News Release Contact: Katie Young (Media)
News Release Contact: Katie Young (Media) 908-520-9948 katherine.young@ngc.com Randy Sinclair (Investors) 571-835-5513 randy.sinclair@ngc.com
• Operating margin rate of 11.4 percent, Segment operating margin rate 1 of 12.1 percent
FALLS CHURCH, Va. – October 20, 2026 – Northrop Grumman Corporation (NYSE: NOC) reported third quarter 2026 sales increased 7 percent to $11.1 billion, as compared with $10.4 billion in the third quarter of 2025. Third quarter sales reflect continued strong demand for our global capabilities. Third quarter 2026 net earnings totaled $1.1 billion, or $7.89 per diluted share, as compared with $1.1 billion, or $7.67 per diluted share, in the third quarter of 2025.
“In a complex world with the growing need for solutions that scale and perform, our customers continue to turn to Northrop Grumman, and we are delivering with urgency and innovation. Our investments provide the capacity necessary to deliver durable growth as we expand our product offerings and scale our operations,” said Kathy Warden, chair, chief executive officer and president. “I’m confident our new record backlog, well-positioned portfolio and investments, and industry-leading performance will continue to drive sales and earnings growth as reflected in our 2027 outlook.”
1Non-GAAP measure - see definitions at the end of this earnings release. Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
1Non-GAAP measure - see definitions at the end of this earnings release. Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Third quarter 2026 sales increased $699 million, or 7 percent, driven by higher sales at all four sectors, including a 14 percent increase at Aeronautics Systems and a 12 percent increase at Defense Systems. These increases were partially offset by $95 million of higher intercompany eliminations.
Third quarter 2026 operating income increased $27 million, or 2 percent, primarily due to $68 million of higher segment operating income 1 , partially offset by a $52 million decrease in the FAS/CAS operating adjustment. Operating margin rate declined to 11.4 percent from 11.9 percent principally due to the decrease in the FAS/CAS operating adjustment.
Third quarter 2026 segment operating income 1 increased $68 million, or 5 percent, primarily due to $72 million of higher operating income at Aeronautics Systems. Third quarter 2026 segment operating margin rate 1 of 12.1 percent reflects strong program performance and higher operating margin rates at Aeronautics Systems and Space Systems. Segment operating margin rate 1 decreased from 12.3 percent in the third quarter of 2025 principally due to a prior year $68 million favorable EAC adjustment in the restricted advanced microelectronics portfolio at Mission Systems.
Third quarter 2026 income tax expense decreased $49 million, or 22 percent, due to a lower effective tax rate (ETR) and $25 million of lower earnings before income taxes. The third quarter 2026 ETR decreased to 13.4 percent from 16.9 percent principally due to higher research credits.
Third quarter 2026 net earnings increased $24 million, or 2 percent, primarily due to a $49 million decrease in income tax expense, a $31 million increase in the non-operating FAS pension benefit and a $27 million increase in operating income, partially offset by an $86 million decrease in Other, net largely driven by favorable returns on marketable securities in the prior year.
Third quarter 2026 net cash provided by operating activities increased $188 million, or 12 percent, primarily due to improved trade working capital. Third quarter 2026 adjusted free cash flow 1 increased $554 million, or 44 percent, due to proceeds received in connection with the sale of equipment to a customer and higher net cash provided by operating activities.
Third quarter 2026 net awards totaled $16.4 billion, and backlog totaled $109.6 billion. Significant third quarter new awards include $4.6 billion for restricted programs (primarily at Aeronautics Systems, Space Systems, and Mission Systems), $2.0 billion for Sentinel, $1.4 billion for Virginia Class submarines, $1.3 billion for F-35 at Aeronautics Systems, and $1.0 billion for E-2.
1Non-GAAP measure - see definitions at the end of this earnings release. Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Third quarter 2026 sales increased $433 million, or 14 percent, primarily due to a $195 million increase on F-35 driven by the timing of material costs on production lots and increased sustainment volume, higher B-21 sales and an increase in B-2 sustainment volume.
Third quarter 2026 operating income increased $72 million, or 24 percent, due to higher sales and a higher operating margin rate. Operating margin rate increased to 10.5 percent from 9.7 percent primarily due to higher net contract margin adjustments, including on certain mature production and sustainment programs.
Third quarter 2026 sales increased $248 million, or 12 percent, primarily due to a $180 million increase on Sentinel as the program continues to ramp, higher volume on the Guided Multiple Launch Rocket System Extended Range (GMLRS ER) program due to the timing of awards, and higher volume on various tactical solid rocket motor programs. These increases were partially offset by lower volume on armament programs, primarily on certain military ammunition programs.
Third quarter 2026 operating income increased $16 million, or 7 percent, primarily due to higher sales, partially offset by a lower operating margin rate. Operating margin rate decreased to 10.8 percent from 11.4 percent, primarily due to changes in contract mix toward more cost-type content.
1Non-GAAP measure - see definitions at the end of this earnings release. Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Third quarter 2026 sales increased $62 million, or 2 percent, primarily due to ramp-up on restricted airborne radar programs and higher volume on marine systems programs. These increases were partially offset by lower volume on restricted advanced microelectronics programs.
Third quarter 2026 operating income decreased $15 million, or 3 percent, primarily due to a lower operating margin rate, partially offset by higher sales. Third quarter 2026 operating margin rate of 15.8 percent reflects strong program performance on marine systems and restricted airborne radar programs. Operating margin rate decreased from 16.7 percent in the third quarter of 2025 due, in part, to a prior year $68 million favorable EAC adjustment in the restricted advanced microelectronics portfolio.
