Press Release

Northrop Grumman Settles Heritage TRW Lawsuit

By SpaceRef Editor
June 9, 2003
Filed under , ,

Northrop Grumman Corporation
agreed to settle a joint complaint filed by a former TRW Inc.
employee and the U.S. Department of Justice under the qui tam provisions of
the civil False Claims Act.

The company said it will pay approximately $111 million to settle claims
that TRW, acquired by Northrop Grumman in December 2002, misclassified various
costs and improperly charged those costs to certain of its federal contracts.
The suits were originally filed under seal in 1994 and 1995 in the U.S.
District Court for the Central District of California.

The company expressly denied any liability for violating the False Claims
Act and has agreed to settle this matter, allowing management to focus on the
excellent business prospects for the heritage TRW businesses and the entire
Northrop Grumman enterprise.

Northrop Grumman said the settlement amount was contemplated in the
company’s acquisition of TRW. The company continues to expect 2003 earnings
per share of $3.80 to $4.20. Although cash from operations will be affected
by the settlement, the company still expects 2003 cash from operations of
$1.1 billion to $1.3 billion, excluding the $1.0 billion B-2 tax payment.

Northrop Grumman Corporation is a $25 billion global defense company,
headquartered in Los Angeles, Calif. Northrop Grumman provides
technologically advanced, innovative products, services and solutions in
systems integration, defense electronics, information technology, advanced
aircraft, shipbuilding and space technology. With approximately
120,000 employees and operations in all 50 states and 25 countries, Northrop
Grumman serves U.S. and international military, government and commercial
customers.

Forward-Looking Information

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

Such “forward-looking” information is based on numerous assumptions and
uncertainties, many of which are outside Northrop Grumman’s control. These
include Northrop Grumman’s ability to successfully integrate its acquisitions,
including TRW, to realize the preliminary estimates for accounting conformance
and purchase accounting valuations for TRW which will be finalized in the 2003
fourth quarter and which may materially vary from these estimates, assumptions
with respect to future revenues, expected program performance and cash flows,
returns on pension plan assets and variability of pension actuarial and
related assumptions, the outcome of litigation and appeals, environmental
remediation, divestitures of businesses, successful reduction of debt,
successful negotiation of contracts with labor unions, effective tax rates and
timing and amounts of tax payments, and anticipated costs of capital
investments, among other things. Northrop Grumman’s operations are subject to
various additional risks and uncertainties resulting from its position as a
supplier, either directly or as subcontractor or team member, to the U.S.
Government and its agencies as well as to foreign governments and agencies;
actual outcomes are dependent upon factors, including, without limitation,
Northrop Grumman’s successful performance of internal plans; government
customers’ budgetary constraints; customer changes in short-range and long-
range plans; domestic and international competition in both the defense and
commercial areas; product performance; continued development and acceptance of
new products; performance issues with key suppliers and subcontractors;
government import and export policies; acquisition or termination of
government contracts; the outcome of political and legal processes; legal,
financial, and governmental risks related to international transactions and
global needs for military aircraft, military and civilian electronic systems
and support, information technology, naval vessels, space systems and related
technologies, as well as other economic, political and technological risks and
uncertainties and other risk factors set out in Northrop Grumman’s filings
from time to time with the Securities and Exchange Commission, including,
without limitation, Northrop Grumman reports on Form 10-K and Form 10-Q.

SpaceRef staff editor.