Northrop Grumman (NOC) 10-K risk factor changes: FY2021 vs FY2020

Our primary customer is the U.S. government, from which we derived [removed: 84] [added: 85] percent of our sales in [removed: 2020;] [added: 2021;] we have a number of large programs with the U.S. Department of the Air Force, in particular.

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 [added: practices and] strategy, military strategy and planning; or broader changes in social, economic or political demands and priorities.

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

In the event of termination for [removed: the U.S. government’s] convenience, contractors are generally protected by provisions covering reimbursement for costs incurred [removed: 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 [removed: earned had the contract been completed.][added: earned.]

[removed: Termination by] [added: In] the [removed: U.S. government] [added: event] of [removed: a contract] [added: termination] due to [removed: default could require us] [added: default, contractors may be required] 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 [removed: 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.

[removed: It is possible that the] [added: The] U.S. government [added: has invoked and] 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 [removed: on the contract] to date and for costs associated with the temporary stoppage of work [removed: on the contract] plus a reasonable fee.

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

[removed: They could] [added: In some cases, they have] also ultimately [added: resulted and could] result in termination of a contract [removed: (or contracts)] for convenience or reduced future orders.

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

[removed: Consequently, programs] [added: Programs] are often partially funded initially and additional funds are committed only as Congress makes further appropriations.

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

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

Laws and plans adopted by the U.S. government relating to, along with pressures on [removed: and uncertainty surrounding] the federal budget, potential changes in priorities and defense spending levels, [removed: sequestration,] the appropriations process, use of continuing resolutions (with restrictions, e.g., on new starts) and the [removed: permissible] federal debt limit, [added: have adversely affected and] 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 [added: has at times been, and in the future] may [removed: be] [added: be,] terminated or adjusted by the [removed: U.S.] government or [removed: the] prime contractor.

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

[removed: The budget environment] and [removed: uncertainty surrounding] the [removed: 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 [removed: priorities of the new Administration and Congress, and what challenges budget reductions will present for the defense industry.][added: priorities.]

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 [removed: effectively] to progress programs and [removed: to] make timely payments, and our ability to perform on our U.S. government contracts and successfully compete for new work.

[removed: Funding] [added: Future funding] for certain programs in which we participate may be reduced, delayed or cancelled.

In addition, budget cuts globally could [added: continue to] adversely affect the viability of our subcontractors and suppliers, and our employee base.

While we believe that our business is well-positioned in areas [removed: that the DoD and other customers have previously indicated are areas of focus] for future defense spending, changing priorities, budget pressures, defense spending cuts, challenges in the appropriations process, the debt ceiling and ongoing fiscal debates remain uncertain.

Contract cost growth or changes in estimated contract revenues and costs [removed: could] [added: can] affect our profitability and our overall financial position.

Contract accounting requires judgment relative to assessing risks, estimating contract revenues and costs, and [removed: making] assumptions regarding performance.

Reasons for increased estimated contract costs [removed: may] include: design issues; changes in estimates of the nature and complexity of the [removed: work to be performed,] [added: work,] including technical or quality issues or requests [removed: to perform] [added: for] additional [removed: work at the direction of the customer;] [added: work;] production challenges, including those resulting from the [removed: availability and] timeliness of customer funding, unavailability or reduced productivity of qualified and timely cleared [removed: labor or the effect of any delays in performance;] [added: labor;] the availability, performance, [added: and] quality [removed: or financial strength] of significant subcontractors; supplier issues, including the costs, timeliness and availability of materials and components; [removed: the effect of any] changes in laws or regulations; actions [removed: deemed] necessary for long-term customer satisfaction; and natural disasters or environmental matters.

We [added: have filed and] may file requests for equitable adjustment or claims to seek recovery in whole or in part for our increased costs and aim to protect against these risks through contract terms and conditions when [removed: practical.][added: practical, but the government may disagree with our requests and may not have funding to cover them.]

Due to their nature, fixed-price contracts inherently tend to have more financial risk than cost-type [removed: contracts.][added: contracts, including as a result of inflationary pressures, labor shortages, and increased labor rates.]

In [removed: 2020,] [added: 2021,] approximately half of our sales were derived from fixed-price contracts.

We [added: have] typically [removed: enter into] [added: looked to] fixed-price contracts where costs can be more reasonably estimated based on actual experience, such as for production programs.

If [removed: the] [added: we do not achieve our estimates or meet] terms specified in our [removed: contracts are not met,] [added: contracts,] our profitability [added: has at times been and] may be [removed: reduced] [added: reduced,] and we [added: have incurred and] may incur [removed: a loss.][added: losses.]

[removed: Our] [added: Certain of our] fixed-price contracts [added: include or] may include fixed-price development work.

This [removed: type of] work is inherently more [removed: uncertain as to future events than production contracts,] [added: uncertain,] and, as a result, there is typically more variability in estimates of the costs to complete the development stage.

As work progresses [removed: through the development stage] into production, the risks associated with estimating the total costs [removed: of the contract] are typically reduced.

While management uses its best judgment to estimate costs associated with fixed-price development contracts, future events could result in [removed: adjustments to those estimates.][added: adjustments.]

These cost-type programs typically have award or incentive fees that are [removed: subject to uncertainty] [added: uncertain] and may be earned over extended periods or towards the end of the contract.

[removed: In these cases, the associated financial risks are primarily] in recognizing profit, which ultimately may not be earned, or program cancellation if cost, schedule, or technical performance issues arise.

We also [removed: may] face additional financial risk due to [removed: an increasing] [added: the] number of contract solicitations requiring the contractor to bid on cost-type development work and related fixed-price production lots and/or options in one submission, or cost-type development work requiring the contractor to provide certain items to the customer at the contractor’s expense or at little or no fee.

Because of the significance of management’s judgments and the estimation [removed: processes described above,] [added: processes,] it is possible that materially different amounts could be obtained if different assumptions were used or if the underlying circumstances were to change.

Changes in underlying assumptions, circumstances or estimates, and the failure to prevail on claims for equitable adjustments could have a material adverse effect on the profitability of one or more [added: of our contracts and on our overall financial position, results of operations and/or cash flows.]

The budget environment and uncertainty surrounding the appropriations processes

See “Overview – U.S. Political and Economic Environment” in MD&A.

If the statutory debt limit is not increased adequately, we could be obligated to work without receiving timely payments.

Suppliers’ expected performance is also considered.

However, our customers may also seek fixed-price contracts for development programs, where the risks are greater.

In these cases, the associated financial risks are primarily

We also face the risk that contracts do not or will not enable full recovery of costs incurred as a result of or related to the COVID-19 pandemic.

We are also facing increasing competition for, and more limited access to various critical products, services and other supplies, including related to scarcity of resources, and mergers and acquisitions.

In addition, our success in competing and remaining cost-competitive depends, in part, on our ability successfully to adopt and integrate new digital manufacturing and operating technologies into our products and services.

See Note 11 to the consolidated financial statements for information regarding the Orbital

ATK FTC decision and order and subsequent interactions with FTC staff.

These costs are not always fully recoverable.

Whether or not illegal

These requirements, whether specific to our industry or broadly applicable, may limit our conduct and ability to achieve our goals.

Stricter or different enforcement of existing laws and regulations; new laws, regulations or cleanup requirements; discovery of previously unknown or more extensive contamination or new contaminants; imposition of fines, penalties, compensatory or other damages (including natural resource

We understand that the State will next seek court approval of the consent decree.

We are also in discussions with the DoD (Navy and DCMA) and the Bethpage and South Farmingdale Water Districts to explore whether claims involving these parties can be resolved at this stage.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize them over five years pursuant to IRC Section 174.

Although Congress is considering legislation that would defer the amortization requirement to later years, we have no assurance that the provision will be repealed or otherwise modified.

If the requirement is not modified, it will materially reduce our cash flows beginning in 2022.

Our operations have been and, we expect, will continue to be further impacted by the COVID-19 pandemic.

The pandemic likely will continue to impact our workforce, including staffing levels (as a result of illnesses, quarantine, isolation and absenteeism) and adjusted work locations and schedules; our facilities and access to them; those with whom we do business and on whom we rely to continue our operations; travel restrictions; and, overall, our ability to perform as required, at cost and on schedule, and to achieve and increase efficiencies.

The pandemic may require us to continue to take extraordinary measures to protect the health and well-being of our employees.

We have incurred and will continue to incur additional costs which may not be fully recoverable.

If, going forward, significant portions of our workforce are unable to work effectively, or we are otherwise unable to maintain our level of operations, staffing and performance, we can expect facility closures, work slowdowns or stoppages, and adverse impacts on our overall performance, operations and financial results.

The macroeconomic impacts of the pandemic, including a tightened labor market and government requirements, including those related to vaccinations, will also likely continue to affect our company.

The continued global pandemic has impacted and may continue to impact the company’s supply chains.

which could materially impact the calculation of long-term liabilities such as our pension obligations.

And inflationary pressures related to COVID-19 could adversely affect our business further, including through increased cost of labor and materials on our contracts.

We are also subject to increasing government, customer and other cyber and security requirements, including disclosure obligations.

We have robust measures in place to address and mitigate cyber-related risks.

However, we have experienced cyber attacks and expect we will continue to experience additional attacks in the future.

We continue to invest in the cybersecurity and resiliency of our networks and products and to enhance our internal controls and processes, which are designed to help protect our systems and infrastructure.

These include timely detection of incidents through monitoring, training, incident response capabilities, and mitigating cyber and security risks to our data, systems, technology, and products and services.

However, these efforts may not be fully effective.

We depend on our customers, suppliers, and other business partners to implement adequate controls and safeguards to protect against and report cyber incidents.

If they fail to do so, we may suffer financial and other harm, including to our information, operations, performance, employees, customers and reputation.

Some of these threats are zero-day attacks associated with unknown third party software or product vulnerabilities.

We also face threats to our physical security, including to our facilities and the safety and well-being of our people.

These threats could involve terrorism, insider threats, workplace violence, civil unrest, natural disasters, damaging weather, fires or similar acts, which could adversely affect our company.

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

\-7-

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.

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.

It is likely budget and program decisions made in this environment could have long-term implications for our company and the entire defense industry.

\-8-

Suppliers’ expected performance is also assessed and considered in estimating costs and profitability.

\-9-

of the affected contracts and on our overall financial position, results of operations and/or cash flows.

We are also seeing a significant number of bid protests from unsuccessful bidders on new program awards.

provisions; and government contract negotiation offers that indicate what our costs should be, among others, also may affect our profitability and predictability.

We also incur, and expect to continue to incur, additional costs to meet environmental sustainability goals increasingly required by our stakeholders.

The State is preparing to file a new consent decree reflecting the agreement and to seek court approval.

(including the United States Navy, the Defense Contract Management Agency, the state, local municipalities and water districts) and insurance carriers, as well as class action and individual plaintiffs alleging personal injury and property damage and seeking both monetary and non-monetary relief.

These Bethpage matters could result in additional costs, fines, penalties, sanctions, compensatory or other damages, determinations on allowability, allocation, and insurance coverage, and non-monetary relief.

