What changed in this filing

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Item 1. Business

2025-01-30 compared with 2024-01-25 · 69 added, 79 removed, 221 unchanged (40% of the section changed)

26 unchanged sentences

Aeronautics Systems, Defense Systems, Mission Systems and Space Systems.

Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division, which includes the Ground-Based Strategic Deterrent (“Sentinel”) program, from Space Systems to Defense Systems.

This realignment is reflected in the financial information contained in this report.

NORTHROP GRUMMAN CORPORATION

Subsequent Realignment - 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 not reflected in the financial information contained in this report;

it will be reflected in the company’s operating results beginning in the first quarter of 2025.

AERONAUTICS SYSTEMS

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airborne battle management and command and control systems;

and unmanned autonomous aircraft systems, including high-altitude long-endurance (HALE) strategic intelligence, surveillance and reconnaissance (ISR)

NORTHROP GRUMMAN CORPORATION

systems and vertical take-off and landing (VTOL) tactical ISR systems.

and unmanned autonomous aircraft systems, including high-altitude long-endurance (HALE) strategic intelligence, surveillance and reconnaissance (ISR) systems.

Approximately 45 percent of this business is performed through restricted programs.

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• Modernization and sustainment services for the B-2 Spirit stealth aircraft;

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

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

and international forces;

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

• MQ-8C Fire Scout, ship-based, VTOL tactical ISR systems that provide situational awareness and precision targeting for the U.S.

DEFENSE SYSTEMS

Defense Systems is a leader in the design, development, integration and production of advanced tactical weapons and missile defense solutions, and a provider of sustainment, modernization and training services for manned and unmanned aircraft and electronics systems for the U.S.

Defense Systems is a leader in the design, engineering, development, integration and production of strategic deterrent systems, advanced tactical weapons, and missile defense solutions, and a provider of sustainment, modernization and training services for manned and unmanned aircraft and electronics systems for the U.S.

military and a broad range of international customers.

Major products and services include integrated, all-domain command and control (C2) battle management systems, precision strike weapons;

advanced propulsion, including high speed air-breathing and hypersonic systems;

Major products and services include strategic missiles;

integrated, all-domain command and control (C2) systems;

precision strike weapons;

advanced propulsion, including tactical solid rocket motors and high speed air-breathing and hypersonic systems;

high-performance gun systems, ammunition, precision munitions and advanced fuzes;

aircraft and mission systems logistics support, sustainment, operations and modernization;

and warfighter training.

and aircraft and mission systems logistics support, sustainment, operations and modernization.

Less than 5 percent of this business is performed through restricted programs.

Key programs include:

• Integrated Air and Missile Defense Battle Command System (IBCS) for the U.S.

• Sentinel Engineering & Manufacturing Development (EMD) program, initial phase of the modernization of the intercontinental ballistic missile (ICBM) system that will serve as the ground-based strategic deterrent for the U.S.

nuclear triad;

• Integrated Battle Command System (IBCS) for the U.S.

Army and Poland, which is an open architecture system that seamlessly integrates sensors and effectors to deliver among the most advanced C2 systems for joint and coalition forces;

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• Hypersonic Attack Cruise Missile (HACM) air-breathing, scramjet propulsion subsystem for the hypersonic air-launched cruise missile to travel at speeds of Mach 5 or greater;

NORTHROP GRUMMAN CORPORATION

• Global system sustainment and operations support for the F-35, B-2, P-3 Orion, E-6B Mercury, KC-30A multi-role tanker, C-27J transport, NATO AGS, Triton and restricted programs;

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• Special Electronics Mission Aircraft (SEMA) ISR support.

• Distributed Mission Operations Network (DMON), a live, virtual, constructive, and synthetic simulation program for global training and exercises.

NORTHROP GRUMMAN CORPORATION

MISSION SYSTEMS

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advanced communications and network systems;

full spectrum cyber solutions;

intelligence processing systems;

advanced microelectronics;

navigation and positioning sensors;

and maritime power, propulsion and payload launch systems.

maritime power, propulsion and payload launch systems;

full spectrum cyber solutions;

and intelligence processing systems.

Approximately 30 percent of this business is performed through restricted programs.

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• Embedded Global Positioning System (GPS) / Inertial Navigation Systems-Modernization (EGI-M) program, which provides state-of-the-art airborne navigation capabilities with an open architecture that enables rapid responses to future threats.

• UH-60V Black Hawk integrated mission equipment package, which modernizes the U.S.

Army’s Black Hawk helicopters with a glass cockpit, including an integrated computational system, visual display system and control display units, extending the life and mission capabilities of the UH-60 platform.

NORTHROP GRUMMAN CORPORATION

SPACE SYSTEMS

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

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

Major products include satellites and spacecraft systems, subsystems, sensors and payloads;

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missile defense systems and interceptors;

launch vehicles and related propulsion systems;

and strategic missiles.

and launch vehicles and related propulsion systems.

