Edgar Filing: NORTHROP GRUMMAN CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to

Commission file number
1-3229

NORTHROP GRUMMAN CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation or organization)		95-1055798 (I.R.S. Employer Identification Number)

1840 Century Park East, Los Angeles, California 90067 www.northgrum.com (Address of principal executive offices and internet site)

(310) 553-6262 (Registrant's telephone number, including area code) Securities registered pursuant to section 12(b) of the Act:

Title of each class
Common Stock, $1 par value

Name of each exchange on which registered
New York Stock Exchange
Pacific Stock Exchange

Securities Registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X)

As of February 19, 2001, 72,126,289 shares of Common Stock were outstanding, and the aggregate market value of the Common Stock (based upon the closing price of the stock on the New York Stock Exchange) of the Registrant held by nonaffiliates was approximately $6,449 million.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2001 Annual Meeting of Stockholders. Part III

This Form 10-K/A corrects an incorrect subtotal on the line item "total revenue" on the consolidated statements of income.

This Form 10-K/A corrects a positional discrepancy in the consolidated financial statements footnote entitled "Income Taxes", by aligning the descriptions in the footnote with the proper numerical amounts.

This Form 10-K/A also modifies the Independent Auditors' Consent by inserting the qualifier "except for subsequent events footnote, as to which the date is March 1, 2001"

NORTHROP GRUMMAN CORPORATION

CONSOLIDATED STATEMENTS OF INCOME


Years ended December 31, $ in millions, except per share		2000	1999	1998

Sales and service revenues
	Product sales	$ 6,133	$ 6,304	$ 6,381
	Service revenues	1,485	1,312	986

Total revenue		7,618	7,616	7,367

Cost of sales
	Cost of product sales	4,160	4,491	4,737
	Cost of service revenues	1,286	1,143	867
	Administrative and general expenses	1,074	1,028	1,011

Operating margin		1,098	954	752
Other income(deductions)
	Interest income	29	18	11
	Merger costs			(186)
	Interest expense	(175)	(224)	(232)
	Investment loss			(30)
	Other, net	23	(1)	(6)

Income from continuing operations before income taxes
and cumulative effect of accounting change		975	747	309
Federal and foreign income taxes		350	273	116

Income from continuing operations before
cumulative effect of accounting change		608	474	193
Income from discontinued operations, net of federal income
tax expense of $22, $6 and $2 in 2000, 1999 and 1998, respectively		39	9	1
Loss on disposal of discontinued operations,
net of federal income tax expense of $40		(56)

Income before cumulative effect of accounting change		608	483	194
Cumulative effect of accounting change, net of income tax
benefit of $11			(16)

Net income		$ 608	$ 467	$ 194

Weighted average common shares outstanding, in millions		70.6	69.3	68.5

Basic earnings per share
Continuing operations		$ 8.86	$ 6.84	$ 2.82
Discontinued operations		.55	.13	.01
Disposal of discontinued operations		(.80)

Before cumulative effect of accounting change		8.61	6.97	2.83
Accounting change			(.24)

Basic earnings per share		$ 8.61	$ 6.73	$ 2.83

Diluted earnings per share:
Continuing operations		$ 8.82	$ 6.80	$ 2.78
Discontinued operations		.55	.13	.01
Disposal of discontinued operations		(.79)

Before cumulative effect of accounting change		8.58	6.93	2.79
Accounting change			(.24)

Diluted earnings per share		$ 8.58	$ 6.69	$ 2.79

The accompanying notes are an integral part of these consolidated financial statements.

