LOS ANGELES, April 23, 2001 (PRIMEZONE) -- Northrop Grumman Corporation (NYSE:NOC) today reported first quarter 2001 economic earnings of $101 million, or $1.39 per share, compared to $101 million, or $1.44 per share, for the first quarter of 2000 based on average diluted shares outstanding of 72.8 million in the first quarter of 2001 compared to 69.9 million in last year's first quarter. Economic earnings are defined as income from continuing operations, excluding the after-tax effects of pension income and amortization of goodwill and other purchased intangibles. First quarter 2001 results do not include the company's acquisition of Litton Industries Inc. (NYSE:LIT), which closed on April 3, 2001.

Under Generally Accepted Accounting Principles (GAAP), the company reported first quarter 2001 net income of $103 million, or $1.42 per share, compared to net income from continuing operations of $156 million, or $2.23 per share, reported for the first quarter last year. The decrease in net income is primarily due to the previously announced reduction in pension income.

Sales for the first quarter ended March 31 increased 10 percent to nearly $2.0 billion from $1.8 billion reported for the first quarter of 2000. Northrop Grumman's operating margin for the quarter was $190 million, compared with $287 million reported for the same period a year ago. Operating margin for the first quarter of this year included $69 million of pension income, significantly lower than the $140 million in the first quarter of 2000. Pension income for 2001, excluding any income or expense from the Litton pension plans, is expected to be approximately $280 million. Including Litton, the preliminary estimate for 2001 pension income is $330 million to $350 million.

"We are pleased to report another solid quarter of growth in sales and contract acquisitions, led by double digit increases at our Electronic Sensors and Systems Sector (ES3) and Logicon," said Kent Kresa, Northrop Grumman's chairman, president and chief executive officer. "The Litton acquisition, along with our excellent internal growth prospects and a positive defense spending environment, places our company on an excellent growth trajectory. Our recently announced strategic acquisition of Aerojet-General's Electronic Information Systems group will further enhance our position in the dynamic space sensors and systems arena and will also increase our missile defense program capabilities. We are confident that the new Northrop Grumman, with its outstanding management team, technologies and portfolio of businesses, is well positioned to capitalize on the opportunities that lie ahead.

"In order to achieve our synergy goals, we're moving aggressively to integrate Litton's businesses into Northrop Grumman. We're confident that this process will be completed by the end of this year," added Kresa. "With the addition of Litton, we expect sales of more than $13 billion this year, in line with our previously announced pro-forma sales of $15 billion. We are targeting 2001 economic earnings per share of $7.00 to $7.40, with double-digit increases through 2003."

Litton's financial data will be included in Northrop Grumman's financial statements beginning with the second quarter of 2001.

Northrop Grumman's contract acquisitions increased 51 percent to $2.2 billion in the first quarter of 2001 from $1.5 billion in the same period a year ago, with increases at all three of the company's sectors. For the first quarter 2001, the company's Integrated Systems Sector (ISS) reported higher Joint STARS funding; ES3 received full funding on the Wedgetail contract and Logicon reported contract acquisitions from the three companies Northrop Grumman acquired in 2000. The company's business backlog at March 31, 2001, was $10.3 billion, compared with the $8.2 billion reported a year earlier.

Sales for ISS were $733 million in the first quarter, down 14 percent from the same period a year ago, reflecting lower B-2 sales. Operating margin for the quarter was $80 million, compared with $100 million reported last year, which included one B-2 delivery.

ES3 reported sales of $701 million in the first quarter of 2001, a 17 percent increase from the same period of 2000. Operating margin for the quarter was $36 million, essentially unchanged from the same period a year ago. First quarter 2001 sales included higher automation and information and land combat revenue as well as several new development programs in the Aerospace Electronic Systems business area, such as F-16 block upgrades and Wedgetail. No operating margin is being recorded on these Aerospace programs while they are in the early stages of development.

Logicon reported sales of $589 million in the quarter ended March 31, 2001, an increase of 56 percent over the same period a year ago. Logicon's sales growth is due to the sales generated by the newly acquired Federal Data, Sterling's Federal Systems Group, and the Federal Systems unit of Comptek Research Inc. Logicon's operating margin was $24 million in the quarter, down from the $31 million reported in the first quarter of 2000, which included a $5 million noncash positive adjustment related to retiree benefits. Logicon's first quarter 2001 operating margin also reflected a $7 million increase in amortization of goodwill and other purchased intangibles and a change in product mix to lower margin business.

Northrop Grumman's net debt at March 31, 2001, was $1.5 billion, up from the $1.3 billion reported at Dec. 31, 2000. Interest expense for the first quarter was $47 million, essentially unchanged from the $46 million reported in the first quarter of 2000. In February 2001, Northrop Grumman issued $1.5 billion in long-term notes and debentures. The proceeds generated $9 million in interest income in the first quarter of 2001 prior to its use in April 2001 for the Litton acquisition.

Northrop Grumman Corporation is a $15 billion, global aerospace and defense company with its worldwide headquarters in Los Angeles. Northrop Grumman provides technologically advanced, innovative products, services and solutions in defense and commercial electronics, systems integration, information technology and non-nuclear shipbuilding and systems. With 80,000 employees and operations in 44 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.

Note: Certain statements and assumptions in this release contain or are based on "forward-looking" information (that the company believes to be within the definition in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties. Such "forward-looking" information includes the statements above as to the impact of the proposed acquisition on revenues and earnings. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the company's control. These include the company's ability to successfully integrate the operations of Litton, assumptions with respect to future revenues, expected program performance and cash flows, the outcome of contingencies including litigation, environmental remediation, divestitures of businesses, and anticipated costs of capital investments. The company'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, the company's successful performance of internal plans; government customers' budgetary restraints; 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 defense equipment, military and civilian electronic systems and support and information technology; as well as other economic, political and technological risks and uncertainties and other risk factors set out in the company's filings from time to time with the Securities and Exchange Commission, including, without limitation, the company's reports on Form 10-K and Form 10-Q.

