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Northrop Grumman Reports Second Quarter 2005 Results



 Earnings Per Share from Continuing Operations Increase 22 Percent
 to $1.00

 Income from Continuing Operations Increases 23 Percent to $366
 Million

 Sales Increase 7 Percent to $8 Billion

 Cash from Operations Increases 33 Percent to $813 Million

 2005 Earnings Per Share Guidance Raised to $3.90 to $4.00

 2006 Earnings Per Share Projected to Range between $4.10 to $4.30

LOS ANGELES, July 28, 2005 (PRIMEZONE) -- Northrop Grumman Corporation (NYSE:NOC) reported that second quarter 2005 income from continuing operations rose 23 percent to $366 million, or $1.00 per diluted share, from $298 million, or $0.82 per diluted share, for the same period of 2004. Sales for the second quarter of 2005 increased 7 percent to $8.0 billion from $7.4 billion for the same period of 2004. Previously reported second quarter 2004 sales increased $61 million as a result of the reclassification of certain operations from discontinued to continuing operations.

"We executed across the board this quarter with higher sales from every segment and double-digit increases in operating margin from five of the six businesses," said Ronald D. Sugar, Northrop Grumman chairman, chief executive officer and president. "Cash from operations showed a healthy increase, reflecting the quality of our earnings growth."

"Based on year-to-date results, we expect earnings per share growth of approximately 30 percent in 2005, reflecting our continuing focus on improving the performance of our businesses," Sugar continued.

Operating margin for the 2005 second quarter increased $123 million, or 25 percent, to $616 million from $493 million for the same period of 2004, and included a $107 million, or 19 percent, increase in segment operating margin. Higher operating margin from the company's six business segments and lower net pension and unallocated expense contributed to the increase in operating margin.

Second quarter 2005 pension expense, as determined in accordance with accounting principles generally accepted in the United States, increased to $103 million from $86 million for the same period of 2004. Pension expense allocated to contracts pursuant to government Cost Accounting Standards (CAS) increased operating margin by $105 million in the second quarter of 2005 and $77 million for the same period of 2004.

Net interest expense for the 2005 second quarter declined to $69 million from $96 million for the same period of 2004. The $27 million decrease reflects lower debt than in the prior year period, as well as interest income recognized for a state tax refund related to research and development tax credits.

The effective tax rate applied to income from continuing operations for the 2005 second quarter was 33.9 percent compared with 25.5 percent in the 2004 second quarter. In the 2004 second quarter the company recognized tax credits of $31 million related to research and development and export sales activities in prior years.

Net income for the 2005 second quarter increased to $367 million, or $1.00 per diluted share, from $298 million, or $0.82 per diluted share, for the same period of 2004.

Contract acquisitions were $5.6 billion in the second quarter of 2005 compared with $5.4 billion for the same period of 2004. Total backlog, which includes funded backlog and firm orders for which funding is not currently contractually obligated by the customer, was $57.1 billion at June 30, 2005, compared with $58.1 billion at Dec. 31, 2004.

Cash Measurements and Debt

Net cash provided by operating activities for the 2005 second quarter was $813 million, compared with $610 million for the second quarter of 2004. Capital spending in the second quarter totaled $149 million.

Northrop Grumman's total debt was $5.2 billion at June 30, 2005, unchanged from Dec. 31, 2004.

2005 & 2006 Guidance

The company continues to expect sales to increase to between $31 and $31.5 billion in 2005. For 2006, the company now expects sales to increase to approximately $32 billion.

The company now expects 2005 earnings per diluted share from continuing operations to increase to $3.90 to $4.00 versus its prior guidance of $3.70 to $3.85. Guidance for 2005 includes a pre-tax gain of $59 million, or $0.11 per diluted share after-tax, from the July 2005 sale of 1.4 million shares of Endwave common stock. The gain will be included in 2005 third quarter results. The 2005 guidance also includes estimated pension expense as determined in accordance with accounting principles generally accepted in the United States of $415 million, and CAS pension expense of $395 million. The company's prior estimate of CAS pension expense was $375 million.

