2. Safe Harbor Statement
Certain statements and assumptions in these presentations and materials contain or are based on “forward-
looking” information. Such “forward-looking” information includes, among other things, projected deliveries,
expected funding for various programs, future effective income tax rates, financial guidance and estimated
amounts regarding sales, segment operating margin, pension expense, employer contributions under
pension plans and medical and life benefits plans, cash flow and earnings per share, and is subject to
numerous assumptions and uncertainties, many of which are outside Northrop Grumman’s control. These
include Northrop Grumman’s assumptions with respect to future revenues, expected program performance
and cash flows, returns on pension plan assets and variability of pension actuarial and related assumptions,
the outcome of litigation and appeals, environmental remediation, divestitures of businesses, successful
reduction of debt, successful negotiation of contracts with labor unions, effective tax rates and timing and
amounts of tax payments, and anticipated costs of capital investments, among other things. Northrop
Grumman’s operations are subject to various additional risks and uncertainties resulting from its position as
a supplier, either directly or as subcontractor or team member, to the U.S. Government and its agencies as
well as to foreign governments and agencies; actual outcomes are dependent upon various factors,
including, without limitation, Northrop Grumman’s successful performance of internal plans; government
customers’ budgetary constraints; customer changes in short-range and long-range plans; domestic and
international competition in both the defense and commercial areas; product performance; continued
development and acceptance of new products and, in connection with any fixed price development
programs, controlling cost growth in meeting production specifications and delivery rates; performance
issues with key suppliers and subcontractors; government import and export policies; acquisition or
termination of government contracts; the outcome of political and legal processes and of the assertion or
prosecution of potential substantial claims by or on behalf of a U.S. government customer; natural disasters,
and any associated amounts and timing of recoveries under insurance contracts, availability of materials
and supplies, continuation of the supply chain, contractual performance relief and the application of cost
sharing terms, impacts of timing of cash receipts and the availability of other mitigating elements; terrorist
acts; legal, financial and governmental risks related to international transactions and global needs for
military aircraft, military and civilian electronic systems and support, information technology, naval vessels,
space systems, technical services and related technologies, as well as other economic, political and
technological risks and uncertainties and other risk factors set out in Northrop Grumman’s filings from time
to time with the Securities and Exchange Commission, including, without limitation, Northrop Grumman
reports on Form 10-K and Form 10-Q.
1
Copyright 2006 Northrop Grumman Corporation
3. Presentation Format
Guidance
Effective 1/1/07 Radio Systems business will be transferred from Space
Technology to Mission Systems
Reported results for Q4 2006 & Full Year 2006 will not reflect the transfer
Guidance does not reflect the change
Guidance does not include Essex