Northrop Grumman will webcast its security analyst conference call at 2 p.m. E.D.T. on April 23, 2001. A live audio broadcast of the conference call will be available on the investor relations page of the company's Web site at http://www.northropgrumman.com . The conference call is also available by calling (303) 267-1021. For those who cannot participate in this call in real time, it will be recorded and available through April 25 by calling (303) 804-1855 and using passcode #987270.

LEARN MORE ABOUT US: Northrop Grumman news releases, product information, photos and video clips are available on the Internet at: http://www.northropgrumman.com

                                 FINANCIAL HIGHLIGHTS
                         ($ in millions, except per share)

                                             FIRST QUARTER
                                          2001             2000
                                     ------------      ------------

 Economic earnings1                      $ 101            $ 101
 Economic earnings per share(1)          $1.39            $1.44

 Net cash provided by (used in) 
  operating activities                   $ (33)           $  91

 EBITDAP(2)                              $ 221            $ 234
 EBITDAP per share(2)                    $3.04            $3.36

 Debt to capitalization ratio(3)            44%              29%

                                        MAR. 31           DEC. 31
                                          2001              2000
                                     ------------      ------------
 Cash and cash equivalents             $ 1,636          $   319
 Accounts receivable                     1,493            1,557
 Inventoried costs                         749              585
 Property, plant and equipment, net      1,014            1,015
 Total debt                              3,105            1,615
 Net debt(4)                             1,469            1,296
 Shareholders' equity                    4,007            3,919
 Total assets                           11,185            9,622

 (1)  Diluted earnings from continuing operations per share excluding
      pension income and amortization of goodwill and other purchased
      intangibles, after tax. The company believes that economic
      earnings is a better performance metric of operating results.
      Pension income is a noncash item which is impacted more by 
      market conditions than by the entity's results from operations.
      Amortization of goodwill and other purchased intangibles are 
      also noncash items which do not require recurring cash outflows 
      for replenishment and upgrades like property, plant and 

 (2)  Earnings Before Interest, Taxes, Depreciation, Amortization, and
     Pension Income

 (3)  Total debt divided by the sum of shareholders' equity and total
 (4)  Total debt less cash and cash equivalents

                            NORTHROP GRUMMAN CORPORATION
                                 OPERATING RESULTS
                           QUARTER ENDED MARCH 31, 2001
                         ($ in millions, except per share)

                                    CONTRACT               FUNDED
                                  ACQUISITIONS          ORDER BACKLOG
                                  FIRST QUARTER           MARCH 31,
                                 2001      2000        2001      2000

 Integrated Systems           $    615  $    462  $  4,173  $  4,057
 Electronic Sensors & 
  Systems                          987       595     5,265     3,518
 Logicon                           636       437       990       668
 Intersegment Eliminations         (38)      (35)     (108)      (87)
                              --------  --------  --------  --------
    TOTAL SECTOR              $  2,200  $  1,459  $ 10,320  $  8,156
                              ========  ========  ========  ======== 

                                      NET SALES       OPERATING MARGIN
                                    FIRST QUARTER      FIRST QUARTER

                                 2001       2000       2001      2000

 Integrated Systems            $   733   $   856   $    80  $    100
 Electronic Sensors &
  Systems                          701       601        36        34
 Logicon                           589       378        24        31
 Intersegment Eliminations         (37)      (33)

    TOTAL SECTOR              $  1,986   $ 1,802       140       165

        Other items included in operating margin
    Corporate expenses                                  (9)      (7)
    Deferred state tax provision                       (10)     (11)
    Pension income                                      69       140
                                                     -----     -----

 Operating margin                                      190       287

 Other income, net                                      17         2
 Interest expense                                      (47)      (46)
                                                     -----     -----

 Income from continuing operations before taxes        160       243

 Federal and foreign income taxes                       57        87
                                                     -----     -----
 Income from continuing operations                     103       156

 Income from discontinued operations, net of tax                  17
 Net income                                          $ 103     $ 173
                                                     =====     =====

 Diluted earnings per share
  Continuing operations                              $1.42     $2.23
  Discontinued operations                                       0.24
                                                     -----     -----
  Diluted earnings per share                         $1.42     $2.47
                                                     =====     =====

                               NORTHROP GRUMMAN CORPORATION
                             ADDITIONAL SEGMENT INFORMATION
                                      ($ in millions)

                                                2001       2000
        ACS                                    $ 406      $ 502
        AEW/EW                                   166        183
        AGS/BM                                   165        176
        Intrasegment Eliminations                 (4)        (5)
                                               ------    ------
                                                $ 733     $ 856
                                               ======    ======
        Aerospace Electronic Systems           $ 325      $ 257
        C3I&N                                    200        177
        Defensive Electronic Systems              83         96
        Other                                     93         71
                                               -----      -----
                                               $ 701      $ 601
                                               =====      =====
        Government Information Technology      $ 276      $ 183
        Enterprise Information Technology        141         37
        Technology Services                      113        117
        Commercial Information Technology         59         41
                                               -----      ----- 
                                               $ 589      $ 378
                                               =====      =====

  OTHER PURCHASED INTANGIBLES                    2001       2000
 Integrated Systems                            $  12      $  11
 Electronic Sensors and Systems                   34         34
 Logicon                                          11          4
                                               -----      -----
                                               $  57      $  49
                                               =====      =====
  CONTACT:  Northrop Grumman Corporation, Los Angeles
          Bob Bishop (Media) 
          (310) 201-3335
          Gaston Kent (Investors) 
          (310) 201-3423