Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Northrop Grumman Corporation (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”) is a leading global aerospace and defense company. 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 other governments, including foreign governments, and commercial customers.

The following discussion should be read along with the financial statements included in this Form 10-Q, as well as our 2020 Annual Report on Form 10-K, which provides additional information on our business and the environment in which we operate and our operating results.

Divestiture of IT and Mission Support Services Business

Effective January 30, 2021 (the “Divestiture date”), we completed the previously announced 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 on sale of $2.0 billion. The IT and mission support services business was comprised of the majority of the Information Solutions and Services (IS&S) division of Defense Systems (excluding our Vinnell Arabia business); select cyber, intelligence and missions support programs, which were part of the Cyber and Intelligence Mission Solutions (CIMS) division of Mission Systems; and the Space Technical Services business unit of Space Systems. Operating results include sales and operating income for the IT and mission support services business prior to the Divestiture date.

COVID-19

Coronavirus disease 2019, which was first reported in late 2019, and subsequent variants (collectively “COVID-19” or the “pandemic”), have dramatically impacted the global health and economic environment, including millions of confirmed cases and deaths, business slowdowns or shutdowns, labor shortfalls, supply chain challenges, regulatory challenges, and market volatility. We discuss in some detail in our Annual Report on Form 10-K, and subsequent SEC filings, the pandemic, its impacts and risks, and actions taken up to the time of filing. In this Form 10-Q, we provide a further update. We continue closely to monitor and address the developments, including the impact on our company, our employees, our customers, our suppliers and our communities. The company continues to consider and be guided by health data and evolving guidance from the Centers for Disease Control and Prevention (CDC), in particular, as well as other health organizations globally, federal, state and local governmental authorities, and our customers, among others. During the course of this year, COVID-19 case rates and the health impacts of the pandemic have fluctuated dramatically in different communities in the U.S. and globally. We have continued to see a prolonged impact on the economy, our industry, and our company, with increased challenges for customers and suppliers, labor shortages (including greater leave-taking), 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 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 (with exceptions including where an employee is legally entitled to an accommodation). We are taking steps to comply with the executive order, guidance, and related contract terms, broadly requiring vaccination among our U.S.-based employees. We are continuing to evaluate these evolving requirements, especially as our customers determine when and how to implement new contractual obligations, but we cannot at this stage predict the various impacts they may have on our workforce, our suppliers, or our company. The Occupational Safety and Health Administration has said it is developing an emergency temporary standard for employers with 100 or more employees to ensure their workers are fully vaccinated or undergo weekly testing. State and local governments are also taking actions related to the pandemic, imposing additional and varying requirements on industry. These 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,

-19-

Table of Contents

NORTHROP GRUMMAN CORPORATION

and result in costs that we may not be able to recover fully. The company continues to take robust actions globally to protect the health, safety and well-being of our employees, and to serve our customers with continued performance. We also continue to take steps to support our suppliers, with a particular focus on critical small and midsized business partners, including passing through increased progress payments from the DoD to our suppliers and accelerating payments to certain suppliers.

The company’s third 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 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 reduced sales and additional liabilities, losses and costs, that we may not be able to recover fully. Our employees, customers and suppliers, the company, our economy and our global community continue to face both continuing and new or evolving challenges, including related to the vaccine mandate, and we cannot predict how this dynamic situation will evolve or the impact it will have on the company, or our financial position, results of operations and/or cash flows. For further information on the pandemic and the potential impact to the company of COVID-19, see “Liquidity and Capital Resources” below and “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

U.S. Political and Economic Environment

On May 28, 2021, the Administration released its budget request for fiscal year (FY) 2022. The budget proposes $753 billion for national defense programs and $770 billion in non-defense discretionary funding, and continues to be the subject of debate in Congress. The Administration’s budget request includes funding for the American Jobs Plan, a $2.3 trillion infrastructure and economic recovery plan, and the American Families Plan, a $1.8 trillion education and economic support plan. If some or all of these plans are enacted, they may have broader implications for the defense industry, our customers’ budgets and priorities, and the overall economic environment, including the national debt. It is difficult to predict the specific course of future defense budgets. However, the threat to national security remains very substantial and we believe that our capabilities, particularly in space, missiles, missile defense, hypersonics, counter-hypersonics, survivable aircraft and mission systems should help our customers to meet the threats and, as a result, continue to allow for long-term profitable growth in our business.

FY 2022 appropriations have not been enacted, to date, and, on September 30, 2021, a continuing resolution was enacted, providing funding generally at FY 2021 levels through December 3, 2021. The Congress’ FY 2022 deliberations have demonstrated broad support for national security, and in key pieces of legislation, have proposed increased funding 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.

On October 14, 2021, the statutory debt limit was increased by $480 billion, which reportedly allows the Treasury Department to finance the government through approximately early December 2021. If the debt limit is not lifted, or further increased, and the debt ceiling is breached, there may be significant consequences for our customers and programs, and we may be required to continue to perform for some period of time on certain of our U.S. Government contracts even if the U.S. Government is unable to make timely payments.

The political environment, federal budget and debt ceiling are expected to continue to be the subject of considerable debate, which could have material impacts on defense spending broadly and the company’s programs in particular.

For further information on the risks we face from the current political and economic environment, see “Risk Factors” in our 2020 Annual Report on Form 10-K.

-20-

Table of Contents

NORTHROP GRUMMAN CORPORATION

CONSOLIDATED OPERATING RESULTS

For purposes of the operating results discussion below, we assess our performance using certain financial measures that are not calculated in accordance with GAAP. 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”) expense and related tax impacts, which are generally only recognized during the fourth quarter. 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 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 the IT services divestiture and MTM accounting are not considered in management’s assessment of the company’s operating performance or in its determination of incentive compensation awards.

