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News ReleaseContact:
Katie Young (Media)
908-520-9948
 
katherine.young@ngc.com
 
 Todd Ernst (Investors)
 
703-280-4535
 todd.ernst@ngc.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
•Backlog grows to new company record of $95.7 billion driven by full year book to bill of 1.10
•Q4 sales increase 10 percent to $11.7 billion; 2025 sales of $42.0 billion
•Q4 operating income increases 17 percent to $1.3 billion; OM rate of 10.9 percent
•Q4 segment operating income1 increases 10 percent; segment OM rate1 of 11.2 percent
•2025 diluted earnings per share (EPS) of $29.08; MTM-adjusted EPS1 of $26.34
•2025 operating cash flow of $4.8 billion; free cash flow1 of $3.3 billion
•2026 financial guidance projects mid-single digit sales growth and continued strong performance and free cash flow1 consistent with the outlook provided in October

FALLS CHURCH, Va. – January 27, 2026 – Northrop Grumman Corporation (NYSE: NOC) reported fourth quarter 2025 sales increased 10 percent to $11.7 billion, as compared with $10.7 billion in the fourth quarter of 2024. Sales increased 2 percent to $42.0 billion in 2025, as compared with $41.0 billion in 2024. Organic sales1 increased 3 percent to $41.8 billion in 2025, as compared with $40.7 billion in 2024.
Fourth quarter 2025 net earnings totaled $1.4 billion, or $9.99 per diluted share, and 2025 net earnings were $4.2 billion, or $29.08 per diluted share. Excluding the after-tax mark-to-market (MTM) benefit of $394 million, fourth quarter 2025 MTM-adjusted net earnings1 totaled $1.0 billion, or $7.23 per diluted share, and 2025 MTM-adjusted net earnings1 totaled $3.8 billion, or $26.34 per diluted share.
“We delivered outstanding results in 2025 through strong performance and a laser focus on our customers’ and stakeholders’ highest priorities,” said Kathy Warden, chair, chief executive officer and president. “Investments in anticipation of our customers’ requirements and ability to deliver differentiating technology at speed and scale position us well to continue to meet the moment for our nation and our partners around the globe. Our record backlog supports our 2026 outlook of mid-single digit sales growth and we are confident in our ability to deliver continued strong performance.”
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
2
MTM-adjusted Net Earnings and EPS1
Net earnings for the fourth quarter and full year 2025 were increased by a $394 million after-tax MTM benefit. The MTM benefit relates to pension and other post-retirement benefits (OPB) actuarial gains and losses, which the company recognizes immediately through earnings upon annual remeasurement of the assets and projected benefit obligations of our pension and OPB plans. MTM-adjusted earnings1 and EPS1 are the measures the company uses to compare performance to prior periods and for EPS guidance.
The table below reconciles net earnings and diluted EPS to MTM-adjusted net earnings1 and MTM-adjusted diluted EPS1:
 Three Months Ended December 31Year Ended December 31
$ in millions, except per share amounts2025202420252024
MTM-adjusted net earnings
Net earnings
$1,427 $1,264 $4,182 $4,174 
MTM benefit(527)(443)(527)(443)
MTM-related deferred state tax expense2
28 23 28 23 
Federal tax expense of items above3
105 88 105 88 
MTM benefit, net of tax$(394)$(332)$(394)$(332)
MTM-adjusted net earnings1
$1,033 $932 $3,788 $3,842 
MTM-adjusted per share data
Diluted EPS
$9.99 $8.66 $29.08 $28.34 
MTM benefit per share(3.69)(3.03)(3.66)(3.02)
MTM-related deferred state tax expense per share2
0.20 0.16 0.19 0.16 
Federal tax expense of items above per share3
0.73 0.60 0.73 0.60 
MTM benefit, net of tax, per share$(2.76)$(2.27)$(2.74)$(2.26)
MTM-adjusted diluted EPS1
$7.23 $6.39 $26.34 $26.08 
1 Non-GAAP measure — see definitions at the end of this earnings release.
2 
The deferred state tax impact in each period was calculated using the company’s blended state tax rate of 5.25 percent.
3 
The federal tax impact in each period was calculated by subtracting the deferred state tax impact from MTM benefit and applying the 21 percent federal statutory rate.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
3

