Q4 Earnings Per Share from Continuing Operations Increase 39 Percent
 to $1.29

 Q4 Sales Increase 5 Percent to $8 Billion

 Q4 Contract Acquisitions of $12.2 Billion Drive Total Backlog to
 Record $61 Billion

 Q4 Cash from Operations Totals $309 Million, $1.8 Billion for 2006

 2006 Earnings Per Share from Continuing Operations Increase 16 Percent
 to $4.44

 2006 Contract Acquisitions Increase to Record $38.8 Billion

 2006 Sales of $30.1 Billion

 2007 Earnings Per Share Guidance Range Increased to $4.80 to $5.05
 

LOS ANGELES -- Jan. 25, 2007 -- Northrop Grumman Corporation (NYSE:NOC) reported that fourth quarter 2006 income from continuing operations rose 37 percent to $457 million, or $1.29 per diluted share, from $334 million, or $0.93 per diluted share, in the fourth quarter of 2005. Income from continuing operations for 2006 increased 13 percent to $1.6 billion, or $4.44 per diluted share, from $1.4 billion, or $3.83 per diluted share, in 2005.

Sales for the 2006 fourth quarter increased 5 percent to $8 billion from $7.7 billion in the 2005 fourth quarter. Sales for 2006 totaled $30.1 billion and are comparable to 2005. Fourth quarter and full year operating results for 2006 and 2005 reflect the reclassification of certain operations from continuing to discontinued operations.

Cash from operations for the 2006 fourth quarter totaled $309 million compared with $660 million in the 2005 fourth quarter, and cash from operations for the year totaled $1.8 billion compared with $2.6 billion in 2005. Contract acquisitions in the 2006 fourth quarter increased 90 percent, to $12.2 billion. For all of 2006, contract acquisitions increased 58 percent to $38.8 billion, bringing funded backlog to $30.5 billion and total backlog to a record $61 billion at Dec. 31, 2006.

"Our focus on performance generated another strong quarter and our fourth consecutive year of double-digit growth in earnings per share. Together, our four businesses achieved solid double-digit growth in operating margin and outstanding cash generation, for both the quarter and the year," said Ronald D. Sugar, Northrop Grumman chairman and chief executive officer. "Our focus on operating margin rate improvement resulted in an expansion of 80 basis points in operating margin rate in 2006 compared with 2005," he added.

"For 2007, we are targeting solid earnings growth driven by higher sales and improving margin rates. Northrop Grumman's financial position continues to strengthen. Our record backlog gives us the foundation for future sales growth, and our outstanding balance sheet supports a cash deployment strategy that invests for the future and returns cash to shareholders through dividends and share repurchases," Sugar concluded.

2007 Guidance

The company expects 2007 sales to range between $31 and $32 billion. Earnings per diluted share from continuing operations are expected to range between $4.80 and $5.05, and include estimated net pension income of approximately $70 million. The company's estimated pension expense for 2007 is based on a composite discount rate of 6 percent and a long-term expected rate of return on plan assets of 8.5 percent. The company's 2006 discount rate was 5.75 percent. Net cash provided by operating activities is expected to range between $2.5 billion and $2.8 billion in 2007.

Fourth Quarter 2006 Results

Fourth quarter 2006 income from continuing operations rose 37 percent to $457 million, or $1.29 per diluted share, from $334 million, or $0.93 per diluted share, for the same period of 2005. Fourth quarter 2006 sales rose 5 percent to $8 billion compared with $7.7 billion in the 2005 fourth quarter.

Total segment operating margin rose 13 percent and includes double-digit percentage increases in operating margin in Information & Services, Electronics and Ships. Total operating margin for the 2006 fourth quarter increased 15 percent to $622 million from $539 million for the 2005 fourth quarter. Fourth quarter 2006 includes a $61 million pre-tax forward loss provision for the Multi-role Electronically Scanned Array (MESA) radar system fixed price development programs. Fourth quarter 2005 included a $65 million pre-tax forward loss provision for the F-16 Block 60 fixed price development program.

Other income for the 2006 fourth quarter increased to $134 million from $17 million for the same period of 2005. The increase includes a $111 million pre-tax gain on the sale of approximately 9.7 million shares of TRW Automotive common stock.

Federal and foreign income taxes for the 2006 fourth quarter increased to $230 million from $131 million in the fourth quarter of 2005. The increase is primarily attributable to higher income in the 2006 fourth quarter. In addition, the fourth quarter of 2005 included a $20 million net tax benefit related to the settlement of prior years IRS appeals cases. The effective tax rate applied to income from continuing operations for the 2006 fourth quarter was 33.5 percent compared with 28.2 percent in the 2005 fourth quarter.

Net income for the 2006 fourth quarter increased 37 percent to $453 million, or $1.28 per diluted share, from $331 million, or $0.92 per diluted share, for the same period of 2005. Earnings per share are based on weighted average diluted shares outstanding of 359 million for the fourth quarter of 2006 and 358.1 million for the fourth quarter of 2005. Fourth quarter 2006 weighted average shares outstanding include the dilutive impact of the company's Series B mandatorily redeemable preferred stock.

