbsp;Pension and other postretirement benefit plan assets | **3167** | 2184 |
| &nbsp;&nbsp;&nbsp;Other non-current assets | **1604** | 1484 |
| **Total assets** | $**51377** | $49359 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Trade accounts payable | $**3240** | $2599 |
| &nbsp;&nbsp;&nbsp;Accrued employee compensation | **2309** | 2271 |
| &nbsp;&nbsp;&nbsp;Advance payments and billings in excess of costs incurred | **4086** | 4070 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | **4247** | 5188 |
| Total current liabilities | **13882** | 14128 |
| &nbsp;&nbsp;Long-term debt, net of current portion of $534 for 2025 and $1,582 for 2024 | **15162** | 14692 |
| &nbsp;&nbsp;&nbsp;Pension and other postretirement benefit plan liabilities | **1110** | 1120 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | **1857** | 1798 |
| &nbsp;&nbsp;&nbsp;Other non-current liabilities | **2692** | 2331 |
| **Total liabilities** | **34703** | 34069 |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | **—** |  |
| &nbsp;&nbsp;Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2025—141,997,194 and 2024—144,952,026 | **142** | 145 |
| &nbsp;&nbsp;&nbsp;Paid-in capital | **—** |  |
| &nbsp;&nbsp;&nbsp;Retained earnings | **16658** | 15297 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | **(126)** | (152) |
| **Total shareholders' equity** | **16674** | 15290 |
| **Total liabilities and shareholders' equity** | $**51377** | $49359 |

---

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 15

**SCHEDULE 3**

**NORTHROP GRUMMAN CORPORATION**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| | Year Ended December 31 | Year Ended December 31 | Year Ended December 31 |
| *$ in millions* | **2025** | 2024 | 2023 |
| **Operating activities** |  |  |  |
| Net earnings | $**4182** | $4174 | $2056 |
| Adjustments to reconcile to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **1472** | 1370 | 1338 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | **119** | 101 | 87 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | **548** | (582) | (988) |
| &nbsp;&nbsp;B-21 loss provisions | **477** |  | 1559 |
| &nbsp;&nbsp;&nbsp;Gain on sale of business | **(231)** |  |  |
| &nbsp;&nbsp;&nbsp;Mark-to-market pension and OPB (benefit) expense | **(527)** | (443) | 422 |
| &nbsp;&nbsp;&nbsp;Net periodic pension and OPB income | **(346)** | (438) | (308) |
| &nbsp;&nbsp;&nbsp;Pension and OPB contributions | **(130)** | (129) | (139) |
| &nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | **(108)** | 182 | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unbilled receivables, net | **(754)** | (215) | 247 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventoried costs, net | **97** | (358) | (220) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | **8** | 35 | (86) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts payable | **646** | 485 | (469) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance payments and billings in excess of costs incurred | **19** | (123) | 587 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | **(212)** | (875) | 401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable, net | **(559)** | 1143 | (658) |
| &nbsp;&nbsp;&nbsp;Other operating activities | **56** | 61 | (8) |
| Net cash provided by operating activities | **4757** | 4388 | 3875 |
| **Investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Capital expenditures | **(1450)** | (1767) | (1775) |
| &nbsp;&nbsp;&nbsp;Divestiture of training services business | **333** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of minority investments | **—** |  | 197 |
| &nbsp;&nbsp;&nbsp;Other investing activities | **(38)** | 18 | (4) |
| Net cash used in investing activities | **(1155)** | (1749) | (1582) |
| **Financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net proceeds from issuance of long-term debt | **998** | 2495 | 1995 |
| &nbsp;&nbsp;&nbsp;Payments of long-term debt | **(1500)** |  | (1050) |
| &nbsp;&nbsp;&nbsp;Common stock repurchases | **(1624)** | (2514) | (1500) |
| &nbsp;&nbsp;&nbsp;Cash dividends paid | **(1293)** | (1186) | (1116) |
| &nbsp;&nbsp;&nbsp;Payments of employee taxes withheld from share-based awards | **(39)** | (58) | (52) |
| &nbsp;&nbsp;&nbsp;Other financing activities | **(94)** | (132) | (38) |
| Net cash used in financing activities | **(3552)** | (1395) | (1761) |
| Increase in cash and cash equivalents | **50** | 1244 | 532 |
| Cash and cash equivalents, beginning of year | **4353** | 3109 | 2577 |
| Cash and cash equivalents, end of period | $**4403** | $4353 | $3109 |

