Northrop Grumman (NOC) 10-K risk factor changes: FY2020 vs FY2019

Our consolidated financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within our control, that may cause actual performance to differ materially from historical or projected future performance.

We encourage you to consider carefully the risk factors described below in evaluating the information contained in this report as the outcome of one or more of these risks could have a material adverse effect on our financial position, results of operations and/or cash flows.

Industry and Economic Risks

▪We depend heavily on a single customer, the U.S. government, for a substantial portion of our business.

Changes in this customer’s priorities and spending could have a material adverse effect on our financial position, results of operations and/or cash flows.

Our primary customer is the U.S. government, from which we derived 84 percent of our sales in 2020; we have a number of large programs with the U.S. Department of the Air Force, in particular.

The U.S. government has been implementing significant changes and spending levels have fluctuated and may continue to fluctuate over time even more so.

We cannot predict the impact on existing, follow-on, replacement or future programs from potential changes in the threat environment, defense spending levels, government priorities, political leadership, procurement strategy, military strategy and planning; or broader changes in social, economic or political demands and priorities.

The U.S. government also has the ability to delay, modify or cancel ongoing competitions, procurements and programs, as well as to change its future acquisition strategy.

The U.S. government generally has the ability to terminate contracts, in whole or in part, for its convenience or for default based on performance.

In the event of termination for the U.S. government’s convenience, contractors are generally protected by provisions covering reimbursement for costs incurred on the contracts and profit on those costs up to the amount authorized under the contract, but not the anticipated profit that would have been earned had the contract been completed.

Termination by the U.S. government of a contract due to default could require us to pay for re-procurement costs in excess of the original contract price, net of the value of work accepted from the original contract, as well as other damages.

Termination of a contract due to our default could have a material adverse effect on our reputation, our ability to compete for other contracts and our financial position, results of operations and/or cash flows.

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The U.S. government also has the ability to stop work under a contract for a limited period of time for its convenience.

It is possible that the U.S. government could invoke this ability across a limited or broad number of contracts.

In the event of a stop work order, contractors are typically protected by provisions covering reimbursement for costs incurred on the contract to date and for costs associated with the temporary stoppage of work on the contract plus a reasonable fee.

However, such temporary stoppages and delays could introduce inefficiencies and result in financial and other damages for which we may not be able to negotiate full recovery from the U.S. government.

They could also ultimately result in termination of a contract (or contracts) for convenience or reduced future orders.

A significant shift in government priorities, programs or acquisition strategies could have a material adverse effect on our financial position, results of operations and/or cash flows.

▪Significant delays or reductions in appropriations for our programs and U.S. government funding more broadly may negatively impact our business and programs and could have a material adverse effect on our financial position, results of operations and/or cash flows.

U.S. government programs are subject to annual congressional budget authorization and appropriation processes.

For many programs, Congress appropriates funds on an annual fiscal year basis even though the program performance period may extend over several years.

Consequently, programs are often partially funded initially and additional funds are committed only as Congress makes further appropriations.

If we incur costs in excess of funds obligated on a contract, we may be at risk for reimbursement of those costs unless and until additional funds are obligated to the contract.

More broadly, we cannot predict the extent to which total funding and/or funding for individual programs will be included, increased or reduced as part of the annual appropriations ultimately approved by Congress and the President or in separate supplemental appropriations or continuing resolutions, as applicable.

Laws and plans adopted by the U.S. government relating to, along with pressures on and uncertainty surrounding the federal budget, potential changes in priorities and defense spending levels, sequestration, the appropriations process, use of continuing resolutions (with restrictions, e.g., on new starts) and the permissible federal debt limit, could adversely affect the funding for individual programs and delay purchasing or payment decisions by our customers.

In the event government funding for our significant programs becomes unavailable, or is reduced or delayed, or planned orders are reduced, our contract or subcontract for such programs may be terminated or adjusted by the U.S. government or the prime contractor.

The U.S. continues to face an uncertain and changing political environment and substantial fiscal and economic challenges, which affect funding for discretionary and non-discretionary budgets.

The Budget Control Act of 2011 (BCA) mandated spending caps for all federal discretionary spending across a ten-year period (FY 2012 through FY 2021), including specific limits for defense and non-defense spending.

In prior years, these spending caps have been revised by separate bills for specific fiscal years.

In August 2019, the Bipartisan Budget Act of 2019 was enacted, increasing spending caps under the Budget Control Act (BCA) for FY 2020 and FY 2021, the final two fiscal years covered by the BCA, and suspending the debt ceiling through July 31, 2021.

In February 2020, the then President proposed a budget request for FY 2021, which addressed various capabilities highlighted in the U.S. National Security Strategy, the National Defense Strategy and the Missile Defense Review.

On December 27, 2020, FY 2021 appropriations were enacted under the Consolidated Appropriations Act of 2021.

The budget environment and uncertainty surrounding the appropriations processes and the debt ceiling, remain significant short and long-term risks.

Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the defense spending priorities of the new Administration and Congress, and what challenges budget reductions will present for the defense industry.

If annual appropriations bills are not timely enacted, the U.S. government may continue to operate under a continuing resolution, restricting new contract or program starts, presenting resource allocation challenges and placing limitations on some planned program budgets, and we may face a government shutdown of unknown duration.

If a prolonged government shutdown of the DoD were to occur, it could result in program cancellations, disruptions and/or stop work orders and could limit the U.S. government’s ability effectively to progress programs and to make timely payments, and our ability to perform on our U.S. government contracts and successfully compete for new work.

We believe continued budget pressures could have serious negative consequences for the security of our country, the defense industrial base, including Northrop Grumman, and the customers, employees, suppliers, investors and communities that rely on companies in the defense industrial base.

OVERVIEW

The following discussion should be read along with the financial statements included in this Form 10-K, as well as Part II, “Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended December 31, 2019 (“2019 Annual Report on Form 10-K”), as well as Exhibit 99.3 of our Form 8-K that we filed with the SEC on April 29, 2020, which recasts the disclosures in certain portions of the 2019 Annual Report on Form 10-K to reflect changes in the company’s reportable segments, both of which provide additional information on comparisons of years 2019 and 2018.

Acquisition of Orbital ATK

On June 6, 2018 (the “Merger Date”), the company completed its previously announced acquisition of Orbital ATK, Inc. (“Orbital ATK”) (the “Merger”).

On the Merger date, Orbital ATK became a wholly-owned subsidiary of the company and its name was changed to Northrop Grumman Innovation Systems, Inc. We established Innovation Systems as a new, fourth business sector.

The operating results of legacy Innovation Systems subsequent to the Merger Date have been included in the company’s consolidated results of operations and, upon our January 1, 2020 sector realignment, are reflected in the Space Systems, Defense Systems and Aeronautics Systems sectors.

See Note 2 to the consolidated financial statements for further information regarding the acquisition of Orbital ATK.

In June 2018, the U.S. Federal Trade Commission (FTC) issued a Decision and Order enabling the acquisition to proceed and providing for solid rocket motors to be available on a non-discriminatory basis under certain circumstances and processes.

The company has taken and continues to take robust actions to help ensure compliance with the terms of the Order.

Similarly, the Compliance Officer, appointed under the Order, and the FTC have taken and continue to take various actions to oversee compliance.

In October 2019, the company received a civil investigative demand from the FTC requesting certain information relating to a potential issue of the company’s compliance with the Order in connection with a then pending strategic missile competition.

The company has provided information in response to the request.

We believe the company has been and continues to be in full compliance with the Order, but we cannot predict the ultimate outcome of this matter.

Disposition of IT and Mission Support Services Business

On December 7, 2020, we entered into a definitive agreement to sell our IT and mission support services business for $3.4 billion in cash.

The IT and mission support services business is comprised of the majority of the Information Solutions and Services (IS&S) division of Defense Systems (excluding our Vinnell Arabia business); select cyber, intelligence and missions support programs, which are part of the Cyber and Intelligence Mission Solutions (CIMS) division of Mission Systems; and the Space Technical Services business unit of Space Systems.

The assets and liabilities of the IT and mission support services business were classified as held for sale in the consolidated statement of financial position as of December 31, 2020 and no impairment losses were recognized in the consolidated statement of earnings and comprehensive income for the year ended December 31, 2020.

We expect to complete the sale of the IT and mission support services business in the first quarter of 2021, subject to regulatory approvals and customary closing conditions.

See Note 2 to the consolidated financial statements for further information regarding the disposition.

COVID-19

Coronavirus disease 2019 (“COVID-19”) was first reported in late 2019 and has since dramatically impacted the global health and economic environment, including millions of confirmed cases, business slowdowns or shutdowns, government challenges and market volatility.

In March 2020, the World Health Organization characterized COVID-19 as a global pandemic, and the President declared a national emergency concerning the COVID-19 outbreak.

The company’s leadership, our crisis management and business resumption teams, and local site leadership continue closely to monitor and address the developments, including the impact on our company, our employees, our customers, our suppliers and our communities.

The company has considered and continues to consider guidance from the Centers for Disease Control (CDC), other health organizations, federal, state and local governmental authorities, and our customers, among others.

We have taken, and continue to take, robust actions to help protect the health, safety and well-being of our employees, to support our suppliers and local communities, and to continue to serve our customers.

Our goals have been to lessen the immediate potential adverse impacts, both health and economic, and to continue to position the company for long-term success.

Like the communities in which we serve, our actions have varied depending on the spread of COVID-19 and local health requirements, the needs of our employees and the needs of our business.

Among other actions, we have required or enabled employees to work from home or remotely where practicable, and expanded IT and communication support to enhance their productivity; adjusted work spaces and shift schedules to facilitate social distancing for those who continue to work in our facilities; enhanced cleaning and disinfecting procedures at our facilities; required face coverings and worked

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to procure and distribute personal protective equipment (PPE); implemented health checks and visitor protocols; restricted travel; provided additional benefits to our employees, including for those most at risk; and contributed financial and manufacturing resources to supporting critical national requirements, such as for PPE.

Along with the Northrop Grumman Foundation, we have provided grants for global, national and local organizations that support frontline healthcare workers, address food insecurity, advance efforts for vaccines, increase student access to technology and provide support to vulnerable populations; donated PPE items to emergency response teams and healthcare professionals, including N95 masks and Tyvek suits; and established a COVID-19 relief matching gift program for employees.

More recently, we have sought to assist state and local governments as they start to distribute and deliver vaccines.

Earlier in the COVID-19 pandemic and at times of higher transmission, many state and local jurisdictions implemented mandatory stay-at-home or shelter-in-place orders.

Most of those orders exempted some or all of the defense industrial base, including Northrop Grumman and many of our suppliers, as part of the essential or critical infrastructure.

Our facilities have largely remained open and many of our employees who cannot work remotely are continuing to come to work and support our customers’ national security and mission-essential operations.

Towards the end of the second quarter of 2020, some state and local jurisdictions started to lift mandatory stay-at-home or shelter-in-place orders and started gradually to ease restrictions.

We started to implement, or prepared to implement certain return to office plans to allow some employees who had been working remotely gradually to return to the workplace.

Later in 2020, as the number of cases began to rise again, and particularly in the fourth quarter of 2020, we paused or reversed many of our efforts to bring more employees back to the work place.

We are exposed to market risk with respect to our portfolio of marketable securities with a fair value of [removed: $382] [added: $396] million at December 31, [removed: 2019.][added: 2020.]

We are exposed to interest rate risk on [removed: variable-rate,] [added: variable-rate] short-term [removed: borrowings under our] credit [removed: facilities,] [added: facilities] for which there [removed: was £60 million (the equivalent of approximately $78 million as of December 31, 2019)] [added: were no borrowings] outstanding at December 31, [removed: 2019.][added: 2020.]

At December 31, [removed: 2019,] [added: 2020,] we have [removed: $13.9] [added: $15.0] billion of long-term debt, primarily consisting of fixed-rate debt, with a fair value of approximately [removed: $15.1] [added: $18.2] billion.

At December 31, [removed: 2019,] [added: 2020,] foreign currency forward contracts with a notional amount of [removed: $98] [added: $133] million were outstanding.

At December 31, [removed: 2019,] [added: 2020,] a 10 percent unfavorable foreign exchange rate movement would not have a material impact on our consolidated financial position, annual results of operations and/or cash flows.

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Item 8.

Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Northrop Grumman Corporation

Falls Church, Virginia

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Northrop Grumman Corporation and subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of earnings and comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on the criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 29, 2020 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of ASC 842, *Leases*.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Cost and Revenue Estimates for Development Contracts - Refer to Note 1 to the financial statements

*Critical Audit Matter Description*

As more fully described in Note 1 to the financial statements, the Company recognizes substantially all revenue as control is transferred to the customer on their long-term contracts over time using the cost-to-cost method (cost incurred relative to total cost estimated at completion).

