2. Safe Harbor Statement
Certain statements and assumptions in these presentations and materials contain or are based on “forward-
looking” information. Such “forward-looking” information includes, among other things, projected deliveries,
expected funding for various programs, future effective income tax rates, financial guidance and estimated
amounts regarding sales, segment operating margin, pension expense, employer contributions under
pension plans and medical and life benefits plans, cash flow and earnings per share, and is subject to
numerous assumptions and uncertainties, many of which are outside Northrop Grumman’s control. These
include Northrop Grumman’s assumptions with respect to future revenues, expected program performance
and cash flows, returns on pension plan assets and variability of pension actuarial and related assumptions,
the outcome of litigation and appeals, environmental remediation, divestitures of businesses, successful
reduction of debt, successful negotiation of contracts with labor unions, effective tax rates and timing and
amounts of tax payments, and anticipated costs of capital investments, among other things. Northrop
Grumman’s operations are subject to various additional risks and uncertainties resulting from its position as
a supplier, either directly or as subcontractor or team member, to the U.S. Government and its agencies as
well as to foreign governments and agencies; actual outcomes are dependent upon various factors,
including, without limitation, Northrop Grumman’s successful performance of internal plans; government
customers’ budgetary constraints; customer changes in short-range and long-range plans; domestic and
international competition in both the defense and commercial areas; product performance; continued
development and acceptance of new products and, in connection with any fixed price development
programs, controlling cost growth in meeting production specifications and delivery rates; performance
issues with key suppliers and subcontractors; government import and export policies; acquisition or
termination of government contracts; the outcome of political and legal processes and of the assertion or
prosecution of potential substantial claims by or on behalf of a U.S. government customer; natural disasters,
and any associated amounts and timing of recoveries under insurance contracts, availability of materials
and supplies, continuation of the supply chain, contractual performance relief and the application of cost
sharing terms, impacts of timing of cash receipts and the availability of other mitigating elements; terrorist
acts; legal, financial and governmental risks related to international transactions and global needs for
military aircraft, military and civilian electronic systems and support, information technology, naval vessels,
space systems, technical services and related technologies, as well as other economic, political and
technological risks and uncertainties and other risk factors set out in Northrop Grumman’s filings from time
to time with the Securities and Exchange Commission, including, without limitation, Northrop Grumman
reports on Form 10-K and Form 10-Q.
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3. Presentation Format
Guidance
Effective 1/1/07 Radio Systems business will be transferred from Space
Technology to Mission Systems
Reported results for Q4 2006 & Full Year 2006 will not reflect the transfer
Guidance does not reflect the change
Guidance does not include Essex
Segment results 2003 - 2005
Presented on a pro forma basis reflecting
Previously announced organizational realignments
Transfer of Radio Systems business
Adoption of dual-margin recognition on inter-segment sales
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4. The Leadership Team
Bus Dev & HR &
Communications Law
Govt Relations Administration
Ron Sugar Wes Bush
Chairman President
& CFO
& CEO
Bob Helm Burks Terry
Ian Ziskin
Rosanne O'Brien
Corp VP Corp VP &
Corp VP & Chief
Corp VP
General Counsel
HR & Admin Officer
Mission Information Technical Electronic Integrated Space Ship Newport
Systems Technology Services Systems Systems Technology Systems News
Jerry Agee Jim O’Neill Jim Cameron Jim Pitts Scott Seymour Alexis Livanos Phil Teel Mike Petters
Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President Corp VP & President
Information & Services Electronics Aerospace Ships
The Right Team For Our Strategy
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5. Electronics
Growth Operating Margin
2007E
2006E ($B) 2006E 2007E Long-Term
Growth Margin
Opportunity2
Operating Margin %
I&S ~$11 8-10% Information & Services Low 8 ~8 8-9
Aerospace Low 9 ~9 9-10
Aerospace ~$9 ~(5)%
Mid to
Electronics High 11 ~12
High 11
Electronics ~$6.6 ~5% Ships ~7 Mid 8 9+
Segment OM1 Low 9 Low 9 ~10
Ships ~$5 ~10%
Total Operating Margin Low 8 High 8 9+
Total ~$30.2 $31-32 1 Non-GAAP Metric - see reconciliation and definition on pages 25 & 26
2 Dependent on long-term business mix
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6. Electronic
Systems
Overview
2006 Institutional Investor Conference
November 9, 2006
James F. Pitts
President
Northrop Grumman Electronic Systems
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7. Electronic Systems … $6.6B 2006E Sales
Space
Sensors
Airborne Sensors Ground & Soldier
& Self-Protection Systems
Systems
Maritime & International &
Underseas Large
Systems Infrastructure
Solutions
… World Class Solution Provider … World Class Financial Performance
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8. Strong & Diversified Portfolio …
DoD budget trends
Non-DoD
Upgrades balanced with new starts 20%
DoD
Adapting products to GWOT International 55%
25%
GWOT
GWOT
An evolving market
Undersea to
Undersea to Protecting core business
Outer Space
Outer Space
Technology insertion
Global
Global
Move up value chain
Security
Security
Peer Exploiting international opportunities
Peer
Competitor
Competitor Expanding into adjacent markets
Acting with speed
Positioned for shifting budget priorities
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9. Strong Performance Focus
8 14%
Top Line… 12%
7 10%
Acquisitions up 17%
Sales $B
OM %
8%
from 2005 6
6%
Solid revenue projection 4%
5
2%
Bottom Line… 4 0%
2003 2004 2005 2006E 2007E
Retiring risk
Expanding margins
Business imperatives …
Improving processes
– Leadership & people
Cash…
– Teamwork & collaboration
Improving cash conversion
– Continuous improvement
Reducing capital – Strategic thinking for growth
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10. Electronics Systems …
Strong leadership focus
Improving top line growth
Strong, diversified portfolio
Scholarship
Expanding into adjacent
markets
Exploiting international Learning Teams
Mentoring
marketplace
Aligning to customer missions
Improving margins and cash
performance
Resource Groups
Delivering shareholder value
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