Our operations may be further impacted by the COVID-19 pandemic if significant portions of our workforce are unable to work effectively, including because of illness, quarantines or absenteeism; steps the company has taken to protect health and well-being; government actions; facility closures; work slowdowns or stoppages; inadequate supplies or resources (such as reliable personal protective equipment, testing and vaccines); or other circumstances related to COVID-19.

Looking forward, we may be unable to perform fully on our contracts, we may experience interruptions in our business and we may incur liabilities and suffer losses as a result.

The continued global pandemic, including the economic impact, are likely also to cause further disruption in our supply chain.

If our suppliers have increased challenges with their workforce (including as a result of illness,

For example, the tightening of credit in financial markets outside of the U.S. could adversely affect the ability of our customers and suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products and services or impact the ability of our customers to make payments.

We face risks related to our products that are approved for export, but may be subject to the U.S. government changing or revoking the export authorization after the product is ordered.

systems; harm to individuals; and loss of assets.

requirements and contract terms, including if what we receive is counterfeit or otherwise improper, our financial position, results of operations and/or cash flows could be materially adversely affected.

adverse effect on our reputation, our ability to compete for other contracts and our financial position, results of operations and/or cash flows.

We may not be able adequately to exploit, protect or access intellectual property and the conduct of our customers, competitors and suppliers may make it more difficult for us to do so.

A substantial portion of our current and retired employee population is covered by pension and OPB plans.

The cost accounting rules have been revised in order to partially harmonize the measurement and period of assignment of defined benefit pension plan costs allocable to U.S. government contracts and minimum required contributions under the Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Pension Protection Act (PPA) of 2006.

These rules better align, but do not eliminate, mismatches between ERISA funding requirements and CAS pension costs for U.S. government CAS covered contracts.

Additionally, we acquired a significant amount of purchased intangible and other long-lived assets in the Merger, whose recovery is dependent, in part, on future business conditions.

We continue to monitor the recoverability of the carrying value of our goodwill and other long-lived assets.

Significant write-offs of goodwill or other long-lived assets could have a material adverse effect on our financial condition and/or results of operations.

Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended December 31, [removed: 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] [added: 2020 (“2020] Annual Report on Form [removed: 10-K to reflect changes in the company’s reportable segments, both of which provide additional information on comparisons of years 2019 and 2018.][added: 10-K”).]

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

[removed: Coronavirus disease 2019 (“COVID-19”) was first reported in late 2019 and has] [added: In the almost two years] since [added: then, the pandemic has] dramatically impacted the global health and economic environment, including millions of confirmed [removed: cases,] [added: cases and deaths,] business slowdowns or shutdowns, [removed: government challenges] [added: labor shortfalls, supply chain challenges, regulatory challenges,] and market volatility.

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

The company has considered and continues to consider [added: and be guided by health data and evolving] guidance from the Centers for Disease Control [added: and Prevention] (CDC), [added: in particular, as well as] other health [removed: organizations,] [added: organizations globally,] 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 [added: continued performance, to support] our suppliers and local communities, and to continue to serve our customers.

Our goals have [removed: been] [added: been, and continue] to [added: be to] lessen the [removed: 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 [removed: serve,] [added: operate,] our actions have varied depending on the spread of COVID-19 and [removed: local health] [added: applicable government] requirements, the needs of our [removed: employees] [added: employees, the needs of our customers] and the needs of our business.

[removed: Throughout, we have worked to adapt and] [added: The company continues] to take robust actions [added: globally] to protect the health, safety and well-being of our [removed: employees] [added: employees,] and to serve our [removed: customers, considering, among other things, local circumstances, state and local requirements and guidance from the CDC.][added: customers with continued performance.]

We [removed: have] also [removed: taken various] [added: continue to take] steps [removed: in efforts] to support our suppliers, with a particular focus on critical small and midsized business partners, including passing through increased progress payments from [added: the] DoD to our suppliers and accelerating payments to certain suppliers.

[removed: However, our] [added: Our] employees, [removed: suppliers] [added: customers] and [removed: customers,] [added: suppliers,] the [removed: company] [added: company, our economy] and our global community [removed: are facing tremendous] [added: face both continuing and new or evolving] challenges [added: related to the pandemic,] and we cannot predict how this dynamic situation will evolve or the impact it will have on the [removed: company.][added: company, or our financial position, results of operations and/or cash flows.]

For further information on the [added: pandemic and the] potential impact to the company of COVID-19, see [added: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Liquidity and Capital Resources” below and] “Risk Factors.”

The U.S. and its allies continue to face a global security environment of heightened tensions and instability, threats from state and non-state [removed: actors] [added: actors, including major global powers,] as well as terrorist organizations, emerging nuclear tensions, diverse regional security concerns and political instability.

Geopolitical relationships are changing and global economic growth is expected to remain in the low single digits in [removed: 2021] [added: 2022] reflecting the impact of and uncertainty surrounding geopolitical tensions globally and financial market volatility and the COVID-19 pandemic.

The global economy may also be affected by [added: the residual legal, regulatory and economic impacts of] Britain’s exit from the European Union, the full [removed: impact] [added: impacts] of which [removed: is not known at this time.][added: are complex and gradually becoming evident.]

[removed: With a new President and Administration, a new Congress and pressing debt and needs, it] [added: It] is difficult to predict the specific course of future defense budgets.

[removed: However, the threat remains very substantial and we] [added: We] believe that our capabilities, particularly in space, missiles, missile defense, hypersonics, counter-hypersonics, survivable aircraft and mission systems should help our customers [removed: to meet the] [added: defend against future] threats and, as a result, continue to allow for long-term profitable growth in our business.

Due to [removed: Federal Acquisition Regulation (FAR) rules] [added: the applicable FAR and CAS requirements] that govern our U.S. government [removed: business and related Cost Accounting Standards (CAS),] [added: business,] most types of costs are allocable to U.S. government contracts.

In evaluating our operating performance, we [removed: look] primarily [removed: at] [added: focus on] changes in sales and operating [removed: income.][added: margin rates.]

Changes in sales are generally described in terms of volume, while changes in [added: operating] margin rates are generally described in terms of performance and/or contract mix.

For purposes of the operating results discussion below, we assess our performance using certain financial measures that are not calculated in accordance with [removed: GAAP.][added: accounting principles generally accepted in the United States of America (“GAAP” or “FAS”).]

These non-GAAP measures may be useful to investors and other users of our financial statements as supplemental measures in evaluating the company’s underlying financial performance by presenting the company’s operating results before the non-operational impact of [added: divestiture activity and] pension and OPB actuarial gains and losses.

These measures are also consistent with how management views the underlying performance of the business as the impact of [added: the IT services divestiture and] MTM accounting [removed: is] [added: are] not considered in management’s assessment of the company’s operating performance or in its determination of incentive compensation awards.

[added: We reconcile these non-GAAP] financial measures to their most directly comparable GAAP financial measures below.

| *$ in millions, except per share amounts* | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Sales | | | $ | [removed: 36,799] [added: 35,667] | | | | | $ | [removed: 33,841] [added: 36,799] | | | | | $ | [removed: 30,095] [added: 33,841] | | | | | [removed: 9] [added: (3)] | | % | | | | [removed: 12] [added: 9] | | % |

| Operating costs and expenses | | | [removed: 32,734] [added: 31,996] | | | | | | [removed: 29,872] [added: 32,734] | | | | | | [removed: 26,315] [added: 29,872] | | | | | | [removed: 10] [added: (2)] | | % | | | | [removed: 14] [added: 10] | | % |

| *Operating costs and expenses as a % of sales* | | | [removed: 89.0] [added: 89.7] | | % | | | | [removed: 88.3] [added: 89.0] | | % | | | | [removed: 87.4] [added: 88.3] | | % | | | | | | | | | | | | |

| Operating income | | | [removed: 4,065] [added: 5,651] | | | | | | [removed: 3,969] [added: 4,065] | | | | | | [removed: 3,780] [added: 3,969] | | | | | | [removed: 2] [added: 39] | | % | | | | [removed: 5] [added: 2] | | % |

| *Operating margin rate* | | | [removed: 11.0] [added: 15.8] | | % | | | | [removed: *11.7*] [added: *11.0*] | | *%* | | | | [removed: *12.6*] [added: *11.7*] | | *%* | | | | | | | | | | | | |

| Mark-to-market pension and OPB [removed: expense] [added: benefit (expense)] | | | [removed: (1,034)] [added: 2,355] | | | | | | [removed: (1,800)] [added: (1,034)] | | | | | | [removed: (655)] [added: (1,800)] | | | | | | [removed: (43)] [added: (328)] | | % | | | | [removed: 175] [added: (43)] | | % |

| Federal and foreign income tax expense | | | [removed: 539] [added: 1,933] | | | | | | [removed: 300] [added: 539] | | | | | | [removed: 513] [added: 300] | | | | | | [removed: 80] [added: 259] | | % | | | | [removed: (42)] [added: 80] | | % |

| *Effective income tax rate* | | | [removed: 14.5] [added: 21.6] | | % | | | | [removed: *11.8*] [added: *14.5*] | | *%* | | | | [removed: *13.7*] [added: *11.8*] | | *%* | | | | | | | | | | | | |

| Net earnings | | | [removed: 3,189] | | | [removed: | | | 2,248 | | | | | | 3,229] [added: $] | [added: 7,005] | | | | | [removed: 42] [added: $] | [added: 3,189] | [removed: %] | | | | [removed: (30)] [added: $] | [added: 2,248] | [removed: %] |

| Diluted earnings per share | | | [removed: 19.03] [added: 43.54] | | | | | | [removed: 13.22] [added: 19.03] | | | | | | [removed: 18.49] [added: 13.22] | | | | | | [removed: 44] [added: 129] | | % | | | | [removed: (29)] [added: 44] | | % |

[removed: 2020 operating income] [added: Transaction-adjusted net earnings] increased [removed: $96] [added: $160] million, or [removed: 2] [added: 4] percent, primarily due to [removed: an increase in] [added: lower unallocated corporate expense and higher] segment operating income, partially offset by higher [removed: unallocated corporate expense and a lower net FAS (service)/CAS pension adjustment.][added: income tax expense.]

Mark-to-Market Pension and OPB [removed: Expense][added: Benefit/Expense]

The primary components of pre-tax MTM [removed: expense] [added: benefit (expense)] are presented in the table below:

| *$ in millions* | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Actuarial [removed: (losses)] gains [added: (losses)] on projected benefit obligation | | | $ | [removed: (3,570)] [added: 1,163] | | | | | $ | [removed: (4,866)] [added: (3,570)] | | | | | $ | [removed: 2,772] [added: (4,866)] | |

Effective January 30, 2021 (the “Divestiture date”), we completed the sale of our IT and mission support services business (the “IT services divestiture”) for $3.4 billion in cash and recorded a pre-tax gain of $2.0 billion.

COVID-19 was first reported in late 2019.

We discussed in some detail in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and subsequent SEC filings in 2021, the pandemic, its impacts and risks, and actions taken up to the time of each filing.

In this Form 10-K, we provide a further update.

Over the course of 2021, COVID-19 case rates and the health and economic impacts of the pandemic fluctuated dramatically in different communities in the U.S. and globally, particularly with the spread of new variants.

But we continued to see a prolonged impact on the economy, our industry, and our company, with increased challenges for customers and suppliers, labor shortages, supply chain challenges, and increasing inflation, among other impacts.

