NORTHROP GRUMMAN CORP /DE/ 10-Q

Item 1. Financial Statements CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended June 30 Six Months Ended June 30 $ in millions, except per share amounts 2025 2024 2025 2024 Sales Product $ 8,258 $ 8,076 $ 15,779 $ 16,178 Service 2,093 2,142 4,040 4,173 Total sales 10,351 10,218 19,819 20,351 Operating costs and expenses Product 6,526 6,388 12,892 12,799 Service 1,615 1,639 3,137 3,228 General and administrative expenses 1,016 1,101 2,023 2,163 Total operating costs and expenses 9,157 9,128 18,052 18,190 Gain on sale of business 231 — 231 — Operating income 1,425 1,090 1,998 2,161 Other (expense) income Interest expense ( 173 ) ( 154 ) ( 329 ) ( 300 ) Non-operating FAS pension benefit 137 167 267 335 Other, net 38 43 69 81 Earnings before income taxes 1,427 1,146 2,005 2,277 Federal and foreign income tax expense 253 206 350 393 Net earnings $ 1,174 $ 940 $ 1,655 $ 1,884 Basic earnings per share $ 8.17 $ 6.37 $ 11.48 $ 12.72 Weighted-average common shares outstanding, in millions 143.7 147.5 144.2 148.1 Diluted earnings per share $ 8.15 $ 6.36 $ 11.45 $ 12.69 Weighted-average diluted shares outstanding, in millions 144.0 147.7 144.5 148.5 Net earnings (from above) $ 1,174 $ 940 $ 1,655 $ 1,884 Other comprehensive income (loss), net of tax Change in cumulative translation adjustment 7 ( 1 ) 9 — Change in other, net 11 ( 2 ) 19 ( 18 ) Other comprehensive income (loss), net of tax 18 ( 3 ) 28 ( 18 ) Comprehensive income $ 1,192 $ 937 $ 1,683 $ 1,866 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. -1- Table of Contents NORTHROP GRUMMAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) $ in millions, except par value June 30, 2025 December 31, 2024 Assets Cash and cash equivalents $ 1,899 $ 4,353 Accounts receivable, net 2,196 1,272 Unbilled receivables, net 7,133 5,908 Inventoried costs, net 1,553 1,455 Prepaid expenses and other current assets 1,245 1,286 Total current assets 14,026 14,274 Property, plant and equipment, net of accumulated depreciation of $ 9,207 for 2025 and $ 8,733 for 2024 10,537 10,536 Operating lease right-of-use assets 1,783 1,770 Goodwill 17,435 17,512 Intangible assets, net 231 254 Deferred tax assets 1,713 1,599 Pension and other postretirement benefit plan assets 2,393 2,184 Other non-current assets 1,333 1,230 Total assets $ 49,451 $ 49,359 Liabilities Trade accounts payable $ 2,592 $ 2,599 Accrued employee compensation 1,856 2,271 Advance payments and billings in excess of costs incurred 3,997 4,070 Other current liabilities 5,014 5,188 Total current liabilities 13,459 14,128 Long-term debt, net of current portion of $ 551 for 2025 and $ 1,582 for 2024 15,160 14,692 Pension and other postretirement benefit plan liabilities 1,108 1,120 Operating lease liabilities 1,805 1,798 Other non-current liabilities 2,448 2,331 Total liabilities 33,980 34,069 Commitments and contingencies (Note 7) 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— 143,276,021 and 2024— 144,952,026 143 145 Paid-in capital — — Retained earnings 15,452 15,297 Accumulated other comprehensive loss ( 124 ) ( 152 ) Total shareholders’ equity 15,471 15,290 Total liabilities and shareholders’ equity $ 49,451 $ 49,359 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. -2- Table of Contents NORTHROP GRUMMAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30 $ in millions 2025 2024 Operating activities Net earnings $ 1,655 $ 1,884 Adjustments to reconcile to net cash (used in) provided by operating activities: Depreciation and amortization 687 625 Stock-based compensation 40 46 Deferred income taxes ( 114 ) ( 230 ) B-21 loss provision 477 — Gain on sale of business ( 231 ) — Net periodic pension and OPB income ( 169 ) ( 226 ) Pension and OPB contributions ( 62 ) ( 69 ) Changes in assets and liabilities: Accounts receivable, net ( 929 ) ( 240 ) Unbilled receivables, net ( 1,343 ) ( 741 ) Inventoried costs, net ( 102 ) ( 398 ) Prepaid expenses and other assets 21 45 Accounts payable and other liabilities ( 492 ) ( 918 ) Income taxes payable, net ( 145 ) 925 Other, net 10 16 Net cash (used in) provided by operating activities ( 697 ) 719 Investing activities Capital expenditures ( 487 ) ( 590 ) Divestiture of training services business 333 — Other, net ( 37 ) — Net cash used in investing activities ( 191 ) ( 590 ) Financing activities Net proceeds from issuance of long-term debt 998 2,495 Payments of long-term debt ( 1,500 ) — Net borrowings on commercial paper 566 — Common stock repurchases ( 891 ) ( 1,752 ) Cash dividends paid ( 634 ) ( 586 ) Payments of employee taxes withheld from share-based awards ( 38 ) ( 57 ) Other, net ( 67 ) ( 66 ) Net cash (used in) provided by financing activities ( 1,566 ) 34 (Decrease) increase in cash and cash equivalents ( 2,454 ) 163 Cash and cash equivalents, beginning of year 4,353 3,109 Cash and cash equivalents, end of period $ 1,899 $ 3,272 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. -3- Table of Contents NORTHROP GRUMMAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) Three Months Ended June 30 Six Months Ended June 30 $ in millions, except per share amounts 2025 2024 2025 2024 Common stock Beginning of period $ 144 $ 148 $ 145 $ 150 Common stock repurchased ( 1 ) ( 2 ) ( 2 ) ( 4 ) End of period 143 146 143 146 Paid-in capital Beginning of period — — — — End of period — — — — Retained earnings Beginning of period 14,982 14,218 15,297 14,773 Common stock repurchased ( 391 ) ( 577 ) ( 872 ) ( 1,763 ) Net earnings 1,174 940 1,655 1,884 Dividends declared ( 332 ) ( 304 ) ( 631 ) ( 583 ) Stock compensation 19 24 3 ( 10 ) End of period 15,452 14,301 15,452 14,301 Accumulated other comprehensive loss Beginning of period ( 142 ) ( 143 ) ( 152 ) ( 128 ) Other comprehensive income (loss), net of tax 18 ( 3 ) 28 ( 18 ) End of period ( 124 ) ( 146 ) ( 124 ) ( 146 ) Total shareholders’ equity $ 15,471 $ 14,301 $ 15,471 $ 14,301 Cash dividends declared per share $ 2.31 $ 2.06 $ 4.37 $ 3.93 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. -4- Table of Contents NORTHROP GRUMMAN CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Reporting These unaudited condensed consolidated financial statements (the “financial statements”) include the accounts of Northrop Grumman Corporation and its subsidiaries and joint ventures or other investments for which we consolidate the financial results (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”). Intercompany accounts, transactions and profits are eliminated in consolidation. Investments in equity securities and joint ventures where the company has significant influence, but not control, are accounted for using the equity method. 