Third quarter 2026 sales increased $51 million, or 2 percent, primarily due to ramp-up of programs in the restricted space portfolio, partially offset by $136 million of lower sales on Commercial Resupply Service missions due to launch timing.
Third quarter 2026 operating income increased $14 million, or 5 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 11.3 percent from 11.0 percent, primarily due to changes in contract mix toward more fixed-price content.
1Non-GAAP measure - see definitions at the end of this earnings release. Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Financial guidance, as well as outlook, trends, expectations and other forward- looking statements provided by the company for 2026 and beyond, reflect the company's judgment based on the information available to the company at the time of this release. The company’s financial guidance and outlook for 2026 and beyond reflect what the company currently anticipates will be the impacts on the company from, among other factors, the global macroeconomic, security, and political/budget environments, including the impacts from inflationary pressures and labor and supply chain challenges; changes in the threat environment; changes in government budget, appropriations and procurement priorities and processes; changes in the regulatory environment, including trade policy; and changes in support for our programs. We are not assuming, and the company’s financial guidance and outlook for 2026 and beyond do not reflect impacts on the company from, a prolonged government shutdown, or application of spending limits or other spending cuts. However, the company cannot predict how these factors will evolve or what impacts they will have, and there can be no assurance that the company’s current expectations or underlying assumptions are correct. These factors can affect the company’s ability to achieve guidance or meet expectations.
For additional factors that may impact the company’s ability to achieve guidance or meet expectations, please see the “Forward-Looking Statements” section in this release and our Form 10-Q.
2026 Segment Guidance As of 10/20/2026 Sales ($B) OM Rate % Aeronautics Systems ~$14 High 9% Prior: Mid to High 9% Defense Systems Mid to High $8 ~10% Mission Systems High $12 Mid 15% Prior: ~15% Space Systems ~$11 Low 10% Intersegment Eliminations ~($2.7) Mid 13%
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Northrop Grumman will webcast its earnings conference call at 9:30 a.m. Eastern Time on October 20, 2026. A live audio broadcast of the conference call will be available on the investor relations page of the company’s website at www.northropgrumman.com .
Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our employees define possible every day. ###
This earnings release and the information we are incorporating by reference, and statements to be made on the earnings conference call, contain or may contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “strategy,” “project,” “forecast,” “achieve,” “believe,” “estimate,” “guidance,” “outlook,” “trends,” “goals,” “confident,” “targeting,” “on track” and similar expressions generally identify these forward-looking statements.
Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and/or cash flows, including financial guidance, outlook, trends, expectations and other forward- looking statements for 2026 and beyond. 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, those identified and discussed more fully in the section entitled “Risk Factors” in the Form 10-K for the year ended December 31, 2025, and from time to time in our other filings with the Securities and Exchange Commission (SEC). They include:
• our dependence on the U.S. government for a substantial portion of our business
• significant delays or reductions in appropriations and/or for our programs, and U.S. government funding and program support more broadly, including as a result of a prolonged continuing resolution and/or government shutdown, and/or related to the global security environment or other global events
• significant delays or reductions in payments as a result of or related to a breach of the debt ceiling or a prolonged government shutdown
• the use of estimates when accounting for our contracts and the effect of contract cost growth and our efforts to recover or offset such costs and/or changes in estimated contract costs and revenues, including as a result of inflationary pressures, labor shortages, supply chain challenges, changes in trade policies and/or other macroeconomic factors, and risks related
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
to management’s judgments and assumptions in estimating and/or projecting contract revenue and performance which may be inaccurate
• continued pressures from macroeconomic trends, including on costs, schedules, performance and ability to meet expectations
• investigations, claims, disputes, enforcement actions, litigation (including criminal, civil and administrative) and/or other legal proceedings
• changes in procurement and other laws, SEC, U.S. Department of War (DoW) and other rules and regulations, including changes through executive orders, contract terms and practices applicable to our industry, findings by the U.S. government as to our compliance with such requirements, more aggressive enforcement of such requirements and changes in our customers’ business practices and preferences globally
• the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate, including the impact on our reputation and our ability to do business
• environmental matters, unforeseen environmental costs and government and third-party claims
• unanticipated changes in our tax provisions or exposure to additional tax liabilities
• cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners, including threats or disruptions from the use of artificial intelligence models capable of exploiting vulnerabilities to conduct or enhance cyber attacks, and changes in related regulations
• the performance and viability of our subcontractors and suppliers and the availability and pricing of raw materials, critical minerals and metals, chemicals, parts and components, particularly with inflationary pressures, increased costs, pricing changes, shortages in labor and financial resources, supply chain disruptions, and extended material lead times
• our ability to attract and retain a qualified and talented workforce with the necessary security clearances to meet our performance obligations
• our exposure to additional risks as a result of our international business, including risks related to global security and strategic alliances, geopolitical and economic factors, misconduct, suppliers, laws and regulations
• our ability to innovate, develop new products and technologies, progress and benefit from digital transformation and maintain technologies to meet the needs of our customers
• natural disasters, epidemics, pandemics and similar outbreaks and other significant disruptions
• products and services we provide related to hazardous and high risk operations, including the production and use of such products, which subject us to various environmental, regulatory, financial, reputational and other risks
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
• the adequacy and availability of, and ability to obtain, insurance coverage, customer indemnifications or other liability protections
• the future investment performance of plan assets, gains or losses associated with changes in valuation of marketable securities related to our non-qualified benefit plans, changes in actuarial assumptions associated with our pension and other postretirement benefit plans and legislative or other regulatory actions impacting our pension and postretirement benefit obligations
• changes in business conditions that could impact business investments and/or recorded goodwill or the value of other long-lived assets, and other potential future liabilities
You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of forward- looking statements. These forward-looking statements speak only as of the date this earnings release is first issued or, in the case of any document incorporated by reference, the date of that document. 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.