For 2006, the company expects earnings per diluted share from continuing operations to increase to between $4.10 and $4.30, which includes an estimated pre-tax expense of $12 million, or $0.02 per diluted share, associated with the adoption of Statement of Financial Accounting Standards No. 123R, Share-Based Payment on January 1, 2006.

On May 16, 2005, the company's board of directors approved accelerating the vesting of all outstanding unvested employee stock options (excluding elected officers), effective Sept. 30, 2005, as part of an ongoing evaluation of the company's overall incentive compensation strategy. The amount associated with the decision to accelerate vesting is being charged over the new vesting period and is not significant.

The estimated range for 2006 earnings per diluted share from continuing operations assumes that pension expense as determined in accordance with accounting principles generally accepted in the United States and CAS pension expense are the same as estimates for 2005. Actual 2006 pension expense is subject to variation and will depend on plan asset returns in 2005 and discount rate and expected rate of return assumptions.

Net cash provided by operating activities in 2005 is expected to range between $2.2 and $2.5 billion, and net cash provided by operating activities in 2006 is expected to be approximately $2.5 billion.

Share Repurchase Program

On Oct. 26, 2004, the board of directors authorized a program to repurchase $1 billion of the company's outstanding common stock. Share repurchases will take place at management's discretion and under pre-established non-discretionary programs from time to time, depending on market conditions, in the open market, and in privately negotiated transactions.

During the second quarter of 2005 the company repurchased 2.8 million common shares at an average price of $55.22 per share. As of June 30, 2005, under the current authorization, the company repurchased 14.6 million common shares at an average price of $54.56 per share. Through the end of the 2005 second quarter and since the inception of its share repurchases in August of 2003, the company has repurchased 29 million shares at an average price of $51.68.

Segment Results

Effective Jan. 1, 2005, certain business areas within the Electronic Systems, Ships and Space Technology segments were realigned and some business areas have been renamed. Where applicable, all prior period information has been reclassified to reflect these realignments, as shown in Schedule 5 of this press release.



 ELECTRONIC SYSTEMS

                                         ($ in millions)
                                          SECOND QUARTER
                               ---------------------------------------
                                      2005                2004
                               ------------------- -------------------
 Sales                                      $1,765              $1,591
 Operating Margin                              198                 138
 % Operating margin to sales                 11.2%                8.7%

Electronic Systems second quarter 2005 sales increased 11 percent from the second quarter of 2004 primarily due to increases in Aerospace Systems, Defensive & Navigation Systems, and Government Systems, partially offset by lower sales in Defense Other. Aerospace Systems revenue increased 26 percent due to higher airborne surveillance sales. Defensive & Navigation Systems revenue increased 15 percent primarily due to higher sales for the Large Aircraft Infrared Countermeasures and EA-18 programs. Government Systems revenue increased 25 percent due to higher sales of biohazard detection systems.

Electronic Systems second quarter 2005 operating margin increased 43 percent from the second quarter of 2004. Second quarter 2004 operating margin included a $60 million pre-tax charge for the F-16 Block 60 fixed-price development program, which was partially offset by improved performance and contract close-outs for several other programs. The increase in second quarter 2005 operating margin also reflects higher volume and improved performance in Government Systems.

On Jan.1, 2005, the manufacturer of complex printed circuit boards and assemblies and the electronic connector manufacturer previously reported under "Other" were realigned to the company's Electronic Systems segment. The impact to prior year results for Electronic Systems is not significant and prior year results have not been reclassified.



 SHIPS
                                            ($ in millions)
                                             SECOND QUARTER
                                 -----------------------------------
                                       2005               2004
                                 ----------------- -----------------
 Sales                                      $1,587            $1,557
 Operating Margin                              101               100
 % Operating margin to sales                  6.4%              6.4%

Ships second quarter 2005 sales, which include the financial results of the Newport News and Ship Systems sectors, increased 2 percent from the second quarter of 2004, primarily due to higher sales in Expeditionary Warfare, Submarines and Aircraft Carriers, which were partially offset by lower sales in Surface Combatants.