Consolidated Operating Results and Cash Flows
Three Months Ended December 31Year Ended December 31
$ in millions, except per share amounts20252024Change20252024Change
Sales
Aeronautics Systems$3,922 $3,331 18 %$12,992 $12,396 5 %
Defense Systems2,147 2,003 7 %8,002 7,399 8 %
Mission Systems3,449 3,144 10 %12,506 11,399 10 %
Space Systems2,859 2,710 5 %10,771 11,731 (8)%
Intersegment eliminations(665)(502)(2,317)(1,892)
Total sales11,712 10,686 10 %41,954 41,033 2 %
Operating income
Aeronautics Systems370 309 20 %813 1,236 (34)%
Defense Systems205 209 (2)%871 716 22 %
Mission Systems510 469 9 %1,827 1,598 14 %
Space Systems322 275 17 %1,183 1,254 (6)%
Intersegment eliminations(94)(69)(317)(260)
Segment operating income1
1,313 1,193 10 %4,377 4,544 (4)%
Segment operating margin rate1
11.2%11.2%— bps10.4%11.1%(70) bps
FAS/CAS operating adjustment65 8 713 %258 40 545 %
Unallocated corporate expense:
Gain on sale of business— — — %231 — NM
Training services divestiture - unallowable state taxes and transaction costs— (3)NM(20)(5)300 %
Intangible asset amortization and PP&E step-up depreciation(21)(25)(16)%(84)(97)(13)%
MTM-related deferred state tax expense
(28)(23)22 %(28)(23)22 %
Other unallocated corporate expense(58)(61)(5)%(223)(89)151 %
Unallocated corporate expense(107)(112)(4)%(124)(214)(42)%
Total operating income
$1,271 $1,089 17 %$4,511 $4,370 3 %
Operating margin rate10.9%10.2%70 bps10.8%10.6%20 bps
Interest expense(175)(160)9 %(665)(621)7 %
Non-operating FAS pension benefit138 153 (10)%541 656 (18)%
Mark-to-market pension and OPB benefit
527 443 19 %527 443 19 %
Other, net(21)26 NM154 168 (8)%
Earnings before income taxes
1,740 1,551 12 %5,068 5,016 1 %
Federal and foreign income tax expense
313 287 9 %886 842 5 %
Effective income tax rate18.0%18.5%(50) bps17.5%16.8%70 bps
Net earnings
$1,427 $1,264 13 %$4,182 $4,174 — %
Diluted earnings per share
9.99 8.66 15 %29.08 28.34 3 %
Weighted-average diluted shares outstanding, in millions142.9 145.9 (2)%143.8 147.3 (2)%
Net cash provided by operating activities$3,897 $2,578 51 %$4,757 $4,388 8 %
Capital expenditures(662)(816)(19)%(1,450)(1,767)(18)%
Free cash flow1
$3,235 $1,762 84 %$3,307 $2,621 26 %
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
4

Sales
Three Months Ended December 31%Year Ended December 31%
$ in millions
20252024Change20252024Change
Sales$11,712 $10,686 10 %$41,954 $41,033 2 %
Less: Training services sales
— (78)(112)(304)
Organic sales1
$11,712 $10,608 10 %$41,842 $40,729 3 %
Fourth quarter 2025 sales increased $1.0 billion, or 10 percent, due to higher sales of $591 million at Aeronautics Systems, $305 million at Mission Systems, $149 million at Space Systems and $144 million at Defense Systems, net of a $78 million reduction related to the training services divestiture, partially offset by $163 million of higher intercompany eliminations.
2025 sales increased $921 million, or 2 percent, due to higher sales of $1.1 billion at Mission Systems, $603 million at Defense Systems, net of a $192 million reduction related to the training services divestiture, and $596 million at Aeronautics Systems. These increases were partially offset by $960 million of lower sales at Space Systems, largely due to a $738 million sales reduction associated with wind-down of work on the restricted space and NGI programs, and $425 million of higher intercompany eliminations.
Operating Income and Margin Rate
Fourth quarter 2025 operating income increased $182 million, or 17 percent, primarily due to a $120 million increase in segment operating income and a $57 million increase in the FAS/CAS operating adjustment. Operating margin rate increased to 10.9 percent from 10.2 percent reflecting the items above.
2025 operating income increased $141 million, or 3 percent, primarily due to a $231 million pre-tax gain on sale for the training services divestiture and a $218 million increase in the FAS/CAS operating adjustment. These increases were partially offset by a $167 million decrease in segment operating income, primarily driven by $423 million of lower operating income at Aeronautics Systems reflecting the first quarter B-21 loss provision, and a $126 million increase in non-divestiture-related unallocated corporate expense largely driven by higher deferred state tax expense. 2025 operating margin rate increased to 10.8 percent from 10.6 percent reflecting the items above.
Segment Operating Income and Margin Rate1
Fourth quarter 2025 segment operating income1 increased $120 million, or 10 percent, primarily due to higher operating income of $61 million at Aeronautics Systems, $47 million at Space Systems and $41 million at Mission Systems. Segment operating margin rate1 of 11.2 percent was comparable to the prior year and reflects a higher operating margin rate at Space Systems, partially offset by a lower operating margin rate at Defense Systems.
2025 segment operating income1 decreased $167 million, or 4 percent, primarily due to the $423 million of lower operating income at Aeronautics Systems described above and $71 million of lower operating income at Space Systems, partially offset by higher operating income of $229 million at Mission Systems and $155 million at Defense Systems. Segment operating margin rate1 decreased to 10.4 percent primarily due to the B-21 loss provision at Aeronautics Systems, partially offset by higher operating margin rates at Defense Systems, Mission Systems and Space Systems.
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
5