Approximately 40 percent of this business is performed through restricted programs.

Key unrestricted programs include:

• Ground Based Strategic Deterrent (GBSD) Engineering & Manufacturing Development (EMD) program;

• Missile defense systems, interceptors, targets, mission processing and boosters for the Missile Defense Agency's (MDA) Next-Generation Interceptor (NGI) and Ground-based Midcourse Defense Weapon Systems (GWS);

• Evolved Strategic SATCOM (ESS) satellites and payloads providing assured, no-fail, and survivable Nuclear Command and Control (NC3) communications capabilities;

• Next-Generation Overhead Persistent Infrared (Next-Gen OPIR) program satellites and payloads providing resilient and enhanced missile warning over the critical northern polar region;

• Space Development Agency Tracking and Transport layers providing missile warning/tracking and resilient, low-latency, high-volume data transport communication systems;

• Next-Generation Overhead Persistent Infrared (Next Gen OPIR) program satellites and payloads providing data for missile defense;

• Missile defense systems, interceptors, targets, mission processing and boosters for the Missile Defense Agency's (MDA) Ground-based Midcourse Defense Weapon Systems (GWS);

• Cygnus spacecraft, used in the execution of our Commercial Resupply Services (CRS) contracts with NASA to resupply and re-boost the International Space Station;

• Development and production of solid rocket motors for NASA’s Space Launch System (SLS) heavy lift vehicle;

• Habitation and Logistics Outpost (HALO) module in support of NASA’s Lunar Gateway;

• 63-inch diameter Graphite Epoxy Motor (GEM 63) and the extended length variation (GEM 63XL) solid rocket boosters used to provide lift capability for the ATLAS V and Vulcan launch vehicles;

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Navy's Trident II Fleet Ballistic Missile program;

• Evolved Strategic SATCOM (ESS) and Protected Tactical SATCOM (PTS) satellites and payloads providing survivable, protected communications to U.S.

• Intercontinental Ballistic Missile (ICBM) Ground Subsystem Support Contract (GSSC);

• Cygnus spacecraft, used in the execution of our Commercial Resupply Services (CRS) contracts with NASA;

• Habitation and Logistics Outpost (HALO) module in support of NASA’s Gateway;

• James Webb Space Telescope (JWST) operations and sustainment contract.

• Glide Phase Interceptor (GPI) Cooperative Development producing interceptor capability to defeat hypersonic threats;

• Protected Tactical SATCOM (PTS) satellites and payloads providing resilient, protected tactical communications to U.S.

• Arctic Satellite Broadband Mission (ASBM) satellites and payloads expanding both commercial as well as military broadband communications for an international partner.

CUSTOMER CONCENTRATION

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It is not unusual to compete for a contract award with a peer company and, simultaneously, perform as a supplier to or a customer of that same competitor on other contracts, or vice versa.

No material portion of our business is considered to be seasonal.

At December 31, 2023, total backlog, which is equivalent to the company’s remaining performance obligations, was $84.2 billion as compared with $78.7 billion at December 31, 2022.

For further information, see “Backlog” in

No material portion of our business is seasonal.

NORTHROP GRUMMAN CORPORATION

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) and Note 1 to the consolidated financial statements.

At December 31, 2024, total backlog, which is equivalent to the company’s remaining performance obligations, was $91.5 billion as compared with $84.2 billion at December 31, 2023.

For further information, see “Backlog” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) and Note 1 to the consolidated financial statements.

INTELLECTUAL PROPERTY

We routinely apply for and own a number of U.S.

and foreign patents related to the technologies we develop.

We also develop and protect intellectual property as trade secrets.

In addition to owning a large portfolio of proprietary intellectual property, we license some intellectual property rights to third parties and we license or otherwise obtain access to intellectual property from third parties.

We protect our technological innovations using a combination of trade secrets, patents, trademarks, and copyrights.

We routinely apply for patents related to the technologies we develop in the U.S.

and in certain foreign jurisdictions.

We license some intellectual property rights to third parties and we also license or otherwise obtain access to intellectual property from third parties.

government typically holds licenses to patents developed in the performance of U.S.

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HUMAN CAPITAL

Fostering a culture that offers employees opportunities to live our values, deliver for our customers, and act responsibly and sustainably is central to our diverse and talented workforce.

Our culture and values enable us to continue attracting qualified talent, particularly those with security clearances and requisite skills in multiple areas, including science, technology, engineering and math.

This focus on our culture and workforce was a factor in our ability to hire approximately 14,500 new employees in 2023, and as of December 31, 2023, we have approximately 101,000 employees.

Additional information regarding our human capital strategy is available in our Environmental, Social, and Governance (ESG) Report, which can be found on our company website.

