# NORTHROP GRUMMAN CORP /DE/ (NOC)

Informational only - not investment advice.

CIK: 0001133421
SIC: 3812 Search, Detection, Navigation, Guidance, Aeronautical Sys
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 38](/major-group/38/) > [SIC 3812 Search, Detection, Navigation, Guidance, Aeronautical Sys](/industry/3812/)
Latest 10-K filed: 2026-01-27
SEC page: https://www.sec.gov/edgar/browse/?CIK=1133421
Filing source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-01-27 · accession 0001133421-26-000003 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001133421.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 41,954,000,000 USD | 2025 | verified |
| Net income | 4,182,000,000 USD | 2025 | verified |
| Assets | 51,377,000,000 USD | 2025 | verified |
| Free cash flow | 3,307,000,000 USD | 2025 | computed |
| Net margin | 9.97% | 2025 | computed |
| Operating margin | 10.75% | 2025 | computed |
| Revenue YoY | +2.24% | 2025 | computed |
| ROE | 25.08% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

Peer groups: [Defense and aerospace primes](/compare/defense/) · SIC 3812 Search, Detection, Navigation, Guidance, Aeronautical Sys

No market price, no rating, no forecast on this site. Not investment advice.

## Peer comparisons including NOC

- Defense and aerospace primes: [peer review](/compare/defense/) · [market-risk page](/compare/defense/risk/)

### Peer percentile fingerprint

| Ratio | NOC | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 10.0% | 3.1% | 65 | 148 |
| Operating margin | 10.8% | 6.4% | 58 | 145 |
| Revenue growth | 2.2% | 8.3% | 25 | 153 |
| FCF margin | 7.9% | 7.4% | 51 | 152 |
| ROE | 25.1% | 2.4% | 93 | 145 |
| ROA | 8.1% | 1.1% | 78 | 154 |
| Liabilities / equity | 2.08 | 0.82 | 83 | 150 |
| Current ratio | 1.10 | 2.81 | 5 | 153 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 38 SIC Major Group 38, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 41954000000 | USD | 2025 | 2026-01-27 |
| Net income | 4182000000 | USD | 2025 | 2026-01-27 |
| Assets | 51377000000 | USD | 2025 | 2026-01-27 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-01-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001133421.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 24,706,000,000 | 26,004,000,000 | 30,095,000,000 | 33,841,000,000 | 36,799,000,000 | 35,667,000,000 | 36,602,000,000 | 39,290,000,000 | 41,033,000,000 | 41,954,000,000 |
| Net income | 2,043,000,000 | 2,869,000,000 | 3,229,000,000 | 2,248,000,000 | 3,189,000,000 | 7,005,000,000 | 4,896,000,000 | 2,056,000,000 | 4,174,000,000 | 4,182,000,000 |
| Operating income | 3,277,000,000 | 3,218,000,000 | 3,780,000,000 | 3,969,000,000 | 4,065,000,000 | 5,651,000,000 | 3,601,000,000 | 2,537,000,000 | 4,370,000,000 | 4,511,000,000 |
| Diluted EPS | 11.32 | 16.34 | 18.49 | 13.22 | 19.03 | 43.54 | 31.47 | 13.53 | 28.34 | 29.08 |
| Operating cash flow | 2,813,000,000 | 2,613,000,000 | 3,827,000,000 | 4,297,000,000 | 4,305,000,000 | 3,567,000,000 | 2,901,000,000 | 3,875,000,000 | 4,388,000,000 | 4,757,000,000 |
| Capital expenditures | 920,000,000 | 928,000,000 | 1,249,000,000 | 1,264,000,000 | 1,420,000,000 | 1,415,000,000 | 1,435,000,000 | 1,775,000,000 | 1,767,000,000 | 1,450,000,000 |
| Dividends paid | 640,000,000 | 689,000,000 | 821,000,000 | 880,000,000 | 953,000,000 | 983,000,000 | 1,052,000,000 | 1,116,000,000 | 1,186,000,000 | 1,293,000,000 |
| Share buybacks | 1,547,000,000 | 393,000,000 | 1,263,000,000 | 744,000,000 | 490,000,000 | 3,705,000,000 | 1,504,000,000 | 1,500,000,000 | 2,514,000,000 | 1,624,000,000 |
| Assets | 25,614,000,000 | 35,128,000,000 | 37,653,000,000 | 41,089,000,000 | 44,469,000,000 | 42,579,000,000 | 43,755,000,000 | 46,544,000,000 | 49,359,000,000 | 51,377,000,000 |
| Liabilities | 20,355,000,000 | 27,996,000,000 | 29,466,000,000 | 32,270,000,000 | 33,890,000,000 | 29,653,000,000 | 28,443,000,000 | 31,749,000,000 | 34,069,000,000 | 34,703,000,000 |
| Stockholders' equity | 5,363,000,000 | 7,132,000,000 | 8,187,000,000 | 8,819,000,000 | 10,579,000,000 | 12,926,000,000 | 15,312,000,000 | 14,795,000,000 | 15,290,000,000 | 16,674,000,000 |
| Cash and cash equivalents | 2,541,000,000 | 11,225,000,000 | 1,579,000,000 | 2,245,000,000 | 4,907,000,000 | 3,530,000,000 | 2,577,000,000 | 3,109,000,000 | 4,353,000,000 | 4,403,000,000 |
| Free cash flow | 1,893,000,000 | 1,685,000,000 | 2,578,000,000 | 3,033,000,000 | 2,885,000,000 | 2,152,000,000 | 1,466,000,000 | 2,100,000,000 | 2,621,000,000 | 3,307,000,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 8.27% | 11.03% | 10.73% | 6.64% | 8.67% | 19.64% | 13.38% | 5.23% | 10.17% | 9.97% |
| Operating margin | 13.26% | 12.38% | 12.56% | 11.73% | 11.05% | 15.84% | 9.84% | 6.46% | 10.65% | 10.75% |
| Return on equity | 38.09% | 40.23% | 39.44% | 25.49% | 30.14% | 54.19% | 31.97% | 13.90% | 27.30% | 25.08% |
| Return on assets | 7.98% | 8.17% | 8.58% | 5.47% | 7.17% | 16.45% | 11.19% | 4.42% | 8.46% | 8.14% |
| Liabilities / equity | 3.80 | 3.93 | 3.60 | 3.66 | 3.20 | 2.29 | 1.86 | 2.15 | 2.23 | 2.08 |
| Current ratio | 1.22 | 2.34 | 1.17 | 1.13 | 1.60 | 1.30 | 1.08 | 1.15 | 1.01 | 1.10 |

