NORTHROP GRUMMAN CORP DE

9. DEBT

Commercial Paper

The company maintains a commercial paper program that serves as a source of short-term financing with capacity to issue unsecured commercial paper notes up to $2.5 billion. There wereno commercial paper borrowings outstanding at December 31, 2024 and December 31, 2023, respectively.

Credit Facility

The company maintains a five-year senior unsecured credit facility in an aggregate principal amount of $2.5 billion (the “2022 Credit Agreement”) that matures in August 2027. The revolving credit facility established under the 2022 Credit Agreement is intended to support the company’s commercial paper program and other general corporate purposes. Commercial paper borrowings reduce the amount available for borrowing under the 2022 Credit Agreement. At December 31, 2024, there wereno borrowings outstanding under this facility.

The 2022 Credit Agreement contains generally customary terms and conditions, including covenants restricting the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake other fundamental changes and incur liens. The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreement) to exceed 65 percent. At December 31, 2024, the company was in compliance with all covenants under its credit agreement.

Unsecured Senior Notes

Issuance of Senior Notes

In January 2024, the company issued $2.5 billion of unsecured senior notes for general corporate purposes, including debt repayment, share repurchases, and working capital, as follows:

•$500 million of 4.60% senior notes due 2029 (the “2029 Notes”),

•$850 million of 4.90% senior notes due 2034 (the “2034 Notes”), and

•$1.15 billion of 5.20% senior notes due 2054 (the “2054 Notes”).

In February 2023, the company issued $2.0 billion of unsecured senior notes for general corporate purposes, including debt repayment, share repurchases, and working capital, as follows:

•$1.0 billion of 4.70% senior notes due 2033 (the “2033 Notes”) and

•$1.0 billion of 4.95% senior notes due 2053 (the “2053 Notes”).

We refer to the 2029 Notes, 2033 Notes, 2034 Notes, 2053 Notes and 2054 Notes, together, as the “notes.” Interest on the notes is payable semi-annually in arrears. The notes are generally subject to redemption, in whole or in part, at the company’s discretion at any time, or from time to time, prior to maturity at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed or an applicable “make-whole” amount, plus accrued and unpaid interest.

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Repayments of Senior Notes

In August 2023, the company repaid $1.05 billion of 3.25 percent unsecured senior notes upon maturity.

Subsequent Event - In January 2025, the company repaid $1.5 billion of 2.93 percent unsecured senior notes upon maturity.

Long-term debt consists of the following:

(1)The current portion of long-term debt is recorded in Other current liabilities in the consolidated statements of financial position.

The estimated fair value of long-term debt was $15.3 billion and $13.4 billion as of December 31, 2024 and 2023, respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements.

Indentures underlying long-term debt issued by the company or its subsidiaries contain various restrictions with respect to the issuer, including one or more restrictions relating to limitations on liens, sale-leaseback arrangements and funded debt of subsidiaries. The majority of these fixed rate notes and debentures are subject to redemption at the company’s discretion at any time prior to maturity in whole or in part at the principal amount plus any make-whole premium and accrued and unpaid interest. Interest on these fixed rate notes and debentures are payable semi-annually in arrears.

Total interest payments, net of interest received and capitalized, were $475 million, $437 million and $474 million for the years ended December 31, 2024, 2023 and 2022, respectively. The company capitalized interest expense of $113 million, $95 million and $53 million during the years ended December 31, 2024, 2023 and 2022, respectively.

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Maturities of long-term debt as of December 31, 2024, are as follows: