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NORTHROP LOSS PROVISION FOR TRI-SERVICE MISSILE TO REDUCE THIRD QUARTER NET INCOME BY $100 MILLION

 NORTHROP LOSS PROVISION FOR TRI-SERVICE MISSILE
 TO REDUCE THIRD QUARTER NET INCOME BY $100 MILLION
 LOS ANGELES, Aug. 12 /PRNewswire/ -- Northrop Corp. (NYSE: NOC) today said it would make a $152 million loss provision in the third quarter for the estimated financial impact of its proposal to extend the schedule to complete the flight test program for the Tri-Service Standoff Attack Missile (TSSAM). The charge will reduce third quarter net income by $100 million, or $2.13 per share.
 The requirement for the loss provision was made following discussions with the Air Force this month.
 TSSAM is a stealthy, conventionally armed cruise missile designed to be carried on a number of Air Force and Navy aircraft and ground- launched by the Army. The very sophisticated TSSAM is highly classified, and no photographs or drawings of the missile have ever been released. The government has said it plans to purchase more than 7,000 TSSAMs.
 The TSSAM program is one of a number of fixed-price development programs that have plagued several defense companies. Fixed-price development programs are a legacy of government procurement policies in the 1980s that have since been largely abandoned. The TSSAM program was awarded some time before Northrop stopped accepting fixed-price development contracts in 1988. The company said today the TSSAM is its only remaining development program being carried out under this form of contract.
 The company said that in its judgment the current provision should be adequate to complete the development program. However, because of the nature of fixed-price research and development contracts, the possibility of future provisions will remain until the contract is completed. Northrop previously reported provisions for losses on this program in 1988 and 1989. The company said it is also discussing with the Air Force an equitable settlement of various other contract matters, the outcome of which will have a bearing on the loss from the development phase of the TSSAM program.
 -0- 8/12/92
 /CONTACT: Tony Cantafio of Northrop, 310-201-3333/
 (NOC) CO: Northrop Corp. ST: California IN: ARO SU: ERP


KJ-JL -- LA039 -- 9346 08/12/92 17:08 EDT
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Publication:PR Newswire
Date:Aug 12, 1992
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