## As-reported value updates

6 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/NOC/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-21. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001133421.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 5.89 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 5.50 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 5.34 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 9,775,000,000 | 937,000,000 | 6.18 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 10,638,000,000 | -535,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 10,133,000,000 | 944,000,000 | 6.32 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 10,218,000,000 | 940,000,000 | 6.36 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 9,996,000,000 | 1,026,000,000 | 7.00 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 10,686,000,000 | 1,264,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 9,468,000,000 | 481,000,000 | 3.32 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 10,351,000,000 | 1,174,000,000 | 8.15 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 10,423,000,000 | 1,100,000,000 | 7.67 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 11,712,000,000 | 1,427,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 9,881,000,000 | 875,000,000 | 6.14 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 10,876,000,000 | 1,094,000,000 | 7.68 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from NOC's latest 10-K: [/company/NOC/business/](/company/NOC/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from NOC's latest 10-K: [/company/NOC/risk-factors/](/company/NOC/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000034/noc-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-07-21
Report date: 2026-06-30

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Northrop Grumman Corporation (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”) is a leading global aerospace and defense technology company. We deliver a broad range of products, services and solutions to U.S. and international customers, and principally to the U.S. Department of War (“DoW”) and intelligence community. Our broad portfolio is aligned to support national security priorities and our solutions equip our customers with capabilities they need to connect, protect and advance humanity.

The company is a leading provider of space systems, military aircraft, missile defense, advanced weapons and long-range fires capabilities, mission systems, networking and communications, strategic deterrence systems, and breakthrough technologies, such as advanced computing, microelectronics and cyber. We are focused on competing and winning programs that enable continued growth, performing on our commitments and affordably delivering capability our customers need. With the investments we've made in advanced technologies, combined with our talented workforce and digital transformation capabilities, Northrop Grumman is well positioned to meet our customers' needs today and in the future.

The following discussion should be read along with the financial statements included in this Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Liquidity and Capital Resources,” “Quantitative and Qualitative Disclosures About Market Risks” and “Risk Factors” in our 2025 Annual Report on Form 10-K, which provides additional information on our business, the environment in which we operate and our operating results.

