Northrop Grumman 2013 Annual Report Download

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2013
Annual Report

Table of contents

  • Page 1
    2013 Annual Report

  • Page 2
    ... pension contributions of $323 million, $193 million, and $648 million for years 2013, 2012 and 2011, respectively. Free cash flow is cash provided by operations less capital expenditures. Free cash flow is reconciled to cash provided by operations in the table on page 35 of Part II, Item...

  • Page 3
    ... for the future - unmanned systems, C4ISR, cyber and logistics and modernization - as well as manned strike aircraft. We are cognizant of our responsibility to the communities in which we work and live. In 2013, Northrop Grumman and the Northrop Grumman Foundation contributed a total of $38.1 "We...

  • Page 4
    ...the defense of our nation and its allies. Northrop Grumman broadened its business focus to one that is increasingly global, looking for opportunities to expand the delivery of products and services into attractive global markets by leveraging our core positions in C4ISR, unmanned systems, cyber and...

  • Page 5
    ..., advanced training solutions, including the U.S. Army's Combat Training Center Instrumentation System, high-technology engineering services and operationally responsive systems for programs such as KC-10 Extender refueling aircraft; U.S. Army Mission Command Training Program; Hunter unmanned aerial...

  • Page 6
    ... Services DAVID T. PERRY Corporate Vice President and Chief Global Business Development Officer JENNIFER C. MCGAREY SHEILA C. CHESTON Corporate Vice President and General Counsel Corporate Vice President and Secretary THOMAS E. VICE Corporate Vice President and President, Aerospace Systems...

  • Page 7
    ... Fairview Park Drive, Falls Church, Virginia 22042 (703) 280-2900 (Address and telephone number of principal executive offices) Securities registered pursuant to section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $1 par value New York Stock Exchange...

  • Page 8
    ...Consolidated Financial Statements 1. Summary of Significant Accounting Policies 2. Earnings Per Share, Share Repurchases and Dividends on Common Stock 3. Business Dispositions 4. Segment Information 5. Accounts Receivable, Net 6. Inventoried Costs, Net 7. Income Taxes 8. Goodwill and Other Purchased...

  • Page 9
    ...Procedures Item 9B. Other Information Management's Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting PART III Directors, Executive Officers, and Corporate Governance Executive Compensation Security...

  • Page 10
    [THIS PAGE INTENTIONALLY LEFT BLANK]

  • Page 11
    ... financial statements in Part II, Item 8 for further information. AEROSPACE SYSTEMS Aerospace Systems, headquartered in Redondo Beach, California, is a leader in the design, development, integration and production of manned aircraft, unmanned systems, spacecraft, high-energy laser systems...

  • Page 12
    ...our global military, civil and commercial customers. Electronic Systems provides a variety of defense electronics and systems, airborne fire control radars, situational awareness systems, early warning systems, airspace management systems, navigation systems, communications systems, marine power and...

  • Page 13
    ...civilian, state and international customers, providing dynamic cyber defense and specialized cyber systems and services in support of critical government missions. Applications are predominantly for high end intelligence and defense missions, but also include health, homeland security, public safety...

  • Page 14
    ... foreign military sales - a method to sell U.S. defense equipment and services to foreign governments through the DoD) accounted for 86 percent or more of total revenues in each of the years ended December 31, 2013, 2012 and 2011. International sales (which include foreign military sales) accounted...

  • Page 15
    ...in backlog until the time the option or IDIQ task order is exercised or awarded. For multi-year service contracts with non-U.S. Government customers having no stated contract values, backlog includes only the amounts committed by the customer. Backlog is converted into sales as costs are incurred or...

  • Page 16
    ... of the work within some specified time and some stated dollar limitation. Fees on cost-type contracts can be fixed in terms of dollar value or percentage of costs. Award and incentive fees are based on performance criteria such as cost, schedule, quality, and technical performance. Award fees are...

