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Northrop Grumman Northrop Grumman

Aerospace Systems
J uly 2014
Forward Looking Statements
This presentation contains statements, other than statements of historical fact, that constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, intend, may, could, plan, project,
forecast, believe, estimate, outlook, "anticipate, trends, guidance, "goals," and similar expressions generally identify these
forward-looking statements. Forward-looking statements in this release and the attachments include, among other things, statements
relating to our future financial condition results of operations and cash flows Forward-looking statements are basedupon relating to our future financial condition, results of operations and cash flows . Forward-looking statements are based upon
assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time.
These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are
difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward-
looking statements include, but are not limited to, risks related to: the assumptions on which our guidance is based; our dependence
on U.S. Government contracts; the effect of economic conditions in the United States and globally; changes in government and
f f f customer priorities and requirements; government budgetary constraints; shifts or reductions in defense spending resulting from
budget pressures and/or changes in priorities, sequestration under the Budget Control Act of 2011, a continuing resolution with limited
new starts; the lack of annual appropriations legislation or otherwise; debt-ceiling limits and disruption to or shutdown of government
operations; timing of payments; changes in import and export policies; changes in customer short-range and long-range plans; major
program terminations; the acquisition, deferral, reduction or termination of contracts or programs; our non-U.S. business, including
legal, regulatory, financial, security and governmental risks related to doingbusiness internationally; the outcome of litigation, claims, legal, regulatory, financial, security and governmental risks related to doing business internationally; the outcome of litigation, claims,
audits, appeals, bid protests and investigations; our ability to recover certain costs under U.S. Government contracts; market
conditions; our ability to access capital; performance and financial viability of key suppliers and subcontractors; interest anddiscount
rates or other changes that may impact pension plan assumptions and actual returns on pension plan assets; the adequacy of our
insurance coverage and recoveries; the costs of environmental remediation; our ability to attract and retain qualified personnel;
changes in health care costs and requirements; changes in organizational structure and reporting segments; acquisitions, dispositions,
spin off transactions joint ventures strategic alliances and other business arrangements; possible impairments of goodwill or other spin-off transactions, joint ventures, strategic alliances and other business arrangements; possible impairments of goodwill or other
intangible assets; the effects of legislation, regulations, and other changes in accounting, tax, defense procurement or other rules or
practices; technical, operational or quality setbacks in contract performance; availability of materials and supplies; controlling costs of
fixed-price development programs; domestic and international competition; potential security threats, information technology attacks,
natural disasters and other disruptions not under our control; and other risk factors and other important factors disclosed in our Form
10-K for the year ended December 31, 2013, and other filings with the Securities and Exchange Commission. You are urged to
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y g g g
consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on forward-looking statements.
These forward-looking statements speak only as of the date of this release, and 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.
Northrop Grumman Today
Leading global security company
2013 sales of $24.7 billion
Leadingcapabilities Leading capabilities
Unmanned systems
Cyber
C4ISR C4ISR
Logistics
Strike aircraft
Aerospace Systems
2013 sales of $10 billion
2013 operating margin rate of 12.1% p g g
$16.7 billion backlog (6/30/14)
~20,000 employees
Strong sustainable performance for shareholders and customers Strong sustainable performance for shareholders and customers
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Aerospace Systems Value Proposition
Performance
Margin performance and cash generation
Invest and innovate for affordability
Diverse, engaged workforce
Strategy - sustainable competitive differentiation Strategy sustainable competitive differentiation
Invest in our people
Perform on our programs
B ild t t t d t l ti hi Build strong trusted customer relationships
Develop affordable and sustainable solutions
Invest in new technologies necessary to solve
h d ti l it h ll hard national security challenges
Grow the business
Risk management
Focus on execution
Smart capture management
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Financial Performance
Sales
14% 15
Sales and OM %
Stable revenue performance in
challenging budget environment
11.6%
12.2% 12.2% 12.1%
12%
14%
12
13
14
15
OM %
Sustained performance level
10.0%
10%
8
9
10
11
i
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B
i
l
l
i
o
n
s
)
Maintaining top margin rate
performance among peers
9.9
10.4
10.0 10.0 10.0 6%
8%
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6
7
8
S
a
l
e
s