This release and the attachments also contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the company’s use of these measures are included in this release or the attachments.
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
$ in millions, except September 30, December 31, par value 2026 2025 ────────────────────────────────────────────────────────────────────────────── Assets Cash and cash $ 3,744 $ 4,403 equivalents Accounts 2,080 1,375 receivable, net Unbilled receivables, 7,899 6,544 net Inventoried 1,361 1,309 costs, net Prepaid expenses and 1,893 1,656 other current assets Total current 16,977 15,287 assets Property, plant and equipment, net of accumulated 10,461 10,972 depreciation of $10,306 for 2026 and $9,648 for 2025 Operating lease right-of-use 2,182 1,859 assets Goodwill 17,440 17,437 Deferred tax 488 1,051 assets Pension and other postretirement 3,447 3,167 benefit plan assets Other non-current 1,502 1,604 assets Total assets $ 52,497 $ 51,377 Liabilities Trade accounts $ 3,281 $ 3,240 payable Accrued employee 2,039 2,309 compensation Advance payments and billings in 3,838 4,086 excess of costs incurred Other current 4,595 4,247 liabilities Total current 13,753 13,882 liabilities Long-term debt, net of current portion 14,433 15,162 of $764 for 2026 and $534 for 2025 Pension and other postretirement 1,076 1,110 benefit plan liabilities Operating lease 2,202 1,857 liabilities Other non-current 2,350 2,692 liabilities Total 33,814 34,703 liabilities 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; 142 142 issued and outstanding: 2026—142,064,1… and 2025—141,997,1… Paid-in capital 63 — Retained 18,610 16,658 earnings Accumulated other -132 -126 comprehensive loss Total shareholders’ 18,683 16,674 equity Total liabilities and $ 52,497 $ 51,377 shareholders’ equity
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Nine Months Ended $ in millions September 30 Operating activities 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings $ 3,093 $ 2,755 Adjustments to reconcile to net cash provided by operating activities: Depreciation and 1,118 1,066 amortization Stock-based 75 65 compensation Deferred income taxes 651 344 B-21 loss provision — 477 Gain on sale of — -231 business Net periodic pension -361 -256 and OPB income Pension and OPB -92 -94 contributions Changes in assets and liabilities: Accounts receivable, -705 -716 net Unbilled receivables, -1,177 -1,240 net Inventoried costs, net -65 -179 Prepaid expenses and 55 -29 other assets Trade accounts payable 41 203 Advance payments and billings in excess -248 -505 of costs incurred Other liabilities -868 -340 Income taxes payable, -125 -421 net Other operating -23 -39 activities Net cash provided by operating 1,369 860 activities Investing activities Capital expenditures -775 -788 Proceeds from sale of equipment to a 371 — customer Proceeds from sale of 107 — investment Divestiture of training services — 333 business Other investing -17 -36 activities Net cash used in -314 -491 investing activities Financing activities Net proceeds from issuance of long-term — 998 debt Payments of long-term -527 -1,500 debt Common stock -68 -1,168 repurchases Cash dividends paid -1,035 -964 Payments of employee taxes withheld from -58 -38 share-based awards Other financing -26 -93 activities Net cash used in -1,714 -2,765 financing activities Decrease in cash and -659 -2,396 cash equivalents Cash and cash equivalents, beginning 4,403 4,353 of year Cash and cash equivalents, end of $ 3,744 $ 1,957 period
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
1 Funded backlog represents firm orders for which funding is authorized and appropriated. Total backlog excludes unexercised contract options and indefinite 2 delivery, indefinite quantity (IDIQ) contracts until the time the option or IDIQ task order is exercised or awarded.
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Non-GAAP Financial Measures Disclosure: This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in the text of the release. Definitions for the non-GAAP measures are provided below and reconciliations are provided in the body of the release, except that reconciliations of forward-looking non-GAAP measures are not provided because the company is unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of certain items, including, but not limited to, the impact of any mark-to-market pension adjustment. Other companies may define these measures differently or may utilize different non-GAAP measures.
MTM-adjusted EPS: Diluted earnings per share excluding the per share impact of MTM benefit (expense) and related tax impacts. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company’s underlying financial performance by presenting the company’s diluted earnings per share results before the non-operational impact of pension and OPB actuarial gains and losses.
Segment operating income and segment operating margin rate: Segment operating income and segment operating margin rate (segment operating income divided by sales) reflect the combined operating income of our four segments less the operating income associated with intersegment sales. Segment operating income includes pension expense allocated to our sectors under FAR and CAS and excludes FAS pension service expense and unallocated corporate items. These measures may be useful to investors and other users of our financial statements as supplemental measures in evaluating the financial performance and operational trends of our sectors. These measures should not be considered in isolation or as alternatives to operating results presented in accordance with GAAP.
Organic sales: Total sales excluding sales attributable to the company’s former training services business. This measure may be useful to investors and other users of our financial statements as a supplemental measure in evaluating the company’s underlying sales growth as well as in understanding our ongoing business and future sales trends by presenting the company’s sales adjusted for the impact of the divestiture.
