SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 16, 1994
NORTHROP GRUMMAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-3229 No. 95-1055798
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
1840 Century Park East
Los Angeles, California 90067
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 553-6262
Northrop Corporation
(Former name or former address, if changed since last report)
Item 5. Other Events
Registrant, Northrop Grumman Corporation, a Delaware corporation, was formerly
known as Northrop Corporation. The Certificate of Incorporation was amended to
change the name from Northrop Corporation to Northrop Grumman Corporation
pursuant to shareholder approval at the Annual Shareholders Meeting on May 18,
1994 in Los Angeles, California. The Certificate of Amendment was filed with
the Secretary of State of the State of Delaware on May 18, 1994 and became
effective the same date. The name was changed following a successful tender
offer by Northrop Acquisition, Inc., a wholly owned subsidiary of Northrop
Corporation, for Grumman Corporation.<PAGE>
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information
The following unaudited pro forma condensed financial statements combine on a
pro forma basis the consolidated financial statements of Northrop Grumman
Corporation, formerly known as Northrop Corporation, ("Northrop") and of
Grumman Corporation ("Grumman"). The unaudited pro forma balance sheet has
been prepared as if Northrop had purchased Grumman on March 31, 1994. The pro
forma statements of operations for the year ended December 31, 1993 and for the
three months ended March 31, 1994 were prepared as if Northrop had purchased
Grumman on January 1, 1993 and January 1, 1994, respectively. The acquisition
of Grumman is accounted for in these pro forma financial statements using the
purchase method of accounting. The purchase price has been allocated to the
underlying assets and liabilities of Grumman based on preliminary estimates of
their respective fair values. During the remainder of 1994 these estimates
will be refined and changes, if any, will be reflected in the Company's 1994
Annual Report on Form 10K.
These unaudited pro forma condensed financial statements and the accompanying
notes are intended to be used for informational purposes only and are not
necessarily indicative of the financial condition or results of operations had
the acquisition of Grumman occurred as of the dates indicated and are not
intended to be indicative of future results.
PRO FORMA CONDENSED COMBINED Northrop Grumman Corporation and Subsidiaries
STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
MARCH 31, 1994
Pro Forma Pro Forma
Northrop Grumman Adjustments Combined
$ in millions
Assets:
Cash and cash equivalents $ 206 $ 287 $ $ 493
Marketable securities 28 28
Accounts receivable 812 557 (81)(a)(b)(c) 1,288
Inventoried costs 564 518 (104)(a)(b)(c) 978
Prepaid expenses &
other current assets 67 54 19 (a) 140
Total current assets 1,649 1,444 (166) 2,927
Property, plant and equipment 2,796 1,363 (905)(a)(b) 3,254
Accumulated depreciation
and amortization (1,798) (999) 999 (a) (1,798)
998 364 94 1,456
Goodwill 1,219 (a) 1,219
Other purchased intangible assets 392 (a) 392
Prepaid pension cost and
intangible pension asset 298 13 311
Investments in and advances to
affiliates and sundry assets 83 101 (17)(a)(b) 167
Deferred income taxes 7 112 (95)(a) 24
388 226 1,499 2,113
$ 3,035 $2,034 $1,427 $ 6,496
Pro Forma Pro Forma
Northrop Grumman Adjustments Combined
Liabilities and Shareholders' Equity:
Current maturities of
long-term debt $ $ 7 $ 330 (a) $ 337
Trade accounts payable 294 145 (29)(b) 410
Accrued employees' compensation 159 169 36 (a)(b) 364
Income taxes 462 75 (2)(b) 535
Other current liabilities 212 183 159 (a)(b)(c) 554
Total current liabilities 1,127 579 494 2,200
Long-term debt 160 241 1,680 (a) 2,081