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. Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. These realignments are reflected in the financial information contained in this report. On May 24, 2025 (the “Divestiture date”), the company completed its previously announced sale of substantially all of the Immersive Mission Solutions (IMS) operating unit of Defense Systems (the “training services” business or “divestiture”) for $ 333 million in cash, subject to a final working capital adjustment, and recorded a pre-tax gain on sale of $ 231 million. IMS is a provider of mission training and satellite ground network communications software for U.S. government customers. Operating results include sales and operating income for the training services business prior to the Divestiture date. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “FAS”) and in accordance with the rules of the Securities and Exchange Commission (SEC) for interim reporting. The financial statements include adjustments of a normal recurring nature considered necessary by management for a fair presentation of the company’s unaudited condensed consolidated financial position, results of operations and cash flows. For classification of certain current assets and liabilities, we consider the duration of our customer contracts when defining our operating cycle, which is generally longer than one year. Results reported in the financial statements are not necessarily indicative of results that may be expected for the entire year. The financial statements should be read in conjunction with the information contained in the company’s 2024 Annual Report on Form 10-K. Quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30 and third quarter as ending on September 30. It is the company’s long-standing practice to establish actual interim closing dates using a “fiscal” calendar, in which we close our books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. This practice is only used at interim periods within a reporting year. Accounting Estimates Preparation of the financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Revenue Recognition Contract Estimates Contract sales may include estimates of variable consideration, including cost or performance incentives (such as award and incentive fees), un-priced change orders, requests for equitable adjustment (REAs) and contract claims. Variable consideration is included in total estimated sales to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We estimate variable consideration as the most likely amount to which we expect to be entitled. We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis. Net estimate-at-completion (EAC) adjustments represent the cumulative effect of the changes on current and prior periods; sales and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. If it is determined that a loss is expected to result on an individual performance -5- Table of Contents NORTHROP GRUMMAN CORPORATION obligation, the entire amount of the estimable future loss, including an allocation of general and administrative expense, is charged against income in the period the loss is identified. B-21 Program During the fourth quarter of 2023, we recognized a projected loss of $ 1.56 billion across the five low-rate initial production (LRIP) options on the B-21 program. During the first quarter of 2025, we recognized an additional $ 477 million loss across the five LRIP options. As of June 30, 2025 , the remaining loss accrual on the B-21 program totaled $ 1.6 billion, which is included in Other current liabilities. Net EAC Adjustments The following table presents the effect of aggregate net EAC adjustments: Three Months Ended June 30 Six Months Ended June 30 $ in millions, except per share data 2025 2024 2025 2024 Revenue $ 164 $ 37 $ 202 $ 111 Operating income 126 38 26 132 Net earnings (1) 100 30 21 104 Diluted earnings per share (1) 0.69 0.20 0.15 0.70 (1) Based on a 21 percent federal statutory tax rate . EAC adjustments on a single performance obligation can have a significant effect on the company’s financial statements. When such adjustments occur, we generally disclose the nature, underlying conditions and financial impact of the adjustments. During the second quarter of 2025, the company recorded a $ 76 million favorable EAC adjustment on the EMD phase of the Sentinel program at Defense Systems largely related to our expectations for achieving certain contract incentives. During the first quarter of 2025, the company recorded a $ 226 million unfavorable EAC adjustment on the first and second LRIP lots of the B-21 program at Aeronautics Systems. No EAC adjustments on a single performance obligation had a significant impact on the financial statements during the six months ended June 30, 2024. 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. Company backlog as of June 30, 2025 was $ 89.7 billion and reflects a $ 150 million reduction of backlog in connection with the training services divestiture. Of our June 30, 2025 backlog, we expect to recognize approximately 40 percent as revenue over the next 12 months and 65 percent as revenue over the next 24 months, with the remainder to be recognized thereafter. Contract Assets and Liabilities For each of the company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Contract assets are equivalent to and reflected as Unbilled receivables in the unaudited condensed consolidated statements of financial position and are primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Contract liabilities are equivalent to and reflected as Advance payments and billings in excess of costs incurred in the unaudited condensed consolidated statements of financial position. The amount of revenue recognized for the three and six months ended June 30, 2025 that was included in the December 31, 2024 contract liability balance was $ 780 million and $ 2.7 billion, respectively. The amount of revenue recognized for the three and six months ended June 30, 2024 that was included in the December 31, 2023 contract liability balance was $ 1.1 billion and $ 3.0 billion, respectively. Disaggregation of Revenue See Note 10 for information regarding the company’s sales by customer type, contract type and geographic region for each of our segments. We believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. -6- Table of Contents NORTHROP GRUMMAN CORPORATION Property, Plant, and Equipment Non-cash investing activities for the six months ended June 30, 2025 and 2024 include capital expenditures incurred but not yet paid of $ 134 million and $ 77 million, respectively. Leases As of June 30, 2025 , we have approximately $ 1.3 billion in rental commitments for real estate leases that have not yet commenced. These leases are expected to commence between 2025 and 2027 with lease terms of 8 to 26 years. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, are as follows: $ in millions June 30, 2025 December 31, 2024 Cumulative translation adjustment $ ( 131 ) $ ( 140 ) Other, net 7 ( 12 ) Total accumulated other comprehensive loss $ ( 124 ) $ ( 152 ) Related Party Transactions For all periods presented, the company had no material related party transactions. Accounting Standards Updates On December 14, 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. We are evaluating the disclosure impact of ASU 2023-09; however, the standard will not have an impact on the company’s consolidated financial position, results of operations and/or cash flows. On November 4, 2024, the FASB issued ASU No. 2024-03 Disaggregation of Income Statement Expenses (Subtopic 220-40). ASU 2024-03 requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 will be effective for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028 and will be applied on a prospective basis with the option to apply the standard retrospectively. We are evaluating the disclosure impact of ASU 2024-03; however, we do not expect the standard will have a material impact on the company’s consolidated financial position, results of operations and/or cash flows. Other accounting standards updates adopted and/or issued, but not effective until after June 30, 2025 , are not expected to have a material effect on the company’s consolidated financial position, results of operations and/or cash flows. 2. EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK Basic Earnings Per Share We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period. Diluted Earnings Per Share Diluted earnings per share include the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 0.3 million shares for the three and six months ended June 30, 2025 . The dilutive effect of these securities totaled 0.2 million shares and 0.4 million shares for the three and six months ended June 30, 2024, respectively. Share Repurchases Share Repurchase Programs On January 24, 2022, the company’s board of directors authorized a share repurchase program of up to $ 2.0 billion in share repurchases of the company’s common stock (the “2022 Repurchase Program”). Repurchases under the 2022 Repurchase Program commenced in April 2023 and were completed in February 2024. -7- Table of Contents NORTHROP GRUMMAN CORPORATION On December 6, 2023, the company’s board of directors authorized a new share repurchase program of up to an additional $ 2.5 billion in share repurchases of the company’s common stock (the “2023 Repurchase Program”). Repurchases under the 2023 Repurchase Program commenced in February 2024 upon completion of the 2022 Repurchase Program. As of June 30, 2025 , repurchases under the 2023 Repurchase Program totaled $ 2.2 billion; $ 0.3 billion remained under this share repurchase authorization. By its terms, the 2023 Repurchase Program will expire when we have used all authorized funds for repurchases. On December 11, 2024, the company’s board of directors authorized a new share repurchase program of up to an additional $ 3.0 billion in share repurchases of the company’s common stock (the “2024 Repurchase Program”). Repurchases under the 2024 R epurchase Program will commence upon completion of the 2023 Repurchase Program and will expire when we have used all authorized funds for repurchases. As of June 30, 2025 , there have been no repurchases under the 2024 Repurchase Program and the company’s total outstanding share repurchase authorization was $ 3.3 billion. Accelerated Share Repurchase Agreements During the first quarter of 2024, the company entered into an accelerated share repurchase (ASR) agreement with Morgan Stanley & Co. LLC (Morgan Stanley) to repurchase $ 1.0 billion of the company’s common stock as part of the 2022 Repurchase Program. Under the agreement, we made a payment of $ 1.0 billion to Morgan Stanley and received an initial delivery of 1.8 million shares valued at $ 800 million that were immediately canceled by the company. The remaining balance of $ 200 million was settled on May 1, 2024 with a final delivery of 0.4 million shares from Morgan Stanley. The final average purchase price was $ 455.73 per share. Share repurchases take place from time to time, subject to market and regulatory conditions and management’s discretion, in the open market or in privately negotiated transactions. The company retires its common stock upon repurchase and, in the periods presented, has not made any purchases of common stock other than in connection with these publicly announced repurchase programs. The table below summarizes the company’s share repurchases to date under the authorizations described above: Shares Repurchased (in millions) Repurchase Program Authorization Date Amount Authorized (in millions) Total Shares Retired (in millions) Average Price Per Share (1) Date Completed Six Months Ended June 30 2025 2024 January 24, 2022 $ 2,000 4.4 $ 455.01 February 2024 — 2.5 December 6, 2023 $ 2,500 4.7 $ 474.22 1.8 1.4 December 11, 2024 $ 3,000 — $ — — — (1) Excludes brokerage commissions and other costs of execution, including taxes. Dividends on Common Stock In May 2025, the company increased the quarterly common stock dividend 12 percent to $ 2.31 per share from the previous amount of $ 2.06 per share. 