As filed pursuant to Rule 424(b)(5)
Registration No. 333-196238
CALCULATION OF REGISTRATION FEE
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Title of Each Class of
Securities to be Registered |
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Amount to be Registered |
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Proposed Maximum Offering Price |
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Proposed Maximum Aggregate
Offering Price |
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Amount of
Registration Fee(1) |
3.850% Senior Notes due 2045 |
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$600,000,000 |
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99.973% |
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$599,838,000 |
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$69,701.18 |
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(1) |
Calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended. |
Filed Pursuant to Rule 424(b)(5)
Registration No.: 333-196238
PROSPECTUS SUPPLEMENT
(To prospectus dated May 23, 2014)
NORTHROP GRUMMAN CORPORATION
$600,000,000 3.850% Senior Notes due 2045
We are offering $600,000,000 of
our 3.850% Senior Notes due 2045, which we refer to as the notes. The notes will mature on April 15, 2045, unless redeemed earlier. We will pay interest on the notes semi-annually in arrears on April 15 and October 15 of each year,
beginning October 15, 2015. Interest on the notes will accrue from February 6, 2015.
We may redeem the notes at our option, as a whole or in
part, at any time or from time to time, at the redemption prices described in this prospectus supplement. The redemption provisions are more fully described in this prospectus supplement in the section titled Description of NotesOptional
Redemption. The notes will not be listed on any securities exchange. Currently there is no public market for the notes.
The notes will be unsecured
senior obligations of Northrop Grumman Corporation, which we refer to as Northrop Grumman. The notes will rank equally and ratably in right of payment with all Northrop Grummans existing and future unsecured and unsubordinated indebtedness and
senior in right of payment to any future indebtedness of Northrop Grumman that is subordinated to the notes.
Investing in the notes
involves risks. See the section entitled Risk Factors beginning on page S-7 of this prospectus supplement, in our Annual Report on Form 10-K for our fiscal year ended December 31, 2014 and in other
documents incorporated by reference herein.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a
criminal offense.
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Per Note |
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Total |
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Public offering price(1) |
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99.973 |
% |
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$ |
599,838,000 |
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Underwriting discounts and commissions |
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0.875 |
% |
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$ |
5,250,000 |
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Proceeds to Northrop Grumman Corporation, before expenses |
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|
99.098 |
% |
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$ |
594,588,000 |
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(1) |
Plus accrued interest, if any, from February 6, 2015, if settlement occurs after that date. |
We urge you
to carefully read this prospectus supplement and the accompanying prospectus, which will describe the terms of the offering, before you make your investment decision.
The underwriters expect to
deliver the notes to purchasers in book-entry form only, through the facilities of The Depository Trust Company for the accounts of its participants, including Clearstream Banking, société anonyme, and the Euroclear Bank, S.A./N.V.,
against payment on or about February 6, 2015.
Joint
Book-Running Managers
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Deutsche Bank Securities |
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J.P. Morgan |
BofA Merrill Lynch |
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Mizuho Securities |
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MUFG |
Senior Co-Managers
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BNP PARIBAS |
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Citigroup |
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Credit Suisse |
Goldman, Sachs & Co. |
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RBS |
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Wells Fargo Securities |
Co-Managers
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Blaylock Beal Van, LLC |
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Drexel Hamilton |
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Mischler Financial Group, Inc. |
The date of this prospectus supplement is February 3, 2015.
TABLE OF CONTENTS
Prospectus supplement
Prospectus
You should rely only on the information contained in or incorporated by reference in this prospectus supplement, in the accompanying prospectus or in any
related free writing prospectus filed by us with the SEC. Neither we nor the underwriters have authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
Neither we nor the underwriters are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should read this prospectus supplement and the accompanying prospectus, including the documents
incorporated by reference in this prospectus supplement and the accompanying prospectus, when making your investment decision.
i
ABOUT THIS PROSPECTUS SUPPLEMENT
Unless otherwise stated or the context otherwise requires, references in this prospectus supplement or the accompanying prospectus to Northrop
Grumman are to Northrop Grumman Corporation, and references to we, our, us or similar references are to Northrop Grumman and its consolidated subsidiaries.
This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and other matters
relating to us and our financial condition. The second part is the accompanying prospectus, which gives more general information about securities we may offer from time to time, some of which may not apply to this offering. This prospectus
supplement and the accompanying prospectus are part of a shelf registration statement that we filed with the Securities and Exchange Commission, or the SEC, using the SECs shelf registration rules.
You should read both this prospectus supplement and the accompanying prospectus together with additional information described in this prospectus supplement
in the sections titled Where You Can Find More Information and Incorporation by Reference. If there is any inconsistency between the information in this prospectus supplement and the accompanying prospectus, you should rely
on the information contained in this prospectus supplement.
Any statement made in this prospectus supplement, in the accompanying prospectus or in any
document incorporated or deemed to be incorporated by reference in this prospectus supplement or the accompanying prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement
contained in this prospectus supplement or in any other subsequently filed document that is also incorporated or deemed to be incorporated by reference in this prospectus supplement or the accompanying prospectus modifies or supersedes that
statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus.
The information in this prospectus supplement is accurate as of the date on the front cover. You should assume that the information appearing in this
prospectus supplement, in the accompanying prospectus, in the documents incorporated by reference and in any related free writing prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations,
cash flows and/or prospects may have changed materially since those dates.
WHERE YOU CAN FIND MORE
INFORMATION
Northrop Grumman files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy
any document filed with the SEC (including exhibits to such documents) at the SECs Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain additional information about the Public Reference Room by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website at http://www.sec.gov that contains reports, proxy statements and other information that we file electronically with the SEC. Copies of certain information filed by us with the SEC
are also available on our website at www.northropgrumman.com. Our website is not a part of, and is not incorporated by reference into, this prospectus supplement or the accompanying prospectus, and you should not consider it a part of this
prospectus supplement or the accompanying prospectus.
INCORPORATION BY REFERENCE
We are incorporating by reference information into this prospectus supplement, which means that we can disclose important information to you by
referring you to another document that has been filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus supplement, and information that we file later with the SEC will automatically
update and supersede the information contained in documents filed earlier with the SEC or contained in this prospectus supplement. This means that you must look
S-1
at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus supplement or in any document previously incorporated by reference have been
modified or superseded. We incorporate by reference in this prospectus supplement the documents listed below (File No. 001-16411) and any future filings made by us with the SEC under Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the Exchange Act), after the initial filing of this prospectus supplement and prior to the time that the offering is completed (in each case, other than those documents or the portions of those documents
not deemed to be filed):
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our Annual Report on Form 10-K for the year ended December 31, 2014; |
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information specifically incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2013 from our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 4,
2014; and |
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our Current Report on Form 8-K filed on February 3, 2015. |
You may obtain copies, without charge, of documents
incorporated by reference in this prospectus supplement, by requesting them in writing or by telephone from us as follows:
Jennifer C.
McGarey
Corporate Vice President and Secretary
2980 Fairview Park Drive
Falls
Church, Virginia 22042
(703) 280-2900
Exhibits to the filings will not be sent, unless those exhibits have been specifically incorporated by reference in this prospectus supplement.
FORWARD-LOOKING STATEMENTS AND IMPORTANT FACTORS
This prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein or therein contain statements, other than
statements of historical fact, that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, intend, may,
could, plan, project, forecast, believe, estimate, outlook, anticipate, trends, goals and similar expressions generally identify
these forward-looking statements. Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and cash flows. Forward-looking statements are based upon assumptions,
expectations, plans and projections that we believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are
difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward-looking statements include, but are not limited to, those identified under Risk Factors in this
prospectus supplement and in our Annual Report on Form 10-K for the year ended December 31, 2014 and other important factors disclosed in this prospectus supplement, the accompanying prospectus, our reports, and from time to time in our other
filings with the SEC.
You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the
accuracy of forward-looking statements. These forward-looking statements speak only as of the date of this prospectus supplement or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
S-2
SUMMARY
The following summary is provided solely for your convenience. It is not intended to be complete. You should read carefully this entire prospectus
supplement, the accompanying prospectus and all the information included or incorporated by reference herein or therein, especially the risks discussed in the section titled Risk Factors beginning on page S-7 of this prospectus
supplement and in the documents incorporated by reference herein.
Northrop Grumman Corporation
Northrop Grumman Corporation is a leading global security company. We offer a broad portfolio of capabilities and technologies that enable us to deliver
innovative products, systems and solutions for applications that range from undersea to outer space and into cyberspace. We provide products, systems and solutions in unmanned systems; cyber; command, control, communications and computers (C4),
intelligence, surveillance, and reconnaissance (C4ISR); strike aircraft; and logistics and modernization to government and commercial customers worldwide through our four segments: Aerospace Systems, Electronic Systems, Information Systems and
Technical Services. We participate in many high-priority defense and government programs in the United States (U.S.) and abroad. We conduct most of our business with the U.S. Government, principally the Department of Defense and intelligence
community. We also conduct business with foreign, state and local governments and domestic and international commercial customers.
The principal
executive offices of Northrop Grumman are located at 2980 Fairview Park Drive, Falls Church, Virginia 22042, and our telephone number is (703) 280-2900.
We maintain a website at http://www.northropgrumman.com. The information contained at our website is not incorporated by reference in this prospectus
supplement or the accompanying prospectus, and you should not consider it a part of this prospectus supplement or the accompanying prospectus.
The
information above concerning Northrop Grumman is only a summary and does not purport to be comprehensive. For additional information about Northrop Grumman, you should refer to the information described in Where You Can Find More
Information and Incorporation by Reference in this prospectus supplement.
S-3
The Offering
The following summary contains basic information about this offering. For a more complete understanding of this offering, we encourage you to read this
entire prospectus supplement and the accompanying prospectus.
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Issuer: |
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Northrop Grumman Corporation. |
Securities offered: |
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$600,000,000 aggregate principal amount of 3.850% Senior Notes due 2045.
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The notes will be issued as global notes to be deposited with the trustee as custodian for The Depository Trust Company, or DTC, and
delivered to purchasers in book-entry form. |
Maturity date: |
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The notes will mature on April 15, 2045, unless redeemed earlier.
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Interest rate: |
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The notes will bear interest at the rate of 3.850% per annum.
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Interest payment dates: |
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Interest on the notes is payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2015.
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Interest on the notes will accrue from February 6, 2015.
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Use of proceeds: |
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We expect the net proceeds from this offering to be approximately $594,000,000, after deducting underwriting discounts and commissions and
our share of the estimated expenses of this offering, which totals approximately $588,000. We expect to use the net proceeds from this offering for general corporate purposes, including the funding of a $500 million voluntary contribution to our
pension plans and debt repayment. Pending their application, we may invest the net proceeds in short-term investments. See Use of Proceeds in this prospectus supplement.
