SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 11-K



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

            For the fiscal year ended December 31, 2002

                                       OR

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

            For the transition period from __________ to __________


                         Commission file number: 1-12385



      A.    Full title of the plan and address of the plan,  if  different  from
            that of the issuer named below:

                  LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM



      B.    Name of issuer of the  securities  held pursuant to the plan and the
            address of its principal executive office:

                          NORTHROP GRUMMAN CORPORATION
                             1840 Century Park East
                          Los Angeles, California 90067

















                                   SIGNATURES




         Pursuant to the requirements of the Securities and Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.



                        LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM





Dated:  June 30, 2003        /s/ J. Michael Hateley
                             _____________________________________
                        By   J. Michael Hateley
                             Chairman, Administrative Committee

































LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM

TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                            Page

INDEPENDENT AUDITORS' REPORT                                                   1

FINANCIAL STATEMENTS:

  Statements of Net Assets Available for Plan Benefits
    as of December 31, 2002 and 2001                                           2

  Statement of Changes in Net Assets Available for Plan Benefits for the
   Year Ended December 31, 2002                                                3

  Notes to Financial Statements                                             4-13

SUPPLEMENTAL SCHEDULE--Form 5500, Schedule H, Part IV, Line 4i, Schedule of
   Assets (Held at End of Year) at December 31, 2002                          14









INDEPENDENT AUDITORS' REPORT


Administrative Committee
Litton Financial Security and Savings Program

We have audited the  accompanying  statements  of net assets  available for plan
benefits of the Litton Financial Security and Savings Program (the "Plan") as of
December  31, 2002 and 2001 and the related  statement  of changes in net assets
available  for plan  benefits  for the  year  ended  December  31,  2002.  These
financial  statements  are the  responsibility  of the  Plan's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the financial statements,  referred to above, present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 2002 and 2001 and the changes in net assets  available for plan benefits for
the year ended  December 31, 2002,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole. The supplemental  schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is not
a  required  part  of  the  basic  financial  statements  but  is  supplementary
information  required by the  Department  of Labor's Rules and  Regulations  for
Reporting and Disclosure  under the Employee  Retirement  Income Security Act of
1974.  This  schedule  is the  responsibility  of  the  Plan's  management.  The
supplemental  schedule has been subjected to the auditing  procedures applied in
our audit of the basic 2002 financial  statements and, in our opinion, is fairly
stated  in all  material  respects  when  considered  in  relation  to the basic
financial statements taken as a whole.




/s/ Deloitte & Touche LLP
-------------------------
DELOITTE & TOUCHE LLP

June 26, 2003
Los Angeles, California




LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM

STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2002 AND 2001
------------------------------------------------------------------------------------------------------------------------------------

                                                                   2002                                         2001
                                                 -------------------------------------------  --------------------------------------
                                                  Retirement      Savings                      Retirement     Savings
                                                    Account       Account         Total         Account       Account        Total
                                                                                                    