3. INVENTORIED COSTS, NET Inventoried costs, net consist of the following: $ in millions June 30, 2025 December 31, 2024 Raw materials $ 350 $ 293 Work in process 1,133 1,118 Finished goods 70 44 Inventoried costs, net $ 1,553 $ 1,455 -8- Table of Contents NORTHROP GRUMMAN CORPORATION 4. INCOME TAXES Three Months Ended June 30 Six Months Ended June 30 $ in millions 2025 2024 2025 2024 Federal and foreign income tax expense $ 253 $ 206 $ 350 $ 393 Effective income tax rate 17.7 % 18.0 % 17.5 % 17.3 % Current Quarter Second quarter 2025 income tax expense increased $ 47 million, or 23 percent, due to higher earnings before income taxes, partially offset by a lower effective tax rate (ETR). The second quarter 2025 ETR decreased to 17.7 percent from 18.0 percent in the prior year period primarily due to lower interest expense on unrecognized tax benefits and higher research credits, partially offset by additional income tax expense related to nondeductible goodwill in the divested training services business. The second quarter 2025 ETR includes benefits of $ 68 million for research credits and $ 12 million for foreign derived intangible income (FDII), partially offset by $ 18 million of interest expense on unrecognized tax benefits and $ 17 million of tax expense related to nondeductible goodwill in the divested business. The second quarter 2024 ETR included benefits of $ 46 million for research credits and $ 15 million for FDII, partially offset by $ 25 million of interest expense on unrecognized tax benefits. Year to Date Year to date 2025 income tax expense decreased $ 43 million, or 11 percent, due to lower earnings before income taxes, partially offset by a higher effective tax rate. The year to date 2025 ETR increased to 17.5 percent from 17.3 percent in the prior year period primarily due to additional income tax expense related to nondeductible goodwill in the divested training services business and lower benefits for FDII and employee share-based compensation. These increases were partially offset by higher research credits and lower interest expense on unrecognized tax benefits. The year to date 2025 ETR includes benefits of $ 103 million for research credits and $ 18 million for FDII, partially offset by $ 34 million of interest expense on unrecognized tax benefits and $ 17 million of tax expense related to nondeductible goodwill in the divested business. The year to date 2024 ETR included benefits of $ 90 million for research credits and $ 30 million for FDII, partially offset by $ 46 million of interest expense on unrecognized tax benefits. During 2025, we increased our unrecognized tax benefits by approximately $ 140 million principally in connection with state apportionment matters and research credits. It is reasonably possible that within the next 12 months the company’s unrecognized tax benefits may increase by approximately $ 80 million. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. During the fourth quarter of 2024, the company entered into an agreed Revenue Agent’s Report (“RAR”) for certain matters related to the company’s 2018-2020 federal income tax returns, resulting in a $ 766 million reduction to our unrecognized tax benefits and an immaterial impact to income tax expense. The matters not addressed by the agreed RAR related to the company’s 2018-2020 federal income tax returns are currently under Internal Revenue Service (IRS) examination. Certain matters related to the 2014-2017 federal income tax returns and refund claims related to its 2007-2016 federal tax returns are currently under review by the IRS Appeals Office. The Organization for Economic Co-operation and Development issued Pillar Two model rules for a global minimum tax of 15% effective January 1, 2024. Pillar Two had no impact on our second quarter or year to date 2025 or 2024 ETR, and we do not currently expect Pillar Two to significantly impact our ETR going forward. Subsequent Event On July 4, 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 is evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025. We currently expect the impact of the OBBBA will be to increase the company’s effective tax rate and to favorably impact the timing of cash taxes, subject to the federal corporate alternative minimum tax. For 2025, we currently expect the OBBBA will increase our 2025 effective tax rate to the high 17 percent range and provide a current year cash tax benefit of $ 200 million to $ 250 million. -9- Table of Contents NORTHROP GRUMMAN CORPORATION 5. FAIR VALUE OF FINANCIAL INSTRUMENTS The company holds a portfolio of marketable securities including investments to partially fund non-qualified employee benefit plans as well as investments in companies that are advancing or developing technologies applicable to our business. A portion of these securities are held in common/collective trust funds and are measured at fair value using net asset value (NAV) per share as a practical expedient; therefore, they are not categorized in the fair value hierarchy table below. Marketable securities are included in Other non-current assets in the unaudited condensed consolidated statements of financial position. The company’s derivative portfolio consists primarily of foreign currency forward contracts. Where model-derived valuations are appropriate, the company utilizes the income approach to determine the fair value using internal models based on observable market inputs. The following table presents the financial assets and liabilities the company records at fair value on a recurring basis identified by the level of inputs used to determine fair value: June 30, 2025 December 31, 2024 $ in millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial Assets Marketable securities $ 343 $ — $ 64 $ 407 $ 325 $ — $ 14 $ 339 Marketable securities valued using NAV 6 8 Total marketable securities 343 — 64 413 325 — 14 347 Derivatives — 9 — 9 — ( 11 ) — ( 11 ) The notional value of the company’s foreign currency forward contracts at June 30, 2025 and December 31, 2024 was $ 335 million and $ 399 million, respectively. The portion of notional value designated as a cash flow hedge at June 30, 2025 and December 31, 2024 was $ 236 million and $ 273 million, respectively. The derivative fair values and related unrealized gains/losses at June 30, 2025 and December 