The contract covers the integration of worldwide operations capabilities, mission planning enhancements, logistics support and flight test activity.

Work is expected to be completed by December 2003 and will be performed at Edwards Air Force Base and at company facilities in Palmdale and San Diego, Calif. The Aeronautical Systems Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity.

The Global Hawk system, produced for the Air Force by Northrop Grumman's Integrated Systems sector, will provide battlefield commanders near real-time, high-resolution, reconnaissance imagery.

Flying at extremely high altitudes, Global Hawk can survey large geographic areas with pinpoint accuracy to give military decision-makers the most current information about enemy resources and personnel.

Northrop Grumman Revenues Up
In other news, Northrop Grumman reported 2001 fourth quarter economic earnings of $158 million, compared with $106 million for the same period of 2000.

On a per share basis, the company reported 2001 fourth quarter economic earnings of $1.55 on average diluted shares outstanding of 98.0 million, compared with economic earnings of $1.46 on average diluted shares outstanding of 72.5 million for the fourth quarter of 2000.

Under Generally Accepted Accounting Principles (GAAP), the company reported fourth quarter 2001 net income of $131 million, or $1.28 per share, compared with net income from continuing operations of $144 million, or $1.99 per share, for the same period of 2000. The comparable decline reflects a substantial decrease in pension income and increases in interest expense and in the number of shares outstanding.

For the quarter ended Dec. 31, 2001, sales increased to $4.3 billion compared with $2.2 billion reported for the fourth quarter of 2000.

The increase is primarily due to the contributions of the three companies acquired in 2001: Litton Industries Inc., Newport News Shipbuilding and the Electronics and Information Systems group of Aerojet-General Corporation. Also contributing to the sales increase was strong organic growth at the company's Electronic Systems sector.

Northrop Grumman's operating margin for the 2001 fourth quarter increased 25 percent to $314 million from $252 million for the same period last year despite a sharp drop in pension income. Pension income declined to $88 million from $128 million reported for the last three months of 2000.

"Today's outstanding results validate our strategy to create a top-tier defense enterprise focused on our customers' current and future needs," said Kent Kresa, chairman and chief executive officer of Northrop Grumman. "Last year's strategic acquisitions -- which added some $8 billion in annualized revenues -- provided new core competencies and established a solid foundation for future growth."

Mr. Kresa added, "Looking ahead, we expect to focus on several critical areas as demand intensifies for next-generation warfighting capabilities, particularly C4ISR, precision strike, unmanned aerial vehicles and all classes of naval vessels.

Another priority will be to support emerging initiatives such as missile defense and homeland security. With more than $21 billion in business backlog, continued strong operating performance and expected increases in the U.S. defense budget over the next several years, Northrop Grumman's future is certainly bright.

"We are reaffirming our 2002 financial guidance targets and expectations for double-digit revenue and economic earnings growth in 2003," Mr. Kresa concluded.

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