We reconcile these non-GAAP financial measures to their most directly comparable GAAP financial measures below. These non-GAAP measures may not be defined and calculated by other companies in the same manner and should not be considered in isolation or as an alternative to operating results presented in accordance with GAAP.

Selected financial highlights are presented in the table below:

			Three Months Ended September 30												%						Nine Months Ended September 30												%
$ in millions, except per share amounts			2021						2020						Change						2021						2020						Change
Sales			$	8,720					$	9,083					(4)		%				$	27,028					$	26,587					2		%
Operating costs and expenses			7,677						8,098						(5)		%				24,099						23,674						2		%
Operating costs and expenses as a % of sales			88.0		%				89.2		%										89.2		%				89.0		%
Gain on sale of business			—						—						NM						1,980						—						NM
Operating income			1,043						985						6		%				4,909						2,913						69		%
Operating margin rate			12.0		%				10.8		%										18.2		%				11.0		%
Federal and foreign income tax expense			212						181						17		%				1,298						564						130		%
Effective income tax rate			16.6		%				15.5		%										23.2		%				16.5		%
Net earnings			1,063						986						8		%				4,295						2,859						50		%
Diluted earnings per share			$	6.63					$	5.89					13		%				$	26.55					$	17.05					56		%

-21-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Sales

The tables below reconcile sales to organic sales:

															Three Months Ended September 30
																					2021												2020
$ in millions																					Sales			IT services sales			Organic sales						Sales			IT services sales			Organic sales						Organic sales % change
Aeronautics Systems																					$	2,725		$	—		$	2,725					$	2,914		$	—		$	2,914					(6)		%
Defense Systems																					1,409			—			1,409						1,859			(425)			1,434						(2)		%
Mission Systems																					2,436			—			2,436						2,551			(133)			2,418						1		%
Space Systems																					2,681			—			2,681						2,198			(48)			2,150						25		%
Intersegment eliminations																					(531)			—			(531)						(439)			4			(435)
Total																					$	8,720		$	—		$	8,720					$	9,083		$	(602)		$	8,481					3		%

															Nine Months Ended September 30
																					2021												2020
$ in millions																					Sales			IT services sales			Organic sales						Sales			IT services sales			Organic sales						Organic sales % change
Aeronautics Systems																					$	8,628		$	—		$	8,628					$	8,682		$	—		$	8,682					(1)		%
Defense Systems																					4,398			(106)			4,292						5,626			(1,230)			4,396						(2)		%
Mission Systems																					7,613			(42)			7,571						7,344			(394)			6,950						9		%
Space Systems																					7,950			(16)			7,934						6,194			(135)			6,059						31		%
Intersegment eliminations																					(1,561)			2			(1,559)						(1,259)			13			(1,246)
Total																					$	27,028		$	(162)		$	26,866					$	26,587		$	(1,746)		$	24,841					8		%

Current Quarter

Third quarter 2021 sales decreased $363 million, or 4 percent, due to lower sales at Defense Systems and Missions Systems, principally due to the impact of the IT services divestiture, and lower sales at Aeronautics Systems, partially offset by 22 percent sales growth at Space Systems. Third quarter 2021 sales were affected by the impact of COVID-19 on the broader economic environment, including a tight labor market, elevated levels of employee leave, and supply chain challenges. Third quarter 2021 organic sales increased $239 million, or 3 percent.

Year to Date

Year to date 2021 sales increased $441 million, or 2 percent, primarily due to higher sales at Space Systems and Mission Systems, partially offset by lower sales at Defense Systems, principally due to the impact of the IT services divestiture. Year to date 2021 organic sales increased $2.0 billion, or 8 percent. As a result of the company using a fiscal calendar convention for interim reporting periods (as described in Note 1 to the financial statements), year to date 2021 sales at each sector benefited approximately 2 percent from three additional working days when compared to the prior year period.

See “Segment Operating Results” below for further information by segment and “Product and Service Analysis” for product and service detail. See Note 9 to the financial statements for information regarding the company’s sales by customer type, contract type and geographic region for each of our segments.

-22-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Operating Income and Margin Rate

Current Quarter

Third quarter 2021 operating income increased $58 million, or 6 percent, primarily due to lower unallocated corporate expense, partially offset by a lower FAS/CAS operating adjustment. Third quarter 2021 operating margin rate increased to 12.0 percent reflecting a higher segment operating margin rate in addition to the items above.

Third quarter 2021 general and administrative (G&A) costs as a percentage of sales increased to 10.2 percent from 9.4 percent in the prior year period primarily due to an increase in investments for future business opportunities as well as the timing of indirect cost recognition during the quarter.

Year to Date

Year to date 2021 operating income increased $2.0 billion, or 69 percent, primarily due to the IT services divestiture, including the $2.0 billion pre-tax gain on sale and $192 million of unallocated corporate expense for unallowable state taxes and transaction costs. Operating income also increased due to lower non-divestiture-related unallocated corporate expenses and higher segment operating income, partially offset by a lower FAS/CAS operating adjustment. Year to date 2021 operating margin rate increased to 18.2 percent reflecting the items above.

Year to date 2021 G&A costs as a percentage of sales increased to 10.3 percent from 9.3 percent in the prior year period primarily due to an increase in investments for future business opportunities as well as the timing of indirect cost recognition during the year.

