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Northrop
    Grumman
    2006 Institutional
    Investor
    Conference

    November 9, 2006

    Gaston Kent
    Vice President, Investor Relations
    Northrop Grumman Corporation
0
                                         Copyright 2006 Northrop Grumman Corporation
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.


1
                                                                                                Copyright 2006 Northrop Grumman Corporation
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




3
                                                                     Copyright 2006 Northrop Grumman Corporation
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

1                                                                                                                                         Copyright 2006 Northrop Grumman Corporation
Aerospace


                  Growth                                        Operating Margin
                               2007E                                              2006E              2007E
                  2006E ($B)                                                                                            Long-Term
                               Growth                                                                                     Margin
                                                                                   Operating Margin %                  Opportunity2

    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




2                                                                                                Copyright 2006 Northrop Grumman Corporation
Space
    Technology
    Overview
    2006 Institutional Investor Conference




    November 9, 2006

    Alexis Livanos
    President
    Northrop Grumman Space Technology
3                                            Copyright 2006 Northrop Grumman Corporation
Space Technology at a Glance. . .

      $2.9B 2005 sales
                                                          Intelligence,
      8,000 employees                                     Surveillance,
                                                         Reconnaissance
      Headquarters in                                                                Civil
                                                               40%
      Redondo Beach,                                                                Space
                                                                                       26%
      CA                                Technology
                                                           Missile
                                           & Other
                                                         & Space
                                               3%
      A leading provider                                             SatCom
                                                        Defense
      of space systems,                                               17%
                                                         14%
      and directed
      energy
                                                            2006E Sales

                             $8.7B Total Backlog

    Preliminary restatement of Radio Systems transfer
4                                                                           Copyright 2006 Northrop Grumman Corporation
Key Programs

     National Polar-orbiting
     Operational Environmental
     Satellite System (NPOESS)
     James Webb Space Telescope
     (JWST)
     Advanced Extremely High
     Frequency Satellite (AEHF)
     Space Tracking & Surveillance
     System (STSS)
     Airborne Laser (ABL)
     Restricted Programs
     Defense Support Program
     (DSP)
     Laser Weapon Systems
     Space Radar

5                                    Copyright 2006 Northrop Grumman Corporation
Market

     Budget: Overall stable, significant growth in
     Communications, Intelligence, Surveillance,
     Reconnaissance
     Strategic Thrusts: Evolving heritage programs with
     infusion of new technologies and inventing quick-
     turnaround systems to solve new, urgent problems
     Key New Programs:




       Space Radar   GOES-R     TSAT        Restricted




6                                                   Copyright 2006 Northrop Grumman Corporation
Focused on Performance

                  5                                                   10
                                                                                               Margin Expansion
                                Sales
                                                 Margin
                                                                                                Margin expansion continues
                  4                                                   8




                                                                           Margin % of Sales
                                                                                                with focus on program
     Sales ($B)




                  3                                                   6
                                                                                                performance
                  2                                                   4
                                                                                                   Cost management
                  1                                                   2
                                                                                                   Delivery milestones
                                                                                                   Six Sigma
                  0                                                   0
                          2003A          2004A           2005A
                      Preliminary restatement of Radio Systems transfer



                  Cash Generation
                        Maintaining strong negative working capital
                        Aggressively managing to reduce capital investment


                                 Positioning for ’07-’08 growth

7                                                                                                                  Copyright 2006 Northrop Grumman Corporation
Summary
     Program Execution
     Shaping Change
     Immerse with Customers
     System Engineering and
     Technology as Competitive
     Differentiators
     Growth and Financial
     Performance
     Leverage Northrop
     Grumman’s Potential

     Flexibility, innovation,
              speed
8                                Copyright 2006 Northrop Grumman Corporation
Integrated
    Systems
    Overview
    2006 Institutional Investor Conference




    November 9, 2006

    Scott Seymour
    President
    Northrop Grumman Integrated Systems
9                                            Copyright 2006 Northrop Grumman Corporation
Integrated Systems at a Glance. . .
           $5.5 billion sales in 2005(A)
           14,200 employees                                     Airborne Ground
                                                              Surveillance & Battle
           Major locations                                        Management
                                                                    Systems
               El Segundo, Rancho Bernardo,                             11%
               Palmdale, CA
                                                      Airborne Early
               Bethpage, NY                                                          Western Region
                                                        Warning &
                                                        Electronic                (Air Combat Systems /
               Melbourne, St. Augustine, FL          Warfare Systems               Unmanned Systems)
           Primary customers                               27%                            62%