Ships second quarter 2005 operating margin increased 1 percent from the second quarter of 2004. The increase includes favorable performance in Aircraft Carriers, which was offset by lower performance in Surface Combatants and Expeditionary Warfare.



 INTEGRATED SYSTEMS

                                           ($ in millions)
                                            SECOND QUARTER
                                -------------------------------------
                                       2005               2004
                                ------------------ ------------------
 Sales                                      $1,404             $1,133
 Operating Margin                              108                 90
 % Operating margin to sales                  7.7%               7.9%

Integrated Systems second quarter 2005 sales increased 24 percent from the second quarter of 2004 due to higher sales in Air Combat Systems and Airborne Early Warning and Electronic Warfare Systems. Air Combat Systems revenue rose 22 percent primarily due to higher revenue from the Joint Unmanned Combat Air System program. Airborne Early Warning and Electronic Warfare Systems revenue increased 38 percent due to higher volume from the E-2 Advanced Hawkeye and EA-18G programs.

Integrated Systems second quarter 2005 operating margin increased 20 percent from the second quarter of 2004. Operating margin in the 2004 second quarter was favorably impacted by a contract close-out for the Joint STARS program.



 MISSION SYSTEMS

                                            ($ in millions)
                                            SECOND QUARTER
                                -------------------------------------
                                       2005               2004
                                ------------------ ------------------
 Sales                                      $1,320             $1,298
 Operating Margin                               99                 86
 % Operating margin to sales                  7.5%               6.6%

Mission Systems second quarter 2005 sales increased 2 percent from the second quarter of 2004 due to higher sales in Missile Systems, which were partially offset by lower sales in Technical & Management Services. Missile Systems sales rose 9 percent due to higher revenue in the Kinetic Energy Interceptors and Intercontinental Ballistic Missile programs. Technical & Management Services sales declined 6 percent.

Mission Systems second quarter 2005 operating margin increased 15 percent from the second quarter of 2004 primarily due to improved program performance in Missile Systems.



 INFORMATION TECHNOLOGY

                                               ($ in millions)
                                                SECOND QUARTER
                                     ---------------------------------
                                           2005             2004
                                     ---------------- ----------------
 Sales                                         $1,331           $1,225
 Operating Margin                                  89               73
 % Operating margin to sales                     6.7%             6.0%

Information Technology second quarter 2005 sales increased 9 percent from the second quarter of 2004 due to higher sales in Government Information Technology and Technical Services. Government Information Technology sales rose 14 percent due to higher volume in existing programs, new program awards, and the acquisition of Integic. Technology Services revenue increased 16 percent primarily due to higher revenue for existing programs.

Information Technology second quarter 2005 operating margin increased 22 percent from the second quarter of 2004, primarily due to higher sales and improved program performance in Government Information Technology, partially offset by lower performance in Enterprise Information Technology.



 SPACE TECHNOLOGY

                                            ($ in millions)
                                            SECOND QUARTER
                                --------------------------------------
                                       2005               2004
                                ------------------ -------------------
 Sales                                        $875                $836
 Operating Margin                               69                  61
 % Operating margin to sales                  7.9%                7.3%

Space Technology second quarter 2005 sales increased 5 percent from the second quarter of 2004, primarily due to higher sales in Civil Space and Intelligence, Surveillance & Reconnaissance, which were partially offset by lower revenue in Missile & Space Defense and Satellite Communications. Civil Space revenue increased 21 percent, due to higher volume from NASA and National Oceanic and Atmospheric Administration programs. Intelligence, Surveillance & Reconnaissance revenue rose 12 percent.

Space Technology second quarter 2005 operating margin increased 13 percent from the second quarter of 2004 due to higher sales volume in Civil Space and Intelligence, Surveillance & Reconnaissance and improved program performance in Missile & Space Defense.