Federal and Foreign Income Taxes
In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. The company recognized the income tax effects of the OBBBA in its 2025 financial statements.
Fourth quarter 2025 income tax expense increased $26 million, or 9 percent, due to higher earnings before taxes, partially offset by a lower effective tax rate (ETR). The fourth quarter 2025 ETR decreased to 18.0 percent from 18.5 percent primarily due to lower interest expense on unrecognized tax benefits and higher benefits from foreign derived intangible income, partially offset by lower research credits, principally due to enactment of the OBBBA, and a larger ETR impact associated with the MTM adjustment. The 2025 MTM benefit increased the fourth quarter 2025 ETR by 1.2 percentage points, whereas the prior year MTM benefit increased the fourth quarter 2024 ETR by 0.9 percentage points.
2025 income tax expense increased $44 million, or 5 percent, due to a higher ETR and higher earnings before income taxes. The 2025 ETR increased to 17.5 percent from 16.8 percent in 2024 primarily due to a net reduction in tax reserves in the prior year, lower research credits principally due to enactment of the OBBBA, and additional income tax expense related to nondeductible goodwill in the divested training services business. These increases were partially offset by lower interest expense on unrecognized tax benefits. The MTM benefit in both 2025 and 2024 increased each respective year’s ETR by 0.4 percentage points.
Net Earnings
Fourth quarter 2025 net earnings increased $163 million, or 13 percent, primarily due to the $182 million increase in operating income described above and an $84 million increase in our MTM benefit, partially offset by a $47 million decrease in Other, net driven by lower returns on our marketable securities and a $26 million increase in income tax expense.
2025 net earnings were comparable to the prior year and reflect the $141 million increase in operating income described above and an $84 million increase in our MTM benefit, partially offset by a $115 million decrease in the non-operating FAS pension benefit, $44 million of higher interest expense and a $44 million increase in income tax expense.
Cash Flows
Fourth quarter 2025 net cash provided by operating activities increased $1.3 billion as compared with the same period in 2024 primarily due to a $1.1 billion decrease in net tax payments. Fourth quarter 2025 free cash flow1 increased $1.5 billion, or 84 percent, due to an increase in net cash provided by operating activities and lower capital expenditures. Fourth quarter 2025 capital expenditures totaled 5.7 percent of sales.
2025 cash provided by operating activities increased $369 million, or 8 percent, primarily due to $149 million of lower net cash tax payments and improvements in trade working capital. 2025 free cash flow1 increased $686 million, or 26 percent, due to higher net cash provided by operating activities as well as lower capital expenditures. 2025 capital expenditures totaled 3.5 percent of sales.
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
6