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NORTHROP GRUMMAN CORPORATION

INCOME TAXES

Income tax expense, both federal and foreign, was comprised of the following:

Years ended December 31, $ in millions		2000	1999	1998

Income taxes on continuing operations:
Currently payable
	Federal income taxes	$ 96	$ 77	$ (13)
	Foreign income taxes	5	4	5

		101	81	(8)
Change in deferred federal income taxes		249	192	124

Total income taxes on continuing operations		$ 350	$ 273	$ 116

Income tax expense differs from the amount computed by multiplying the statutory federal income tax rate times the income before income taxes due to the following:

Years ended December 31, $ in millions	2000	1999	1998

Income tax expense on continuing operations at statutory rate	$ 341	$ 261	$ 108
Goodwill amortization	20	15	15
Benefit from ESOP dividends	(3)	(3)	(3)
Other, net	(8)		(4)

	$ 350	$ 273	$ 116

Deferred income taxes arise because of differences in the treatment of income and expense items for financial reporting and income tax purposes. The principal type of temporary difference stems from the recognition of income on contracts being reported under different methods for tax purposes than for financial reporting.

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NORTHROP GRUMMAN CORPORATION

The tax effects of significant temporary differences and carryforwards that gave rise to year-end deferred federal and state tax balances, as categorized in the Consolidated Statements of Financial Position, were as follows:

$ in millions			2000	1999

Deferred tax assets
	Deductible temporary differences
		Provision for estimated expenses	$ 21	$ 33

			21	33
	Taxable temporary differences
		Income on contracts		(10)

				(10)

			$ 21	$ 23


Deferred tax liabilities
	Taxable temporary differences
		Income on contracts	$ 901	$ 913
		Retiree benefit plan income	142
		Goodwill amortization	107	95
		Purchased intangibles	63	89
		Excess tax over book depreciation	51	72
		Administrative and general expenses period costed for tax purposes		14
		Other	14	14

			1,278	1,197

	Deductible temporary differences
		Provision for estimated expenses	(168)	(207)
		Retiree benefit plan expense		(197)
		Administrative and general expenses period costed for tax purposes	(8)
		Other	(77)	(50)

			(253)	(454)

	Tax carryforwards
		Tax credits	(24)	(75)
		Alternative minimum tax credit	(44)	(54)

			(68)	(129)

			$ 957	$ 614


Net deferred tax liability
	Total deferred tax liabilities (taxable temporary differences above)		$ 1,278	$ 1,207
	Less total deferred tax assets (deductible
	temporary differences and tax carryforwards above)		342	616

			$ 936	$ 591

The tax carryforward benefits are expected to be used in the periods in which net deferred tax liabilities mature. These tax credit carryforwards are in various amounts and expire over the years 2001 through 2007. The alternative minimum tax credit can be carried forward indefinitely.

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NORTHROP GRUMMAN CORPORATION

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 2nd day of March 2001.

By:          Robert B. Spiker
               Robert B. Spiker
Corporate Vice President and Controller
         (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on behalf of the registrant this the 2nd day of March 2001, by the following persons and in the capacities indicated.

Signature		Title
Kent Kresa* Jack R. Borsting* John T. Chain, Jr.* Vic Fazio* Phillip Frost* Lewis W. Coleman Charles R. Larson* Robert A. Lutz* Aulana L. Peters* John E. Robson* Richard R. Rosenberg* John Brooks Slaughter* Richard J. Stegemeier* Richard B. Waugh, Jr.*	Chairman of the Board, President and Chief Executive Officer and Director (Principal Executive Officer) Director Director Director Director Director Director Director Director Director Director Director Director Corporate Vice President and Chief Financial Officer (Principal Financial Officer)

*By    John H. Mullan
           John H. Mullan
          Attorney-in-Fact
pursuant to a power of attorney

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NORTHROP GRUMMAN CORPORATION

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements Nos. 333-59815, 33-59853 and 333-68003 of Northrop Grumman Corporation on Form S-8, Registration Statements Nos. 333-78251, 333-85633 and 333-40862 of Northrop Grumman Corporation on Form S-3 and Registration Statement No. 333-54800 of NNG, Inc. on Form S-4 of our report dated January 24, 2001, <R>except for subsequent events footnote, as to which the date is March 1, 2001<R>, appearing in this Annual Report on Form 10-K for the year ended December 31, 2000.

DELOITTE & TOUCHE LLP

Los Angeles, California

March 1, 2001

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