Northrop Grumman Corporation agreed to settle a joint complaint filed by a former TRW Inc. employee and the U.S. Department of Justice under the qui tam provisions of the civil False Claims Act.
The company said it will pay approximately $111 million to settle claims that TRW, acquired by Northrop Grumman in December 2002, misclassified various costs and improperly charged those costs to certain of its federal contracts. The suits were originally filed under seal in 1994 and 1995 in the U.S. District Court for the Central District of California.
The company expressly denied any liability for violating the False Claims Act and has agreed to settle this matter, allowing management to focus on the excellent business prospects for the heritage TRW businesses and the entire Northrop Grumman enterprise.
Northrop Grumman said the settlement amount was contemplated in the company’s acquisition of TRW. The company continues to expect 2003 earnings per share of $3.80 to $4.20. Although cash from operations will be affected by the settlement, the company still expects 2003 cash from operations of $1.1 billion to $1.3 billion, excluding the $1.0 billion B-2 tax payment.
Northrop Grumman Corporation is a $25 billion 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 approximately 120,000 employees and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.