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Optional redemption: |
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We may redeem the notes at our option, as a whole or in part, at any time or from time to time, on at least 15 days but not more than 60
days prior notice to the registered holders. Prior to October 15, 2044 (the date that is six months prior to the maturity date of the notes), the redemption price for the notes will be equal to the greater of the following amounts:
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100% of the principal amount of the notes being redeemed; and
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the sum of the present values of the remaining scheduled payments
of principal and interest on the notes being redeemed (not including any portion of any payments of interest accrued to the redemption date), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at a rate equal to the sum of the Adjusted Treasury Rate (as defined herein), as determined by the Independent Investment Banker (as defined herein), plus 25 basis points;
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plus, in either case, accrued and unpaid interest on the principal amount of the notes to be redeemed to, but not including, the
redemption date. On and after October 15, 2044 (the date that is six months prior to
the maturity date of the notes), we may redeem the notes at our option, as a whole or in part, at any time or from time to time, at a redemption price equal to 100% of the principal |
S-4
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amount of the notes being redeemed, plus accrued and unpaid interest on the principal amount of the notes to be redeemed to, but not
including, the redemption date. See Description of NotesOptional Redemption in this prospectus supplement. |
Ranking: |
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The notes will be unsecured senior obligations of Northrop Grumman. The notes will rank equally and ratably in right of payment with all
Northrop Grummans existing and future unsecured and unsubordinated indebtedness and will rank senior in right of payment to any future indebtedness that is subordinated to the notes. The notes will be (i) effectively subordinated to all of
Northrop Grummans existing and future secured indebtedness to the extent of the assets securing that indebtedness and (ii) structurally subordinated to all indebtedness and liabilities of Northrop Grummans subsidiaries, including any of
our future indebtedness guaranteed by our subsidiaries. |
Certain covenants: |
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The indenture governing the notes limits our ability and the ability of our subsidiaries, among other things, to:
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create liens without equally and ratably securing the notes, unless
an exception applies; and |
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engage in certain sale and leaseback transactions.
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The indenture also limits our ability to engage in certain mergers, consolidations and sales of assets. These covenants are subject to
important exceptions and qualifications, as described in Description of Senior Debt SecuritiesObligations Under the Indenture and Description of Senior Debt SecuritiesConsolidation, Merger or Sale in the
accompanying prospectus. |
Additional notes: |
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We may, without notice to or consent of the holders of any notes, create and issue additional notes in a separate offering. If these
additional notes have substantially the same terms as the notes offered hereby (except in some cases for the issue date, the issue price, the initial interest payment date and corresponding record date and the initial interest accrual date), we may
consolidate these additional notes with the notes to form a single series under the indenture; provided, however, that in the event any additional notes are not fungible with the notes offered hereby for U.S. federal income tax
purposes, such nonfungible additional notes will be issued with a separate CUSIP number so that they are distinguishable from the notes offered hereby. See Description of NotesIssuing Additional Notes in this prospectus
supplement. |
No listing: |
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We do not intend to list the notes on any securities exchange. The notes will be new securities for which there currently is no public
market. See Risk FactorsRisks Related to the OfferingYou may not be able to sell your notes if an active trading market for the notes does not develop in this prospectus supplement.
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Trustee: |
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The Bank of New York Mellon. |
Governing law: |
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The notes will be governed by New York law. |
Risk factors: |
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Investing in the notes involves risks. See the section titled Risk Factors beginning on page S-7 of this prospectus supplement and in the documents incorporated by reference herein and other information included in
the accompanying prospectus and the documents incorporated by reference therein for a discussion of factors you should carefully consider before deciding to invest in the notes. |
S-5
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Conflicts of interest: |
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Certain of the underwriters or their affiliates hold positions in certain of our indebtedness and, accordingly, may receive a portion of the net proceeds of this offering. Because an underwriter (together with its affiliates) may
receive five percent or more of the proceeds of this offering, creating a conflict of interest within the meaning of FINRA Rule 5121, this offering will be conducted in accordance with Rule 5121. Any underwriters with a conflict of interest within
the meaning of Rule 5121 will not sell these notes to a discretionary account without specific written approval from the account holder. |
S-6
RISK FACTORS
Your investment in the notes is subject to certain risks. This prospectus supplement does not describe all of the risks of an investment in the notes. You
should consult your own financial and legal advisors about the risks entailed by an investment in the notes and the suitability of your investment in the notes in light of your particular circumstances. For a discussion of the factors you should
carefully consider before deciding to purchase any notes that may be offered, please read Risk Factors in our Form 10-K for the year ended December 31, 2014, as well as those risk factors included below. Additional risks and
uncertainties not currently known to us or that we currently deem immaterial may also adversely affect our business and operations. If any of the matters described in the risk factors were to occur, our business, financial condition, results of
operations, cash flows or prospects could be materially adversely affected. In such case, you could lose all or a portion of your investment.
Risks Related to the Offering (In Addition to Those Set Forth in our Form 10-K)
The indenture does not limit the amount of indebtedness that we may incur.
The indenture under which the notes will be issued does not limit the amount of indebtedness that we may incur. The indenture does not contain any financial
covenants or other provisions that would afford the holders of the notes any substantial protection in the event we participate in a highly leveraged transaction.
The notes are obligations of Northrop Grumman and not of its subsidiaries, and will be structurally subordinated to the claims of the lenders, trade
creditors and others who now or in the future have claims against those subsidiaries.
Northrop Grumman is the sole obligor on the notes. Northrop
Grumman is a holding company which conducts substantially all of its operations through its subsidiaries, which are separate and distinct legal entities. None of these subsidiaries is obligated to repay the notes or to make funds available for any
payments due on the notes. Northrop Grumman depends on the distribution of earnings, repayments of inter-company loans or other payments from its subsidiaries to generate cash flow. As a result, its cash flow and its ability to service its debt,
including the notes, depends upon the assets, liabilities, earnings and results of operations of its subsidiaries and their ability to distribute or otherwise transfer assets to Northrop Grumman.
The subsidiaries generally have no obligation to provide Northrop Grumman with funds to meet its payment obligations under the notes, whether by dividends,
distributions, loans or other payments. Payments of dividends and similar distributions by these subsidiaries to their stockholders are subject to statutory restrictions and may be subject to additional contractual restrictions or business
constraints. The extension of loans or advances by those subsidiaries to Northrop Grumman could also be subject to statutory or contractual restrictions or business constraints. Failure by any subsidiary to abide by these restrictions could require
Northrop Grumman to return any payments made by that subsidiary.
Northrop Grummans right to receive any assets upon the liquidation or
reorganization of any of its subsidiaries, and therefore the right of the holders of the notes to participate in those assets, will be structurally subordinated to the claims of that subsidiarys current and future creditors, including
debenture and note holders (whether senior or subordinated, and including holders of our future indebtedness guaranteed by a subsidiary), banks and trade creditors. In addition, even if Northrop Grumman were a creditor of any of its subsidiaries,
its rights as a creditor would be subordinated to any creditor holding a security interest in the assets of that subsidiary or holding any indebtedness of that subsidiary senior to that held by Northrop Grumman. Northrop Grumman may also elect to
issue debt which is guaranteed by one or more of its subsidiaries, in which case the notes would be structurally subordinated to the new debt.
Consequently, the notes will be structurally subordinated to all liabilities from time to time of its current and future subsidiaries. As of December 31,
2014, Northrop Grummans subsidiaries had approximately $1.6 billion of indebtedness.
S-7
Negative covenants in the indenture will have a limited effect.
The indenture governing the notes contains only limited negative covenants that apply to us. These covenants do not limit the amount of additional debt that we
may incur and do not require us to maintain any financial ratios or specific levels of net worth, revenues, income, cash flows or liquidity. Accordingly, the indenture does not protect holders of the notes in the event we experience significant
adverse changes in our financial condition or results of operations. See Description of Senior Debt SecuritiesObligations Under the Indenture in the accompanying prospectus. In light of the limited negative covenants applicable to
the notes, holders of the notes may be structurally or contractually subordinated to new lenders.
You may not be able to sell your notes if an
active trading market for the notes does not develop.
The notes are a new issue of securities for which there currently is no trading market. We
do not intend to apply for listing of the notes on any securities exchange. As a result, we cannot provide any assurance that a market will develop for the notes or that you will be able to sell your notes. If the notes are traded after their
initial issuance, they may trade at a discount from their initial offering price. Future trading prices of the notes will depend on many factors, including prevailing interest rates, the market for similar securities, general economic conditions and
our financial condition, performance and prospects. Accordingly, you may be required to bear the financial risk of an investment in the notes for an indefinite period of time. Any trading market that might develop would be affected by many factors
independent of and in addition to the foregoing, including:
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time remaining to the maturity of the notes; |
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outstanding amount of the notes; |
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the terms related to optional redemption of the notes; and |
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the level, direction and volatility of market interest rates generally. |
Changes in our credit rating
may adversely affect your investment in the notes.
Actual or anticipated changes or downgrades in our credit ratings, including any announcement
that our ratings are under further review for a downgrade, could increase our corporate borrowing costs and affect the market value of the notes. Also, our credit ratings may not reflect the potential impact of risks related to structure, market or
other factors related to the value of the notes.
S-8
USE OF PROCEEDS
We expect the net proceeds from this offering to be approximately $594,000,000, after deducting underwriting discounts and commissions and our share of the
estimated expenses of this offering, which totals approximately $588,000. We expect to use the net proceeds from this offering for general corporate purposes, including the funding of a $500 million voluntary contribution to our pension plans and
debt repayment. Pending their application, we may invest the net proceeds in short-term investments.
S-9
CAPITALIZATION
The following table sets forth as of December 31, 2014 (i) our actual cash and cash equivalents, long-term debt, shareholders equity and
capitalization and (ii) our as adjusted cash and cash equivalents, long-term debt, shareholders equity and capitalization after giving effect to the receipt of the net proceeds of this offering as set forth under Use of
Proceeds in this prospectus supplement, but not the application thereof. This table should be read in conjunction with our financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31,
2014, which is incorporated by reference in this prospectus supplement and the accompanying prospectus.
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As of December 31, 2014 |
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Actual |
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As Adjusted |
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$ in millions |
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(audited) |
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(unaudited) |
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Cash and cash equivalents |
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$ |
3,863 |
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$ |
4,457 |
(1) |
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Long-term debt |
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Fixed rate notes and debentures maturing in |
|
Interest rate |
|
|
|
|
|
|
|
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2016 |
|
7.75% |
|
$ |
107 |
|
|
$ |
107 |
|
2018 |
|
1.75% - 6.75% |
|
|
1,050 |
|
|
|
1,050 |
|
2019 |
|
5.05% |
|
|
500 |
|
|
|
500 |
|
2021 |
|
3.50% |
|
|
700 |
|
|
|
700 |
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2023 |
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3.25% |
|
|
1,050 |
|
|
|
1,050 |
|
2026 |
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7.75% - 7.88% |
|
|
527 |
|
|
|
527 |
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2031 |
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7.75% |
|
|
466 |
|
|
|
466 |
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2040 |
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5.05% |
|
|
300 |
|
|
|
300 |
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2043 |
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4.75% |
|
|
950 |
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|
|
950 |
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Capital Leases |
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Various |
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|
33 |
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|
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33 |
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Other |
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Various |
|
|
245 |
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|
245 |
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Notes offered hereby |
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600 |
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Total long-term debt |
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5,928 |
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6,528 |
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Less current portion |
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3 |
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3 |
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Total long-term debt, net of current portion |
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$ |
5,925 |
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$ |
6,525 |
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Shareholders equity |
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Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding |
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|
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Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 198,930,240 |
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|
|
199 |
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|
|
199 |
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Paid-in capital |
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|
|
|
|
|
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|
Retained earnings |
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|
|
|
12,392 |
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|
|
12,392 |
|
Accumulated other comprehensive loss |
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|
|
|
(5,356 |
) |
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|
(5,356 |
) |
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|
|
|
|
|
|
|
|
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|
Total shareholders equity |
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|
|
|
7,235 |
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|
|
7,235 |
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|
|
|
|
|
|
|
|
|
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|
Total capitalization |
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|
|
$ |
13,160 |
|
|
$ |
13,760 |
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|
|
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|
(1) |
As Adjusted cash and cash equivalents reflects the receipt of the net proceeds of this offering but not the application thereof (including the application thereof for the expected funding of a $500 million
voluntary contribution to our pension plans and any potential debt repayment as set forth under Use of Proceeds in this prospectus supplement). |
S-10
DESCRIPTION OF NOTES
The following description of the notes offered by this prospectus supplement is intended to supplement, and to the extent inconsistent to replace, the more
general terms and provisions of the senior debt securities described in the accompanying prospectus, to which we refer you. This description of the notes is only a summary and may not include all the information that is important to you. You should
read the indenture we refer to below and the notes for more details regarding our obligations and your rights with respect to the notes.