  • Page 17
    ... on our consolidated financial position, annual results of operations and/or cash flows. EXECUTIVE OFFICERS See Part III, Item 10, for information about our executive officers. AVAILABLE INFORMATION Our principal executive offices are located at 2980 Fairview Park Drive, Falls Church, Virginia 22042...

  • Page 18
    ...business and programs and could have a material adverse effect on our financial position, results of operations and/or cash flows. U.S. Government programs are subject to annual congressional budget authorization and appropriation processes. For many programs, Congress appropriates funds on a fiscal...

  • Page 19
    ... Northrop Grumman, and the customers, employees, suppliers, investors, and communities that rely on companies in the defense industrial base. Although it is difficult to determine specific impacts, we expect that over the longer term, the budget environment may result in lower awards, revenues...

  • Page 20
    ... Management Agency (DCMA) and the DoD Inspector General. These agencies review performance under our contracts, our cost structure and our compliance with applicable laws, regulations and standards, as well as the adequacy of, and our compliance with, our internal control systems and policies. Costs...

  • Page 21
    ...revenues and market share, which would negatively impact our financial position, results of operations and/or cash flows. We also are seeing an increasing number of bid protests from unsuccessful bidders on new program awards. Bid protests could result in significant expense to the company, contract...

  • Page 22
    ... state-of-the-art manufacturing expertise or are dependent upon factors not wholly within our control. Failure to meet these obligations could adversely affect our profitability and future prospects. We design, develop and manufacture technologically advanced and innovative products and services...

  • Page 23
    ... remedial actions, loss of business or potential liability. They could have a material adverse effect on our financial position, results of operations and/or cash flows. We provide cyber and information technology systems, products and services to various customers (government and commercial) and...

  • Page 24
    ...effect on our financial position, results of operations and/or cash flows. Changes to business practices for U.S. Government contractors could have a significant adverse effect on current programs, potential new awards and the processes by which procurements are awarded and managed. Our industry has...

  • Page 25
    ... value of our goodwill or other long-lived assets. Unforeseen environmental costs could have a material adverse effect on our financial position, results of operations and/or cash flows. Our operations are subject to and affected by a variety of federal, state, local and foreign environmental laws...

  • Page 26
    NORTHROP GRUMMAN CORPORATION rights in a government contracting environment. Our intellectual property is also subject to challenge, invalidation, misappropriation or circumvention by third parties. We also rely significantly upon proprietary technology, information, processes and know-how that are ...

  • Page 27
    ...on our cash flows. The cost accounting rules have been revised in order to partially harmonize the measurement and period of assignment of defined benefit pension plan costs allocable to U.S. Government contracts and the minimum required contribution under the Employee Retirement Income Security Act...

  • Page 28
    ... generally identify these forwardlooking statements. Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and cash flows. Forward-looking statements are based upon assumptions, expectations, plans and projections...

  • Page 29
    ... Hill Air Force Base, UT; and Herndon, VA. CORPORATE Falls Church and Lebanon, VA; and Irving, TX. The following is a summary of our floor space at December 31, 2013: U.S. Government Owned/Leased 1,930 - - 1 - 1,931 Square feet (in thousands) Aerospace Systems Electronic Systems Information Systems...

  • Page 30
    NORTHROP GRUMMAN CORPORATION is likely to have a material adverse effect on the company's consolidated financial position as of December 31, 2013, its annual results of operations and/or cash flows. For further information on the risks we face from existing and future investigations, lawsuits, ...

  • Page 31
    ... par value per share, of which no shares were issued and outstanding as of December 31, 2013 and 2012. MARKET INFORMATION Our common stock is listed on the New York Stock Exchange and trades under the symbol NOC. The following table sets forth, for the periods indicated, the high and low sale prices...

  • Page 32
    ... Includes commissions paid. Share repurchases take place from time to time, subject to market conditions and management's discretion, in the open market or in privately negotiated transactions. The company retires its common stock upon repurchase and has not made any purchases of common stock other...