Divestiture of Training Services Business

On May 24, 2025 (the “Divestiture date”), the company completed its previously announced sale of substantially all of the Immersive Mission Solutions (IMS) operating unit of Defense Systems (the “training services” business or “divestiture”) for $333 million in cash and recorded a pre-tax gain on sale of $231 million. IMS is a provider of mission training and satellite ground network communications software for U.S. government customers. 2025 operating results include sales and operating income for the training services business prior to the Divestiture date.

Global Security Environment

The U.S. and its allies continue to face a dynamic global security environment of heightened tensions and instability, threats from state and non-state actors, including in particular major global powers, as well as terrorist organizations, increasing nuclear tensions, diverse regional security concerns, political instability and uncertainty concerning global strategic alliances. The market for defense products, services and solutions globally is driven by these complex and rapidly evolving security challenges, considered in the broader context of political and socioeconomic circumstances and priorities. Our operations and financial performance, as well as demand for our products and services, are impacted by these events, including global unrest. The same is true for our suppliers and other business partners.

The ongoing conflicts in Ukraine and Iran and threats elsewhere, particularly in the Middle East and the Western Pacific region, have increased global tensions and instability and highlighted security requirements globally. These conflicts have resulted in and may continue to result in increased demand for defense products and services from allies and partner nations, particularly in those regions. We continue to monitor developments in these regions, but have not experienced, and do not anticipate experiencing, significant adverse financial impacts directly from these conflicts.

We believe the current global security environment, characterized by significant national security threats to the U.S. and its allies, continues to highlight the need for strong deterrence and robust defense capabilities. We are actively evaluating both opportunities and risks associated with this environment and are moving with speed and at scale to deliver innovative solutions to our customers. We believe our capabilities, particularly in space, C4ISR, air and missile defense, battle management, solid rocket motors, advanced weapons, strategic deterrence, survivable aircraft, autonomous aircraft systems and mission systems should help our customers in the U.S. and globally defend against current and future threats and, as a result, continue to position us for long-term profitable business growth.

Global Economic Environment

Over the past several years, the global economic environment has experienced challenges, including inflationary pressures; widespread delays and disruptions in supply chains; constraints on the availability of critical materials, including rare earth minerals and metals; business slowdowns or shutdowns; workforce challenges and labor shortfalls; and market volatility. These macroeconomic factors have contributed, and could continue to contribute, to increased costs, delays, disruptions and other performance challenges, as well as increased competing demands for

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NORTHROP GRUMMAN CORPORATION                        

limited resources to address such increased costs and other challenges, for our company, suppliers and partners, and customers.

In addition, if interest rates increase or otherwise fluctuate, it could impact government spending priorities (in the U.S. and allied countries, in particular), including the demand for defense products. Economic tensions and changes in international trade policies, including, for example, widespread tariffs announced since last year by the U.S. on its major trading partners, higher tariffs on imported goods and materials and actions taken in response (such as retaliatory tariffs or other trade protectionist measures or the renegotiation of free trade agreements), could also further impact the global market for defense products, services and solutions. In addition, following the first quarter 2026 U.S. Supreme Court decision that invalidated tariffs imposed pursuant to the International Emergency Economic Powers Act (“IEEPA”), the U.S. announced tariffs under different statutory authorities, including a 10% global tariff. The full impact of these governmental actions on macroeconomic conditions and on our business is uncertain, difficult to predict and depends on a number of factors, including the extent and duration of tariffs, the availability of exemptions, changes in the amount and scope of tariffs, any reversal or temporary suspension of announced tariffs, the availability of refunds for tariffs paid under IEEPA, the imposition of new tariffs and other measures that target countries may take in response to U.S. trade policies, and possible resulting general inflationary pressures in the global economy. We are continuing to monitor the impact on our business, suppliers and customers, but do not believe that the tariffs, including the IEEPA tariffs, have had or will have a material adverse effect on our business.

U.S. Political, Budget and Regulatory Environment

The U.S. continues to face an uncertain and evolving political, budget and regulatory environment. In particular, it is difficult to predict the specific course of future defense budgets. Current and future requirements related to the conflicts in Ukraine and Iran and threats in the Middle East, the Western Pacific and Latin America and other security priorities, as well as the macroeconomic environment, the national debt, and other domestic priorities, among other things, in the U.S. and globally, will continue to impact our customers’ budgets, spending and priorities, and our industry. The U.S. political environment may also impact defense budgets and priorities, issues related to the national debt, and government spending more broadly. We anticipate that issues related to budgetary priorities, defense spending levels and the debt ceiling will continue to be subjects of considerable debate, with a potentially significant impact on our programs and the company.