See “Segment Operating Results” below for further information by segment. For information regarding product and service operating costs and expenses, see “Product and Service Analysis” below.

Federal and Foreign Income Taxes

Current Quarter

The third quarter 2021 effective tax rate (ETR) increased to 16.6 percent from 15.5 percent in the prior year period primarily due to lower benefits from foreign-derived intangible income. See Note 3 to the financial statements for additional information.

Year to Date

The year to date 2021 ETR increased to 23.2 percent from 16.5 percent in the prior period primarily due to federal income taxes resulting from the IT services divestiture. See Note 3 to the financial statements for additional information.

-23-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Net Earnings

The table below reconciles net earnings to transaction-adjusted net earnings:

			Three Months Ended September 30												%			Nine Months Ended September 30												%
$ in millions			2021						2020						Change			2021						2020						Change
Net earnings			$	1,063					$	986					8		%	$	4,295					$	2,859					50		%
Gain on sale of business			—						—						NM			(1,980)						—						NM
State tax impact1			—						—						NM			160						—						NM
Transaction costs			—						—						NM			32						—						NM
Make-whole premium			—						—						NM			54						—						NM
Federal tax impact of items above2			—						—						NM			614						—						NM
Adjustment, net of tax			$	—					$	—					NM			$	(1,120)					$	—					NM
Transaction-adjusted net earnings			$	1,063					$	986					8		%	$	3,175					$	2,859					11		%

**(1)**The state tax impact includes $62 million of incremental tax expense related to $1.2 billion of nondeductible goodwill in the divested business.

**(2)**The federal tax impact was calculated by applying the 21 percent federal statutory rate to the adjustment items and also includes $250 million of incremental tax expense related to $1.2 billion of nondeductible goodwill in the divested business.

Current Quarter

Third quarter 2021 net earnings increased $77 million, or 8 percent, primarily due to an increase in non-operating FAS pension benefit and higher operating income, partially offset by an increase in income tax expense.

Year to Date

Year to date 2021 net earnings increased $1.4 billion, or 50 percent, primarily due to the IT services divestiture. Transaction-adjusted net earnings increased $316 million or 11 percent, primarily due to higher segment operating income and an increase in non-operating FAS pension benefit, partially offset by an increase in income tax expense.

Diluted Earnings Per Share

The table below reconciles diluted earnings per share to transaction-adjusted EPS:

			Three Months Ended September 30												%			Nine Months Ended September 30												%
			2021						2020						Change			2021						2020						Change
Diluted EPS			$	6.63					$	5.89					13		%	$	26.55					$	17.05					56		%
Gain on sale of business per share			—						—						NM			(12.24)						—						NM
State tax impact per share1			—						—						NM			0.99						—						NM
Transaction costs per share			—						—						NM			0.20						—						NM
Make-whole premium per share			—						—						NM			0.33						—						NM
Federal tax impact of line items above per share2			—						—						NM			3.79						—						NM
Adjustment, net of tax per share			$	—					$	—					NM			$	(6.93)					$	—					NM
Transaction-adjusted EPS			$	6.63					$	5.89					13		%	$	19.62					$	17.05					15		%

**(1)**The state tax impact includes $62 million of incremental tax expense related to $1.2 billion of nondeductible goodwill in the divested business.

**(2)**The federal tax impact was calculated by applying the 21 percent federal statutory rate to the adjustment items and also includes $250 million of incremental tax expense related to $1.2 billion of nondeductible goodwill in the divested business.

Current Quarter

Third quarter 2021 diluted earnings per share increased 13 percent, reflecting an 8 percent increase in net earnings and a 4 percent reduction in weighted-average diluted shares outstanding.

Year to Date

Year to date 2021 diluted earnings per share increased 56 percent, principally due to a $6.93 increase associated with the IT services divestiture. Transaction-adjusted earnings per share increased $2.57, or 15 percent, reflecting an 11 percent increase in transaction-adjusted net earnings and a 4 percent reduction in weighted-average diluted shares outstanding.

-24-

Table of Contents

NORTHROP GRUMMAN CORPORATION

SEGMENT OPERATING RESULTS

Basis of Presentation

The company is aligned in four operating sectors, which also comprise our reportable segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. We present our sectors in the following business areas, which are reported in a manner reflecting core capabilities:

Aeronautics Systems						Defense Systems						Mission Systems						Space Systems
Autonomous Systems						Battle Management & Missile Systems						Airborne Multifunction Sensors						Launch & Strategic Missiles
Manned Aircraft						Mission Readiness						Maritime/Land Systems & Sensors						Space
												Navigation, Targeting & Survivability
												Networked Information Solutions

Effective during the first quarter of 2021 within Mission Systems, the businesses of the former Cyber & Intelligence Mission Solutions business area that remained with Northrop Grumman after the IT services divestiture were merged with the Communications business unit and F-35 Communications, Navigation and Identification programs within the former Airborne, Sensors & Networks business area to form the Networked Information Solutions business area. The Airborne Sensors & Networks business area was then renamed the Airborne Multifunction Sensors business area to better reflect its new portfolio. This change had no impact on the segment operating results of Mission Systems as a whole.

This section discusses segment sales, operating income and operating margin rates. In evaluating segment operating performance, we look primarily at changes in sales and operating income. Where applicable, significant fluctuations in operating performance attributable to individual contracts or programs, or changes in a specific cost element across multiple contracts, are described in our analysis. Based on this approach and the nature of our operations, the discussion of results of operations below first focuses on our four segments before distinguishing between products and services. Changes in sales are generally described in terms of volume, while changes in margin rates are generally described in terms of performance and/or contract mix. For purposes of this discussion, volume generally refers to increases or decreases in sales or cost from production/service activity levels and performance generally refers to non-volume related changes in profitability. Contract mix generally refers to changes in the ratio of contract type and/or lifecycle (e.g., cost-type, fixed-price, development, production, and/or sustainment).