  • Page 33
    ... total return as a reinvested dividend. The S&P Aerospace & Defense Index is comprised of The Boeing Company, General Dynamics Corporation, Honeywell International Inc., L-3 Communications, Lockheed Martin Corporation, Northrop Grumman Corporation, Precision Castparts Corporation, Raytheon Company...

  • Page 34
    ...Total backlog Square footage at year-end (in thousands) Number of employees at year-end (1) (2) Other customer sales includes foreign military sales. Total long-term obligations includes the long-term portions of debt, pension and other post-retirement benefit plan liabilities, deferred compensation...

  • Page 35
    ... Northrop Grumman, and the customers, employees, suppliers, investors, and communities that rely on companies in the defense industrial base. Although it is difficult to determine specific impacts, we expect that over the longer term, the budget environment may result in lower awards, revenues...

  • Page 36
    ... to include long range strike, missile defense, command and control, network communications, enhanced situational awareness, satellite systems, restricted programs, cybersecurity, technical services and information technology, as well as numerous homeland security programs. The company believes it...

  • Page 37
    ...194) $ in millions Aerospace Systems Electronic Systems Information Systems Technical Services Intersegment sales elimination Total sales variance 0% (6%) (7%) (5%) 2% (5%) For further information by segment refer to Segment Operating Results below, and for product and service detail, refer to...

  • Page 38
    ... at Electronic Systems, Information Systems and Technical Services. General and administrative expenses as a percentage of total sales increased to 9.7 percent in 2012, from 8.9 percent in 2011; the increase includes the impact of lower sales, higher indirect costs related to compensation accruals...

  • Page 39
    ... adjustment Unallocated corporate expenses Other Total operating income For financial statement purposes, we account for our employee pension plans in accordance with GAAP under FAS. We charge the costs of these plans to our contracts in accordance with the FAR and the related CAS that govern such...

  • Page 40
    ... from the multi-year 2 contract to the lower margin multi-year 3 contract, principally offset by performance improvements in space systems and higher operating margin rates and volume on sales of unmanned systems. ELECTRONIC SYSTEMS Year Ended December 31 2013 2012 2011 $7,149 $6,950 $7,372...

  • Page 41
    ... Kits (I-KITS), Enterprise Network Management (ENM) and F-22 programs, partially offset by higher volume of approximately $110 million on the Encore II Information Technology support program, as well as higher volume on the Air and Space Operations Center, Enterprise System Development, and Ground...

  • Page 42
    ... operating margins in newly awarded programs at Information Systems. Service costs as a percentage of service sales for 2013 increased 50 basis points, as compared with 2012. The increase is primarily due to lower service operating margins at Aerospace Systems and Information Systems. 2012 - Product...

  • Page 43
    NORTHROP GRUMMAN CORPORATION The following table presents product and service sales and operating costs and expenses by segment: $ in millions Segment Information: Aerospace Systems Product Service Electronic Systems Product Service Information Systems Product Service Technical Services Product ...

  • Page 44
    ... as compared with 2011, primarily due to lower service sales at Information Systems across a number of programs, partially offset by the transition of the ICBM program from product to service at Technical Services and higher service volume at Electronic Systems. Service costs for 2012 decreased $544...

  • Page 45
    ... due in 2014 and 2015 (see Note 10 in Part II, Item 8). The remaining net proceeds from the offering of the Notes will be used for general corporate purposes, including debt repayments, share repurchases, pension plan funding, acquisitions and working capital. Cash balances and cash generated from...

  • Page 46
    ... for long-term liquidity, from such sources as the public or private capital markets, the sale of assets, sale and leaseback of operating assets, and leasing rather than purchasing new assets. We have an effective shelf registration statement on file with the Securities and Exchange Commission (SEC...

