Northrop Grumman : Second Quarter 2021

Northrop Grumman Second Quarter

2021 Conference Call

July 29, 2021

Kathy Warden

Chairman, Chief Executive Officer and

President

Dave Keffer

Corporate Vice President and

Chief Financial Officer

1

Forward-Looking Statements

This presentation 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," "project," "forecast," "believe," "estimate," "guidance," "outlook," "trends," "goals" and similar expressions generally identify these forward-looking statements.

Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and/or cash flows. Forward-looking statements are based upon assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward- looking statements include, but are not limited to, those identified and discussed more fully in the section entitled "Risk Factors" in the Form 10-K for the year ended December 31, 2020 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, which has caused and will continue to cause significant challenges, instability and uncertainty. They include:

• the impact of the COVID-19 outbreak or future epidemics on our business, including the potential for worker absenteeism, facility closures, work slowdowns or stoppages, supply chain disruptions, additional costs and liabilities, program delays, our ability to recover costs under contracts, changing government funding and acquisition priorities and processes, changing government payment rules and practices, insurance challenges, and potential impacts on access to capital, the markets and the fair value of our assets
• our dependence on the U.S. government for a substantial portion of our business
• significant delays or reductions in appropriations for our programs, and U.S. government funding and program support more broadly
• investigations, claims, disputes, enforcement actions, litigation and/or other legal proceedings
• the use of estimates when accounting for our contracts and the effect of contract cost growth and/or changes in estimated contract revenues and costs
• our exposure to additional risks as a result of our international business, including risks related to geopolitical and economic factors, suppliers, laws and regulations
• the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate and the impact on our reputation and our ability to do business
• cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners
• the performance and financial viability of our subcontractors and suppliers and the availability and pricing of raw materials and components
• changes in procurement and other laws, regulations, contract terms and practices applicable to our industry, findings by the U.S. government as to our compliance with such requirements, and changes in our customers' business practices globally
• increased competition within our markets and bid protests
• the ability to maintain a qualified workforce with the required security clearances and requisite skills
• our ability to meet performance obligations under our contracts, including obligations that require innovative design capabilities, are technologically complex, require certain manufacturing expertise or are dependent on factors not wholly within our control
• environmental matters, including unforeseen environmental costs and government and third party claims
• natural disasters
• health epidemics, pandemics and similar outbreaks
• the adequacy and availability of our insurance coverage, customer indemnifications or other liability protections
• products and services we provide related to hazardous and high risk operations, including the production and use of such products, which subject us to various environmental, regulatory, financial, reputational and other risks
• the future investment performance of plan assets, changes in actuarial assumptions associated with our pension and other postretirement benefit plans and legislative or other regulatory actions impacting our pension and postretirement benefit obligations
• our ability appropriately to exploit and/or protect intellectual property rights
• our ability to develop new products and technologies and maintain technologies, facilities, and equipment to win new competitions and meet the needs of our customers
• unanticipated changes in our tax provisions or exposure to additional tax liabilities
• changes in business conditions that could impact business investments and/or recorded goodwill or the value of other long-lived assets

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 presentation 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 presentation 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 presentation.

2

Q2 2021 Highlights

• Sales Increase3% to $9.2 Billion; Organic sales(1) increase10%
• Segment Operating Margin Rate(1) of 12.2%
• EPS increase7% to $6.42
• YTD Transaction-adjusted EPS(1) increase16% to $13.00
• YTD Operating Cash Flow of $962M
• YTD Transaction-adjusted Free Cash Flow(1) increases 26% to$1 Billion
• Dividend increased 8%
• Guidance increased for Q2 performance

3

Q2 Sales Growth ($M)

(1)

Q2 Organic Sales(1) Growth of over 10%

4

1. Non-GAAP metric. See Appendix.

Q2 2021 EPS Bridge

+7%

Note - Year over year benefit from share reduction embedded in individual items, tax effected at 21%

Q2 2020 EPS	$6.01
Segment Performance	0.60
Corporate Unallocated	0.22
Marketable Securities	(0.18)
Tax, Interest, and Other	(0.23)
Q2 2021 EPS	$6.42

5