-25-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Segment Operating Income and Margin Rate

Segment operating income, as reconciled in the table below, and segment operating margin rate (segment operating income divided by sales) are non-GAAP (accounting principles generally accepted in the United States of America) measures that reflect total earnings from our four segments, including allocated pension expense we have recognized under the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS), and excluding FAS pension service expense and unallocated corporate items (certain corporate-level expenses, which are not considered allowable or allocable under requirements in the applicable CAS or FAR, and costs not considered part of management’s evaluation of segment operating performance). These non-GAAP measures may be useful to investors and other users of our financial statements as supplemental measures in evaluating the financial performance and operational trends of our sectors. These measures may not be defined and calculated by other companies in the same manner and should not be considered in isolation or as alternatives to operating results presented in accordance with GAAP.

			Three Months Ended September 30												%						Nine Months Ended September 30												%
$ in millions			2021						2020						Change						2021						2020						Change
Segment operating income			$	1,035					$	1,049					(1)		%				$	3,247					$	3,047					7		%
Segment operating margin rate			11.9		%				11.5		%										12.0		%				11.5		%
CAS pension expense			165						210						(21)		%				409						622						(34)		%
Less: FAS pension service expense			(104)						(102)						2		%				(311)						(306)						2		%
FAS/CAS operating adjustment			61						108						(44)		%				98						316						(69)		%
Gain on sale of business			—						—						NM						1,980						—						NM
IT services divestiture – unallowable state taxes and transaction costs			—						—						NM						(192)						—						NM
Intangible asset amortization and PP&E step-up depreciation			(62)						(81)						(23)		%				(191)						(240)						(20)		%
Other unallocated corporate expense			9						(91)						(110)		%				(33)						(210)						(84)		%
Unallocated corporate (expense) income			(53)						(172)						(69)		%				1,564						(450)						(448)		%
Operating income			$	1,043					$	985					6		%				$	4,909					$	2,913					69		%

Current Quarter

Third quarter 2021 segment operating income decreased $14 million, or 1 percent, due to lower sales, partially offset by a higher segment operating margin rate. Third quarter 2020 segment operating income from the IT services business was $69 million. Lower operating income at Defense Systems, principally due to the impact of the IT services divestiture, and Aeronautics Systems was partially offset by higher operating income at Space Systems. Segment operating margin rate increased to 11.9 percent from 11.5 percent due to higher operating margin rates at Mission Systems, Defense Systems and Space Systems, partially offset by a lower operating margin rate at Aeronautics Systems.

Year to Date

Year to date 2021 segment operating income increased $200 million, or 7 percent, due to higher sales and a higher segment operating margin rate. Higher operating income at Space Systems and Mission Systems was partially offset by lower operating income at Defense Systems due to the impact of the IT services divestiture. Year to date 2021 segment operating income from the IT services business was $20 million as compared to $180 million in the prior year period. Year to date 2021 segment operating income includes a first quarter 2021 benefit of approximately $100 million due to the impact of lower overhead rates on the company’s fixed price contracts. The lower projected overhead rates were principally driven by a reduction in projected CAS pension costs as well as operational performance at the sectors, which more than offset lower business base due to the IT services divestiture. Segment operating margin rate increased to 12.0 percent from 11.5 percent and reflects higher operating margin rates at all four sectors largely as a result of the items discussed above.

FAS/CAS Operating Adjustment

Third quarter 2021 and year to date 2021 FAS/CAS operating adjustment decreased primarily due to lower CAS pension expense resulting from favorable plan asset returns in 2020 and changes in certain CAS actuarial assumptions as of December 31, 2020. Third quarter 2021 CAS pension expense also reflects a $44 million benefit from updated demographic information.

-26-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Unallocated Corporate (Expense) Income

Current Quarter

The decrease in third quarter 2021 unallocated corporate expense is due, in part, to a $60 million benefit from insurance settlements related to shareholder litigation involving the former Orbital ATK prior to the company’s acquisition, that was resolved in June 2019. Unallocated corporate expense also decreased due to a change in deferred state income taxes related to our methods of timing of revenue recognition and related costs as well as lower intangible asset amortization and PP&E step-up depreciation.

Year to Date

The increase in year to date 2021 unallocated corporate (expense) income is primarily due to a $2.0 billion pre-tax gain on the sale of our IT services business, partially offset by $192 million of unallowable state taxes and transaction costs associated with the divestiture. Unallocated corporate (expense) income also increased due to the current quarter items described above, as well as a net increase in deferred state tax assets related to certain state tax legislation adopted in 2020 that places temporary limitations on tax credits and a change in tax revenue recognition on certain contracts.

Net EAC Adjustments - We record changes in estimated contract earnings at completion (net EAC adjustments) using the cumulative catch-up method of accounting. Net EAC adjustments can have a significant effect on reported sales and operating income and the aggregate amounts are presented in the table below:

			Three Months Ended September 30												Nine Months Ended September 30
$ in millions			2021						2020						2021						2020
Favorable EAC adjustments			$	273					$	271					$	930					$	788
Unfavorable EAC adjustments			(164)						(148)						(477)						(429)
Net EAC adjustments			$	109					$	123					$	453					$	359

Net EAC adjustments by segment are presented in the table below:

			Three Months Ended September 30												Nine Months Ended September 30
$ in millions			2021						2020						2021						2020
Aeronautics Systems			$	(2)					$	—					$	67					$	34
Defense Systems			37						58						95						119
Mission Systems			43						58						192						196
Space Systems			33						10						103						15
Eliminations			(2)						(3)						(4)						(5)
Net EAC adjustments			$	109					$	123					$	453					$	359

For purposes of the discussion in the remainder of this Segment Operating Results section, references to operating income and operating margin rate reflect segment operating income and segment operating margin rate, respectively.

