What changed in this filing

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Item 1. Financial Statements

2025-10-21 compared with 2025-07-22 · 114 added, 101 removed, 595 unchanged (27% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited)

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

$ in millions, except per share amounts 2025 2024 2025 2024

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

$ in millions, except par value June 30, 2025 December 31, 2024

$ in millions, except par value September 30, 2025 December 31, 2024

Cash and cash equivalents $ 1,957 $ 4,353

41 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30

Nine Months Ended September 30

$ in millions 2025 2024

1 unchanged sentence

Net earnings $ 2,755 $ 2,910

Adjustments to reconcile to net cash (used in) provided by operating activities:

Adjustments to reconcile to net cash provided by operating activities:

Depreciation and amortization 1,066 956

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Other, net ( 39 ) 37

Net cash (used in) provided by operating activities ( 697 ) 719

Net cash provided by operating activities

Investing activities

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Payments of long-term debt ( 1,500 ) —

Net borrowings on commercial paper 566 —

Common stock repurchases ( 1,168 ) ( 2,073 )

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Other, net ( 93 ) ( 120 )

Net cash (used in) provided by financing activities ( 1,566 ) 34

Net cash used in financing activities

( 2,765 ) ( 642 )

(Decrease) increase in cash and cash equivalents ( 2,396 ) 217

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

$ in millions, except per share amounts 2025 2024 2025 2024

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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.

As of September 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

Three Months Ended September 30 Nine Months Ended September 30

$ in millions, except per share data 2025 2024 2025 2024

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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 third quarter of 2025, the company recorded a $ 122 million unfavorable EAC adjustment on the first and second LRIP lots of the B-21 program at Aeronautics Systems largely driven by higher-than-expected costs to produce the EMD flight test aircraft, which increased our estimates to manufacture the LRIP units;

this EAC adjustment was largely offset by a reduction in our loss contingency accrual on the remaining LRIP lots due to a contract restructure that occurred during the third quarter of 2025.

Also during the third quarter of 2025, the company recorded a $ 68 million favorable EAC adjustment in the restricted advanced microelectronics portfolio at Mission Systems largely driven by program efficiencies and risk mitigations.

During the second quarter of 2025, the company recorded a $ 76 million favorable EAC adjustment on the engineering and manufacturing development (EMD) phase of the Sentinel program at Defense Systems.

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.

During the third quarter of 2024, the company recorded a $ 39 million favorable EAC adjustment on the HALO program at Space Systems.

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.

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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.

Company backlog as of September 30, 2025 was $ 91.4 billion and reflects a $ 150 million reduction to backlog in connection with the training services divestiture during the second quarter of 2025.

Of our September 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

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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.

The amount of revenue recognized for the three and nine months ended September 30, 2025 that was included in the December 31, 2024 contract liability balance was $ 431 million and $ 3.1 billion, respectively.

The amount of revenue recognized for the three and nine months ended September 30, 2024 that was included in the December 31, 2023 contract liability balance was $ 354 million and $ 3.4 billion, respectively.

NORTHROP GRUMMAN CORPORATION

Disaggregation of Revenue

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We believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

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.

As of June 30, 2025 , we have approximately $ 1.3 billion in rental commitments for real estate leases that have not yet commenced.

Non-cash investing activities for the nine months ended September 30, 2025 and 2024 include capital expenditures incurred but not yet paid of $ 140 million and $ 251 million, respectively.

As of September 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 5 to 26 years.

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The components of accumulated other comprehensive loss, net of tax, are as follows:

$ in millions June 30, 2025 December 31, 2024

$ in millions September 30, 2025 December 31, 2024

Cumulative translation adjustment $ ( 129 ) $ ( 140 )

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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.

however, the standard will not have an impact on the company’s consolidated financial position, results of operations and/or cash flows.

On September 18, 2025, the FASB issued ASU No.

2025-06 Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40) .

