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Copyright 2006 Northrop Grumman Corporation0

Northrop Grumman 2006 Institutional Investor Conference

November 9, 2006

Gaston KentVice President, Investor RelationsNorthrop Grumman Corporation


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.

Safe Harbor Statement


Presentation Format

GuidanceEffective 1/1/07 Radio Systems business will be transferred from Space Technology to Mission SystemsReported results for Q4 2006 & Full Year 2006 will not reflect the transferGuidance does not reflect the changeGuidance does not include Essex

Segment results 2003 - 2005Presented on a pro forma basis reflecting

Previously announced organizational realignmentsTransfer of Radio Systems businessAdoption of dual-margin recognition on inter-segment sales


The Leadership Team

Bob HelmCorp VP

Bus Dev &Govt Relations

Jim O’NeillCorp VP & President

InformationTechnology

MissionSystems

Jerry AgeeCorp VP & President

Jim CameronCorp VP & President

TechnicalServices

Information & Services

Jim PittsCorp VP & President

Electronic Systems

Electronics

Mike PettersCorp VP & President

NewportNews

Phil TeelCorp VP & President

ShipSystems

Ships

Burks TerryCorp VP &

General Counsel

Law

Ian ZiskinCorp VP & Chief

HR & Admin Officer

HR &Administration

Rosanne O'BrienCorp VP

Communications

Space Technology

Alexis LivanosCorp VP & President

Scott SeymourCorp VP & President

Integrated Systems

Aerospace

Ron SugarChairman & CEO

Wes BushPresident& CFO

The Right Team For Our StrategyThe Right Team For Our Strategy


Aerospace

Operating Margin

1 Non-GAAP Metric - see reconciliation and definition on pages 25 & 262 Dependent on long-term business mix

9+High 8Low 8Total Operating Margin

~10Low 9Low 9Segment OM1

9+Mid 8~7Ships

~12High 11Mid to High 11Electronics

9-10~9Low 9Aerospace

8-9~8Low 8Information & Services

Operating Margin %

Long-TermMargin

Opportunity2

2007E2006E

$31-32~$30.2Total

~10%~$5Ships

~5%~$6.6Electronics

~(5)%~$9Aerospace

8-10%~$11I & S

2006E ($B) 2007EGrowth

Growth


Space Technology Overview

November 9, 2006

Alexis LivanosPresidentNorthrop Grumman Space Technology

2006 Institutional Investor Conference


Space Technology at a Glance. . .

$2.9B 2005 sales8,000 employeesHeadquarters in Redondo Beach, CAA leading provider of space systems, and directed energy

$8.7B Total Backlog$8.7B Total Backlog

Missile& Space

Defense14%

Missile& Space

Defense14%

SatCom17%

SatCom17%

CivilSpace

26%

CivilSpace

26%Technology& Other

3%

Intelligence, Surveillance,

Reconnaissance40%

Intelligence, Surveillance,

Reconnaissance40%

Preliminary restatement of Radio Systems transfer

2006E Sales2006E Sales2006E Sales


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 ProgramsDefense Support Program (DSP)Laser Weapon SystemsSpace Radar


Market

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

Space Radar GOES-R TSAT Restricted


Margin ExpansionMargin expansion continues with focus on program performance

Cost managementDelivery milestonesSix Sigma0

1

2

3

4

5

2003A 2004A 2005A

Sale

s ($

B)

0

2

4

6

8

10

Margin %

of Sales

Focused on Performance

Cash GenerationMaintaining strong negative working capitalAggressively managing to reduce capital investment

SalesMargin

Positioning for ’07-’08 growthPositioning for ’07-’08 growth

Preliminary restatement of Radio Systems transfer


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

Flexibility, innovation,speed


Integrated Systems Overview

November 9, 2006

Scott SeymourPresidentNorthrop Grumman Integrated Systems

2006 Institutional Investor Conference


E-2 HawkeyeMP-RTIPJoint STARSE-10 / BMC2

EA-6B ICAP III

$9.8B Total Backlog

Integrated Systems at a Glance. . .

$5.5 billion sales in 2005(A)14,200 employeesMajor locations

El Segundo, Rancho Bernardo, Palmdale, CABethpage, NYMelbourne, St. Augustine, FL

Primary customersU.S. Air ForceU.S. NavyU.S. Army

Key programsB-2F/A-18E/F, EA-18GF-35Global HawkFire Scout

Western Region(Air Combat Systems / Unmanned Systems)

62%

Airborne Ground Surveillance & Battle

Management Systems

11%

Airborne Early Warning & Electronic

Warfare Systems27%

2006 Integrated Systems Investors Conf 110906

2006E Sales2006E Sales2006E Sales


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



• Broad Area MaritimeSurveillance (BAMS)

• KC-135 Replacement (KC-X)(Tanker)

• Navy Unmanned Combat Air System (N-UCAS)

• Next Generation Long Range Strike (NGLRS)

• Advanced Electronic Attack (AEA)

• International —NATO Alliance Ground

Surveillance (NATO AGS)—Euro Hawk

Key New Programs

BAMS

NGLRS


Tanker

N-UCAS

AEA

NATO AGS

Euro Hawk


Focus on PerformanceMargin

Contract mix for development programs at 57% of sales; major SDD programs transitioning to early productionDriving improved margin performance

Program execution– Independent Risk Review -

minimizing performance risks– Systems engineering and program

management– Supply chain integration– Process improvement – Six Sigma

Cost reduction initiatives


CashMaintaining strong negative working capitalImproving balance sheet fundamentals for greater cash generation; cash > marginAggressively managing to reduce capital investment, lease facilities and labs

Sales

-

1,000

2,000

3,000

4,000

5,000

6,000

2003 2004 20050%

3%

6%

9%

12%

Sales ROS


Perform Position Grow

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


Economy & Finance

northrop grumman Aerospace