AERONAUTICS SYSTEMS			Three Months Ended September 30												%						Nine Months Ended September 30												%
$ in millions			2021						2020						Change						2021						2020						Change
Sales			$	2,725					$	2,914					(6)		%				$	8,628					$	8,682					(1)		%
Operating income			265						294						(10)		%				873						867						1		%
Operating margin rate			9.7		%				10.1		%										10.1		%				10.0		%

Sales

Current Quarter

Third quarter 2021 sales decreased $189 million, or 6 percent, due to lower volume in both Manned Aircraft and Autonomous Systems, including restricted programs, F-35, the B-2 Defensive Management Systems Modernization (DMS) program and certain Global Hawk programs.

-27-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Year to Date

Year to date 2021 sales decreased $54 million, or 1 percent, due to lower volume at Autonomous Systems, which was partially offset by higher volume at Manned Aircraft. Lower A350 production activity, and lower volume on B-2 DMS and certain Global Hawk programs, was partially offset by higher volume on E-2 and restricted programs.

Operating Income

Current Quarter

Third quarter 2021 operating income decreased $29 million, or 10 percent, due to lower sales and a lower operating margin rate. Operating margin rate decreased to 9.7 percent from 10.1 percent principally due to a $42 million unfavorable EAC adjustment on F-35 due to labor-related production inefficiencies largely driven by COVID-19-related impacts on the labor market and employee leave. This was partially offset by higher net favorable EAC adjustments at Autonomous Systems.

Year to Date

Year to date 2021 operating income was consistent with the prior year period and operating margin rate increased to 10.1 percent from 10.0 percent principally due to higher net favorable EAC adjustments, which were largely driven by the first quarter 2021 reduction in overhead rates, partially offset by the unfavorable F-35 adjustment discussed above.

DEFENSE SYSTEMS			Three Months Ended September 30												%						Nine Months Ended September 30												%
$ in millions			2021						2020						Change						2021						2020						Change
Sales			$	1,409					$	1,859					(24)		%				$	4,398					$	5,626					(22)		%
Operating income			175						217						(19)		%				529						632						(16)		%
Operating margin rate			12.4		%				11.7		%										12.0		%				11.2		%

Sales

Current Quarter

Third quarter 2021 sales decreased $450 million, or 24 percent, primarily due to a $425 million reduction in sales related to the IT services divestiture. Third quarter 2021 organic sales decreased $25 million, or 2 percent, principally due to the close-out of the contract at the Army’s Lake City ammunition plant (Lake City), partially offset by higher volume on several Mission Readiness programs, including the U.S. Customs and Border Protection P-3 (CBP P-3) program.

Year to Date

Year to date 2021 sales decreased $1.2 billion, or 22 percent, primarily due to a $1.1 billion reduction in sales related to the IT services divestiture. Year to date 2021 organic sales decreased $104 million, or 2 percent, principally due to the close-out of Lake City, partially offset by higher volume on several programs including the Guided Missile Launch Rocket System, Republic of Korea Global Hawk Contractor Logistics Support (ROK Global Hawk CLS), CBP P-3, B-2 sustainment and advanced fuzes.

Operating Income

Current Quarter

Third quarter 2021 operating income decreased $42 million, or 19 percent, primarily due to the impact of the IT services divestiture. Operating margin rate increased to 12.4 percent from 11.7 percent and reflects improved performance at Battle Management and Missile Systems due to changes in mix as a result of recent contract completions, partially offset by lower net favorable EAC adjustments.

Year to Date

Year to date 2021 operating income decreased $103 million, or 16 percent, primarily due to the impact of the IT services divestiture. Operating margin rate increased to 12.0 percent from 11.2 percent primarily due to improved performance at Battle Management and Missile Systems and lower net favorable EAC adjustments as described above.

-28-

Table of Contents

NORTHROP GRUMMAN CORPORATION

MISSION SYSTEMS			Three Months Ended September 30												%						Nine Months Ended September 30												%
$ in millions			2021						2020						Change						2021						2020						Change
Sales			$	2,436					$	2,551					(5)		%				$	7,613					$	7,344					4		%
Operating income			372						370						1		%				1,177						1,070						10		%
Operating margin rate			15.3		%				14.5		%										15.5		%				14.6		%

Sales

Current Quarter

Third quarter 2021 sales decreased $115 million, or 5 percent, due to a $133 million reduction in sales related to the IT services divestiture. Third quarter 2021 organic sales increased $18 million, or 1 percent. Navigation, Targeting and Survivability sales increased primarily due to higher intercompany volume on the ramp up of the Ground Based Strategic Deterrent (GBSD) program. Maritime/Land Systems and Sensors sales increased principally due to higher volume on land systems, including the Ground/Air Task-Oriented Radar (G/ATOR) program. Networked Information Solutions sales decreased primarily due to lower volume on F-35 and restricted programs, partially offset by higher volume on the Joint Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (JCREW) program.