Adjusted free cash flow: Net cash provided by or used in operating activities, less capital expenditures, plus proceeds from the sale of equipment to a customer (not otherwise included in net cash provided by or used in operating activities) and the after-tax impact of discretionary pension contributions. Adjusted free cash flow includes proceeds from the sale of equipment to a customer, if any, as such proceeds were generated in a customer sales transaction. It also includes the after-tax impact of discretionary pension contributions, if any, for consistency and comparability of financial performance. This measure may not be defined and calculated by other companies in the same manner. We use adjusted free cash flow as a key factor in our planning for, and consideration of, acquisitions, the payment of dividends and stock repurchases. This non-GAAP measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with GAAP. During the nine months ended September 30, 2026 and 2025, the company made no discretionary pension contributions. #
Northrop Grumman Corporation 2980 Fairview Park Drive • Falls Church, VA 22042-4511 news.northropgrumman.com
Full text with the tables
Exhibit 99
News Release Contact: Katie Young (Media)
908-520-9948
katherine.young@ngc.com
Randy Sinclair (Investors)
571-835-5513
randy.sinclair@ngc.com
Northrop Grumman Reports Third Quarter 2026 Financial Results
• Book to bill ratio of 1.5x; Net awards of $16 billion
• Backlog increases to $110 billion
• Sales increase 7 percent to $11.1 billion
• Operating margin rate of 11.4 percent, Segment operating margin rate 1 of 12.1
percent
• Diluted earnings per share (EPS) of $7.89
• Company raises 2026 guidance for key financial metrics:
◦ Segment operating income 1 increased by $65 million at the midpoint
◦ MTM-adjusted EPS 1 increased by $0.70 at the midpoint
FALLS CHURCH, Va. – October 20, 2026 – Northrop Grumman Corporation (NYSE: NOC)
reported third quarter 2026 sales increased 7 percent to $11.1 billion, as
compared with $10.4 billion in the third quarter of 2025. Third quarter sales
reflect continued strong demand for our global capabilities. Third quarter 2026
net earnings totaled $1.1 billion, or $7.89 per diluted share, as compared with
$1.1 billion, or $7.67 per diluted share, in the third quarter of 2025.
“In a complex world with the growing need for solutions that scale and perform,
our customers continue to turn to Northrop Grumman, and we are delivering with
urgency and innovation. Our investments provide the capacity necessary to
deliver durable growth as we expand our product offerings and scale our
operations,” said Kathy Warden, chair, chief executive officer and president.
“I’m confident our new record backlog, well-positioned portfolio and
investments, and industry-leading performance will continue to drive sales and
earnings growth as reflected in our 2027 outlook.”
1Non-GAAP measure - see definitions at the end of
this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Third Quarter 2026 2
Financial Results
Consolidated Operating Results and Cash Flows
$
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1Non-GAAP measure - see definitions at the end of
this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Third Quarter 2026 3
Financial Results
Sales
Third quarter 2026 sales increased $699 million, or 7 percent, driven by higher
sales at all four sectors, including a 14 percent increase at Aeronautics
Systems and a 12 percent increase at Defense Systems. These increases were
partially offset by $95 million of higher intercompany eliminations.
Operating Income and Margin Rate
Third quarter 2026 operating income increased $27 million, or 2 percent,
primarily due to $68 million of higher segment operating income 1 , partially
offset by a $52 million decrease in the FAS/CAS operating adjustment. Operating
margin rate declined to 11.4 percent from 11.9 percent principally due to the
decrease in the FAS/CAS operating adjustment.
Segment Operating Income and Margin Rate
1
Third quarter 2026 segment operating income 1 increased $68 million, or 5
percent, primarily due to $72 million of higher operating income at Aeronautics
Systems. Third quarter 2026 segment operating margin rate 1 of 12.1 percent
reflects strong program performance and higher operating margin rates at
Aeronautics Systems and Space Systems. Segment operating margin rate 1 decreased
from 12.3 percent in the third quarter of 2025 principally due to a prior year
$68 million favorable EAC adjustment in the restricted advanced microelectronics
portfolio at Mission Systems.
Federal and Foreign Income Taxes
Third quarter 2026 income tax expense decreased $49 million, or 22 percent, due
to a lower effective tax rate (ETR) and $25 million of lower earnings before
income taxes. The third quarter 2026 ETR decreased to 13.4 percent from 16.9
percent principally due to higher research credits.
Net Earnings
Third quarter 2026 net earnings increased $24 million, or 2 percent, primarily
due to a $49 million decrease in income tax expense, a $31 million increase in
the non-operating FAS pension benefit and a $27 million increase in operating
income, partially offset by an $86 million decrease in Other, net largely driven
by favorable returns on marketable securities in the prior year.
Cash Flows
Third quarter 2026 net cash provided by operating activities increased $188
million, or 12 percent, primarily due to improved trade working capital. Third
quarter 2026 adjusted free cash flow 1 increased $554 million, or 44 percent,
due to proceeds received in connection with the sale of equipment to a customer
and higher net cash provided by operating activities.
Awards and Backlog
Third quarter 2026 net awards totaled $16.4 billion, and backlog totaled $109.6
billion. Significant third quarter new awards include $4.6 billion for
restricted programs (primarily at Aeronautics Systems, Space Systems, and
Mission Systems), $2.0 billion for Sentinel, $1.4 billion for Virginia Class
submarines, $1.3 billion for F-35 at Aeronautics Systems, and $1.0 billion for
E-2.