Second Quarter 2005 Highlights



  -- NASA selected a Northrop Grumman -- Boeing team to compete 
     for an award to design and build the space agency's planned 
     Crew Exploration Vehicle, a human space-transportation system 
     that will serve as the Space Shuttle's replacement.  

  -- NASA awarded Northrop Grumman a software assurance services 
     ID/IQ contract valued at up to $200 million over five years. 
     Northrop Grumman will provide the space agency the capability 
     to independently verify and validate mission-critical software 
     that will support the safety requirements and technology needs 
     of the agency.   

  -- Northrop Grumman was awarded a $3.2 billion multi-year contract
     to continue production work on the F/A-18 Super Hornet.  The 
     contract covers procurement of 210 shipsets at the rate of 42 
     during each of the fiscal years 2005-2009.  

  -- The second Virginia-class submarine, Texas (SSN 775), was 
     launched on Apr. 9, 2005.  

  -- Production began on the X-47B Joint Unmanned Combat Air 
     Systems aircraft, the world's first unmanned surveillance 
     attack aircraft capable of operating from both land bases and 
     aircraft carriers. 

  -- The Counter-MANPADS System Development and Demonstration 
     program being performed for the Department of Homeland Security 
     completed system design and began installing the system on an MD-
     11 test aircraft.  Flight tests will commence in August.  

  -- The U.S. Coast Guard's innovative, fast-response cutter reached 
     a systems requirement milestone that confirmed that the Coast 
     Guard's requirements have been sufficiently developed and can 
     proceed to design development.  

  -- The AN/APG-81 fire control radar for the F-35 Joint Strike 
     Fighter passed a key milestone in system integration testing by 
     detecting airborne targets at the company's integration 
     laboratory.  

  -- The 23rd and final satellite in the long-running Defense Support 
     Program (DSP) series was shipped to the U.S. Air Force's Cape 
     Canaveral Air Station for launch preparation.  The upcoming 
     launch is a major milestone in a program that has produced many 
     technical innovations and provided the nation with a reliable 
     missile-warning system.   

  -- Northrop Grumman successfully demonstrated, ahead of schedule, 
     two key battle management capabilities for the new Kinetic Energy 
     Interceptors missile-defense program.   

  -- The LPD-17 San Antonio successfully completed acceptance trials, 
     which is the last significant milestone before delivery to the 
     Navy.  

  -- The company achieved its nineteenth CMMI(r) Level 5 rating, the 
     highest possible rating for benchmarking commercial and defense 
     industry practices for management and engineering.  

  -- Philip A. Teel was elected president, Northrop Grumman Ship 
     Systems, effective July 1, 2005.  

About Northrop Grumman

Northrop Grumman Corporation is a 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 more than 125,000 employees, and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.

Northrop Grumman will webcast its earnings conference call at 12 p.m. ET on July 28, 2005. A live audio broadcast of the conference call along with a supplemental presentation will be available on the investor relations page of the company's Web site at http://www.northropgrumman.com.

Note: 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," "believe," "guidance" 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 includes, among other things, financial guidance regarding sales, segment operating margin, pension expense, employer contributions under pension plans and medical and life benefits plans, and cash flow, and is subject to numerous assumptions and uncertainties, many of which are outside Northrop Grumman's control. These include Northrop Grumman's 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 various 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 and, in connection with any fixed price development programs, controlling cost growth in meeting production specifications and delivery rates; 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; natural disasters and terrorist acts; 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.