Year to Date

Year to date 2021 sales increased $269 million, or 4 percent, due to higher volume across the sector, partially offset by a $352 million reduction in sales related to the IT services divestiture. Year to date 2021 organic sales increased $621 million, or 9 percent. Maritime/Land Systems and Sensors sales increased primarily due to higher volume on land systems, including G/ATOR, and higher marine systems, restricted and international volume. Navigation, Targeting and Survivability sales increased principally due to higher intercompany volume on GBSD ramp up as well as higher volume on infrared countermeasures and targeting programs. Airborne Multifunction Sensors sales increased principally due to higher airborne radar volume, including on the Scalable Agile Beam Radar (SABR) program, and higher restricted volume. Networked Information Solutions sales increased principally due to higher volume on electronic warfare programs, including JCREW.

Operating Income

Current Quarter

Third quarter 2021 operating income was consistent with the prior year period and reflects a higher operating margin rate and lower sales. Operating margin rate increased to 15.3 percent from 14.5 percent principally due to improved performance and changes in contract mix toward more fixed-price content, largely as a result of the IT services divestiture, partially offset by lower net favorable EAC adjustments.

Year to Date

Year to date 2021 operating income increased $107 million, or 10 percent, due to higher sales volume and a higher operating margin rate. Operating margin rate increased to 15.5 percent from 14.6 percent and reflects improved performance, the favorable resolution of certain government accounting matters in the second quarter of 2021 and mix changes largely related to the IT services divestiture, as discussed above.

SPACE SYSTEMS			Three Months Ended September 30												%						Nine Months Ended September 30												%
$ in millions			2021						2020						Change						2021						2020						Change
Sales			$	2,681					$	2,198					22		%				$	7,950					$	6,194					28		%
Operating income			288						224						29		%				865						635						36		%
Operating margin rate			10.7		%				10.2		%										10.9		%				10.3		%

Sales

Current Quarter

Third quarter 2021 sales increased $483 million, or 22 percent, due to higher sales in both the Launch & Strategic Missiles and Space business areas, partially offset by a $48 million reduction in sales related to the IT services divestiture. Third quarter 2021 organic sales increased $531 million, or 25 percent. Launch & Strategic Missiles sales increased primarily due to ramp-up on development programs, such as GBSD and the Next Generation Interceptor (NGI) program. Space sales were driven by higher volume on restricted programs.

-29-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Year to Date

Year to date 2021 sales increased $1.8 billion, or 28 percent, due to higher sales in both the Launch & Strategic Missiles and Space business areas, partially offset by a $119 million reduction in sales related to the IT services divestiture. Year to date 2021 organic sales increased $1.9 billion, or 31 percent. Launch & Strategic Missiles sales increased primarily due to ramp-up on development programs, such as GBSD and NGI, as well as higher volume on hypersonics and Commercial Resupply Services (CRS) programs. Space sales were driven by higher volume on restricted programs, Artemis and the Next Generation Overhead Persistent Infrared (Next Gen OPIR) program.

Operating Income

Current Quarter

Third quarter 2021 operating income increased $64 million, or 29 percent, due to higher sales volume and a higher operating margin rate. Operating margin rate increased to 10.7 percent from 10.2 percent principally due to higher net favorable EAC adjustments, which were largely driven by improved performance on restricted programs.

Year to Date

Year to date 2021 operating income increased $230 million, or 36 percent, due to higher sales volume and a higher operating margin rate. Operating margin rate increased to 10.9 percent from 10.3 percent primarily due to higher net favorable EAC adjustments, which were largely driven by improved performance on commercial space programs and the first quarter 2021 reduction in overhead rates.

PRODUCT AND SERVICE ANALYSIS

The following table presents product and service sales and operating costs and expenses by segment:

			Three Months Ended September 30															Nine Months Ended September 30
$ in millions			2021						2020									2021						2020
Segment Information:			Sales			Operating Costs and Expenses			Sales			Operating Costs and Expenses						Sales			Operating Costs and Expenses			Sales			Operating Costs and Expenses
Aeronautics Systems
Product			$	2,233		$	2,023		$	2,469		$	2,231					$	7,241		$	6,527		$	7,390		$	6,677
Service			444			393			415			362						1,250			1,104			1,207			1,062
Intersegment eliminations			48			44			30			27						137			124			85			76
Total Aeronautics Systems			2,725			2,460			2,914			2,620						8,628			7,755			8,682			7,815
Defense Systems
Product			618			532			735			661						1,939			1,687			2,258			2,041
Service			585			523			933			812						1,873			1,664			2,826			2,469
Intersegment eliminations			206			179			191			169						586			518			542			484
Total Defense Systems			1,409			1,234			1,859			1,642						4,398			3,869			5,626			4,994
Mission Systems
Product			1,766			1,498			1,735			1,506						5,300			4,506			4,889			4,168
Service			426			354			623			511						1,578			1,302			1,902			1,635
Intersegment eliminations			244			212			193			164						735			628			553			471
Total Mission Systems			2,436			2,064			2,551			2,181						7,613			6,436			7,344			6,274
Space Systems
Product			2,228			1,991			1,728			1,550						6,580			5,865			4,788			4,277
Service			420			371			445			401						1,267			1,126			1,327			1,211
Intersegment eliminations			33			31			25			23						103			94			79			71
Total Space Systems			2,681			2,393			2,198			1,974						7,950			7,085			6,194			5,559
Segment Totals
Total Product			$	6,845		$	6,044		$	6,667		$	5,948					$	21,060		$	18,585		$	19,325		$	17,163
Total Service			1,875			1,641			2,416			2,086						5,968			5,196			7,262			6,377
Total Segment**(1)**			$	8,720		$	7,685		$	9,083		$	8,034					$	27,028		$	23,781		$	26,587		$	23,540

(1)A reconciliation of segment operating income to total operating income is included in “Segment Operating Results.”