Weighted average diluted shares outstanding used to calculate earnings per diluted share and earnings per diluted share from continuing operations are adjusted to reflect the assumed conversion of the company's Series B preferred stock if the effect is dilutive. For the fourth quarter of 2006 and the full year 2006, the assumed conversion of these shares was dilutive, and earnings per share amounts were adjusted to include the effects of an additional 6.4 million shares outstanding and the elimination of dividends on the preferred stock.

Contract acquisitions for the 2006 fourth quarter increased to $12.2 billion from $6.4 billion for the same period of 2005. The increase in contract acquisitions includes higher acquisitions in all four businesses. Fourth quarter 2005 contract acquisitions were impacted by the delay in the passage of the 2006 defense budget. Total backlog, which includes funded backlog and firm orders for which funding is not currently contractually obligated by the customer, was $61 billion at Dec. 31, 2006 compared with $56.2 billion at Dec. 31, 2005.

2006 Results

Income from continuing operations for 2006 rose 13 percent to $1.6 billion, or $4.44 per diluted share, from $1.4 billion, or $3.83 per diluted share, for 2005. Sales for 2006 were comparable to 2005.

Total segment operating margin for 2006 increased 16 percent to $2.8 billion from $2.4 billion in 2005. Total operating margin for 2006 increased 12 percent to $2.5 billion from $2.2 billion in 2005. The increase was driven by higher operating margin in all four of the company's businesses, including double-digit percentage increases in Information & Services and Ships operating margin.

Unallocated expenses increased $97 million in 2006 principally due to a $112.5 million pre-tax legal provision recorded in the third quarter of 2006. For 2006, net pension expense increased to $37 million from $21 million in 2005 due principally to higher FAS costs.

Net interest expense for 2006 declined to $303 million from $334 million in 2005. The decrease primarily reflects lower average debt in 2006.

Other income for 2006 declined to $125 million from $200 million in 2005. In 2006, the company sold approximately 9.7 million TRW Automotive shares for a pre-tax gain of $111 million. In 2005, the company sold non-core equity investments, which generated pre-tax gains totaling $165 million.

The effective tax rate applied to income from continuing operations for 2006 was 31.2 percent compared with 32.4 percent for 2005.

Net income for 2006 rose 10 percent to $1.5 billion, or $4.37 per diluted share, from $1.4 billion, or $3.85 per diluted share, in 2005. Earnings per share are based on weighted average diluted shares outstanding of 358.6 million for 2006 and 363.2 million for 2005. For 2006, weighted average shares outstanding include the dilutive impact of the company's Series B preferred stock.

Cash Measurements, Debt and Share Repurchases

Cash from operations in the 2006 fourth quarter totaled $309 million compared with cash from operations of $660 million in the 2005 fourth quarter. Fourth quarter 2006 cash from operations was reduced by discretionary pension pre-funding of $800 million, and the 2005 fourth quarter was reduced by discretionary pension pre-funding of $203 million.

Cash from operations in 2006 was $1.8 billion compared with $2.6 billion in 2005. Cash from operations in 2006 reflects contributions to the company's pension plans totaling $1.2 billion. Cash from operations in 2005 reflects contributions to the company's pension plans totaling $415 million.

Capital spending totaled $244 million in the 2006 fourth quarter compared with capital spending of $305 million in the 2005 fourth quarter. Capital spending totaled $737 million in 2006 and $824 million in 2005. In 2006, Hurricane Katrina-related insurance recoveries totaled approximately $217 million. Since Aug. 29, 2005, Hurricane Katrina-related insurance recoveries for damage, repair and restoration have totaled $344 million compared with total hurricane-related expenditures of $431 million.

Cash and cash equivalents were $1 billion at Dec. 31, 2006 compared with $1.6 billion at Dec. 31, 2005. Total debt in 2006 was reduced by approximately $1 billion. In 2006, $1.2 billion of debt matured and the company received a $200 million loan through the Mississippi Business Finance Corporation, which represents the proceeds of issuance of Gulf Opportunity Zone bonds, a 22-year obligation at a fixed interest rate of 4.55 percent. The company repurchased $825 million of its common stock in 2006.

The company currently has approximately $1.2 billion authorized for share repurchases under authorizations approved in December 2006 and October 2005. Share repurchases take place at management's discretion, from time to time, depending on market conditions, in the open market and in privately negotiated transactions over the next 24 months. Common shares outstanding totaled 345.9 million at Dec. 31, 2006.

Total debt declined to $4.2 billion at Dec. 31, 2006 from $5.1 billion at Dec. 31, 2005, and net debt declined to $3.1 billion at Dec. 31, 2006 from $3.5 billion at Dec. 31, 2005.