Use of the cost-to-cost-method requires the Company to

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make reasonably dependable estimates regarding the revenue and costs associated with the design, manufacture and delivery of their products or services.

The Company estimates profit on these contracts as the difference between total estimated sales and total estimated costs at completion and recognizes that profit as costs are incurred.

Cost estimates on contracts requiring development work are inherently more uncertain as to future events than production contracts, and, as a result, there is typically more variability in those estimates.

Certain of these contracts are fixed price in nature, which results in greater financial risk associated with unanticipated cost growth.

Alternatively, cost-type contracts may have award or incentive fees that are subject to uncertainty and may be earned over extended periods or towards the end of the contract.

As a result, the estimation of costs required to complete these contracts and the expected revenues that will be earned is complex and requires significant judgment.

Given the judgment necessary to make reasonably dependable estimates regarding the revenue and costs associated with such contracts, auditing these estimates required extensive audit effort due to the complexity of the underlying programs and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

*How the Critical Audit Matter Was Addressed in the Audit*

Northrop Grumman Corporation (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”) is a leading global [removed: security] [added: aerospace and defense] company.

We [removed: provide] [added: use our broad portfolio of] capabilities [added: and technologies to create and deliver innovative platforms, systems and solutions] in [added: space; manned and] autonomous [added: airborne systems, including strike; strategic deterrence] systems; [added: hypersonics; missile defense; weapons systems;] cyber; command, control, communications and computers, intelligence, surveillance and reconnaissance (C4ISR); [removed: space; strike;] and logistics and modernization.

[removed: At December 31, 2019, the company was] [added: We are currently] aligned in four operating sectors, which also comprise our reportable segments: [removed: Aerospace] [added: Aeronautics] Systems, [removed: Innovation] [added: Defense] Systems, Mission Systems and [removed: Technology Services.][added: Space Systems.]

The sector is reported in [removed: three] [added: two] business [removed: areas, which] [added: areas that] reflect our core capabilities: Autonomous [removed: Systems, Manned Aircraft] [added: Systems] and [removed: Space.][added: Manned Aircraft.]

*Autonomous Systems* – designs, develops, manufactures, integrates and sustains autonomous aircraft systems for [removed: tactical and] strategic [added: and tactical] ISR missions.

[removed: Key] [added: Strategic ISR] programs include high-altitude long-endurance (HALE) [added: autonomous] systems, such as the [added: U.S. Air Force RQ-4] Global [removed: Hawk system,] [added: Hawk,] which provides near real-time high resolution imagery of land masses for theater awareness; the [removed: Triton system,] [added: U.S. Navy MQ-4C Triton,] which provides real-time ISR over vast ocean and coastal regions for maritime domain [added: awareness; the North Atlantic Treaty Organization (NATO) Alliance Ground Surveillance (AGS) system for ISR missions conducted in multinational theater operations; and HALE autonomous ISR systems for Japan and the Republic of Korea.]

*Manned Aircraft* – designs, develops, manufactures and integrates [added: strategic] long-range strike aircraft systems, [removed: airborne C4ISR systems,] tactical [added: fighter] aircraft [removed: systems] and [removed: directed energy] [added: airborne battle management] systems.

[removed: Key long-range] [added: Long-range] strike aircraft programs include the [added: U.S. Air Force’s] B-21 Raider long-range strike bomber and modernization and sustainment services for the B-2 Spirit bomber.

[removed: Key airborne C4ISR] [added: Airborne battle management] programs include the E-2D Advanced Hawkeye and [added: E-8C] Joint Surveillance Target Attack Radar System (JSTARS).

Tactical [added: fighter] aircraft programs include the design, development, manufacture and integration of [added: the] F-35 Lightning II center fuselage and F/A-18 Super Hornet center/aft fuselage sections.

*Space* – designs, develops, manufactures and integrates spacecraft systems, subsystems, [removed: sensors and communications] [added: sensors,] payloads [removed: in support of space C4ISR] and [added: ground systems to deliver mission capability to national security,] science [added: and environmental, communications, on-orbit servicing, and human-rated space systems for earth orbit and deep-space exploration] missions.

[removed: Key unrestricted programs include] the [removed: James Webb Space Telescope (JWST), a large infrared telescope being built for the National Aeronautics and Space Administration (NASA) that will be deployed in space to study the origins] [added: execution] of [removed: the universe;] [added: our CRS contracts with NASA;] Advanced Extremely High Frequency [removed: (AEHF) and] [added: (AEHF),] Enhanced Polar System [removed: (EPS)] [added: (EPS), Evolved Strategic SATCOM (ESS), and Protected Tactical SATCOM (PTS)] payloads providing survivable, protected communications to U.S. forces; [removed: and] Next-Generation Overhead Persistent Infrared Program (OPIR) satellites and payloads [removed: and Space-Based Infrared System (SBIRS) payloads] providing data for missile [removed: surveillance, missile defense, technical intelligence] [added: defense;] and [removed: battlespace characterization.][added: the James Webb Space Telescope (JWST), a large infrared telescope being built for NASA that will be deployed in space to study the origins of the universe.]

[removed: Innovation] [added: Space] Systems, headquartered in Dulles, Virginia, is a leader in [added: delivering end-to-end mission solutions through] the design, development, [removed: integration and] [added: integration,] production [added: and operation] of [removed: flight, armament] [added: space, missile defense, launch] and [removed: space] [added: strategic missile] systems [removed: to enable] [added: for] national security, civil [removed: government and] [added: government,] commercial [removed: customers to achieve their critical missions.][added: and international customers.]

Major products include [removed: launch vehicles] [added: satellites] and [removed: related propulsion] [added: payloads; ground] systems; missile [removed: products and] defense [removed: electronics; precision weapons, armament] systems and [removed: ammunition; satellites and associated space components] [added: interceptors; launch vehicles] and [removed: services;] [added: related propulsion systems;] and [removed: advanced aerospace structures.][added: strategic missiles.]

The sector is reported in [removed: three] [added: two] business [removed: areas, which] [added: areas that] reflect our core capabilities: [removed: Defense] [added: Battle Management & Missile] Systems, [removed: Flight Systems] and [removed: Space Systems.][added: Mission Readiness.]

[removed: *Flight Systems*] [added: *Launch & Strategic Missiles*] – designs, [removed: develops and] [added: develops,] manufactures [added: and integrates large strategic missile systems; missile defense systems;] small- and medium-class space launch vehicles to place satellites into earth orbit and escape trajectories; [removed: interceptor] and [removed: target vehicles for missile defense systems; and] suborbital launch vehicles that place payloads into a variety of high-altitude trajectories.

Competencies [removed: also] include [added: large strategic missile design, integration, production, and sustainment as well as] the production of medium- and large-class rocket propulsion systems for human and cargo launch [removed: vehicles;] [added: vehicles, hypersonic boosters and] missile defense [removed: interceptors; and target vehicles.][added: interceptors.]

Key programs include [removed: the development] [added: missile defense systems, interceptors,] and [removed: production of solid rocket motors for NASA’s Space Launch System (SLS) heavy lift vehicle; interceptor] boosters for the [removed: MDA] [added: Missile Defense Agency's (MDA)] Ground-based Midcourse Defense (GMD) [removed: system;] [added: system and Ground Based Interceptor (GBI);] the Antares rocket used in the execution of our Commercial Resupply Services (CRS) contracts with [removed: NASA;] [added: the National Aeronautics and Space Administration (NASA); the development and production of solid rocket motors for NASA’s Space Launch System (SLS) heavy lift vehicle;] medium-class solid rocket motors for the U.S. Navy's Trident II Fleet Ballistic Missile program; [removed: and production of the majority of the composite fuselage stringers] [added: Ground Based Strategic Deterrent (GBSD) Engineering & Manufacturing Development (EMD) program;] and [removed: frames for] the [removed: Airbus A350 XWB wide-body passenger jetliner.][added: Intercontinental Ballistic Missile (ICBM) Ground Subsystem Support Contract (GSSC).]

Mission Systems, headquartered in Linthicum, Maryland, is a leader in advanced [removed: end-to-end] mission solutions and multifunction [removed: systems] [added: systems, primarily] for [removed: DoD,] [added: the U.S. defense and] intelligence [removed: community, international, federal-civil] [added: community] and [removed: commercial] [added: international] customers.

Major products and services include C4ISR systems; radar, electro-optical/infrared (EO/IR) and acoustic sensors; electronic warfare systems; [added: advanced communications and network systems;] cyber solutions; [removed: space systems;] intelligence processing systems; [removed: air and missile defense (AMD) integration;] navigation; and [removed: shipboard missile] [added: maritime power, propulsion] and [removed: encapsulated] payload launch systems.

The sector is reported in [removed: three] [added: two] business [removed: areas, which] [added: areas that] reflect our core capabilities: [removed: Advanced Capabilities, Cyber and ISR and Sensors] [added: Launch & Strategic Missiles,] and [removed: Processing.][added: Space.]

[removed: *Advanced Capabilities* –] [added: The business] provides integration and interoperability of net-enabled battle management, sensors, targeting and surveillance [removed: systems;] [added: systems, as well as] air and missile defense [removed: command and control (C2); and global battlespace awareness.][added: C2 systems.]

[removed: It also] [added: *Navigation, Targeting & Survivability* –] delivers products, systems and services that support [removed: maritime] [added: aircraft] platforms [added: with targeting, self-protection] and [added: situational awareness mission systems; and provides] embedded navigation and positioning sensors for a range of platforms including ships, aircraft, spacecraft and weapons.

*Cyber [removed: and ISR*] [added: & Intelligence Mission Solutions*] – delivers products, systems and services that support full-spectrum cyber solutions, [removed: space-based payload and exploitation systems, space-based communications, C2 and processing systems,] [added: secure processing, transformational computing, advanced technology development, Signals Intelligence (SIGINT) mission systems] and enterprise integration of multi-intelligence mission data across all domains.

Competencies include cyber mission management; large-scale cyber solutions for national security applications; [removed: missile warning and defense systems; weather and satellite communications;] [added: cyber survivability;] ground software systems; [added: SIGINT sensors] and [added: processing; and] geospatial intelligence and data fusion, specializing in the collection, processing and exploitation of data.

Key programs include exploitation and cyber programs; [removed: operational services to the United States Computer Emergency Readiness Team (US-CERT); worldwide IT coverage and support services through] [added: Enhanced] Solutions for the Information Technology Enterprise [removed: (SITE);] [added: (E-SITE);] the Enterprise Application Managed Services (EAMS) program; the [added: Transforming All-Source Analysis with Location-Based Object Services (TALOS); the] Unified Platform System Coordinator program; [added: the Airborne Signals Intelligence Payload (ASIP);] and restricted programs.

[removed: *Sensors and Processing*] [added: *Airborne Sensors & Networks*] – delivers products, systems and services that support [removed: ground-based and fixed wing and rotary wing aircraft] [added: airborne] platforms with [added: advanced communications and network systems; multi-function radio frequency (RF) and EO/IR systems;] radar, electronic [removed: warfare, C2, Signals Intelligence (SIGINT),] [added: warfare] and situational awareness mission [removed: systems.][added: systems; and high altitude ISR sensors.]

Competencies include [removed: targeting, surveillance, air defense] [added: fire control, surveillance] and early warning [removed: &] [added: and] control radar systems; [removed: EO/IR and radio frequency (RF) self-protection, targeting and surveillance systems;] electronic attack and electronic support systems; [added: software defined radios and network gateways,] communications and [removed: intelligence] [added: counter-communications] systems; [removed: digitized cockpits;] and multi-sensor processing.

[removed: Key programs include Airborne Early Warning & Control (AEW&C) and air-to-ground sensors; Battlefield Airborne Communications Node (BACN); F-35 fire control radar, Distributed Aperture System (DAS), and Communications,] Navigation and Identification (CNI) integrated avionics system; [removed: Ground/Air Task Oriented] [added: LONGBOW Fire Control] Radar [removed: (G/ATOR);] [added: (FCR);] Joint Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (JCREW); [removed: RF and Infrared Countermeasures (IRCM) programs for both fixed wing and rotary wing platforms; EO/IR targeting and surveillance programs;] Scalable Agile Beam Radar (SABR); [removed: UH-60V Black Hawk integrated mission equipment package;] and restricted programs.

[removed: *Global Logistics and Modernization*] [added: *Mission Readiness*] – provides [removed: global] [added: full life cycle service and support for software, weapons systems and aircraft, and] logistics support, sustainment, operations and modernization for air, sea and ground [removed: systems and weapon system components.][added: systems.]

