Slide 1: and se peatiee e e
and se peatiee e e stuedlley Seguin S3 investmenticontere! 3, 2003, Febriaryi5)200s\and February 42) 2003)
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements and assumptions in these materials contain or are based on “forward-looking” information and involve risks and uncertainties. Such “forward-looking” information includes, among other things, the Impact of the TRW Inc. acquisition on revenues and earnings. Suc
Slide 3: NOC - New Powerhouse
NOC - New Powerhouse = Sustainable growth in defense spending = Best positioned portfolio * Strong relationships with all DoD & Intelligence customers = Strengthened system-of-systems integration «= Strong acquisition integration track record = Solid financial performance & balance sheet + Excellent
Slide 4: US DoD Procurement & RDT&E
US DoD Procurement & RDT&E SBN Appropriations Outlays 1996 1999 6% - 8% CAGR (2002- 2007E) in appropriations and outlays NOC positioned in high priority, faster growing sweet spots - C4ISR, ‘space, NMD and ships Homeland Security initiatives provide additional growth ‘Source: Department of Defense “
Slide 5: The Persistent Strategy
The Persistent Strategy = Build portfolio of technologies essential to system-of-systems, network centric warfare across all platforms and services pursue emerging = Apply advanced technologies and human capital across the company = Constantly improve program and financial performance 1 TRW Added th
Slide 6: Land > Sea > Air > Space > Cyberspace
Land > Sea > Air > Space > Cyberspace
Slide 7: NOC Ideally Aligned with Future Defense Needs
NOC Ideally Aligned with Future Defense Needs... Core Competencies Rerecernny Programs 7 Large-Scale Integrated ‘rcraft Carriers, Attack Subs, Systems GLOBAL FORCE PROJECTION B-2) EiAy 0 E00) Dose Oyetsy ‘Amphibious Assault Ships, ICBM + Design and Manufacture of | PRECISION STRIKE Sophisticated Ele
Slide 8: Northrop Grumman / TRW Revenue Synergy
Northrop Grumman / TRW Revenue Synergy = “Top-tier” status yields “Seat at the Table” for system of systems = Combination provides unparalleled pool of technical talent * Will yield significant growth in: Pay issile Defense — Space — Tactical systems — Intelligence programs — Information warfare — H
Slide 9: Leadership in Key Business Areas
Leadership in Key Business Areas Revue |~S61B 478 ~ Airborne Radars. C4SR = CHSR = Government IT. ~ Electronic Infrastructure Warfare ~ Sconce & — Navigation Technology Guidance Information = Military Space Security! ~ Homeland combed Security Theale) Solutions = Homeland Security Homeland Security
Slide 10: Best-Positioned Program Portfolio in the Industry
Best-Positioned Program Portfolio in the Industry * Aircraft Carriers = F35 rspacr beast rr +p0651 + Global Hawk ee an +FA8 PSEC aan ear + Submarines = D(X) pcivees ae = + International air defense : cone eS “= International Air Defense * Boost Phase Intercept Trailblazer icrsland Sent + Survellance
Slide 11: Integration process
> Discipined and organized > Mult-disciplined process > Mult-disciplinary team integration team. »Well-honed, rapid, full spectrum integration > Contract by contract process projections build-up » Identify cost savings & ROG ain ‘synergy opportunities, expected > TRW 2002 better than > "Best of the
Slide 12: Excellent Operating Performance
Excellent Operating Performance | _—_—sW’Focus ts on Execution —_—__—swiy]
Slide 13: Results in Demonstrated Ability to Manage Debt
Results in Demonstrated Ability to Manage Debt =| Microwave Navia PIPEPEPPPLPL PPPS EF NORTHROP GRUMMAN PRIVATE
Slide 14: Accelerating Growth
Accelerating Growth Revenue $ Billions 35 30 25 8 15 10 Double-digit CAGR: a 2001A 2002E 2003E 2004E 2005E (DES OMT GIS @ Ships OMS GST GRevenue Syn
Slide 15: Net Debt/Total Capital
Net Debt/Total Capital Strong Balance Sheet Following Transaction 45% 40% | 35% i 30% 25% 20% 15% 10% TRW Acquisition Increases NOC Debt Capacity and Financial Flex 5% 0% 2002E 2003E 2004E 2005E Proforma fr sale of auto 12/31/02 + Includes 82 tax payment and TRW transaction costs
Slide 16: FAS Accounting Does Not Drive Pension Funding
FAS Accounting Does Not Drive Pension Funding = Funding driven by ERISA not FAS — Different actuarial methods — Much smoother results — Less short-term market sensitivity — Better visibility of future funding = Cash contributions are allowable costs in Government Contracting = Recoverability method
Slide 17: 2002 — Another Record Year
2002 — Another Record Year Top Line Revenue Growth Segment Operating Margin ~ $17.28 - $1.38 — 32% YoY growth — 31% YoY growth — All sectors met plan — Q3 charges moderated growth EPS/EEPS Cash from Operations — EEPS $6.29 (share adjusted) ~ $1.7B — Beat $6.10-$6.20 guidance — $1B available for debt
Slide 18: NOC = Value for Shareholders
NOC = Value for Shareholders Top Line Revenue Growth Segment Operating Margin — ~$25B to $26B in 2003 ~ 2003 mid 7% range — ~$28B to $29B in 2004 — 2004 mid 7% range EPS Cash from Operations — 2003 between $4.00 and $4.50 — 2003 $1.1B to $1.3B before B-2 — 2004 revenue growth, steady tax payment mar
Slide 19: NOC - New Powerhouse
NOC - New Powerhouse = Sustainable growth in defense spending = Best positioned portfolio = Strong relationships with all DoD & Intelligence customers = Strengthened system-of-systems integration * Strong acquisition integration track record * Solid financial performance & balance sheet = Excellent,