  Business Results
 ----------------

 Information & Services
 ---------------------------------------------------------------------
                                 Fourth Quarter ($ Millions)
                    --------------------------------------------------
                               2006                      2005
                             Operating  % of           Operating  % of
                     Sales    Margin   Sales   Sales    Margin   Sales
                    --------------------------------------------------
 Mission Systems    $1,313     $113     8.6%  $1,243      $91     7.3%
 Information
  Technology         1,051       87     8.3%     978       84     8.6%
 Technical Services    501       22     4.4%     379       25     6.6%
                    --------------------------------------------------
                    $2,865     $222     7.7%  $2,600     $200     7.7%
 

Information & Services fourth quarter 2006 sales increased 10 percent from the prior year period and include higher revenue for all three segments. The 32 percent sales increase in Technical Services was driven by new business, primarily the Nevada Test Site program. Mission Systems sales increased 6 percent due to higher volume for Command, Control & Intelligence and Technical & Management Services programs. Information Technology sales increased 7 percent due to higher volume across several programs in Intelligence, Defense, and Commercial, State & Local, partially offset by lower volume in Civilian Agencies programs.

Information & Services fourth quarter 2006 operating margin increased 11 percent from 2005 and includes higher operating margin in Mission Systems and Information Technology. Mission Systems operating margin increased 24 percent due to favorable program performance and lower expense for amortization of purchased intangibles.

  Information & Services
 ---------------------------------------------------------------------
                                Total Year ($ Millions)
                   ---------------------------------------------------
                              2006                       2005
                            Operating   % of           Operating  % of
                    Sales    Margin    Sales   Sales    Margin   Sales
                   ---------------------------------------------------
 Mission Systems    $5,074     $471     9.3%  $5,017     $374     7.5%
 Information
  Technology         4,031      352     8.7%   3,771      328     8.7%
 Technical Services  1,789      110     6.1%   1,533       89     5.8%
                   ---------------------------------------------------
                   $10,894     $933     8.6% $10,321     $791     7.7%
                   ---------------------------------------------------
 

Information & Services 2006 sales increased 6 percent due to higher sales in all three segments. Mission Systems sales rose 1 percent due to higher sales volume in Command, Control and Intelligence and Technical & Management Services, partially offset by lower sales for the Intercontinental Ballistic Missile program. Information Technology sales increased 7 percent due to higher volume in Intelligence, Defense and Commercial, State & Local programs, partially offset by lower volume for Civilian Agencies programs. The 17 percent sales increase in Technical Services was driven by new business, primarily the Nevada Test Site program.

Information & Services 2006 operating margin increased 18 percent and includes higher operating margin in all three segments. Mission Systems operating margin increased 26 percent due to favorable program performance across multiple programs and lower expense for amortization of purchased intangibles. Information Technology operating margin increased 7 percent due to higher sales volume. Technical Services operating margin increased 24 percent driven by higher sales volume and favorable program performance.

  Aerospace
 ---------------------------------------------------------------------
                                 Fourth Quarter ($ Millions)
                    --------------------------------------------------
                               2006                      2005
                             Operating  % of           Operating  % of
                     Sales    Margin   Sales   Sales    Margin   Sales
                    --------------------------------------------------
 Integrated Systems $1,384     $125     9.0%  $1,453     $124     8.5%
 Space Technology      849       68     8.0%     815       61     7.5%
                    --------------------------------------------------
                    $2,233     $193     8.6%  $2,268     $185     8.2%
                    --------------------------------------------------
 

Aerospace fourth quarter 2006 sales declined 2 percent from the prior year period due to lower volume in Integrated Systems, partially offset by higher sales in Space Technology.

Integrated Systems sales declined 5 percent primarily due to lower volume for the EA-6B Prowler, E-8C Joint STARS and E-2D Advanced Hawkeye programs. Lower volume for these programs was partially offset by higher volume for the F-35 Lightning II program. Space Technology sales increased 4 percent, primarily due to higher volume for the Space Radar, James Webb Telescope, and restricted programs.

Aerospace fourth quarter 2006 operating margin increased 4 percent from the prior year period and includes higher operating margin for Space Technology. Integrated Systems operating margin is comparable to the prior year period. Space Technology operating margin increased 11 percent due to performance in Civil Space and restricted programs.

  Aerospace
 ---------------------------------------------------------------------
                                Total Year ($ Millions)
                   ---------------------------------------------------
                              2006                       2005
                            Operating   % of           Operating  % of
                    Sales    Margin    Sales   Sales    Margin   Sales
                   ---------------------------------------------------
 Integrated Systems $5,500     $551    10.0%  $5,489     $499     9.1%
 Space Technology    3,351      293     8.7%   3,395      274     8.1%
                   ---------------------------------------------------
                    $8,851     $844     9.5%  $8,884     $773     8.7%
                   ---------------------------------------------------
 

Aerospace 2006 sales were comparable to 2005. Integrated Systems sales rose $11 million, and Space Technology sales declined 1 percent. Integrated Systems sales include higher volume for the F-35 Lightning II and F/A-18 Hornet programs, partially offset by lower volume for the E-2D Advanced Hawkeye, E-8C Joint STARS and EA-6B Prowler programs. The sales decline in Space Technology was primarily due to lower volume in the NPOESS and restricted programs, the wind down of a software defined radio program, and lower volume for the F-35 Lightning II program. Lower volume in these programs was partially offset by higher volume in the Advanced Extremely High Frequency and Airborne Laser programs.