1Non-GAAP measure - see definitions at the end of
this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Third Quarter 2026 4
Financial Results
Segment Operating Results
… …
… …
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… … … …
… … 2… … … C… % 2… … … C… %
──────────────────────────────────────────────────────────────────────────────
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Sales
Third quarter 2026 sales increased $433 million, or 14 percent, primarily due to
a $195 million increase on F-35 driven by the timing of material costs on
production lots and increased sustainment volume, higher B-21 sales and an
increase in B-2 sustainment volume.
Operating Income
Third quarter 2026 operating income increased $72 million, or 24 percent, due to
higher sales and a higher operating margin rate. Operating margin rate increased
to 10.5 percent from 9.7 percent primarily due to higher net contract margin
adjustments, including on certain mature production and sustainment programs.
T… N…
… M… M…
… E… E…
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Sales
Third quarter 2026 sales increased $248 million, or 12 percent, primarily due to
a $180 million increase on Sentinel as the program continues to ramp, higher
volume on the Guided Multiple Launch Rocket System Extended Range (GMLRS ER)
program due to the timing of awards, and higher volume on various tactical solid
rocket motor programs. These increases were partially offset by lower volume on
armament programs, primarily on certain military ammunition programs.
Operating Income
Third quarter 2026 operating income increased $16 million, or 7 percent,
primarily due to higher sales, partially offset by a lower operating margin
rate. Operating margin rate decreased to 10.8 percent from 11.4 percent,
primarily due to changes in contract mix toward more cost-type content.
1Non-GAAP measure - see definitions at the end of
this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
Northrop Grumman Reports Third Quarter 2026 5
Financial Results
T… N…
M… M…
$ E… E…
… M… S… S…
… S… … 30 2… … % … 30 2… … %
──────────────────────────────────────────────────────────────────────────────
… $ … $ 3… 2 % $ … $ 9… 2 %
… … 5… -3 % … 1… 9 %
…
…
… 1… % … % 1… % … %
…
Sales
Third quarter 2026 sales increased $62 million, or 2 percent, primarily due to
ramp-up on restricted airborne radar programs and higher volume on marine
systems programs. These increases were partially offset by lower volume on
restricted advanced microelectronics programs.
Operating Income
Third quarter 2026 operating income decreased $15 million, or 3 percent,
primarily due to a lower operating margin rate, partially offset by higher
sales. Third quarter 2026 operating margin rate of 15.8 percent reflects strong
program performance on marine systems and restricted airborne radar programs.
Operating margin rate decreased from 16.7 percent in the third quarter of 2025
due, in part, to a prior year $68 million favorable EAC adjustment in the
restricted advanced microelectronics portfolio.
T… …
M… …
$ E… …
… S… S… …
… S… … 30 2… … % 2… … … C… %
──────────────────────────────────────────────────────────────────────────────
… $ … $ 2… 2 % $ 7… $ … 1 %
… … 2… 5 % 7… … … %
…
…
… 1… % … % … % 1… %
…
Sales
Third quarter 2026 sales increased $51 million, or 2 percent, primarily due to
ramp-up of programs in the restricted space portfolio, partially offset by $136
million of lower sales on Commercial Resupply Service missions due to launch
timing.
Operating Income
Third quarter 2026 operating income increased $14 million, or 5 percent, due to
a higher operating margin rate and higher sales. Operating margin rate increased
to 11.3 percent from 11.0 percent, primarily due to changes in contract mix
toward more fixed-price content.
1Non-GAAP measure - see definitions at the end of
this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 6
Financial Results
Guidance
Financial guidance, as well as outlook, trends, expectations and other forward-
looking statements provided by the company for 2026 and beyond, reflect the
company's judgment based on the information available to the company at the time
of this release. The company’s financial guidance and outlook for 2026 and
beyond reflect what the company currently anticipates will be the impacts on the
company from, among other factors, the global macroeconomic, security, and
political/budget environments, including the impacts from inflationary pressures
and labor and supply chain challenges; changes in the threat environment;
changes in government budget, appropriations and procurement priorities and
processes; changes in the regulatory environment, including trade policy; and
changes in support for our programs. We are not assuming, and the company’s
financial guidance and outlook for 2026 and beyond do not reflect impacts on the
company from, a prolonged government shutdown, or application of spending limits
or other spending cuts. However, the company cannot predict how these factors
will evolve or what impacts they will have, and there can be no assurance that
the company’s current expectations or underlying assumptions are correct. These
factors can affect the company’s ability to achieve guidance or meet
expectations.
For additional factors that may impact the company’s ability to achieve guidance
or meet expectations, please see the “Forward-Looking Statements” section in
this release and our Form 10-Q.
2026 Guidance
($ in millions, except per share amounts) As of 10/20/2026
Sales $43,750 — $44,250
Segment operating income1 $4,940 — $5,040
Prior: $4,850 — $5,000
MTM-adjusted EPS1 $29.35 — $29.75
Prior: $28.60 — $29.10
Adjusted free cash flow1 $3,100 — $3,500
2026 Segment Guidance
As of 10/20/2026
Sales ($B) OM Rate %
Aeronautics Systems ~$14 High 9%
Prior: Mid to High 9%
Defense Systems Mid to High $8 ~10%
Mission Systems High $12 Mid 15%
Prior: ~15%
Space Systems ~$11 Low 10%
Intersegment Eliminations ~($2.7) Mid 13%
1 Non-GAAP measure - see definitions at the end of this earnings release.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 7
Financial Results
About Northrop Grumman
Northrop Grumman will webcast its earnings conference call at 9:30 a.m. Eastern
Time on October 20, 2026. A live audio broadcast of the conference call will be
available on the investor relations page of the company’s website at
www.northropgrumman.com .