31, 2024 were not material. There were no transfers of financial instruments into or out of Level 3 of the fair value hierarchy during the six months ended June 30, 2025 . The carrying value of cash and cash equivalents and commercial paper approximates fair value. Long-term Debt The estimated fair value of the company’s long-term debt was $ 14.9 billion and $ 15.3 billion as of June 30, 2025 and December 31, 2024, respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements. The current portion of long-term debt is recorded in Other current liabilities in the unaudited condensed consolidated statements of financial position. Issuance of Senior Notes In May 2025, the company issued $ 1.0 billion of unsecured senior notes for general corporate purposes, including debt repayment, share repurchases, and working capital, as follows: • $ 500 million of 4.65 % senior notes due 2030 (the “2030 Notes”) and • $ 500 million of 5.25 % senior notes due 2035 (the “2035 Notes”). In January 2024, the company issued $ 2.5 billion of unsecured senior notes for general corporate purposes, including debt repayment, share repurchases, and working capital, as follows: • $ 500 million of 4.60 % senior notes due 2029 (the “2029 Notes”), • $ 850 million of 4.90 % senior notes due 2034 (the “2034 Notes”), and • $ 1.15 billion of 5.20 % senior notes due 2054 (the “2054 Notes”). We refer to the 2029 Notes, 2030 Notes, 2034 Notes, 2035 Notes, and 2054 Notes together, as the “notes.” Interest on the notes is payable semi-annually in arrears. The notes are generally subject to redemption, in whole or in part, at the company’s discretion at any time, or from time to time, prior to maturity at a redemption price equal to the -10- Table of Contents NORTHROP GRUMMAN CORPORATION greater of 100% of the principal amount of the notes to be redeemed or an applicable “make-whole” amount, plus accrued and unpaid interest. Repayment of Senior Notes In January 2025, the company repaid $ 1.5 billion of 2.93 % unsecured senior notes upon maturity. 6. INVESTIGATIONS, CLAIMS AND LITIGATION For over 25 years, the company has worked closely with the United States Navy, the United States Environmental Protection Agency, the New York State Department of Environmental Conservation, the New York State Department of Health and other federal, state and local governmental authorities, to address environmental conditions allegedly resulting from historic operations at the former United States Navy and Grumman facilities in Bethpage, New York. We have incurred, and expect to continue to incur, as included in Note 7, substantial remediation costs related to these Bethpage environmental conditions, including potential costs relating to unanticipated developments such as new discoveries of potential contaminants. It is also possible that applicable remediation standards and other requirements to which we are subject may continue to change, and that our costs may increase materially. In 2022, we resolved several disputes and regulatory proceedings concerning the scope and allocation of remediation responsibilities and costs related to this site and we continue remediation consistent with agreements through which those disputes were resolved. The company continues to be involved in other remediation-related disputes, none of which are material individually or in the aggregate. We are also a party to various individual lawsuits and a putative class action in the Eastern District of New York alleging personal injury and property damage related to the legacy Bethpage environmental conditions (the “Bethpage EDNY cases”). The court has stayed the filed individual lawsuits, pending its decision on class certification. Although the court has ordered supplemental briefing on pending class certification and expert motions in the putative class action, the parties remain engaged in an ongoing mediation. We are also a party, and may become a party, to other lawsuits brought by or against insurance carriers, and by other individual plaintiffs and/or putative classes, as well as other parties. We cannot at this time predict or reasonably estimate the potential outcomes or ranges of possible liability of the Bethpage EDNY cases. The company received from the U.S. Department of Justice (DOJ) a criminal subpoena on December 9, 2022, and a civil investigative demand (CID) on February 2, 2023, both seeking information regarding financial and cost accounting and controls that appears focused on the interest rate assumptions the company used to determine our U.S. Government Cost Accounting Standards (CAS) pension expense, which we discuss in Note 7 below. The company is engaging with the government and responding to the requests. We cannot at this point predict the outcome of these matters. The company is a party to various other investigations, lawsuits, arbitration, claims, enforcement actions and other legal proceedings, including government investigations and claims, that arise in the ordinary course of our business. The nature of legal proceedings is such that we cannot assure the outcome of any particular matter. However, based on information available to the company to date, the company does not believe that the outcome of any of these other matters pending against the company is likely to have a material adverse effect on the company’s unaudited condensed consolidated financial position as of June 30, 2025 , or its annual results of operations and/or cash flows. 