Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Long-Term Debt

10. DEBT

Commercial Paper

The company maintains a commercial paper program that serves as a source of short-term financing with capacity to issue unsecured commercial paper notes up to $2.0 billion. There were no commercial paper borrowings outstanding at December 31, 2021 and December 31, 2020, respectively. The outstanding balance of commercial paper borrowings is recorded in Other current liabilities in the consolidated statements of financial position.

Credit Facility

In August 2018, the company entered into a five-year senior unsecured credit facility in an aggregate principal amount of $2.0 billion (the “2018 Credit Agreement”). In October 2019, the company amended the 2018 Credit Agreement to extend its maturity date by one year from August 2023 to August 2024. The revolving credit facility established under the 2018 Credit Agreement is intended to support the company’s commercial paper program and other general corporate purposes. At December 31, 2021, there was no balance outstanding under this facility. Commercial paper borrowings reduce the amount available for borrowing under the 2018 Credit Agreement.

Our credit agreement contains generally customary terms and conditions, including covenants restricting the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake other fundamental changes and incur liens. The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreement) to exceed 65 percent. At December 31, 2021, the company was in compliance with all covenants under its credit agreement.

Unsecured Senior Notes

Repayments of Senior Notes
In March 2021, the company repaid $700 million of 3.50 percent unsecured notes upon maturity.

In March 2021, the company redeemed $1.5 billion of 2.55 percent unsecured notes due October 2022. The company recorded a pre-tax charge of $54 million principally related to the premium paid on the redemption, which was recorded in Other, net in the unaudited condensed consolidated statements of earnings and comprehensive income.

Debt Exchange
On September 2, 2021, the company completed an exchange offer to eligible holders of the outstanding notes of our direct wholly owned subsidiary, Northrop Grumman Systems Corporation (“NGSC”) maturing through 2036. An aggregate principal amount of $422 million of the NGSC notes was exchanged for $422 million of Northrop Grumman Corporation notes with the same interest rates and maturity dates as the NGSC notes exchanged. Because

the debt instruments are not substantially different, the exchange was treated as a debt modification for accounting purposes with no gain or loss recognized.

Long-term debt consists of the following:

$ in millions		December 31
		2021		2020
Fixed-rate notes and debentures, maturing in	Interest rate
2021	3.50%	$	—	$	700
2022	2.55%	—		1,500
2023	3.25%	1,050		1,050
2025	2.93%	1,500		1,500
2026	7.75% - 7.88%	527		527
2027	3.20%	750		750
2028	3.25%	2,000		2,000
2030	4.40%	750		750
2031	7.75%	466		466
2040	5.05% - 5.15%	800		800
2043	4.75%	950		950
2045	3.85%	600		600
2047	4.03%	2,250		2,250
2050	5.25%	1,000		1,000
Other	Various	205		235
Debt issuance costs		(65)		(75)
Total long-term debt		12,783		15,003
Less: current portion(1)		6		742
Long-term debt, net of current portion		$	12,777	$	14,261

(1) The current portion of long-term debt is recorded in Other current liabilities in the consolidated statements of financial position.

The estimated fair value of long-term debt was $15.1 billion and $18.2 billion as of December 31, 2021 and 2020, respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements.

Indentures underlying long-term debt issued by the company or its subsidiaries contain various restrictions with respect to the issuer, including one or more restrictions relating to limitations on liens, sale-leaseback arrangements and funded debt of subsidiaries. The majority of these fixed rate notes and debentures are subject to redemption at the company’s discretion at any time prior to maturity in whole or in part at the principal amount plus any make-whole premium and accrued and unpaid interest. Interest on these fixed rate notes and debentures are payable semi-annually in arrears.

Total interest payments, net of interest received, were $570 million, $572 million and $521 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Maturities of long-term debt as of December 31, 2021, are as follows:

$ in millions
Year Ending December 31
2022	$	6
2023	1,063
2024	3
2025	1,503
2026	530
Thereafter	9,757
Total principal payments	12,862
Unamortized premium on long-term debt, net of discount	(14)
Debt issuance costs	(65)
Total long-term debt	$	12,783