mission systems overview -...

Copyright 2005 Northrop Grumman Corporation1

Mission Systems Overview2005 Institutional Investor Conference

March 24, 2005

Donald C. WinterPresident, Mission SystemsNorthrop Grumman Corporation


Missile Systems

Command Control & Intelligence

Mission Systems

Technical and Management Services

A leading integrator of complex, mission-enabling systems2004 Sales – $4.95B18,000 employees in 50 states and in 23 countries1500 active contractsDeep, legacy domain expertise in priority, high-growth segmentsPremier provider of mission critical end-to-end solutions


Mission Systems Leadership

Jerry AgeeJerry AgeeDeputy Sector PresidentDeputy Sector President

Donald WinterDonald WinterPresidentPresident

ProgramsProgramsDavid BarakatDavid Barakat

Planning &Planning &DevelopmentDevelopment

Larry EdelmanLarry Edelman

TechnologyTechnologyNeil SiegelNeil Siegel

Mission AssuranceMission Assurance& Six Sigma& Six SigmaLinda MillsLinda Mills

Washington OfficeWashington OfficeDarryl FraserDarryl Fraser

BusinessBusinessDevelopmentDevelopment& Resources& ResourcesSally Sullivan Sally Sullivan

HumanHumanResourcesResourcesRobert WatersRobert Waters

InformationInformationSystemsSystemsDiane MurrayDiane Murray

LegalLegalMarsha KlontzMarsha Klontz

BusinessBusinessManagement Management Steve MoviusSteve Movius

ICBM John Clay

ICBM John Clay Tactical Systems

Otto GuentherTactical SystemsOtto Guenther

Defense Mission SystemsBarry Rhine

Defense Mission SystemsBarry Rhine

Technical & Management Services


Missile SystemsMissile SystemsCommand, Control

& IntelligenceCommand, Control

& Intelligence

Missile DefenseFrank MooreMissile DefenseFrank Moore

Enterprise ManagementServices

George Petteys

Enterprise ManagementServices

George Petteys

Information &Technical SolutionsPamela Sullivan

Information &Technical SolutionsPamela Sullivan

Kinetic Energy InterceptorsCraig Staresinich

Kinetic Energy InterceptorsCraig Staresinich

Intelligence SystemsDan Allen

Intelligence SystemsDan Allen

Surveillance & ReconnaissanceBob Pattishall

Surveillance & ReconnaissanceBob Pattishall


Sustainable Growth and Improving Margins

Strong organic growthDifferentiated offeringsRobust pipeline

Improving marginTarget selectionContract bid and negotiationProgram performance and review

0

1

2

3

4

5

6

2004 2005E 2006E

Sale

s ($

B)

0%

2%

4%

6%

8%

10%

Mar

gin

% o

f Sal

es

2003


Mission Systems ObjectivesDeliver long-term double-digit annual sales and margin growth with strong predictable cash flow

Overall StrategyBe a leading global system integrator of complex, mission-enabling systems

PrioritiesMeet our commitments

Pursue new business opportunities with vigor

Move forward with quality and process improvement initiatives

Strategic Direction


Mission AssuranceMission AssuranceEnsure Complete Customer and User Satisfaction

Quality & Process Improvements

Process ImprovementsProcess Improvements95% of Organization CMM or CMMI Level 5Active Six Sigma Program

Gover

nanc

e Pol

icies

, Pro

cess

es an

d Pr

oced

ures

Process Process EffectivenessEffectiveness

Dashboards for Enterprise Wide Managem

ent

Program Effectiveness

Mission Mission Assurance Assurance

Operations Effectiveness

Operations Effectiveness


Quick Response Provider To War On Terrorism

10

Rocket Based Interceptor SystemRocket Based Interceptor System

Perimeter security of critical mid east military facilitiesInstallation in 30-90 days

Force ProtectionForce Protection

90 day development and test programInstalled more then 1,200 systems for OIF forces