  • Page 47
    ...statements in Part II, Item 8. CRITICAL ACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS Revenue Recognition We generate the majority of our business from long-term contracts with the U.S. Government for development, production and support activities. We classify contract revenues as product or service...

  • Page 48
    ... cost of new capital adjusted as appropriate to consider lower risk profiles associated with longer-term contracts and barriers to market entry. The terminal value assumptions are applied to the final year of the discounted cash flow model. Impairment assessment inherently involves management...

  • Page 49
    ... determine the present value of future cash flows currently expected to be required to settle our pension and other post-retirement benefit obligations. The discount rate is generally based on the yield of high-quality corporate fixed-income investments. At the end of each year, the discount rate is...

  • Page 50
    ... Pension expense Other post-retirement benefit expense Estimated Fair Market Value of Plan Assets - For certain plan assets where the fair market value is not readily determinable, such as real estate, private equity and hedge funds, estimates of fair value are determined using the best information...

  • Page 51
    ...Updates Accounting standards updates effective after December 31, 2013, are not expected to have a material effect on the company's financial position, annual results of operations and/or cash flows. Business Dispositions There were no material business dispositions in 2013 or 2012; however, in 2011...

  • Page 52
    ...respect to our international operations. We enter into foreign currency forward contracts to manage a portion of the exchange rate risk related to receipts from customers and payments to suppliers denominated in foreign currencies. We do not hold or issue derivative financial instruments for trading...

  • Page 53
    ... PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Northrop Grumman Corporation Falls Church, Virginia We have audited the accompanying consolidated statements of financial position of Northrop Grumman Corporation and subsidiaries (the "Company") as of December 31, 2013 and 2012...

  • Page 54
    ... in unamortized benefit plan costs, net of tax (expense) benefit of ($1,177) in 2013, $860 in 2012 and $823 in 2011 Change in cumulative translation adjustment Change in unrealized loss on marketable securities and cash flow hedges, net of tax benefit of $1 in 2013, $0 in 2012 and $2 in 2011 Other...

  • Page 55
    ...accounts payable Accrued employee compensation Advance payments and amounts in excess of costs incurred Other current liabilities Total current liabilities Long-term debt, net of current portion of $2 in 2013 and $5 in 2012 Pension and other post-retirement benefit plan liabilities Other non-current...

  • Page 56
    ... GRUMMAN CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS $ in millions Operating activities Sources of cash-continuing operations Cash received from customers Other cash receipts Total sources of cash-continuing operations Uses of cash-continuing operations Cash paid to suppliers and employees...

  • Page 57
    ... 2011 $ in millions Reconciliation of net earnings to net cash provided by operating activities Net earnings Net earnings from discontinued operations Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization Stock-based compensation Excess tax benefits...

  • Page 58
    ... stock repurchased Shares issued for stock awards and options End of year Paid-in capital Beginning of year Common stock repurchased Stock compensation and options exercised Shipbuilding spin-off adjustment End of year Retained earnings Beginning of year Net earnings Dividends declared End of year...

  • Page 59
    ... FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Northrop Grumman Corporation (herein referred to as "Northrop Grumman," the "company," "we," "us," or "our") is a leading global security company providing innovative systems, products and solutions in unmanned...

  • Page 60
    ...material effect on our consolidated financial position, annual results of operations and/or cash flows. Changes in estimates of contract sales, costs, or profits are recognized using the cumulative catch-up method of accounting. This method recognizes, in the current period, the cumulative effect of...

  • Page 61
    ...high credit standards for counterparties and through periodic settlements of positions. For derivative financial instruments not designated as cash flow hedging instruments, gains or losses resulting from changes in the fair value are reported in other, net in the consolidated statements of earnings...

  • Page 62
    NORTHROP GRUMMAN CORPORATION funds. The company does not invest in high yield or high risk securities. Cash in bank accounts at times may exceed federally insured limits. Accounts Receivable and Inventoried Costs Accounts receivable include amounts billed and currently due from customers, as well as...