For purposes
of this section entitled Description of Notes, references to we, our, us or similar references are to Northrop Grumman only, and not to any of its subsidiaries.
General
We will issue our 3.850% Senior Notes due 2045
under the indenture, dated as of November 21, 2001 (the base indenture), by and between Northrop Grumman and The Bank of New York Mellon, as successor to JPMorgan Chase Bank, as trustee, as supplemented by the first supplemental
indenture, dated as of July 30, 2009, the third supplemental indenture dated as of March 30, 2011, the fourth supplemental indenture, dated as of March 30, 2011 and a sixth supplemental indenture to be entered into between Northrop
Grumman and the trustee (the supplemental indentures together with the base indenture, the indenture).
The notes will be issued as a separate
series of securities under the indenture in an initial aggregate principal amount of $600,000,000.
Payment of the full principal amount of the notes will
be due on April 15, 2045, unless the notes are redeemed in whole or in part as described below under Optional Redemption.
The notes
will bear interest at the rate of 3.850% per annum. We will pay interest on the notes semi-annually in arrears on April 15 and October 15 of each year, beginning October 15, 2015, until the principal is paid or made available for payment, to the
persons in whose names the notes are registered at the close of business on the April 1 or October 1, as the case may be (in each case, whether or not a business day), immediately preceding the corresponding interest payment date. Interest
on the notes will accrue from February 6, 2015. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. If any date on which interest is payable or the maturity date falls on a day that
is not a business day, the payment will be made on the next business day as if it were made on the date the payment was due, and no interest will accrue on the amount so payable for the period from and after that interest payment date or the
maturity date, as the case may be.
The notes will be issued in denominations of $2,000 and integral multiples of $1,000.
The notes will not be subject to a sinking fund and you will not be permitted to require us to redeem or repurchase the notes at your option.
Issuing Additional Notes
We may create and issue
additional notes in an unlimited aggregate principal amount at any time and from time to time under the same indenture, without notice to or the consent of the holders or beneficial owners of the notes. These additional notes may have substantially
the same terms as the notes offered hereby (except in some cases for the issue date, the issue price, the initial interest payment date and corresponding record date and the initial interest accrual date) so that these additional notes may be
consolidated and form a single series with the notes under the indenture offered hereby. Any additional notes so consolidated will constitute a single series of securities for all purposes under the indenture, including voting, waivers, amendments
and redemptions; provided, however, that in the event any additional notes are not fungible with the notes offered hereby for U.S. federal income tax purposes, such nonfungible additional notes will be issued with a separate CUSIP number so
that they are distinguishable from the notes offered hereby.
S-11
Optional Redemption
We may redeem the notes at our option, as a whole or in part, at any time or from time to time, on at least 15 days but not more than 60 days prior notice to
the registered holders. Prior to October 15, 2044 (the date that is six months prior to the maturity date of the notes), the redemption price for the notes will be equal to the greater of the following amounts:
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100% of principal amount of the notes to be redeemed; and |
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the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (not including any portion of any payments of interest accrued to the redemption date), discounted
to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the Adjusted Treasury Rate (as defined below), as determined by the Independent Investment Banker (as defined
below), plus 25 basis points; |
plus, in either case, accrued and unpaid interest on the principal amount of the notes to be redeemed to, but
not including, the redemption date.
On and after October 15, 2044 (the date that is six months prior to the maturity date of the notes), we may redeem
the notes at our option, as a whole or in part, at any time or from time to time, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest on the principal amount of the notes to be
redeemed to, but not including, the redemption date.
Notwithstanding the foregoing, installments of interest on notes that are due and payable on
interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the registered holders as of the close of business on the corresponding record date pursuant to the notes and the indenture.
Adjusted Treasury Rate means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
Comparable Treasury Issue means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.
Comparable Treasury Price means, with respect to any redemption date, (A) the arithmetic mean of the Reference Treasury Dealer
Quotations received for such redemption date or (B) if only one Reference Treasury Dealer Quotation is received, such quotation.
Independent
Investment Banker means one of the Reference Treasury Dealers appointed by us to act as the Independent Investment Banker.
Reference Treasury Dealer means (A) Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC (or their respective affiliates which are
primary U.S. Government securities dealers in the United States (Primary Treasury Dealers)), and their respective successors; provided, however, that if any of the foregoing ceases to be a Primary Treasury Dealer, we will
substitute another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by us.
Reference Treasury Dealer
Quotation means, with respect to each Reference Treasury Dealer and any redemption date, the arithmetic mean, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to us by such Reference Treasury Dealer at 3:30 p.m. (New York City time) on the third business day preceding such redemption date.
S-12
We will mail notice of any redemption at least 15 days but not more than 60 days before the redemption date to
each registered holder of the notes to be redeemed. Once notice of redemption is mailed, the notes called for redemption will become due and payable on the redemption date at the applicable redemption price, plus accrued and unpaid interest to, but
not including, the redemption date. If we elect to redeem all or a portion of the notes, that redemption will not be conditional upon receipt by the paying agent or the trustee of monies sufficient to pay the redemption price.
Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on the notes or portions thereof called
for redemption.
If less than all of the notes offered hereby are to be redeemed, the trustee will select the notes to be redeemed by a method the trustee
deems fair and appropriate; provided that if the notes are represented by one or more global notes, interests in the notes will be selected for redemption by DTC in accordance with its standard procedures therefor.
Except as described above, the notes will not be redeemable. The notes will not be entitled to the benefit of any sinking fund or mandatory redemption
provisions.
Ranking
The notes will be unsecured
senior obligations of Northrop Grumman. The notes will rank equally and ratably in right of payment with all Northrop Grummans existing and future unsecured and unsubordinated indebtedness and will rank senior in right of payment to any future
indebtedness of Northrop Grumman that is subordinated to the notes. The notes will be (i) effectively subordinated to all of Northrop Grummans existing and future secured indebtedness to the extent of the assets securing that indebtedness
and (ii) structurally subordinated to all indebtedness and liabilities of Northrop Grummans subsidiaries, including any of our future indebtedness guaranteed by our subsidiaries.
The indenture does not limit the amount of additional indebtedness that Northrop Grumman or any of its subsidiaries may incur. Northrop Grumman, the sole
obligor on the notes, is a holding company which conducts substantially all of its operations through its subsidiaries, which are separate and distinct legal entities. None of these subsidiaries is obligated to repay the notes or to make funds
available to make payments due on the notes. Northrop Grumman depends on the distribution of earnings, repayments of inter-company loans or other payments from its subsidiaries to generate cash flow. As a result, its cash flow and its ability to
service its debt, including the notes, depends upon the assets, liabilities, earnings and results of operations of its subsidiaries and their ability to distribute or otherwise transfer assets to Northrop Grumman. Payments of dividends and similar
distributions by these subsidiaries to their stockholders are subject to statutory restrictions and may be subject to additional contractual restrictions or business constraints. The extension of loans or advances by those subsidiaries to Northrop
Grumman could also be subject to statutory or contractual restrictions or business constraints. Failure by any subsidiary to abide by these restrictions could require Northrop Grumman to return any payments made by that subsidiary.
Northrop Grummans right to receive any assets upon the liquidation or reorganization of any of its subsidiaries, and therefore the right of the holders
of the notes to participate in those assets, will be structurally subordinated to the claims of that subsidiarys current and future creditors, including debenture and note holders, banks and trade creditors. In addition, even if Northrop
Grumman were a creditor of any of its subsidiaries, its rights as a creditor would be subordinated to any creditor holding a security interest in the assets of that subsidiary or holding any indebtedness of that subsidiary senior to that held by
Northrop Grumman. Northrop Grumman may also elect to issue debt which is guaranteed by one or more of its subsidiaries, in which case the notes would be structurally subordinated to the new debt.
S-13
Certain Covenants
The indenture governing the notes limits our ability and the ability of our subsidiaries, among other things, to:
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create liens without equally and ratably securing the notes, unless an exception applies; and |
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engage in certain sale and leaseback transactions. |
The indenture also limits our ability to engage in certain
mergers, consolidations and sales of assets. These covenants are subject to important exceptions and qualifications, as described in the sections titled Description of Senior Debt SecuritiesObligations Under the Indenture and
Description of Senior Debt SecuritiesConsolidation, Merger or Sale in the accompanying prospectus.
Information Concerning the
Trustee
The Bank of New York Mellon has its principal corporate trust office at 101 Barclay Street, New York, New York 10286. The indenture limits the
right of the trustee, if it becomes our creditor, to obtain payment of claims or secure its claims. The trustee is permitted to engage in certain other transactions. If the trustee acquires any conflicting interest for purposes of the Trust
Indenture Act of 1939, however, and there is a default under the debt securities of any series under the indenture for which it is trustee, the trustee must eliminate the conflict or resign.
In the ordinary course of its business, The Bank of New York Mellon and its affiliates have engaged and may in the future engage in commercial and investment
banking transactions with us or our subsidiaries.
We have designated the trustee as our sole initial paying agent and registrar for the notes.
Governing Law
The notes will be governed by the law of
the state of New York.
Unclaimed Funds
Subject to
any applicable abandoned property laws, any money deposited with the trustee or any paying agent, or then held by us, in trust for the payment of the principal of or any premium or interest on any note and remaining unclaimed for two years after the
principal, premium or interest has become due and payable will be paid to us at our written request in accordance with the indenture, or (if then held by us) will be discharged from the trust. After that time, the holder of the note may, as an
unsecured general creditor, look only to us for payment of the unclaimed amounts, and all liability of the trustee or the paying agent with respect to that amount, and all our liability as trustee thereof, will cease. The trustee or the paying
agent, before being required to pay the funds to us, may at our expense cause to be published a notice that the funds remain unclaimed and that, after a date specified in the notice, which will not be less than 30 days from the date of the
publication, any unclaimed balance of the money then remaining will be repaid to us.
Form and Denomination
The notes will be issued:
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only in fully registered form, |
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without interest coupons, and |
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in denominations of $2,000 and integral multiples of $1,000. |
S-14
Global Notes
The notes offered hereby will initially be evidenced by one or more global notes, which will be deposited with the trustee as custodian for DTC and registered
in the name of Cede & Co., or Cede, as nominee of DTC. As long as DTC is the depositary for the notes, you may hold your interests in the global notes through participants in DTC, including through Clearstream Banking, société
anonyme, or Clearstream, or Euroclear Bank S.A./N.V., as operator of the Euroclear System, or Euroclear, either as a participant in those systems or indirectly through organizations which are participants in those systems. Clearstream and Euroclear
will hold interests in the global notes on behalf of their respective participants through customers securities accounts in Clearstreams and Euroclears names on the books of their respective depositaries, which in turn will hold
interests in customers securities accounts in the depositaries names on the books of DTC.
Except as set forth below, record ownership of the
global notes may be transferred, in whole or in part, to DTC, to another nominee of DTC, or to a successor of DTC or its nominee.