---

**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 16

**SCHEDULE 4**

**NORTHROP GRUMMAN CORPORATION**

**TOTAL BACKLOG**

**(Unaudited)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | December 31, 2024 | % Change in 2025 |
| *$ in millions* | **Funded**<sup>1</sup> | **Unfunded** | **Total<br>Backlog**<sup>2</sup> | Total<br>Backlog<sup>2</sup> | % Change in 2025 |
| Aeronautics Systems | $**12585** | $**10467** | $**23052** | $25202 | **(9)%** |
| Defense Systems | **8610** | **19186** | **27796** | 26614 | **4%** |
| Mission Systems | **13251** | **5381** | **18632** | 16443 | **13%** |
| Space Systems | **9083** | **17118** | **26201** | 23209 | **13%** |
| Total backlog | $**43529** | $**52152** | $**95681** | $91468 | **5%** |

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| | |
|:---|:---|
| 1 | Funded backlog represents firm orders for which funding is authorized and appropriated. |
| 2 | Total backlog excludes unexercised contract options and indefinite delivery, indefinite quantity (IDIQ) contracts until the time the option or IDIQ task order is exercised or awarded. |

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**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 17

**SCHEDULE 5**

**NORTHROP GRUMMAN CORPORATION**

**SUPPLEMENTAL PER SHARE INFORMATION**

**(Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended December 31 | Three Months Ended December 31 | Year Ended December 31 | Year Ended December 31 |
| *$ in millions, except per share amounts* | **2025** | 2024 | **2025** | 2024 |
| **Per share impact of total net FAS/CAS pension adjustment** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;FAS/CAS operating adjustment | $**65** | $8 | $**258** | $40 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-operating FAS pension benefit | **138** | 153 | **541** | 656 |
| Total net FAS/CAS pension adjustment | **203** | 161 | **799** | 696 |
| MTM pension and OPB benefit | **527** | 443 | **527** | 443 |
| Total pension-related benefit | **730** | 604 | **1326** | 1139 |
| Tax effect<sup>1</sup> | **(183)** | (152) | **(333)** | (286) |
| After-tax impact | $**547** | $452 | $**993** | $853 |
| Weighted-average diluted shares outstanding, in millions | **142.9** | 145.9 | **143.8** | 147.3 |
| **Per share impact** | $**3.83** | $3.10 | $**6.91** | $5.79 |
| **Per share impact of intangible asset amortization and PP&E step-up depreciation** |  |  |  |  |
| Intangible asset amortization and PP&E step-up depreciation | $**(21)** | $(25) | $**(84)** | $(97) |
| Tax effect<sup>1</sup> | **5** | 6 | **21** | 24 |
| After-tax impact | $**(16)** | $(19) | $**(63)** | $(73) |
| Weighted-average diluted shares outstanding, in millions | **142.9** | 145.9 | **143.8** | 147.3 |
| **Per share impact** | $**(0.11)** | $(0.13) | $**(0.44)** | $(0.50) |

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| | |
|:---|:---|
| 1 | Based on a 21% federal statutory tax rate and a 5.25% blended state tax rate. |

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**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>

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<u>Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results</u> 18

**<u>Non-GAAP Financial Measures Disclosure:</u>** This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in the text of the release. Definitions for the non-GAAP measures are provided below and reconciliations are provided in the body of the release, except that reconciliations of forward-looking non-GAAP measures are not provided because the company is unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of certain items, including, but not limited to, the impact of any mark-to-market pension adjustment. Other companies may define these measures differently or may utilize different non-GAAP measures.

**<u>MTM-adjusted net earnings:</u>** Net earnings excluding MTM benefit (expense) and related tax impacts. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company's underlying financial performance by presenting the company's operating results before the non-operational impact of pension and OPB actuarial gains and losses. This measure is also consistent with how management views the underlying performance of the business as the impact of MTM accounting is not considered in management's assessment of the company's operating performance or in its determination of incentive compensation awards.

**<u>MTM-adjusted EPS:</u>** Diluted earnings per share excluding the per share impact of MTM benefit (expense) and related tax impacts. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company's underlying financial performance by presenting the company's diluted earnings per share results before the non-operational impact of pension and OPB actuarial gains and losses.

**<u>Segment operating income and segment operating margin rate:</u>** 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 allocated to our sectors under FAR and CAS and excludes FAS pension service expense and unallocated corporate items. These measures may be useful to investors and other users of our financial statements as supplemental measures in evaluating the financial performance and operational trends of our sectors. These measures should not be considered in isolation or as alternatives to operating results presented in accordance with GAAP.

**<u>Free cash flow:</u>** Net cash provided by or used in operating activities less capital expenditures. We use free cash flow as a key factor in our planning for, and consideration of, acquisitions, the payment of dividends and stock repurchases. This measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with GAAP.

**<u>Organic sales:</u>** Total sales excluding sales attributable to the company's former training services business. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company's underlying sales growth as well as in understanding our ongoing business and future sales trends by presenting the company's sales adjusted for the impact of the divestiture.

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**Northrop Grumman Corporation**<br>2980 Fairview Park Drive • Falls Church, VA 22042-4511<br>news.northropgrumman.com<br>