  • Page 63
    ...and annual income or expense of the company's pension and other post-retirement benefit plans are determined using methodologies that involve several actuarial assumptions, the most significant of which are the discount rate, the expected long-term rate of return on plan assets, and the cash balance...

  • Page 64
    ...Diluted Earnings Per Share Diluted earnings per share includes the dilutive effect of awards granted to employees under stock-based compensation plans. The dilutive effect of these securities totaled 4.3 million, 4.8 million and 4.8 million shares for the years ended December 31, 2013, 2012 and 2011...

  • Page 65
    ... benefits, intellectual property, information technology, insurance and tax-related assets and liabilities. In connection with the spin-off, the company incurred $28 million of non-deductible transaction costs for the year ended December 31, 2011, which were included in discontinued operations...

  • Page 66
    ... 31, 2013, 2012 or 2011. 4. SEGMENT INFORMATION The company is aligned into four segments: Aerospace Systems, Electronic Systems, Information Systems, and Technical Services. The company, from time to time, acquires or disposes of businesses and realigns contracts, programs or business areas among...

  • Page 67
    ... Technical Services Intersegment eliminations Total sales Operating income Aerospace Systems Electronic Systems Information Systems Technical Services Intersegment eliminations Total segment operating income Reconciliation to operating income: Net FAS/CAS pension adjustment Unallocated corporate...

  • Page 68
    ...sales and operating income Aerospace Systems Electronic Systems Information Systems Technical Services Total Other Financial Information $ in millions Assets Aerospace Systems Electronic Systems Information Systems Technical Services Segment assets Corporate assets (1) Total assets December 31 2013...

  • Page 69
    ... millions Income Taxes on Continuing Operations Currently payable Federal income taxes Foreign income taxes Total federal and foreign income taxes currently payable Deferred federal and foreign income taxes Total federal and foreign income taxes Year Ended December 31 2013 2012 2011 $803 28 831 80...

  • Page 70
    ...: Year Ended December 31 2013 2012 2011 $1,002 $1,038 $1,079 (63) (42) (32) (37) (17) - 9 (9) (33) $ 911 $ 987 $ 997 $ in millions Income tax expense on continuing operations at statutory rate Manufacturing deduction Research tax credit Other, net Total federal and foreign income taxes The company...

  • Page 71
    ... tests, the company uses a discounted cash flow approach corroborated by comparative market multiples, where appropriate, to determine the fair value of its businesses. Accumulated goodwill impairment losses at December 31, 2013 and 2012, totaled $570 million at the Aerospace Systems segment. -61...

  • Page 72
    NORTHROP GRUMMAN CORPORATION The changes in the carrying amounts of goodwill for the years ended December 31, 2013 and 2012, were as follows: Aerospace Systems $3,801 (43) $3,758 - $3,758 Electronic Systems $2,400 10 $2,410 - $2,410 Information Systems $5,248 39 $5,287 7 $5,294 Technical Services $...

  • Page 73
    ... at December 31, 2013 and 2012, were not material. Hedge contracts not designated for hedge accounting and the ineffective portion of cash flow hedges are recorded in other income. Long-Term Debt The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available...

  • Page 74
    ...31, 2013, are as follows: $ in millions Year Ending December 31 2014 2015 2016 2017 2018 Thereafter Total principal payments Unamortized premium on long-term debt, net of discount Total long-term debt The premium on long-term debt primarily represents non-cash fair market value adjustments resulting...

  • Page 75
    ... of action. On May 4, 2012, the company commenced an action, Northrop Grumman Systems Corp. v. United States, in the U.S. Court of Federal Claims. This lawsuit relates to an approximately $875 million firm fixed price contract awarded to the company in 2007 by the U.S. Postal Service (USPS) for the...