Aerospace 2006 operating margin increased 9 percent and includes higher operating margin in both Integrated Systems and Space Technology. Integrated Systems operating margin increased 10 percent, primarily due to favorable performance and higher sales volume for the F/A-18 Hornet and F-35 Lightning II programs. Space Technology operating margin increased 7 percent and includes favorable performance for several programs including Airborne Laser, F22-A, and the Space Tracking and Surveillance System.

  Electronics
 ---------------------------------------------------------------------
                                   ($ Millions)
                   ---------------------------------------------------
                              2006                       2005
                            Operating   % of           Operating  % of
                    Sales    Margin    Sales   Sales    Margin   Sales
                   ---------------------------------------------------
 Fourth Quarter     $1,795     $201    11.2%  $1,727     $166     9.6%
                   ---------------------------------------------------

                   ---------------------------------------------------
 Total Year         $6,578     $744    11.3%  $6,602     $702    10.6%
                   ---------------------------------------------------
 

Electronics fourth quarter 2006 sales increased 4 percent from the prior year period due to higher sales across several areas, including infrared countermeasures, bio-detection equipment, automated flat sorting machines for the U.S. Postal Service, and navigation systems. These increases were partially offset by lower sales for the F-16 Block 60 program, and sales adjustments resulting from the forward loss provisions on the MESA radar system fixed price development program.

Electronics fourth quarter 2006 operating margin increased 21 percent from the prior year period and includes lower expense for amortization of purchased intangibles and improved program performance. Pre-tax forward loss provisions totaling $61 million for the MESA radar system programs (Wedgetail and Peace Eagle), partially offset the lower amortization and improved program performance. Electronics fourth quarter 2005 operating margin included a $65 million pre-tax forward loss provision for the F-16 Block 60 fixed price development program.

Electronics 2006 sales were comparable to 2005 and include lower sales for the F-16 Block 60, MESA radar, and Longbow Missile programs, partially offset by higher sales of automated flat sorting machines to the U.S. Postal Service, vehicle intercommunication systems to the U.S. Army, and infrared countermeasures.

Electronics 2006 operating margin increased 6 percent due to lower expense for the amortization of purchased intangibles and favorable program performance, which was partially offset by forward loss provisions for the MESA and ASPIS II programs.

  Ships
 ---------------------------------------------------------------------
                                   ($ Millions)
                   ---------------------------------------------------
                              2006                       2005
                            Operating   % of           Operating  % of
                    Sales    Margin    Sales   Sales    Margin   Sales
                   ---------------------------------------------------
 Fourth Quarter     $1,513     $120     7.9%  $1,463     $105     7.2%
                   ---------------------------------------------------

                   ---------------------------------------------------
 Total Year         $5,321     $393     7.4%  $5,786     $249     4.3%
                   ---------------------------------------------------
 

Ships fourth quarter 2006 sales rose 3 percent from the fourth quarter of 2005 and included higher aircraft carrier sales, primarily driven by higher volume for the USS Carl Vinson refueling program, higher revenue for the Coast Guard's Deepwater program, and continued recovery from the impact of Hurricane Katrina. Ships 2006 sales declined 8 percent from 2005 primarily due to lower sales for the DDG 1000 program (formerly known as the DD(X) program) and continued recovery from the impact of Hurricane Katrina. Sales declines in these programs were partially offset by higher sales for aircraft carrier and Coast Guard programs.

Ships fourth quarter 2006 operating margin increased 14 percent from the fourth quarter of 2005. Ships fourth quarter operating margin includes a pension benefit resulting from the Pension Protection Act of 2006 and improved sales mix, partially offset by lower performance on the LHD program. Ships 2006 operating margin increased 58 percent. Ships operating margin for 2005 included a $150 million pre-tax charge for Hurricane Katrina-related cost growth.

Business Realignment

As previously announced, the Radio Systems business will be reported as part of Mission Systems beginning in the first quarter of 2007. Schedule 4 of this earnings release provides previously reported quarterly financial results and realigned results reflecting the transfer of Radio Systems from Space Technology to Mission Systems.

Fourth Quarter Highlights

  * The U.S. Navy awarded Northrop Grumman a $1.47 billion shipbuilding 
   contract for the construction of a new San Antonio (LPD 17)-class ship, 
   the Arlington (LPD 24) and for long lead material procurement for the 
   Somerset (LPD 25). 

 * The U.S. Navy awarded Northrop Grumman an $860.6 million contract 
   modification to a previously awarded contract for continuation of work 
   on the CVN 21 aircraft carrier program, which brings the total value of 
   the CVN 21 contract to $2.2 billion.  