We expect these and other impacts to continue and they could worsen, depending on the future course of the pandemic and actions taken in connection with it.

In the U.S., the Food and Drug Administration issued emergency use authorization for COVID-19 vaccines and the government began extensive efforts to administer them.

The company also has taken various steps to encourage and facilitate vaccination access for our employees, in accordance with federal guidance.

We have provided paid leave and flexibility for employees to get vaccinated, and strongly encouraged our workforce to take care of themselves and their colleagues.

In September 2021, the White House issued an executive order and guidance from the Safer Federal Workforce Task Force broadly requiring many U.S.-based federal contractors to be fully vaccinated by December 8, 2021 (or to have an approved accommodation).

In early November 2021, the federal government extended that deadline to January 18, 2022.

On December 7, 2021, a federal district judge issued an order, temporarily suspending the government from enforcing the federal contractor mandate.

That order is on appeal.

State and local governments are also taking actions related to the pandemic, imposing additional and varying requirements on industry.

We have taken and are taking steps strongly to encourage our employees to be fully vaccinated (or to have an approved accommodation) to protect our workplace and to position the company to comply with the executive order, guidance, and related contract terms, if and as necessary, as we continue to evaluate the evolving situation and our customers’ requirements.

Evolving government requirements, including regarding a vaccine mandate, along with the broader impacts of the continuing pandemic, could significantly impact

our workforce and performance, as well as those of our suppliers, and result in costs that we may not be able to recover fully.

The company’s fourth quarter 2021 revenue and operating income were affected by the impact of the COVID-19 pandemic on the company and the broader economic environment, including through a tightened labor market, elevated levels of employee leave, evolving government requirements, and supply chain challenges.

These factors are expected to continue and could worsen and affect further our ability (and that of our suppliers) to maintain a qualified workforce and to perform fully for our customers (including with respect to cost and schedule), with delayed or reduced sales and additional liabilities, losses and costs, that we may not be able to recover fully.

Rising inflation also could lead to increased interest rates, raising the cost of borrowing for the federal government, which could impact other spending priorities.

On May 28, 2021, the Administration released its budget request for FY 2022.

The budget proposed $753 billion for national defense programs and $770 billion in non-defense discretionary funding.

It continues to be the subject of debate in Congress.

The Administration’s budget request included funding for an infrastructure and economic recovery plan and an education and economic support plan.

On November 15, 2021, the President signed into law the $1.2 trillion Infrastructure and Investment and Jobs Act.

Enactment of the infrastructure plan and any future spending plans, as well as the costs of the pandemic (as discussed more above), may have broader implications for the defense industry, our customers’ budgets and priorities, and the overall economic environment, including the national debt.

However, the threat to U.S. national security remains very substantial.

FY 2022 appropriations have not been enacted to date.

On September 30, 2021, a continuing resolution was enacted, providing funding generally at FY 2021 levels through December 3, 2021; the continuing resolution was further extended through February 18, 2022.

Congressional deliberations over FY 2022 appropriations have demonstrated broad support for national security, with increased funding proposed in certain areas for national defense above the Administration’s budget request.

It remains uncertain whether and, if so, when the government will approve FY 2022 appropriations, with which programs funded at what levels, and for how long the government will operate under a continuing resolution, with potential impacts on our programs and new starts, in particular.

The Bipartisan Budget Act of 2019 suspended the debt ceiling through July 31, 2021.

In October 2021, the statutory debt limit was increased by $480 billion and, in December 2021, was further increased by $2.5 trillion, which is currently expected to allow the Treasury Department to finance the government into 2023.

Organic sales is defined as total sales excluding sales attributable to the company's IT services divestiture.

This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company’s underlying sales growth as well as in providing an understanding of our ongoing business and future sales trends by presenting the company’s sales before the impact of divestiture activity.

Transaction-adjusted net earnings and transaction-adjusted earnings per share (transaction-adjusted EPS) exclude impacts related to the IT services divestiture, including the gain on sale of the business, associated federal and state income tax expenses, transaction costs, and the make-whole premium for early debt redemption.

They also exclude the impact of mark-to-market pension and OPB (“MTM”) benefit/(expense) and related tax impacts, which are generally only recognized during the fourth quarter.

| Gain on sale of business | | | 1,980 | | | | | | — | | | | | | — | | | | | | NM | | | | | | NM | | |

The tables below reconcile sales to organic sales:

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.

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 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.

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.

In the fourth quarter of 2020 and the first quarter of 2021, after FDA approval, we began to explore how the company could best facilitate the provision of vaccinations to our personnel in accordance with federal guidance and state and local vaccination plans.

Absenteeism rates (including because of employees in quarantine or those suffering from COVID-19) and the impacts on productivity have fluctuated significantly, especially as local cases and transmission rates have changed.

We have experienced and expect to continue to experience various increased costs to maintain our operations, including as a result of actions taken to protect the health, safety and well-being of our employees; because of illness, quarantines, and absenteeism; as a result of government actions; and because of disruption and stress among our suppliers and customers.

We have also experienced certain lower costs, including those related to employee travel, some health benefits and personal time off.

We continue to monitor this situation closely and cannot predict how it will change, including the extent of any increase in the number of COVID-19 cases and the costs and impacts to us.

Our customers have generally continued to make timely payments, and we are working with them to consider the possibility of additional cost recoveries.

Again, however, our customers are facing tremendous demands and budget pressures, and we cannot predict how this may change and how they will continue to allocate limited resources.

The company’s overall 2020 revenue and operating income were not significantly impacted by COVID-19.

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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.

We are exposed to market risk with respect to our portfolio of marketable securities with a fair value of [removed: $396] [added: $418] million at December 31, [removed: 2020.][added: 2021.]

We are exposed to interest rate risk on variable-rate short-term credit facilities for which there were no borrowings outstanding at December 31, [removed: 2020.][added: 2021.]

At December 31, [removed: 2020,] [added: 2021,] we have [removed: $15.0] [added: $12.8] billion of long-term debt, primarily consisting of fixed-rate debt, with a fair value of approximately [removed: $18.2] [added: $15.1] billion.

At December 31, [removed: 2020,] [added: 2021,] foreign currency forward contracts with a notional amount of [removed: $133] [added: $120] million were outstanding.

At December 31, [removed: 2020,] [added: 2021,] 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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The company originally was formed in [removed: Hawthorne, California,] [added: 1939] in [removed: 1939,] [added: Hawthorne, California] as Northrop Aircraft Incorporated and was reincorporated in Delaware in 1985, as Northrop Corporation.

The company developed into one of the largest defense contractors in the world through a series of acquisitions, as well as organic [removed: growth.][added: growth, including the following:]

[removed: In 1994, we acquired Grumman Corporation (Grumman), after which time the] [added: The combined] company was renamed Northrop Grumman [removed: Corporation.][added: Corporation;]

[removed: In 1996, we acquired] [added: - 1996 - Acquired] the defense and electronics businesses of Westinghouse Electric Corporation, [removed: a world leader in the development and production] [added: developer] of sophisticated radar and other [removed: electronic systems for the nation’s defense, civil aviation, and other U.S. and international applications.][added: electronics systems;]

[removed: In 2001, we acquired] [added: - 2001 - Acquired] Litton Industries, Inc., a global electronics and information technology [removed: company,] [added: company] and [removed: one of the nation’s leading] full service [removed: shipbuilders.][added: shipbuilder;]

[removed: Also in 2001, we acquired] [added: - 2001 - Acquired] Newport News Shipbuilding Inc., [removed: a leading] designer and builder of nuclear-powered aircraft carriers and [removed: submarines.][added: submarines;]

[removed: In 2002, we acquired] [added: - 2002 - Acquired] TRW Inc., [removed: a leading] developer of military and civil space systems and payloads, [removed: as well as a leading global] [added: and] integrator of complex, mission-enabling systems and [removed: services.][added: services;]

[removed: In 2011, we completed] [added: - 2011 - Completed] the spin-off [removed: to our shareholders] of Huntington Ingalls Industries, [removed: Inc. (HII).][added: Inc., operator of our former shipbuilding business, comprised largely of a part of Litton Industries and Newport News Shipbuilding;]

[removed: In 2018, we acquired] [added: - 2018 - Acquired] Orbital ATK, [removed: Inc., a global leader in the development] [added: Inc. (OATK), developer] and [removed: production] [added: producer] of [removed: launch vehicles, missile products and] satellites and other space [removed: systems.][added: systems, launch vehicles and missile products; and]

[removed: We are currently] [added: At December 31, 2021, the company was] aligned in four operating sectors, which also comprise our reportable segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems.

Aeronautics [removed: Systems’ primary customers are] [added: Systems is a leader in] the [added: design, development, production, integration, sustainment and modernization of advanced aircraft systems for the] U.S. Air Force, the U.S. Navy, other U.S. government [removed: agencies] [added: agencies,] and international customers.

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

[removed: Tactical ISR programs include the U.S. Navy] [added: -] MQ-8B and [removed: -8C] [added: MQ-8C] Fire Scout, [removed: ship-based vertical take-off and landing (VTOL)] [added: ship-based, VTOL tactical ISR] systems that provide situational [added: awareness and precision targeting for the U.S. Navy.]

*Manned Aircraft* – [removed: designs, develops, manufactures and integrates] [added: provides] strategic long-range strike [removed: aircraft systems,] [added: aircraft,] tactical fighter [removed: aircraft] and [added: air dominance aircraft, and] airborne battle management [added: and command and control] systems.

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

Defense [removed: Systems, headquartered in McLean, Virginia,] [added: Systems] 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 [removed: systems,] [added: systems and aircraft and] mission [removed: system] [added: systems] sustainment and [removed: modernization, information technology services and intelligence operations.][added: modernization.]

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

The business provides integration and interoperability of net-enabled battle management, sensors, targeting and surveillance [removed: systems,] [added: systems – a backbone architecture for Joint All-Domain Command and Control (JADC2) capable of integrating sensors and shooters,] as well as air and missile defense C2 systems.

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

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

Major products and services include [removed: C4ISR] [added: cyber; command, control, communications and computers, intelligence, surveillance and reconnaissance (C4ISR)] systems; radar, electro-optical/infrared (EO/IR) and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion and payload launch systems.

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

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

Competencies include fire control, surveillance and early warning and control radar systems; electronic attack and electronic support systems; [removed: software defined radios] and [removed: network gateways, communications and counter-communications systems; and] multi-sensor processing.

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

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

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

The sector is reported in two business [removed: areas that reflect our core capabilities:] [added: areas:] Launch & Strategic Missiles, and Space.

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

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

Key unrestricted programs [removed: include the Cygnus spacecraft used in][added: include:]

[removed: the execution of our CRS contracts with NASA;] [added: -] Advanced Extremely High Frequency (AEHF), Enhanced Polar System (EPS), Evolved Strategic SATCOM (ESS), and Protected Tactical SATCOM (PTS) [added: satellites and] payloads providing survivable, protected communications to U.S. forces; [removed: Next-Generation Overhead Persistent Infrared Program (OPIR) satellites and payloads providing data for missile defense; and 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.]