                    NORTHROP GRUMMAN CORPORATION           SCHEDULE 1
                        FINANCIAL HIGHLIGHTS
                 ($ in millions, except per share)
                           (unaudited)



                            SECOND QUARTER         FIRST SIX MONTHS
                         ---------------------   ---------------------
                            2005      2004 (4)      2005      2004 (4)
                         ---------   ---------   ---------   ---------
 OPERATING RESULTS HIGHLIGHTS
 Total contract
  acquisitions (1)       $   5,556   $   5,409   $  13,397   $  13,895
 Total sales                 7,962       7,435      15,415      14,599
 Total operating
  margin                       616         493       1,211         931
 Income from
  continuing
  operations                   366         298         764         530
 Net income                    367         298         776         534
 Diluted earnings
  per share from
  continuing
  operations                  1.00         .82        2.09        1.46
 Diluted earnings
  per share                   1.00         .82        2.12        1.47

 Net cash provided
  by operating
  activities                   813         610       1,076         873

 ---------------------------------------------------------------------
                          JUNE 30,     DEC 31,
                            2005      2004 (4)
                         ---------   ---------
 BALANCE SHEET HIGHLIGHTS
  Cash and cash          
   equivalents           $   1,215   $   1,230
  Accounts receivable, 
   net                       3,542       3,492
  Inventoried costs, net     1,185       1,049
  Property, plant, and 
   equipment, net            4,204       4,210
  Total debt                 5,160       5,158
  Net debt (2)               3,945       3,928
  Mandatorily redeemable 
   preferred stock             350         350
  Shareholders' equity      16,858      16,700
  Total assets              33,446      33,295

  Net debt to 
   capitalization 
   ratio (3)                    18%         18%

 ---------------------------------------------------------------------

 (1)  Contract acquisitions represent orders received during the 
      period for which funding has been contractually obligated by 
      the customer.

 (2)  Total debt less cash and cash equivalents.
 (3)  Net debt divided by the sum of shareholders' equity and total 
      debt.
 (4)  Certain prior year amounts have been reclassified to conform to 
      the 2005 presentation.


                   NORTHROP GRUMMAN CORPORATION          SCHEDULE 2
                         OPERATING RESULTS
                 ($ in millions, except per share)
                            (unaudited)





                        SECOND QUARTER         FIRST SIX MONTHS
                     --------------------    --------------------
                       2005      2004 (1)      2005      2004 (1)
                     --------    --------    --------    --------
 Sales
  Electronic
   Systems           $  1,765    $  1,591    $  3,308    $  3,129
  Ships                 1,587       1,557       3,101       3,001
  Integrated
   Systems              1,404       1,133       2,703       2,280
  Mission Systems       1,320       1,298       2,625       2,481
  Information
   Technology           1,331       1,225       2,560       2,455
  Space Technology        875         836       1,738       1,642
  Other                    11          61          22         120
  Intersegment
   Eliminations          (331)       (266)       (642)       (509)
                     --------    --------    --------    --------

                     $  7,962    $  7,435    $ 15,415    $ 14,599
                     ========    ========    ========    ========

 Operating margin
  Electronic
   Systems           $    198    $    138    $    359    $    296
  Ships                   101         100         205         186
  Integrated
   Systems                108          90         244         206
  Mission Systems          99          86         190         162
  Information
   Technology              89          73         174         144
  Space Technology         69          61         131         112
  Other                    (5)          4          (6)          6
                     --------    --------    --------    --------
 Total segment
  operating
  margin (2)              659         552       1,297       1,112

 Reconciliation to
  operating margin
  Unallocated
   expenses               (42)        (47)        (69)       (154)
  Pension expense        (103)        (86)       (206)       (177)
  Reversal of CAS
   pension expense
   included above         105          77         197         157
  Reversal of
   royalty income
   included above          (3)         (3)         (8)         (7)
                     --------    --------    --------    --------

 Operating margin         616         493       1,211         931

 Interest income           25          16          39          32
 Interest expense         (94)       (112)       (189)       (225)
 Other, net                 7           3          89          13
                     --------    --------    --------    --------

 Income from
  continuing
  operations
  before income
  taxes                   554         400       1,150         751

 Federal and
  foreign income
  taxes                   188         102         386         221
                     --------    --------    --------    --------

 Income from
  continuing
  operations              366         298         764         530