 * The U.S. Army selected Northrop Grumman, among 15 companies, to provide 
   logistics support services for the Field and Installation Readiness 
   Support Team (FIRST) program under an indefinite delivery, indefinite 
   quantity contract.  The contract period is five years with two one-year 
   options.  The 15 contracts have potential value of more than $9 
   billion, collectively. 

 * The U.S. Navy awarded Northrop Grumman a planning contract valued at 
   $558 million for the refueling and complex overhaul of the 
   nuclear-powered aircraft carrier USS Theodore Roosevelt (CVN 71).  

 * The U.S. Citizenship and Immigration Services awarded Northrop Grumman 
   a $357 million indefinite delivery, indefinite quantity contract to 
   continue providing biometric capture services in support of U.S. 
   citizenship applications and green card renewals. The contract has a 
   potential value of $750 million over a five-year period. 

 * The U.S. Air Force awarded Northrop Grumman two contracts worth a total 
   of $254 million for the E-8C Joint STARS. The contracts cover work on 
   the Joint STARS Total System Support Responsibility sustainment and 
   Joint STARS Extended Test Support programs. 

 * The U.S. Air Force's Electronic Systems Center awarded Northrop Grumman 
   a $104.6 million contract to outfit 17 NATO AWACS aircraft with the 
   company's Large Aircraft Infrared Countermeasures systems on behalf of 
   the NATO Airborne Early Warning and Control Program Management 
   Organization.

 * The U.S. General Services Administration awarded Northrop Grumman a 
   contract on behalf of the U.S. Army Program Executive Office Enterprise 
   Information Systems to provide an integrated Department of Defense 
   biometrics system-of-systems enterprise solution that will integrate 
   their worldwide biometrics efforts.  The contract is valued at 
   approximately $75 million. 

 * The Boeing Corporation awarded Northrop Grumman a contract to upgrade 
   Japan's four E-767 AWACS aircraft. The potential value of the contract 
   could be as high as $73 million. 

 * Northrop Grumman's board of directors approved a new $1 billion share 
   repurchase authorization in December. This new authorization is in 
   addition to $175 million remaining on the company's most recent share 
   repurchase authorization. In total, the company now has $1.175 billion 
   authorized for share repurchases.

 * Northrop Grumman signed a definitive agreement under which it will 
   acquire for cash all of the outstanding shares of Essex Corporation for 
   $24 per common share. The transaction is valued at approximately $580 
   million, which includes the assumption of Essex's debt.  

 * In November, Northrop Grumman sold its entire remaining equity 
   investment in TRW Automotive Holdings Corp. for approximately $209 
   million, or approximately $21.41 per share.  

 * The U.S. Navy and Northrop Grumman christened the nation's 10th and 
   final Nimitz-class aircraft carrier, George H. W. Bush (CVN 77) on Oct. 
   7. The ship's namesake and 41st President of the United States, George 
   H. W. Bush, attended the ceremony and became the first president in the 
   shipyard's 120-year history to participate in the christening of his 
   namesake ship. 

 * The first new U.S. Coast Guard high endurance cutter to be built in 
   more than 35 years was christened Bertholf (WMSL 750) on Nov. 11 at 
   Northrop Grumman's Pascagoula shipyard.
 

About Northrop Grumman

Northrop Grumman Corporation is a $30 billion global defense and technology company whose 120,000 employees provide innovative systems, products, and solutions in information and services, electronics, aerospace and shipbuilding to government and commercial customers worldwide.

Northrop Grumman will webcast its earnings conference call at 12 p.m. EST on Jan. 25, 2007. A live audio broadcast of the conference call along with a supplemental presentation will be available on the investor relations page of the company's Web site at http://www.northropgrumman.com .

Note: Certain statements and assumptions in this release contain or are based on "forward-looking" information that Northrop Grumman Corporation (the "Company") believes to be within the definition in the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties, and include, among others, statements in the future tense, and all statements accompanied by terms such as "project," "expect," "estimate," "assume," "believe," "plan," "guidance" or variations thereof. This information reflects the Company's best estimates when made, but the Company expressly disclaims any duty to update this information if new data become available or estimates change after the date of this release.

Such "forward-looking" information includes, among other things, financial guidance 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 the Company's control. These include the Company'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; hurricane-related insurance recoveries; environmental remediation; acquisitions and divestitures of businesses; successful reduction of debt; performance issues with key suppliers and subcontractors; product performance and the successful execution of internal plans; successful negotiation of contracts with labor unions; effective tax rates and timing and amounts of tax payments; the results of any audit or appeal process with the Internal Revenue Service; and anticipated costs of capital investments, among other things.

The Company'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, the Company'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, 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 the Company's filings from time to time with the Securities and Exchange Commission, including, without limitation, Company reports on Form 10-K and Form 10-Q.

