Northrop Grumman Northrop Grumman

El ectroni c Systems
J uly 2014
Forward Looking Statements
This presentation contains statements, other than statements of historical fact, that constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, intend, may, could, plan, project,
forecast, believe, estimate, outlook, "anticipate, trends, guidance, "goals," and similar expressions generally identify these
forward-looking statements. Forward-looking statements in this release and the attachments include, among other things, statements
relating to our future financial condition results of operations and cash flows Forward-looking statements are basedupon relating to our future financial condition, results of operations and cash flows. Forward-looking statements are based upon
assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time.
These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are
difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward-
looking statements include, but are not limited to, risks related to: the assumptions on which our guidance is based; our dependence
on U.S. Government contracts; the effect of economic conditions in the United States and globally; changes in government and
f f f customer priorities and requirements; government budgetary constraints; shifts or reductions in defense spending resulting from
budget pressures and/or changes in priorities, sequestration under the Budget Control Act of 2011, a continuing resolution with limited
new starts; the lack of annual appropriations legislation or otherwise; debt-ceiling limits and disruption to or shutdown of government
operations; timing of payments; changes in import and export policies; changes in customer short-range and long-range plans; major
program terminations; the acquisition, deferral, reduction or termination of contracts or programs; our non-U.S. business, including
legal, regulatory, financial, security and governmental risks related to doingbusiness internationally; the outcome of litigation, claims, legal, regulatory, financial, security and governmental risks related to doing business internationally; the outcome of litigation, claims,
audits, appeals, bid protests and investigations; our ability to recover certain costs under U.S. Government contracts; market
conditions; our ability to access capital; performance and financial viability of key suppliers and subcontractors; interest anddiscount
rates or other changes that may impact pension plan assumptions and actual returns on pension plan assets; the adequacy of our
insurance coverage and recoveries; the costs of environmental remediation; our ability to attract and retain qualified personnel;
changes in health care costs and requirements; changes in organizational structure and reporting segments; acquisitions, dispositions,
spin off transactions joint ventures strategic alliances and other business arrangements; possible impairments of goodwill or other spin-off transactions, joint ventures, strategic alliances and other business arrangements; possible impairments of goodwill or other
intangible assets; the effects of legislation, regulations, and other changes in accounting, tax, defense procurement or other rules or
practices; technical, operational or quality setbacks in contract performance; availability of materials and supplies; controlling costs of
fixed-price development programs; domestic and international competition; potential security threats, information technology attacks,
natural disasters and other disruptions not under our control; and other risk factors and other important factors disclosed in our Form
10-K for the year ended December 31, 2013, and other filings with the Securities and Exchange Commission.
2
y g g
You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on forward-
looking statements. These forward-looking statements speak only as of the date of this release, and we undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by applicable law.
Northrop Grumman Today
Leading global security company
2013 sales of ~$24.7 billion
Leadingcapabilities Leading capabilities
Unmanned Systems
Cyber
C4ISR C4ISR
Logistics
Strike aircraft
Electronic Systems
2013 sales of $7.1 billion
2013 operating margin rate of 17.1% p g g
$9.6 billion backlog (6/30/14)
~17,000 employees
Top tier global defense electronics supplier
Strong sustainable performance for shareholders and customers Strong sustainable performance for shareholders and customers
3
Electronic Systems Value Proposition
Performance
Margin performance and cash generation
Invest and innovate for affordability
Diverse, engaged workforce
Strategy - sustainable competitive differentiation Strategy sustainable competitive differentiation
Protect the core and adapt existing solutions
Capitalize on extensive installed base
I t ti l i l b l International expansion on global core
Invest in select breakthroughs and near adjacencies
Elevate partnerships, supply chain
Risk Management
Focus on execution
Smart capture management p g
Scalable enterprise
4
Financial Performance
Stable revenue performance in
18% 10
Sales and Margin
p
challenging budget environment
Outstanding margin rate performance
>400 bps margin rate e pansion
13 4%
14.5%
17.1%
%
16%
18%
8
9
10
17.1%
>400 bps margin rate expansion
Solid program performance
Disciplined focus on cost and
affordability
12.6%
13.4%
12%
14%
6
7
l
i
o
n
s
affordability
Portfolio shaping to focus on
core competencies
C h
7.7
7.6
7.4
7.0
7.1
8%
10%
3
4
5
$

B
i
l
Cash
Consistently strong cash
conversion
Lowcapital requirements
4%
6%
1
2
3
Low capital requirements
2% 0
2009 2010 2011 2012 2013
5
Strategy
Core Core Near Adjacencies Near Adjacencies
Fixed-Wing
Rotary
Air Force Marines
Protecting and Adapting Protecting and Adapting Transitioning Transitioning
International International Long Long- -Term Differentiation Term Differentiation
Capital
investment
Common building
blocks across
domains
Outstanding CRAD Technology
Centers of
Excellence
Sustained high
IR&D
Expanding Expanding Investing for the Future Investing for the Future
6
performance breakthroughs
Portfolio Where We Work
Baltimore, MD
C4ISR: Radar, Exploitation
International
Employees: 2,000
Revenue: 24%
UnitedStates United States
Employees: 15,000
Revenue: 76%
Rolling Meadows, IL
C4ISR & Cyber/NK: EO/IR,
Electronic Warfare
Sunnyvale, CA
Precision Gear, Heavy Machinery
Serving an installed base in ~70 nations across six continents Serving an installed base in ~70 nations across six continents
Woodland Hills, CA
C4ISR: Navigation, Situational Awareness
Azusa, CA
C4ISR: Space Sensors
7
Portfolio Who We Serve
Our Customers
46%
54%
7%
U.S. Army
Prime Sub
22%
U.S. Air
Force
20%
U.S. Navy
28%
72%
23%
International
28%
Other U S
72%
Competitive Sole Source
Other U.S.