7. COMMITMENTS AND CONTINGENCIES U.S. Government Cost Claims and Contingencies From time to time, the company is advised of claims by the U.S. government concerning certain potential disallowed costs, plus, at times, penalties and interest. When such findings are presented, the company and U.S. government representatives engage in discussions to enable the company to evaluate the merits of these claims, as well as to assess the amounts being claimed. Where appropriate, provisions are made to reflect the company’s estimated exposure for such potential disallowed costs. Such provisions are reviewed periodically using the most recent information available. The company believes it has adequately reserved for disputed amounts that are probable and reasonably estimable, and that the outcome of any such matters would not have a material adverse effect on its unaudited condensed consolidated financial position as of June 30, 2025 , or its annual results of operations and/or cash flows. In 2019, the Defense Contract Management Agency (DCMA) raised questions about an interest rate assumption used by the company to determine our CAS pension expense. On June 1, 2020, DCMA provided written notice that the assumptions the company used during the period 2013-2019 were potentially noncompliant with CAS. We submitted a formal response on July 31, 2020, which we believed demonstrates the appropriateness of the assumptions used. On November 24, 2020, DCMA replied to the company’s response, disagreeing with our position -11- Table of Contents NORTHROP GRUMMAN CORPORATION and requesting additional input, which we provided on February 22, 2021. We subsequently continued to exchange correspondence and engage with DCMA on this matter, including responding to requests for and providing additional information. On February 15, 2024, DCMA sent to the company a Contracting Officer’s determination of noncompliance with CAS, which is an interim, non-final determination, and the parties engaged in discussions. In addition, as noted in Note 6 above, the company received from the DOJ a criminal subpoena on December 9, 2022 and a CID on February 2, 2023, both seeking information that appears related to the interest rate assumptions at issue in our discussions with DCMA. The company has responded to requests and expects to continue discussions with the DOJ and DCMA as these matters progress. We cannot at this point predict the outcome of these matters. The sensitivity to changes in interest rate assumptions makes it reasonably possible the outcome of these matters could have a material adverse effect on our financial position, results of operations and/or cash flows, although we are not currently able to estimate a range of any potential loss. Environmental Matters The table below summarizes the amount accrued for environmental remediation costs, management’s estimate of the amount of reasonably possible future costs in excess of accrued costs and the deferred costs expected to be recoverable through overhead charges on U.S. government contracts as of June 30, 2025 and December 31, 2024: $ in millions Accrued Costs (1)(2) Reasonably Possible Future Costs in Excess of Accrued Costs (2) Deferred Costs (3) June 30, 2025 $ 555 $ 394 $ 516 December 31, 2024 546 377 507 (1) As of June 30, 2025 , $ 187 million is recorded in Other current liabilities and $ 368 million is recorded in Other non-current liabilities. (2) Estimated remediation costs are not discounted to present value. The reasonably possible future costs in excess of accrued costs do not take into consideration amounts expected to be recoverable through overhead charges on U.S. government contracts. (3) As of June 30, 2025 , $ 176 million is deferred in Prepaid expenses and other current assets and $ 340 million is deferred in Other non-current assets. These amounts are evaluated for recoverability on a routine basis. Although management cannot predict whether (i) new information gained as our environmental remediation projects progress, (ii) changes in remediation standards or other requirements to which we are subject, or (iii) other changes in facts and circumstances will materially affect the estimated liability accrued, we do not anticipate that future remediation expenditures associated with our currently identified projects will have a material adverse effect on the company’s unaudited condensed consolidated financial position as of June 30, 2025 , or its annual results of operations and/or cash flows. Financial Arrangements In the ordinary course of business, the company uses standby letters of credit and guarantees issued by commercial banks and surety bonds issued principally by insurance companies to guarantee the performance on certain obligations. At June 30, 2025 , there were $ 619 million of stand-by letters of credit and guarantees and $ 269 million of surety bonds outstanding. Commercial Paper The company maintains a commercial paper program that serves as a source of short-term financing with capacity to issue unsecured commercial paper notes up to $ 2.5 billion. At June 30, 2025 , the company had $ 570 million of outstanding commercial paper borrowings at a weighted-average interest rate of 4.76 %, with original maturities of three months or less from the date of issuance. The outstanding balance of commercial paper borrowings is recorded in Other current liabilities in the unaudited condensed consolidated statements of financial position. Credit Facilities The company maintains a five-year senior unsecured credit facility in an aggregate principal amount of $ 2.5 billion (the “2022 Credit Agreement”) that matures in August 2027 and is intended to support the company's commercial paper program and other general corporate purposes. Commercial paper borrowings reduce the amount available for borrowing under the 2022 Credit Agreement. At June 30, 2025 , there were no borrowings outstanding under this facility; however, the amount available for borrowing was reduced by the $ 570 million of commercial paper borrowings described above. The 2022 Credit Agreement contains generally customary terms and conditions, including covenants restricting the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake -12- Table of Contents NORTHROP GRUMMAN CORPORATION other fundamental changes and incur liens. The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreement) to exceed 65 percent. At June 30, 2025 , the company was in compliance with all covenants under its credit agreements. 