Sales to the U.S. government accounted for [removed: 84] [added: 85] percent, [removed: 83] [added: 84] percent and [removed: 82] [added: 83] percent of sales during the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] respectively.

[added: The] Boeing Company, General Dynamics, L3Harris Technologies, Lockheed Martin, and Raytheon Technologies are some of our primary competitors.

A company competing to be a prime contractor may, upon ultimate award of the contract to another competitor, [removed: become] [added: serve as] a subcontractor to the ultimate prime contracting company.

At December 31, [removed: 2020,] [added: 2021,] total backlog, which is equivalent to the company’s remaining performance obligations, was [removed: $81.0] [added: $76.0] billion as compared with [removed: $64.8] [added: $81.0] billion at December 31, [removed: 2019.][added: 2020.]

This focus was a factor in our ability to hire approximately [removed: 13,000] [added: 9,500] new employees in [removed: 2020.][added: 2021 and as of December 31, 2021, we have approximately 88,000 employees.]

Additional information regarding our human capital strategy is available in our [removed: comprehensive] Sustainability Report and Proxy [removed: Statement that] [added: Statement, which] can be found on our company website.

Our values are also integral to our commitment to long-term sustainability, with robust environmental, social and governance [added: (ESG)] practices across our company.

We deliver a broad range of products, services and solutions to U.S. and international customers, and principally to the U.S. Department of Defense (DoD) and intelligence community.

Our broad portfolio is aligned to support national security priorities and our solutions equip our customers with capabilities they need to connect, protect and advance humanity.

The company is a leading provider of space systems, advanced aircraft, missile defense, advanced weapons and long-range fires capabilities, mission systems, networking and communications, strategic deterrence systems, and breakthrough technologies, such as artificial intelligence, advanced computing and cyber.

We are focused on competing and winning programs that enable continued growth, performing on our commitments and affordably delivering capability our customers need.

With the investments we've made in advanced technologies, combined with our talented workforce and digital transformation capabilities, Northrop Grumman is well positioned to meet our customers' needs today and in the future.

- 1994 - Acquired Grumman Corporation, a premier military aircraft systems integrator.

- 2021 - Completed the sale of our IT and mission support services business (the “IT services divestiture”) to Veritas Capital.

These aircraft systems support four mission areas: strike; air dominance; battle management

and control; and intelligence, surveillance and reconnaissance (ISR).

*Autonomous Systems* – provides unmanned autonomous aircraft systems, including high-altitude long-endurance (HALE) strategic ISR systems and vertical take-off and landing (VTOL) tactical ISR systems.

Key programs include:

- MQ-4C Triton, which provides wide area strategic ISR over vast ocean and coastal regions for maritime domain awareness to the U.S. Navy and Australia;

- RQ-4 Global Hawk, which provides high resolution imagery of land masses for theater awareness and strategic ISR to the U.S. Air Force, Japan, and the Republic of Korea;

- North Atlantic Treaty Organization (NATO) Alliance Ground Surveillance (AGS), a Global Hawk variant, for strategic ISR missions conducted in multinational theater operations; and

Key programs include:

- Fuselage production for the F/A-18 Super Hornet and the F-35 Lighting II Joint Strike Fighter for use by U.S. and international forces;

- E-2D Advanced Hawkeye battle management aircraft production for the U.S. Navy, Japan, and France; and

- E-8C Joint Surveillance Target Attack Radar System (JSTARS) aircraft sustainment and modernization for the U.S. Air Force.

Key programs include:

- Integrated Air and Missile Defense Battle Command System (IBCS) for the U.S. Army and Poland, which is a system that integrates sensors and effectors to deliver among the most advanced C2 systems for joint and coalition forces;

- Counter Rocket, Artillery and Mortar (C-RAM), a set of systems used to detect and destroy incoming threats;

- U.S. Navy’s Advanced Anti-Radiation Guided Missile (AARGM), a medium-range, air-to-surface missile, and its extended range variant, AARGM-ER;

- Guided Multiple Launch Rocket System (GMLRS) propulsion and warhead subsystems for a surface-to-surface system used to defeat targets using indirect precision fires up to 70-plus kilometers;

- Precision Guidance Kit (PGK), replaces conventional fuzes for artillery and mortar munitions and transforms them into Global Positioning System enabled precision guided weapons; and

- U.S. Army’s Mission Command Training Program (MCTP), providing the design, development and support to train and exercise senior Army Commanders on modern warfighting operations.

It also supports critical warfighter training for complex missions in a realistic virtual environment.

Competencies include aircraft, electronics and embedded software sustainment; digital engineering and extended reality training for platform logistics; and maintenance.

Key programs include:

- Global system sustainment and operations support for the F-35, B-2, E-8C JSTARS surveillance aircraft, P-3 Orion, KC-30A multi-role tanker, C-27J transport, Global Hawk and Triton programs;

- Special Electronics Mission Aircraft (SEMA) intelligence, surveillance and reconnaissance support;

- AAQ-24 sensor sustainment and repair for U.S. military customers; and

- APN-241 radar sustainment, repair and production for U.S. military and foreign military sales (FMS) customers.

- Airborne Early Warning & Control (AEW&C).

The center piece of the E-7 AEW&C aircraft is the Multi-role Electronically Scanned Array (MESA) radar which enables 360 degree long range advanced air moving target indicator (AMTI) capabilities for Battle Management, Command and Control, and Maritime Surveillance;

- F-35 fire control radar and Distributed Aperture System (DAS), which provides 360 degree field of view tracking, identifying, missile warning and night vision capabilities;

- LONGBOW Fire Control Radar (FCR), which provides fire control radar capabilities for the global AH-64 helicopter fleet; and

- Scalable Agile Beam Radar (SABR), an active electronically scanned array fire control radar system for F-16 aircraft.

Key unrestricted programs include:

- Surface Electronic Warfare Improvement Program (SEWIP) Block III, which protects surface ships from anti-ship missiles, provides early detection, signal analysis and threat warning;

- Ground/Air Task Oriented Radar (G/ATOR), a mobile multi-mode active electronically scanned array;

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

We participate in many high-priority defense and government programs in the United States (U.S.) and abroad.

We conduct most of our business with the U.S. government, principally the Department of Defense (DoD) and intelligence community.

We also conduct business with foreign, state and local governments, as well as commercial customers.

Grumman was a premier military aircraft systems integrator and builder of the Lunar Module that first delivered humans to the surface of the moon.

HII operates our former Shipbuilding business, comprised largely of a part of Litton Industries and Newport News Shipbuilding.

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.

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

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).

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

Strategic ISR programs include high-altitude long-endurance (HALE) autonomous systems, such as the U.S. Air Force RQ-4 Global Hawk, which provides near real-time high resolution imagery of land masses for theater awareness; the U.S. Navy MQ-4C Triton, which provides real-time ISR over vast ocean and coastal regions for maritime domain 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.

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.

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

Airborne battle management programs include the E-2D Advanced Hawkeye and E-8C Joint Surveillance Target Attack Radar System (JSTARS).

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.

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,

Navigation and Identification (CNI) integrated avionics system; LONGBOW Fire Control Radar (FCR); Joint Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (JCREW); Scalable Agile Beam Radar (SABR); and restricted programs.

Key programs include exploitation and cyber programs; Enhanced Solutions for the Information Technology Enterprise (E-SITE); the Enterprise Application Managed Services (EAMS) program; the Transforming All-Source Analysis with Location-Based Object Services (TALOS); the Unified Platform System Coordinator program; the Airborne Signals Intelligence Payload (ASIP); and restricted programs.

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.

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.

Key programs include missile defense systems, interceptors, and boosters for the Missile Defense Agency's (MDA) Ground-based Midcourse Defense (GMD) system and Ground Based Interceptor (GBI); the Antares rocket used in the execution of our Commercial Resupply Services (CRS) contracts with 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; Ground Based Strategic Deterrent (GBSD) Engineering & Manufacturing Development (EMD) program; and the Intercontinental Ballistic Missile (ICBM) Ground Subsystem Support Contract (GSSC).

SELECTED FINANCIAL DATA

For a summary of selected consolidated financial information, see “Selected Financial Data” under Part II - Item 6.

No single program accounted for more than ten percent of total sales during any period presented.

We have not experienced significant delays in the supply or availability of raw materials, nor have we experienced a significant price increase for raw materials.

In 2020, our employee response rate was 84%, an indication that our employees believe their feedback is important.

We develop and retain our employees with the skills and capabilities to support the company’s growth and innovation.

Examples of costs incurred by us and not billed to the U.S. government in

| Cost-type contracts | | | | | | $ | 17,706 | | | | | $ | 710 | | | | | $ | 22 | | | | | $ | 18,438 | | | | | 50 | | % |

| Fixed-price contracts | | | | | | 13,197 | | | | | | 4,478 | | | | | | 686 | | | | | | 18,361 | | | | | | 50 | | % |

| Total sales | | | | | | $ | 30,903 | | | | | $ | 5,188 | | | | | $ | 708 | | | | | $ | 36,799 | | | | | 100 | | % |

20 percent from 2014 levels; and to achieve a 70 percent solid waste diversion rate (away from landfills).

For the fiscal year ended December 31, [removed: 2020][added: 2021]

As of June 30, [removed: 2020,] [added: 2021,] 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: $51.2] [added: $58.2] billion.

As of January [removed: 25, 2021, 166,718,384] [added: 24, 2022, 156,101,934] 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: 2021] [added: 2022] Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.

| Item 1. | | | [removed: [Business](#i7a77f5c365c94f9485034eb3233bc1b9_13)] [added: [Business](#i0f90a9f5f44046e1b24d871e2f754fd8_13)] | | | [removed: [1](#i7a77f5c365c94f9485034eb3233bc1b9_13)] [added: [1](#i0f90a9f5f44046e1b24d871e2f754fd8_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i7a77f5c365c94f9485034eb3233bc1b9_25)] [added: Factors](#i0f90a9f5f44046e1b24d871e2f754fd8_25)] | | | [removed: [7](#i7a77f5c365c94f9485034eb3233bc1b9_25)] [added: [10](#i0f90a9f5f44046e1b24d871e2f754fd8_25)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i7a77f5c365c94f9485034eb3233bc1b9_28)] [added: Comments](#i0f90a9f5f44046e1b24d871e2f754fd8_28)] | | | [removed: [21](#i7a77f5c365c94f9485034eb3233bc1b9_28)] [added: [24](#i0f90a9f5f44046e1b24d871e2f754fd8_28)] | | |