So long as DTC or its
nominee is the registered owner of a global note, DTC or that nominee will be considered the sole owner and holder of the rights represented by that global note for all purposes under the indenture and under the notes. As a result:
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You will not be able to obtain a note registered in your name. |
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You cannot receive certificated (physical) notes in exchange for your beneficial interest in a global note. |
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You will not be considered to be the owner or holder of a global note or any notes it represents under the indenture or under the notes for any purpose, including with respect to the giving of any direction, instruction
or approval to the trustee. Accordingly, you must rely on the procedures of DTC and, if you are not a direct or indirect participant in DTC, on the procedures of the participant through which you own your interest, to exercise any rights of a holder
of notes under the indenture or a global note. |
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All payments on a global note will be made to DTC or its nominee, and all notices to holders of notes, including any redemption notices, will be delivered to DTC or its nominee. |
The laws of some jurisdictions may require that specified purchasers of securities take physical delivery of those securities in definitive (i.e.,
certificated) form. Accordingly, your ability to transfer your beneficial interests in a global note to those persons may be limited. In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of persons who hold
interests through participants, the ability of an investor holding an interest in notes represented by a global note to pledge or transfer those interests to persons or entities that do not participate in DTCs system, or otherwise to take
actions in respect of their interest, may be affected by the lack of a physical definitive security evidencing their interest.
Investors will be able to
make and receive payments, deliveries, transfers, exchanges, notices and other transactions involving any securities held through Euroclear and Clearstream only on days when those systems are open for business. Those systems may not be open for
business on days when banks, brokers and other institutions are open for business in the United States.
In addition, because of time-zone differences,
U.S. investors who wish to transfer their beneficial interests in the global notes held through Clearstream or Euroclear, or to receive or make a payment or delivery or exercise any other right with respect to those interests, on a particular day
may find that the transaction will not be effected until the next business day in Luxembourg or Brussels, as applicable. Thus, these investors may need to exercise rights that expire on a particular day before the expiration date. In addition,
investors who hold their interests through both DTC and Euroclear or Clearstream may need to make special arrangements to finance any purchases or sales of their interests between the DTC and Euroclear or Clearstream, and those transactions may
settle later than transactions effected within one clearing system.
S-15
Secondary trading in bonds and notes of corporate issuers is generally settled in clearing-house (that is,
next-day) funds. In contrast, beneficial interests in a global note usually trade in DTCs same-day funds settlement system, and settle in immediately available funds. We make no representations as to the effect that settlement in immediately
available funds will have on trading activity in those beneficial interests. Because of time-zone differences, credits of interests in notes held through Clearstream or Euroclear as a result of a transaction with a DTC participant will be made
during subsequent securities settlement processing and dated the business day following the DTC settlement date. These credits, or any transactions in those notes settled during such processing, will be reported to the relevant Clearstream or
Euroclear participants on that business day. Cash received in Clearstream or Euroclear as a result of sales of notes by or through a Clearstream participant or a Euroclear participant to a DTC participant will be received with value on the DTC
settlement date, but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of notes among participants of DTC,
Clearstream and Euroclear, they are under no obligation to perform or continue to perform those procedures, and may discontinue those procedures at any time.
Book-Entry Procedures
Ownership of beneficial interests
in a global note will appear, and transfer of those interests can be made, only on the records kept by DTC (for their participants interests) and the records kept by those participants (for interests of persons held by participants on their
behalf). Only institutions (such as a securities broker or dealer) that have accounts with DTC or its nominee, whom we refer to as participants, and persons that may directly or indirectly hold beneficial interests through participants can own a
beneficial interest in a global note.
DTC has advised us as follows:
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With respect to any distributions of principal of or any interest or premium on a global note, DTCs practice is to credit direct participants accounts upon DTCs receipt of funds with payments in
amounts proportionate to their respective beneficial interests in the global note as shown on DTCs records. Payments by these participants to the beneficial owners of the notes will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of each participant and not of DTC, the paying agent, or us, subject to applicable statutory or
regulatory requirements. |
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Purchases of interests in a global note must be made by or through direct participants, which will receive a credit for their interests on DTCs records. Your ownership interest in a global note is in turn to be
recorded on the direct and indirect participants records. You will not receive written confirmation from DTC of your purchase, though you are expected to receive written confirmations providing details of the transaction, as well as periodic
statements of your holdings, from the participant through which you entered into the transaction. Transfers of ownership interests in a global note are to be accomplished by entries made on the books of direct and indirect participants acting on
behalf of the beneficial owners. |
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If we redeem a global note in part, DTCs practice is to determine by lot the amount of the interest of each direct participant holding an interest in the global note to be redeemed. |
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Neither DTC nor Cede (nor any other DTC nominee) will consent or vote with respect to the notes unless authorized by a direct participant in accordance with DTCs applicable procedures. Under its usual procedures,
DTC will mail an omnibus proxy to us as soon as possible after the record date for any action by the holders of notes. The omnibus proxy assigns Cedes consenting or voting rights to those direct participants to whose accounts the notes are
credited on the record date (identified in a listing attached to the omnibus proxy). |
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DTC will take any action permitted to be taken by a holder of a note (including the presentation of the note for exchange) only at the direction of
one or more participants to whose account with DTC interests in the |
S-16
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global note are credited and only in respect of that portion of the principal amount of the global note as to which that participant has, or those participants have, given direction.
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DTC is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a
clearing corporation within the meaning of the New York Uniform Commercial Code and a clearing agency registered pursuant to the provisions of Section 17A of the Exchange Act. |
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DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation, which we refer to as DTCC. DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. |
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DTC holds securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic computerized book-entry transfers and pledges between direct
participants accounts. |
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Direct participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to the DTC system is available to other
entities such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly.
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We have provided the descriptions of the operations and procedures of DTC, Clearstream and Euroclear in this prospectus supplement solely
as a matter of convenience. These operations and procedures are solely within the control of DTC, Clearstream and Euroclear, respectively, and are subject to change by them from time to time. Neither we, the underwriters nor the trustee takes any
responsibility for these operations or procedures, and you are urged to contact DTC or their participants directly to discuss these matters.
Neither we,
the underwriters nor the trustee have any responsibility or liability for any aspect of the records of DTC, Clearstream or Euroclear, or any of their respective participants, relating to beneficial interests in any global note, including for
payments of interest and premium, if any, on and principal of any global note. Neither we, the underwriters nor the trustee are responsible for maintaining, supervising or reviewing any of those records.
The information in this section concerning DTC, Clearstream and Euroclear, and their respective book-entry systems, has been obtained from sources that we
believe to be reliable, but we take no responsibility for the accuracy thereof.
Certificated Notes
No global note will be registered in the name of any person, or exchanged for certificated notes that are registered in the name of any person, other than DTC
or its nominee, unless one of the following occurs:
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DTC notifies us that it is unwilling or unable to continue acting as the depositary for the global note or DTC has ceased to be a clearing agency registered under the Exchange Act, and in either case we fail to appoint
a successor depositary; |
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subject to the arrangements then existing between us and DTC, we elect in our sole discretion not to have the notes represented by a global note; or |
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an event of default with respect to the notes has occurred and is continuing, and DTC requests the issuance of certificated notes. |
In those circumstances, DTC will determine the persons in whose names any notes issued in exchange for the global note will be registered, and we will issue
certificated notes to those persons upon surrender by DTC of the global note. Neither we nor the trustee will be liable for any delay by DTC, its nominee or any direct or indirect
S-17
participant in identifying the beneficial owners of a global note. We and the trustee may conclusively rely on, and will be protected in relying on, instructions from DTC or its nominee for all
purposes, including with respect to the registration and delivery, and the respective principal amounts, of the certificated notes to be issued.
Holders
of certificated notes, if so issued, can transfer or exchange their notes, duly endorsed or accompanied by a written instrument of transfer satisfactory to us and the security registrar, without service charge, upon reimbursement of any taxes or
government charges, at the trustees corporate trust office or at any other office we maintain for those purposes.
S-18
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax considerations relating to the purchase, ownership and disposition of the notes, but does
not purport to be a complete analysis of all potential tax considerations. This summary is based on the provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, the regulations the Department of Treasury has
promulgated under the Code, which we refer to as Treasury regulations, judicial authority, published administrative positions of the U.S. Internal Revenue Service, which we refer to as the IRS, and other applicable authorities, all as in effect on
the date of this prospectus supplement, and all of which are subject to change, possibly on a retroactive basis. We have not sought any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and
there can be no assurance that the IRS will agree with our statements and conclusions.
This summary only describes the material U.S. federal income tax
considerations relevant to beneficial owners of notes that purchase the notes in this offering at a price equal to the price set out on the cover page of this prospectus supplement, and that will hold the notes as capital assets within
the meaning of section 1221 of the Code (generally, property held for investment). This summary does not purport to address all aspects of U.S. federal income taxation that might be relevant to particular holders in light of their personal
investment circumstances or status, such as the impact of the unearned income Medicare contribution tax, nor does it address tax considerations applicable to investors that may be subject to special tax rules, such as certain financial institutions,
individual retirement and other tax-deferred accounts, tax-exempt organizations, S corporations, partnerships or other entities treated as partnerships for U.S. federal income tax purposes or investors in such entities, insurance companies,
broker-dealers, dealers or traders in securities or currencies, certain former citizens or residents of the United States, and taxpayers subject to the alternative minimum tax. This summary also does not discuss the tax considerations applicable to
persons that hold notes as part of a hedge, straddle, synthetic security or conversion transaction, persons that purchase or sell notes as part of a wash sale for tax purposes, or situations in which the functional currency of a U.S.
holder (as described below) is not the U.S. dollar. Moreover, the effect of any applicable U.S. federal estate or gift, state, local or non-U.S. tax laws is not discussed.
The following discussion is for informational purposes only and is not a substitute for careful tax planning and advice. Investors considering the purchase of
notes should consult their own tax advisors with respect to the application of the U.S. federal income tax laws to their particular situations, as well as any tax consequences arising under the federal estate or gift tax laws or the laws of any
state, local or non-U.S. taxing jurisdiction or under any applicable tax treaty.
U.S. Holders
A U.S. holder is a beneficial owner of a note that is, for U.S. federal income tax purposes:
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an individual who is a citizen or a resident of the United States; |
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a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia; |
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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
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a trust, if (i) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or
(ii) a valid election is in place under applicable Treasury regulations to treat such trust as a domestic trust. |
In the case of a
beneficial owner of notes that is classified as a partnership for U.S. federal income tax purposes, the tax treatment of the notes to a partner of the partnership generally will depend upon the tax status of the partner and the activities of the
partnership. If you are a partner of a partnership holding notes, then you should consult your own tax advisors.
S-19
Payment of Interest
Stated interest on a note will be included in the gross income of a U.S. holder as ordinary income at the time the interest is accrued or received, in
accordance with the holders method of accounting for U.S. federal income tax purposes.
Sale, Exchange, Redemption, Retirement or Other Taxable
Disposition of the Notes
Upon the sale, exchange, redemption, retirement or other taxable disposition of a note, a U.S. holder generally will
recognize gain or loss equal to the difference between (i) the amount realized upon the disposition and (ii) the holders adjusted tax basis in the note. The amount realized will be equal to the sum of the amount of cash and the fair
market value of any property received in exchange for the note (less any portion allocable to any accrued and unpaid interest, which will be taxed as ordinary interest income to the extent not previously so taxed). A U.S. holders adjusted tax
basis in a note generally will equal the cost of the note to that holder. This gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the U.S. holder has held the note for more than one year. In general,
long-term capital gains of a non-corporate U.S. holder are taxed at lower rates than those applicable to ordinary income. The deductibility of capital losses is subject to limitations. U.S. holders should consult their own tax advisors as to the
deductibility of capital losses in their particular circumstances.