Sales to the U.S. government accounted for [removed: 83] [added: 84] percent, [removed: 82] [added: 83] percent and [removed: 85] [added: 82] percent of sales during the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] respectively.

[removed: BAE Systems, Boeing, Booz Allen Hamilton,] [added: Boeing Company,] General Dynamics, L3Harris Technologies, [removed: Leidos, Leonardo,] Lockheed Martin, [removed: Raytheon] and [removed: Thales] [added: Raytheon Technologies] are some of our primary competitors.

At December 31, [removed: 2019,] [added: 2020,] total backlog, which is equivalent to the company’s remaining performance obligations, was [removed: $64.8] [added: $81.0] billion as compared with [removed: $53.5] [added: $64.8] billion at December 31, [removed: 2018.][added: 2019.]

Approximately [removed: 5,000] [added: 4,000 employees] are covered by 17 collective agreements in the U.S., of which we negotiated [removed: two] [added: six] renewals [removed: and one new agreement] in [removed: 2019] [added: 2020] and expect to negotiate [removed: six] [added: five] renewals in [removed: 2020.][added: 2021.]

See “Risk Factors” for further discussion regarding risks related to [added: our workforce and] employee relations.

[removed: Examples of costs incurred by us and not billed to the U.S. government in] accordance with the FAR and CAS include, but are not limited to, [added: unallowable employee compensation costs,] certain legal costs, charitable donations, [removed: advertising costs,] interest expense and [removed: unallowable employee compensation] [added: advertising] costs.

The following table summarizes sales for the year ended December 31, [removed: 2019,] [added: 2020,] recognized by contract type and customer category:

| *$ in millions* | | [added: | | | |] U.S. Government(1) | | | | [added: | |] International(2) | | | | [added: | |] Other Customers | | | | [added: | |] Total | | | | [added: | |] Percentage of Total Sales | | [added: |]

[removed: | (1) | Sales] [added: (1)Sales] to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. [removed: Each of the company’s segments derives substantial revenue from the U.S. government. |]

In 2015, we announced our 2020 environmental sustainability goals: to reduce absolute greenhouse gas emissions by 30 percent from 2010 levels; to reduce potable water use by [removed: 20 percent from 2014 levels; and to achieve a 70 percent solid waste diversion rate (away from landfills).]

In 2018, we acquired Orbital ATK, Inc., a global leader in the development and production of launch vehicles, missile products and satellites and other space systems.

In the fourth quarter of 2020, we entered into a definitive agreement to sell our IT and mission support services business for $3.4 billion in cash, subject to regulatory approvals and customary closing conditions.

The sale is expected to close in the first quarter of 2021.

The business descriptions below reflect our business as of December 31, 2020 and will evolve subsequent to the planned divestiture of our IT and mission support services business.

From time to time, we acquire or dispose of businesses and realign contracts, programs or businesses among and within our operating segments.

Internal realignments are typically designed to leverage existing capabilities more fully and to enhance efficient development and delivery of products and services.

The operating results for all periods presented have been revised to reflect any such changes made through December 31, 2020.

AERONAUTICS SYSTEMS

Aeronautics Systems, headquartered in Palmdale, California, is a leader in the design, development, integration and production of autonomous and manned aircraft systems used for battle management, strike and intelligence, surveillance and reconnaissance (ISR).

Aeronautics Systems’ primary customers are the U.S. Air Force, the U.S. Navy, other U.S. government agencies and international customers.

Tactical ISR programs include the U.S. Navy MQ-8B and -8C Fire Scout, ship-based vertical take-off and landing (VTOL) systems that provide situational

\-1-

awareness for maritime forces and precision targeting support; and the Firebird product line, which is available in manned, autonomous and optionally-piloted configurations, and provides flexibility through open architecture and plug-and-play mission payload integration.

DEFENSE SYSTEMS

Defense Systems, headquartered in McLean, Virginia, is a leader in the design, development, production, integration, sustainment and modernization of weapon and mission systems for U.S. military and civilian agency customers, and a broad range of international customers.

Major products and services include integrated battle management systems, weapons systems, mission system sustainment and modernization, information technology services and intelligence operations.

*Battle Management & Missile Systems* – designs, develops and integrates multi-domain command and control (C2) and weapons systems, including munitions and missiles.

It also develops and produces precision strike weapons; advanced propulsion, including high speed air-breathing systems; and high-performance gun systems and precision munitions.

Competencies include system and software development; integration of weapon systems; tactical missile and component development and production; and production of advanced fuzes, munitions and defense electronics.

Key programs include the Integrated Air and Missile Defense Battle Command System (IBCS) for the U.S. Army and Poland; Counter Rocket, Artillery and Mortar (C-RAM); the U.S. Navy’s Advanced Anti-Radiation Guided Missile (AARGM); Guided Multiple Launch Rocket System (GMLRS); Precision Guidance Kit (PGK); and the Mission Command Training Program (MCTP).

It also provides full life cycle development, modernization and sustainment of information systems; security services including information and cyber operations; and intelligence analysis and support.

Competencies include aircraft, electronics and software sustainment and engineering; electronic subsystems modernization; weapon systems logistics support; cyber; data analytics and decision support tools; and IT infrastructure including cloud.

Key programs include AAQ-24 and APN-241 sensor sustainment; system sustainment and operations support for the B-2 Spirit bomber, E-8C JSTARS surveillance aircraft, KC-30A multi-role tanker, C-27J transport, UK E-3D Airborne Early Warning and Control System, Global Hawk, Triton, and F-35; the Social Security Administration Information Technology Support Services Contract (SSA-ITSSC); Counter Threat Messaging (CTM) for Joint Services; restricted intelligence operations; and Consular Systems Modernization (CSM) for Department of State.

The sector is reported in four business areas that reflect our core capabilities: Airborne Sensors & Networks; Cyber & Intelligence Mission Solutions; Maritime/Land Systems & Sensors; and Navigation, Targeting & Survivability.

Key programs include Airborne Early Warning & Control (AEW&C); Battlefield Airborne Communications Node (BACN); F-35 fire control radar, Distributed Aperture System (DAS), and Communications,

\-2-

*Maritime/Land Systems & Sensors* – delivers products, systems and services that enable maritime and ground platform mission capabilities via sensors, targeting and surveillance systems; electronic warfare systems; mission module integration; power, propulsion and control systems; and missile launchers.

Competencies include ground and maritime radar systems; nuclear ship propulsion and power generation systems; shipboard missile and encapsulated payload launch systems; integrated bridge systems; unmanned maritime vehicles; high-resolution undersea sensors; deep-sea packaging; and mission integration.

Key programs include the Surface Electronic Warfare Improvement Program (SEWIP) Block III; Ground/Air Task Oriented Radar (G/ATOR); submarine power, propulsion, launch and sensing systems for Ohio, Virginia and Columbia class submarines; AQS-24B Minehunting System; Littoral Combat Ship Mission Module Integration; DDG Modernization; Offshore Patrol Cutter; and restricted programs associated with the maritime operating domain.

Competencies include EO/IR and RF self-protection; targeting and surveillance systems; digitized cockpits; and inertial navigation systems.

Key programs include the LITENING Advanced Targeting Pod; Large Aircraft and Common Infrared Countermeasures (LAIRCM, DoN LAIRCM, CIRCM) systems; APR-39 DV(2) and EV(2) Radar Warning Receiver programs; AC/MC 130J Radio Frequency Countermeasures; the Embedded Global Positioning System (GPS)/Inertial Navigation Systems-Modernization (EGI-M) program; the UH-60V Black Hawk integrated mission equipment package; and restricted programs.

SPACE SYSTEMS

Key unrestricted programs include the Cygnus spacecraft used in

\-3-

HUMAN CAPITAL

Creating a diverse, talented and inclusive workplace is central to our culture, employee engagement, innovation and excellence, and in performing and delivering on our commitments.

This focus was a factor in our ability to hire approximately 13,000 new employees in 2020.

\-4-

Additional information regarding our human capital strategy is available in our comprehensive Sustainability Report and Proxy Statement that can be found on our company website.

Information on our website, including our Sustainability Report, is not incorporated by reference into this Annual Report.

We offer a broad portfolio of capabilities and technologies that enable us to deliver innovative platforms, systems and solutions for applications that range from undersea to outer space and into cyberspace.

On June 6, 2018 (the “Merger date”), the company completed its acquisition of Orbital ATK, Inc. (“Orbital ATK”) (the “Merger”).

On the Merger date, Orbital ATK became a wholly-owned subsidiary of the company and its name was changed to Northrop Grumman Innovation Systems, Inc., which we established as a new, fourth business sector (“Innovation Systems”).

The operating results of Innovation Systems subsequent to the Merger date have been included in the company’s consolidated results of operations.

See Note 2 to the consolidated financial statements for further information regarding the acquisition of Orbital ATK.

*Subsequent Realignment* – Effective January 1, 2020, the company reorganized its sectors to better align the company’s broad portfolio to serve its customers’ needs.

The four new sectors are: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems.

This realignment is not reflected in the business descriptions below or in any of the accompanying financial information contained in this report.

AEROSPACE SYSTEMS

Aerospace Systems, headquartered in Redondo Beach, California, is a leader in the design, development, integration and production of manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems.

Aerospace Systems’ customers, primarily the DoD and other U.S. government agencies, use these systems in mission areas including intelligence, surveillance and reconnaissance (ISR), strike operations, communications, earth observation and space science.

\-1\-

NORTHROP GRUMMAN CORPORATION

awareness; the North Atlantic Treaty Organization (NATO) Alliance Ground Surveillance (AGS) system for multinational theater operations; and the ship-based vertical take off and landing (VTOL) Fire Scout system, which provides situational awareness for maritime forces and precision targeting support.

Directed energy involves the design, development and integration of laser weapon systems for air, ground, and sea platforms and production of the Airborne Laser Mine Detection System for the U.S. Navy and international customers.

INNOVATION SYSTEMS

*Defense Systems* – develops and produces small-, medium- and large-caliber ammunition; precision weapons and munitions; high-performance gun systems; and propellant and energetic materials.

Operations include the Lake City Army Ammunition Plant in Independence, Missouri, and a Naval Sea Systems Command facility in Rocket Center, West Virginia.

Competencies include tactical solid rocket motor development and production for a variety of air-, sea- and land-based missile systems propulsion control systems that support U.S. Missile Defense Agency (MDA) and NASA programs; airborne missile warning systems; advanced fuzes and defense electronics.

Key programs include the U.S. Navy’s Advanced Anti-Radiation Guided Missile (AARGM) and the development of advanced air-breathing propulsion systems and special-mission aircraft for defense applications.

*Space Systems* – develops and produces small- and medium-class satellites for global and regional communications and broadcasting, space-related scientific research and national security; human-rated space systems for earth orbit and deep-space exploration, including delivering cargo to the International Space Station (ISS); and spacecraft components and subsystems as well as specialized engineering and operations services to U.S. government agencies.

Key programs include the Cygnus spacecraft used in the execution of our CRS contracts with NASA, restricted national security space programs and science and environmental satellite programs.

\-2\-

Competencies include advanced AMD integration with land, air and space assets; shipboard missile and encapsulated payload launch systems; unmanned maritime vehicles and high-resolution undersea sensors; and inertial navigation systems.

Key programs include the Integrated Air and Missile Defense Battle Command System (IBCS); Ground-based Midcourse Defense (GMD) system; Surface Electronic Warfare Improvement Program (SEWIP) Block III; the Embedded Global Positioning System (GPS)/Inertial Navigation Systems-Modernization; AQS-24B Minehunting System; and Trident and Virginia-Class payload launch systems.

TECHNOLOGY SERVICES

Technology Services, headquartered in Herndon, Virginia, is a leader in delivering full life-cycle solutions and services in support of mission-critical networks and systems including: sustainment, modernization, training and simulation, software, engineering services, cyber, rapidly-deployable global logistics and information technology.

Customers include the DoD, federal, civilian and health agencies, and international customers.

The sector is reported in two business areas, which reflect our core capabilities: Global Logistics and Modernization and Global Services.

Competencies include aircraft, electronics and software sustainment and engineering; electronic warfare/attack and avionics/electronics subsystems modernization; supply chain management; manned and unmanned weapon systems deployed logistics support; field services, on-going maintenance and technical assistance; and rapid response in support of global customers.

Capabilities include: integration, delivery and global support of unmanned special mission aircraft solutions for platforms such as the MQ-5B Hunter, Global Hawk and Triton autonomous systems; subsystem and component-level depot repair and modernization for electronic/avionic products such as AAQ-24, APN-241, ALQ-135 and ALQ-131A sensors; missile sustainment and modernization solutions for the Intercontinental Ballistic Missile Minuteman III; and weapon

\-3\-

systems sustainment, refurbishment, overhaul, modernization and contractor logistics support for several unique small fleet, high-demand platforms, including the B-2 Spirit bomber, JSTARS E-8 surveillance aircraft, KC-30A multi-role tanker, C-27J transport, UK E-3D Airborne Early Warning and Control System, and special mission electronic surveillance aircraft.