ASU 2025-06 removes references to prescriptive and sequential development stages, requiring companies to capitalize internal-use software costs when management commits to funding the software project and it is probable the project will be completed.

ASU 2025-06 will be effective for annual and interim periods beginning January 1, 2028, and can be applied on a prospective, modified prospective, or retrospective basis.

We are currently evaluating the potential impact of ASU 2025-06 on the company’s consolidated financial position, results of operations and cash flows.

Other accounting standards updates adopted and/or issued, but not effective until after September 30, 2025, are not expected to have a material effect on the company’s consolidated financial position, results of operations and/or cash flows.

EARNINGS PER SHARE, SHARE REPURCHASES AND DIVIDENDS ON COMMON STOCK

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We calculate basic earnings per share by dividing net earnings by the weighted-average number of shares of common stock outstanding during each period.

NORTHROP GRUMMAN CORPORATION

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.

The dilutive effect of these securities totaled 0.4 million shares and 0.3 million shares for the three and nine months ended September 30, 2025, respectively.

The dilutive effect of these securities totaled 0.3 million shares for each of the three and nine months ended September 30, 2024.

Share Repurchases

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Repurchases under the 2022 Repurchase Program commenced in April 2023 and were completed in February 2024.

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;

Repurchases under the 2023 Repurchase Program commenced in February 2024 and were completed in September 2025.

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 commenced in September 2025 upon completion of the 2023 Repurchase Program.

As of September 30, 2025, repurchases under the 2024 Repurchase Program totaled $ 8 million;

$ 2.99 billion remained under this share repurchase authorization.

By its terms, the 2024 Repurchase Program will expire when we have used all authorized funds for repurchases.

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

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Per Share (1)

Date Completed Six Months Ended June 30

Date Completed Nine Months Ended September 30

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 6, 2023 $ 2,500 5.2 $ 482.41 September 2025 2.3 2.0

December 11, 2024 $ 3,000 — $ 589.50 — —

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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.

NORTHROP GRUMMAN CORPORATION

INVENTORIED COSTS, NET

Inventoried costs, net consist of the following:

$ in millions June 30, 2025 December 31, 2024

$ in millions September 30, 2025 December 31, 2024

Raw materials $ 340 $ 293

2 unchanged sentences

Inventoried costs, net $ 1,615 $ 1,455

NORTHROP GRUMMAN CORPORATION

Three Months Ended June 30 Six Months Ended June 30

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 recognized the income tax effects of the OBBBA in its third quarter 2025 financial statements.

Three Months Ended September 30 Nine Months Ended September 30

$ in millions 2025 2024 2025 2024

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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 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.

Third quarter 2025 income tax expense increased $ 61 million, or 38 percent, due to a higher effective tax rate (ETR) and higher earnings before income taxes.

The third quarter 2025 ETR increased to 16.9 percent from 13.6 percent primarily due to the prior year ETR reflecting a net reduction in tax reserves largely due to a federal court decision in 2024 as well as a reduction in research credits in the current year due to enactment of the OBBBA, partially offset by lower interest expense on unrecognized tax benefits.

The third quarter 2025 ETR includes benefits of $ 66 million for research credits and $ 16 million for foreign derived intangible income (FDII), partially offset by $ 19 million of interest expense on unrecognized tax benefits.

The third quarter 2024 ETR included benefits of $ 191 million for research credits, partially offset by $ 64 million of interest expense on unrecognized tax benefits and $ 41 million in tax expense related to FDII.

Year to date 2025 income tax expense increased $ 18 million, or 3 percent, due to a higher ETR, which more than offset lower earnings before income taxes.

The year to date 2025 ETR increased to 17.2 percent from 16.0 percent primarily due to the prior year ETR reflecting a net reduction in tax reserves largely due to a federal court decision in 2024 as well as additional income tax expense in the current year related to nondeductible goodwill in the divested training services business, partially offset by lower interest expense on unrecognized tax benefits.