Segment results 2003 - 2005
Presented on a pro forma basis reflecting
Previously announced organizational realignments
Transfer of Radio Systems business
Adoption of dual-margin recognition on inter-segment sales
3
Copyright 2006 Northrop Grumman Corporation
4. The Leadership Team
Bus Dev & HR &
Communications Law
Govt Relations Administration
Ron Sugar Wes Bush
Chairman President
& CFO
& CEO
Bob Helm Burks Terry
Ian Ziskin
Rosanne O'Brien
Corp VP Corp VP &
Corp VP & Chief
Corp VP
General Counsel
HR & Admin Officer
Mission Information Technical Electronic Integrated Space Ship Newport
Systems Technology Services Systems Systems Technology Systems News
Jerry Agee Jim O’Neill Jim Cameron Jim Pitts Scott Seymour Alexis Livanos Phil Teel Mike Petters
Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President
Information & Services Electronics Aerospace Ships
The Right Team For Our Strategy
1 Copyright 2006 Northrop Grumman Corporation
5. Information & Services
Growth Operating Margin
2007E
2006E ($B) 2006E 2007E Long-Term
Growth Margin
Opportunity2
Operating Margin %
I&S ~$11 8-10% Information & Services Low 8 ~8 8-9
Aerospace Low 9 ~9 9-10
Aerospace ~$9 ~(5)%
Mid to
Electronics High 11 ~12
High 11
Electronics ~$6.6 ~5% Ships ~7 Mid 8 9+
Segment OM1 Low 9 Low 9 ~10
Ships ~$5 ~10%
Total Operating Margin Low 8 High 8 9+
Total ~$30.2 $31-32 1 Non-GAAP Metric - see reconciliation and definition on pages 25 & 26
2 Dependent on long-term business mix
2 Copyright 2006 Northrop Grumman Corporation
6. Information
Technology
Overview
2006 Institutional Investor Conference
November 9, 2006
James R. O’Neill
President
Information Technology Sector
3 Copyright 2006 Northrop Grumman Corporation
7. IT Sector at a Glance
2005 Sales – $3.8B
18,500 employees
Northern Virginia headquarters, geographically
dispersed facilities
Commercial,
Primary customers:
State & Local
Intelligence
Intelligence Agencies
17%
32%
DoD, DHS
Civilian
Civilian Agencies
Agencies
State & Local Governments Defense
29%
Key programs: 22%
Virginia IT Outsourcing
New York City Wireless
National Health Information Network
2006E Sales
Defense Integrated Military HR System
Restricted Programs
Strong Pipeline of New Business,
Projecting High Single-Digit Growth
4 Copyright 2006 Northrop Grumman Corporation
8. The IT Market Is Large, Growing & Diverse
Majority of IT sector’s sales are from outside DoD
Fastest growing segments include:
State/Local – NYC Wireless, Virginia, San Diego
Health IT – CDC, DoD Electronic Health Record
International – IDENT1
Lead sector for corporate initiatives:
Homeland Security – Homeland Secure Data Network, MaxHR
Information Operations – Army First IO Command
Robust pipeline of new business opportunities:
Uni-Comm, UK Military Flight Training System, Intelligence
Programs, First Responder Wireless Opportunities
1,100 proposals in process
Strategic focus on key growth segments
5 Copyright 2006 Northrop Grumman Corporation
9. Focus on Performance
Emphasis on program execution
MARGIN
MARGIN
Higher award fee grades, improved profitability
on fixed-rate/fixed-price contracts
Cost reduction initiatives
Maximize facilities utilization
Implementation of a single ERP system
Repeatable solutions
IT outsourcing, enterprise architecture, wireless marketplaces
Process improvement initiatives
CASH
CASH
Billing cycle reductions
Procurement and payable processes
Reduction in capital expenditures
Aggressive focus on contract structure
Milestone payments, interim billing, etc.