Accrued retiree benefits 318 301 183 (d) 802
Deferred income taxes 48 (48)(a)(c)(d)
Other liabilities and
deferred gain 22 96 (65)(a) 53
Common stock 261 345 (345)(c) 261
Retained earnings 1,099 472 (472)(a)(c)(d) 1,099
1,360 817 (817) 1,360
$3,035 $2,034 $1,427 $6,496
PRO FORMA CONDENSED COMBINED Northrop Grumman Corporation and Subsidiaries
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1994
Pro Forma Pro Forma
Northrop Grumman Adjustments Combined
$ in millions, except per share
Net Sales $1,218 $ 638 $ 37 (b)(c) $1,893
Cost of sales
Operating costs 1,019 564 4 (a)(b)(c) 1,587
Administrative and
general expenses 116 27 53 (a)(b)(e) 196
Operating margin 83 47 (20) 110
Interest expense (5) (7) (26)(b)(e) (38)
Merger related costs (60) 60 (f)
Other, net 1 6 (3)(b) 4
Income(loss) before income taxes 79 (14) 11 76
Federal and foreign
income taxes(benefit) 27 (5) 7 (g) 29
Net income $ 52 $ (9) $ 4 $ 47
Weighted average shares outstanding,
in millions 49.1 49.1
Earnings per share $ 1.05 $ .96
PRO FORMA CONDENSED COMBINED Northrop Grumman Corporation and Subsidiaries
STATEMENTS OF OPERATIONS
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
Pro Forma Pro Forma
Northrop Grumman Adjustments Combined
$ in millions, except per share
Net Sales $5,063 $3,225 $ (360)(b) $7,928
Cost of sales
Operating costs 4,359 2,930 (580)(a)(b)(c) 6,709
Administrative and
general expenses 485 116 279 (a)(b)(e) 880
Operating margin 219 179 (59) 339
Interest expense (38) (32) (104)(a)(e) (174)
Restructuring charge (85) 85 (f)
Other, net (11) 25 (8)(b) 6
Income before income taxes 170 87 (86) 171
Federal and foreign
income taxes 74 21 (20)(g) 75
Net income $ 96 $ 66 $ (66) $ 96
Weighted average shares outstanding,
in millions 48.1 48.1
Earnings per share $ 1.99 $ 1.99
Notes to Pro Forma Condensed Combined Financial Statements
(Unaudited)
a. Adjustments to record $2-billion term loans obtained to finance the
acquisition of Grumman, accrue $127 million for the payment of the
balance of Grumman shares still outstanding along with additional
acquisition related costs and to assign the purchase price to assets
acquired and liabilities assumed. The allocation of the purchase
price to assets and liabilities is based on preliminary estimates of
their respective fair values and may subsequently be adjusted.
b. Adjustment to reflect the Special Purpose Vehicles industry segment as
discontinued operations. Management intends to dispose of the Special
Purpose Vehicles industry segment previously operated by Grumman and
therefor these operations have been excluded from the Statements of
Operations and included in the caption Investment in and advances to
affiliates and sundry assets on the Statement of Financial Position.
c. Adjustment to reflect change in the method of recognizing revenue on
certain government contracts applied by Grumman to conform with
revenue recognition policy applied by Northrop.
d. Adjustment to record Grumman retiree benefits liabilities in excess of
market value of assets at March 31, 1994. Management is in the
process of reviewing the Grumman health and welfare benefit plans and
based on the results of that review the fair value of the liability
may be adjusted.
e. Adjustment to: 1) record interest on term loans used to finance the
acquisition of Grumman at the estimated effective rate of 5.5%; 2)
amortize goodwill over a 40 year period on a straight line basis; and
3) amortize other purchased intangible assets on a straight line basis
over periods ranging from 3 to 38 years, with a weighted average life
of 23 years.
f. Adjustments to eliminate certain expenses which will not be incurred
on an ongoing basis.
g. Adjustment to record the income tax effects of pretax pro forma
adjustments.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DATED: JUNE 30, 1994 NORTHROP GRUMMAN CORPORATION
&&PINAD1368
Sheila M. Gibbons
Vice President and Secretary
