NORTHROP GRUMMAN CORP /DE/

We are focused on the efficient conversion of operating income into cash to provide for the company’s material cash requirements, including working capital needs, satisfaction of contractual commitments, funding of our pension and OPB plans, investment in our business through capital expenditures, and shareholder returns.

At September 30, 2026, we had $3.7 billion in cash and cash equivalents. We expect cash and cash equivalents and cash generated from operating activities, supplemented by borrowings under credit facilities, commercial paper and/or in the capital markets, if needed, to be sufficient to provide liquidity to the company in the short-term and long-

-32- term. The company has a five-year senior unsecured revolving credit facility in an aggregate principal amount of $3.0 billion, and in April 2026, we renewed our one-year $500 million uncommitted credit facility. At September 30, 2026, there were no borrowings outstanding under these credit facilities.

Cash Flow Measures

In addition to our cash position, we consider various cash flow measures in capital deployment decision-making, including cash provided by operating activities and adjusted free cash flow, a non-GAAP measure described in more detail below.

Operating Cash Flow

The table below summarizes key components of cash provided by operating activities:

(1)Beginning in the fourth quarter of 2025, the company redefined trade working capital presented in this table to include accounts receivable, unbilled receivables, inventoried costs, trade accounts payable and advance payments and billings in excess of costs incurred. Prior period amounts and disclosures have been recast to conform to the current period presentation.

Year to date 2026 net cash provided by operating activities increased $509 million as compared with the same period in 2025, primarily due to lower net cash tax payments.

Adjusted Free Cash Flow

Adjusted free cash flow, as reconciled in the table below, is a non-GAAP measure defined as net cash provided by or used in operating activities, less capital expenditures, plus proceeds from the sale of equipment to a customer (not otherwise included in net cash provided by or used in operating activities) and the after-tax impact of discretionary pension contributions. Adjusted free cash flow includes proceeds from the sale of equipment to a customer, if any, as such proceeds were generated in a customer sales transaction. It also includes the after-tax impact of discretionary pension contributions, if any, for consistency and comparability of financial performance. This measure may not be defined and calculated by other companies in the same manner. We use adjusted free cash flow as a key factor in our planning for, and consideration of, acquisitions, the payment of dividends and stock repurchases. This non-GAAP measure may be useful to investors and other users of our financial statements as a supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating cash flows presented in accordance with GAAP. During the nine months ended September 30, 2026 and 2025, the company made no discretionary pension contributions.

The table below reconciles net cash provided by operating activities to adjusted free cash flow:

Year to date 2026 adjusted free cash flow increased $893 million, or 1,240 percent, as compared with the same period in 2025, primarily due to higher net cash from operating activities and proceeds received in connection with the sale of equipment to a customer.

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Investing Cash Flow

Year to date 2026 net cash used in investing activities decreased $177 million, or 36 percent, as compared with the same period in 2025, principally due to $371 million of proceeds from the sale of equipment to a customer and $107 million of proceeds from the sale of an investment, partially offset by $333 million of proceeds from the training services divestiture in the prior year.

Financing Cash Flow

Year to date 2026 net cash used in financing activities decreased $1.1 billion, or 38 percent, as compared with the same period in 2025, primarily due to a $1.1 billion decrease in share repurchases.

Credit Facilities, Commercial Paper and Financial Arrangements -See Note 7 to the financial statements for further information on our credit facilities, commercial paper and our use of standby letters of credit and guarantees.

Share Repurchases - See Note 2 to the financial statements for further information on our share repurchase programs.

Long-term Debt - See Note 5 to the financial statements for further information.