The year to date 2025 ETR includes benefits of $ 169 million for research credits and $ 34 million for FDII, partially offset by $ 53 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.

The year to date 2024 ETR included benefits of $ 280 million for research credits, partially offset by $ 110 million of interest expense on unrecognized tax benefits and $ 11 million in tax expense related to FDII.

Taxes receivable, which are included in Prepaid expenses and other current assets in the unaudited condensed consolidated statements of financial position, were $ 786 million as of September 30, 2025 and $ 517 million as of December 31, 2024.

Enactment of the OBBBA resulted in an increase of $ 346 million to taxes receivable and a decrease of $ 383 million to deferred tax assets as of September 30, 2025.

During 2025, we increased our unrecognized tax benefits by approximately $ 180 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 $ 90 million.

NORTHROP GRUMMAN CORPORATION

We file income tax returns in the U.S.

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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.

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.

NORTHROP GRUMMAN CORPORATION

Pillar Two had no impact on our third quarter or year to date 2025 or 2024 ETR, and we do not currently expect Pillar Two to significantly impact our ETR going forward.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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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

September 30, 2025 December 31, 2024

$ in millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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Derivatives — 7 — 7 — ( 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.

During the third quarter of 2025, the company transferred $ 50 million of securities from Level 3 to Level 1 in connection with the initial public offering (“IPO”) of a company in which we hold an investment.

As of September 30, 2025, the company’s investment was valued at $ 115 million.

The company is prohibited from selling this investment until the first quarter of 2026 .

There were no other transfers of financial instruments into or out of Level 3 of the fair value hierarchy during the nine months ended September 30, 2025.

Unrealized gains and losses from marketable securities, which are reflected in Other, net on the unaudited condensed consolidated statement of earnings and comprehensive income, were $ 82 million and $ 92 million for the three and nine months ended September 30, 2025, respectively.

Unrealized gains and losses from marketable securities were not material for the three and nine months ended September 30, 2024.

The notional value of the company’s foreign currency forward contracts at September 30, 2025 and December 31, 2024 was $ 334 million and $ 399 million, respectively.

The portion of notional value designated as a cash flow hedge at September 30, 2025 and December 31, 2024 was $ 241 million and $ 273 million, respectively.

The derivative fair values and related unrealized gains/losses at September 30, 2025 and December 31, 2024 were not material.

The carrying value of cash and cash equivalents 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 estimated fair value of the company’s long-term debt was $ 15.1 billion and $ 15.3 billion as of September 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

NORTHROP GRUMMAN CORPORATION

arrangements.

The current portion of long-term debt is recorded in Other current liabilities in the unaudited condensed consolidated statements of financial position.

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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

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.

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 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

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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.

Although the court has ordered supplemental briefing on pending class certification and expert motions in the putative class action, the parties remain engaged in a 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.

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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.

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 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.

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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.

NORTHROP GRUMMAN CORPORATION

condensed consolidated financial position as of September 30, 2025, or its annual results of operations and/or cash flows.

COMMITMENTS AND CONTINGENCIES

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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.

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 September 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.

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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

NORTHROP GRUMMAN CORPORATION

and requesting additional input, which we provided on February 22, 2021.

On November 24, 2020, DCMA replied to the company’s response, disagreeing with our position 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.

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 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.

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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:

government contracts as of September 30, 2025 and December 31, 2024:

$ in millions Accrued Costs (1)(2)

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Deferred Costs (3)

June 30, 2025 $ 555 $ 394 $ 516

September 30, 2025 $ 567 $ 387 $ 522

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.

(1) As of September 30, 2025, $ 198 million is recorded in Other current liabilities and $ 369 million is recorded in Other non-current liabilities.

(2) Estimated remediation costs are not discounted to present value.

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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.

(3) As of September 30, 2025, $ 184 million is deferred in Prepaid expenses and other current assets and $ 338 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.