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  NORTHROP GRUMMAN CORPORATION        SCHEDULE 1
                        FINANCIAL HIGHLIGHTS
                  ($ in millions, except per share)
                            (unaudited)

                                   FOURTH QUARTER        TOTAL YEAR
                                ------------------  ------------------
                                  2006    2005 (d)    2006    2005 (d)
                                ------------------  ------------------
 OPERATING RESULTS HIGHLIGHTS
  Total contract
   acquisitions (a)              $12,183   $ 6,404   $38,755   $24,508
  Total sales and service
   revenues                        8,021     7,667    30,148    30,067
  Total operating margin             622       539     2,454     2,193
  Income from continuing
   operations                        457       334     1,567     1,392
  Net income                         453       331     1,542     1,400
  Diluted earnings per share
   from continuing operations       1.29       .93      4.44      3.83
  Diluted earnings per share        1.28       .92      4.37      3.85

  Net cash provided by
   operating activities              309       660     1,794     2,627

 ---------------------------------------------------------------------

                                 DEC 31,   DEC 31,
                                   2006     2005 (d)
                                 -------------------
 BALANCE SHEET HIGHLIGHTS
  Cash and cash equivalents      $ 1,015   $ 1,605
  Accounts receivable, net         3,566     3,553
  Inventoried costs, net           1,213     1,164
  Property, plant, and
   equipment, net                  4,531     4,403
  Total debt                       4,162     5,145
  Net debt (b)                     3,147     3,540
  Series B preferred stock           350       350
  Shareholders' equity            16,615    16,828
  Total assets                    32,057    34,214

  Net debt to capitalization
   ratio (c)                         15%        16%

 ---------------------------------------------------------------------

 (a) Contract acquisitions represent orders received during the period
     for which funding has been contractually obligated by the
     customer.
 (b) Total debt less cash and cash equivalents.
 (c) Net debt divided by the sum of shareholders' equity and total
     debt.
 (d) Certain prior year amounts have been reclassified to conform to
     the 2006 presentation.


                       NORTHROP GRUMMAN CORPORATION       SCHEDULE 2
                            OPERATING RESULTS
                    ($ in millions, except per share)
                              (unaudited)


                                   FOURTH QUARTER       TOTAL YEAR
                                 ------------------- ------------------
                                   2006     2005(a)    2006     2005(a)
                                 ------------------- ------------------
 Sales and Service Revenues
 Information & Services
   Mission Systems               $ 1,313   $ 1,243   $ 5,074   $ 5,017
   Information Technology          1,051       978     4,031     3,771
   Technical Services                501       379     1,789     1,533
 Total Information & Services      2,865     2,600    10,894    10,321

 Aerospace
   Integrated Systems              1,384     1,453     5,500     5,489
   Space Technology                  849       815     3,351     3,395
 Total Aerospace                   2,233     2,268     8,851     8,884

 Electronics                       1,795     1,727     6,578     6,602
 Ships                             1,513     1,463     5,321     5,786
 Other                                          11                  42
 Intersegment Eliminations          (385)     (402)   (1,496)   (1,568)
                                 -------------------------------------

                                 $ 8,021   $ 7,667   $30,148   $30,067
                                 =====================================

 Operating Margin and Net Income
   Information & Services
   Mission Systems               $   113   $    91   $   471   $   374
   Information Technology             87        84       352       328
   Technical Services                 22        25       110        89
                                 -------------------------------------
 Total Information & Services        222       200       933       791

 Aerospace
   Integrated Systems                125       124       551       499
   Space Technology                   68        61       293       274
                                 -------------------------------------
 Total Aerospace                     193       185       844       773

 Electronics                         201       166       744       702
 Ships                               120       105       393       249
 Other                                          (6)                (17)
 Intersegment Eliminations           (30)      (24)     (117)      (84)
                                 -------------------------------------

 Total segment operating
  margin (b)                         706       626     2,797     2,414

 Reconciliation to operating
  margin
   Unallocated expenses              (66)      (79)     (287)     (190)
   Net pension expense (c)           (13)       (8)      (37)      (21)
   Reversal of royalty income
    included above                    (5)                (19)      (10)
                                 -------------------------------------

 Total operating margin              622       539     2,454     2,193

 Interest income                      15        10        44        54
 Interest expense                    (84)     (101)     (347)     (388)
 Other, net                          134        17       125       200
                                 -------------------------------------

 Income from continuing operations
  before income taxes                687       465     2,276     2,059

 Federal and foreign income taxes    230       131       709       667
                                 -------------------------------------

 Income from continuing operations   457       334     1,567     1,392

 Discontinued operations, net
  of tax                              (4)       (3)      (25)        8
                                 -------------------------------------

 Net income                      $   453   $   331   $ 1,542   $ 1,400
                                 =====================================

 Income from continuing
  operations                     $   457   $   334   $ 1,567   $ 1,392
 Preferred dividends                   6                  24
                                 -------------------------------------
 Income available to common
  shareholders from continuing
  operations                     $   463   $   334   $ 1,591   $ 1,392
                                 =====================================

 Weighted average diluted shares
  outstanding before Series B
  preferred dilution               352.6     358.1     352.2     363.2
 Series B preferred dilution         6.4                 6.4
                                 -------------------------------------
 Weighted average diluted shares
  outstanding                      359.0     358.1     358.6     363.2
                                 =====================================

 Diluted Earnings (Loss) Per Share
   Continuing operations         $  1.29   $   .93   $  4.44   $  3.83
   Discontinued operations          (.01)     (.01)     (.07)      .02
                                 -------------------------------------
 Diluted Earnings Per Share      $  1.28   $   .92   $  4.37   $  3.85
                                 =====================================


 (a) Certain prior year amounts have been reclassified to conform to
     the 2006 presentation.