Awards and Backlog
Fourth quarter 2025 and year to date 2025 net awards totaled $15.9 billion and $46.3 billion, respectively, and backlog totaled $95.7 billion. Significant fourth quarter new awards include $4.0 billion for restricted programs (primarily at Aeronautics Systems, Space Systems and Mission Systems), $1.3 billion for F-35 (at Aeronautics Systems and Mission Systems), $2.5 billion for Graphite Epoxy Motor 63 (GEM 63), $0.9 billion for Virginia Class submarines and $0.8 billion for Space Development Agency (SDA) Tranche 3 Tracking Layer.
Significant 2025 new awards include $14.8 billion for restricted programs (primarily at Aeronautics Systems, Space Systems, and Mission Systems), $3.3 billion for F-35 (at Mission Systems and Aeronautics Systems), $2.5 billion for GEM 63, $1.8 billion for Ground-based Midcourse Defense Weapon System (GWS), and $1.3 billion for Virginia Class submarines.
Segment Operating Results
Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. This realignment is reflected in the financial information contained in this report.
AERONAUTICS SYSTEMS
Three Months Ended December 31%Year Ended December 31
%
$ in millions20252024Change20252024Change
Sales$3,922$3,33118 %$12,992$12,3965 %
Operating income
37030920 %8131,236(34)%
Operating margin rate9.4 %9.3 %6.3 %10.0 %
Sales
Fourth quarter 2025 sales increased $591 million, or 18 percent, primarily due to a $274 million increase on the F-35 program largely driven by materials volume, a $153 million increase on the E-130J TACAMO (“TACAMO”) program as it ramps up, and higher volume on the B-21 and E-2 programs.
2025 sales increased $596 million, or 5 percent, primarily due to a $385 million increase on F-35 largely driven by material volume, a $379 million increase on TACAMO as that program ramps, and higher volume on the E-2 and B-21 programs. These increases were partially offset by lower sales on other restricted programs and a $106 million decrease on F/A-18 as final production deliveries were completed.
Operating Income
Fourth quarter 2025 operating income increased $61 million, or 20 percent, primarily due to higher sales. Operating margin rate of 9.4 percent was comparable to the prior year. Each of the fourth quarters in 2025 and 2024 include operating margin rate impacts from higher B-21 sales related to the exercise of LRIP contract options.
2025 operating income decreased $423 million and operating margin rate decreased to 6.3 percent primarily due to a $477 million loss provision recorded on the LRIP phase of the B-21 program in the first quarter of 2025. This was partially offset by higher net EAC adjustments across the portfolio.
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
7

DEFENSE SYSTEMS
Three Months Ended December 31%Year Ended December 31
%
$ in millions20252024Change20252024Change
Sales$2,147$2,0037 %$8,002$7,3998 %
Less: Training services sales
—(78)(112)(304)
Organic sales1
$2,147$1,92512 %$7,890$7,09511 %
Operating income$205 $209 (2)%$871 $716 22 %
Operating margin rate9.5 %10.4 %10.9 %9.7 %
Sales
Fourth quarter 2025 sales increased $144 million, or 7 percent, primarily due to higher volume due to the timing of materials on the Guided Multiple Launch Rocket System (GMLRS), increased volume from new awards across the Integrated Battle Command System (IBCS) program portfolio, higher volume on Sentinel as that program continues to ramp, and higher volume on armament programs, including military ammunition programs. These increases were partially offset by a reduction in sales related to the divested training services business.
2025 sales increased $603 million, or 8 percent, primarily due to a $224 million increase on Sentinel as that program continues to ramp, a $185 million increase on armament programs, including military ammunition programs, a $153 million increase in sales from new awards across the IBCS program portfolio, and higher volume due to material timing on the GMLRS program. These increases were partially offset by a $192 million reduction in sales related to the divested training services business.
Operating Income
Fourth quarter 2025 operating income decreased $4 million, or 2 percent, due to a lower operating margin rate, partially offset by higher sales. Operating margin rate decreased to 9.5 percent from 10.4 percent principally due to lower net EAC adjustments.
2025 operating income increased $155 million, or 22 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 10.9 percent from 9.7 percent primarily due to higher net EAC adjustments, including a $76 million favorable EAC adjustment on the Sentinel program during the second quarter of 2025.
MISSION SYSTEMS
Three Months Ended December 31%Year Ended December 31
%
$ in millions20252024Change20252024Change
Sales$3,449$3,14410 %$12,506$11,39910 %
Operating income5104699 %1,8271,59814 %
Operating margin rate14.8 %14.9 %14.6 %14.0 %
Sales
Fourth quarter 2025 sales increased $305 million, or 10 percent, primarily due to ramp-up on restricted airborne radar programs, as well as higher volume on F-35, the Surface Electronic Warfare Improvement Program (SEWIP) and international ground-based radar programs. These increases were partially offset by lower sales on restricted advanced microelectronics programs.
2025 sales increased $1.1 billion, or 10 percent, primarily due to continued ramp-up on restricted airborne radar programs, as well as higher sales of $161 million on marine systems programs, $141 million on international ground-based radar programs and $105 million on communications programs, as several programs ramp up following new awards.
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
8

