...in Addition to Other Things...

Northrop Grumman Corporation reported net income from continuing operations of $226 million for the 2002 fourth quarter, compared with adjusted net income from continuing operations of $195 million in the fourth quarter of 2001. (These
results are adjusted to exclude amortization of goodwill in 2001.)

Northrop Grumman's 2002 fourth quarter and year-end income statements do not include TRW's post-acquisition results because they were not material. On an economic earnings basis, Northrop Grumman's 2002 fourth quarter earnings from continuing operations increased to $238 million, compared with $156 million for the comparable period in 2001

Fourth quarter 2002 sales increased 17 percent to $4.8 billion from $4.1 billion in the comparable 2001 period, primarily due to the inclusion of the full quarter results for Newport News, which was acquired on November 29, 2001. The company generated net cash from operations of $748 million for the 2002 fourth quarter, a 20 percent increase compared with $625 million for the same period last year.

Operating results improved, as well.

Northrop Grumman's operating margin for the 2002 fourth quarter increased 8 percent to $411 million from an adjusted $381 million in the prior year. "Our 2002 fourth quarter operating performance was outstanding, with all of our segments generating excellent cash from operations," said Kent Kresa, Northrop Grumman chairman and chief executive officer.  "The results also include double digit increases in both net income and economic earnings. Together with the former TRW defense businesses, which completed one of their most impressive years ever, we are well positioned to benefit from increasing defense budgets and homeland security initiatives.  The new Northrop Grumman enters 2003 with an unparalleled business portfolio tightly focused on defense-related programs, a $26 billion funded order backlog, and expected 2003 sales of $25 billion to $26 billion," Kresa concluded.

2002 Results

"For the year ended Dec. 31, 2002, income from continuing operations and before the cumulative effect of an accounting change totaled $697 million compared with an adjusted $642 million in the prior year. Net income for the year was $64 million and includes a previously reported $432 million charge for the cumulative effect of an accounting change on Jan. 1, 2002, to recognize the impairment of goodwill in the company's Component Technologies reporting units, along with the expected loss from the sale of certain of these discontinued operations that totaled $201 million for the year."

FMI: www.northropgrumman.com