8. RETIREMENT BENEFITS The cost to the company of its pension and other postretirement benefit (OPB) plans is shown in the following table: Three Months Ended June 30 Six Months Ended June 30 Pension Benefits OPB Pension Benefits OPB $ in millions 2025 2024 2025 2024 2025 2024 2025 2024 Components of net periodic benefit cost (benefit) Service cost $ 54 $ 59 $ 1 $ 1 $ 108 $ 119 $ 2 $ 2 Interest cost 402 382 15 16 805 763 31 31 Expected return on plan assets ( 539 ) ( 549 ) ( 21 ) ( 22 ) ( 1,079 ) ( 1,098 ) ( 42 ) ( 43 ) Amortization of prior service credit — — — — — — ( 1 ) — Other — — — — 7 — — — Net periodic benefit cost (benefit) $ ( 83 ) $ ( 108 ) $ ( 5 ) $ ( 5 ) $ ( 159 ) $ ( 216 ) $ ( 10 ) $ ( 10 ) Employer Contributions The company sponsors defined benefit pension and OPB plans, as well as defined contribution plans. We fund our defined benefit pension plans annually in a manner consistent with the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 . Contributions made by the company to its retirement plans are as follows: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2025 2024 2025 2024 Defined benefit pension plans $ 24 $ 24 $ 42 $ 49 OPB plans 10 9 20 20 Defined contribution plans 155 151 384 381 9. STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS Stock Awards The following table presents the number of restricted stock rights (RSRs) and restricted performance stock rights (RPSRs) granted to employees under the company’s long-term incentive stock plan and the grant date aggregate fair value of those stock awards for the periods presented: Six Months Ended June 30 in millions 2025 2024 RSRs granted 0.1 0.1 RPSRs granted 0.1 0.2 Grant date aggregate fair value $ 104 $ 105 RSRs typically vest on the third anniversary of the grant date, while RPSRs generally vest and pay out based on the achievement of certain performance metrics and market conditions over a three-year period. -13- Table of Contents NORTHROP GRUMMAN CORPORATION Cash Awards The following table presents the minimum and maximum aggregate payout amounts related to cash units (CUs) and cash performance units (CPUs) granted to employees in the periods presented: Six Months Ended June 30 $ in millions 2025 2024 Minimum aggregate payout amount $ 35 $ 35 Maximum aggregate payout amount 198 200 CUs typically vest and settle in cash on the third anniversary of the grant date, while CPUs generally vest and pay out in cash based on the achievement of certain performance metrics over a three-year period. -14- Table of Contents NORTHROP GRUMMAN CORPORATION 10. SEGMENT INFORMATION The following table presents sales, operating costs and expenses, and operating income by segment: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2025 2024 2025 2024 Aeronautics Systems Sales $ 3,114 $ 3,060 $ 5,928 $ 6,104 Operating costs and expenses: Product 2,109 2,028 4,467 4,087 Service 649 692 1,250 1,341 Intersegment 35 28 73 58 Aeronautics Systems operating income 321 312 138 618 Defense Systems Sales 1,991 1,859 3,796 3,596 Operating costs and expenses: Product 1,372 1,295 2,634 2,495 Service 319 333 643 678 Intersegment 47 40 87 76 Defense Systems operating income 253 191 432 347 Mission Systems Sales 3,157 2,773 5,964 5,432 Operating costs and expenses: Product 1,945 1,685 3,675 3,290 Service 483 475 917 921 Intersegment 288 252 570 482 Mission Systems operating income 441 361 802 739 Space Systems Sales 2,646 3,002 5,214 6,151 Operating costs and expenses: Product 1,893 2,254 3,722 4,629 Service 362 355 724 705 Intersegment 111 89 205 183 Space Systems operating income 280 304 563 634 Intersegment profit eliminations ( 76 ) ( 67 ) ( 148 ) ( 133 ) Total segment operating income 1,219 1,101 1,787 2,205 FAS/CAS operating adjustment 63 6 126 12 Unallocated corporate income (expense) 143 ( 17 ) 85 ( 56 ) Total operating income 1,425 1,090 1,998 2,161 Other (expense) income Interest expense ( 173 ) ( 154 ) ( 329 ) ( 300 ) Non-operating FAS pension benefit 137 167 267 335 Other, net 38 43 69 81 Earnings before income taxes $ 1,427 $ 1,146 $ 2,005 $ 2,277 -15- Table of Contents NORTHROP GRUMMAN CORPORATION FAS/CAS Operating Adjustment For financial statement purposes, we account for our employee pension plans in accordance with FAS. However, the cost of these plans is charged to our contracts in accordance with applicable Federal Acquisition Regulation (FAR) and CAS requirements. The FAS/CAS operating adjustment reflects the difference between CAS pension expense included as cost in segment operating income and the service cost component of FAS expense included in total operating income. Unallocated Corporate Expense Unallocated corporate expense includes the portion of corporate costs not considered allowable or allocable under applicable FAR and CAS requirements, and therefore not allocated to the segments, such as changes in deferred state income taxes and a portion of management and administration, legal, environmental, compensation, retiree benefits, advertising and other corporate unallowable costs. Unallocated corporate expense also includes costs not considered part of management’s evaluation of segment operating performance, such as amortization of purchased intangible assets and the additional depreciation expense related to the step-up in fair value of property, plant and equipment acquired through business combinations, as well as certain compensation and other costs. During the second quarter of 2025, the $ 231 million pre-tax gain on the sale of our training services business and $ 19 million of unallowable state taxes and transaction costs associated with the divestiture were recorded in Unallocated corporate income (expense). -16- Table of Contents NORTHROP GRUMMAN CORPORATION Disaggregation of Revenue Sales by Customer Type Three Months Ended June 30 Six Months Ended June 30 2025 2024 2025 2024 $ in millions $ % (3) $ % (3) $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 2,526 82 % $ 2,606 86 % $ 4,816 82 % $ 5,190 86 % International (2) 544 18 % 415 14 % 1,022 18 % 839 14 % Other customers 6 — % 5 — % 11 — % 9 — % Intersegment sales 38 34 79 66 Aeronautics Systems sales 3,114 3,060 5,928 6,104 Defense Systems U.S. government (1) 1,611 83 % 1,508 83 % 3,062 83 % 2,963 85 % International (2) 305 16 % 287 16 % 594 16 % 506 14 % Other customers 22 1 % 19 1 % 42 1 % 40 1 % Intersegment sales 53 45 98 87 Defense Systems sales 1,991 1,859 3,796 3,596 Mission Systems U.S. government (1) 2,282 81 % 2,028 82 % 4,255 80 % 3,940 81 % International (2) 505 18 % 427 17 % 980 19 % 881 18 % Other customers 29 1 % 21 1 % 53 1 % 37 1 % Intersegment sales 341 297 676 574 Mission Systems sales 3,157 2,773 5,964 5,432 Space Systems U.S. government (1) 2,349 93 % 2,746 95 % 4,658 93 % 5,639 95 % International (2) 47 2 % 56 2 % 91 2 % 121 2 % Other customers 125 5 % 100 3 % 235 5 % 186 3 % Intersegment sales 125 100 230 205 Space Systems sales 2,646 3,002 5,214 6,151 Total U.S. government (1) 8,768 85 % 8,888 87 % 16,791 85 % 17,732 87 % International (2) 1,401 13 % 1,185 12 % 2,687 13 % 2,347 12 % Other customers 182 2 % 145 1 % 341 2 % 272 1 % Total Sales $ 10,351 $ 10,218 $ 19,819 $ 20,351 (1) Sales to the U.S. 