noc-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-16411

NORTHROP GRUMMAN CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		80-0640649
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2980 Fairview Park Drive
Falls Church,	Virginia	22042
(Address of principal executive offices)		(Zip Code)

(703) 280-2900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NOC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer ☒ Accelerated Filer ☐

Non-accelerated Filer ☐ Smaller Reporting Company ☐

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 22, 2024, 147,989,969 shares of common stock were outstanding.

Table of Contents

NORTHROP GRUMMAN CORPORATION

TABLE OF CONTENTS


		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Earnings and Comprehensive Income	1
	Condensed Consolidated Statements of Financial Position	2
	Condensed Consolidated Statements of Cash Flows	3
	Condensed Consolidated Statements of Changes in Shareholders’ Equity	4
	Notes to Condensed Consolidated Financial Statements
	1. Basis of Presentation	5
	2. Earnings Per Share, Share Repurchases and Dividends on Common Stock	7
	3. Inventoried Costs, Net	9
	4. Income Taxes	9
	5. Fair Value of Financial Instruments	10
	6. Investigations, Claims and Litigation	11
	7. Commitments and Contingencies	11
	8. Retirement Benefits	13
	9. Stock Compensation Plans and Other Compensation Arrangements	13
	10. Segment Information	14
	Report of Independent Registered Public Accounting Firm	18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Overview	19
	Consolidated Operating Results	21
	Segment Operating Results	21
	Product and Service Analysis	25
	Backlog	26
	Liquidity and Capital Resources	26
	Critical Accounting Policies, Estimates and Judgments	28
	Accounting Standards Updates	28
	Forward-Looking Statements and Projections	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.	Other Information	30
Item 6.	Exhibits	32
	Signatures	33

Table of Contents

NORTHROP GRUMMAN CORPORATION

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31
$ in millions, except per share amounts		2024		2023
Sales
Product		$	8,102	$	7,271
Service		2,031		2,030
Total sales		10,133		9,301
Operating costs and expenses
Product		6,411		5,727
Service		1,589		1,589
General and administrative expenses		1,062		1,038
Total operating costs and expenses		9,062		8,354
Operating income		1,071		947
Other (expense) income
Interest expense		(146)		(129)
Non-operating FAS pension benefit		168		132
Other, net		38		48
Earnings before income taxes		1,131		998
Federal and foreign income tax expense		187		156
Net earnings		$	944	$	842

Basic earnings per share		$	6.34	$	5.52
Weighted-average common shares outstanding, in millions		148.9		152.6
Diluted earnings per share		$	6.32	$	5.50
Weighted-average diluted shares outstanding, in millions		149.3		153.2

Net earnings (from above)		$	944	$	842
Other comprehensive (loss) income, net of tax
Change in cumulative translation adjustment		1		2
Change in other, net		(16)		—
Other comprehensive (loss) income, net of tax		(15)		2
Comprehensive income		$	929	$	844

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

-1-

Table of Contents

NORTHROP GRUMMAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)


$ in millions, except par value	March 31, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	3,061	$	3,109
Accounts receivable, net	1,832		1,454
Unbilled receivables, net	6,450		5,693
Inventoried costs, net	1,370		1,109
Prepaid expenses and other current assets	2,083		2,341
Total current assets	14,796		13,706
Property, plant and equipment, net of accumulated depreciation of $8,149 for 2024 and $7,964 for 2023	9,690		9,653
Operating lease right-of-use assets	1,763		1,818
Goodwill	17,515		17,517
Intangible assets, net	290		305
Deferred tax assets	1,123		1,020
Other non-current assets	2,641		2,525
Total assets	$	47,818	$	46,544

Liabilities
Trade accounts payable	$	2,580	$	2,110
Accrued employee compensation	1,701		2,251
Advance payments and billings in excess of costs incurred	3,530		4,193
Other current liabilities	5,321		3,388
Total current liabilities	13,132		11,942
Long-term debt, net of current portion of $1,582 for 2024 and $70 for 2023	14,742		13,786
Pension and other postretirement benefit plan liabilities	1,250		1,290
Operating lease liabilities	1,830		1,892
Other non-current liabilities	2,641		2,839
Total liabilities	33,595		31,749

Commitments and contingencies (Note 7)

Shareholders’ equity
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2024—148,088,480 and 2023—150,109,271	148		150
Paid-in capital	—		—
Retained earnings	14,218		14,773
Accumulated other comprehensive loss

SEC Form 10-Q filed by Northrop Grumman Corporation