| Item 2. | | | [removed: [Properties](#i7a77f5c365c94f9485034eb3233bc1b9_31)] [added: [Properties](#i0f90a9f5f44046e1b24d871e2f754fd8_31)] | | | [removed: [22](#i7a77f5c365c94f9485034eb3233bc1b9_31)] [added: [26](#i0f90a9f5f44046e1b24d871e2f754fd8_31)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i7a77f5c365c94f9485034eb3233bc1b9_34)] [added: Proceedings](#i0f90a9f5f44046e1b24d871e2f754fd8_34)] | | | [removed: [23](#i7a77f5c365c94f9485034eb3233bc1b9_34)] [added: [27](#i0f90a9f5f44046e1b24d871e2f754fd8_34)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i7a77f5c365c94f9485034eb3233bc1b9_37)] [added: Disclosures](#i0f90a9f5f44046e1b24d871e2f754fd8_37)] | | | [removed: [23](#i7a77f5c365c94f9485034eb3233bc1b9_37)] [added: [27](#i0f90a9f5f44046e1b24d871e2f754fd8_37)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i7a77f5c365c94f9485034eb3233bc1b9_43)] [added: Securities](#i0f90a9f5f44046e1b24d871e2f754fd8_43)] | | | [removed: [24](#i7a77f5c365c94f9485034eb3233bc1b9_43)] [added: [28](#i0f90a9f5f44046e1b24d871e2f754fd8_43)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i7a77f5c365c94f9485034eb3233bc1b9_49)] [added: Operations](#i0f90a9f5f44046e1b24d871e2f754fd8_49)] | | | [removed: [27](#i7a77f5c365c94f9485034eb3233bc1b9_49)] [added: [31](#i0f90a9f5f44046e1b24d871e2f754fd8_49)] | | |

| | | | [Consolidated Operating [removed: Results](#i7a77f5c365c94f9485034eb3233bc1b9_55)] [added: Results](#i0f90a9f5f44046e1b24d871e2f754fd8_55)] | | | [removed: [29](#i7a77f5c365c94f9485034eb3233bc1b9_55)] [added: [33](#i0f90a9f5f44046e1b24d871e2f754fd8_55)] | | |

| | | | [Segment Operating [removed: Results](#i7a77f5c365c94f9485034eb3233bc1b9_58)] [added: Results](#i0f90a9f5f44046e1b24d871e2f754fd8_58)] | | | [removed: [31](#i7a77f5c365c94f9485034eb3233bc1b9_58)] [added: [37](#i0f90a9f5f44046e1b24d871e2f754fd8_58)] | | |

| | | | [Product and Service [removed: Analysis](#i7a77f5c365c94f9485034eb3233bc1b9_61)] [added: Analysis](#i0f90a9f5f44046e1b24d871e2f754fd8_61)] | | | [removed: [35](#i7a77f5c365c94f9485034eb3233bc1b9_61)] [added: [41](#i0f90a9f5f44046e1b24d871e2f754fd8_61)] | | |

| | | | [Liquidity and Capital [removed: Resources](#i7a77f5c365c94f9485034eb3233bc1b9_67)] [added: Resources](#i0f90a9f5f44046e1b24d871e2f754fd8_67)] | | | [removed: [36](#i7a77f5c365c94f9485034eb3233bc1b9_67)] [added: [42](#i0f90a9f5f44046e1b24d871e2f754fd8_67)] | | |

| | | | [Critical Accounting Policies, Estimates and [removed: Judgments](#i7a77f5c365c94f9485034eb3233bc1b9_70)] [added: Judgments](#i0f90a9f5f44046e1b24d871e2f754fd8_70)] | | | [removed: [38](#i7a77f5c365c94f9485034eb3233bc1b9_70)] [added: [44](#i0f90a9f5f44046e1b24d871e2f754fd8_70)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i7a77f5c365c94f9485034eb3233bc1b9_76)] [added: Risk](#i0f90a9f5f44046e1b24d871e2f754fd8_76)] | | | [removed: [44](#i7a77f5c365c94f9485034eb3233bc1b9_76)] [added: [49](#i0f90a9f5f44046e1b24d871e2f754fd8_76)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i7a77f5c365c94f9485034eb3233bc1b9_79)] [added: Data](#i0f90a9f5f44046e1b24d871e2f754fd8_79)] | | | [removed: [45](#i7a77f5c365c94f9485034eb3233bc1b9_79)] [added: [50](#i0f90a9f5f44046e1b24d871e2f754fd8_79)] | | |

| | | | [Report of Independent Registered Public Accounting [removed: Firm](#i7a77f5c365c94f9485034eb3233bc1b9_82)] [added: Firm on Internal Control over Financial Reporting](#i0f90a9f5f44046e1b24d871e2f754fd8_163)] | | | [removed: [45](#i7a77f5c365c94f9485034eb3233bc1b9_82)] [added: [91](#i0f90a9f5f44046e1b24d871e2f754fd8_163)] | | |

| | | | [Consolidated Statements of Earnings and Comprehensive [removed: Income](#i7a77f5c365c94f9485034eb3233bc1b9_85)] [added: Income](#i0f90a9f5f44046e1b24d871e2f754fd8_85)] | | | [removed: [48](#i7a77f5c365c94f9485034eb3233bc1b9_85)] [added: [53](#i0f90a9f5f44046e1b24d871e2f754fd8_85)] | | |

| | | | [Consolidated Statements of Financial [removed: Position](#i7a77f5c365c94f9485034eb3233bc1b9_91)] [added: Position](#i0f90a9f5f44046e1b24d871e2f754fd8_88)] | | | [removed: [49](#i7a77f5c365c94f9485034eb3233bc1b9_91)] [added: [54](#i0f90a9f5f44046e1b24d871e2f754fd8_88)] | | |

| | | | [Consolidated Statements of Cash [removed: Flows](#i7a77f5c365c94f9485034eb3233bc1b9_97)] [added: Flows](#i0f90a9f5f44046e1b24d871e2f754fd8_91)] | | | [removed: [50](#i7a77f5c365c94f9485034eb3233bc1b9_97)] [added: [55](#i0f90a9f5f44046e1b24d871e2f754fd8_91)] | | |

| | | | [Consolidated Statements of Changes in Shareholders’ [removed: Equity](#i7a77f5c365c94f9485034eb3233bc1b9_100)] [added: Equity](#i0f90a9f5f44046e1b24d871e2f754fd8_94)] | | | [removed: [51](#i7a77f5c365c94f9485034eb3233bc1b9_100)] [added: [56](#i0f90a9f5f44046e1b24d871e2f754fd8_94)] | | |

| | | | [Notes to Consolidated Financial [removed: Statements](#i7a77f5c365c94f9485034eb3233bc1b9_103)] [added: Statements](#i0f90a9f5f44046e1b24d871e2f754fd8_97)] | | | [removed: [52](#i7a77f5c365c94f9485034eb3233bc1b9_103)] [added: [57](#i0f90a9f5f44046e1b24d871e2f754fd8_97)] | | |

| | | | [1. Summary of Significant Accounting [removed: Policies](#i7a77f5c365c94f9485034eb3233bc1b9_106)] [added: Policies](#i0f90a9f5f44046e1b24d871e2f754fd8_100)] | | | [removed: [52](#i7a77f5c365c94f9485034eb3233bc1b9_106)] [added: [57](#i0f90a9f5f44046e1b24d871e2f754fd8_100)] | | |

| | | | [3. Earnings Per Share, Share Repurchases and Dividends on Common [removed: Stock](#i7a77f5c365c94f9485034eb3233bc1b9_115)] [added: Stock](#i0f90a9f5f44046e1b24d871e2f754fd8_106)] | | | [removed: [62](#i7a77f5c365c94f9485034eb3233bc1b9_115)] [added: [65](#i0f90a9f5f44046e1b24d871e2f754fd8_106)] | | |

| | | | [4. Accounts Receivable, [removed: Net](#i7a77f5c365c94f9485034eb3233bc1b9_118)] [added: Net](#i0f90a9f5f44046e1b24d871e2f754fd8_109)] | | | [removed: [63](#i7a77f5c365c94f9485034eb3233bc1b9_118)] [added: [66](#i0f90a9f5f44046e1b24d871e2f754fd8_109)] | | |

| | | | [5. Unbilled Receivables, [removed: Net](#i7a77f5c365c94f9485034eb3233bc1b9_121)] [added: Net](#i0f90a9f5f44046e1b24d871e2f754fd8_112)] | | | [removed: [63](#i7a77f5c365c94f9485034eb3233bc1b9_121)] [added: [66](#i0f90a9f5f44046e1b24d871e2f754fd8_112)] | | |

| | | | [6. Inventoried Costs, [removed: Net](#i7a77f5c365c94f9485034eb3233bc1b9_124)] [added: Net](#i0f90a9f5f44046e1b24d871e2f754fd8_115)] | | | [removed: [64](#i7a77f5c365c94f9485034eb3233bc1b9_124)] [added: [67](#i0f90a9f5f44046e1b24d871e2f754fd8_115)] | | |

| | | | [8. Goodwill and Other Purchased Intangible [removed: Assets](#i7a77f5c365c94f9485034eb3233bc1b9_130)] [added: Assets](#i0f90a9f5f44046e1b24d871e2f754fd8_121)] | | | [removed: [68](#i7a77f5c365c94f9485034eb3233bc1b9_130)] [added: [70](#i0f90a9f5f44046e1b24d871e2f754fd8_121)] | | |

| | | | [9. Fair Value of Financial [removed: Instruments](#i7a77f5c365c94f9485034eb3233bc1b9_136)] [added: Instruments](#i0f90a9f5f44046e1b24d871e2f754fd8_124)] | | | [removed: [69](#i7a77f5c365c94f9485034eb3233bc1b9_136)] [added: [71](#i0f90a9f5f44046e1b24d871e2f754fd8_124)] | | |

| | | | [11. Investigations, Claims and [removed: Litigation](#i7a77f5c365c94f9485034eb3233bc1b9_145)] [added: Litigation](#i0f90a9f5f44046e1b24d871e2f754fd8_130)] | | | [removed: [71](#i7a77f5c365c94f9485034eb3233bc1b9_145)] [added: [73](#i0f90a9f5f44046e1b24d871e2f754fd8_130)] | | |

| | | | [12. Commitments and [removed: Contingencies](#i7a77f5c365c94f9485034eb3233bc1b9_148)] [added: Contingencies](#i0f90a9f5f44046e1b24d871e2f754fd8_133)] | | | [removed: [72](#i7a77f5c365c94f9485034eb3233bc1b9_148)] [added: [74](#i0f90a9f5f44046e1b24d871e2f754fd8_133)] | | |

| | | | [13. Retirement [removed: Benefits](#i7a77f5c365c94f9485034eb3233bc1b9_151)] [added: Benefits](#i0f90a9f5f44046e1b24d871e2f754fd8_136)] | | | [removed: [73](#i7a77f5c365c94f9485034eb3233bc1b9_151)] [added: [75](#i0f90a9f5f44046e1b24d871e2f754fd8_136)] | | |

| | | | [14. Stock Compensation Plans and Other Compensation [removed: Arrangements](#i7a77f5c365c94f9485034eb3233bc1b9_157)] [added: Arrangements](#i0f90a9f5f44046e1b24d871e2f754fd8_139)] | | | [removed: [79](#i7a77f5c365c94f9485034eb3233bc1b9_157)] [added: [80](#i0f90a9f5f44046e1b24d871e2f754fd8_139)] | | |