Govt
38%
62%
75%
Cost Type Fixed Price/T&M All data are based on 2013 Sales
8
Sales $7.1B
Portfolio What We Do
Sit Awareness
5%
Business Focus Areas
C4ISR Business Focus Area
Cyber
Other
12%
PED
6%
5%
C4ISR
68%
Navigation
9%
11%
Radar
61%
EO/IR
28%
60%
9
PED = Processing, Exploitation and Dissemination
All data are based on 2013 Sales
C4ISR
Radar / RF
Key capabilities
Fire control airborne earlywarning&
Space Sensors
Key capabilities
Missile warningsensors
Fire control, airborne early warning &
control, tactical surveillance, maritime
surveillance, air and missile defense
Key products / programs
F-35, F-22, F-16 radar family
Missile warning sensors
Weather sensors
Active and passive RF and EO
Key products / programs
, , y
737 MESA, AWACS
Global Hawk, Triton, J oint STARS
TPS-78, G/ATOR
SPQ 9B
DSP, SBIRS
Key opportunities
Restricted
SPQ-9B
Key opportunities
Global F-16, airborne surveillance, global
ground-based air defense upgrade market
10
C4ISR (continued)
Electro-Optical
Key capabilities
Targeting
Key capabilities
IR warning and jamming
Threat warning sensors
Key products / programs
Targeting and surveillance;
ranging, designation and
illumination
Key products / programs
IRCM product family
Key opportunities
Integrated aircraft self-
Key products / programs
LITENING, F-35 Distributed
Aperture System (DAS), LLDR
Key opportunities
protection equipment
y pp
LITENING expansion
11
C4ISR (continued)
Processing, Exploitation and
Dissemination (PED)
Situational Awareness
Key capabilities
Key capabilities
Enterprise integration of multi-
intelligence mission data across
all domains
Modular integrated avionics suites
and components
Key products / programs
Blackhawk cockpit
Key products / programs
DCGS
SBIRS Ground Processing
Blackhawk cockpit
Key opportunities
International upgrades
g
Key opportunities
International
12
Navigation
Key capabilities
Inertial navigation and positioning Inertial navigation and positioning
systems
Key products / programs
Wide array of products for ships, aircraft,
space craft, and weapons systems
Key opportunities Key opportunities
GPS-challenged environments
13
Cyber
(including Non-Kinetic / Electronic Warfare)
Key capabilities
Electronic attack, electronic support,
information operations, special
communications, EW simulation
Key products / programs
ALQ-218, APR-39, P-8 EWSP and
ESM, DoD and Intel Community y
programs
Key opportunities
U d EW Unmanned EW
Restricted
14
Marine & Undersea
Key capabilities
Naval power and propulsion, control Naval power and propulsion, control
systems, launchers, integrated bridge
systems, undersea sensors/controls
Key products / programs Key products / programs
Machinery controls, nuclear instrumentation
and control, mine countermeasures,
support to current U.S. submarine force
Key opportunities
International mine hunting, surface and
subsurface sensors/controls subsurface sensors/controls
15
Diverse Portfolio for Value Growth
16
Electronic Systems Value Proposition
Performance
Margin performance and cash generation
Invest and innovate for affordability
Diverse, engaged workforce
Strategy - sustainable competitive differentiation Strategy - sustainable competitive differentiation
Protect the core and adapt existing solutions
Capitalize on extensive installed base
I t ti l i l b l International expansion on global core
Invest in select breakthroughs and near adjacencies
Elevate partnerships, supply chain
Risk Management
Focus on execution
Smart capture management
17
Smart capture management
Scalable enterprise