ASSETS:
  Investments (Notes 2, 3, 4 and 5):
    Investment in Northrop Grumman Employee
     Benefit Plan Master Trust at fair value      $369,013,143 $          -  $ 369,013,143   $         -  $         -  $           -
    Investment in Northrop Grumman Defined
     Contribution Plans Master Trust at fair value              665,220,727    665,220,727
    Short-term investments                                                                    75,870,873   18,833,847     94,704,720
    U.S. government obligations                                                              108,187,000   66,425,256    174,612,256
    Corporate obligations                                                                                 188,937,909    188,937,909
    Common stock                                                                             144,208,421  413,550,487    557,758,908
    Registered investment companies                                                           82,236,617    1,424,107     83,660,724
    Common/collective trusts                                                                               35,096,982     35,096,982
    Loans receivable from participants                           26,082,904      26,082,904                25,407,153     25,407,153
    Other investments                                                                                      51,000,000     51,000,000
                                                  ------------ ------------  -------------- ------------ ------------ --------------
           Total investments                       369,013,143  691,303,631   1,060,316,774  410,502,911  800,675,741  1,211,178,652
                                                  ------------ ------------  -------------- ------------ ------------ --------------
  Receivables:
    Dividends and interest                                                                     2,618,795    6,953,103      9,571,898
    Employee deposits                                  219,509      281,249         500,758      318,188      451,977        770,165
    Interfund transfers                                                                          981,392     (981,392)
    Employer contributions                                          158,003         158,003                   749,946        749,946
                                                   ------------ ------------  -------------- ------------ ------------ -------------
           Total receivables                           219,509      439,252         658,761    3,918,375    7,173,634     11,092,009
                                                  ------------ ------------  -------------- ------------ ------------ --------------
           Total assets                            369,232,652  691,742,883   1,060,975,535  414,421,286  807,849,375  1,222,270,661
                                                  ------------ ------------  -------------- ------------ ------------ --------------
LIABILITIES:
  Accrued expenses                                     408,174      532,362         940,536      214,814      640,980        855,794
  Due brokers for securities purchased                                                                     12,262,294     12,262,294
                                                  ------------ ------------  -------------- ------------ ------------ --------------
           Total liabilities                           408,174      532,362         940,536      214,814   12,903,274     13,118,088
                                                  ------------ ------------  -------------- ------------ ------------ --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS            $368,824,478 $691,210,521  $1,060,034,999 $414,206,472 $794,946,101 $1,209,152,573
                                                  ============ ============  ============== ============ ============ ==============


See notes to financial statements.

                                      -2-



LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------------------------------------


                                                            Retirement         Savings
                                                             Account           Account            Total
                                                                                     
INVESTMENT INCOME (LOSS) (Notes 2, 3, 4 and 5):
  Net depreciation in fair value
    of investments                                      $    (8,001,736)   $   (99,896,266)   $  (107,898,002)
  Plan interest in the Northrop Grumman
    Employee Benefit Plan Master Trust
    investment loss                                         (40,689,371)                          (40,689,371)
  Plan interest in the Northrop Grumman
    Defined Contribution Plans Master Trust
    investment loss                                                             (5,086,597)        (5,086,597)
  Dividends                                                      99,530          3,530,337          3,629,867
  Interest                                                    2,622,396         11,470,370         14,092,766
                                                        ---------------    ---------------    ---------------
           Total investment loss                            (45,969,181)       (89,982,156)      (135,951,337)
                                                        ---------------    ---------------    ---------------
DEPOSITS AND CONTRIBUTIONS:
  Employee deposits                                          18,789,025         41,586,426         60,375,451
  Employer contributions                                                        18,140,340         18,140,340
  Employee rollovers into plan                                                     663,472            663,472
  Interfund transfers                                         1,103,926         (1,103,926)
  Loan payments pending transfer                                                  (149,428)          (149,428)
                                                        ---------------    ---------------    ---------------
           Total deposits and contributions                  19,892,951         59,136,884         79,029,835
                                                        ---------------    ---------------    ---------------
DEDUCTIONS:
  Benefits paid to participants (Note 2)                     18,552,282         71,080,564         89,632,846
  Administrative expenses                                       835,779          2,010,323          2,846,102
                                                        ---------------    ---------------    ---------------
           Total deductions                                  19,388,061         73,090,887         92,478,948
                                                        ---------------    ---------------    ---------------
TRANSFERS FROM OTHER PLANS (Note 1)                              82,297            200,579            282,876
                                                        ---------------    ---------------    ---------------
NET DECREASE                                                (45,381,994)      (103,735,580)      (149,117,574)

NET ASSETS AVAILABLE FOR
  PLAN BENEFITS:
  Beginning of year                                         414,206,472        794,946,101      1,209,152,573
                                                        ---------------    ---------------    ---------------
  End of year                                           $   368,824,478    $   691,210,521    $ 1,060,034,999
                                                        ===============    ===============    ===============

See notes to financial statements.