Information on our website, including our ESG Report, is not incorporated by reference into this Annual Report.

Underpinned by our values and culture, we hire, promote, and pay based on merit and performance to ensure we have the best team to deliver for our customers.

Our focus on technology, innovation and career growth enables us to attract qualified talent, particularly those with security clearances and requisite skills in multiple areas, including science, technology, engineering and math.

Our differentiated culture and workforce was a factor in our ability to hire approximately 7,400 new employees in 2024, and as of December 31, 2024, we have approximately 97,000 employees.

Our Values and Culture

Our values reflect our priorities and form the bedrock of our culture:

• We do the right thing – we earn trust, act with ethics, integrity and transparency, treat everyone with respect, value diversity and foster safe and inclusive environments.

• We do the right thing – we earn trust, act with ethics, integrity and transparency, treat everyone with respect, value diverse perspectives and foster safe and inclusive environments.

• We do what we promise – we own the delivery of results, focused on quality.

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• We pioneer – with fierce curiosity, dedication and innovation, we seek to solve the world’s most challenging problems.

We believe our culture and values are vital to the ongoing success of the company, including our ability to attract and retain a talented and diverse workforce.

Our values are also integral to our commitment to long-term sustainability, with robust ESG practices across our company.

The company has a Standards of Business Conduct program.

Our employees are empowered to raise concerns without fear of reprisal.

Among other programs through which the company lives its values, the company maintains a Standards of Business Conduct program through which our employees are empowered to raise concerns through multiple channels without fear of reprisal.

In addition to full-time ethics professionals, we also have over 150 business conduct advisors who promote values and an ethical culture within the company.

Our annual Employee Experience Survey gives employees a voice and a mechanism to provide feedback on our culture and empower our leaders to enhance the employee experience.

Additionally, our annual Employee Experience Survey gives employees a voice and a mechanism to provide feedback on our culture and empower our leaders to enhance the employee experience.

This anonymous survey encourages employee candor on key engagement and inclusion drivers, including belonging, respect, a sense of personal work accomplishment and recommending the company to others.

In 2023, 81 percent of employees responded to the survey, an indication that our employees believe their feedback matters, and our survey results exceeded many of the global norms of our third party vendor for both engagement and inclusion.

In 2024, 80 percent of employees responded to the survey, an indication that our employees believe their feedback matters.

Our performance on the annual survey is compared to the Qualtrics Global Benchmark and our survey results exceeded many of their global norms for both engagement and inclusion.

Our leaders review the survey responses and work collaboratively with their teams to take meaningful actions based on survey results.

Our culture and values serve as an enabling force that helps us pioneer, perform and deliver on quality, which results in value for our shareholders, customers, and employees.

We actively seek candidates for employment from a wide range of backgrounds and experiences to tap into the full spectrum of talent available now and in the future to create a culture of belonging for everyone.

NORTHROP GRUMMAN CORPORATION

Diversity, Equity and Inclusion

We value diversity and belonging in its broadest sense, as an enabling force that helps us pioneer, perform and deliver on quality, which results in value for our shareholders, customers, and employees.

Across our U.S.

employee population, as of December 31, 2023, 25 percent are female, 38 percent are people of color, 18 percent are veterans and 8 percent are persons with disabilities.

At the vice president level, 35 percent are female and 20 percent are people of color.

We strive to reach all parts of the diverse talent pools available now and in the future because we recognize that we benefit from having coworkers with different ideas, perspectives and approaches to help us innovate.

Talent Management

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building leaders of the future;

and enabling new ways of working.

Our strategy addresses the external and internal landscape and ensures that we are able to attract, retain and develop the workforce necessary to support the continued success of the business.

and fostering employee growth.

Our strategy addresses the external and internal landscape and ensures that we can attract, retain and develop the workforce necessary to support the continued success of the business.

We hold regular talent review discussions to ensure line of sight to talent at various levels of the organization.

Succession plans are refreshed and reviewed to ensure a robust, diverse pipeline of talent and business continuity with a tight linkage to development.

We refresh and review succession plans to ensure a robust pipeline of talent and business continuity with a tight linkage to development.

We focus on accelerating learning and development of our leaders by providing a combination of experiences, exposure and education.

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In addition to offering our employees flexible work arrangements, caregiver support and mental health services that help our employees make their careers work within their lives, we also help our employees build the careers that will serve them into the future.

We ensure that our employees have the tools and resources to develop their knowledge base and skill sets, so that they can continue to thrive at Northrop Grumman even in the midst of change.

We ensure that our employees have the tools and resources to develop their knowledge base and skill sets, so they can continue to thrive at Northrop Grumman even in the midst of change.

When our employees succeed and grow at work, our business succeeds and grows.

Through a focus on our employees, we remain agile and innovative, adapting to the future as it unfolds before us.