Operating Income
Fourth quarter 2025 operating income increased $41 million, or 9 percent, primarily due to higher sales. Operating margin rate of 14.8 percent was comparable to the prior year. Lower net EAC adjustments were largely offset by favorable changes in contract mix driven by sales growth on programs with accretive margin rates.
2025 operating income increased $229 million, or 14 percent, due to higher sales and a higher operating margin rate. Operating margin rate increased to 14.6 percent from 14.0 percent primarily due to higher net EAC adjustments, including a $68 million favorable EAC adjustment recorded in the third quarter of 2025 in the restricted advanced microelectronics portfolio, partially offset by investments made by the sector in connection with restricted business opportunities during the first quarter of 2025.
SPACE SYSTEMS
Three Months Ended December 31%Year Ended December 31
%
$ in millions20252024Change20252024Change
Sales$2,859$2,7105 %$10,771$11,731(8)%
Operating income32227517 %1,1831,254(6)%
Operating margin rate11.3 %10.1 %11.0 %10.7 %
Sales
Fourth quarter 2025 sales increased $149 million, or 5 percent, primarily due to production ramp-up on the GEM 63 program, increased sales from new program awards in the restricted space portfolio, and higher volume on the Habitation and Logistics Outpost (HALO) program, partially offset by wind-down of work on the Next Generation Interceptor (NGI) program.
2025 sales decreased $960 million, or 8 percent, primarily due to wind-down of work on the restricted space and NGI programs, which reduced sales by $738 million, as well as a $172 million decrease for the SDA satellite programs due to the timing of materials and a $102 million decrease driven by lower volume on the SLS Booster program. These decreases were partially offset by a $168 million increase on GEM 63 and higher volume on HALO as those programs continue to ramp.
Operating Income
Fourth quarter 2025 operating income increased $47 million, or 17 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 11.3 percent from 10.1 percent principally due to higher net EAC adjustments and more favorable contract mix.
2025 operating income decreased $71 million, or 6 percent, due to lower sales, partially offset by a higher operating margin rate. Operating margin rate increased to 11.0 percent from 10.7 percent principally due to more favorable contract mix.
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
9

Guidance
    Financial guidance, as well as outlook, trends, expectations and other forward-looking statements provided by the company for 2026 and beyond, reflect the company's judgment based on the information available to the company at the time of this release. The company’s financial guidance and outlook for 2026 and beyond reflect what the company currently anticipates will be the impacts on the company from, among other factors, the global macroeconomic, security, and political/budget environments, including the impacts from inflationary pressures and labor and supply chain challenges; changes in the threat environment; changes in government budget, appropriations and procurement priorities and processes; changes in the regulatory environment, including trade policy and tax policy; and changes in support for our programs. We are not assuming, and the company’s financial guidance and outlook for 2026 and beyond do not reflect impacts on the company from, a prolonged government shutdown, or application of spending limits or other spending cuts. However, the company cannot predict how these factors will evolve or what impacts they will have, and there can be no assurance that the company’s current expectations or underlying assumptions are correct. These factors can affect the company’s ability to achieve guidance or meet expectations.
For additional factors that may impact the company’s ability to achieve guidance or meet expectations, please see the “Forward-Looking Statements” section in this release and our Form 10-K.
2026 Guidance
($ in millions, except per share amounts)
As of 1/27/2026
Sales$43,500 — $44,000
Segment operating income1
$4,850 — $5,000
MTM-adjusted EPS1
$27.40 — $27.90
Free cash flow1
$3,100 — $3,500
2026 Segment Guidance
As of 1/27/2026
Sales ($B)OM Rate %
Aeronautics SystemsMid $13Low to Mid 9%
Defense SystemsMid to High $8~10%
Mission SystemsHigh $12High 14%
Space Systems~$11~11%
Intersegment Eliminations
~($2.4)High 13%
1
Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
10

About Northrop Grumman
Northrop Grumman will webcast its earnings conference call at 9:30 a.m. Eastern Time on January 27, 2026. A live audio broadcast of the conference call will be available on the investor relations page of the company’s website at www.northropgrumman.com.
Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our employees define possible every day.

###

Forward-Looking Statements and Projections
This earnings release and the information we are incorporating by reference, and statements to be made on the earnings conference call, contain or may contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “strategy,” “project,” “forecast,” “achieve,” “believe,” “estimate,” “guidance,” “outlook,” “trends,” “goals,” “confident,” “on track” and similar expressions generally identify these forward-looking statements.
Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and/or cash flows, including financial guidance, outlook, trends, expectations and other forward-looking statements for 2026 and beyond. Forward-looking statements are based upon assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward-looking statements include, but are not limited to, those identified and discussed more fully in the section entitled “Risk Factors” in the Form 10-K for the year ended December 31, 2025, and from time to time in our other filings with the Securities and Exchange Commission (SEC). They include:
Industry and Economic Risks
•our dependence on the U.S. government for a substantial portion of our business
•significant delays or reductions in appropriations and/or for our programs, and U.S. government funding and program support more broadly, including as a result of a prolonged continuing resolution and/or government shutdown, and/or related to the global security environment or other global events
•significant delays or reductions in payments as a result of or related to a breach of the debt ceiling or a prolonged government shutdown
•the use of estimates when accounting for our contracts and the effect of contract cost growth and our efforts to recover or offset such costs and/or changes in estimated contract costs and revenues, including as a result of inflationary pressures, labor shortages, supply chain challenges, changes in trade policies and/or other macroeconomic factors, and risks related
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
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to management’s judgments and assumptions in estimating and/or projecting contract revenue and performance which may be inaccurate
•increased competition within our markets and bid protests
•continued pressures from macroeconomic trends, including on costs, schedules, performance and ability to meet expectations
Legal and Regulatory Risks
•investigations, claims, disputes, enforcement actions, litigation (including criminal, civil and administrative) and/or other legal proceedings
•changes in procurement and other laws, SEC, U.S. Department of War (DoW) and other rules and regulations, including changes through executive orders, contract terms and practices applicable to our industry, findings by the U.S. government as to our compliance with such requirements, more aggressive enforcement of such requirements and changes in our customers’ business practices and preferences globally
•the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate, including the impact on our reputation and our ability to do business
•environmental matters, unforeseen environmental costs and government and third-party claims
•unanticipated changes in our tax provisions or exposure to additional tax liabilities
Business and Operational Risks
•cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners, and changes in related regulations
•the performance and viability of our subcontractors and suppliers and the availability and pricing of raw materials, chemicals, parts and components, particularly with inflationary pressures, increased costs, shortages in labor and financial resources, supply chain disruptions, and extended material lead times
•our ability to attract and retain a qualified and talented workforce with the necessary security clearances to meet our performance obligations
•our exposure to additional risks as a result of our international business, including risks related to global security, geopolitical and economic factors, misconduct, suppliers, laws and regulations
•our ability to innovate, develop new products and technologies, progress and benefit from digital transformation and maintain technologies to meet the needs of our customers
•natural disasters, epidemics, pandemics and similar outbreaks and other significant disruptions
•products and services we provide related to hazardous and high risk operations, including the production and use of such products, which subject us to various environmental, regulatory, financial, reputational and other risks
•our ability appropriately to protect and exploit intellectual property rights
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
12

General and Other Risk Factors
•the adequacy and availability of, and ability to obtain, insurance coverage, customer indemnifications or other liability protections
•the future investment performance of plan assets, gains or losses associated with changes in valuation of marketable securities related to our non-qualified benefit plans, changes in actuarial assumptions associated with our pension and other postretirement benefit plans and legislative or other regulatory actions impacting our pension and postretirement benefit obligations
•changes in business conditions that could impact business investments and/or recorded goodwill or the value of other long-lived assets, and other potential future liabilities
You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of forward-looking statements. These forward-looking statements speak only as of the date this earnings release is first issued or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
This release and the attachments also contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the company’s use of these measures are included in this release or the attachments.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
13

SCHEDULE 1
NORTHROP GRUMMAN CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(Unaudited)