Information Reporting and Backup Withholding
In general, we and other payors must report certain information to the IRS with respect to payments of principal, premium, if any, and interest on a note, and
payments of the proceeds of the sale or other disposition of a note, to certain non-corporate U.S. holders. The payor (which may be us or an intermediate payor) will be required to impose backup withholding at a rate of 28% if:
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the payee fails to furnish a taxpayer identification number, which we refer to as a TIN, to the payor or to establish an exemption from backup withholding; |
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|
|
the IRS notifies the payor that the TIN furnished by the payee is incorrect; |
|
|
|
there has been a notified payee underreporting described in section 3406(c) of the Code; or |
|
|
|
the payee has not certified under penalties of perjury that it has furnished a correct TIN and that the IRS has not notified the payee that it is subject to backup withholding under the Code. |
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. holder will be allowed as a
credit against that holders U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS.
Non-U.S. Holders
A non-U.S. holder is a beneficial owner
of a note that is, for U.S. federal income tax purposes, an individual, corporation, trust or estate that is not a U.S. holder (as that term is defined above under U.S. Holders).
The following discussion applies only to non-U.S. holders, and assumes that no item of income, gain, deduction or loss derived by the non-U.S. holder in
respect of the notes at any time is effectively connected with the conduct of a U.S. trade or business by such non-U.S. holder. Special rules may apply to certain non-U.S. holders such as controlled foreign corporations, passive
foreign investment companies, corporations that accumulate earnings to avoid U.S. federal income tax, investors in pass-through entities that are subject to special treatment under the Code, and certain former citizens or residents of the
United States. Such non-U.S. holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.
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Payment of Interest
Subject to the discussion of backup withholding below, interest paid on a note by us or any paying agent to a non-U.S. holder will be exempt from U.S. income
and withholding tax under the portfolio interest exemption, provided that (i) the non-U.S. holder does not, actually or constructively, own 10% or more of the combined voting power of all classes of our stock entitled to vote;
(ii) the non-U.S. holder is not a controlled foreign corporation related to us, directly or indirectly, through stock ownership; (iii) the non-U.S. holder is not a bank that acquired the note in consideration for an extension of credit
made pursuant to a loan agreement entered into in the ordinary course of its trade or business; and (iv) either (a) the non-U.S. holder provides to us or our paying agent an IRS Form W-8BEN or W-8BEN-E, as applicable (or a suitable
substitute form), signed under penalties of perjury, that includes its name and address and that certifies its non-U.S. status in compliance with applicable law and regulations or (b) a securities clearing organization, bank or other financial
institution that holds customers securities in the ordinary course of its trade or business on behalf of the non-U.S. holder provides a statement to us or our paying agent, signed under penalties of perjury, in which it certifies that an IRS
Form W-8BEN or W-8BEN-E, as applicable (or a suitable substitute form), has been received by it from the non-U.S. holder or qualifying intermediary and furnishes a copy of that form to us or our paying agent.
If a non-U.S. holder cannot satisfy the requirements of the portfolio interest exemption described above, payments of interest made to that holder generally
will be subject to U.S. withholding tax at the rate of 30%, unless that holder provides us or our paying agent with a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from or reduction of the withholding tax
under the benefit of an applicable tax treaty.
Sale, Exchange, Redemption, Retirement or Other Disposition of Notes
Subject to the discussion of backup withholding below, a non-U.S. holder generally will not be subject to U.S. federal income tax or withholding tax on any
gain realized on a sale, exchange, redemption, retirement or other disposition of a note (other than any amount representing accrued but unpaid interest on the note, which is subject to the rules discussed above under Non-U.S.
HoldersPayment of Interest) unless the non-U.S. holder is an individual who was present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met. If a non-U.S. holder is an
individual who is present in the United States for 183 days or more during the taxable year of the sale, exchange or redemption of a note, and certain other requirements are met, then that holder generally will be subject to U.S. federal income tax
at a flat rate of 30% (unless a lower applicable treaty rate applies) on any realized gain.
Information Reporting and Backup Withholding
The amount of interest paid to a non-U.S. holder and the amount of tax, if any, withheld from that payment generally must be reported annually to the non-U.S.
holder and to the IRS. The IRS may make this information available under the provisions of an applicable income tax treaty to the tax authorities in the country in which the non-U.S. holder is resident.
Provided that a non-U.S. holder has complied with certain reporting procedures (usually satisfied by providing an IRS Form W-8BEN or W-8BEN-E, as applicable)
or otherwise establishes an exemption, that holder generally will not be subject to backup withholding with respect to interest payments on, and the proceeds from the disposition of, a note, unless we or our paying agent know or have reason to know
that the holder is a U.S. person. Additional information reporting and backup withholding rules may be applicable to certain non-U.S. holders who hold notes through brokers or other agents, and these non-U.S. holders should consult their own tax
advisors regarding compliance with those rules.
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against
the non-U.S. holders U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.
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FATCA
Under
Sections 1471 through 1474 of the Code (provisions commonly referred to as FATCA), a 30 percent U.S. federal withholding tax may apply to interest income paid on a note and, for a disposition of a note occurring after December 31, 2016, the
gross proceeds from such disposition, in each case paid to (i) a foreign financial institution (as specifically defined in the legislation), whether such foreign financial institution is the beneficial owner or an intermediary,
unless such foreign financial institution agrees to verify, report and disclose its United States account holders (as specifically defined in the legislation) and meets certain other specified requirements or (ii) a non-financial
foreign entity, whether such non-financial foreign entity is the beneficial owner or an intermediary, unless such entity provides a certification that the beneficial owner of the payment does not have any substantial U.S. owners or provides the
name, address and taxpayer identification number of each such substantial U.S. owner and certain other specified requirements are met. In certain cases, the relevant foreign financial institution or non-financial foreign entity may qualify for an
exemption from, or be deemed to be in compliance with, these rules. Non-U.S. holders should consult their own tax advisors regarding this legislation and whether it may be relevant to their ownership and disposition of notes.
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UNDERWRITING (CONFLICTS OF INTEREST)
Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representatives, Deutsche Bank Securities Inc.
and J.P. Morgan Securities LLC, have severally agreed to purchase from us the following respective principal amounts of notes listed opposite their name below at the public offering price less the underwriting discounts and commissions set forth on
the cover page of this prospectus supplement:
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|
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|
Underwriter |
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Principal Amount of Notes |
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Deutsche Bank Securities Inc. |
|
$ |
126,000,000 |
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J.P. Morgan Securities LLC |
|
|
126,000,000 |
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Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
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60,000,000 |
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Mitsubishi UFJ Securities (USA), Inc. |
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60,000,000 |
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Mizuho Securities USA Inc. |
|
|
60,000,000 |
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BNP Paribas Securities Corp. |
|
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24,000,000 |
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Citigroup Global Markets Inc. |
|
|
24,000,000 |
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Credit Suisse Securities (USA) LLC |
|
|
24,000,000 |
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Goldman, Sachs & Co. |
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24,000,000 |
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RBS Securities Inc. |
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|
24,000,000 |
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Wells Fargo Securities, LLC |
|
|
24,000,000 |
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Mischler Financial Group, Inc. |
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9,000,000 |
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Blaylock Beal Van, LLC |
|
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7,500,000 |
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Drexel Hamilton, LLC |
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7,500,000 |
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|
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Total |
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$ |
600,000,000 |
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|
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The underwriting agreement provides that the obligations of the several underwriters to purchase the notes offered hereby are
subject to certain conditions precedent and that the underwriters will purchase all of the notes offered by this prospectus supplement if any of these notes are purchased. The offering of the notes by the underwriters is subject to receipt and
acceptance and subject to the underwriters right to reject any order in whole or in part.
We have been advised by the representatives of the
underwriters that the underwriters propose to offer the notes initially to the public at the initial public offering price set forth on the cover of this prospectus supplement and to dealers at a price that represents a concession not in excess of
0.500% of the principal amount of the notes. The underwriters may allow, and these dealers may re-allow, a concession of not more than 0.250% of the principal amount of the notes to other dealers. After the initial public offering, the
representatives of the underwriters may change the offering price and other selling terms.
In addition, we estimate that our share of the total expenses
of this offering, excluding underwriting discounts and commissions, will be approximately $588,000. The underwriters have agreed to reimburse certain expenses related to this offering.
We have agreed to indemnify the underwriters and their officers, directors and controlling persons against some specified types of liabilities, including
liabilities under the Securities Act of 1933, as amended, and to contribute to payments any of those persons may be required to make in respect of any of these liabilities.
The notes are a new issue of securities with no established trading market. The notes will not be listed on any securities exchange. The underwriters have
advised us that they may make a market in the notes after completion of the offering, but will not be obligated to do so and may discontinue any market-making activities at any time
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without notice. No assurance can be given as to the liquidity of the trading market for the notes or that an active public market for the notes will develop. If an active public trading market
for the notes does not develop, the market price and liquidity of the notes may be adversely affected.
In connection with the offering, the underwriters
may purchase and sell the notes in the open market. These transactions may include short sales, purchases to cover positions created by short sales and stabilizing transactions. If the underwriters engage in these transactions, they may discontinue
doing so at any time.
Short sales involve the sale by the underwriters of a greater principal amount of notes than they are required to purchase in the
offering. The underwriters may close out any short position by purchasing notes in the open market. A short position is more likely to be created if underwriters are concerned that there may be downward pressure on the price of the notes in the open
market prior to the completion of the offering.
Stabilizing transactions consist of various bids for or purchases of the notes made by the underwriters
in the open market prior to the completion of the offering.
The underwriters may impose a penalty bid. This occurs when a particular underwriter repays
to the other underwriters a portion of the underwriting discount received by it because the representatives of the underwriters have repurchased notes sold by or for the account of that underwriter in stabilizing or short covering transactions.
Purchases to cover a short position and stabilizing transactions may have the effect of preventing or slowing a decline in the market price of the notes.
Additionally, these purchases, along with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the notes. As a result, the price of the notes may be higher than the price that might otherwise exist in
the open market. These transactions may be effected in the over-the-counter market or otherwise.
The underwriters and their respective affiliates are
full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage
and other financial and non-financial activities and services. Certain of the underwriters or their respective affiliates have from time to time performed various financial advisory, commercial banking, investment banking, or hedging services for
us, including repurchases of Northrop Grumman common stock, in the ordinary course of their respective businesses, for which they have received customary fees and reimbursement of expenses. Certain of the underwriters or their affiliates are
lenders, and are also agents, under our revolving credit facility. Certain of the underwriters or their affiliates hold positions in certain of our indebtedness and, accordingly, may receive a portion of the net proceeds of this offering. Because an
underwriter (together with its affiliates) may receive five percent or more of the proceeds of this offering, creating a conflict of interest within the meaning of FINRA Rule 5121, this offering will be conducted in accordance with Rule 5121. Any
underwriters with a conflict of interest within the meaning of Rule 5121 will not sell these notes to a discretionary account without specific written approval from the account holder.
In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase,
sell or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such
investment and trading activities may involve or relate to our assets, securities and/or instruments (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with us. If any of the underwriters
or their affiliates have a lending relationship with us, certain of those underwriters or their affiliates routinely hedge, and certain other of those underwriters or their affiliates may hedge, their credit exposure to us consistent with their
customary risk management policies. Typically, these underwriters and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our
securities, including potentially the notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of the
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notes offered hereby. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express
independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.