We provide many avenues for our employees to feel included, so we can hire, develop and retain the best people to support our common mission and better pioneer together.

Employee Health and Safety

Health and safety are a core focus in everything we do.

People are our most valuable resource, and our goals have been, and continue to be, to keep our employees safe and position the company for long-term success.

Risk and hazard identification, abatement and prevention are key components of Northrop Grumman’s safety program.

Everyone has a responsibility to identify workplace hazards and we empower employees to report these hazards without fear of repercussion.

We evaluate the effectiveness of our health and safety programs externally, through benchmarking with industry peers and the U.S.

Health and safety are foundational to our success.

People are our most valuable resource and we prioritize occupational health and safety to position the company for long-term success.

Training and risk and hazard identification, mitigation and prevention are key components of Northrop Grumman’s safety program.

Everyone has a responsibility to identify workplace hazards, and employees may raise concerns without fear of reprisal.

We evaluate the effectiveness of our health and safety programs by conducting trend analyses of our past performance and externally through benchmarking with industry peers and the U.S.

Bureau of Labor Statistics.

Internally, we determine program effectiveness by conducting trend analyses of our past performance.

Collective Agreements

Approximately 4,100 employees are covered by 15 collective agreements in the U.S., of which we negotiated one renewal in 2023 and expect to negotiate five renewals in 2024.

Approximately 4,100 employees are covered by 15 collective agreements in the U.S., of which we negotiated five renewals in 2024 and expect to negotiate seven renewals in 2025.

See “Risk Factors” for further discussion regarding risks related to our workforce and employee relations.

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We are prohibited by the U.S.

government from publicly discussing the details of certain classified programs.

government from publicly discussing the details of classified programs.

These programs are generally referred to as “restricted” in this Annual Report.

The consolidated financial statements and financial information in this Annual Report reflect the operating results of our entire company, including restricted programs.

NORTHROP GRUMMAN CORPORATION

We generate the majority of our business from long-term contracts with the U.S.

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government are routinely audited by the Defense Contract Audit Agency (DCAA).

NORTHROP GRUMMAN CORPORATION

Our long-term contracts typically fall into one of two contract types:

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As a result, cost-type contracts have less financial risk associated with unanticipated cost growth but generally provide lower profit margins than fixed-price contracts.

Cost-type contracts typically require that the contractor use its best efforts to accomplish the scope of the work within some specified time and stated dollar limitation.

Cost-type contracts typically require that the contractor use its best efforts to accomplish the scope of work within some specified time and stated dollar limitation.

Fees on cost-type contracts can be fixed in terms of dollar value or can be variable due to award and incentive fees, which are generally based on performance criteria such as cost, schedule, quality and/or technical performance.

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See Note 1 to the consolidated financial statements and “Risk Factors” for further information regarding our contracts and Note 15 to the consolidated financial statements for sales by contract type.

NORTHROP GRUMMAN CORPORATION

The following table summarizes sales for the year ended December 31, 2024, recognized by contract type and customer category:

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government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S.

Each of the company’s segments derives substantial revenue from the U.S.

Each of the company’s segments derives a substantial percentage of its revenue from the U.S.

(2) International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer.

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Environmental

Our operations are subject to and affected by federal, state, local and foreign laws, regulations and enforcement actions relating to protection of the environment.

We have incurred and expect to continue to incur capital and operating costs to comply with applicable environmental laws and regulations and to achieve our environmental sustainability commitments.

Our operations are subject to and affected by federal, state, local and foreign laws, regulations and enforcement actions relating to protection of human health and the environment.

We have incurred and expect to continue to incur capital and operating costs to comply with applicable environmental laws and regulations and to achieve our environmental sustainability goals.

See “Risk Factors” and Notes 1 and 11 to the consolidated financial statements for further information regarding environmental matters.

In 2022, we announced our next generation environmental sustainability goals, and in 2023, we announced our goals for water and waste.

These goals focus on Northrop Grumman’s facilities in addition to supply chain partners and customers:

• Net zero greenhouse gas emissions in operations by 2035;

Our environmental sustainability goals focus on Northrop Grumman’s facilities in addition to supply chain partners and customers:

NORTHROP GRUMMAN CORPORATION

• Net zero greenhouse gas emissions (GHG) in operations (Scopes 1 and 2) by 2035.

Interim target of 50% GHG emissions reduction by 2030;

• Source 50 percent of total electricity from renewable sources by 2030;

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locations by 2030, in collaboration with external partners.

Additional information regarding our environmental sustainability goals is available in our ESG Report, which can be found on our company website.

Additional information regarding our environmental sustainability goals is available in our Sustainability Report, which can be found on our company website.

EXECUTIVE OFFICERS

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The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information about SEC registrants, including Northrop Grumman Corporation.

NORTHROP GRUMMAN CORPORATION

References to our website and the SEC’s website in this report are provided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, such websites.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business