               U.S. Air Force
               U.S. Navy
               U.S. Army
           Key programs
                                         E-2 Hawkeye
               B-2
                                         MP-RTIP
               F/A-18E/F, EA-18G
                                                                   2006E Sales
                                         Joint STARS
               F-35
                                         E-10 / BMC2
               Global Hawk
                                         EA-6B ICAP III
               Fire Scout

                                                     $9.8B Total Backlog

10                                                                                     Copyright 2006 Northrop Grumman Corporation
     2006 Integrated Systems Investors Conf 110906
Market Environment
        • Budget
                 —Overall stable across core programs
        • Strategic Thrusts
                 —Continued focus on performance and modernization
                  of core programs
                 —SDD program transition to production
                 —Leverage competencies in systems integration and
                  manned/ unmanned systems
                                Pursue next generation follow-on core programs
                                Identify adjacent/new market opportunities created
                                by recapitalization/transformation needs

11                                                                       Copyright 2006 Northrop Grumman Corporation
     2006 Integrated Systems Investors Conf 110906
Key New Programs

     • Broad Area Maritime
       Surveillance (BAMS)
                                                                                  Tanker

     • KC-135 Replacement (KC-X)
       (Tanker)
                                                      BAMS
                                                                                                         N-UCAS
     • Navy Unmanned Combat Air
       System (N-UCAS)

     • Next Generation Long Range Strike
       (NGLRS)

     • Advanced Electronic Attack (AEA)                          NGLRS
                                                                   NATO AGS
     • International
                                                                                                               AEA
                —NATO Alliance Ground
                 Surveillance (NATO AGS)
                —Euro Hawk

                                                     Euro Hawk
12                                                                            Copyright 2006 Northrop Grumman Corporation
     2006 Integrated Systems Investors Conf 110906
Focus on Performance
                                                                               Margin
                                                                                 Contract mix for development
                                                                                 programs at 57% of sales; major SDD
                                                Sales
            6,000                                                        12%
                                                                                 programs transitioning to early
            5,000
                                                                                 production
                                                                         9%
            4,000
                                                                                 Driving improved margin performance
                                                                                    Program execution
            3,000                                                        6%

                                                                                     – Independent Risk Review -
            2,000
                                                                         3%
                                                                                       minimizing performance risks
            1,000
                                                                                     – Systems engineering and program
              -                                                          0%
                                                                                       management
                            2003                     2004         2005
                                                                                     – Supply chain integration
                                                 Sales      ROS

                                                                                     – Process improvement – Six Sigma
                                                                                    Cost reduction initiatives

             Cash
               Maintaining strong negative working capital
               Improving balance sheet fundamentals for greater cash generation;
               cash > margin
               Aggressively managing to reduce capital investment, lease facilities
               and labs

13                                                                                                      Copyright 2006 Northrop Grumman Corporation
     2006 Integrated Systems Investors Conf 110906
Summary

      • Drive a relentless customer focus

      • Improve program execution

      • Streamline operating model
        and process

      • Establish key internal/external
        alliances

      • Capture targeted business
        pursuits

      • Deliver strong financial results




                                                     Perform   Position   Grow


14                                                                               Copyright 2006 Northrop Grumman Corporation
     2006 Integrated Systems Investors Conf 110906