On July 4, 2025, the FY 2025 reconciliation bill titled the One Big Beautiful Bill Act (the “OBBBA”) was enacted. The OBBBA allocated approximately $150 billion in mandatory defense funding, including funding for air and missile defense, munitions, strategic deterrence, shipbuilding and supply chains and other military capabilities. The appropriated funds will remain available to be obligated until September 30, 2029 and expended through FY 2034. Funding from the OBBBA has allowed for increased investments by the DoW in defense modernization projects, homeland missile defense capabilities, and increased production capacity across a number of key programs. See Note 4 to the financial statements for additional information on key income tax provisions of the OBBBA.

On February 3, 2026, annual appropriations to fund a vast majority of the federal government for FY 2026, including approximately $859 billion for defense, were enacted. Appropriations to partially fund the Department of Homeland Security were enacted on April 30, 2026, with the remaining appropriations enacted on June 10, 2026. On April 3, 2026, the Trump Administration (the “Administration”) released its FY 2027 budget request. The request includes $1.45 trillion for defense, with $1.1 trillion in the base budget (discretionary funding) and $350 billion in reconciliation (mandatory) funding. The total defense budget request reflects an increase of 44% ($441 billion) above the FY 2026 enacted levels (including $153 billion in FY 2026 reconciliation funding). Congress is evaluating the Administration’s budget request as it drafts authorization and appropriations legislation for FY 2027. Additionally, the Administration recently transmitted an $88 billion supplemental funding request for FY 2026, of which $67 billion is intended to address the operational costs associated with the Iran conflict and other defense priorities. There is uncertainty as to when Congress will act on the reconciliation funding and supplemental request.

The Administration has issued numerous executive orders, including orders to undertake a comprehensive overhaul of the Federal Acquisition Regulation, to reform the DoW defense acquisition process and, more recently, to promote the use of fixed price contracts where appropriate and to address underperformance and insufficient prioritization of government contracts, insufficient investment in production and production speed and incentive compensation metrics applicable to defense contractors. See “Risk factors” for further discussion regarding risks associated with executive orders and regulatory changes. Some of the Administration’s executive orders are subject to ongoing court challenges. Implementation of certain of these executive orders could adversely affect our business or create a more challenging or costly regulatory, operating and economic environment.

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NORTHROP GRUMMAN CORPORATION                        

In light of the ongoing conflicts and heightened global instability as well as political tensions and related legal challenges, we expect continued uncertainty in the global security, U.S. political, budget and regulatory environment. Initiatives to reduce governmental spending, federal budget and debt ceiling action, and further changes in U.S. government policy positions, including trade and foreign policy, tax policy and DoW policies or priorities, could materially impact defense spending broadly and the company’s programs in particular.

B-21 Program

In 2015, the U.S. Air Force awarded Northrop Grumman the B-21 contract, which includes a base contract for EMD and five low-rate initial production (LRIP) options for a baseline total of 21 aircraft. Th

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm
Complete FY 2025 MD&A: /company/NOC/mda/fy2025/

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub.
Confidence: high
Filing date: 2026-01-27
Report date: 2025-12-31

OVERVIEW

The following discussion should be read along with the financial statements included in this Form 10-K, as well as Part II, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) of our Form 10-K for the year ended December 31, 2024 (“2024 Annual Report on Form 10-K”). To the extent the January 1, 2025 SSAS realignment impacted the disclosures in the 2024 Annual Report on Form 10-K, we recast those prior year disclosures herein.

Divestiture of Training Services Business

On May 24, 2025 (the “Divestiture date”), the company completed its previously announced sale of substantially all

of the Immersive Mission Solutions (IMS) operating unit of Defense Systems (the “training services” business or

“divestiture”) for $333 million in cash and recorded a pre-tax gain on sale of $231 million. IMS is a provider of mission training and satellite ground network communications software for U.S. government customers. Operating results include sales and operating income for the training services business prior to the Divestiture date.

Global Security Environment

The U.S. and its allies continue to face a global security environment of heightened tensions and instability, threats from state and non-state actors, including in particular major global powers, as well as terrorist organizations, increasing nuclear tensions, diverse regional security concerns and political instability. The market for defense products, services and solutions globally is driven by these complex and evolving security challenges, considered in the broader context of political and socioeconomic circumstances and priorities. Our operations and financial performance, as well as demand for our products and services, are impacted by these events, including global unrest. The same is true for our suppliers and other business partners.