European Economic Area
This prospectus supplement and
the accompanying prospectus have been prepared on the basis that any offer of notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State) will be made pursuant to
an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of notes. Accordingly, any person making or intending to make an offer in that Relevant Member State
of notes which are the subject of an offering contemplated in this prospectus supplement or the accompanying prospectus may only do so in circumstances in which no obligation arises for us or any underwriter to publish a prospectus pursuant to
Article 3 of the Prospectus Directive in relation to such offer. Neither we nor any underwriter has authorized, nor do they authorize, the making of any offer of notes in circumstances in which an obligation arises for us or any underwriter to
publish a prospectus for such offer.
In relation to each Relevant Member State of the European Economic Area, each underwriter has represented and agreed
that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, it has not made and will not make an offer of the notes to the public in that Relevant Member State other than:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons
(other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of notes shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an offer of notes to the public in relation to any notes in any Relevant Member State means the
communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes, as the same may be varied in that Member State
by any measure implementing the Prospectus Directive in that Member State, the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the
Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU.
United Kingdom
In the United Kingdom, this prospectus
supplement and the accompanying prospectus are only being distributed to, and are only directed at, (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the Order), or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons).
The notes will only be available to, and any
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invitation, offer or agreement to subscribe, purchase or otherwise acquire the notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely
on this prospectus supplement, the accompanying prospectus or any of their contents.
Each underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the notes in circumstances in which Section 21(1) of the FSMA does not apply to us; and
(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or
otherwise involving the United Kingdom.
Hong Kong
The notes may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the
meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to professional investors within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or
(iii) in other circumstances which do not result in the document being a prospectus within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the notes may be
issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if
permitted to do so under the laws of Hong Kong) other than with respect to notes which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors within the meaning of the Securities and
Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Singapore
This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus supplement, the accompanying prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the notes may not be circulated or distributed, nor may the notes be offered
or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter
289 of Singapore (the SFA), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in
accordance with the conditions of, any other applicable provision of the SFA.
Where the notes are subscribed or purchased under Section 275 by a
relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited
investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or
the beneficiaries rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the notes under Section 275 except: (1) to an institutional investor under Section 274
of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation
of law.
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Japan
The
notes have not been registered under the Financial Instruments and Exchange Law of Japan. The notes have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan
(which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except
(i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law and (ii) in compliance with any other applicable requirements of the Financial Instruments and Exchange Law and any other applicable laws,
regulations and ministerial guidelines of Japan.
Each underwriter has agreed that it will not knowingly offer, sell or deliver any of the notes in any
other jurisdiction outside the United States except under circumstances that will result in compliance with the applicable laws of that jurisdiction, and that it will take at its own expense whatever action is required to permit its resale of the
notes in such a jurisdiction.
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VALIDITY OF THE NOTES
Cravath, Swaine & Moore LLP, New York, New York will issue an opinion about the validity of the notes for us. The validity of the notes offered
hereby is being passed upon for the underwriters by Sullivan
& Cromwell LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements incorporated by reference herein from our Annual Report on Form 10-K for the year ended December 31, 2014 and the
effectiveness of our internal control over financial reporting incorporated by reference herein from our Annual Report on Form 10-K for the year ended December 31, 2014, have been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
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PROSPECTUS
Northrop Grumman Corporation
SENIOR DEBT SECURITIES
COMMON STOCK
We may offer
and sell any combination of the securities described in this prospectus from time to time in one or more offerings, in one or more series and in amounts, at prices and on terms that we will determine at the time of the offering.
We will provide the specific terms of the securities, including their offering prices, and the methods by which we will sell them, in
supplements to this prospectus. The prospectus supplements may also add, update or change information contained in this prospectus. You should read this prospectus and any accompanying prospectus supplements carefully before you make your investment
decision.
We may offer and sell the securities on an immediate, continuous or delayed basis directly to investors or through
underwriters, dealers or agents, or through a combination of these methods.
Northrop Grummans common stock is listed on The New
York Stock Exchange under the symbol NOC.
Investing in
these securities involves certain risks. See Risk Factors included in any accompanying prospectus supplement and in the documents incorporated by reference in this prospectus for a discussion of the factors you should carefully consider
before deciding to purchase these securities.
Neither the
Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 23, 2014.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
Unless otherwise stated or the context otherwise requires, references in this prospectus to Northrop Grumman are to Northrop
Grumman Corporation, and references to we, our, us or similar references are to Northrop Grumman and its consolidated subsidiaries.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a shelf
registration process. Under this shelf registration process, Northrop Grumman may from time to time sell, either separately or together, senior debt securities or common stock, in one or more offerings to the public. This prospectus provides you
with a general description of these securities.
Each time we sell securities, we will provide a prospectus supplement containing specific
information about the terms of that offering. That prospectus supplement may include or incorporate by reference a detailed and current discussion of any risk factors and will discuss any special considerations applicable to those securities. The
prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any accompanying prospectus supplement together with additional information described under the heading
Where You Can Find More Information and Incorporation by Reference. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information contained in that
prospectus supplement.
You should rely only on the information contained in or incorporated by reference in this prospectus, any
accompanying prospectus supplement or in any related free writing prospectus filed by us with the SEC. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you
should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should read this prospectus, including the documents incorporated by reference in this prospectus, when
making your investment decision. You should assume that the information appearing in this prospectus, any prospectus supplement, the documents incorporated by reference and any related free writing prospectus is accurate only as of their respective
dates. Our business, financial condition, results of operations, cash flows and/or prospects may have changed materially since those dates.
1
WHERE YOU CAN FIND MORE INFORMATION
Northrop Grumman files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any
document we file with the SEC (including exhibits to such documents) at the SECs Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain additional information about the Public Reference Room by calling
the SEC at 1-800- SEC-0330. In addition, the SEC maintains a site on the internet at http://www.sec.gov that contains reports, proxy statements and other information that we file electronically with the SEC. Copies of certain information filed by us
with the SEC are also available on our website at www.northropgrumman.com. Our website is not a part of, and is not incorporated by reference into, this prospectus. You may also read such reports, proxy statements and other documents at the offices
of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
This prospectus is part of a registration statement we filed
with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and regulations. You should review the information in, and the exhibits to, the registration statement for further information
on us and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be
comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements.
INCORPORATION BY REFERENCE
We are incorporating by reference information into this prospectus, which means that we
can disclose important information to you by referring you to another document that has been filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede the information contained in documents filed earlier with the SEC or contained in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to
determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded. We incorporate by reference in this prospectus the documents listed below (File No. 001-16411) and
any future filings made by us with the SEC under Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), after the initial filing of the registration statement that contains this
prospectus and prior to the time that the offering of the securities under the registration statement is terminated or completed (in each case, other than those documents or the portions of those documents not deemed to be filed):
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Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (including information specifically incorporated by reference into the Annual Report on Form 10-K from our Definitive Proxy Statement on
Schedule 14A filed with the SEC on April 4, 2014); |
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Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014; |
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Current Report on Form 8-K filed on February 24, 2014; and |
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The description of our common stock contained in our Registration Statement on Form 8-A filed on March 28, 2001, including any amendments or reports filed for the purpose of updating such description.
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You may obtain copies, without charge, of documents incorporated by reference in this prospectus, by requesting them in
writing or by telephone from us as follows:
Jennifer C. McGarey
Corporate Vice President and Secretary
2980 Fairview Park Drive
Falls
Church, Virginia 22042
(703) 280-2900
2
Exhibits to the filings will not be sent, unless those exhibits have been specifically
incorporated by reference in this prospectus.
FORWARD-LOOKING STATEMENTS AND IMPORTANT FACTORS
This prospectus and the information we are incorporating by reference contain statements, other than statements of historical fact, that
constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, intend, may, could, plan,
project, forecast, believe, estimate, outlook, anticipate, trends, goals, and similar expressions generally identify these forward-looking statements.
Forward-looking statements include, among other things, statements relating to our future financial condition, results of operations and cash flows. Forward-looking statements are based upon assumptions, expectations, plans and projections that we
believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific risks that could
cause actual results to differ materially from those expressed or implied in these forward-looking statements include, but are not limited to, those identified under Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2013 and Item IA, Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and other important factors disclosed in our reports, and from time to time in our other filings with the SEC.
You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of
forward-looking statements. These forward-looking statements speak only as of the date of this prospectus or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
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NORTHROP GRUMMAN CORPORATION
Northrop Grumman Corporation is a leading global security company. We provide innovative systems, products and solutions in unmanned systems;
cybersecurity; command, control, communications and computers (C4) intelligence, surveillance, and reconnaissance; strike aircraft; and logistics and modernization to government and commercial customers worldwide through our four segments: Aerospace
Systems, Electronic Systems, Information Systems and Technical Services. We participate in many high-priority defense and government services programs in the United States (U.S.) and abroad. We offer a broad portfolio of capabilities and
technologies that enable us to deliver innovative systems and solutions for applications that range from undersea to outer space and into cyberspace. We conduct most of our business with the U.S. Government, principally the Department of Defense and
intelligence community. We also conduct business with local, state, and foreign governments and domestic and international commercial customers.
Our principal executive offices are located at 2980 Fairview Park Drive, Falls Church, Virginia 22042, and our telephone number is
(703) 280-2900.
We maintain an internet site at http://www.northropgrumman.com. The information contained at our internet site is
not incorporated by reference in this prospectus, and you should not consider it a part of this prospectus.
USE OF PROCEEDS
Unless we specify otherwise in a prospectus supplement, we will use the net proceeds from the sale of the securities for general corporate
purposes. These purposes may include repayment of debt, repurchase of our common stock, working capital needs, capital expenditures, acquisitions and any other general corporate purpose.
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DESCRIPTION OF SENIOR DEBT SECURITIES
The following description of senior debt securities, which we refer to as the debt securities, sets forth the general terms and provisions of
the debt securities we may offer. The specific terms of any debt securities we offer and the extent to which these general terms and provisions apply to those debt securities will be described in a prospectus supplement.
Northrop Grumman may issue the debt securities in one or more series under the indenture dated as of November 21, 2001, which we refer to
as the base indenture, as supplemented and/or amended by (i) the first supplemental indenture dated as of July 30, 2009, between Northrop Grumman and The Bank of New York Mellon, which we refer to as the trustee, (ii) the third
supplemental indenture dated as of March 30, 2011, by and among Titan II, Inc. (formerly known as Northrop Grumman Corporation), the trustee and Titan Holdings II, L.P. and (iii) the fourth supplemental indenture dated as of March 30,
2011, by and among Titan Holdings II, L.P., the trustee and Northrop Grumman (formerly known as New P, Inc.). We refer to the base indenture as modified by the supplemental indentures, and as further amended and/or supplemented, as the indenture. If
we use a different indenture trustee for any series of debt securities, we will provide the details in a prospectus supplement.
We have
summarized some of the material provisions of the indenture on the following pages. The summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all provisions of the indenture, including
definitions of various terms contained in the indenture. The base indenture and the supplemental indentures are exhibits to the registration statement of which this prospectus is a part. We encourage you to read the indenture. If you would like more
information on the indenture, see Where You Can Find More Information on how to obtain copies of the indenture. Section references in the summary below are to the section in the base indenture as such section may have been modified by
the supplemental indentures.