                                      -3-




LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------


1.  DESCRIPTION OF THE PLAN

    The  following  description  of the Litton  Financial  Security  and Savings
    Program  (the  "FSSP" or the "Plan") is  provided  for  general  information
    purposes  only.  Participants  should refer to the Plan  document for a more
    complete description of the Plan's provisions.

    General--The FSSP is a tax-qualified  defined  contribution plan established
    effective  October 1, 1984, by Litton  Industries,  Inc.  ("Litton") for the
    benefit of  employees  of its U.S.  subsidiaries  and  divisions  as well as
    employees of Premier America Credit Union, an unaffiliated entity. Effective
    January 1, 1996,  employees  have been eligible to  participate  in the Plan
    upon their date of hire on a voluntary  basis.  In addition,  prior  service
    credit may be given to  employees  of  certain  businesses  acquired  by the
    Company from time to time.

    Effective  June 2001,  Litton  was  acquired  by and  became a wholly  owned
    subsidiary  of  Northrop   Grumman   Corporation   ("NGC"),   which  assumed
    sponsorship of the Plan.

    Effective May 1, 2002,  the Plan  transferred  all of its assets from Mellon
    Bank (the  "Former  Trustee")  to State  Street  Bank  ("Trustee")  and then
    immediately  transferred all assets for the FSSP  Retirement  Account to the
    Northrop  Grumman  Employee  Benefit Plan Master Trust (the "Pension  Master
    Trust").

    Effective  October 1, 2002,  the Plan began  utilizing the Northrop  Grumman
    Defined  Contribution  Plans Master Trust (the "Savings  Master  Trust") for
    plan contributions and related  investments.  On November 18, 2002, the Plan
    transferred the remaining  assets of the FSSP Savings Account to the Savings
    Master  Trust.  State  Street Bank acts as Trustee  for the  Savings  Master
    Trust.

    The FSSP is subject to the  provisions  of the  Employee  Retirement  Income
    Security Act of 1974, as amended ("ERISA").

    Employee  Deposits  and  Company  Contributions--The  Plan  includes an FSSP
    Retirement  Account and an FSSP Savings  Account.  A participant may deposit
    from 1% to 4% of his/her annual cash  compensation  into the FSSP Retirement
    Account.  A participant's FSSP Retirement Account deposits provide the basis
    for  determining  the extent to which the participant is entitled to receive
    pension benefits under the Litton heritage  retirement plans  (collectively,
    the  "Litton  Retirement  Plans").  As of June 1, 2002,  a  participant  who
    deposits 4% of his/her  annual cash  compensation  into the FSSP  Retirement
    Account could deposit an additional 1% to 26% into the FSSP Savings  Account
    (prior to June 1, 2002,  the FSSP Savings  Account  deposit  limit was 16%).
    Subject to certain collective bargaining  agreements,  the Company currently
    matches 50% of the first 6% of a  participant's  deposits to the FSSP,  with
    such contributions remitted to the participant's FSSP Savings Account.

    The investment of FSSP Retirement Account deposits is directed solely by the
    Investment  Committee,  and FSSP Savings Account  deposits are invested,  as
    designated  by the  participant,  in one or  more  of the  investment  funds
    currently available.  However, the aggregate amount of deposits for any plan
    year to all FSSP  accounts may not exceed the maximum  amounts for such year
    allowable under Section 401(k) of the Internal Revenue Code (the "Code").

                                      -4-


    Each year, as required by the Plan document,  the Plan re-allocates  current
    year deposits to ensure that each  participant  receives the maximum pension
    and  company  matching  contributions  that  he/she is  eligible to receive,
    subject  to  federal  deferral  and  compensation  limits.  Maximization  is
    performed at the end of the calendar year or upon termination of employment,
    whichever comes first. To the extent that deposits are  re-allocated  from a
    participant's FSSP Savings Account to his/her FSSP Retirement  Account,  the
    amount of Company matching  contributions on any such  re-allocated  amounts
    may be forfeited if the  re-allocation  reduces  his/her  deposits below the
    maximum level eligible for Company  matching  contributions.  Forfeitures of
    Company matching  contributions plus investment earnings thereon are used to
    reduce subsequent Company matching contributions.