The ongoing conflict in Ukraine, recent events in Venezuela and threats elsewhere, particularly in the Middle East and the Western Pacific region, have increased global tensions and instability and highlighted security requirements globally, including in Europe, the Middle East, the Pacific region and Latin America, as well as the U.S. These conflicts have resulted in and may continue to result in increased demand for defense products and services from allies and partner nations, particularly in those regions. For example, we experienced an increase in demand for certain of our products and services directly and indirectly related to the conflict in Ukraine. We continue to monitor developments in these regions, but have not experienced, and do not anticipate experiencing, significant adverse financial impacts directly from these conflicts.

We believe the current global security environment, characterized by significant national security threats to the U.S. and its allies, continues to highlight the need for strong deterrence and robust defense capabilities, and we are actively evaluating both opportunities and risks associated with this environment. We believe our capabilities, particularly in space, C4ISR, air and missile defense, battle management, advanced weapons, strategic deterrence, survivable aircraft and mission systems should help our customers in the U.S. and globally defend against current and future threats and, as a result, continue to position us for long-term profitable business growth.

Global Economic Environment

Over the past several years, the global economic environment has experienced challenges, including inflationary pressures; widespread delays and disruptions in supply chains; business slowdowns or shutdowns; workforce challenges and labor shortfalls; and market volatility. These macroeconomic factors can and have contributed, and could continue to contribute, to increased costs, delays, disruptions and other performance challenges, as well as increased competing demands for limited resources to address such increased costs and other challenges, for our company, our suppliers and partners, and our customers. We continue to work to address challenges to our business caused by the macroeconomic environment. We have seen progress in the supply chain as on-time deliveries and quality continue to improve. In remaining areas of pressure, we are proactively working with our suppliers to help meet our contract commitments.

In addition, although interest rates have declined over the past year, they remain elevated compared to recent years and have raised the cost of borrowing for governments. If rates increase or remain elevated, it could impact government spending priorities (in the U.S. and allied countries, in particular), including the demand for defense products. Economic tensions and changes in international trade policies, including, for example, the widespread tariffs announced since last year by the U.S. on its major trading partners, higher tariffs on imported goods and materials and actions taken in response (such as retaliatory tariffs or other trade protectionist measures or the renegotiation of free trade agreements), could also further impact the global market for defense products, services and solutions. The full impact of these governmental actions on macroeconomic conditions and on our business is uncertain, difficult to predict and depends on a number of factors, including the extent and duration of tariffs, any

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reversal or temporary suspension of announced tariffs, the availability of exemptions, changes in the amount and scope of tariffs, the imposition of new tariffs and other measures that target countries may take in response to U.S. trade policies, and possible resulting general inflationary pressures in the global economy. We are continuing to monitor the impact on our business, suppliers and customers, but do not believe that the tariffs in effect at this time will have a material adverse effect on our business.

U.S. Political, Budget and Regulatory Environment

The U.S. continues to face an uncertain and evolving political, budget and regulatory environment. In particular, it is difficult to predict the specific course of future defense budgets. Current and future requirements related to the conflict in Ukraine and threats in the Middle East, the Western Pacific and Latin America and other security priorities, as well as the macroeconomic environment, the national debt, and other domestic priorities, among other things, in the U.S. and globally, will continue to impact our customers’ budgets, spending and priorities, and our industry. The U.S. political environment may also impact defense budgets and priorities, issues related to the national debt, and government spending more broadly. We anticipate that issues related to budgetary priorities, defense spending levels and the debt ceiling will continue to be subjects of considerable debate, with a potentially significant impact on our programs and the company.

On July 4, 2025, the FY 2025 reconciliation bill titled the One Big Beautiful Bill Act (the “OBBBA”) was enacted. The OBBBA allocates approximately $150 billion in funds for defense spending, including funding for air and missile defense, munitions, strategic deterrence, shipbuilding and supply chains and other military capabilities, and the appropriated funds will remain available to be obligated until September 30, 2029 and expended through FY 2034. The OBBBA is expected to result in increased investments by the DoW in defense modernization projects and Pacific region deterrence, among other programs. See Note 6 to the financial statements for additional information on key income tax provisions of the OBBBA.