*Global Services* – provides information technology and mission support services to our customers in defense, civil, health and restricted arenas; delivers technology differentiated services to modernize and sustain mission critical IT systems, improve the health of people, and strengthen the security of the U.S. and its allies.

From an information technology perspective, Global Services supports the full software life cycle providing software development, sustainment and modernization services as well as delivering secure and resilient next generation information solutions that enable customer missions.

Our services and solutions include agile/DevSecOps, legacy modernization, mission information processing and analytics, cybersecurity, cloud migration and services, and secure networks and infrastructure.

From a mission support perspective, we deliver the people and services supporting cyber operations, systems engineering and scientific analysis.

We also deliver the full range of training services, from individual training products and courseware to networked and integrated live, virtual and constructive training systems.

\-4\-

EMPLOYEE RELATIONS

Consistent with SEC Regulation S-K Item 103, we have elected to disclose those environmental proceedings with a governmental entity as a party where the company reasonably believes such proceeding would result in monetary sanctions, exclusive of interest and costs, of $1.0 million or more.

| FORM | [added: | |] 10-K | [added: | |]

| ☒ | | [added: | | | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| ☐ | | [added: | | | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

| Delaware | | | [added: | | | | | |] 80-0640649 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | | [added: | | | | | |] (I.R.S. Employer Identification Number) | [added: | |]

| 2980 Fairview Park Drive | | | | [added: | | | | | | | |]

| Falls Church, | [added: | |] Virginia | | [added: | | | |] 22042 | [added: | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip code) | [added: | |]

[removed: (703) 280-2900][added: (703) 280-2900]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Common Stock | [added: | |] NOC | [added: | |] New York Stock Exchange | [added: | |]

As of June 30, [removed: 2019,] [added: 2020,] the aggregate market value of the common stock (based upon the closing price of the stock on the New York Stock Exchange) of the registrant held by non-affiliates was approximately [removed: $54.5] [added: $51.2] billion.

As of January [removed: 27, 2020, 167,637,130] [added: 25, 2021, 166,718,384] shares of common stock were outstanding.

Portions of Northrop Grumman Corporation’s Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.

| | | [added: | | | |] Page | [added: | |]

| Item 1. | [removed: [Business](#s4283C870AD6D58BDB9CB7265D2592F5E)] | [removed: [1](#s4283C870AD6D58BDB9CB7265D2592F5E)] | [added: [Business](#i7a77f5c365c94f9485034eb3233bc1b9_13) | | | [1](#i7a77f5c365c94f9485034eb3233bc1b9_13) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#s07FC8CA4FB885C6CBAB980AD5DF1C6C0)] [added: Factors](#i7a77f5c365c94f9485034eb3233bc1b9_25)] | [removed: [6](#s07FC8CA4FB885C6CBAB980AD5DF1C6C0)] | [added: | [7](#i7a77f5c365c94f9485034eb3233bc1b9_25) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s012A6820CF5153A2A4AB9AA98B6E145E)] [added: Comments](#i7a77f5c365c94f9485034eb3233bc1b9_28)] | [removed: [19](#s012A6820CF5153A2A4AB9AA98B6E145E)] | [added: | [21](#i7a77f5c365c94f9485034eb3233bc1b9_28) | | |]

| Item 2. | [removed: [Properties](#s66871ABA45E2568390FFF56340C5D11E)] | [removed: [20](#s66871ABA45E2568390FFF56340C5D11E)] | [added: [Properties](#i7a77f5c365c94f9485034eb3233bc1b9_31) | | | [22](#i7a77f5c365c94f9485034eb3233bc1b9_31) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#sD4B1FA4228F550799C07805BD9DA258B)] [added: Proceedings](#i7a77f5c365c94f9485034eb3233bc1b9_34)] | [removed: [21](#sD4B1FA4228F550799C07805BD9DA258B)] | [added: | [23](#i7a77f5c365c94f9485034eb3233bc1b9_34) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s93E71BDBEC175427AB133E6E4F27F46B)] [added: Disclosures](#i7a77f5c365c94f9485034eb3233bc1b9_37)] | [removed: [21](#s93E71BDBEC175427AB133E6E4F27F46B)] | [added: | [23](#i7a77f5c365c94f9485034eb3233bc1b9_37) | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s75F32C7A835158838A3C64AFB315CEF3)] [added: Securities](#i7a77f5c365c94f9485034eb3233bc1b9_43)] | [removed: [22](#s75F32C7A835158838A3C64AFB315CEF3)] | [added: | [24](#i7a77f5c365c94f9485034eb3233bc1b9_43) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#sAE23503354845EC09FDB092E23A54C16)] [added: Data](#i7a77f5c365c94f9485034eb3233bc1b9_46)] | [removed: [24](#sAE23503354845EC09FDB092E23A54C16)] | [added: | [26](#i7a77f5c365c94f9485034eb3233bc1b9_46) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD3971408030850D8A5C6AC4101E2121C)] [added: Operations](#i7a77f5c365c94f9485034eb3233bc1b9_49)] | [removed: [25](#sD3971408030850D8A5C6AC4101E2121C)] | [added: | [27](#i7a77f5c365c94f9485034eb3233bc1b9_49) | | |]

| | [added: | |] [Consolidated Operating [removed: Results](#s8C4EEE9AA49457DD8AD025A6761281EA)] [added: Results](#i7a77f5c365c94f9485034eb3233bc1b9_55)] | [removed: [26](#s8C4EEE9AA49457DD8AD025A6761281EA)] | [added: | [29](#i7a77f5c365c94f9485034eb3233bc1b9_55) | | |]

| | [added: | |] [Segment Operating [removed: Results](#s148A8A76A956555499EDB58E62527E62)] [added: Results](#i7a77f5c365c94f9485034eb3233bc1b9_58)] | [removed: [28](#s148A8A76A956555499EDB58E62527E62)] | [added: | [31](#i7a77f5c365c94f9485034eb3233bc1b9_58) | | |]

| | [added: | |] [Product and Service [removed: Analysis](#s59B1988885F75E9591EAE57B9CE8917F)] [added: Analysis](#i7a77f5c365c94f9485034eb3233bc1b9_61)] | [removed: [32](#s59B1988885F75E9591EAE57B9CE8917F)] | [added: | [35](#i7a77f5c365c94f9485034eb3233bc1b9_61) | | |]

| | [added: | |] [Liquidity and Capital [removed: Resources](#s48126AA1F72B5D45820019548C1B09C1)] [added: Resources](#i7a77f5c365c94f9485034eb3233bc1b9_67)] | [removed: [33](#s48126AA1F72B5D45820019548C1B09C1)] | [added: | [36](#i7a77f5c365c94f9485034eb3233bc1b9_67) | | |]

| | [added: | |] [Critical Accounting Policies, Estimates and [removed: Judgments](#s35A188EDED4754C38160519FAE07DCE0)] [added: Judgments](#i7a77f5c365c94f9485034eb3233bc1b9_70)] | [removed: [35](#s35A188EDED4754C38160519FAE07DCE0)] | [added: | [38](#i7a77f5c365c94f9485034eb3233bc1b9_70) | | |]

| | [added: | |] [Other [removed: Matters](#s91DA86C3AF34545A8501A99BACAEC717)] [added: Matters](#i7a77f5c365c94f9485034eb3233bc1b9_73)] | [removed: [39](#s91DA86C3AF34545A8501A99BACAEC717)] | [added: | [43](#i7a77f5c365c94f9485034eb3233bc1b9_73) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s07BB80B460E05E40B877E0E62A2FCC04)] [added: Risk](#i7a77f5c365c94f9485034eb3233bc1b9_76)] | [removed: [40](#s07BB80B460E05E40B877E0E62A2FCC04)] | [added: | [44](#i7a77f5c365c94f9485034eb3233bc1b9_76) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sEC8F13AAAA8856ECA129EEC2A805EA43)] [added: Data](#i7a77f5c365c94f9485034eb3233bc1b9_79)] | [removed: [41](#sEC8F13AAAA8856ECA129EEC2A805EA43)] | [added: | [45](#i7a77f5c365c94f9485034eb3233bc1b9_79) | | |]

| | [added: | |] [Report of Independent Registered Public Accounting [removed: Firm](#sB06423B735C95076A5BDE50E18391BAF)] [added: Firm](#i7a77f5c365c94f9485034eb3233bc1b9_82)] | [removed: [41](#sB06423B735C95076A5BDE50E18391BAF)] | [added: | [45](#i7a77f5c365c94f9485034eb3233bc1b9_82) | | |]

| | [added: | |] [Consolidated Statements of Earnings and Comprehensive [removed: Income](#s427564CD66A758B89BF83E9688B2682C)] [added: Income](#i7a77f5c365c94f9485034eb3233bc1b9_85)] | [removed: [44](#s427564CD66A758B89BF83E9688B2682C)] | [added: | [48](#i7a77f5c365c94f9485034eb3233bc1b9_85) | | |]

| | [added: | |] [Consolidated Statements of Financial [removed: Position](#s7F82239FF65E57F8A455DAA5B64D6CA4)] [added: Position](#i7a77f5c365c94f9485034eb3233bc1b9_91)] | [removed: [45](#s7F82239FF65E57F8A455DAA5B64D6CA4)] | [added: | [49](#i7a77f5c365c94f9485034eb3233bc1b9_91) | | |]

| | [added: | |] [Consolidated Statements of Cash [removed: Flows](#s7BFA5E43DB1D57D0A6473A4B584F4A19)] [added: Flows](#i7a77f5c365c94f9485034eb3233bc1b9_97)] | [removed: [46](#s7BFA5E43DB1D57D0A6473A4B584F4A19)] | [added: | [50](#i7a77f5c365c94f9485034eb3233bc1b9_97) | | |]

| | [added: | |] [Consolidated Statements of Changes in Shareholders’ [removed: Equity](#s17C3D452E9EF54CE87DE4748271A4560)] [added: Equity](#i7a77f5c365c94f9485034eb3233bc1b9_100)] | [removed: [47](#s17C3D452E9EF54CE87DE4748271A4560)] | [added: | [51](#i7a77f5c365c94f9485034eb3233bc1b9_100) | | |]

| | [added: | |] [Notes to Consolidated Financial [removed: Statements](#sFC9F7CAC5C185F70902F5475EA2AAC4D)] [added: Statements](#i7a77f5c365c94f9485034eb3233bc1b9_103)] | [removed: [48](#sFC9F7CAC5C185F70902F5475EA2AAC4D)] | [added: | [52](#i7a77f5c365c94f9485034eb3233bc1b9_103) | | |]

| | [added: | |] [1. Summary of Significant Accounting [removed: Policies](#sC0CD681949CA542A884C1B0C304C6F60)] [added: Policies](#i7a77f5c365c94f9485034eb3233bc1b9_106)] | [removed: [48](#sC0CD681949CA542A884C1B0C304C6F60)] | [added: | [52](#i7a77f5c365c94f9485034eb3233bc1b9_106) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☒

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| | | | [PART I](#i7a77f5c365c94f9485034eb3233bc1b9_10) | | | | | |

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| | | | [PART II](#i7a77f5c365c94f9485034eb3233bc1b9_40) | | | | | |

| | | | [Overview](#i7a77f5c365c94f9485034eb3233bc1b9_52) | | | [27](#i7a77f5c365c94f9485034eb3233bc1b9_52) | | |

| | | | [Backlog](#i7a77f5c365c94f9485034eb3233bc1b9_64) | | | [36](#i7a77f5c365c94f9485034eb3233bc1b9_64) | | |

| | | | [2.](#i7a77f5c365c94f9485034eb3233bc1b9_112) [Acquisitions](#i7a77f5c365c94f9485034eb3233bc1b9_112) [and Dis](#i7a77f5c365c94f9485034eb3233bc1b9_112)[positions](#i7a77f5c365c94f9485034eb3233bc1b9_112) | | | [59](#i7a77f5c365c94f9485034eb3233bc1b9_112) | | |

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| | | | [PART IV](#i7a77f5c365c94f9485034eb3233bc1b9_205) | | | | | |

| | | | [Signatures](#i7a77f5c365c94f9485034eb3233bc1b9_214) | | | [103](#i7a77f5c365c94f9485034eb3233bc1b9_214) | | |

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| --- | --- |

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| --- | --- | --- |

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| --- | --- | --- | --- |

| | [PART I](#s8763216A80045AE5A8B1D0C662BA2307) | |

| | [PART II](#s7D8F5B71D09C53DF812F2E6D3E33FA38) | |

| | [Overview](#s546FD2074DED5413B23CEAD5EE30C3ED) | [25](#s546FD2074DED5413B23CEAD5EE30C3ED) |

| | [Backlog](#s1D1E5B88B7CA5F779B22EE8B5FAF4D7A) | [32](#s1D1E5B88B7CA5F779B22EE8B5FAF4D7A) |

| | [2. Acquisition of Orbital ATK](#s57B7074853C952A18A1E9E2083C025B5) | [55](#s57B7074853C952A18A1E9E2083C025B5) |

| | [PART IV](#s954E1B2213D0504CB036BC12BE3410F0) | |

| | [Signatures](#s4279F60261B15CB3ADE61CF657C1A3C8) | [99](#s4279F60261B15CB3ADE61CF657C1A3C8) |

None.