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 September 30, 2025, or its annual results of operations and/or cash flows.

NORTHROP GRUMMAN CORPORATION

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.

At September 30, 2025, there were $ 598 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.

The company maintains a commercial paper program that serves as a source of short-term financing.

In September 2025, the company amended its commercial paper program to increase its capacity to issue unsecured commercial paper notes from $ 2.5 billion to $ 3.0 billion.

At September 30, 2025, there were no commercial paper borrowings outstanding.

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.

In September 2025, the company entered into a new five-year senior unsecured revolving credit facility in an aggregate principal amount of $ 3.0 billion (the “2025 Credit Agreement”).

The 2025 Credit Agreement replaced the company’s prior five-year, $ 2.5 billion revolving credit facility entered into in August 2022.

The revolving credit facility established under the 2025 Credit Agreement 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 2025 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

NORTHROP GRUMMAN CORPORATION

other fundamental changes and incur liens.

At September 30, 2025, there were no borrowings outstanding under this facility.

The 2025 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 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.

At September 30, 2025, the company was in compliance with all covenants under its credit agreements.

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

Three Months Ended September 30 Nine Months Ended September 30

Benefits OPB Pension

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Contributions made by the company to its retirement plans are as follows:

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

$ in millions 2025 2024 2025 2024

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Defined contribution plans 133 136 517 517

NORTHROP GRUMMAN CORPORATION

STOCK COMPENSATION PLANS AND OTHER COMPENSATION ARRANGEMENTS

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

Nine Months Ended September 30

in millions 2025 2024

3 unchanged sentences

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.

NORTHROP GRUMMAN CORPORATION

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

Nine Months Ended September 30

$ in millions 2025 2024

5 unchanged sentences

The following table presents sales, operating costs and expenses, and operating income by segment:

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

$ in millions 2025 2024 2025 2024

11 unchanged sentences

297 333 940 1,011

45 38 132 114

Defense Systems operating income

20 unchanged sentences

FAS/CAS operating adjustment 67 20 193 32

Unallocated corporate income (expense) 143 ( 17 ) 85 ( 56 )

Unallocated corporate expense

( 102 ) ( 46 ) ( 17 ) ( 102 )

Total operating income 1,242 1,120 3,240 3,281

15 unchanged sentences

Disaggregation of Revenue

Sales by Customer Type Three Months Ended June 30 Six Months Ended June 30

Sales by Customer Type Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

45 unchanged sentences

NORTHROP GRUMMAN CORPORATION

Sales by Contract Type Three Months Ended June 30 Six Months Ended June 30

Sales by Contract Type Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

25 unchanged sentences

NORTHROP GRUMMAN CORPORATION

Sales by Geographic Region Three Months Ended June 30 Six Months Ended June 30

Sales by Geographic Region Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

49 unchanged sentences

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

Three Months Ended September 30 Nine Months Ended September 30

$ in millions 2025 2024 2025 2024

5 unchanged sentences

Corporate (1)

Total $ 231 $ 320 $ 487 $ 590

Total capital expenditures $ 301 $ 361 $ 788 $ 951

Depreciation and Amortization

4 unchanged sentences

Corporate (1)

Total $ 350 $ 326 $ 687 $ 625

71 45 194 127

Total depreciation and amortization $ 379 $ 331 $ 1,066 $ 956

(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.

6 unchanged sentences

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”).

We have reviewed the accompanying condensed consolidated statement of financial position of Northrop Grumman Corporation and subsidiaries (the “Company”) as of September 30, 2025, and the related condensed consolidated statements of earnings and comprehensive income and changes in shareholders’ equity for the three-month and nine-month periods ended September 30, 2025 and 2024, and of cash flows for the nine-month periods ended September 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.

12 unchanged sentences

McLean, Virginia

July 21, 2025

October 20, 2025

NORTHROP GRUMMAN CORPORATION

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-Q

Item 1. Financial Statements