  • Page 76
    ... consolidated financial position as of December 31, 2013, or its annual results of operations and/or cash flows. Environmental Matters The company has been named a Potentially Responsible Party by the Environmental Protection Agency or similarly designated state or local agencies at certain current...

  • Page 77
    ... under long-term non-cancelable operating leases as of December 31, 2013, are payable as follows: $ in millions Year Ending December 31 2014 2015 2016 2017 2018 Thereafter Total Minimum Lease Payments 13. RETIREMENT BENEFITS Plan Descriptions Defined Benefit Pension Plans - The company sponsors...

  • Page 78
    ... for post retirement medical and life benefits. Summary Plan Results The cost to the company of its retirement benefit plans in each of the three years ended December 31 is shown in the following table: Year Ended December 31 Medical and Pension Benefits Life Benefits 2013 2013 2012 2011 2012 $ 516...

  • Page 79
    ... 2008, who retire beginning after December 31, 2012. As a result of these changes, the company recognized a reduction of approximately $640 million in its projected benefit obligations for the affected employee groups as of December 31, 2011. Due to these changes, certain nonqualified benefit plans...

  • Page 80
    NORTHROP GRUMMAN CORPORATION The following tables set forth the funded status and amounts recognized in the consolidated statements of financial position for the company's defined benefit pension and retiree health care and life insurance benefit plans. Pension benefits data includes the qualified ...

  • Page 81
    ... rate is generally based on the yield of high-quality corporate fixed-income investments. At the end of each year, the discount rate is primarily determined using a portfolio of high-quality bonds matching the notional cash inflows with the expected benefit payments for each significant benefit plan...

  • Page 82
    ... in health care cost trend rates to Total service and interest cost Other post-retirement benefit liability Plan Assets and Investment Policy Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term...

  • Page 83
    ... International equities Fixed income securities U.S. Treasuries U.S. Government Agency Non-U.S. Government Corporate debt Asset backed High yield debt Bank loans Alternative Investments Hedge funds Private equities Real estate Other Fair value of plan assets at the end of the year Level 1 2013 2012...

  • Page 84
    ... 31, 2013, Northrop Grumman had stock-based compensation awards outstanding under the following plans: the 2001 Long-Term Incentive Stock Plan (2001 Plan) and the 2011 Long-Term Incentive Stock Plan (2011 Plan), both applicable to employees, and the 1993 Stock Plan for Non-Employee Directors (1993...

  • Page 85
    ... price on the date of the grant and expires ten years from the date of grant. As of December 31, 2013, three non-employee directors held unexercised stock options. Compensation Expense Stock-based compensation expense and the related tax benefits for the years ended December 31, 2013, 2012 and 2011...

  • Page 86
    ...of measuring compensation expense for performance awards, the number of shares ultimately expected to vest is estimated at each reporting date based on management's expectations regarding the relevant performance criteria. Stock award activity for the years ended December 31, 2013, 2012 and 2011, is...

  • Page 87
    ... pay out based on the achievement of financial metrics for the three-year period ending December 31, 2015. In 2014, the company expects to issue to employees approximately 2.5 million shares of common stock with a grant date fair value of $80 million, principally related to the 2011 RPSR awards that...

  • Page 88
    ...controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit is accumulated and communicated to management, including the principal executive officer and the principal financial officer...

  • Page 89
    MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of Northrop Grumman Corporation (the company) prepared and is responsible for the consolidated financial statements and all related financial information contained in this Annual Report. This responsibility includes ...

  • Page 90
    ... REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Northrop Grumman Corporation Falls Church, Virginia We have audited the internal control over financial reporting of Northrop Grumman Corporation and subsidiaries (the "Company") as of December 31, 2013, based on...

  • Page 91
    ... Relations Corporate Vice President, Controller, and Chief Accounting Officer Corporate Vice President and President, Enterprise Shared Services Corporate Vice President and General Counsel Since 2010 Prior Business Experience (Last Five Years) President and Chief Operating Officer (2007-2009...