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. government. Each of the company’s segments derives a substantial percentage of its revenue from the U.S. government. (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. These sales include foreign military sales contracted through the U.S. government. (3) Percentages calculated based on external customer sales. -17- Table of Contents NORTHROP GRUMMAN CORPORATION Sales by Contract Type Three Months Ended June 30 Six Months Ended June 30 2025 2024 2025 2024 $ in millions $ % (1) $ % (1) $ % (1) $ % (1) Aeronautics Systems Cost-type $ 1,461 47 % $ 1,415 47 % $ 2,800 48 % $ 2,759 46 % Fixed-price 1,615 53 % 1,611 53 % 3,049 52 % 3,279 54 % Intersegment sales 38 34 79 66 Aeronautics Systems sales 3,114 3,060 5,928 6,104 Defense Systems Cost-type 1,084 56 % 967 53 % 2,049 55 % 1,878 54 % Fixed-price 854 44 % 847 47 % 1,649 45 % 1,631 46 % Intersegment sales 53 45 98 87 Defense Systems sales 1,991 1,859 3,796 3,596 Mission Systems Cost-type 1,406 50 % 1,107 45 % 2,569 49 % 2,174 45 % Fixed-price 1,410 50 % 1,369 55 % 2,719 51 % 2,684 55 % Intersegment sales 341 297 676 574 Mission Systems sales 3,157 2,773 5,964 5,432 Space Systems Cost-type 1,562 62 % 1,804 62 % 3,102 62 % 3,679 62 % Fixed-price 959 38 % 1,098 38 % 1,882 38 % 2,267 38 % Intersegment sales 125 100 230 205 Space Systems sales 2,646 3,002 5,214 6,151 Total Cost-type 5,513 53 % 5,293 52 % 10,520 53 % 10,490 52 % Fixed-price 4,838 47 % 4,925 48 % 9,299 47 % 9,861 48 % Total Sales $ 10,351 $ 10,218 $ 19,819 $ 20,351 (1) Percentages calculated based on external customer sales. -18- Table of Contents NORTHROP GRUMMAN CORPORATION Sales by Geographic Region Three Months Ended June 30 Six Months Ended June 30 2025 2024 2025 2024 $ in millions $ % (3) $ % (3) $ % (3) $ % (3) Aeronautics Systems United States (1) $ 2,532 82 % $ 2,611 86 % $ 4,827 82 % $ 5,199 86 % Asia/Pacific 226 8 % 164 5 % 426 8 % 334 6 % Europe 301 10 % 243 9 % 570 10 % 490 8 % Other geographic regions (2) 17 — % 8 — % 26 — % 15 — % Intersegment sales 38 34 79 66 Aeronautics Systems sales 3,114 3,060 5,928 6,104 Defense Systems United States (1) 1,633 84 % 1,527 84 % 3,104 84 % 3,003 86 % Asia/Pacific 79 4 % 80 4 % 160 4 % 130 4 % Europe 168 9 % 164 10 % 338 9 % 296 8 % Other geographic regions (2) 58 3 % 43 2 % 96 3 % 80 2 % Intersegment sales 53 45 98 87 Defense Systems sales 1,991 1,859 3,796 3,596 Mission Systems United States (1) 2,311 82 % 2,049 83 % 4,308 81 % 3,977 82 % Asia/Pacific 132 5 % 122 5 % 260 5 % 248 5 % Europe 263 9 % 226 9 % 502 10 % 481 10 % Other geographic regions (2) 110 4 % 79 3 % 218 4 % 152 3 % Intersegment sales 341 297 676 574 Mission Systems sales 3,157 2,773 5,964 5,432 Space Systems United States (1) 2,474 98 % 2,846 98 % 4,893 98 % 5,825 98 % Asia/Pacific 15 1 % 11 — % 23 — % 24 — % Europe 20 1 % 34 2 % 46 2 % 76 2 % Other geographic regions (2) 12 — % 11 — % 22 — % 21 — % Intersegment sales 125 100 230 205 Space Systems sales 2,646 3,002 5,214 6,151 Total United States (1) 8,950 87 % 9,033 88 % 17,132 87 % 18,004 88 % Asia/Pacific 452 4 % 377 4 % 869 4 % 736 4 % Europe 752 7 % 667 7 % 1,456 7 % 1,343 7 % Other geographic regions (2) 197 2 % 141 1 % 362 2 % 268 1 % Total Sales $ 10,351 $ 10,218 $ 19,819 $ 20,351 (1) No country other than the United States represents greater than 10% of total company sales. (2) Other geographic regions are principally comprised of the Middle East. (3) Percentages calculated based on external customer sales. -19- Table of Contents NORTHROP GRUMMAN CORPORATION Capital Expenditures and Depreciation and Amortization The following table presents capital expenditures and depreciation and amortization for each of our reportable segments and for Corporate: Three Months Ended June 30 Six Months Ended June 30 $ in millions 2025 2024 2025 2024 Capital Expenditures Aeronautics Systems $ 69 $ 116 $ 148 $ 200 Defense Systems 11 14 23 22 Mission Systems 47 38 86 81 Space Systems 71 146 181 273 Corporate (1) 33 6 49 14 Total $ 231 $ 320 $ 487 $ 590 Depreciation and Amortization Aeronautics Systems $ 92 $ 99 $ 181 $ 174 Defense Systems 42 43 85 85 Mission Systems 68 62 135 124 Space Systems 84 81 163 160 Corporate (1) 64 41 123 82 Total $ 350 $ 326 $ 687 $ 625 (1) Corporate amounts include the amortization of purchased intangible assets and the additional depreciation expense related to the step-up in fair value of PP&E acquired through business combinations as they are not considered part of management’s evaluation of segment operating performance. Assets Our chief operating decision maker (“CODM”) does not use assets by segment to evaluate segment performance or allocate resources. Therefore, we do not disclose assets by segment. -20- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Northrop Grumman Corporation Falls Church, Virginia Results of Review of Interim Financial Information We have reviewed the accompanying condensed consolidated statement of financial position of Northrop Grumman Corporation and subsidiaries (the “Company”) as of June 30, 2025 , and the related condensed consolidated statements of earnings and comprehensive income and changes in shareholders’ equity for the three-month and six-month periods ended June 30, 2025 and 2024, and of cash flows for the six-month periods ended June 30, 2025 and 2024 and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of Northrop Grumman Corporation and subsidiaries as of December 31, 2024, and the related consolidated statements of earnings and comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated January 29, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2024, is fairly stated, in all material respects, in relation to the audited consolidated statement of financial position from which it has been derived. Basis for Review Results This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /s/ Deloitte & Touche LLP McLean, Virginia July 21, 2025 -21- Table of Contents NORTHROP GRUMMAN CORPORATION