Northrop Grumman is a leading global aerospace and defense technology company.
Our pioneering solutions equip our customers with the capabilities they need to
connect and protect the world, and push the boundaries of human exploration
across the universe. Driven by a shared purpose to solve our customers’ toughest
problems, our employees define possible every day.
###
Forward-Looking Statements and Projections
This earnings release and the information we are incorporating by reference, and
statements to be made on the earnings conference call, contain or may contain
statements that constitute “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as “will,”
“expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “strategy,”
“project,” “forecast,” “achieve,” “believe,” “estimate,” “guidance,” “outlook,”
“trends,” “goals,” “confident,” “targeting,” “on track” and similar expressions
generally identify these forward-looking statements.
Forward-looking statements include, among other things, statements relating to
our future financial condition, results of operations and/or cash flows,
including financial guidance, outlook, trends, expectations and other forward-
looking statements for 2026 and beyond. 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, those identified and
discussed more fully in the section entitled “Risk Factors” in the Form 10-K for
the year ended December 31, 2025, and from time to time in our other filings
with the Securities and Exchange Commission (SEC). They include:
Industry and Economic Risks
• our dependence on the U.S. government for a substantial portion of our
business
• significant delays or reductions in appropriations and/or for our programs,
and U.S. government funding and program support more broadly, including as a
result of a prolonged continuing resolution and/or government shutdown, and/or
related to the global security environment or other global events
• significant delays or reductions in payments as a result of or related to a
breach of the debt ceiling or a prolonged government shutdown
• the use of estimates when accounting for our contracts and the effect of
contract cost growth and our efforts to recover or offset such costs and/or
changes in estimated contract costs and revenues, including as a result of
inflationary pressures, labor shortages, supply chain challenges, changes in
trade policies and/or other macroeconomic factors, and risks related
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 8
Financial Results
to management’s judgments and assumptions in estimating and/or projecting
contract revenue and performance which may be inaccurate
• increased competition within our markets and bid protests
• continued pressures from macroeconomic trends, including on costs, schedules,
performance and ability to meet expectations
Legal and Regulatory Risks
• investigations, claims, disputes, enforcement actions, litigation (including
criminal, civil and administrative) and/or other legal proceedings
• changes in procurement and other laws, SEC, U.S. Department of War (DoW) and
other rules and regulations, including changes through executive orders,
contract terms and practices applicable to our industry, findings by the U.S.
government as to our compliance with such requirements, more aggressive
enforcement of such requirements and changes in our customers’ business
practices and preferences globally
• the improper conduct of employees, agents, subcontractors, suppliers, business
partners or joint ventures in which we participate, including the impact on our
reputation and our ability to do business
• environmental matters, unforeseen environmental costs and government and
third-party claims
• unanticipated changes in our tax provisions or exposure to additional tax
liabilities
Business and Operational Risks
• cyber and other security threats or disruptions faced by us, our customers or
our suppliers and other partners, including threats or disruptions from the use
of artificial intelligence models capable of exploiting vulnerabilities to
conduct or enhance cyber attacks, and changes in related regulations
• the performance and viability of our subcontractors and suppliers and the
availability and pricing of raw materials, critical minerals and metals,
chemicals, parts and components, particularly with inflationary pressures,
increased costs, pricing changes, shortages in labor and financial resources,
supply chain disruptions, and extended material lead times
• our ability to attract and retain a qualified and talented workforce with the
necessary security clearances to meet our performance obligations
• our exposure to additional risks as a result of our international business,
including risks related to global security and strategic alliances, geopolitical
and economic factors, misconduct, suppliers, laws and regulations
• our ability to innovate, develop new products and technologies, progress and
benefit from digital transformation and maintain technologies to meet the needs
of our customers
• natural disasters, epidemics, pandemics and similar outbreaks and other
significant disruptions
• products and services we provide related to hazardous and high risk
operations, including the production and use of such products, which subject us
to various environmental, regulatory, financial, reputational and other risks
• our ability appropriately to protect and exploit intellectual property rights
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 9
Financial Results
General and Other Risk Factors
• the adequacy and availability of, and ability to obtain, insurance coverage,
customer indemnifications or other liability protections
• the future investment performance of plan assets, gains or losses associated
with changes in valuation of marketable securities related to our non-qualified
benefit plans, changes in actuarial assumptions associated with our pension and
other postretirement benefit plans and legislative or other regulatory actions
impacting our pension and postretirement benefit obligations
• changes in business conditions that could impact business investments and/or
recorded goodwill or the value of other long-lived assets, and other potential
future liabilities
You are urged to consider the limitations on, and risks associated with,
forward-looking statements and not unduly rely on the accuracy of forward-
looking statements. These forward-looking statements speak only as of the date
this earnings release is first issued or, in the case of any document
incorporated by reference, the date of that document. 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.