Terms
The indenture provides for the issuance of debt securities in one or more series. A prospectus supplement relating to any series of debt
securities we offer will describe the specific terms relating to the offering. These terms will include some or all of the following:
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the title and type of the debt securities; |
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any limit on the total principal amount of the debt securities; |
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the person who will receive interest payments on any debt securities, if other than the registered holder; |
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the price or prices at which we will sell the debt securities; |
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the maturity date or dates of the debt securities; |
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the rate or rates, which may be fixed or variable, per annum at which the debt securities will bear interest and the date from which such interest will accrue; |
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the dates on which interest will be payable and the related record dates; |
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whether any index, formula or other method will determine payments of principal, premium or interest and the manner of determining the amount of such payments; |
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the place or places of payments on the debt securities; |
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whether and on what terms the debt securities are redeemable; |
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any mandatory or optional sinking fund or purchase fund or analogous provisions; |
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the denominations of the debt securities if other than $1,000 or multiples of $1,000; |
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the currency or currency units of principal, premium and interest payments if other than U.S. dollars; |
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any deletions from, changes in or additions to the events of default or the covenants specified in the indenture; |
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any trustees, authenticating or paying agents, transfer agents, registrars or other agents for the debt securities; |
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whether the debt securities are subject to defeasance or covenant defeasance; |
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any conversion or exchange features of the debt securities; |
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whether we will issue the debt securities as original issue discount securities for federal income tax purposes; |
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any special tax implications of the debt securities; |
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whether the debt securities will be issued in whole or in part in temporary or permanent global form and, if so, the initial depositary with respect to the global security; |
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the terms of payment upon acceleration; and |
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any other material terms of the debt securities. (Section 301) |
We may issue debt securities
that are convertible into or exchangeable for our common stock. If we issue convertible or exchangeable debt securities, we will provide additional information in a prospectus supplement.
We may sell debt securities at a discount below their stated principal amount, bearing no interest or interest at a rate that, at the time of
issuance, is different than market rates.
Ranking of Debt Securities
The debt securities will be our senior unsecured obligations and will rank equally and ratably in right of payment with all of our other
unsecured and non-subordinated indebtedness.
Denomination, Form, Payment and Transfer
Normally, we will denominate and make payments on debt securities in U.S. dollars. If we issue debt securities denominated, or with payments,
in a foreign or composite currency, the applicable prospectus supplement will specify the currency or composite currency. (Section 301)
We may from time to time issue debt securities in certificated form. This means that holders will be entitled to receive certificates
representing the debt securities registered in their name. You can transfer or exchange debt securities in certificated form without service charge, upon reimbursement of any taxes or government charges. You can make this transfer or exchange at the
trustees corporate trust office or at any other office we maintain for such purposes. If the debt securities are in certificated form, we can pay interest by check mailed to the person in whose name the debt securities are registered on the
days specified in the indenture. (Sections 301 and 305)
Global Notes
We may issue the debt securities of a particular series in whole or in part in the form of one or more global notes that will be issued to and
registered in the name of a depositary, which we refer to as the depositary, or its nominee, identified in the prospectus supplement relating to that series. Global notes may be issued only in fully registered form and in either temporary or
permanent form. Unless and until a global note is exchanged in whole or in part for certificated debt securities, a global note may only be transferred as a whole between the depositary (or its successor) and its nominees. (Section 305)
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While the specific terms of the depositary arrangement with respect to a series of debt
securities will be described in the prospectus supplement relating to that series, we anticipate that the following provisions will generally apply to depositary arrangements for global notes.
Upon the issuance of a global note, the depositary or its nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the persons who beneficially own the global note to their accounts with the depositary. These accounts will be designated by the dealers, underwriters or agents through whom we sold the debt securities, or by us if we
offer and sell the debt securities directly. Ownership of beneficial interests in a global note will be limited to persons that have accounts with the depositary, whom we refer to as participants, or persons that may hold interests through
participants. Ownership of beneficial interests in a global note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary or its nominee (with respect to interests of participants) and
the records of participants (with respect to interests of beneficial owners other than participants). The laws of some states require that certain purchasers of securities must take physical delivery of debt securities in definitive, certificated
form. These requirements may impair our ability to sell, and the ability of a purchaser to transfer, beneficial interests in a global note.
So long as the depositary or its nominee is the registered owner of a global note, the depositary or its nominee will be considered the sole
owner or Holder of the debt represented by the global note for all purposes under the indenture. Except as described below, owners of beneficial interests in a global note will not be entitled to have any of the debt represented by the
global note registered in their individual names, will not receive or be entitled to receive certificates representing debt securities in definitive form, and will not be considered the owners or Holders of the debt securities under the
indenture. Accordingly, investors who hold an interest in global debt securities in accounts at banks or brokers will not generally be recognized by us as the legal holders of the debt securities although the depositary or its nominee may choose to
grant proxies or otherwise allow owners of beneficial interests in the debt securities to take action which the depositary as Holder is entitled to take.
Payments of principal of and interest, if any, on a global note registered in the name of the depositary or its nominee will be made to the
depositary or its nominee, as the registered owner of the global note. Neither we nor the trustee, any paying agent or the security registrar for the debt securities will have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the global note or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We expect that the depositary or its nominee, immediately upon receipt of any payment of principal or interest in respect of a global note,
will credit the accounts of the applicable participants with payments in amounts proportionate to their respective beneficial ownership interests in the principal amount of the global note, as shown on the records of the depositary or its nominee.
We further expect that payments by participants to owners of beneficial interests in the global note held through those participants will be governed by standing instructions and customary practices, as is now the case with securities held for the
accounts of customers. These payments will, however, be the sole responsibility of the participants. We have no control over the practices of the depositary or the participants, and there can be no assurance that these practices will not be changed.
If the depositary for a series of debt securities is at any time unwilling, unable or ineligible to continue as depositary and a
successor depositary is not appointed by us within 90 days, we will issue certificated debt securities of that series in exchange for the global note held by that depositary. In addition, we may at any time and in our sole discretion, subject to any
limitations described in the prospectus supplement relating to the debt securities, determine not to have any series of debt securities represented by one or more global notes and, in that event, will issue certificated debt securities of that
series in exchange for the global note. Further, if an Event of Default with respect to any series represented by a global note has occurred and is continuing, the global note may be exchanged for certificated debt securities. In that case, each
owner of a beneficial interest in a global note
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will be entitled to physical delivery of certificated debt securities of the series represented by the global note equal in principal amount to that owners beneficial interest, and to have
those debt securities registered in its name.
Payments
We will pay interest to direct holders listed in the registrars records at the close of business on the record date specified in the
applicable prospectus supplement, which usually falls about two weeks in advance of each due date for interest, even if the holder on the record date no longer owns the debt security on the interest payment date. (Section 307) Holders buying
and selling debt securities must make their own arrangements to account for the issuers payment of all the interest for an interest period to the person who was the registered holder on the record date.
If any amount payable on any debt security remains unclaimed at the end of two years after the amount became due and payable, the paying agent
or trustee will return that amount to us. (Section 1003)
Events of Default
Unless we indicate otherwise in a prospectus supplement, the following are events of default under the indenture with respect to any series of
issued debt securities:
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pay the principal or any premium on any debt security of that series when due; |
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pay interest on any debt security of that series within 30 days of when due; |
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deposit any sinking fund payment on any debt security of that series when due; or |
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perform any other covenant in the indenture applicable to that series and the issuer or guarantor, if applicable, that continues for 90 days after we have been given written notice of the failure by the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series; or |
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the occurrence of specified bankruptcy, insolvency or reorganization events. (Section 501) |
An event of default for one series of debt securities does not necessarily constitute an event of default for any other series under the
indenture.
If the specified bankruptcy, insolvency or reorganization events occur, the entire principal of all the debt securities of
that series will be due and payable immediately. If any other event of default occurs and continues, the trustee, or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of the series, may declare the entire
principal of all the debt securities of that series to be due and payable immediately. If this happens, and we cure the event of default in the manner specified in the indenture, the holders of a majority of the aggregate outstanding principal
amount of the debt securities of that series can void the acceleration of payment. (Section 502)
The indenture provides that the
trustee has no obligation to exercise any of its rights at the direction of any holders, unless the holders offer the trustee reasonable indemnity. (Section 603) If they provide this indemnification, the holders of a majority in principal
amount of any series of debt securities have the right to direct any proceeding, remedy, or power available to the trustee with respect to that series. (Section 512)
Obligations Under the Indenture
Unless
specified otherwise in the applicable prospectus supplement, the following covenants will apply to any series of debt securities issued under the indenture.
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Limitations on Liens. The indenture restricts our ability to encumber specified types of
our assets or those of our restricted subsidiaries. If we, or any restricted subsidiary, pledges or mortgages any principal property, or any stock or indebtedness of any restricted subsidiary, to secure any debt or guarantee of debt, then for as
long as the debt or guarantee is secured by the property, we or our restricted subsidiary will be obligated to pledge or mortgage the same property to the trustee to secure the debt securities on an equal and ratable basis with such other secured
debt, unless an exception applies. Restricted subsidiary means any of our direct or indirect subsidiaries that has substantially all of its assets located in the United States and carries on substantially all of its business in the United States, or
that holds substantially all of its assets in the form of ownership of other restricted subsidiaries. Principal property means any manufacturing plant or facility located in the continental United States which is owned by us or any of our restricted
subsidiaries, unless our board of directors determines the plant or facility is not of material importance to our total business and the business of our restricted subsidiaries.
This limitation is subject to exceptions. We may encumber our assets without equally and ratably securing the debt securities if the
encumbrance is a permitted lien, without regard to the amount of debt secured by the encumbrance. We may also encumber assets if the amount of all of our debt and the debt of our restricted subsidiaries secured by encumbrances on any principal
property, or any stock or indebtedness of any restricted subsidiary, other than the permitted liens, does not exceed the greater of $1,000,000,000 or 10% of our consolidated net tangible assets. Consolidated net tangible assets means our total
assets, including the assets of our subsidiaries, as reflected in our most recent balance sheet, less current liabilities (other than the current portion of debt and capital leases, notes and loans payable and deferred income taxes), goodwill,
patents and trademarks and unamortized debt discount. Permitted liens include:
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liens on a corporations property, stock or indebtedness at the time it becomes a restricted subsidiary; |
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liens on property at the time we or a restricted subsidiary acquires the property; |
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liens securing debt owing by a restricted subsidiary to us or another of our restricted subsidiaries; |
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liens existing at the time the indenture became effective; |
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liens on property of an entity at the time it is merged into or consolidated with us or a restricted subsidiary or at the time we or any restricted subsidiary acquires all or substantially all of the assets of the
entity; |
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liens in favor of any governmental customer to secure payments or performance pursuant to any contract or statute, or to secure indebtedness we incur or guarantee with respect to the acquisition or construction of the
property subject to the liens; and |
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any renewal, extension or replacement for any lien permitted by one of the exceptions described above. (Section 1009) |
Limitations on Sale Leaseback Arrangements. The indenture also restricts our ability and the ability of any of our restricted
subsidiaries to enter into sale-leaseback transactions with respect to any principal property. A sale-leaseback transaction is permitted if we or the restricted subsidiary would be permitted to incur indebtedness secured by the principal property at
least equal in amount to the attributable debt with respect to the transaction, or the greater of the net proceeds of the sale or the attributable debt with respect to the transaction is used to prepay our long-term debt or the long-term debt of any
restricted subsidiary (other than debt owed to us or another restricted subsidiary). Sale-leaseback transaction means, subject to some exceptions, an arrangement pursuant to which we, or a restricted subsidiary, transfers a principal property to a
person and leases it back from that person. Attributable debt for a sale-leaseback transaction means the lesser of the fair market value of the property, as determined by our board of directors, or the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease. (Section 1010)
The indenture will not otherwise limit our ability
to incur additional debt, except as otherwise described in a prospectus supplement.