 Income from
  discontinued
  operations, net
  of tax                                                        1
 Gain from
  disposal of
  discontinued
  operations, net
  of tax                    1                      12           3
                     --------    --------    --------    --------

 Net income          $    367    $    298    $    776    $    534
                     ========    ========    ========    ========

 Weighted average
  diluted shares
  outstanding, in
  millions              365.2       363.5       365.7       364.3

 Diluted earnings
  per share

  Continuing
   operations        $   1.00    $    .82    $   2.09    $   1.46
  Disposal of
   discontinued
   operations                                     .03         .01
                     --------    --------    --------    --------
 Diluted earnings
  per share          $   1.00    $    .82    $   2.12    $   1.47
                     ========    ========    ========    ========


 ---------------------------------------------------------------------
 (1) Certain prior year amounts have been reclassified to conform to
     the 2005 presentation.

 (2)  Non-GAAP measure. Management uses segment operating margin as an
      internal measure of financial performance for the individual
      business segments. Pension expense is included in determining
      segment operating margin to the extent that the cost is 
      currently recognized under U.S. Government Cost Accounting 
      Standards (CAS). In order to reconcile from segment operating 
      margin to total company operating margin, these amounts are 
      reported under the caption "Reversal of CAS pension expense 
      included above." Total pension expense or income determined in 
      accordance with accounting principles generally accepted in the 
      United States is reported separately as a reconciling item 
      under the caption "Pension expense." The reconciling item 
      captioned "Unallocated expenses" includes the portion of 
      corporate, legal, environmental, other retiree benefits, stock 
      compensation, and other expenses not allocated to the segments.


                   NORTHROP GRUMMAN CORPORATION        SCHEDULE 3
                  ADDITIONAL SEGMENT INFORMATION
                         ($ in millions)
                           (unaudited)



                           CONTRACT                     FUNDED
                         ACQUISITIONS(1)               BACKLOG(2)
               ----------------------------------- ------------------
                SECOND QUARTER   FIRST SIX MONTHS       JUNE 30,
               ----------------- ----------------- -----------------
                 2005   2004 (3)   2005   2004 (4)   2005   2004 (3)
               -------- -------- -------- -------- -------- -------- 

 Electronic
  Systems      $  1,393 $  1,489 $  3,065 $  3,261 $  6,535 $  6,600
 Ships              321      592    1,487    2,110    7,551    8,858
 Integrated
  Systems           667      820    2,606    2,588    4,594    4,606
 Mission
  Systems         1,157      990    2,412    2,326    2,954    2,750
 Information
  Technology      1,505    1,207    2,811    2,401    2,819    2,265
 Space
  Technology        737      552    1,610    1,685    1,621    1,601
 Other               14       64       27      130       33       73
 Intersegment
  Eliminations     (238)    (305)    (621)    (606)    (563)    (529)
               -------- -------- -------- -------- -------- --------
 Total         $  5,556 $  5,409 $ 13,397 $ 13,895 $ 25,544 $ 26,224
               ======== ======== ======== ======== ======== ========


                     TOTAL BACKLOG, JUNE 30, 2005
               --------------------------------------
                                             TOTAL
                 FUNDED      UNFUNDED(4)    BACKLOG 
               ----------    ----------    ----------

 Electronic 
  Systems      $    6,535    $    1,725    $    8,260 
 Ships              7,551         3,350        10,901 
 Integrated 
  Systems           4,594         8,767        13,361
 Mission 
  Systems           2,954         7,585        10,539 
 Information
  Technology        2,819         3,184         6,003
 Space 
  Technology        1,621         6,956         8,577
 Other                 33            --            33 
 Intersegment 
  Eliminations       (563)           --          (563)
               ----------    ----------    ----------  
 Total         $   25,544    $   31,567    $   57,111 
               ==========    ==========    ==========

 (1)  Contract acquisitions represent orders received during the
      period for which funding has been contractually obligated by 
      the customer.