-30-

Table of Contents

NORTHROP GRUMMAN CORPORATION

Product Sales and Costs

Current Quarter

Third quarter 2021 product sales increased $178 million, or 3 percent, primarily due to an increase in product sales at Space Systems, partially offset by decreases in product sales at Aeronautics Systems and Defense Systems. The increase at Space Systems was principally due to ramp-up on GBSD and NGI. The decrease at Aeronautics Systems was driven by lower volume on restricted programs and F-35. The decrease at Defense Systems was primarily driven by the close-out of Lake City.

Third quarter 2021 product costs increased $96 million, or 2 percent, consistent with the increase in product sales above.

Year to Date

Year to date 2021 product sales increased $1.7 billion, or 9 percent, principally due to an increase in product sales at Space Systems and Mission Systems, partially offset by a decrease at Defense Systems. The increase at Space Systems was primarily driven by higher volume on GBSD, restricted programs, Artemis, Next Gen OPIR and NGI. The increase at Mission Systems was driven by higher volume across the sector. The decrease at Defense Systems was primarily driven by the close-out of Lake City.

Year to date 2021 product costs increased $1.4 billion, or 8 percent, consistent with the higher product sales described above.

Service Sales and Costs

Current Quarter

Third quarter 2021 service sales decreased $541 million, or 22 percent, primarily due to the IT services divestiture. Third quarter 2020 sales from the IT services business, which were largely included in service sales, were $602 million. The reductions associated with the IT services divestiture were partially offset by higher volume on the CBP P-3 program at Defense Systems.

Third quarter 2021 service costs decreased $445 million, or 21 percent, consistent with the lower service sales above.

Year to Date

Year to date 2021 service sales decreased $1.3 billion, or 18 percent, primarily due to the IT services divestiture. Year to date 2021 sales from the IT services business, which were largely included in service sales, were $162 million as compared to $1.7 billion in the prior year period. The reductions associated with the IT services divestiture were partially offset by higher volume on the ROK Global Hawk CLS and CBP P-3 programs at Defense Systems.

Year to date 2021 service costs decreased $1.2 billion, or 19 percent, consistent with the lower services sales described above.

BACKLOG

Backlog represents the future sales we expect to recognize on firm orders received by the company and is equivalent to the company’s remaining performance obligations at the end of each period. It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog. Unexercised contract options and indefinite delivery indefinite quantity (IDIQ) contracts are not included in backlog until the time an option or IDIQ task order is exercised or awarded. Backlog is converted into sales as costs are incurred or deliveries are made.

Backlog consisted of the following as of September 30, 2021 and December 31, 2020:

						September 30, 2021																		December 31, 2020
$ in millions						Funded						Unfunded						Total Backlog						Total Backlog						% Change in 2021
Aeronautics Systems						$	9,115					$	9,938					$	19,053					$	24,002					(21)		%
Defense Systems						5,786						529						6,315						8,131						(22)		%
Mission Systems						9,375						3,942						13,317						13,805						(4)		%
Space Systems						6,003						30,137						36,140						35,031						3		%
Total backlog						$	30,279					$	44,546					$	74,825					$	80,969					(8)		%

-31-

Table of Contents

NORTHROP GRUMMAN CORPORATION

New Awards

Third quarter and year to date 2021 net awards totaled $6.9 billion and $22.3 billion, respectively, and backlog totaled $74.8 billion. Significant third quarter new awards include $1.8 billion for restricted programs, principally at Space and Mission Systems, $0.9 billion for NASA’s Habitation and Logistics Outpost (HALO) module and $0.5 billion for F-35. In connection with the IT services divestiture, the company reduced backlog by $1.4 billion during the first quarter of 2021 ($1.0 billion at Defense Systems, $0.2 billion at Mission Systems and $0.2 billion at Space Systems).

LIQUIDITY AND CAPITAL RESOURCES

We endeavor to ensure efficient conversion of operating income into cash and to increase shareholder value through cash deployment activities. In addition to our cash position, we use various financial measures to assist in capital deployment decision-making, including cash provided by operating activities and adjusted free cash flow, a non-GAAP measure described in more detail below.

At September 30, 2021, we had $4.1 billion in cash and cash equivalents. Effective January 30, 2021, we completed the IT services divestiture for $3.4 billion cash. Proceeds were primarily used in the first quarter of 2021 for a $2.0 billion accelerated share repurchase and to fund redemption of $1.5 billion of the company’s 2.55 percent unsecured notes due October 2022. In April 2021, we renewed our one-year $500 million uncommitted credit facility.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) established a program with provisions to allow U.S. companies to defer the employer’s portion of social security taxes between March 27, 2020 and December 31, 2020 and pay such taxes in two installments in 2021 and 2022. Our first installment of deferred social security taxes of approximately $200 million is due in the fourth quarter of 2021. Under Section 3610, the CARES Act also authorized the government to reimburse qualifying contractors for certain costs of providing paid leave to employees as a result of COVID-19. The company continues to seek, and anticipates continuing to seek, recovery for certain COVID-19-related costs under Section 3610 of the CARES Act and through our contract provisions, though it is unclear how much we will be able to recover. In addition, the U.S. Department of Defense (DoD) has, to date, taken steps to increase the rate for certain progress payments from 80 percent to 90 percent for costs incurred and work performed on relevant contracts.