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Certain Other Covenants
The indenture contains certain other covenants, including among other things, maintenance of corporate existence and other properties and
payment of taxes.
Consolidation, Merger or Sale
Under the indenture, we may not consolidate with or merge into another entity, transfer our assets substantially as an entirety to another
entity, permit any entity to consolidate with or merge into us, or acquire the assets substantially as an entirety of another entity, unless:
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the successor entity is a U.S. entity that is a corporation, limited liability company, partnership or trust and assumes all of our obligations, as applicable, under the outstanding debt securities and the indenture;
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immediately following the transaction, no event of default and no event that, after notice or lapse of time or both, would become an event of default, has occurred and is continuing; and |
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an officers certificate and a legal opinion have been delivered to the trustee confirming that the transaction is being effected in compliance with the indenture. (Section 801) |
Defeasance and Covenant Defeasance
Any
series of issued debt securities may be subject to the defeasance and discharge provisions of the indenture. Under those provisions, the debt securities of any series may authorize us to elect:
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to defease and to discharge us from any and all of our obligations with respect to those debt securities, except for the rights of holders of those debt securities to receive payments on the securities solely from the
trust fund established pursuant to the indenture and the obligations to exchange or register the transfer of the securities, to replace temporary or mutilated, destroyed, lost or stolen securities, to maintain an office or agency with respect to the
securities and to hold moneys for payment in trust, which we refer to as a defeasance; or |
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to be released from our obligations with respect to those debt securities to comply with the restrictive covenants which are subject to covenant defeasance, and the occurrence of certain events of default with respect
to those restrictive covenants shall no longer be an event default, which we refer to as a covenant defeasance. (Sections 1302 and 1303) |
To invoke defeasance or covenant defeasance with respect to any series of debt securities, we must irrevocably deposit with a trustee, in
trust, money or U.S. Government obligations, or both, which will provide money in an amount sufficient to pay all sums due on that series. (Section 1304)
As a condition to defeasance or covenant defeasance, we must deliver to the trustee an opinion of counsel stating that holders of the
applicable debt securities will not recognize gain or loss for federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if we did not elect the defeasance or covenant defeasance. We may exercise our defeasance option with respect to the securities notwithstanding our prior exercise of our covenant defeasance option. If we exercise our
defeasance option, payment of the securities may not be accelerated by the reference to restrictive covenants which are subject to covenant defeasance. If we do not comply with our remaining obligations after exercising our covenant defeasance
option and the securities are declared due and payable because of the occurrence of any event of default, the amount of money and U.S. Government obligations on deposit in the defeasance trust may be insufficient to pay amounts due on the securities
at the time of the acceleration. However, we will remain liable for those payments. (Sections 1302, 1303 and 1304)
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Changes to the Indenture
Holders who own more than a majority in principal amount of the outstanding debt securities of a series can agree with us to change the
provisions of the indenture relating to that series. However, no change can affect the payment terms or the percentage required to change certain other terms without the consent of all holders of debt securities of the affected series. (Section
902)
We and the trustee may enter into supplemental indentures for other specified purposes and to make changes that would not
materially adversely affect the interests of the holders of debt securities issued under the indenture, including the creation of any new series of debt securities, without the consent of all affected holders of those debt securities. (Section
901)
Governing Law
New York law
will govern the indenture and the debt securities. (Section 112)
Trustee
The Bank of New York Mellon, as successor trustee to JPMorgan Chase Bank, serves as the trustee under the indenture. If we use a different
trustee for any series of debt securities, we will inform you in a prospectus supplement. In the ordinary course of its business, The Bank of New York Mellon and its affiliates have engaged and may in the future engage in commercial and investment
banking transactions with us.
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DESCRIPTION OF COMMON STOCK
The following description of our common stock is only a summary. We encourage you to read our Amended and Restated Certificate of
Incorporation, which has been filed with the SEC and is incorporated by reference into this prospectus.
As of the date of this
prospectus, we are authorized to issue 800,000,000 shares of common stock, par value $1.00 per share, and 10,000,000 shares of preferred stock, par value $1.00 per share. As of April 17, 2014, 214,135,271 shares of common stock were
outstanding. The number of shares of common stock outstanding does not include shares issuable upon exercise of outstanding awards under our equity compensation plans. The common stock is listed on The New York Stock Exchange under the symbol
NOC.
Dividends. Dividends may be paid on the common stock and on any class or series of stock entitled to participate
with the common stock as to dividends, but only when and as declared by our board of directors and only subject to the rights of any then-outstanding series of our preferred stock.
Voting Rights. Each holder of our common stock is entitled to one vote per share on all matters submitted to a vote of stockholders and
does not have cumulative voting rights for the election of directors.
Liquidation. If we liquidate, holders of common stock are
entitled to receive all remaining assets available for distribution to stockholders after satisfaction of our liabilities and the preferential rights of any preferred stock that may be outstanding at that time.
Other Rights. Our outstanding common shares are fully paid and nonassessable. The holders of our common stock do not have any
preemptive, conversion or redemption rights.
Registrar and Transfer Agent. The registrar and transfer agent for our common stock
is Computershare Investor Services.
Some Important Charter and Statutory Provisions. We are subject to the provisions of
Section 203 of the Delaware General Corporation Law. In general, the statute prohibits a Delaware corporation which has a class of stock which is listed on a national stock exchange or which has 2,000 or more stockholders of record from
engaging in a business combination with an interested stockholder (generally, the beneficial owner of 15% or more of the corporations outstanding voting stock) for three years following the time the stockholder became an interested
stockholder, unless, prior to that time, the corporations board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder, or if at least two-thirds of the
outstanding shares not owned by that interested stockholder approve the business combination, or if, upon becoming an interested stockholder, that stockholder owned at least 85% of the outstanding shares, excluding those held by officers, directors
and some employee stock plans. A business combination includes a merger, asset sale, or other transaction resulting in a financial benefit, other than proportionately as a stockholder, to the interested stockholder.
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PLAN OF DISTRIBUTION
We may sell the securities in one or more of the following ways from time to time:
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to or through underwriters or dealers; |
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directly to one or more purchasers; |
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through a combination of any of these methods of sale. |
In addition, we may issue the securities as a dividend
or distribution or in a subscription rights offering to our existing security holders.
We may effect the distribution of the securities
from time to time in one or more transactions either:
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at a fixed price or prices which may be changed from time to time; |
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at market prices prevailing at the time of sale; |
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at prices relating to such prevailing market prices; or |
Each prospectus supplement will describe the method of distribution of the securities
and any applicable restrictions.
The prospectus supplement relating to an offering of offered securities will set forth the terms of such
offering, including:
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the name or names of any underwriters, dealers or agents; |
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the purchase price of the offered securities and the proceeds we will receive from the sale; |
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any underwriting discounts and commissions or agency fees and other items constituting underwriters or agents compensation; and |
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any initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such offered securities may be listed. |
Any initial public offering prices, discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the underwriters will acquire the offered securities for their own account and may resell them from time
to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The offered securities may be offered either to the public through underwriting syndicates
represented by one or more managing underwriters or by one or more underwriters without a syndicate. Unless otherwise set forth in a prospectus supplement, the obligations of the underwriters to purchase any series of securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase all of such series of securities, if any are purchased.
In connection with underwritten offerings of the offered securities and in accordance with applicable law and industry practice, underwriters
may over-allot or effect transactions that stabilize, maintain or otherwise affect the market price of the offered securities at levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting
syndicate covering transactions or imposing penalty bids, each of which is described below.
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A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security. |
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A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering.
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A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate
member are purchased in syndicate covering transactions. |
These transactions may be effected on the NYSE, in the
over-the-counter market, or otherwise. Underwriters are not required to engage in any of these activities, or to continue such activities if commenced.
If a dealer is used in the sale, we will sell such offered securities to the dealer, as principal. The dealer may then resell the offered
securities to the public at varying prices to be determined by that dealer at the time for resale. The names of the dealers and the terms of the transaction will be set forth in the prospectus supplement relating to that transaction.
Offered securities may be sold directly by us to one or more institutional purchasers, or through agents designated by us from time to time,
at a fixed price or prices, which may be changed, or at varying prices determined at the time of sale. Any agent involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any
commission payable by us to such agent will be set forth, in the prospectus supplement relating to that offering. Unless otherwise indicated in such prospectus supplement, any such agent will be acting on a best efforts basis for the period of its
appointment.
If we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby
underwriting agreement with dealers, acting as standby underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis. If we do not enter into a standby underwriting arrangement, we
may retain a dealer-manager to manage a subscription rights offering for us.
Underwriters, dealers and agents may be entitled under
agreements entered into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that the underwriters, dealers or agents may be required to make
in respect thereof. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for us and our affiliates in the ordinary course of business.
If so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit
offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the
aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts will not be subject to any
conditions except that:
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the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that institution is subject; and
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if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have purchased such securities not sold for delayed delivery. The underwriters and other persons
acting as our agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts. |
Certain agents, underwriters and dealers, and their associates and affiliates may be customers of, have borrowing relationships with, engage
in other transactions with, and/or perform services, including investment banking services, for us or one or more of our respective affiliates in the ordinary course of business.
14
Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to
settle in three business days, unless the parties to any such trade expressly agree otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more than three scheduled business days after the
trade date for your securities. Accordingly, in such a case, if you wish to trade securities on any date prior to the third business day before the original issue date for your securities, you will be required, by virtue of the fact that your
securities initially are expected to settle in more than three scheduled business days after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
Each series of the debt securities issued hereunder will be a new issue of securities, will have no prior trading market, and may or may not
be listed on a national securities exchange. Any underwriters to whom we sell debt securities for public offering and sale may make a market in the securities, but such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. We cannot assure you that there will be a market for the offered securities.
VALIDITY OF THE SECURITIES
Unless the applicable prospectus supplement indicates otherwise, Wilmer Cutler Pickering Hale and Dorr
LLP, will issue an opinion about the validity of the senior debt securities and common stock. Underwriters, dealers or agents, who we will identify in a prospectus supplement may have their counsel opine about certain legal matters relating to the
securities.
EXPERTS
The consolidated financial statements of Northrop Grumman Corporation and subsidiaries (the Company) and the effectiveness of the
Companys internal control over financial reporting incorporated in this prospectus by reference from the Companys Annual Report on Form 10-K for the year ended December 31, 2013, have been audited by Deloitte & Touche LLP,
an independent registered public accounting firm, as stated in their reports thereon, which are incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim condensed consolidated financial statements
for the period ended March 31, 2014 which are incorporated herein by reference, Deloitte & Touche LLP, an independent registered public accounting firm, has applied limited procedures in accordance with the standards of the Public
Company Accounting Oversight Board (United States) for a review of such information. However, as stated in their report included in the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and incorporated by
reference herein, they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review
procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim financial information because those reports are not
reports or a part of the Registration Statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act.
15
$600,000,000 3.850% Senior Notes
due 2045
PROSPECTUS SUPPLEMENT
Joint
Book-Running Managers
|
|
|
|
|
Deutsche Bank Securities |
|
J.P. Morgan |
BofA Merrill Lynch |
|
Mizuho Securities |
|
MUFG |
Senior Co-Managers
|
|
|
|
|
BNP PARIBAS |
|
Citigroup |
|
Credit Suisse |
Goldman, Sachs & Co. |
|
RBS |
|
Wells Fargo Securities |
Co-Managers
|
|
|
|
|
Blaylock Beal Van, LLC |
|
Drexel Hamilton |
|
Mischler Financial Group, Inc. |
February 3, 2015
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