 (2)  Funded backlog represents unfilled orders for which funding has
      been contractually obligated by the customer. 

 (3)  Certain prior year amounts have been reclassified to conform to 
      the 2005 presentation.

 (4)  Unfunded backlog represents firm orders for which funding is not
      currently contractually obligated by the customer.

      Unfunded backlog excludes unexercised contract options and
      unfunded Indefinite Delivery Indefinite Quantity (IDIQ).
 ---------------------------------------------------------------------

 AMORTIZATION OF PURCHASED INTANGIBLES

                   SECOND QUARTER              FIRST SIX MONTHS
               ------------------------    -----------------------
                  2005          2004          2005         2004
               ----------    ----------    ----------   ----------

 Electronic 
  Systems      $       20    $       22    $       41   $       43
 Ships                 11            11            20           21
 Integrated
  Systems               3             3             7            7
 Mission 
  Systems               8             8            16           16
 Information
  Technology            5             4             7            9
 Space 
  Technology            8             9            17           17
               ----------    ----------    ----------   ----------
 Total         $       55    $       57    $      108   $      113
               ==========    ==========    ==========   ==========


                     NORTHROP GRUMMAN CORPORATION         SCHEDULE 4
                 SALES BY BUSINESS AREA WITHIN SEGMENTS
                            ($ in millions)
                              (unaudited)


                           SECOND QUARTER         FIRST SIX MONTHS
                        --------------------    --------------------
                          2005      2004 (1)      2005      2004 (1)
                        --------    --------    --------    --------
 Electronic Systems

  Defensive &
   Navigation
   Systems              $    534    $    465    $  1,008    $    905
  Aerospace Systems          464         367         864         770
  Naval & Marine
   Systems                   225         205         412         410
  Government
   Systems                   225         180         399         308
  C4ISR & Space
   Systems                   159         167         320         328
  Defense Other              158         207         305         408
                        --------    --------    --------    --------
                           1,765       1,591       3,308       3,129
                        --------    --------    --------    --------
 
 Ships

  Aircraft
   Carriers                  491         475         927         915
  Surface
   Combatants                407         486         852         948
  Expeditionary
   Warfare                   416         346         798         652
  Submarines                 198         178         380         340
  Coast Guard and
   Coastal Defense            42          30          82          46
  Services                    28          24          55          54
  Commercial and
   Other                      13          40          34          81
  Intrasegment
   Eliminations               (8)        (22)        (27)        (35)
                        --------    --------    --------    --------
                           1,587       1,557       3,101       3,001
                        --------    --------    --------    --------
 
 Integrated
   Systems

  Air Combat 
   Systems                   818         670       1,604       1,382
  Airborne
   Early Warning/
   Electronic
   Warfare Systems           439         318         812         598
  Airborne
   Ground
   Surveillance/
   Battle
   Management
   Systems                   148         147         291         303
  Intrasegment
   Eliminations               (1)         (2)         (4)         (3)
                        --------    --------    --------    --------
                           1,404       1,133       2,703       2,280
                        --------    --------    --------    --------
    
 Mission Systems

  Command,
   Control &
   Intelligence
   Systems                   789         791       1,579       1,514
  Missile Systems            369         337         722         622
  Technical &
   Management
   Services                  173         185         341         373
  Intrasegment
   Eliminations              (11)        (15)        (17)        (28)
                        --------    --------    --------    --------
                           1,320       1,298       2,625       2,481
                        --------    --------    --------    --------
     
 Information
  Technology

  Government
   Information
   Technology                844         740       1,600       1,493
  Commercial
   Information
   Technology                177         157         350         332
  Technology
   Services                  178         154         348         313
  Enterprise
   Information
   Technology                162         202         329         378
  Intrasegment
   Eliminations              (30)        (28)        (67)        (61)
                        --------    --------    --------    --------
                           1,331       1,225       2,560       2,455
                        --------    --------    --------    --------