Cash and cash equivalents and cash generated from operating activities, supplemented by borrowings under credit facilities, commercial paper and/or in the capital markets, if needed, are expected to be sufficient to fund our operations for at least the next 12 months.

Operating Cash Flow

The table below summarizes key components of cash flow provided by operating activities:

															Nine Months Ended September 30												%
$ in millions																					2021						2020						Change
Net earnings																					$	4,295					$	2,859					50		%
Gain on sale of business																					(1,980)						—						NM
Non-cash items(1)																					56						740						(92)		%
Pension and OPB contributions																					(108)						(100)						8		%
Changes in trade working capital																					(124)						(816)						(85)		%
Other, net																					(14)						20						(170)		%
Net cash provided by operating activities																					$	2,125					$	2,703					(21)		%

(1)Includes depreciation and amortization, non-cash lease expense, stock based compensation expense, deferred income taxes and net periodic pension and OPB income.

Year to date 2021 cash provided by operating activities decreased $578 million principally due to $588 million of federal and state taxes paid in connection with the IT services divestiture.

Adjusted Free Cash Flow

Adjusted free cash flow, as reconciled in the table below, is a non-GAAP measure defined as net cash provided by or used in operating activities less capital expenditures, plus proceeds from the sale of equipment to a customer (not otherwise included in net cash provided by or used in operating activities) and the after-tax impact of discretionary

-32-

Table of Contents

NORTHROP GRUMMAN CORPORATION

pension contributions. Adjusted free cash flow includes proceeds from the sale of equipment to a customer as such proceeds were generated in a customer sales transaction. It also includes the after-tax impact of discretionary pension contributions for consistency and comparability of financial performance. This measure may not be defined and calculated by other companies in the same manner. We use adjusted free cash flow as a key factor in our planning for, and consideration of, acquisitions, the payment of dividends and stock repurchases. This non-GAAP measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with GAAP.

The table below reconciles net cash provided by operating activities to adjusted free cash flow:

															Nine Months Ended September 30												%
$ in millions																					2021						2020						Change
Net cash provided by operating activities																					$	2,125					$	2,703					(21)		%
Capital expenditures																					(682)						(828)						(18)		%
Proceeds from sale of equipment to a customer																					84						—						NM
Adjusted free cash flow																					$	1,527					$	1,875					(19)		%

Year to date 2021 adjusted free cash flow decreased $348 million due to lower net cash provided by operating activities, partially offset by a decrease in capital expenditures and the receipt of additional proceeds from the fourth quarter 2020 sale of equipment to a customer.

Investing Cash Flow

Year to date 2021 net cash provided by investing activities was $2.8 billion compared to net cash used in investing activities of $828 million in the prior year period, principally due to $3.4 billion in cash received from the sale of our IT services business during the first quarter of 2021.

Financing Cash Flow

Year to date 2021 net cash used in financing activities was $5.8 billion compared to net cash provided by financing activities of $875 million in the prior year period, principally due to $2.7 billion of share repurchases, $2.2 billion in debt repayments and $737 million of dividends paid in the current year period as compared to $2.2 billion of net proceeds from the issuance of long-term debt, $490 million of share repurchases and $711 million of dividends paid in the prior year period.

Credit Facilities, Commercial Paper and Financial Arrangements - See Note 6 to the financial statements for further information on our credit facilities, commercial paper and our use of standby letters of credit and guarantees.

Share Repurchases - See Note 2 to the financial statements for further information on our share repurchase programs.

Long-term Debt - See Note 4 to the financial statements for further information.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

There have been no material changes to our critical accounting policies, estimates or judgments from those discussed in our 2020 Annual Report on Form 10-K.

ACCOUNTING STANDARDS UPDATES

See Note 1 to our financial statements for further information on accounting standards updates.

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

This Form 10-Q and the information we are incorporating by reference contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “project,” “forecast,” “believe,” “estimate,” “outlook,” “trends,” “goals” and similar expressions generally identify these forward-looking statements. Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and/or cash flows. Forward-looking statements are based upon assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these

-33-

Table of Contents

NORTHROP GRUMMAN CORPORATION

forward-looking statements include, but are not limited to, those identified and discussed more fully in the section entitled “Risk Factors” in our 2020 Annual Report on Form 10-K and from time to time in our other filings with the Securities and Exchange Commission (SEC). These risks and uncertainties are amplified by the global COVID-19 pandemic and the related effects on the broader economic environment, which have caused and will continue to cause significant challenges, instability and uncertainty. They include:

• the impact of the COVID-19 pandemic (or future health epidemics, pandemics or similar outbreaks), and the related effects on the broader economic environment, on our business, including our ability to maintain a qualified workforce, the potential for worker absenteeism and leave taking, facility closures, work slowdowns or stoppages, labor shortages, supply chain challenges, evolving and varying government requirements, including related to a vaccine mandate, additional costs and liabilities for which we are not compensated, performance challenges, program delays, our ability to recover costs under contracts, changing government funding and acquisition priorities and processes, changing government payment rules and practices, insurance challenges, and potential impacts on access to capital, the markets and the fair value of our assets

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

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

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

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

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

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

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

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

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

• increased competition within our markets and bid protests

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

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

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

• natural disasters

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

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

• the future investment performance of plan assets, changes in actuarial assumptions associated with our pension and other postretirement benefit plans and legislative or other regulatory actions impacting our pension and postretirement benefit obligations

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

-34-

Table of Contents

NORTHROP GRUMMAN CORPORATION

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

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

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

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

CONTRACTUAL OBLIGATIONS

There have been no material changes to our contractual obligations from those discussed in our 2020 Annual Report on Form 10-K.