 (b) Management uses segment operating margin as an internal measure
     of financial performance for the individual business segments.
     This measure is not in accordance with accounting principles
     generally accepted in the United States of America (GAAP).

 (c) Net pension expense includes pension expense determined in
     accordance with GAAP less the pension expense allocated to the
     business segments under U.S. Government Cost Accounting
     Standards.


                    NORTHROP GRUMMAN CORPORATION        SCHEDULE 3
                    ADDITIONAL SEGMENT INFORMATION
                           ($ in millions)
                             (unaudited)

                        CONTRACT ACQUISITIONS(a)      FUNDED BACKLOG(b)
                  ----------------------------------  ----------------
                   FOURTH QUARTER      TOTAL YEAR       December 31,
                  ----------------  ----------------  ----------------
                    2006  2005 (c)    2006  2005 (c)    2006  2005 (c)
                  ----------------  ----------------  ----------------

 Information &
  Services
   Mission
    Systems       $ 1,848  $ 1,127  $ 5,717  $ 4,442  $ 2,952  $ 2,309
   Information
    Technology      1,098      876    4,617    3,962    2,830    2,244
   Technical
    Services          370      400    2,288    1,368    1,066      567
                  ----------------  ----------------  ----------------
 Total Information
  & Services        3,316    2,403   12,622    9,772    6,848    5,120

 Aerospace
   Integrated
    Systems         1,847    1,213    6,107    4,544    4,285    3,678
   Space
    Technology      1,496      679    4,314    2,643    1,936      972
                  ----------------  ----------------  ----------------
 Total Aerospace    3,343    1,892   10,421    7,187    6,221    4,650

 Electronics        2,232    1,714    7,167    6,346    6,585    5,996
 Ships              3,673      818   10,045    2,749   10,854    6,130
 Other                         (22)               19                 5
 Intersegment
  Eliminations       (381)    (401)  (1,500)  (1,565)
                  ----------------  ----------------  ----------------
 Total            $12,183  $ 6,404  $38,755  $24,508  $30,508  $21,901
                  ================  ================  ================


                            TOTAL BACKLOG
                  ---------------------------------
                          December 31, 2006
                  ---------------------------------
                      FUNDED   UNFUNDED(d)   TOTAL
                                            BACKLOG
                  ---------------------------------
 Information &
  Services
   Mission Systems    $ 2,952    $ 8,337    $11,289
   Information
    Technology          2,830      2,537      5,367
   Technical
    Services            1,066      3,276      4,342
                  ---------------------------------
 Total Information
  & Services            6,848     14,150     20,998

 Aerospace
   Integrated
    Systems             4,285      4,934      9,219
   Space
    Technology          1,936      7,289      9,225
                  ---------------------------------
 Total Aerospace        6,221     12,223     18,444

 Electronics            6,585      1,583      8,168
 Ships                 10,854      2,566     13,420
 Intersegment
  Eliminations             --                     0
                  ---------------------------------
 Total                $30,508    $30,522    $61,030
                  =================================

 ---------------------------------------------------------------------

 (a) Contract acquisitions represent orders received during the period
     for which funding has been contractually obligated by the
     customer.

 (b) Funded backlog represents unfilled orders for which funding has
     been contractually obligated by the customer.

 (c) Certain prior year amounts have been reclassified to conform with
     the 2006 presentation.

 (d) Unfunded backlog represents firm orders for which funding is not
     currently contractually obligated by the customer. Unfunded
     backlog excludes unexercised contract options and unfunded
     Indefinite Delivery Indefinite Quantity contract awards.



                     NORTHROP GRUMMAN CORPORATION           SCHEDULE 4
                 REALIGNED SEGMENT OPERATING RESULTS
                           ($ in millions)
                             (unaudited)

                                   AS REPORTED
             ---------------------------------------------------------
                                               2006
                               ---------------------------------------
                 Year Ended           Three Months Ended        Total
               2004     2005    Mar 31  Jun 30  Sep 30  Dec 31   Year
             ----------------  ---------------------------------------
 SALES AND
  SERVICE
  REVENUES

 Information
  & Services
   Mission
    Systems  $ 4,586  $ 5,017  $1,232  $1,295  $1,234  $1,313  $ 5,074
  Information
   Technology  3,462    3,771     948     993   1,039   1,051    4,031
  Technical
   Services    1,492    1,533     351     401     535     501    1,789
             ----------------  ---------------------------------------
 Total
  Information
  & Services   9,540   10,321   2,531   2,689   2,808   2,865   10,894