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

This Annual Report on Form 10-K and the information we are incorporating by reference 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,” “project,” “forecast,” “believe,” “estimate,” “outlook,” “trends,” “goals” 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.

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 under “Risk Factors” and other important factors disclosed in this report and from time to time in our other filings with the SEC.

These risks and uncertainties are amplified by the global COVID-19 pandemic, which has caused and will continue to cause significant challenges, instability and uncertainty.

They include:

- the impact of the COVID-19 outbreak or future epidemics on our business, including the potential for worker absenteeism, facility closures, work slowdowns or stoppages, supply chain disruptions, additional costs and liabilities, program delays, our ability to recover costs under contracts, changing government funding and acquisition priorities and processes, changing government payment rules and practices, insurance challenges, and potential impacts on access to capital, the markets and the fair value of our assets

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

- significant delays or reductions in appropriations for our programs, and U.S. government funding and program support more broadly

- investigations, claims, disputes, enforcement actions, litigation and/or other legal proceedings

- the use of estimates when accounting for our contracts and the effect of contract cost growth and/or changes in estimated contract revenues and costs

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

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

- cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners

- the performance and financial viability of our subcontractors and suppliers and the availability and pricing of raw materials and components

- changes in procurement and other laws, regulations, contract terms and practices applicable to our industry, findings by the U.S. government as to our compliance with such requirements, and changes in our customers’ business practices globally

- increased competition within our markets and bid protests

- the ability to maintain a qualified workforce with the required security clearances and requisite skills

- our ability to meet performance obligations under our contracts, including obligations that require innovative design capabilities, are technologically complex, require certain manufacturing expertise or are dependent on factors not wholly within our control

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

- natural disasters

- health epidemics, pandemics and similar outbreaks

- the adequacy and availability of our insurance coverage, customer indemnifications or other liability protections

\-21-

NORTHROP GRUMMAN CORPORATION

- 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

- the future investment performance of plan assets, 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

- our ability appropriately to exploit and/or protect intellectual property rights

- our ability to develop new products and technologies and maintain technologies, facilities, and equipment to win new competitions and meet the needs of our customers

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

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

We urge you 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 report is first filed 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.

At December 31, [removed: 2019,] [added: 2020,] we had approximately [removed: 54] [added: 51] million square feet of floor space at [removed: 545] [added: 530] separate locations, primarily in the U.S., for manufacturing, warehousing, research and testing, administration and various other uses.

At December 31, [removed: 2019,] [added: 2020,] we leased to third parties approximately [removed: 304,000] [added: 189,000] square feet of our owned and leased facilities.

At December 31, [removed: 2019,] [added: 2020,] we had major operations at the following locations:

[removed: Azusa, Carson,] El Segundo, [removed: Manhattan Beach,] Mojave, [removed: Oxnard,] Palmdale, Redondo Beach and San Diego, CA; Melbourne and St. Augustine, FL; [removed: Devens, MA;] [added: Iuka and] Moss Point, MS; [removed: and] [added: Beavercreek, OH;] Oklahoma City, [removed: OK.][added: OK; and Clearfield, UT.]

[removed: Huntsville, AL;] McClellan, [removed: Redondo Beach,] San Diego, Sunnyvale and Woodland Hills, CA; [removed: Aurora and Colorado Springs, CO;] Apopka, FL; Rolling Meadows, IL; Annapolis, Annapolis Junction, Elkridge, Halethorpe, Linthicum and Sykesville, MD; Bethpage and Williamsville, NY; [removed: Beavercreek and] Cincinnati, OH; Salt Lake City, UT; and Chantilly, [removed: Charlottesville, Fairfax, McLean] [added: Charlottesville] and [removed: Richmond,] [added: Fairfax,] VA.

Locations outside the U.S. include [added: France,] Germany, Italy and the United Kingdom.

Locations outside the U.S. include [removed: Australia and France.][added: Australia.]

Falls Church and Lebanon, [removed: VA and Irving, TX.][added: VA.]

The following is a summary of our floor space at December 31, [removed: 2019:][added: 2020:]

| *Square feet (in thousands)* | | [added: | | | |] Owned | | | [added: | | |] Leased | | | [added: | | |] U.S. Government Owned/Leased | | | [added: | | |] Total | | [added: |]

Aeronautics Systems

Defense Systems

Huntsville, AL; Mesa and Sierra Vista, AZ; Los Angeles, CA; Warner Robins, GA; Lake Charles, LA; Baltimore, Cumberland and Elkton, MD; Elk River and Plymouth, MN; Dulles, McLean, Radford and Richmond, VA; and Keyser, WV.

Space Systems

Huntsville, AL; Chandler, Gilbert and Tempe, AZ; Azusa, Carson, Los Angeles, Manhattan Beach, Oxnard, Redondo Beach and San Diego, CA; Aurora and Colorado Springs, CO; Devens, MA; Beltsville, MD; Eden Prairie, MN; Brigham City, Clearfield, Magna, Ogden, Roy and Tremonton, UT; and Dulles and Sterling, VA.

\-22-

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aeronautics Systems | | | | | | 3,415 | | | | | | 6,263 | | | | | | 3,270 | | | | | | 12,948 | | |

| Defense Systems | | | | | | 1,368 | | | | | | 3,997 | | | | | | 2,283 | | | | | | 7,648 | | |

| Mission Systems | | | | | | 7,933 | | | | | | 4,580 | | | | | | — | | | | | | 12,513 | | |

| Space Systems | | | | | | 9,350 | | | | | | 7,092 | | | | | | 545 | | | | | | 16,987 | | |

| Corporate | | | | | | 372 | | | | | | 407 | | | | | | — | | | | | | 779 | | |

| Total | | | | | | 22,438 | | | | | | 22,339 | | | | | | 6,098 | | | | | | 50,875 | | |

Aerospace Systems

Innovation Systems

Chandler, Gilbert, Mesa and Tempe, AZ; Los Angeles and San Diego, CA; Beltsville, Cumberland and Elkton, MD; Eden Prairie, Elk River and Plymouth, MN; Independence, MO; Iuka, MS; Beavercreek, OH; Fort Worth, TX; Brigham City, Clearfield, Magna, Salt Lake City and Tremonton, UT; Dulles, Radford and Sterling, VA; and Keyser, WV.

Technology Services

Sierra Vista, AZ; Warner Robins, GA; Lake Charles, LA; and Herndon, VA.

\-20\-

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aerospace Systems | | 6,884 | | | 6,774 | | | 3,255 | | | 16,913 | |

| Innovation Systems | | 6,161 | | | 6,748 | | | 5,388 | | | 18,297 | |

| Mission Systems | | 8,584 | | | 5,757 | | | — | | | 14,341 | |

| Technology Services | | 434 | | | 2,689 | | | — | | | 3,123 | |

| Corporate | | 614 | | | 492 | | | — | | | 1,106 | |

| Total | | 22,677 | | | 22,460 | | | 8,643 | | | 53,780 | |

\-23-

\-21\-

We have 800,000,000 shares authorized at a $1 par value per share, of which [removed: 167,848,424] [added: 166,717,179] shares and [removed: 170,607,336] [added: 167,848,424] shares were issued and outstanding as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

We have 10,000,000 shares authorized at a $1 par value per share, of which no shares were issued and outstanding as of December 31, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

As of January [removed: 27, 2020,] [added: 25, 2021,] there were [removed: 21,374] [added: 20,639] common shareholders of record.

[removed: The table below summarizes our] [added: We had no] repurchases of common stock during the three months ended December 31, [removed: 2019:][added: 2020.]

[removed: ][added: ]

[removed: | • |] [added: -] Assumes $100 invested at the close of business on December 31, [removed: 2014,] [added: 2015,] in Northrop Grumman Corporation common stock, Standard & Poor’s (S&P) 500 Index and the S&P Aerospace & Defense Index. [removed: |]

[removed: | • |] [added: -] The cumulative total return assumes reinvestment of dividends. [removed: |]

[removed: | • |] [added: -] The S&P Aerospace & Defense Index is comprised of [removed: Arconic, Inc.,] The Boeing Company, General Dynamics Corporation, [added: Howmet Aerospace Inc.,] Huntington Ingalls Industries Inc., L3Harris Technologies, Inc., Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon [removed: Company,] [added: Technologies Corporation, Teledyne Technologies Incorporated,] Textron, Inc., [added: and] TransDigm Group [removed: and United Technologies Corporation. |][added: Incorporated.]

[removed: | • |] [added: -] The total return is weighted according to market capitalization of each company at the beginning of each year. [removed: |]

[removed: | • |] [added: -] This graph is not deemed to be “filed” with the U.S. Securities and Exchange Commission (SEC) or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act. [removed: |]

On January 25, 2021, the company’s board of directors authorized a new share repurchase program of up to an additional $3.0 billion in share repurchases of the company’s common stock (the “2021 Repurchase Program”), bringing the total outstanding authorization up to $5.8 billion.

By its terms, repurchases under the 2021 Repurchase Program will commence upon completion of the prior share repurchase program authorized on December 4, 2018 and will expire when we have used all authorized funds for repurchases.

\-24-

\-25-

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | Total Number of Shares Purchased | | | Average Price Paid per Share(1) | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs ($ in millions) | | | |

| September 28, 2019 - October 25, 2019 | 216,962 | | | $ | 361.84 | | | 216,962 | | | | $ | 3,553 | |

| October 26, 2019 - November 22, 2019 | 286,241 | | | 350.08 | | | | 286,241 | | | | 3,453 | | |

| November 23, 2019 - December 31, 2019 | 356,900 | | | 346.23 | | | | 356,900 | | | | 3,330 | | |

| Total | 860,103 | | | $ | 351.45 | | | 860,103 | | | | $ | 3,330 | |

| | |

| --- | --- |

| (1) | Includes commissions paid. |

\-22\-

NORTHROP GRUMMAN CORPORATION

\-23\-

Item 6.

Selected Financial Data

The data presented in the following table is derived from the audited consolidated financial statements and other information.

SELECTED FINANCIAL DATA

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Year Ended December 31 | | | | | | | | | | | | | | | | | | |

| *$ in millions, except per share amounts* | | 2019 | | | | 2018(1) | | | | 2017 | | | | 2016 | | | | 2015(2) | | |

| Sales | | $ | 33,841 | | | $ | 30,095 | | | $ | 26,004 | | | $ | 24,706 | | | $ | 23,526 | |

| Operating income | | 3,969 | | | | 3,780 | | | | 3,218 | | | | 3,277 | | | | 2,984 | | |

| Net earnings | | 2,248 | | | | 3,229 | | | | 2,869 | | | | 2,043 | | | | 2,119 | | |

| Basic earnings per share | | $ | 13.28 | | | $ | 18.59 | | | $ | 16.45 | | | $ | 11.42 | | | $ | 11.19 | |

| Diluted earnings per share | | 13.22 | | | | 18.49 | | | | 16.34 | | | | 11.32 | | | | 11.06 | | |

| Cash dividends declared per common share | | 5.16 | | | | 4.70 | | | | 3.90 | | | | 3.50 | | | | 3.10 | | |

| Year-End Financial Position | | | | | | | | | | | | | | | | | | | | |

| Total assets(3) | | $ | 41,089 | | | $ | 37,653 | | | $ | 35,128 | | | $ | 25,815 | | | $ | 24,424 | |

| Notes payable to banks and long-term debt | | 13,879 | | | | 14,400 | | | | 15,266 | | | | 7,070 | | | | 6,496 | | |

| Other long-term obligations(3)(4) | | 10,066 | | | | 7,309 | | | | 6,505 | | | | 7,667 | | | | 7,059 | | |

| Financial Metrics | | | | | | | | | | | | | | | | | | | | |

| Net cash provided by operating activities | | $ | 4,297 | | | $ | 3,827 | | | $ | 2,613 | | | $ | 2,813 | | | $ | 2,162 | |

| Free cash flow(5) | | 3,033 | | | | 2,578 | | | | 1,685 | | | | 1,893 | | | | 1,691 | | |

| Other Information | | | | | | | | | | | | | | | | | | | | |

| Company-sponsored research and development expenses | | $ | 953 | | | $ | 764 | | | $ | 639 | | | $ | 705 | | | $ | 712 | |

| Total backlog(6) | | 64,840 | | | | 53,500 | | | | 42,629 | | | | 45,339 | | | | 35,923 | | |

| Square footage at year-end (in thousands) | | 53,780 | | | | 53,283 | | | | 35,379 | | | | 34,112 | | | | 34,392 | | |

| Number of employees at year-end | | 90,000 | | | | 85,000 | | | | 70,000 | | | | 67,000 | | | | 65,000 | | |

| (1) | Selected financial data includes the operating results of Innovation Systems subsequent to the Merger date. |

The data presented in the following table is derived from the audited consolidated financial statements and other information.