(
$

i
Cash
Strong, consistent cash
generation
4%
1
2
3
4
generation
2% 0
2009 2010 2011 2012 2013
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2013 Achievements
UNMANNED MANNED
X47Bfirstcarrieroperations
Tritonfirstflight
FireScoutfirstflight
AwardedE2Dfullrateproduction
AwardedF35productionlots6&7
SPACE INTERNATIONAL
L h d AEHF P l d 3 NATO AGS d i LaunchedAEHFPayload3
AwardedAEHFPayloads5&6
Restricted
NATOAGSproductionstart
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Strategic Objectives
UNMANNED MANNED
Remainaleaderin
unmannedsystemsmarket
Performonourprograms,
positionforgrowth
S I SPACE INTERNATIONAL
Expand market share Grow international revenues Expandmarketshare Growinternationalrevenues
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Portfolio Where We Work
United States
Employees: ~19,800
Palmdale, CA
Aircraft Integration
Center of Excellence
Bethpage, NY
Electronic Attack
Center of Excellence
International Offices
San Diego, CA
UnmannedSystems
St. Augustine, FL
Aircraft Integration
Center of Excellence
Redondo Beach, CA
Space Systems
Center of Excellence
Advanced Concepts Melbourne, FL
Manned Aircraft Design
Center of Excellence
International Offices
Employees: ~200
Unmanned Systems
Center of Excellence
Center of Excellence
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Centers of Excellence Driving Capability Optimization and Affordability
Portfolio Who We Serve
28% Our Customers
Other U.S.
Gov't, 6%
72%
Prime Sub
Int'l, 5%
U.S. Navy,
36%
48%
15%
U.S. Air
Force , 27%
Restricted,
37%
R&D O&M Production
25%
58%
42%
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All data are based on 2013 Sales
Cost Type Fixed Price/T&M
Portfolio What We Do
2013 NGAS Sales by Business Focus Area
Cyber 3%
St ik
Unmanned Systems
27%
C4ISR 33%
Strike
Aircraft
27%
Other 10%
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C4ISR Portfolio
Capabilities
P i t t f i
Products
E 2DAd d H k
Opportunities
E i i i h Prime contractor of air
and space-based C4ISR
platforms
Differentiated by state-
E-2D Advanced Hawkeye
E-8C J STARS
AEHF
Emerging missions such
as communications relay,
air and missile defense
Capability enhancements Differentiated by state
of-the-art technology and
systems integration
capabilities
Restricted
Capability enhancements
for current programs
Next generation program
development
Capitalize on our broad ISR experience and key discriminators
to shape and deliver mission capabilities
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Unmanned Systems Portfolio
Capabilities
P i t t f
Products
RQ 4 Gl b l H k
Opportunities
L d l t Prime contractor of
unmanned aircraft and
ground control systems
Differentiated by
RQ-4 Global Hawk
NATO Alliance Ground
Surveillance
Large development
programs transitioning
into production
Reliability training and Differentiated by
technology leadership in
autonomy and
networked systems
MQ-4C Triton
X-47B UCAS
MQ-8B &MQ-8C Fire
Reliability, training and
sustainment at affordable
costs
Significant follow-on
World-class workforce
MQ 8B & MQ 8C Fire
Scout
Bat UAS
opportunities, domestic
and international
Remain a Leader in Unmanned Systems Market
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Cyber Portfolio
Capabilities Products Opportunities
Differentiated by our in-
depth mission
understanding and next
generation offensive
EA-18G
Directed Energy Systems
Restricted
EA-18G Advanced
Growler integration and
upgrades
generation offensive
cyber capabilities
Restricted
Multifunction electronic
warfare
Directed energy weapons
Outpace the rapidly evolving cyber threat spectrum
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Strike Aircraft Portfolio
Capabilities Products Opportunities
Differentiated by our
unique experience base,
systems engineering
expertise and focused
B-2 Spirit Bomber
F-35 Lightning II
F/A 18 E/F Super Hornet
International expansion
on F/A-18 and F-35
Emerging opportunities
expertise and focused
risk reduction efforts
Vehicle design
Survivability
F/A-18 E/F Super Hornet
for long range strike,
F/A-XX, and F-X
Restricted
Survivability
State-of-the-art
composite manufacturing
Directly support power projection at global ranges
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Northrop Grumman Aerospace Systems
Aerospace Systems
U d
Bat
NATO AGS
Global Hawk
Trit on
Euro Hawk
Unmanned
Systems
E-2 E-8C JSTARS C-2
UCLASS
Bat
UCAS MQ-8B Firebird
Euro Hawk
MQ-8C
Mi l i tary
Ai rcraft
Systems
B-2
F-35 F/A-18 EA-18G
DEW
Space
Systems
DEW
AEHF
eEHF
Rest rict ed
JWST STSS
Products
Strategi c
Programs &
Technol ogy
Rest rict ed
Scal ed Composi tes
Strategic Business Units:
AOA
Astro Aerospace
Cutting Edge Optronics
Sonoma Photonics
Synoptics
Strong & diversified portfolio
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Rest rict ed
Sca ed Co pos tes