  • Page 92
    ... Five Years) Vice President and General Manager, Integrated Logistics and Modernization Division, Technical Services Sector (2010-2012); Director of Product Support (2004-2010) Corporate Vice President and President, Information Systems Sector (2009-2012) Executive Vice President and Chief Financial...

  • Page 93
    ... and Related Transactions and Director Independence will be incorporated herein by reference to the Proxy Statement for the 2014 Annual Meeting of Stockholders to be filed within 120 days after the end of the company's fiscal year. Item 14. Principal Accountant Fees and Services The information as...

  • Page 94
    ...filed October 25, 1994) First Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation, The Bank of New York Mellon (successor trustee to JPMorgan Chase Bank and The Chase Manhattan Bank, N.A.), Titan II, Inc. (formerly known as Northrop Grumman Corporation...

  • Page 95
    ... year ended December 31, 2002, filed March 24, 2003) Third Supplemental Indenture dated as of March 30, 2011 by and among Northrop Grumman Systems Corporation (successor-in-interest to Litton Industries, Inc.), The Bank of New York Mellon (formerly known as The Bank of New York) as trustee, Titan II...

  • Page 96
    ... Northrop Grumman Systems Corporation (successor-in-interest to Northrop Grumman Space & Mission Systems Corp. and TRW, Inc.), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank and to Mellon Bank, N.A., Titan II Inc. (formerly known as Northrop Grumman Corporation), and Titan...

  • Page 97
    ...due 2040 (incorporated by reference to Exhibit 4(a) to Form 8-K filed November 8, 2010) Third Supplemental Indenture dated as of March 30, 2011, by and among Titan II, Inc. (formerly known as Northrop Grumman Corporation), The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, and...

  • Page 98
    ... 23, 2009) Northrop Grumman Corporation Non-Employee Directors Equity Participation Plan (Amended and Restated January 1, 2008) (incorporated by reference to Exhibit 10(q) to Form 10-K for the year ended December 31, 2007, filed February 20, 2008) Northrop Grumman 2001 Long-Term Incentive Stock Plan...

  • Page 99
    ... of Shareholders filed April 8, 2011) (i) Summary of Non-Employee Director Award Terms Under the 2011 Long-Term Incentive Stock Plan effective December 21, 2011 (incorporated by reference to Exhibit 10(j)(ii) to Form 10-K for the year ended December 31, 2011, filed February 7, 2012) (ii) Northrop...

  • Page 100
    ...(incorporated by reference to Item 5.02(e) of Form 8-K filed February 21, 2013) Offering letter dated February 1, 2007 from Northrop Grumman Corporation to James F. Palmer relating to position of Corporate Vice President and Chief Financial Officer (incorporated by reference to Exhibit 10(3) to Form...

  • Page 101
    ... Form 8-K filed December 21, 2009) Northrop Grumman Corporation 1995 Stock Plan for Non-Employee Directors, as Amended as of May 16, 2007 (incorporated by reference to Exhibit A to the Company's Proxy Statement on Schedule 14A for the 2007 Meeting of Shareholders filed April 12, 2007) Retirement and...

  • Page 102
    ... February 2014. NORTHROP GRUMMAN CORPORATION By: /s/ Michael A. Hardesty Michael A. Hardesty Corporate Vice President, Controller, and Chief Accounting Officer (Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on behalf...

  • Page 103
    ...managers should contact Northrop Grumman Investor Relations at (703) 280-2268 or send an e-mail to [email protected] ANNUAL MEETING OF SHAREHOLDERS Wednesday, May 21, 2014 8 a.m. EDT Northrop Grumman Corporation Corporate Office 2980 Fairview Park Drive Falls Church, Virginia 22042 MEDIA RELATIONS...

  • Page 104
    2980 Fairview Park Drive Falls Church, VA 22042-4511 www.northropgrumman.com