 Aerospace
  Integrated
   Systems     4,610    5,489   1,416   1,383   1,317   1,384    5,500
  Space
   Technology  3,269    3,395     855     865     782     849    3,351
             ----------------  ---------------------------------------
 Total
  Aerospace    7,879    8,884   2,271   2,248   2,099   2,233    8,851

 Electronics   6,390    6,602   1,504   1,611   1,669   1,795    6,579

 Ships         6,252    5,786   1,133   1,437   1,238   1,513    5,321

 Other           230       42

 Intersegment
  Elimina-
   tions      (1,291)  (1,568)   (346)   (384)   (381)   (385)  (1,496)
             ----------------  ---------------------------------------
   Total Sales
    and
    Service
    Revenues $29,000  $30,067  $7,093  $7,601  $7,433  $8,021  $30,148
             ----------------  ---------------------------------------
 SEGMENT
  OPERATING
  MARGIN

 Information
  & Services
  Mission
   Systems   $   314  $   374  $  113  $  125  $  119  $  113  $   471
  Information
   Technology    246      328      84      86      95      87      352
  Technical
   Services       71       89      19      33      35      22      110
             ----------------  ---------------------------------------
 Total Informa-
  tion &
  Services       631      791     216     244     249     222      933

 Aerospace
  Integrated
   Systems       431      499     148     141     137     125      551
  Space
   Technology    236      274      71      81      73      68      293
             ----------------  ---------------------------------------
 Total
  Aerospace      667      773     219     222     210     193      844

 Electronics     661      702     176     172     195     201      744

 Ships           395      249      68     129      76     120      393

 Other            (3)     (17)

 Intersegment
  Eliminations   (59)     (84)    (26)    (25)    (34)    (30)    (117)
             ----------------  ---------------------------------------
  Total Segment
   Operating
   Margin(a) $ 2,292  $ 2,414  $  653  $  742  $  696  $  706  $ 2,797
             ----------------  ---------------------------------------


             ---------------------------------------------------------
                               REALIGNED
             ---------------------------------------------------------
                                               2006
                               ---------------------------------------
                 Year Ended           Three Months Ended        Total
               2004     2005    Mar 31  Jun 30  Sep 30  Dec 31   Year
             ----------------  ---------------------------------------
 SALES AND
  SERVICE
  REVENUES

 Information &
  Services
   Mission
    Systems  $ 5,087  $ 5,494  $1,340  $1,407  $1,340  $1,407  $ 5,494
   Information
    Technology 3,462    3,736     929     976   1,023   1,034    3,962
   Technical
    Services   1,534    1,617     383     431     526     518    1,858
             ----------------  ---------------------------------------
 Total Informa-
  tion &
  Services    10,083   10,847   2,652   2,814   2,889   2,959   11,314

 Aerospace
  Integrated
   Systems     4,610    5,489   1,416   1,383   1,317   1,384    5,500
  Space
   Technology  2,723    2,866     733     738     699     753    2,923
             ----------------  ---------------------------------------
 Total
  Aerospace    7,333    8,355   2,149   2,121   2,016   2,137    8,423

 Electronics   6,390    6,602   1,504   1,610   1,669   1,795    6,578

 Ships         6,252    5,786   1,133   1,437   1,238   1,513    5,321

 Other           230       42

 Intersegment
  Elimina-
   tions      (1,288)  (1,565)   (345)   (381)   (379)   (383)  (1,488)
             ----------------  ---------------------------------------
  Total Sales
   and Service
   Revenues  $29,000  $30,067  $7,093  $7,601  $7,433  $8,021  $30,148
             ----------------  ---------------------------------------
 SEGMENT
  OPERATING
  MARGIN

 Information &
  Services
   Mission
   Systems   $   364  $   424  $  125  $  144  $  131  $  119  $   519
  Information
   Technology    246      322      80      84      92      86      342
  Technical
   Services       75      100      24      38      34      24      120
             ----------------  ---------------------------------------
 Total Informa-
  tion &
  Services       685      846     229     266     257     229      981

 Aerospace
  Integrated
   Systems       431      499     148     141     137     125      551
  Space
   Technology    182      219      58      60      66      61      245
             ----------------  ---------------------------------------
 Total
  Aerospace      613      718     206     201     203     186      796

 Electronics     661      702     176     172     195     201      744

 Ships           395      249      68     129      76     120      393

 Other            (3)     (17)

 Intersegment
  Elimina-
   tions         (59)     (84)    (26)    (26)    (35)    (30)    (117)
             ----------------  ---------------------------------------
 Total
  Segment
  Operating
  Margin(a)  $ 2,292  $ 2,414  $  653  $  742  $  696  $  706  $ 2,797
 ---------------------------------------------------------------------

 (a) Non-GAAP measure. Management uses segment operating margin as
     an internal measure of financial performance for the individual
     business segments.
 
  CONTACT:  Dan McClain (Media) 
          Northrop Grumman Corporation
          (310) 201-3335

          Gaston Kent (Investors) 
          Northrop Grumman Corporation
          (310) 201-3423