Slide 1: First Quarter 2024 Conference Call
NORTHROP GRUMMAN First Quarter 2024 Conference Call April 25, 2024 Kathy Warden Dave Keffer Chair, Chief Executive Officer Corporate Vice President and President and Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and the information we are incorporating by reference, and statements to be made on the earnings conference call, Business and Operational Risks contain or may contain statements that constitute “forward-looking statements” within the meaning of the Priva
Slide 3: Q1 Highlights
Q1 Highlights Enterprise Spotlight • FY24 U.S. Defense budget included strong support for key NG capabilities such as nuclear modernization, microelectronics, advanced weapons, and space $79B Q1 Backlog • Received the Aviation Week Grand Laureate award in defense category for B-21 • Prioritizing inv
Slide 4: Q1 Sales
Q1 Sales 9% $9,083 Three Months Ended March 31 $8,720 ($M) 2023 2024 ▲% Aeronautics Systems $2,515 $2,969 18% Defense Systems 1,376 1,412 3% $10,133 $9,301 Mission Systems 2,563 2,659 4% Space Systems 3,350 3,655 9% Intersegment Eliminations (503) (562) Total $9,301 $10,133 9% Q1 2023 Q1 2024 Sales
Slide 5: Q1 Segment Operating Income
Q1 Segment Operating Income(1) 10% Three Months Ended March 31 ($M) 2023 2024 ▲% Aeronautics Systems $237 $297 25% Defense Systems 160 177 11% $1,104 Mission Systems 360 378 5% $1,002 Space Systems 313 332 6% Intersegment Eliminations (68) (80) Total $1,002 $1,104 10% Q1 2023 Q1 2024 Segment operati
Slide 6: Q1 Diluted EPS Bridge
Q1 Diluted EPS Bridge 15% Q1 2023 $5.50 Segment Performance 0.67 Net Pension(1) 0.33 $6.32 Interest Expense (0.11) $5.50 Corporate Unallocated and Other (0.07) Q1 2024 $6.32 Q1 2023 Q1 2024 Year over year EPS growth driven by outstanding operational performance 1. Net Pension tax effected on a 21% f
Slide 7: 2024 Segment Guidance
2024 Segment Guidance(1) As of 1/25/2024 As of 4/25/2024 Sales ($B) OM Rate % Sales ($B) OM Rate % Aeronautics Systems Low $11 Mid 9% Mid $11 Mid 9% Defense Systems ~$6 Low 12% ~$6 Low to Mid 12% Mission Systems Low to Mid $11 ~15% Low to Mid $11 High 14% Space Systems Mid to High $14 ~9% Low to Mid
Slide 8: 2024 Company Level Guidance
2024 Company Level Guidance(1) $ in millions, except per share amounts As of 4/25/2024 Sales $40,800 — $41,200 Segment operating income(2) $4,475 — $4,550 Total Net FAS/CAS pension adjustment(3) ~$700 Unallocated corporate expense: Intangible asset amortization and PP&E step-up depreciation ~$100 Ot
Slide 9: Key Takeaways
Key Takeaways Strong global defense budget • We remain laser focused on performance as we deliver critical outlook capabilities in partnership with our customers Broad portfolio well • Visible path to grow margins over coming years driven by improvements in macro environment, digitally enabled effic
Slide 10: Appendix
Appendix First Quarter 2024 Conference Call 10
Slide 11: Financial Guidance
Financial Guidance Financial guidance, as well as outlook, trends, expectations and other forward-looking statements provided by the company for 2024 and beyond, reflect the company's judgment based on the information available to the company at the time of this presentation. The company’s financial
Slide 12: Non-GAAP Definitions
Non-GAAP Definitions Non-GAAP Financial Measures Disclosure: This presentation contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in this presentation. Definitions for the non-GAA
Slide 13: Non-GAAP Reconciliations: Segment Operating Income
Non-GAAP Reconciliations Segment Operating Income Three Months Ended March 31 ($M) 2023 2024 Total sales $9,301 $10,133 Operating income $947 $1,071 Operating margin rate 10.2% 10.6% Reconciliation to segment operating income: FAS/CAS operating adjustment $21 $(6) Unallocated corporate expense: Inta
Slide 14: Non-GAAP Reconciliations: Free Cash Flow
Non-GAAP Reconciliations Free Cash Flow (1) Three Months Ended March 31 ($M) 2023 2024 ▲% Net cash used in operating activities $(702) $(706) (1)% Capital expenditures (309) (270) (13)% (1) Free cash flow $(1,011) $(976) 3% First Quarter 2024 Conference Call 14
Slide 15: First Quarter 2024 Conference Call
First Quarter 2024 Conference Call 15