Committed to continued margin expansion
and increased cash generation
6 Copyright 2006 Northrop Grumman Corporation
10. Summary
Diverse market mix drives growth and reduces risk
Significant growth opportunities with key current customers
DoD, Intelligence Community, Civil Agencies, State & Local
Leverage capabilities to expand presence in key growing markets
Secure Wireless
IT Outsourcing
Security/Information Assurance
Health IT
Enterprise Business Applications
Select International Opportunities
Combination of growth and program performance will drive
improvements in margin and cash
Positioned for growth and strong
financial performance
7 Copyright 2006 Northrop Grumman Corporation
12. Mission
Systems
Overview
2006 Institutional Investor Conference
November 9, 2006
Jerry Agee
President
Northrop Grumman Mission Systems
9 Copyright 2006 Northrop Grumman Corporation
13. Sector at a Glance. . .
$5.5B – 2005 Actual Sales (adjusted for
Radio Systems)
17,000 employees, 47 states, Intelligence,
19 countries Surveillance &
Reconnaissance
Primary customers Command,
24%
Control &
Air Force Army Navy
Communications
Restricted MDA Missile
50% Systems
Key programs
26%
ICBM Prime Integration Contract
Kinetic Energy Interceptors
Joint Warfighting Center
F/A-22 and F-35 CNI 2006E Sales
Blue Force Tracking
Global Command & Control System
$11B Current Total Backlog
Note: Information presented on a pro forma basis to reflect 2007 organizational realignment
10 Copyright 2006 Northrop Grumman Corporation
14. Focus on Performance
Performance Trends
Business Mix
Sales ($B)
Sales and Margin % Margin %
6 8.0%
Contract 85% Cost (includes T&M)
5
Type 15% Fixed
4 7.5%
Sales ($B)
Margin %
<10% Manufacturing /
Product 3
Production
2 7.0%
>90% Development /
1
Integration / Services
0 6.5%
2003 2004 2005
Pro forma financials reflecting 2007 organizational realignment
Margin Initiatives
Pursue opportunities/markets with higher returns
Deemphasize/exit markets with substandard returns
Adhere to strict program risk management strategies
and tactics
Bid higher margins/reduce indirect costs
Leverage competitive excellence initiatives
11 Copyright 2006 Northrop Grumman Corporation
15. Command, Control & Communications
Products/Offerings Major Programs
Products/Offerings Major Programs
Command, Control & Information Systems Blue Force Tracking
Tactical Operations Centers Command Post Platform
Networks, Communications & Interoperability Global Command & Control System
System Engineering and Analysis Joint Warfighting Center
Communication, Navigation and Identification F/A-22 & F-35 Communication, Navigation
and Identification
Software Defined Radios
Key Customers Major Opportunities
Key Customers Major Opportunities
Joint Network Node
U.S. Army, Air Force, Navy and Department of
Defense (Including Joint Forces) Network Comms Opportunities
Global Command and Control – Maritime
12 Copyright 2006 Northrop Grumman Corporation
16. Intelligence, Surveillance and Reconnaissance
Products/Offerings Major Programs
Products/Offerings Major Programs
Signals Intelligence and Exploitation Systems Airborne Signals Intelligence Payload
