Northrop Grumman Northrop Grumman

Informati on 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.
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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 2013 sales of $24.7 billion
Leading capabilities
Unmanned Systems
Cyber Cyber
C4ISR
Logistics & Modernization
Strike Aircraft
Information Systems
2013 sales of $6.6 billion
2013 operating margin rate of 9.6% 2013 operating margin rate of 9.6%
$6.7 billion backlog (6/30/14)
Top tier global provider of mission-enabling systems
~18,000 employees
3
Strong sustainable performance for shareholders and customers
Information Systems
Tier-one systems provider in Defense,
Intelligence, and Civil markets
W ll iti d i hi h l d i
2013 Sales
Cyber
Federal&
Well-positioned in high value domains
Air, land and sea Command and Control
Integrated Air and Missile Defense Systems
L di i ft C i ti d i b
Cyber
Solutions
25%
Intelligence
Systems
Defense
Technologies
22%
Leading aircraft Communications and airborne
gateways
Full spectrum of Cyber
Air and space ISR payload and processing
2013 Customer Contract Mix
Defense
Systems
34%
19%
Fixed
42%
Cost
58%
Air and space ISR payload and processing
systems
Civil & Health mission systems development
Shortest cycle business
58%
Shortest cycle business
4
Global Network
Information Systems Value Proposition
Performance
Strong margins and cash generation
Invest and Innovate for affordability
Diverse, engaged workforce
St t S t i bl Diff ti ti Strategy Sustainable Differentiation
Protect the core and adapt
existing solutions
Focus in priority arenas Focus in priority arenas
International expansion
Risk Management g
Focus on execution
Scalable enterprise
5
Trusted provider of mission-enabling systems
Premier Global Provider
Over 18,000 employees worldwide Diverse global customer base
Major location Office / presence
6
Financial Performance
Top line
$6.6B 2013 sales
9 7%
10.3%
12%
9
10
Sales and Operating Margin
9 6%
Short cycle business pressures
Reflects portfolio shaping
$6.7B backlog as of 6/30/14
7.3%
9.0%
9.7%
6%
8%
10%
5
6
7
8
9
l
i
o
n
s
9.6%
Supports >12 months of sales
Bottom line
$8.5
$8.4 $7.9 $7.4
$6.6
2%
4%
6%
1
2
3
4
5
$

B
i
l
l
Top quartile ROS 9.6%
Solid program performance
Affordability initiatives on-going
0% 0
1
2009 2010 2011 2012 2013
Sales ROS%
Cash
Exceptional cash conversion
Historical performance >100%
7
Historical performance >100%
Low capital requirements
Portfolio Who We Serve
Customer
Other DoD & Govt
Agencies9%
International 3%
Contract Types
Time & Material 12% Cost PlusAward
Fee18%
Missile Defense
Agency 9%
Navy 7%
Air Force Air Force
14% 14%
Restricted
18%
Federal / S&L
22%
Fixed Price
30%
Other Cost Other Cost
Type Type
Army Army
18% 18%
14% 14%
yp yp
40 40%%
Prime / Sub Systems / Services Prime / Sub Systems / Services
Pi Pi
Sub Sub
14% 14%
Mission Mission
Services Services
Product Development
& Manufacturing10%
Hardware
Integration
11%
Services Services
44% 44%
Prime Prime
86% 86%
35% 35%
Software Software
Development Development
& Integration & Integration 35 35%%
Systems Systems
56% 56%
11%
Staff Augmentation3%
Managed Services6%
Diverse Portfolio Primarily Serving Federal Govt Customers
8
Staff Augmentation3%
All data are based on 2013 Sales
Northrop Grumman Information Systems
Strategic Framework
Trusted partner of mission-enabling information systems
for the security and well-being of our nation and allies
Value
Creation
& Innovation
Performance Affordability
Global
Portfolio
Leadership
& Engagement
Cyber C4ISR
Logistics Unmanned
Other
C2 C2 C2 C2 Comms Comms Comms Comms I SR I SR I SR I SR
Cyber Cyber Cyber Cyber
Heal t h I T Heal t h I T Heal t h I T Heal t h I T
Ci vi l Ci vi l
Sec ur i t y Sec ur i t y
Ci vi l Ci vi l
Sec ur i t y Sec ur i t y
Ef f ec t i ve Ef f ec t i ve
Govt Govt
Ef f ec t i ve Ef f ec t i ve
Govt Govt
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What We Do
C4ISR Business Focus Area
I SR I SR
22% 22%
Ot her
23%
Logi st i c s
2%
C2 C2
59% 59%
Comms
19%
C4I SR C4I SR
58% 58%
Cyber Cyber
16% 16% 16% 16%
Unmanned
1%
10
All data are based on 2013 Sales
C4ISR C2
Key Capabilities / Opportunities
Established product lines and key
U.S. air and land programs of
record
Open architectures
Integrated Cyber / C2 Integrated Cyber / C2
Legacy systems migration
Space capabilities
Major Contracts
J oint National Integration Center
Air Operations Center Air Operations Center
Integrated Air & Missile Defense
Consolidated Afloat Network &
Enterprise Services
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C4ISR Communications / ISR
Communications
K C biliti / O t iti
ISR
K C biliti / O t iti
Key Capabilities / Opportunities
Communications, Navigation and
Identification (CNI)
Airborne gateways and
Key Capabilities / Opportunities
Airborne ISR with passive and
active detection
Data management for high ingest
Airborne gateways and
interoperability
Precision RF Techniques
Multi-function Software
Data management for high ingest
velocity and volume
SIGINT technologies
Event driven, dynamic
missioncontrol Multi INT
Defined Radios
Major Contracts
mission control Multi-INT
Geo-Spatial / SIGINT fusion
Major Contracts
j
Battlefield Airborne Communications
Node
F-35 CNI
j
Enhanced Polar Systems
Communication and Planning
Segment
Ai b Si l I t lli Pl tf
12
Airborne Signals Intelligence Platform
Restricted
Cyber
Key Capabilities / Opportunities
Full Spectrum Cyber operations
Integrated cyber / non-kinetic
Zero-day and advanced persistent
threats
Cyber operations centers
Major Contracts
Net Centric Capabilities Net-Centric Capabilities
DHS Federal Network Resiliency
DISA Command Center
Restricted Restricted
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Other - Health IT / Civil Security /
Effective Government
Health IT
Key Capabilities
Civil Security
Key Capabilities
Effective Govt
Key Capabilities Key Capabilities
- Interoperable
capabilities in health IT
and human services
- Adaptable solutions to
meet transformational
Key Capabilities
- Large metro automated
dispatch and information
sharing products
- Biometric systems with high
ingest and accuracy rates
Key Capabilities
- High throughput
Government information
systems
- Federal Human Capital
Management solutions
challenges
Major Contracts
- Centers for Disease
Control
g y
Major Contracts
- London Met Police C2
- NYCWiN
Major Contracts
- IRS Return Processing
- Virginia Information
Control
- Centers for Medicare &
Medicaid Services
- IDENT1
Technologies Agency
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