SELECTED FINANCIAL DATA

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Year Ended December 31 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| *$ in millions, except per share amounts* | | | | | | 2020 | | | | | | 2019 | | | | | | 2018(1) | | | | | | 2017 | | | | | | 2016 | | |

| Sales | | | | | | $ | 36,799 | | | | | $ | 33,841 | | | | | $ | 30,095 | | | | | $ | 26,004 | | | | | $ | 24,706 | |

| Operating income | | | | | | 4,065 | | | | | | 3,969 | | | | | | 3,780 | | | | | | 3,218 | | | | | | 3,277 | | |

| Net earnings | | | | | | 3,189 | | | | | | 2,248 | | | | | | 3,229 | | | | | | 2,869 | | | | | | 2,043 | | |

| Basic earnings per share | | | | | | $ | 19.08 | | | | | $ | 13.28 | | | | | $ | 18.59 | | | | | $ | 16.45 | | | | | $ | 11.42 | |

| Diluted earnings per share | | | | | | 19.03 | | | | | | 13.22 | | | | | | 18.49 | | | | | | 16.34 | | | | | | 11.32 | | |

| Cash dividends declared per common share | | | | | | 5.67 | | | | | | 5.16 | | | | | | 4.70 | | | | | | 3.90 | | | | | | 3.50 | | |

| Year-End Financial Position | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets(2) | | | | | | $ | 44,469 | | | | | $ | 41,089 | | | | | $ | 37,653 | | | | | $ | 35,128 | | | | | $ | 25,815 | |

| Notes payable to banks and long-term debt | | | | | | 15,003 | | | | | | 13,879 | | | | | | 14,400 | | | | | | 15,266 | | | | | | 7,070 | | |

| Other long-term obligations(2)(3) | | | | | | 10,049 | | | | | | 10,066 | | | | | | 7,309 | | | | | | 6,505 | | | | | | 7,667 | | |

| Financial Metrics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net cash provided by operating activities | | | | | | $ | 4,305 | | | | | $ | 4,297 | | | | | $ | 3,827 | | | | | $ | 2,613 | | | | | $ | 2,813 | |

| Adjusted free cash flow(4) | | | | | | 3,683 | | | | | | 3,128 | | | | | | 2,764 | | | | | | 2,010 | | | | | | 1,893 | | |

| Other Information | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Company-sponsored research and development expenses | | | | | | $ | 1,073 | | | | | $ | 953 | | | | | $ | 764 | | | | | $ | 639 | | | | | $ | 705 | |

| Total backlog(5) | | | | | | 80,969 | | | | | | 64,840 | | | | | | 53,500 | | | | | | 42,629 | | | | | | 45,339 | | |

| Square footage at year-end (in thousands) | | | | | | 50,875 | | | | | | 53,780 | | | | | | 53,283 | | | | | | 35,379 | | | | | | 34,112 | | |

| Number of employees at year-end | | | | | | 97,000 | | | | | | 90,000 | | | | | | 85,000 | | | | | | 70,000 | | | | | | 67,000 | | |

(1)Selected financial data includes the operating results of Orbital ATK subsequent to the June 6, 2018 merger date.

(2)We adopted ASC Topic 842, *Leases*, on January 1, 2019 using the optional transition method and, as a result, did not recast years prior to 2019.

(3)Other long-term obligations include pension and other postretirement benefit (OPB) plan liabilities, operating lease liabilities, deferred tax liabilities and other non-current liabilities, including unrecognized tax benefits, deferred compensation and environmental liabilities.

(4)Adjusted free cash flow is a non-GAAP measure.

See “Liquidity and Capital Resources” – “Adjusted Free Cash Flow” in Management’s Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) for our definition of this measure, including a reconciliation of adjusted free cash flow to net cash provided by operating activities.

(5)We applied the ASC Topic 606 transition practical expedient related to remaining performance obligations for reporting periods presented before the date of initial application.

As such, years prior to 2017 have not been restated for the adoption of ASC Topic 606.

For comparative purposes, we have recast our backlog as of December 31, 2017 to reflect the impact of ASC Topic 606.

\-26-

NORTHROP GRUMMAN CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Northrop Grumman Corporation

Falls Church, Virginia

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Northrop Grumman Corporation and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of earnings and comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on the criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 27, 2021 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Change in Accounting Principle

The Company changed its method of accounting for leases in 2019 due to the adoption of ASC 842, *Leases*.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Cost and Revenue Estimates for Development Contracts - Refer to Note 1 to the financial statements

*Critical Audit Matter Description*

As more fully described in Note 1 to the financial statements, the Company recognizes substantially all revenue as control is transferred to the customer on their long-term contracts over time using the cost-to-cost method (cost incurred relative to total cost estimated at completion).

Use of the cost-to-cost-method requires the Company to make reasonably dependable estimates regarding the revenue and costs associated with the design, manufacture and

\-45-

NORTHROP GRUMMAN CORPORATION

delivery of their products or services.

The Company estimates profit on these contracts as the difference between total estimated sales and total estimated costs at completion and recognizes that profit as costs are incurred.

Cost estimates on contracts requiring development work are inherently more uncertain as to future events than production contracts, and, as a result, there is typically more variability in those estimates.

Certain of these contracts are fixed price in nature, which results in greater financial risk associated with unanticipated cost growth.

Alternatively, cost-type contracts may have award or incentive fees that are subject to uncertainty and may be earned over extended periods or towards the end of the contract.

As a result, the estimation of costs required to complete these contracts and the expected revenues that will be earned is complex and requires significant judgment.

Given the judgment necessary to make reasonably dependable estimates regarding the revenue and costs associated with such contracts, auditing these estimates required extensive audit effort due to the complexity of the underlying programs and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

*How the Critical Audit Matter Was Addressed in the Audit*

Our auditing procedures related to the cost and revenue estimates for these development contracts included the following, among others:

- We tested the effectiveness of controls over the estimates of total costs and revenues on such contracts, including development costs and any related award or incentive fee estimates for the relevant performance obligations.

- We selected certain long-term contracts for testing and performed the following procedures:

Our principal executive officer (Chairman, Chief Executive Officer and President) and principal financial officer (Corporate Vice President and Chief Financial Officer) have evaluated the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934 (the Exchange Act)) as of December 31, [removed: 2019,] [added: 2020,] and have concluded that these controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

During the three months ended December 31, [removed: 2019,] [added: 2020,] no change occurred in our internal [removed: controls] [added: control] over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Based on its assessment, management has concluded that the company’s internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

Deloitte & Touche LLP issued an attestation report dated January [removed: 29, 2020,] [added: 27, 2021,] concerning the company’s internal control over financial reporting, which is contained in this Annual Report.

The company’s consolidated financial statements as of and for the year ended December 31, [removed: 2019,] [added: 2020,] have been audited by the independent registered public accounting firm of Deloitte & Touche LLP in accordance with the standards of the Public Company Accounting Oversight Board (United States).

We have audited the internal control over financial reporting of Northrop Grumman Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on the criteria established in *Internal Control - Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2019] [added: 2020] of the Company and our report dated January [removed: 29, 2020] [added: 27, 2021] expressed an unqualified opinion on those financial [removed: statements and included an explanatory paragraph regarding the Company’s adoption of ASC 842, *Leases*, during 2019.][added: statements.]

\-89-

/s/ David F.

Keffer

January 27, 2021

\-90-

January 27, 2021

\-91-

\-84\-

/s/ Kenneth L.

Bedingfield

January 29, 2020

\-85\-

\-86\-

NORTHROP GRUMMAN CORPORATION

Item 10.

Directors, Executive Officers and Corporate Governance

DIRECTORS

Information about our Directors will be incorporated herein by reference to the Proxy Statement for the 2020 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission (SEC) within 120 days after the end of the company’s fiscal year.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Our executive officers as of January 29, 2020, are listed below, along with their ages on that date, positions and offices held with the company, and principal occupations and employment, focused primarily on the past five years.

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | Age | | | Office Held | | Since | | Recent Business Experience |

| Kathy J. Warden | | 48 | | | Chairman, Chief Executive Officer and President | | 2019 | | Chief Executive Officer and President (2019); President and Chief Operating Officer (2018); Corporate Vice President and President, Mission Systems Sector (2016-2017); Corporate Vice President and President, Former Information Systems Sector (2013-2015) |

| Ann M. Addison | | 58 | | | Corporate Vice President and Chief Human Resources Officer | | 2019 | | Corporate Vice President (2018); Executive Vice President and Chief Human Resources Officer, Leidos (2016-2018); Vice President, Human Resources, Lockheed Martin (2010-2016) |

| Kenneth L. Bedingfield | | 47 | | | Corporate Vice President and Chief Financial Officer | | 2015 | | Vice President, Finance (2014-2015) |

| Mark A. Caylor | | 55 | | | Corporate Vice President and President, Mission Systems Sector | | 2018 | | Corporate Vice President and President, Enterprise Services and Chief Strategy Officer (2014-2017) |

| Sheila C. Cheston | | 61 | | | Corporate Vice President and General Counsel | | 2010 | | |

| Michael A. Hardesty | | 48 | | | Corporate Vice President, Controller, and Chief Accounting Officer | | 2013 | | |

| Lesley A. Kalan | | 46 | | | Corporate Vice President and Chief Strategy and Development Officer | | 2020 | | Corporate Vice President, Government Relations (2018-2019); Vice President, Legislative Affairs (2010-2017) |

| Blake E. Larson | | 60 | | | Corporate Vice President and President, Space Systems Sector | | 2020 | | Corporate Vice President and President, Former Innovation Systems Sector (2018-2020); Chief Operating Officer, Orbital ATK, Inc. (2015-2018); Senior Vice President and President, Aerospace Group, Alliant Techsystems, Inc. (2010-2015) |

| Janis G. Pamiljans | | 59 | | | Corporate Vice President and President, Aeronautics Systems Sector | | 2020 | | Corporate Vice President and President, Former Aerospace Systems Sector (2017-2020); Vice President and General Manager, Strategic Systems Division, Former Aerospace Systems Sector (2015-2017) |

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| David T. Perry | | 55 | | | Corporate Vice President and Chief Global Business Officer | | 2019 | | Corporate Vice President and Chief Global Business Development Officer (2012-2019) |

| Mary D. Petryszyn | | 58 | | | Corporate Vice President and President, Defense Systems Sector | | 2020 | | Vice President and General Manager, Land and Avionics C4ISR Division, Mission Systems Sector (2016-2019), Vice President, Global Strategy and Mission Solutions, Aerospace Systems Sector (2015-2016), Vice President, International, Aerospace Systems Sector (2013-2015) |

| Shawn N. Purvis | | 46 | | | Corporate Vice President and President, Enterprise Services | | 2018 | | Vice President and Chief Information Officer (2016-2017); Vice President and General Manager, Cyber Division, Former Information Systems Sector (2014-2016) |

| Lucy C. Ryan | | 46 | | | Corporate Vice President, Communications | | 2019 | | Vice President, Enterprise Communications (2018); Director of Communications, General Dynamics (2010-2018) |

AUDIT COMMITTEE FINANCIAL EXPERT

The information as to the Audit Committee and the Audit Committee Financial Expert will be incorporated herein by reference to the Proxy Statement for the 2020 Annual Meeting of Shareholders.

CODE OF ETHICS

We have adopted Standards of Business Conduct for all of our employees, including the principal executive officer, principal financial officer and principal accounting officer.

The Standards of Business Conduct can be found on our internet website at www.northropgrumman.com under “Investor Relations – Corporate Governance – Overview.” A copy of the Standards of Business Conduct is available to any stockholder who requests it by writing to: Northrop Grumman Corporation, c/o Office of the Secretary, 2980 Fairview Park Drive, Falls Church, VA 22042.