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northrop grumman Aerospace

  • 1. Northrop Grumman 2006 Institutional Investor Conference November 9, 2006 Gaston Kent Vice President, Investor Relations Northrop Grumman Corporation 0 Copyright 2006 Northrop Grumman Corporation
  • 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. 1 Copyright 2006 Northrop Grumman Corporation
  • 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 3 Copyright 2006 Northrop Grumman Corporation
  • 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 1 Copyright 2006 Northrop Grumman Corporation
  • 5. Aerospace Growth Operating Margin 2007E 2006E 2007E 2006E ($B) Long-Term Growth Margin Operating Margin % Opportunity2 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 2 Copyright 2006 Northrop Grumman Corporation
  • 6. Space Technology Overview 2006 Institutional Investor Conference November 9, 2006 Alexis Livanos President Northrop Grumman Space Technology 3 Copyright 2006 Northrop Grumman Corporation
  • 7. Space Technology at a Glance. . . $2.9B 2005 sales Intelligence, 8,000 employees Surveillance, Reconnaissance Headquarters in Civil 40% Redondo Beach, Space 26% CA Technology Missile & Other & Space 3% A leading provider SatCom Defense of space systems, 17% 14% and directed energy 2006E Sales $8.7B Total Backlog Preliminary restatement of Radio Systems transfer 4 Copyright 2006 Northrop Grumman Corporation
  • 8. Key Programs National Polar-orbiting Operational Environmental Satellite System (NPOESS) James Webb Space Telescope (JWST) Advanced Extremely High Frequency Satellite (AEHF) Space Tracking & Surveillance System (STSS) Airborne Laser (ABL) Restricted Programs Defense Support Program (DSP) Laser Weapon Systems Space Radar 5 Copyright 2006 Northrop Grumman Corporation
  • 9. Market Budget: Overall stable, significant growth in Communications, Intelligence, Surveillance, Reconnaissance Strategic Thrusts: Evolving heritage programs with infusion of new technologies and inventing quick- turnaround systems to solve new, urgent problems Key New Programs: Space Radar GOES-R TSAT Restricted 6 Copyright 2006 Northrop Grumman Corporation
  • 10. Focused on Performance 5 10 Margin Expansion Sales Margin Margin expansion continues 4 8 Margin % of Sales with focus on program Sales ($B) 3 6 performance 2 4 Cost management 1 2 Delivery milestones Six Sigma 0 0 2003A 2004A 2005A Preliminary restatement of Radio Systems transfer Cash Generation Maintaining strong negative working capital Aggressively managing to reduce capital investment Positioning for ’07-’08 growth 7 Copyright 2006 Northrop Grumman Corporation
  • 11. Summary Program Execution Shaping Change Immerse with Customers System Engineering and Technology as Competitive Differentiators Growth and Financial Performance Leverage Northrop Grumman’s Potential Flexibility, innovation, speed 8 Copyright 2006 Northrop Grumman Corporation
  • 12. Integrated Systems Overview 2006 Institutional Investor Conference November 9, 2006 Scott Seymour President Northrop Grumman Integrated Systems 9 Copyright 2006 Northrop Grumman Corporation
  • 13. Integrated Systems at a Glance. . . $5.5 billion sales in 2005(A) 14,200 employees Airborne Ground Surveillance & Battle Major locations Management Systems El Segundo, Rancho Bernardo, 11% Palmdale, CA Airborne Early Bethpage, NY Western Region Warning & Electronic (Air Combat Systems / Melbourne, St. Augustine, FL Warfare Systems Unmanned Systems) Primary customers 27% 62% U.S. Air Force U.S. Navy U.S. Army Key programs E-2 Hawkeye B-2 MP-RTIP F/A-18E/F, EA-18G 2006E Sales Joint STARS F-35 E-10 / BMC2 Global Hawk EA-6B ICAP III Fire Scout $9.8B Total Backlog 10 Copyright 2006 Northrop Grumman Corporation 2006 Integrated Systems Investors Conf 110906
  • 14. Market Environment • Budget —Overall stable across core programs • Strategic Thrusts —Continued focus on performance and modernization of core programs —SDD program transition to production —Leverage competencies in systems integration and manned/ unmanned systems Pursue next generation follow-on core programs Identify adjacent/new market opportunities created by recapitalization/transformation needs 11 Copyright 2006 Northrop Grumman Corporation 2006 Integrated Systems Investors Conf 110906
  • 15. Key New Programs • Broad Area Maritime Surveillance (BAMS) Tanker • KC-135 Replacement (KC-X) (Tanker) BAMS N-UCAS • Navy Unmanned Combat Air System (N-UCAS) • Next Generation Long Range Strike (NGLRS) • Advanced Electronic Attack (AEA) NGLRS NATO AGS • International AEA —NATO Alliance Ground Surveillance (NATO AGS) —Euro Hawk Euro Hawk 12 Copyright 2006 Northrop Grumman Corporation 2006 Integrated Systems Investors Conf 110906
  • 16. Focus on Performance Margin Contract mix for development programs at 57% of sales; major SDD Sales 6,000 12% programs transitioning to early 5,000 production 9% 4,000 Driving improved margin performance Program execution 3,000 6% – Independent Risk Review - 2,000 3% minimizing performance risks 1,000 – Systems engineering and program - 0% management 2003 2004 2005 – Supply chain integration Sales ROS – Process improvement – Six Sigma Cost reduction initiatives Cash Maintaining strong negative working capital Improving balance sheet fundamentals for greater cash generation; cash > margin Aggressively managing to reduce capital investment, lease facilities and labs 13 Copyright 2006 Northrop Grumman Corporation 2006 Integrated Systems Investors Conf 110906
  • 17. Summary • Drive a relentless customer focus • Improve program execution • Streamline operating model and process • Establish key internal/external alliances • Capture targeted business pursuits • Deliver strong financial results Perform Position Grow 14 Copyright 2006 Northrop Grumman Corporation 2006 Integrated Systems Investors Conf 110906