Blue Force TrackingBlue Force Tracking RollRoll--On/OffOn/Off--Beyond Line of Sight Beyond Line of Sight EnhancementEnhancement

Transportable data link for tanker aircraftCapability deployed 6 months following contract award

Defend troops in Iraq from mortar attack90 day development and test program


Command Control & Intelligence Systems

Key ProgramsFBCB2 / Blue Force TrackingGlobal Combat Service SupportCommand Post Program

Expertise in signals and command & control

OpportunitiesForce ProtectionCounter Mortar System

Sale

s ($

M)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2003 2004 2005E 2006E

Defense Mission Systems

Tactical Systems

Surveillance & Reconnaissance

Intelligence Systems


Designed to provide the U.S. Army, Joint and Allied Forces with Standard, Mobile, Digitized, and Fully Integrated Command Post Combat SystemsMajor Features:

Current Contract Value – $400M over 5 yearsFuture Growth Opportunities (Joint, National Guard, Foreign Military Sales, other) bring potential to >$1B

Command Post Platform Program

Mobile Modular Platform

Command Center System On-The-Move Situational Awareness


Missile Systems

Key Programs ICBM Prime IntegrationGround-Based Midcourse DefenseJoint National Integration CenterKinetic Energy Interceptors

Strong systems engineering and integration capabilities

OpportunitiesJoint National Integration Center RecompeteICBM Evolution

Sale

s ($

M)

0

500

1,000

1,500

2,000

2003 2004 2005E 2006E

Kinetic Energy Interceptors

Missile Defense

ICBM Prime Integration


Provides the Missile Defense Agency modeling, simulation, analysis, test and evaluation

Conducting joint and combined simulations, wargames, and exercises in support of the Ballistic Missile Defense System

Major Program Elements

Program Value - $900M+ inception to date

Contract in recompetition, award scheduled late CY-05

Joint National Integration Center

Modeling & Simulation

Operations Support Analysis, Integration and Test

Virtual Test Environment

Facility Support



Key ProgramsJoint Warfighting CenterSaudi Arabian National GuardApplication Support CentersDefense Travel System

Strength in joint training and modeling & simulation

OpportunitiesU.S. Army Linguists (INSCOM)Application Support Centers Recompete

Sale

s ($

M)

0

250

500

750

1,000

2003 2004 2005E 2006E

Enterprise Management Services

Information & Technical Solutions


Joint Training

United States Joint United States Joint Forces CommandForces CommandAt the Center of Training Transformation and Joint Doctrine Development

Joint Task Force Joint Task Force Civil SupportCivil SupportNuclear, Chemical, Biological, Radiological Response Training and Exercise Support

US Special US Special Operations CommandOperations CommandTraining & Exercise Support

Joint Warfighting Joint Warfighting Center Center Training, Simulations and C3 Support for CONUS-Based Forces

Key to administration’s transformation objectives


Organization Flexibility

2004 Sales by Business Area2004 Sales by Business Area 2004 Sales by Customer2004 Sales by Customer

Air Force32%

Air Force32%

Army14%

Army14%

Other DoD10%

Other DoD10%

Other U.S. Govt. Other U.S. Govt. 3%3%

Missile Missile DefenseDefense

10%10%

Tech & Mgmt

Services14%

Tech & Mgmt

Services14%

Command Control &

Intelligence60%

Command Control &

Intelligence60% Missile

Systems26%

Missile Systems

26%

Restricted17%

Restricted17%

Navy8%

Navy8%

Diversified Portfolio Mitigates risk associated with changing national prioritiesOnly 1 program (ICBM) exceeds 3% of sales

Efficient User of CapitalNet Property, Plant & Equipment: ~2% of salesNet Working Capital: ~1% of sales

Foreign Foreign MilitaryMilitary

2%2%

CommercialCommercial4%4%


Summary

Focus on meeting / exceeding expectations for all commitments

Able to deliver fully integrated, technically differentiated end-to-end solutions

Viewed as a trusted partner, thought leader, and “go to” player

Confidence in our future during time of dynamic change

mission systems overview -...

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