We disclose amendments to provisions of our Standards of Business Conduct by posting amendments on our website.

Waivers of the provisions of our Standards of Business Conduct that apply to our directors and executive officers are disclosed in a Current Report on Form 8-K.

The website and information contained on it or incorporated in it are not intended to be incorporated in this Annual Report on Form 10-K or other filings with the SEC.

OTHER DISCLOSURES

Other disclosures required by this Item will be incorporated herein by reference to the Proxy Statement for the 2020 Annual Meeting of Shareholders.

DIRECTORS

Information about our Directors will be incorporated herein by reference to the Proxy Statement for the 2021 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission (SEC) within 120 days after the end of the company’s fiscal year.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Our executive officers as of January 27, 2021, are listed below, along with their ages on that date, positions and offices held with the company, and principal occupations and employment, focused primarily on the past five years.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | | | | | Age | | | | | | Office Held | | | | | | Since | | | | | | Recent Business Experience | | |

| Kathy J. Warden | | | | | | 49 | | | | | | Chairman, Chief Executive Officer and President | | | | | | 2019 | | | | | | Chief Executive Officer and President (2019); President and Chief Operating Officer (2018); Corporate Vice President and President, Mission Systems Sector (2016-2017); Corporate Vice President and President, Former Information Systems Sector (2013-2015) | | |

| Ann M. Addison | | | | | | 59 | | | | | | Corporate Vice President and Chief Human Resources Officer | | | | | | 2019 | | | | | | Corporate Vice President (2018); Executive Vice President and Chief Human Resources Officer, Leidos (2016-2018); Vice President, Human Resources, Lockheed Martin (2010-2016) | | |

| Mark A. Caylor | | | | | | 56 | | | | | | Corporate Vice President and President, Mission Systems Sector | | | | | | 2018 | | | | | | Corporate Vice President and President, Enterprise Services and Chief Strategy Officer (2014-2017) | | |

| Sheila C. Cheston | | | | | | 62 | | | | | | Corporate Vice President and General Counsel | | | | | | 2010 | | | | | | | | |

| Michael A. Hardesty | | | | | | 49 | | | | | | Corporate Vice President, Controller, and Chief Accounting Officer | | | | | | 2013 | | | | | | | | |

| Thomas H. Jones | | | | | | 54 | | | | | | Corporate Vice President and President, Aeronautics Systems Sector | | | | | | 2021 | | | | | | Vice President and General Manager, Airborne C4ISR Division, Mission Systems Sector (2017-2020); Vice President and General Manager, Advanced Concepts & Technologies Division, Mission Systems Sector (2015-2017) | | |

| Lesley A. Kalan | | | | | | 47 | | | | | | Corporate Vice President and Chief Strategy and Development Officer | | | | | | 2020 | | | | | | Corporate Vice President, Government Relations (2018-2019); Vice President, Legislative Affairs (2010-2017) | | |

| David F. Keffer | | | | | | 43 | | | | | | Corporate Vice President and Chief Financial Officer | | | | | | 2020 | | | | | | General Partner, Blue Delta Capital Partners (2018-2020); Chief Financial Officer and Executive Vice President, CSRA, Inc. (2015-2018) | | |

| Blake E. Larson | | | | | | 61 | | | | | | Corporate Vice President and President, Space Systems Sector | | | | | | 2020 | | | | | | Corporate Vice President and President, Former Innovation Systems Sector (2018-2020); Chief Operating Officer, Orbital ATK, Inc. (2015-2018); Senior Vice President and President, Aerospace Group, Alliant Techsystems, Inc. (2010-2015) | | |

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NORTHROP GRUMMAN CORPORATION

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | | | | | Age | | | | | | Office Held | | | | | | Since | | | | | | Recent Business Experience | | |

| David T. Perry | | | | | | 56 | | | | | | Corporate Vice President and Chief Global Business Officer | | | | | | 2019 | | | | | | Corporate Vice President and Chief Global Business Development Officer (2012-2019) | | |

| Mary D. Petryszyn | | | | | | 59 | | | | | | Corporate Vice President and President, Defense Systems Sector | | | | | | 2020 | | | | | | Vice President and General Manager, Land and Avionics C4ISR Division, Mission Systems Sector (2016-2019), Vice President, Global Strategy and Mission Solutions, Aerospace Systems Sector (2015-2016), Vice President, International, Aerospace Systems Sector (2013-2015) | | |

| Shawn N. Purvis | | | | | | 47 | | | | | | Corporate Vice President and President, Enterprise Services | | | | | | 2018 | | | | | | Vice President and Chief Information Officer (2016-2017); Vice President and General Manager, Cyber Division, Former Information Systems Sector (2014-2016) | | |

| Lucy C. Ryan | | | | | | 47 | | | | | | Corporate Vice President, Communications | | | | | | 2019 | | | | | | Vice President, Enterprise Communications (2018); Director of Communications, General Dynamics (2010-2018) | | |

AUDIT COMMITTEE FINANCIAL EXPERT

The information as to the Audit and Risk Committee and the Audit and Risk Committee Financial Expert will be incorporated herein by reference to the Proxy Statement for the 2021 Annual Meeting of Shareholders.

CODE OF ETHICS

We have adopted Standards of Business Conduct for all of our employees, including the principal executive officer, principal financial officer and principal accounting officer.

The Standards of Business Conduct can be found on our internet website at www.northropgrumman.com under “Investors – Corporate Governance – Standards of Business Conduct.” A copy of the Standards of Business Conduct is available to any stockholder who requests it by writing to: Northrop Grumman Corporation, c/o Office of the Secretary, 2980 Fairview Park Drive, Falls Church, VA 22042.

We disclose amendments to provisions of our Standards of Business Conduct by posting amendments on our website.

Waivers of the provisions of our Standards of Business Conduct that apply to our directors and executive officers are disclosed in a Current Report on Form 8-K.

The website and information contained on it or incorporated in it are not intended to be incorporated in this Annual Report on Form 10-K or other filings with the SEC.

OTHER DISCLOSURES

Other disclosures required by this Item will be incorporated herein by reference to the Proxy Statement for the 2021 Annual Meeting of Shareholders.

Information concerning Executive Compensation, including information concerning Compensation Committee Interlocks and Insider Participation and the Compensation Committee Report, will be incorporated herein by reference to the Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders.

The information as to Securities Authorized for Issuance Under Equity Compensation Plans and Security Ownership of Certain Beneficial Owners and Management will be incorporated herein by reference to the Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders.

\-93-

\-88\-

The information as to Certain Relationships and Related Transactions and Director Independence will be incorporated herein by reference to the Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders.

The information as to Principal Accounting Fees and Services will be incorporated herein by reference to the Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders.

\-94-

\-89\-

[removed: | (a) | 1.] Report of Independent Registered Public Accounting Firm [removed: |]

[Consolidated Statements of Earnings and Comprehensive [removed: Income](#s427564CD66A758B89BF83E9688B2682C)][added: Income](#i7a77f5c365c94f9485034eb3233bc1b9_85)]

[Consolidated Statements of Financial [removed: Position](#s7F82239FF65E57F8A455DAA5B64D6CA4)][added: Position](#i7a77f5c365c94f9485034eb3233bc1b9_91)]

[Consolidated Statements of Cash [removed: Flows](#s7BFA5E43DB1D57D0A6473A4B584F4A19)][added: Flows](#i7a77f5c365c94f9485034eb3233bc1b9_97)]

[Consolidated Statements of Changes in Shareholders’ [removed: Equity](#s17C3D452E9EF54CE87DE4748271A4560)][added: Equity](#i7a77f5c365c94f9485034eb3233bc1b9_100)]

[Notes to Consolidated Financial [removed: Statements](#sFC9F7CAC5C185F70902F5475EA2AAC4D)][added: Statements](#i7a77f5c365c94f9485034eb3233bc1b9_103)]

| | [added: | |] 2(a) | [added: | |] [Agreement and Plan of Merger among Titan II, Inc. (formerly Northrop Grumman Corporation), Northrop Grumman Corporation (formerly New P, Inc.) and Titan Merger Sub Inc., dated March 30, 2011 (incorporated by reference to Exhibit 10.1 to Form 8-K filed April 4, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311032455/v59140exv10w1.htm) | [added: | |]

| | [added: | |] 2(b) | [added: | |] [Separation and Distribution Agreement dated as of March 29, 2011, among Titan II, Inc. (formerly Northrop Grumman Corporation), Northrop Grumman Corporation (formerly New P, Inc.), Huntington Ingalls Industries, Inc., Northrop Grumman Shipbuilding, Inc. and Northrop Grumman Systems Corporation (incorporated by reference to Exhibit 10.2 to Form 8-K filed April 4, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311032455/v59140exv10w2.htm) | [added: | |]

| | [added: | |] 2(c) | [added: | |] [Agreement and Plan of Merger dated as of September 17, 2017, among Northrop Grumman Corporation, Neptune Merger, Inc. and Orbital ATK, Inc. (incorporated by reference to Exhibit 2.1 to Form 8-K filed September 18, 2017, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095015717001300/ex2-1.htm) | [added: | |]

| | [added: | |] 2(d) | [added: | |] [Transaction Agreement dated as of April 28, 2014, among Alliant Techsystems Inc., Vista Spinco Inc., Vista Merger Sub Inc. and Orbital Sciences Corporation (incorporated by reference to Exhibit 2.1 to Alliant Techsystems Inc. (now known as Northrop Grumman Innovation Systems, Inc.) Form 8-K filed May 2, 2014, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/866121/000095015714000426/ex2-1.htm) | [added: | |]

| | [added: | |] 3(a) | [added: | |] [Amended and Restated Certificate of Incorporation of Northrop Grumman Corporation dated May 29, 2012 (incorporated by reference to Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 2012, filed July 25, 2012, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000113342112000033/noc-6302012xex31.htm) | [added: | |]

| | [added: | |] 3(b) | [added: | |] [Amended and Restated Bylaws of Northrop Grumman Corporation dated December 4, 2018 (incorporated by reference to Exhibit 3.1 to Form 8-K filed December 10, 2018, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000113342118000055/form8-k120418xex31bylaws.htm) | [added: | |]

| | [added: | |] 4(a) | [added: | |] [Registration Rights Agreement dated as of January 23, 2001, by and among Northrop Grumman Corporation (now Northrop Grumman Systems Corporation), NNG, Inc. (now Northrop Grumman Corporation) and Unitrin, Inc. (incorporated by reference to Exhibit(d)(6) to Amendment No. 4 to Schedule TO filed January 31, 2001, File No. 001-3229)](http://www.sec.gov/Archives/edgar/data/59880/000089843001000375/0000898430-01-000375-0004.txt) | [added: | |]

| | [added: | |] 4(b) | [added: | |] [Indenture dated as of October 15, 1994, between Northrop Grumman Corporation (now Northrop Grumman Systems Corporation) and The Chase Manhattan Bank (National Association), Trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed October 25, 1994, File No. 001-3229)](http://www.sec.gov/Archives/edgar/data/72945/0000912057-94-003514.txt) | [added: | |]

| | [added: | |] 4(c) | [added: | |] [First Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation, The Bank of New York Mellon (successor trustee to JPMorgan Chase Bank and The Chase Manhattan Bank, N.A.), Titan II, Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Indenture dated as of October 15, 1994, between Northrop Grumman Corporation (now Northrop Grumman Systems Corporation) and The Chase Manhattan Bank, N.A., Trustee (incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w1.htm) | [added: | |]

| | [added: | |] 4(d) | [added: | |] [Second Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation, The Bank of New York Mellon (successor trustee to JPMorgan Chase Bank and The Chase Manhattan Bank, N.A.), Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P, Inc.), to Indenture dated as of October 15, 1994, between Northrop Grumman Corporation (now Northrop Grumman Systems Corporation) and The Chase Manhattan Bank, N.A., Trustee (incorporated by reference to Exhibit 4.2 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w2.htm) | [added: | |]

| | [added: | |] 4(e) | [added: | |] [Form of Officers’ Certificate (without exhibits) establishing the terms of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.875% Debentures due 2026 (incorporated by reference to Exhibit 4.3 to Form S-4 Registration Statement No. 333-02653 filed April 19, 1996)](http://www.sec.gov/Archives/edgar/data/72945/0000912057-96-006729.txt) | [added: | |]

| | [added: | |] 4(f) | [added: | |] [Form of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.875% Debentures due 2026 (incorporated by reference to Exhibit 4.6 to Form S-4 Registration Statement No. 333-02653 filed April 19, 1996)](http://www.sec.gov/Archives/edgar/data/72945/0000912057-96-006729.txt) | [added: | |]