  Space
   Technology

  Intelligence,
   Surveillance
   & Reconnaissance          295         263         585         500
  Civil Space                198         163         411         318
  Software
   Defined Radios            136         142         271         285
  Missile & Space
   Defense                   110         128         232         247
  Satellite
   Communications            117         131         214         269
  Technology                  34          32          62          59
  Intrasegment
   Eliminations              (15)        (23)        (37)        (36)
                        --------    --------    --------    --------
                             875         836       1,738       1,642
                        --------    --------    --------    --------
   
  Other                       11          61          22         120

  Intersegment
   Eliminations             (331)       (266)       (642)       (509)

                        --------    --------    --------    --------
  Total Sales           $  7,962    $  7,435    $ 15,415    $ 14,599
                        ========    ========    ========    ========

   (1)  Certain prior year amounts have been reclassified to
        conform to the 2005 presentation.


                                                         SCHEDULE 5
                         NORTHROP GRUMMAN CORPORATION      
                  SEGMENT SALES RESULTS -- AFTER REALIGNMENT
                                ($ in millions)
                                  (unaudited)


 Electronic Systems

 Pro-Forma Sales 
  -- After 
  Realignment                          2004
 ---------------     ------------------------------------------
                           Three Months Ended            
                     ----------------------------------  Total
                     Mar 31   Jun 30   Sep 30   Dec 31    Year
                     ----------------------------------  ------
 Defensive &
  Navigation
  Systems            $  440   $  465   $  433   $  497   $1,835
 Aerospace Systems      403      367      417      422    1,609
 Naval & Marine
  Systems               205      205      207      240      857
 Government
  Systems               128      180      158      223      689
 C4ISR & Space
  Systems               161      167      155      169      652
 Defense Other          201      207      188      179      775
                     ----------------------------------  ------
   Total Sales       $1,538   $1,591   $1,558   $1,730   $6,417
                     ==================================  ======


 Ships

 Pro-Forma Sales 
  -- After 
  Realignment                          2004
 ---------------     ------------------------------------------
                           Three Months Ended            
                     ----------------------------------  Total
                     Mar 31   Jun 30   Sep 30   Dec 31    Year
                     ----------------------------------  ------
 Surface 
  Combatants         $  462   $  486   $  486   $  487   $1,921
 Aircraft 
  Carriers              440      475      466      520    1,901
 Expeditionary 
  Warfare               306      346      344      440    1,436
 Submarines             162      178      180      210      730
 Coast Guard and 
  Coastal Defense        16       30       29       39      114
 Services                30       24       19       26       99
 Commercial and 
  Other                  41       40       38       23      142
 Intrasegment 
  Eliminations          (13)     (22)     (25)     (31)     (91)
                     ----------------------------------  ------
  Total Sales        $1,444   $1,557   $ 1,537  $1,714   $6,252
                     ==================================  ======

 Space Technology

 Pro-Forma Sales 
  -- After 
  Realignment                          2004
 ---------------     ------------------------------------------
                           Three Months Ended            
                     ----------------------------------  Total
                     Mar 31   Jun 30   Sep 30   Dec 31    Year
                     ----------------------------------  ------
 Intelligence, 
  Surveillance & 
  Reconnaissance     $  237   $  263   $  281   $  260   $1,041
 Civil Space            155      163      152      168      638
 Software Defined 
  Radios                143      142      138      123      546
 Missile & Space 
  Defense               119      128      121      119      487
 Satellite 
  Communications        138      131      127      113      509
 Technology              27       32       15       26      100
 Intrasegment 
  Eliminations          (13)     (23)     (11)      (5)     (52)
                     ----------------------------------  ------
  Total Sales        $  806   $  836   $  823   $  804   $3,269
                     ==================================  ======
CONTACTS:  Dan McClain (Media)
           Northrop Grumman Corporation 
           (310) 201-3335

           Gaston Kent (Investors) 
           Northrop Grumman Corporation 
           (310) 201-3423