PASCAGOULA, Miss. -- June 30, 2004 -- Under the U.S. Coast Guard's Deepwater program, Northrop Grumman Corporation (NYSE: NOC) has been awarded approximately $250 million in production and long lead material contracts for the first Maritime Security Cutter, Large (WMSL), formerly named the National Security Cutter, which is a highly capable high-endurance cutter.

These contracts, awarded to the company's Ship Systems sector, bring the lead ship of the most advanced cutter class in the Coast Guard's fleet one step closer to delivery and leverage significant continued production savings across three different cutter classes by sharing the same design team, with common systems, logistics, and training.

The Ship Systems sector leads the construction effort as a major partner in Integrated Coast Guard Systems, a joint venture of Northrop Grumman and Lockheed Martin. The ship will be manufactured here at the Northrop Grumman's Pascagoula shipyard. Construction will begin in September 2004 with the keel laying to follow in April 2005. The anticipated delivery date for the lead ship is the second quarter of 2007.

"This cutter will significantly enhance the maritime security capabilities and efforts of the U.S. Coast Guard," said Dr. Philip A. Dur, president, Northrop Grumman Ship Systems. "Our shipbuilders are experienced in building complex and sophisticated surface combatants which this class of cutters exemplifies. We are proud to be on the Deepwater team, and ready to deliver these ships on an accelerated schedule if that becomes necessary and feasible."

The WMSL will be a 421-foot vessel with a 4,112-ton displacement at full load, when delivered, and will be powered by a twin-screw combined diesel and gas turbine power propulsion plant designed to cruise at a maximum speed of 28 knots. The cutter will include an aft launch and recovery area for two rigid hull inflatable boats, a flight deck to accommodate a range of rotary-wing manned and unmanned aircraft and state of the art command and control electronics.

"The National Security Cutter team is well prepared to begin construction on this ship, and to further provide a product built ready and able to fulfill the U.S. Coast Guard's maritime missions," said Judy Wheat, program manager for the National Security Cutter. "Our entire Deepwater team will continue to survey cost savings and will establish a best value analysis for equipment and component standardization to fully understand the life-cycle cost savings associated with this effort."

Integrated Deepwater System (IDS) is a critical multiyear, multibillion-dollar program to modernize and replace the Coast Guard's aging ships and aircraft, and improve command and control and logistics systems. It is the largest recapitalization effort in the history of the Coast Guard. When complete, the interoperable IDS system will include three classes of new cutters and their associated small boats, a new fixed-wing manned aircraft fleet, a combination of new and upgraded helicopters, and both cutter-based and land-based unmanned aerial vehicles. All of these highly capable assets are linked with command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems, and are supported by a new and far-reaching integrated logistics system.

Northrop Grumman Ship Systems includes primary operations in Pascagoula and Gulfport, Miss., and in New Orleans and Tallulah, La., as well as in a network of fleet support offices in the U.S. and Japan. Ship Systems is one of the nation's leading full-service systems companies for the design, engineering, construction and life-cycle support of major surface ships for the U.S. Navy, U.S. Coast Guard and international navies, and for commercial vessels of all types.

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Bill Glenn
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william.glenn@ngc.com