| | | | [16. Segment [removed: Information](#i7a77f5c365c94f9485034eb3233bc1b9_166)] [added: Information](#i0f90a9f5f44046e1b24d871e2f754fd8_145)] | | | [removed: [82](#i7a77f5c365c94f9485034eb3233bc1b9_166)] [added: [84](#i0f90a9f5f44046e1b24d871e2f754fd8_145)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i7a77f5c365c94f9485034eb3233bc1b9_172)] [added: Disclosure](#i0f90a9f5f44046e1b24d871e2f754fd8_151)] | | | [removed: [89](#i7a77f5c365c94f9485034eb3233bc1b9_172)] [added: [89](#i0f90a9f5f44046e1b24d871e2f754fd8_151)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i7a77f5c365c94f9485034eb3233bc1b9_175)] [added: Procedures](#i0f90a9f5f44046e1b24d871e2f754fd8_154)] | | | [removed: [89](#i7a77f5c365c94f9485034eb3233bc1b9_175)] [added: [89](#i0f90a9f5f44046e1b24d871e2f754fd8_154)] | | |

| Item 9B. | | | [Other [removed: Information](#i7a77f5c365c94f9485034eb3233bc1b9_178)] [added: Information](#i0f90a9f5f44046e1b24d871e2f754fd8_157)] | | | [removed: [89](#i7a77f5c365c94f9485034eb3233bc1b9_178)] [added: [89](#i0f90a9f5f44046e1b24d871e2f754fd8_157)] | | |

| | | | [PART I](#i0f90a9f5f44046e1b24d871e2f754fd8_10) | | | | | |

| | | | [PART II](#i0f90a9f5f44046e1b24d871e2f754fd8_40) | | | | | |

| Item 6. | | | [\[Reserved\]](#i0f90a9f5f44046e1b24d871e2f754fd8_46) | | | [30](#i0f90a9f5f44046e1b24d871e2f754fd8_46) | | |

| | | | [Overview](#i0f90a9f5f44046e1b24d871e2f754fd8_52) | | | [31](#i0f90a9f5f44046e1b24d871e2f754fd8_52) | | |

| | | | [Backlog](#i0f90a9f5f44046e1b24d871e2f754fd8_64) | | | [41](#i0f90a9f5f44046e1b24d871e2f754fd8_64) | | |

| | | | [Report of](#i0f90a9f5f44046e1b24d871e2f754fd8_82) [Indep](#i0f90a9f5f44046e1b24d871e2f754fd8_82)[endent](#i0f90a9f5f44046e1b24d871e2f754fd8_82) [Regist](#i0f90a9f5f44046e1b24d871e2f754fd8_82)[ered](#i0f90a9f5f44046e1b24d871e2f754fd8_82) [P](#i0f90a9f5f44046e1b24d871e2f754fd8_82)[ub](#i0f90a9f5f44046e1b24d871e2f754fd8_82)[lic A](#i0f90a9f5f44046e1b24d871e2f754fd8_82)[ccounting Fir](#i0f90a9f5f44046e1b24d871e2f754fd8_82)[m](#i0f90a9f5f44046e1b24d871e2f754fd8_82) | | | [50](#i0f90a9f5f44046e1b24d871e2f754fd8_82) | | |

| | | | [2. Dispositions](#i0f90a9f5f44046e1b24d871e2f754fd8_103) | | | [64](#i0f90a9f5f44046e1b24d871e2f754fd8_103) | | |

| | | | [7. Income Taxes](#i0f90a9f5f44046e1b24d871e2f754fd8_118) | | | [67](#i0f90a9f5f44046e1b24d871e2f754fd8_118) | | |

| | | | [10. Debt](#i0f90a9f5f44046e1b24d871e2f754fd8_127) | | | [71](#i0f90a9f5f44046e1b24d871e2f754fd8_127) | | |

| | | | [15. Leases](#i0f90a9f5f44046e1b24d871e2f754fd8_142) | | | [83](#i0f90a9f5f44046e1b24d871e2f754fd8_142) | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i0f90a9f5f44046e1b24d871e2f754fd8_1681) | | | [91](#i0f90a9f5f44046e1b24d871e2f754fd8_1681) | | |

| | | | [PART III](#i0f90a9f5f44046e1b24d871e2f754fd8_166) | | | | | |

| | | | [PART IV](#i0f90a9f5f44046e1b24d871e2f754fd8_184) | | | | | |

| | | | [Signatures](#i0f90a9f5f44046e1b24d871e2f754fd8_193) | | | [104](#i0f90a9f5f44046e1b24d871e2f754fd8_193) | | |

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

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

| Item 6. | | | [Selected Financial Data](#i7a77f5c365c94f9485034eb3233bc1b9_46) | | | [26](#i7a77f5c365c94f9485034eb3233bc1b9_46) | | |

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

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

| | | | [Other Matters](#i7a77f5c365c94f9485034eb3233bc1b9_73) | | | [43](#i7a77f5c365c94f9485034eb3233bc1b9_73) | | |

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

| | | | [7. Income Taxes](#i7a77f5c365c94f9485034eb3233bc1b9_127) | | | [64](#i7a77f5c365c94f9485034eb3233bc1b9_127) | | |

| | | | [10. Debt](#i7a77f5c365c94f9485034eb3233bc1b9_139) | | | [69](#i7a77f5c365c94f9485034eb3233bc1b9_139) | | |

| | | | [15. Leases](#i7a77f5c365c94f9485034eb3233bc1b9_163) | | | [81](#i7a77f5c365c94f9485034eb3233bc1b9_163) | | |

| | | | [17. Unaudited Selected Quarterly Data](#i7a77f5c365c94f9485034eb3233bc1b9_169) | | | [88](#i7a77f5c365c94f9485034eb3233bc1b9_169) | | |

| | | | [Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting](#i7a77f5c365c94f9485034eb3233bc1b9_184) | | | [91](#i7a77f5c365c94f9485034eb3233bc1b9_184) | | |

| | | | [PART III](#i7a77f5c365c94f9485034eb3233bc1b9_187) | | | | | |

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

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

- [removed: the impact] [added: impacts] of the COVID-19 [removed: outbreak or] [added: pandemic (or] future [removed: epidemics] [added: health epidemics, pandemics or similar outbreaks), including potential new variants, case surges or prolonged recovery periods, their effects] on [added: the broader environment, and varying related government requirements, on:] our business, [removed: including the potential for worker absenteeism, facility closures,] [added: our ability to maintain a qualified and productive workforce,] work slowdowns or stoppages, [added: labor shortages,] supply chain [removed: disruptions, additional costs] and [removed: liabilities, program delays, our ability to recover] [added: logistics challenges,] costs [removed: under contracts, changing government funding] [added: we cannot recover] and [added: liabilities for which we are not compensated, performance challenges (including cost and schedule), government funding, changes in government] acquisition priorities and processes, [removed: changing] government payment rules and practices, insurance challenges, and potential impacts on access to capital, the markets and the fair value of our assets

\-24-

Industry and Economic Risks

Legal and Regulatory Risks

Business and Operational Risks

- climate change, its impacts on our company, our operations and our stakeholders (employees, suppliers, customers, shareholders and regulators), and changes in laws, regulations and priorities related to greenhouse gas emissions and other climate change related concerns

\-25-

NORTHROP GRUMMAN CORPORATION

General and Other Risk Factors

- health epidemics, pandemics and similar outbreaks

\-21-

At December 31, [removed: 2020,] [added: 2021,] we had approximately 51 million square feet of floor space at [removed: 530] [added: 489] separate locations, primarily in the U.S., for manufacturing, warehousing, research and testing, administration and various other uses.

[removed: At December 31, 2020, we] [added: We] leased to third parties approximately [removed: 189,000] [added: 232,000] square feet of our owned and leased facilities.

[removed: At December 31, 2020, we had] [added: The company’s] major operations [added: are] at the following locations:

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

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; [removed: Beltsville, MD;] Eden Prairie, MN; Brigham City, Clearfield, Magna, Ogden, Roy and Tremonton, UT; and Dulles and Sterling, VA.

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

The following is a summary of our floor space at December 31, [removed: 2020:][added: 2021:]

| Mission Systems | | | | | | 7,933 | | | | | | [removed: 4,580] [added: 4,397] | | | | | | — | | | | | | [removed: 12,513] [added: 12,330] | | |

\-26-

| Aeronautics Systems | | | | | | 3,415 | | | | | | 6,386 | | | | | | 3,336 | | | | | | 13,137 | | |

| Defense Systems | | | | | | 1,367 | | | | | | 3,497 | | | | | | 2,286 | | | | | | 7,150 | | |

| Space Systems | | | | | | 9,350 | | | | | | 7,819 | | | | | | 548 | | | | | | 17,717 | | |

| Corporate | | | | | | 372 | | | | | | 398 | | | | | | — | | | | | | 770 | | |

| Total | | | | | | 22,437 | | | | | | 22,497 | | | | | | 6,170 | | | | | | 51,104 | | |

\-22-

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

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

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

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

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

\-27-

\-23-

We have 800,000,000 shares authorized at a $1 par value per share, of which [removed: 166,717,179] [added: 156,284,423] shares and [removed: 167,848,424] [added: 166,717,179] shares were issued and outstanding as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

As of January [removed: 25, 2021,] [added: 24, 2022,] there were [removed: 20,639] [added: 19,801] common shareholders of record.

[removed: We had no] [added: The table below summarizes our] repurchases of common stock during the three months ended December 31, [removed: 2020.][added: 2021:]

Share repurchases take place from time to time, subject to market [added: and regulatory] conditions and management’s discretion, in the open market or in privately negotiated transactions.

Among Northrop Grumman, the [removed: S&P] [added: Standard & Poor’s (S&P)] 500 Index and the S&P Aerospace & Defense (A&D) Index

[removed: ][added: ]

- Assumes $100 invested at the close of business on December 31, [removed: 2015,] [added: 2016,] in Northrop Grumman Corporation common stock, [removed: Standard & Poor’s (S&P)] [added: the S&P] 500 Index and the S&P [removed: Aerospace & Defense] [added: A&D] Index.

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

- This graph is not deemed to be “filed” with the [removed: U.S. Securities and Exchange Commission (SEC)] [added: 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.

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

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

| 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) | | | | | |

| October 2, 2021 - October 29, 2021 | | | 324,809 | | | | | | $ | 381.98 | | | | | 324,809 | | | | | | $ | | | 2,981 | | |

| October 30, 2021 - November 26, 2021(2) | | | 1,697,050 | | | | | | 355.80 | | | | | | 1,697,050 | | | | | | | | | 2,377 | | |

| November 27, 2021 - December 31, 2021 | | | 458,499 | | | | | | 367.94 | | | | | | 458,499 | | | | | | | | | 2,209 | | |

| Total | | | 2,480,358 | | | | | | $ | 361.47 | | | | | 2,480,358 | | | | | | $ | | | 2,209 | | |

(1)Includes commissions paid.

(2)The company entered into an accelerated share repurchase agreement with Goldman Sachs & Co. LLC to repurchase $500 million of the company’s common stock and received an initial delivery of shares representing approximately 85 percent of the share repurchase agreement.

\-28-

\-29-

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-

\-30-

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-

We have audited the accompanying consolidated statements of financial position of Northrop Grumman Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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, [removed: 2020,] [added: 2021,] 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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020,] [added: 2021,] 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 [removed: 27, 2021] [added: 26, 2022] expressed an unqualified opinion on the Company’s internal control over financial reporting.

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 [added: and risk] 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.

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 [added: delivery of their products or services.]

[removed: 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.