Annual appropriations to fund the federal government for FY 2026 have not yet been enacted. On October 1, 2025, the U.S. Government entered a shutdown, which ended on November 12, 2025. The federal government is currently operating under a continuing resolution (“CR”) that extends funding for most agencies (including DoW) until January 30, 2026. It remains uncertain when the government will approve FY 2026 appropriations and what levels of funding the appropriations will provide. Government operations under an extended CR or a government shutdown could have adverse impacts on our programs and new starts, in particular, and the U.S. Government’s ability to make timely payments.

The Presidential Administration (the “Administration”) has issued numerous executive orders, including orders to undertake a comprehensive overhaul of the Federal Acquisition Regulation, to reform the DoW defense acquisition process and, more recently, to address underperformance and insufficient prioritization of government contracts, insufficient investment in production and production speed and incentive compensation metrics applicable to defense contractors. See “Risk factors” for further discussion regarding risks associated with executive orders and regulatory changes. Some of the Administration’s executive orders are subject to ongoing court challenges. Implementation of certain of these executive orders could adversely affect our business or create a more challenging or costly regulatory, operating and economic environment.

In light of the ongoing conflicts and heightened global instability as well as political tensions and related legal challenges, we expect continued uncertainty in the global security, U.S. political, budget and regulatory environment. Initiatives to reduce governmental spending, federal budget and debt ceiling action, and further changes in U.S. government policy positions, including trade and foreign policy, tax policy and DoW policies or priorities, could materially impact defense spending broadly and the company’s programs in particular.

B-21 Program

In 2015, the U.S. Air Force awarded Northrop Grumman the B-21 contract, which includes a base contract for engineering and manufacturing development (EMD) and five low-rate initial production (LRIP) options for a baseline total of 21 aircraft. The EMD phase of the program is largely cost type and began at contract award. The LRIP options are largely fixed price and are expected to continue to be awarded and executed through approximately the end of the decade. In addition to the five LRIP options, Northrop Grumman and the U.S. Air Force have established not to exceed (NTE) pricing for additional aircraft up to unit 40. The average NTE value for these subsequent lots is above the average unit price of the five LRIP lots, and the NTE lots include an economic price adjustment clause to help protect against certain inflationary pressures. Final terms, quantity, and pricing for these subsequent lots are not fully negotiated. We are in discussions with the U.S. Air Force regarding the potential for an accelerated production rate on the program. While the ultimate outcome of these discussions remains uncertain, we currently expect any agreement to accelerate production rate would require future investment by the

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NORTHROP GRUMMAN CORPORATION

company to expand production capacity along with the opportunity to earn improved returns on the LRIP and NTE phases of the program.

During the fourth quarter of 2023, we recognized a projected loss of $1.56 billion across the five LRIP options. During the first quarter of 2025, we recognized an additional $477 million loss across the five LRIP options. During the fourth quarter of 2025, we again reviewed our estimated profitability on the LRIP phase of the program and made no significant changes to the previously recognized loss.

The company’s 2025 results reflect our current best estimate of cost to complete the LRIP and NTE aircraft, as well as the outcome of ongoing discussions with our suppliers. If our estimated cost to complete the aircraft changes, if we reach an agreement with the customer regarding an accelerated production rate, or if our assumptions regarding contract performance, qua

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/NOC/mda/fy2025/
All MD&A years: /company/NOC/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/NOC/mda/fy2024/): filed 2025-01-30; accession 0001133421-25-000006 (https://www.sec.gov/Archives/edgar/data/1133421/000113342125000006/noc-20241231.htm)
- [FY 2023 MD&A](/company/NOC/mda/fy2023/): filed 2024-01-25; accession 0001133421-24-000006 (https://www.sec.gov/Archives/edgar/data/1133421/000113342124000006/noc-20231231.htm)
- [FY 2022 MD&A](/company/NOC/mda/fy2022/): filed 2023-01-26; accession 0001133421-23-000006 (https://www.sec.gov/Archives/edgar/data/1133421/000113342123000006/noc-20221231.htm)
- [FY 2021 MD&A](/company/NOC/mda/fy2021/): filed 2022-01-27; accession 0001133421-22-000004 (https://www.sec.gov/Archives/edgar/data/1133421/000113342122000004/noc-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3812 Search, Detection, Navigation, Guidance, Aeronautical Sys) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/NOC.md · JSON record: /company/NOC.json · verified financials: /company/NOC/financials.json / /company/NOC/financials.csv · machine TOC for the whole site: /llms.txt