Payload Software Survivor
Information Operations Guardrail
Special Intelligence Diamond
Multi-INT Integration Restricted
Satellite Ground Stations
Key Customers Major Opportunities
Key Customers Major Opportunities
Guardrail Modernization / ACS
Intelligence Community
GPS OCX
U.S. Army, Air Force, Navy
Restricted
13 Copyright 2006 Northrop Grumman Corporation
17. Missile Systems
Products/Offerings Major Programs
Products/Offerings Major Programs
Inter-Continental Ballistic Missile (ICBM) ICBM Prime Integration Contract
Battle Management Command and Control Ground-Based Midcourse Defense Segment
Systems Joint National Integration Center
Kinetic Energy Interceptors
Key Customers Major Opportunities
Key Customers Major Opportunities
ICBM System Program Office Integrated Air & Missile Defense
Adjunct Sensor
U.S. Air Force
KEI International / Sea Basing
U.S. Strategic Command
Missile Defense Agency
14 Copyright 2006 Northrop Grumman Corporation
18. Trusted Provider of Mission-Enabling Systems
Competing and performing as a Tier 1 player
Provide thought leadership
Deliver technically differentiated, fully
integrated solutions
Consistent performance / track record
Trusted partner and thought leader
15 Copyright 2006 Northrop Grumman Corporation
19. Technical
Services
Overview
2006 Institutional Investor Conference
November 9, 2006
James Cameron
President
Northrop Grumman Technical Services
16 Copyright 2006 Northrop Grumman Corporation
20. Sector at a Glance. . .
18,304 employees**
Customer Sales Profile
Sites: 285** all 50 States and 29 Countries
Primary customers:
Other*
DoD DHS
12%
DoE NASA
DoE
DoD
DoS
15%
50%
Key missions:
NASA
“City” Managers: Kennedy Space Center;
Nevada Test Site; Ft. Eustis; Incerlik, Turkey 23%
Aircraft Sustainment and Modernization:
B2; JSTARS; F18; EA-6; Hunter UAV
Homeland Security: Biometrics for Citizenship
and Immigration
Air and Ground Combat Ranges:
Combined Tactical Training Ranges; Ft. Hood
2006E Sales
Range Complex
Physical and Electronic Security: Space
* including DHS, DoS, etc
Gateway Support; Qatar
Performance Based Logistics and
$4.3B Total Backlog*
Supply Chain Management: Whiteman AFB;
Tinker AFB; Robins AFB
Training: Live, Virtual and Constructive Domains
* Funded & Unfunded Backlog
17 ** Includes JVs Copyright 2006 Northrop Grumman Corporation
21. Examples Of What We Do and Where We Do It
B2 Supply Chain
Management –
Tactical
Whiteman AFB, MS
Training
Ranges –
East and Korean Battle
West Coasts Simulation Center –
Yongsan, South
Citizenship and
Korea
Immigration Service –
All 50 States
(136 Centers)
Saudi Arabian
National Guard –
Riyadh, SA
Nevada Test Site
African Contingency
Hunter Support –
Operations and Training
Sierra Vista, AZ with
Assistance
deployed Teams in OIF
Battle Command Training
Space Gateway
Branch – Ft. Hood, TX
Support – Kennedy
Space Center
18 Copyright 2006 Northrop Grumman Corporation
22. Market Environment
Core business
Preparedness Operations Modernization
Infrastructure and Product and and Through
Development Training Maintenance Sustainment
$75B DoD Addressable Market
$55B NASA, DoE, DHS,
DoS Market
NG Development Sectors NG Technical Services NG Dev
~35% DOD Budget ~65% DOD Budget
How We Are Organized To Attack Opportunities?
Training and Simulation Group: Product Development, Scenario Development/Planning, Exercise
Support, Linguists
System Support Group: Operations and Maintenance, Base and Range O&M (DoD, DOE,
NASA), Biometric Collection (DHS)
Life Cycle Optimization and Engineering Group: MRO and Maintenance, in the Field and Depot,
Performance Based Logistics, Supply Chain Management
19 Copyright 2006 Northrop Grumman Corporation
23. Delivered 2006 Performance
New Programs – Recent Wins
Financial Performance
Nevada Test Site (DOE)
Year-Over-Year Organic Growth
Saudi Arabian National Guard
Modernization Program (Army)
U.S. Citizenship and Immigration
Service - Application Support
Centers (DHS)
Robins Air Base Education and
Training (AF)
Battle Command Training Branch
(Army)
2003 2004 2005 2006E 2007E
Realizing immediate impact of
new NGTS organization!
Double-digit organic growth
Outstanding cash contributions
Solid mid-single digit margins
20 Copyright 2006 Northrop Grumman Corporation
24. Strategic Thrusts & Growth Expectations
Strategic Thrusts SSG
Capitalize on “integrated” NOC pedigree and
“reach back”
Leverage services and MRO businesses
through a tactical and strategic focus
Exploit a growing DoD market TSG
Grow existing position in adjacent markets
(DOE, DOS, NASA, DHS, etc)
Expand international footprint
Growth Expectations
Expect double digit growth
LCOE
21 Copyright 2006 Northrop Grumman Corporation
25. Focus on Performance
Growth
Deliver consistent year-over-year double digit growth
Leverage robust pipeline
Key: identifying/qualifying new business pursuits. Have increased
at a ratio of more than 3 to 1
Margin
Focus on higher margin market segments - logistics & training
Enhance contract mix with an increase in performance-based and
fixed-price contracts
“Manage with leading indicator metrics in a continuous process
improvement environment”
Cash
Drive strong working capital performance
Execute with minimal capital utilization
22 Copyright 2006 Northrop Grumman Corporation
26. Summary
Vision and strategies
Be the best in the world at what we do
Deliver superior performance on ALL programs
DoD business
Represents only half of our portfolio
Strong integrated NOC pedigree offers great opportunity for
rapid organic growth
Non-DoD business
Already possess a diverse portfolio in adjacent markets
Sales/Margin/Cash drivers
Driving double digit top-line growth
Solid, mid-single digit margin performance today
Business base has highly favorable capital utilization yielding
strong returns
23 Copyright 2006 Northrop Grumman Corporation