 Year Ended December 31
$ in millions, except per share amounts202520242023
Sales
Product$33,741 $32,726 $30,897 
Service8,213 8,307 8,393 
Total sales41,954 41,033 39,290 
Operating costs and expenses
Product27,280 26,188 26,226 
Service6,361 6,483 6,513 
General and administrative expenses4,033 3,992 4,014 
Total operating costs and expenses37,674 36,663 36,753 
Gain on sale of business231 — — 
Operating income4,511 4,370 2,537 
Other (expense) income
Interest expense(665)(621)(545)
Non-operating FAS pension benefit541 656 530 
Mark-to-market pension and OPB benefit (expense)527 443 (422)
Other, net154 168 246 
Earnings before income taxes5,068 5,016 2,346 
Federal and foreign income tax expense886 842 290 
Net earnings$4,182 $4,174 $2,056 
Basic earnings per share$29.14 $28.39 $13.57 
Weighted-average common shares outstanding, in millions143.5 147.0 151.5 
Diluted earnings per share$29.08 $28.34 $13.53 
Weighted-average diluted shares outstanding, in millions143.8 147.3 152.0 
Net earnings (from above)$4,182 $4,174 $2,056 
Other comprehensive income (loss), net of tax
Change in cumulative translation adjustment9 (2)23 
Change in other, net17 (22)2 
Other comprehensive income (loss), net of tax26 (24)25 
Comprehensive income$4,208 $4,150 $2,081 
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
14

SCHEDULE 2
NORTHROP GRUMMAN CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)

$ in millions, except par valueDecember 31, 2025December 31, 2024
Assets
Cash and cash equivalents$4,403 $4,353 
Accounts receivable, net1,375 1,272 
Unbilled receivables, net6,544 5,908 
Inventoried costs, net1,309 1,455 
Prepaid expenses and other current assets1,656 1,286 
Total current assets15,287 14,274 
Property, plant and equipment, net of accumulated depreciation of $9,648 for 2025 and $8,733 for 2024
10,972 10,536 
Operating lease right-of-use assets1,859 1,770 
Goodwill17,437 17,512 
Deferred tax assets1,051 1,599 
Pension and other postretirement benefit plan assets3,167 2,184 
Other non-current assets1,604 1,484 
Total assets$51,377 $49,359 
Liabilities
Trade accounts payable$3,240 $2,599 
Accrued employee compensation2,309 2,271 
Advance payments and billings in excess of costs incurred4,086 4,070 
Other current liabilities4,247 5,188 
Total current liabilities13,882 14,128 
Long-term debt, net of current portion of $534 for 2025 and $1,582 for 2024
15,162 14,692 
Pension and other postretirement benefit plan liabilities1,110 1,120 
Operating lease liabilities1,857 1,798 
Other non-current liabilities2,692 2,331 
Total liabilities34,703 34,069 
Shareholders’ equity
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding
— — 
Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2025—141,997,194 and 2024—144,952,026
142 145 
Paid-in capital— — 
Retained earnings16,658 15,297 
Accumulated other comprehensive loss(126)(152)
Total shareholders’ equity16,674 15,290 
Total liabilities and shareholders’ equity$51,377 $49,359 
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
15

SCHEDULE 3
NORTHROP GRUMMAN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Year Ended December 31
$ in millions202520242023
Operating activities
Net earnings$4,182 $4,174 $2,056 
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization1,472 1,370 1,338 
Stock-based compensation119 101 87 
Deferred income taxes548 (582)(988)
B-21 loss provisions
477 — 1,559 
Gain on sale of business(231)— — 
Mark-to-market pension and OPB (benefit) expense (527)(443)422 
Net periodic pension and OPB income(346)(438)(308)
Pension and OPB contributions(130)(129)(139)
Changes in assets and liabilities:
Accounts receivable, net(108)182 54 
Unbilled receivables, net(754)(215)247 
Inventoried costs, net97 (358)(220)
Prepaid expenses and other assets8 35 (86)
Trade accounts payable
646 485 (469)
Advance payments and billings in excess of costs incurred
19 (123)587 
Other liabilities
(212)(875)401 
Income taxes payable, net(559)1,143 (658)
Other operating activities56 61 (8)
Net cash provided by operating activities
4,757 4,388 3,875 
Investing activities
Capital expenditures(1,450)(1,767)(1,775)
Divestiture of training services business333 — — 
Proceeds from sale of minority investments— — 197 
Other investing activities(38)18 (4)
Net cash used in investing activities(1,155)(1,749)(1,582)
Financing activities
Net proceeds from issuance of long-term debt998 2,495 1,995 
Payments of long-term debt(1,500)— (1,050)
Common stock repurchases(1,624)(2,514)(1,500)
Cash dividends paid(1,293)(1,186)(1,116)
Payments of employee taxes withheld from share-based awards(39)(58)(52)
Other financing activities(94)(132)(38)
Net cash used in financing activities
(3,552)(1,395)(1,761)
Increase in cash and cash equivalents50 1,244 532 
Cash and cash equivalents, beginning of year4,353 3,109 2,577 
Cash and cash equivalents, end of period$4,403 $4,353 $3,109 
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
16