Until these positions are sustained by the taxing authorities or the statute of limitations concerning such issues lapses, the [removed: Company] [added: company] does not generally recognize the tax benefits [added: resulting from such positions and reports the tax effects as a liability for uncertain tax positions in its consolidated statements of financial position.]

[removed: The Company has recognized increased uncertain tax positions in recent years] principally related to state apportionment, the methods of accounting associated with the timing of revenue recognition and related costs, and the 2017 Tax Act.

| [added: January 25, 2021] | | | [removed: January 27, 2021] | | | [added: $ | 3,000 | | | | | 2.2 | | | | | | $ | 358.38 | | | | | | | | | | | 2.2 | | | | | | — | | | | | | — | | |]

| *$ in millions, except per share amounts* | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Product | | | | | | $ | [removed: 27,015] [added: 27,868] | | | | | $ | [removed: 23,852] [added: 27,015] | | | | | $ | [removed: 20,469] [added: 23,852] | |

| Service | | | | | | [removed: 9,784] [added: 7,799] | | | | | | [removed: 9,989] [added: 9,784] | | | | | | [removed: 9,626] [added: 9,989] | | |

| Total sales | | | | | | [removed: 36,799] [added: 35,667] | | | | | | [removed: 33,841] [added: 36,799] | | | | | | [removed: 30,095] [added: 33,841] | | |

| Product | | | | | | [removed: 21,559] [added: 22,309] | | | | | | [removed: 18,675] [added: 21,559] | | | | | | [removed: 15,785] [added: 18,675] | | |

| Service | | | | | | [removed: 7,762] [added: 6,090] | | | | | | [removed: 7,907] [added: 7,762] | | | | | | [removed: 7,519] [added: 7,907] | | |

| General and administrative expenses | | | | | | [removed: 3,413] [added: 3,597] | | | | | | [removed: 3,290] [added: 3,413] | | | | | | [removed: 3,011] [added: 3,290] | | |

| Operating income | | | | | | [removed: 4,065] [added: 5,651] | | | | | | [removed: 3,969] [added: 4,065] | | | | | | [removed: 3,780] [added: 3,969] | | |

| Interest expense | | | | | | [removed: (593)] [added: (556)] | | | | | | [removed: (528)] [added: (593)] | | | | | | [removed: (562)] [added: (528)] | | |

| [added: Non-operating] FAS [removed: (non-service)] pension benefit | | | | | | [removed: 1,198] [added: 1,469] | | | | | | [removed: 800] [added: 1,198] | | | | | | [removed: 1,049] [added: 800] | | |

| Mark-to-market pension and OPB [removed: expense] [added: benefit (expense)] | | | | | | [removed: (1,034)] [added: 2,355] | | | | | | [removed: (1,800)] [added: (1,034)] | | | | | | [removed: (655)] [added: (1,800)] | | |

| Other, net | | | | | | [removed: 92] [added: 19] | | | | | | [removed: 107] [added: 92] | | | | | | [removed: 130] [added: 107] | | |

| Earnings before income taxes | | | | | | [removed: 3,728] [added: 8,938] | | | | | | [removed: 2,548] [added: 3,728] | | | | | | [removed: 3,742] [added: 2,548] | | |

| Federal and foreign income tax expense | | | | | | [removed: 539] [added: 1,933] | | | | | | [removed: 300] [added: 539] | | | | | | [removed: 513] [added: 300] | | |

| Net earnings | | | | | | $ | [removed: 3,189] [added: 7,005] | | | | | $ | [removed: 2,248] [added: 3,189] | | | | | $ | [removed: 3,229] [added: 2,248] | |

| Basic earnings per share | | | | | | $ | [removed: 19.08] [added: 43.70] | | | | | $ | [removed: 13.28] [added: 19.08] | | | | | $ | [removed: 18.59] [added: 13.28] | |

| Weighted-average common shares outstanding, in millions | | | | | | [removed: 167.1] [added: 160.3] | | | | | | [removed: 169.3] [added: 167.1] | | | | | | [removed: 173.7] [added: 169.3] | | |

| Diluted earnings per share | | | | | | $ | [removed: 19.03] [added: 43.54] | | | | | $ | [removed: 13.22] [added: 19.03] | | | | | $ | [removed: 18.49] [added: 13.22] | |

| Weighted-average diluted shares outstanding, in millions | | | | | | [removed: 167.6] [added: 160.9] | | | | | | [removed: 170.0] [added: 167.6] | | | | | | [removed: 174.6] [added: 170.0] | | |

| Net earnings (from above) | | | | | | $ | [removed: 3,189] [added: 7,005] | | | | | $ | [removed: 2,248] [added: 3,189] | | | | | $ | [removed: 3,229] [added: 2,248] | |

| Change in unamortized prior service credit, net of tax expense of [added: $2 in 2021,] $14 in [removed: 2020,] [added: 2020 and] $15 in 2019 [removed: and $19 in 2018] | | | | | | [removed: (41)] [added: (8)] | | | | | | [removed: (47)] [added: (41)] | | | | | | [removed: (60)] [added: (47)] | | |

| Change in cumulative translation adjustment and other, net | | | | | | [removed: 10] [added: (7)] | | | | | | [removed: 2] [added: 10] | | | | | | [removed: (14)] [added: 2] | | |

| Other comprehensive loss, net of tax | | | | | | [removed: (31)] [added: (15)] | | | | | | [removed: (45)] [added: (31)] | | | | | | [removed: (74)] [added: (45)] | | |

| Comprehensive income | | | | | | $ | [removed: 3,158] [added: 6,990] | | | | | $ | [removed: 2,203] [added: 3,158] | | | | | $ | [removed: 3,155] [added: 2,203] | |

| *$ in millions, except par value* | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Cash and cash equivalents | | | | | | $ | [removed: 4,907] [added: 3,530] | | | | | $ | [removed: 2,245] [added: 4,907] | |

| Accounts receivable, net | | | | | | [removed: 1,501] [added: 1,467] | | | | | | [removed: 1,326] [added: 1,501] | | |

| Unbilled receivables, net | | | | | | [removed: 5,140] [added: 5,492] | | | | | | [removed: 5,334] [added: 5,140] | | |

| Inventoried costs, net | | | | | | [removed: 759] [added: 811] | | | | | | [removed: 783] [added: 759] | | |

| Prepaid expenses and other current assets | | | | | | [removed: 1,402] [added: 1,126] | | | | | | [removed: 997] [added: 1,402] | | |

| Assets of disposal group held for sale | | | | | | [removed: 1,635] [added: —] | | | | | | [removed: —] [added: 1,635] | | |

Cost

The Company has recognized increased uncertain tax positions in recent years

| | | | January 26, 2022 | | |

| Total operating costs and expenses | | | | | | 31,996 | | | | | | 32,734 | | | | | | 29,872 | | |

| Gain on sale of business | | | | | | 1,980 | | | | | | — | | | | | | — | | |

| Gain on sale of business | | | | | | (1,980) | | | | | | — | | | | | | — | | |

| Net periodic pension and OPB income | | | | | | (1,091) | | | | | | (802) | | | | | | (432) | | |

| Pension and OPB contributions | | | | | | (141) | | | | | | (887) | | | | | | (263) | | |

| Divestiture of IT services business | | | | | | 3,400 | | | | | | — | | | | | | — | | |

| Other comprehensive loss, net of tax | | | | | | (15) | | | | | | (31) | | | | | | (45) | | |

We deliver a broad range of products, services and solutions to U.S. and international customers, and principally to the U.S. Department of Defense and intelligence community.

Our broad portfolio is aligned to support national security priorities and our solutions equip our customers with capabilities they need to connect, protect and advance humanity.

The company is a leading provider of space systems, advanced aircraft, missile defense, advanced weapons and long-range fires capabilities, mission systems, networking and communications, strategic deterrence systems, and breakthrough technologies, such as artificial intelligence, advanced computing and cyber.

We are focused on competing and winning programs that enable continued growth, performing on our commitments and affordably delivering capability our customers need.

With the investments we've made in advanced technologies, combined with our talented workforce and digital transformation capabilities, Northrop Grumman is well positioned to meet our customers' needs today and in the future.

Effective January 30, 2021 (the “Divestiture date”), we completed the sale of our IT and mission support services business (the “IT services divestiture”) for $3.4 billion in cash and recorded a pre-tax gain of $2.0 billion.

Operating results include sales and operating income for the IT and mission support services business prior to the Divestiture date.

During the first quarter of 2021, we changed the naming convention for our FAS/CAS pension accounts.

This change does not impact any current or previously reported amounts.

During the second quarter of 2021, we changed the presentation of the retiree benefits components in the operating cash flow section of the consolidated statements of cash flows.

Prior period amounts have been conformed to current period presentation and this change does not impact previously reported cash provided by operating activities.

In those cases, the company accounts for the distinct contract deliverables as separate

During the third quarter of 2021, we recorded a $42 million unfavorable EAC adjustment on the F-35 program at Aeronautics Systems due to labor-related production inefficiencies largely driven by COVID-19-related impacts on the labor market and employee leave.

During the fourth quarter of 2021, we recorded an additional $93 million unfavorable EAC adjustment on the F-35 program at Aeronautics Systems related to continued labor-related production impacts largely driven by COVID-19.

During the fourth quarter of 2021, we modified our F-35 production plan to support a more consistent flow on the program and expect gradually to

increase production rate over time as COVID-19-related impacts subside.

designated as cash flow hedges are recorded as a component of other comprehensive income until settlement.

G&A included in Inventoried costs, net was $44 million and $41 million as of December 31, 2021 and 2020, respectively.

The remaining $155 million is expected to be collected in 2022.

During the year ended December 31, 2021, the company received lease incentives for landlord funded leasehold improvements of $150 million related to a Space Systems real estate lease, which were recorded in PP&E and included in non-cash investing activities.

| *$ in millions* | | | | | | 2021 | | | | | | 2020 | | |

DISPOSITIONS

Effective January 30, 2021, we completed the IT services divestiture for $3.4 billion in cash and recorded a pre-tax gain of $2.0 billion.

The IT and mission support services business was comprised of the majority of the former IS&S division of Defense Systems (excluding the Vinnell Arabia business); select cyber, intelligence and missions support programs, which were part of the former CIMS division of Mission Systems; and the former 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.

Operating results include sales and operating income for the IT and mission support services business prior to the Divestiture date.

Repurchases under the 2018 Repurchase Program were completed in October 2021.

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”).

During the first quarter of 2021, the company entered into an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co. LLC (Goldman Sachs) to repurchase $2.0 billion of the company’s common stock as part of the 2018 Repurchase Program.

Under the agreement, we made a payment of $2.0 billion to Goldman Sachs and received an initial delivery of 5.9 million shares valued at $1.7 billion that were immediately canceled by the company.

Change in Accounting Principle

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

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NORTHROP GRUMMAN CORPORATION

delivery of their products or services.

\-46-

resulting from such positions and reports the tax effects as a liability for uncertain tax positions in its consolidated statements of financial position.

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

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| Retiree benefits | | | | | | (1,678) | | | | | | (703) | | | | | | (1,083) | | |

| Acquisition of Orbital ATK, net of cash acquired | | | | | | — | | | | | | — | | | | | | (7,657) | | |

| Impact from adoption of ASU 2018-02 and ASU 2016-01 | | | | | | — | | | | | | — | | | | | | (21) | | |

| Impact from adoption of ASU 2018-02 and ASU 2016-01 | | | | | | — | | | | | | — | | | | | | 21 | | |

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

We participate in many high-priority defense and government programs in the United States (U.S.) and abroad.