| | [added: | |] 4(g) | [added: | |] [Form of Officers’ Certificate establishing the terms of Northrop Grumman Corporation’s (now Northrop Grumman Systems Corporation’s) 7.75% Debentures due 2031 (incorporated by reference to Exhibit 10.9 to Form 8-K filed April 17, 2001, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000089843001500160/dex109.txt) | [added: | |]

| | [added: | |] 4(h) | [added: | |] [Senior Indenture dated as of December 15, 1991, between Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and The Bank of New York, as trustee, under which its 7.75% and 6.98% debentures due 2026 and 2036 were issued, and specimens of such debentures (incorporated by reference to Exhibit 4.1 to the Form 10-Q of Litton Industries, Inc. for the quarter ended April 30, 1996, filed June 11, 1996, File No. 001-3998)](http://www.sec.gov/Archives/edgar/data/59880/0000950148-96-001149.txt) | [added: | |]

| | [added: | |] 4(i) | [added: | |] [Supplemental Indenture with respect to Senior Indenture dated December 15, 1991, dated as of April 3, 2001, among Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation), Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.7 to Form 10-Q for the quarter ended March 31, 2001, filed May 10, 2001, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000102140801500799/dex47.txt) | [added: | |]

| | [added: | |] 4(j) | [added: | |] [Supplemental Indenture with respect to Senior Indenture dated December 15, 1991, dated as of December 20, 2002, among Litton Industries, Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation), Northrop Grumman Corporation, Northrop Grumman Systems Corporation and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(t) to Form 10-K for the year ended December 31, 2002, filed March 24, 2003, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000089843003002012/dex4t.htm) | [added: | |]

| | [added: | |] 4(k) | [added: | |] [Third Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York), as trustee, Titan II, Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Senior Indenture dated December 15, 1991, between Litton Industries, Inc. and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.5 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w5.htm) | [added: | |]

| | [added: | |] 4(l) | [added: | |] [Fourth Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York) as trustee, Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P, Inc.), to Senior Indenture dated December 15, 1991, between Litton Industries, Inc. and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.6 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w6.htm) | [added: | |]

| | [added: | |] 4(m) | [added: | |] Indenture between TRW Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and Mellon Bank, N.A., as trustee, dated as of May 1, 1986 (incorporated by reference to Exhibit 2 to the Form 8-A Registration Statement of TRW Inc. dated July 3, 1986, File No. 001-02384) | [added: | |]

| | [added: | |] 4(n) | [added: | |] First Supplemental Indenture between TRW Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and Mellon Bank, N.A., as trustee, dated as of August 24, 1989 (incorporated by reference to Exhibit 4(b) to Form S-3 Registration Statement No. 33-30350 of TRW Inc.) | [added: | |]

| | [added: | |] 4(o) | [added: | |] [Fifth Supplemental Indenture between TRW Inc. (predecessor-in-interest to Northrop Grumman Systems Corporation) and The Chase Manhattan Bank, as successor trustee, dated as of June 2, 1999 (incorporated by reference to Exhibit 4(f) to Form S-4 Registration Statement No. 333-83227 of TRW Inc. filed July 20, 1999)](http://www.sec.gov/Archives/edgar/data/100030/000095015299006103/0000950152-99-006103.txt) | [added: | |]

| | [added: | |] 4(p) | [added: | |] [Ninth Supplemental Indenture dated as of December 31, 2009 among Northrop Grumman Space & Mission Systems Corp. (predecessor–in-interest to Northrop Grumman Systems Corporation); The Bank of New York Mellon, as successor trustee; Northrop Grumman Corporation; and Northrop Grumman Systems Corporation (incorporated by reference to Exhibit 4(p) to Form 10-K for the year ended December 31, 2009, filed February 9, 2010, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012310010126/v54508exv4wp.htm) | [added: | |]

| | [added: | |] 4(q) | [added: | |] [Tenth Supplemental Indenture dated as of March 30, 2011, by and among Northrop Grumman Systems Corporation (successor-in-interest to Northrop Grumman Space & Mission Systems Corp. and TRW, Inc.), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank and to Mellon Bank, N.A., Titan II Inc. (formerly known as Northrop Grumman Corporation), and Titan Holdings II, L.P., to Indenture between TRW Inc. and Mellon Bank, N.A., as trustee, dated as of May 1, 1986 (incorporated by reference to Exhibit 4.7 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w7.htm) | [added: | |]

| | [added: | |] 4(r) | [added: | |] [Eleventh Supplemental Indenture dated as of March 30, 2011, by and among Northrop Grumman Systems Corporation (successor-in-interest to Northrop Grumman Space & Mission Systems Corp. and TRW Inc.), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank and to Mellon Bank, N.A., Titan Holdings II, L.P., and Northrop Grumman Corporation (formerly known as New P, Inc.) to Indenture between TRW Inc. and Mellon Bank, N.A., as trustee, dated as of May 1, 1986 (incorporated by reference to Exhibit 4.8 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w8.htm) | [added: | |]

| | [added: | |] 4(s) | [added: | |] [Indenture dated as of November 21, 2001, between Northrop Grumman Corporation and JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed November 21, 2001, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000089843001503659/dex41.txt) | [added: | |]

| | [removed: 4(t)] | [added: | 4(u) | | |] [Second Supplemental Indenture dated as of November 8, 2010, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4(a) to Form 8-K filed November 8, 2010, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012310102289/v57777exv4wa.htm) | [added: | |]

| | [removed: 4(u)] | [added: | 4(v) | | |] [Form of Northrop Grumman Corporation’s 3.500% Senior Note due 2021 (incorporated by reference to Exhibit B to Exhibit 4(a) to Form 8-K filed November 8, 2010, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012310102289/v57777exv4wa.htm) | [added: | |]

| | [removed: 4(v)] | [added: | 4(w) | | |] [Form of Northrop Grumman Corporation’s 5.050% Senior Note due 2040 (incorporated by reference to Exhibit C to Exhibit 4(a) to Form 8-K filed November 8, 2010, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012310102289/v57777exv4wa.htm) | [added: | |]

| | [removed: 4(w)] | [added: | 4(x) | | |] [Third Supplemental Indenture dated as of March 30, 2011, by and among Titan II, Inc. (formerly known as Northrop Grumman Corporation), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, and Titan Holdings II, L.P., to Indenture dated as of November 21, 2001 between Northrop Grumman Corporation and JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.9 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w9.htm) | [added: | |]

| | [removed: 4(x)] | [added: | 4(y) | | |] [Fourth Supplemental Indenture dated as of March 30, 2011, by and among Titan Holdings II, L.P., The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, and Northrop Grumman Corporation (formerly known as New P, Inc.), to Indenture dated as of November 21, 2001 between Northrop Grumman Corporation and JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.10 to Form 10-Q for the quarter ended March 31, 2011, filed April 27, 2011, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012311039852/v58707exv4w10.htm) | [added: | |]

| | [removed: 4(y)] | [added: | 4(z) | | |] [Fifth Supplemental Indenture, dated as of May 31, 2013, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor to JPMorgan Chase Bank, Trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4(a) to Form 8-K filed May 31, 2013, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312513243040/d545882dex4a.htm) | [added: | |]

| | [removed: 4(z)] | [added: | 4(aa) | | |] [Form of 3.250% Senior Note due 2023 (incorporated by reference to Exhibit B to Exhibit 4(a) to Form 8-K filed May 31, 2013, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312513243040/d545882dex4a.htm) | [added: | |]

| | [removed: 4(aa)] | [added: | 4(bb) | | |] [Form of 4.750% Senior Note due 2043 (incorporated by reference to Exhibit C to Exhibit 4(a) to Form 8-K filed May 31, 2013, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312513243040/d545882dex4a.htm) | [added: | |]

| | [removed: 4(bb)] | [added: | 4(cc) | | |] [Sixth Supplemental Indenture, dated as of February 6, 2015, between Northrop Grumman Corporation and The Bank of New York Mellon, as successor to JPMorgan Chase Bank, Trustee, to Indenture dated as of November 21, 2001 (incorporated by reference to Exhibit 4.1 to Form 8-K filed February 6, 2015, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312515037499/d865409dex41.htm) | [added: | |]

(a)1.

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NORTHROP GRUMMAN CORPORATION

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| | | (xvi) | [Modified Terms and Conditions Applicable to 2018 Restricted Performance Stock Rights Granted Under the 2011 Long-Term Incentive Stock Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed September 21, 2018, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000113342118000042/form8-k091918xex102.htm) |

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| | +10(r) | [Orbital ATK, Inc. Executive Officer Incentive Plan (as of May 4, 2016) (incorporated by reference to Exhibit 10.1 to Orbital ATK, Inc. (now known as Northrop Grumman Innovation Systems, Inc.) Form 8-K filed May 5, 2016)](http://www.sec.gov/Archives/edgar/data/866121/000086612116000079/oa_ex101.htm) |

| | | *(i) | [First Amendment to Northrop Grumman Innovation Systems Defined Benefit Supplemental Executive Retirement Plan, effective December 31, 2019](https://www.sec.gov/Archives/edgar/data/1133421/000113342120000006/noc-12312019xex10vi.htm) |

| | +10(y) | [Executive Long-Term Disability Insurance Policy dated January 1, 2019 (incorporated by reference to Exhibit 10.5 to Form 10-Q for the quarter ended March 31, 2019, filed April 24, 2019, File No. 001-16411)](https://www.sec.gov/Archives/edgar/data/1133421/000113342119000021/noc-03312019xex105.htm) |

| | +10(aa) | [Group Personal Excess Liability Policy dated February 14, 2019 and effective as of January 1, 2019 (incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2019, filed April 24, 2019, File No. 001-16411)](https://www.sec.gov/Archives/edgar/data/1133421/000113342119000021/noc-03312019xex103.htm) |

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| | +10(cc) | [Letter dated January 10, 2018 from Northrop Grumman Corporation to Blake Larson regarding compensation effective June 6, 2018 (incorporated by reference to Exhibit 10.3 to Form 10-Q for quarter ended June 30, 2018, filed July 25, 2018, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000113342118000038/noc-06302018xex103.htm) |

| | *24 | [Power of Attorney](https://www.sec.gov/Archives/edgar/data/1133421/000113342120000006/noc-12312019xex24.htm) |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the [removed: 29th] [added: 27th] day of January [removed: 2020.][added: 2021.]

| | [added: | |] NORTHROP GRUMMAN CORPORATION | | [added: | | | |]

| | [added: | |] By: | [added: | |] /s/ Michael A. Hardesty | [added: | |]

| | | [added: | | | |] Michael A. Hardesty | [added: | |]

| | | [added: | | | |] Corporate Vice President, Controller, and Chief Accounting Officer | [added: | |]

| | | [added: | | | |] (Principal Accounting Officer) | [added: | |]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on behalf of the registrant this the [removed: 29th] [added: 27th] day of January [removed: 2020,] [added: 2021,] by the following persons and in the capacities indicated.

| Signature | | [added: | | | |] Title | [added: | |]

| Kathy J. Warden* | | [added: | | | |] Chairman, Chief Executive Officer and President (Principal Executive Officer), and Director | [added: | |]

| [removed: Kenneth L. Bedingfield*] [added: David F. Keffer*] | | [added: | | | |] Corporate Vice President and Chief Financial Officer (Principal Financial Officer) | [added: | |]

| Michael A. Hardesty | | [added: | | | |] Corporate Vice President, Controller and Chief Accounting Officer | [added: | |]

| Marianne C. Brown* | | [added: | | | |] Director | [added: | |]

| Donald E. Felsinger* | | [added: | | | |] Director | [added: | |]

| Ann M. Fudge* | | [added: | | | |] Director | [added: | |]

| Bruce S. Gordon* | | [added: | | | |] Director | [added: | |]

| William H. Hernandez* | | [added: | | | |] Director | [added: | |]

| Madeleine A. Kleiner* | | [added: | | | |] Director | [added: | |]

| Karl J. Krapek* | | [added: | | | |] Director | [added: | |]

| Gary Roughead* | | [added: | | | |] Director | [added: | |]

| Thomas M. Schoewe* | | [added: | | | |] Director | [added: | |]

| James S. Turley* | | [added: | | | |] Director | [added: | |]

| Mark A. Welsh III* | | [added: | | | |] Director | [added: | |]

| *By: | [added: | |] /s/ Jennifer C. McGarey | [added: | |]

| | [added: | |] Jennifer C. McGarey | [added: | |]

| | [added: | |] Corporate Vice President and Secretary | [added: | |]

| | [added: | |] Attorney-in-Fact | [added: | |]

| | [added: | |] pursuant to a power of attorney | [added: | |]

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| David P. Abney* | | | | | | Director | | |

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