SCHEDULE 4
NORTHROP GRUMMAN CORPORATION
TOTAL BACKLOG
(Unaudited)


 December 31, 2025December 31, 2024
% Change in 2025
$ in millions
Funded1
Unfunded
Total
Backlog2
Total
Backlog2
Aeronautics Systems$12,585 $10,467 $23,052 $25,202 (9)%
Defense Systems8,610 19,186 27,796 26,614 4 %
Mission Systems13,251 5,381 18,632 16,443 13 %
Space Systems9,083 17,118 26,201 23,209 13 %
Total backlog$43,529 $52,152 $95,681 $91,468 5 %
1 Funded backlog represents firm orders for which funding is authorized and appropriated.
2 Total backlog excludes unexercised contract options and indefinite delivery, indefinite quantity (IDIQ) contracts until the time the option or IDIQ task order is exercised or awarded.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
17

SCHEDULE 5
NORTHROP GRUMMAN CORPORATION
SUPPLEMENTAL PER SHARE INFORMATION
(Unaudited)


Three Months Ended December 31Year Ended December 31
$ in millions, except per share amounts2025202420252024
Per share impact of total net FAS/CAS pension adjustment
FAS/CAS operating adjustment$65 $8 $258 $40 
Non-operating FAS pension benefit138 153 541 656 
Total net FAS/CAS pension adjustment203 161 799 696 
MTM pension and OPB benefit527 443 527 443 
Total pension-related benefit730 604 1,326 1,139 
Tax effect1
(183)(152)(333)(286)
After-tax impact$547 $452 $993 $853 
Weighted-average diluted shares outstanding, in millions142.9 145.9 143.8 147.3 
Per share impact$3.83 $3.10 $6.91 $5.79 
Per share impact of intangible asset amortization and PP&E step-up depreciation
Intangible asset amortization and PP&E step-up depreciation$(21)$(25)$(84)$(97)
Tax effect1
5 6 21 24 
After-tax impact$(16)$(19)$(63)$(73)
Weighted-average diluted shares outstanding, in millions142.9 145.9 143.8 147.3 
Per share impact$(0.11)$(0.13)$(0.44)$(0.50)
1Based on a 21% federal statutory tax rate and a 5.25% blended state tax rate.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Fourth Quarter and Full-Year 2025 Financial Results
18

Non-GAAP Financial Measures Disclosure: This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in the text of the release. Definitions for the non-GAAP measures are provided below and reconciliations are provided in the body of the release, except that reconciliations of forward-looking non-GAAP measures are not provided because the company is unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of certain items, including, but not limited to, the impact of any mark-to-market pension adjustment. Other companies may define these measures differently or may utilize different non-GAAP measures.
MTM-adjusted net earnings: Net earnings excluding MTM benefit (expense) and related tax impacts. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company’s underlying financial performance by presenting the company’s operating results before the non-operational impact of pension and OPB actuarial gains and losses. This measure is also consistent with how management views the underlying performance of the business as the impact of MTM accounting is not considered in management’s assessment of the company’s operating performance or in its determination of incentive compensation awards.
MTM-adjusted EPS: Diluted earnings per share excluding the per share impact of MTM benefit (expense) and related tax impacts. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company’s underlying financial performance by presenting the company’s diluted earnings per share results before the non-operational impact of pension and OPB actuarial gains and losses.
Segment operating income and segment operating margin rate: Segment operating income and segment operating margin rate (segment operating income divided by sales) reflect the combined operating income of our four segments less the operating income associated with intersegment sales. Segment operating income includes pension expense allocated to our sectors under FAR and CAS and excludes FAS pension service expense and unallocated corporate items. These measures may be useful to investors and other users of our financial statements as supplemental measures in evaluating the financial performance and operational trends of our sectors. These measures should not be considered in isolation or as alternatives to operating results presented in accordance with GAAP.
Free cash flow: Net cash provided by or used in operating activities less capital expenditures. We use free cash flow as a key factor in our planning for, and consideration of, acquisitions, the payment of dividends and stock repurchases. This measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with GAAP.
Organic sales: Total sales excluding sales attributable to the company’s former training services business. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company’s underlying sales growth as well as in understanding our ongoing business and future sales trends by presenting the company’s sales adjusted for the impact of the divestiture.

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