This release and the attachments also contain non-GAAP financial measures. A
reconciliation to the nearest GAAP measure and a discussion of the company’s use
of these measures are included in this release or the attachments.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 10
Financial Results
SCHEDULE 1
NORTHROP GRUMMAN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(Unaudited)
$ in
milli… Three Nine
except Months Months
per Ended Ended
share Septem… Septem…
amoun… 30 30
Sales 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Produ… $ 9,098 $ 8,369 $ 25,864 $ 24,148
Servi… 2,024 2,054 6,015 6,094
Total 11,122 10,423 31,879 30,242
sales
Opera…
costs
and
expen…
Produ… 7,198 6,631 20,786 19,523
Servi… 1,572 1,565 4,660 4,702
Gener…
and 1,083 985 3,079 3,008
admin…
expen…
Total
opera…
costs 9,853 9,181 28,525 27,233
and
expen…
Gain
on
sale — — — 231
of
busin…
Opera… 1,269 1,242 3,354 3,240
income
Other
(expe…
income
Inter… -158 -161 -481 -490
expen…
Non-o…
FAS 167 136 499 403
pensi…
benef…
Other, 20 106 124 175
net
Earni…
before 1,298 1,323 3,496 3,328
income
taxes
Feder…
and
forei… 174 223 403 573
income
tax
expen…
Net $ 1,124 $ 1,100 $ 3,093 $ 2,755
earni…
Basic
earni… $ 7.91 $ 7.69 $ 21.77 $ 19.16
per
share
Weigh…
common
shares 142.1 143.1 142.1 143.8
outst…
in
milli…
Dilut…
earni… $ 7.89 $ 7.67 $ 21.72 $ 19.12
per
share
Weigh…
dilut…
shares 142.4 143.5 142.4 144.1
outst…
in
milli…
Net
earni… $ 1,124 $ 1,100 $ 3,093 $ 2,755
(from
above)
Other
compr…
income
(loss…
net
of tax
Change
in
cumul… 2 2 — 11
trans…
adjus…
Change
in — -1 -6 18
other,
net
Other
compr…
income 2 1 -6 29
(loss…
net
of tax
Compr… $ 1,126 $ 1,101 $ 3,087 $ 2,784
income
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 11
Financial Results
SCHEDULE 2
NORTHROP GRUMMAN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
$ in millions,
except September 30, December 31,
par value 2026 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Cash and cash $ 3,744 $ 4,403
equivalents
Accounts 2,080 1,375
receivable, net
Unbilled
receivables, 7,899 6,544
net
Inventoried 1,361 1,309
costs, net
Prepaid
expenses and 1,893 1,656
other current
assets
Total current 16,977 15,287
assets
Property, plant
and equipment,
net of
accumulated 10,461 10,972
depreciation of
$10,306 for
2026 and $9,648
for 2025
Operating lease
right-of-use 2,182 1,859
assets
Goodwill 17,440 17,437
Deferred tax 488 1,051
assets
Pension and
other
postretirement 3,447 3,167
benefit
plan assets
Other
non-current 1,502 1,604
assets
Total assets $ 52,497 $ 51,377
Liabilities
Trade accounts $ 3,281 $ 3,240
payable
Accrued
employee 2,039 2,309
compensation
Advance
payments and
billings in 3,838 4,086
excess
of costs
incurred
Other current 4,595 4,247
liabilities
Total current 13,753 13,882
liabilities
Long-term debt,
net of current
portion 14,433 15,162
of $764 for
2026 and $534
for 2025
Pension and
other
postretirement 1,076 1,110
benefit
plan
liabilities
Operating lease 2,202 1,857
liabilities
Other
non-current 2,350 2,692
liabilities
Total 33,814 34,703
liabilities
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; 142 142
issued and
outstanding:
2026—142,064,1…
and
2025—141,997,1…
Paid-in capital 63 —
Retained 18,610 16,658
earnings
Accumulated
other -132 -126
comprehensive
loss
Total
shareholders’ 18,683 16,674
equity
Total
liabilities and $ 52,497 $ 51,377
shareholders’
equity
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 12
Financial Results
SCHEDULE 3
NORTHROP GRUMMAN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
$ in millions September 30
Operating activities 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings $ 3,093 $ 2,755
Adjustments to
reconcile to net cash
provided by operating
activities:
Depreciation and 1,118 1,066
amortization
Stock-based 75 65
compensation
Deferred income taxes 651 344
B-21 loss provision — 477
Gain on sale of — -231
business
Net periodic pension -361 -256
and OPB income
Pension and OPB -92 -94
contributions
Changes in assets and
liabilities:
Accounts receivable, -705 -716
net
Unbilled receivables, -1,177 -1,240
net
Inventoried costs, net -65 -179
Prepaid expenses and 55 -29
other assets
Trade accounts payable 41 203
Advance payments and
billings in excess -248 -505
of costs incurred
Other liabilities -868 -340
Income taxes payable, -125 -421
net
Other operating -23 -39
activities
Net cash provided by
operating 1,369 860
activities
Investing activities
Capital expenditures -775 -788
Proceeds from sale of
equipment to a 371 —
customer
Proceeds from sale of 107 —
investment
Divestiture of training
services — 333
business
Other investing -17 -36
activities
Net cash used in -314 -491
investing activities
Financing activities
Net proceeds from
issuance of long-term — 998
debt
Payments of long-term -527 -1,500
debt
Common stock -68 -1,168
repurchases
Cash dividends paid -1,035 -964
Payments of employee
taxes withheld from -58 -38
share-based awards
Other financing -26 -93
activities
Net cash used in -1,714 -2,765
financing activities
Decrease in cash and -659 -2,396
cash equivalents
Cash and cash
equivalents, beginning 4,403 4,353
of
year
Cash and cash
equivalents, end of $ 3,744 $ 1,957
period
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 13
Financial Results
SCHEDULE 4
NORTHROP GRUMMAN CORPORATION
TOTAL BACKLOG
(Unaudited)
%
Sep… Dec… Chan…
30, 31, in
2026 2025 2026
──────────────────────────────────────────────────────────────────────────────
$
in Fun… Unfu… Tota… Tota…
mi…
Ae… $ 15,… $ 11,… $ 26,… $ 23,… 16 %
Sy…
De… 10,… 26,… 36,… 27,… 31 %
Sy…
Mi… 14,… 5,5… 19,… 18,… 7 %
Sy…
Sp… 9,8… 16,… 26,… 26,… 1 %
Sy…
To… $ 50,… $ 59,… $ 109… $ 95,… 15 %
ba…
1 Funded backlog represents firm orders for which funding is authorized
and appropriated.