We conduct most of our business with the U.S. government, principally the Department of Defense (DoD) and intelligence community.

We also conduct business with foreign, state and local governments, as well as commercial customers.

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

At December 31, 2020, the company was aligned in four operating sectors, which also comprise our reportable segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems.

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., which we established as a new, fourth business sector (“Innovation Systems”).

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 for further information regarding the Merger.

Beginning in the second quarter of 2020, the company no longer considers certain unallowable costs and environmental matters that are principally managed at the corporate office as part of management’s evaluation of segment operating performance.

As a result, certain unallowable compensation and other costs, which were previously included in segment operating results, are now reported in Unallocated corporate expense within operating income.

In addition, certain accrued and deferred costs, as well as unallowable costs, if any, associated with certain environmental matters that were previously reflected in segment assets and operating results are now reflected in corporate assets and Unallocated corporate expense within operating income.

The impact of these changes are reflected in the amounts in this Form 10-K.

See Part II, Item 5 in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 for further information regarding the impact of these changes on the company’s prior period segment operating income.

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.

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.

contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period.

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

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

During the second quarter of 2018, the company recognized $69 million of favorable EAC adjustments on multiple restricted programs at Aeronautics Systems.

Higher Advance payments and amounts in excess of costs incurred were driven by Mission Systems and Space Systems.

Lower Unbilled receivables, net were driven by Defense Systems and were partially offset by higher Unbilled receivables, net at Aeronautics Systems and Space Systems.

We recognized operating income in connection with the sale at a margin rate that was dilutive to the Aeronautics Systems margin rate.

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: 2020,] [added: 2021,] 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: 2020,] [added: 2021,] no change occurred in our internal 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: 2020.][added: 2021.]

Deloitte & Touche LLP issued an attestation report dated January [removed: 27, 2021,] [added: 26, 2022,] 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: 2020,] [added: 2021,] 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: 2020,] [added: 2021,] 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: 2020,] [added: 2021,] 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: 2020] [added: 2021] of the Company and our report dated January [removed: 27, 2021] [added: 26, 2022] expressed an unqualified opinion on those financial statements.

January 26, 2022

January 26, 2022

January 27, 2021

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PART III

None.

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NORTHROP GRUMMAN CORPORATION

PART III

Information about our Directors will be incorporated herein by reference to the Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders, to be filed with the [removed: Securities and Exchange Commission (SEC)] [added: SEC] within 120 days after the end of the company’s fiscal year.

Our executive officers as of January [removed: 27, 2021,] [added: 26, 2022,] 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.

| Kathy J. Warden | | | | | | [removed: 49] [added: 50] | | | | | | 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 [removed: (2016-2017); Corporate Vice President and President, Former Information Systems Sector (2013-2015)] [added: (2016-2017)] | | |

| Ann M. Addison | | | | | | [removed: 59] [added: 60] | | | | | | 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 | | | | | | [removed: 56] [added: 57] | | | | | | 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 | | | | | | [removed: 62] [added: 63] | | | | | | Corporate Vice President and General Counsel | | | | | | 2010 | | | | | | | | |

| Michael A. Hardesty | | | | | | [removed: 49] [added: 50] | | | | | | Corporate Vice President, Controller, and Chief Accounting Officer | | | | | | 2013 | | | | | | | | |

| Thomas H. Jones | | | | | | [removed: 54] [added: 55] | | | | | | 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 | | | | | | [removed: 47] [added: 48] | | | | | | 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 | | | | | | [removed: 43] [added: 44] | | | | | | 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 | | | | | | [removed: 61] [added: 62] | | | | | | Corporate Vice President [removed: and President, Space Systems Sector] | | | | | | [removed: 2020] [added: 2022] | | | | | | Corporate Vice President and President, [added: Space Systems Sector (2020-2021); Corporate Vice President and President,] Former Innovation Systems Sector (2018-2020); Chief Operating Officer, Orbital ATK, Inc. [removed: (2015-2018); Senior Vice President and President, Aerospace Group, Alliant Techsystems, Inc. (2010-2015)] [added: (2015-2018)] | | |

| David T. Perry | | | | | | [removed: 56] [added: 57] | | | | | | Corporate Vice President and Chief Global Business Officer | | | | | | 2019 | | | | | | Corporate Vice President and Chief Global Business Development Officer (2012-2019) | | |

| Mary D. Petryszyn | | | | | | [removed: 59] [added: 60] | | | | | | 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 [removed: (2015-2016), Vice President, International, Aerospace Systems Sector (2013-2015)] [added: (2015-2016)] | | |

| Shawn N. Purvis | | | | | | [removed: 47] [added: 48] | | | | | | 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 | | | | | | [removed: 47] [added: 48] | | | | | | Corporate Vice President, Communications | | | | | | 2019 | | | | | | Vice President, Enterprise Communications (2018); Director of Communications, General Dynamics (2010-2018) | | |

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 [removed: 2021] [added: 2022] Annual Meeting of Shareholders.

The Standards of Business Conduct can be found on our internet website at www.northropgrumman.com under [removed: “Investors] [added: “Who We Are] – [added: 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.

Other disclosures required by this Item will be incorporated herein by reference to the Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders.

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| Thomas L. Wilson | | | | | | 53 | | | | | | Corporate Vice President and President, Space Systems Sector | | | | | | 2022 | | | | | | Vice President and General Manager, Strategic Space Systems Division, Space Systems Sector (2020-2021); Vice President of Strategy and Business Development, Space Systems Sector (2020); Vice President of Business Development, Former Innovation Systems Sector (2018-2020); Vice President of Strategy and Business Development, Space Systems Group, Orbital ATK, Inc. (2015-2018) | | |

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: 2021] [added: 2022] 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: 2021] [added: 2022] Annual Meeting of Shareholders.

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NORTHROP GRUMMAN CORPORATION

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: 2021] [added: 2022] Annual Meeting of Shareholders.

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NORTHROP GRUMMAN CORPORATION

The information as to Principal Accounting Fees and Services will be incorporated herein by reference to the Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders.

Report of Independent Registered Public Accounting Firm [added: (PCAOB ID No. 34)]

[Consolidated Statements of Earnings and Comprehensive [removed: Income](#i7a77f5c365c94f9485034eb3233bc1b9_85)][added: Income](#i0f90a9f5f44046e1b24d871e2f754fd8_85)]

[Consolidated Statements of Financial [removed: Position](#i7a77f5c365c94f9485034eb3233bc1b9_91)][added: Position](#i0f90a9f5f44046e1b24d871e2f754fd8_88)]

[Consolidated Statements of Cash [removed: Flows](#i7a77f5c365c94f9485034eb3233bc1b9_97)][added: Flows](#i0f90a9f5f44046e1b24d871e2f754fd8_91)]

[Consolidated Statements of Changes in Shareholders’ [removed: Equity](#i7a77f5c365c94f9485034eb3233bc1b9_100)][added: Equity](#i0f90a9f5f44046e1b24d871e2f754fd8_94)]

[Notes to Consolidated Financial [removed: Statements](#i7a77f5c365c94f9485034eb3233bc1b9_103)][added: Statements](#i0f90a9f5f44046e1b24d871e2f754fd8_97)]

| | | | [removed: 4(s)] [added: 4(u)] | | | [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) | | |

| | | | [removed: 4(t)] [added: 4(v)] | | | [First Supplemental Indenture dated as of July 30, 2009, 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 July 30, 2009, File No. 001-16411)](https://www.sec.gov/Archives/edgar/data/1133421/000095012309027412/v53270exv4wxay.htm) | | |

| | | | [removed: 4(u)] [added: 4(w)] | | | [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) | | |

| | | | [removed: 4(v)] [added: 4(x)] | | | [Form of Northrop Grumman Corporation’s [removed: 3.500%] [added: 5.050%] Senior Note due [removed: 2021] [added: 2040] (incorporated by reference to Exhibit [removed: B] [added: 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) | | |

| | | | [removed: 4(w)] [added: 4(bb)] | | | [Form of [removed: Northrop Grumman Corporation’s 5.050%] [added: 3.250%] Senior Note due [removed: 2040] [added: 2023] (incorporated by reference to Exhibit [removed: C] [added: B] to Exhibit 4(a) to Form 8-K filed [removed: November 8, 2010,] [added: May 31, 2013,] File No. [removed: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000095012310102289/v57777exv4wa.htm)] [added: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312513243040/d545882dex4a.htm)] | | |

| | | | [removed: 4(x)] [added: 4(y)] | | | [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) | | |

| | | | [removed: 4(y)] [added: 4(z)] | | | [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) | | |

| | | | [removed: 4(z)] [added: 4(aa)] | | | [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) | | |

| | | | [removed: 4(aa)] [added: 4(cc)] | | | [Form of [removed: 3.250%] [added: 4.750%] Senior Note due [removed: 2023] [added: 2043] (incorporated by reference to Exhibit [removed: B] [added: 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) | | |

| | | | [removed: 4(bb)] [added: 4(ee)] | | | [Form of [removed: 4.750%] [added: 3.850%] Senior Note due [removed: 2043] [added: 2045] (incorporated by reference to Exhibit [removed: C] [added: A] to Exhibit [removed: 4(a)] [added: 4.1] to Form 8-K filed [removed: May 31, 2013,] [added: February 6, 2015,] File No. [removed: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312513243040/d545882dex4a.htm)] [added: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312515037499/d865409dex41.htm)] | | |

| | | | [removed: 4(cc)] [added: 4(dd)] | | | [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) | | |

| | | | [removed: 4(dd)] [added: 4(gg)] | | | [Form of [removed: 3.850%] [added: 3.200%] Senior Note due [removed: 2045] [added: 2027] (incorporated by reference to Exhibit A to Exhibit 4.1 to Form 8-K filed [removed: February 6, 2015,] [added: December 1, 2016,] File No. [removed: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312515037499/d865409dex41.htm)] [added: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312516782630/d301589dex41.htm)] | | |

| | | | [removed: 4(ee)] [added: 4(ff)] | | | [Seventh Supplemental Indenture, dated as of December 1, 2016, 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 December 1, 2016, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312516782630/d301589dex41.htm) | | |

| | | | [removed: 4(ff)] [added: 4(mm)] | | | [Form of [removed: 3.200%] [added: 4.400%] Senior Note due [removed: 2027] [added: 2030] (incorporated by reference to Exhibit [removed: A to Exhibit] 4.1 to Form 8-K filed [removed: December 1, 2016,] [added: March 24, 2020,] File No. [removed: 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312516782630/d301589dex41.htm)] [added: 001-16411)](https://www.sec.gov/Archives/edgar/data/1133421/000119312520082921/d895407dex41.htm)] | | |

| | | | [removed: 4(gg)] [added: 4(hh)] | | | [Eighth Supplemental Indenture, dated as of October 13, 2017, 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 October 13, 2017, File No. 001-16411)](http://www.sec.gov/Archives/edgar/data/1133421/000119312517309966/d463997dex41.htm) | | |