Northrop Grumman Announces New $500 Million Accelerated Share Repurchase Agreement

Rhea-AI Summary

Northrop Grumman Corporation (NYSE: NOC) announced a $500 million accelerated share repurchase (ASR) agreement with Bank of America on February 2, 2023. This ASR will enhance shareholder value as part of their strategy to return over 100% of free cash flow to shareholders through dividends and share repurchases in 2023. Initial delivery of approximately 0.9 million shares is expected on February 6, based on a closing price of $440.86. The ASR completion is anticipated by the second quarter of 2023 and will utilize part of the $2.5 billion share repurchase authorization currently available.

Positive

• Commits $500 million to ASR, enhancing shareholder value.
• Targets over 100% return of free cash flow to shareholders in 2023.
• Initial delivery of approximately 0.9 million shares indicates strong buyback activity.

Negative

• None.

FALLS CHURCH, Va., Feb. 02, 2023 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE: NOC) today announced that it has entered into an accelerated share repurchase (ASR) agreement with Bank of America, N.A. to repurchase $500 million of Northrop Grumman’s common stock. The ASR is in addition to previously planned repurchases, including open market share repurchases. The company continues to target returning more than 100% of its free cash flow to shareholders through dividends and share repurchases in 2023.

Under the ASR agreement, Northrop Grumman expects to receive an initial delivery of approximately 0.9 million shares on Feb. 6, representing approximately 80 percent of the expected share repurchases under the ASR agreement, based on the company’s closing price of $440.86 on Feb. 2, 2023. The final number of shares to be repurchased through the ASR will be based on Northrop Grumman’s volume-weighted average price during the term of the transaction, less a discount, and is expected to be completed no later than the second quarter of 2023. The ASR will be completed under the company’s current share repurchase authorization, which currently has approximately $2.5 billion remaining.

Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our 95,000 employees define possible every day.

Note: Statements in this press release contain or may contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “project,” “forecast,” “believe,” “estimate,” “guidance,” “outlook,” “trends,” “goals” and similar expressions generally identify these forward-looking statements. These forward-looking statements speak only as of the date when made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements after the date of this release, except as required by applicable law. Forward-looking statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. A discussion of these risks and uncertainties is contained in the Company’s filings with the Securities and Exchange Commission.

Contact:	Vic Beck (Media)
	703-280-4456 (office)
	vic.beck@ngc.com
	Todd Ernst (Investors)
	703-280-4535 (office)
	todd.ernst@ngc.com

FAQ

What is the purpose of Northrop Grumman's $500 million share repurchase agreement?

The $500 million share repurchase is aimed at enhancing shareholder value and returning over 100% of free cash flow to shareholders through dividends and buybacks.

When will Northrop Grumman complete its accelerated share repurchase agreement?

The accelerated share repurchase agreement is expected to be completed by the second quarter of 2023.

How many shares is Northrop Grumman repurchasing in the ASR?

Northrop Grumman expects to initially receive approximately 0.9 million shares under the ASR agreement.

What is Northrop Grumman's stock price based on the ASR completion?

The ASR's initial share delivery is based on a stock price of $440.86 on February 2, 2023.