Total backlog excludes unexercised contract options and indefinite
2 delivery, indefinite quantity (IDIQ) contracts until the time the
option or IDIQ task order is exercised or awarded.
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 14
Financial Results
SCHEDULE 5
NORTHROP GRUMMAN CORPORATION
SUPPLEMENTAL PER SHARE INFORMATION
(Unaudited)
$ in
millio…
except
per
share
amounts
Per
share
impact
of Three Nine
total Months Months
net Ended Ended
FAS/CAS Septemb… September
pension 30 30
adjust… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
FAS/CAS
operat… $ 15 $ 67 $ 29 $ 193
adjust…
Non-op…
FAS 167 136 499 403
pension
benefit
Total
net
FAS/CAS 182 203 528 596
pension
adjust…
Tax -46 -51 -133 -150
effect1
After-… $ 136 $ 152 $ 395 $ 446
impact
Weight…
diluted
shares 142.4 143.5 142.4 144.1
outsta…
in
millio…
Per
share $ 0.96 $ 1.06 $ 2.77 $ 3.10
impact
Per
share
impact
of
intang…
asset
amorti…
and
PP&E
step-up
deprec…
Intang…
asset
amorti…
and $ -13 $ -21 $ -51 $ -63
PP&E
step-up
deprec…
Tax 3 5 13 16
effect1
After-… $ -10 $ -16 $ -38 $ -47
impact
Weight…
diluted
shares 142.4 143.5 142.4 144.1
outsta…
in
millio…
Per
share $ -0.07 $ -0.11 $ -0.27 $ -0.33
impact
1 Based on a 21% federal statutory tax rate and a 5.25% blended state tax
rate.
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2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports Third Quarter 2026 15
Financial Results
Non-GAAP Financial Measures Disclosure: This earnings release contains non-GAAP
(accounting principles generally accepted in the United States of America)
financial measures, as defined by SEC Regulation G and indicated by a footnote
in the text of the release. Definitions for the non-GAAP measures are provided
below and reconciliations are provided in the body of the release, except that
reconciliations of forward-looking non-GAAP measures are not provided because
the company is unable to provide such reconciliations without unreasonable
effort due to the uncertainty and inherent difficulty of predicting the
occurrence and financial impact of certain items, including, but not limited to,
the impact of any mark-to-market pension adjustment. Other companies may define
these measures differently or may utilize different non-GAAP measures.
MTM-adjusted EPS: Diluted earnings per share excluding the per share impact of
MTM benefit (expense) and related tax impacts. This measure may be useful to
investors and other users of our financial statements as a supplemental measure
in evaluating the company’s underlying financial performance by presenting the
company’s diluted earnings per share results before the non-operational impact
of pension and OPB actuarial gains and losses.
Segment operating income and segment operating margin rate: Segment operating
income and segment operating margin rate (segment operating income divided by
sales) reflect the combined operating income of our four segments less the
operating income associated with intersegment sales. Segment operating income
includes pension expense allocated to our sectors under FAR and CAS and excludes
FAS pension service expense and unallocated corporate items. These measures may
be useful to investors and other users of our financial statements as
supplemental measures in evaluating the financial performance and operational
trends of our sectors. These measures should not be considered in isolation or
as alternatives to operating results presented in accordance with GAAP.
Organic sales: Total sales excluding sales attributable to the company’s former
training services business. This measure may be useful to investors and other
users of our financial statements as a supplemental measure in evaluating the
company’s underlying sales growth as well as in understanding our ongoing
business and future sales trends by presenting the company’s sales adjusted for
the impact of the divestiture.
Adjusted free cash flow: Net cash provided by or used in operating activities,
less capital expenditures, plus proceeds from the sale of equipment to a
customer (not otherwise included in net cash provided by or used in operating
activities) and the after-tax impact of discretionary pension contributions.
Adjusted free cash flow includes proceeds from the sale of equipment to a
customer, if any, as such proceeds were generated in a customer sales
transaction. It also includes the after-tax impact of discretionary pension
contributions, if any, for consistency and comparability of financial
performance. This measure may not be defined and calculated by other companies
in the same manner. We use adjusted free cash flow as a key factor in our
planning for, and consideration of, acquisitions, the payment of dividends and
stock repurchases. This non-GAAP measure may be useful to investors and other
users of our financial statements as a supplemental measure of our cash
performance, but should not be considered in isolation, as a measure of residual
cash flow available for discretionary purposes, or as an alternative to
operating cash flows presented in accordance with GAAP. During the nine months
ended September 30, 2026 and 2025, the company made no discretionary pension
contributions.
#
Northrop Grumman Corporation
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