    Vesting--A  participant  is always  fully  vested in his/her  FSSP  deposits
    (including any investment earnings thereon).  Participants currently vest at
    50% in all Company matching  contributions plus related investment  earnings
    after two full years of service  and 100% after three full years of service.
    Full  vesting  also  occurs if a  participant  (while  in the  employ of the
    Company) dies, becomes totally disabled or terminates employment on or after
    his/her 65th birthday.

    Upon termination of employment, a participant forfeits any nonvested amounts
    of Company matching  contributions plus investment earnings related thereto.
    Forfeitures for a terminated  participant  may be restored  depending on the
    time elapsed from his/her  termination date and the time that the terminated
    participant  was  employed  by  the  Company   immediately   prior  to  such
    termination of employment.

    Payment of Benefits--Upon  termination of service (including termination due
    to death,  disability or  retirement),  a participant may receive a lump sum
    payment of his/her  FSSP  Retirement  and/or  Savings  Account  balances.  A
    participant may also delay his/her lump sum payment until the age of 70 1/2,
    if the total account balances exceed $5,000. In addition,  a participant has
    the  option  of  choosing  to take the total  distribution  as a life or, if
    married,  50% joint and  survivor  annuity  or,  at  retirement,  to elect a
    rollover of his/her FSSP Retirement Account to the Litton Retirement Plans.

    A participant's  benefit under the Litton  Retirement Plans is determined by
    the amount of deposits to his/her FSSP  Retirement  Account.  To achieve the
    maximum  retirement  benefit under such retirement  plans, the FSSP provides
    that  employees  must, on an annual basis,  deposit the lesser of: (i) 4% of
    their annual compensation,  (ii) the 401(k) deferral limit as defined by the
    Internal  Revenue  Code,  (iii) 4% of the pay cap  limit as  defined  by the
    Internal  Revenue Code or (iv) such lesser maximum amount as may result from
    the  application  of  the  nondiscrimination  tests.  The  FSSP  and  Litton
    Retirement  Plans  together  constitute a qualified  offset  arrangement  as
    defined in Section 1116(f) of the Tax Reform Act of 1986.

    Withdrawals--Effective  November 18, 2002, a participant may withdraw all or
    a portion of his or her Company matching  contributions  (plus earnings) and
    all or a portion of his or her FSSP Savings Account  deposits for any reason
    after  reaching  age 59 1/2, or prior to reaching  age 59 1/2 in the case of
    hardship (as described in the Plan document).

    Participant Accounts--A separate account is maintained for each participant.
    Each participant's  account is credited with the participant's  contribution
    and allocations of (a) the Company's  contribution,  (b) Plan earnings,  and
    (c) administrative  expenses.  Allocations are based on participant earnings
    on account balances, as defined in the Plan document. The benefit to which a
    participant  is  entitled  is the  benefit  that  can be  provided  from the
    participant's vested account.

                                      -5-


    Investments--Prior  to November 18, 2002,  FSSP assets were invested in five
    funds held in trust.  Participants could allocate their deposits and Company
    matching contributions between one or more of the Savings Account investment
    funds described  below.  Participants  could change the allocation of future
    deposits among funds and/or transfer  existing account balances between such
    funds once every month in 1% increments.

    FSSP Retirement Account (Non-Participant Directed):

     Retirement  Fund--The  Retirement Fund intended to provide  increased value
     through  reasonable  growth in principal and  reasonable  levels of current
     income.  Effective May 1, 2002, the Retirement Fund assets were invested in
     the Northrop Grumman Employee Benefit Plan Master Trust.

    FSSP Savings Account (Participant Directed):

     Bond  Fund--The Bond Fund intended to provide  increased  value through the
     production  of  reasonable  levels of current  income with limited  capital
     risk.  Permissible  investments  included  high quality debt  securities of
     varying time maturities of more than one year, bonds, notes,  debentures or
     other debt obligations of the U.S. or foreign corporate  issuers,  the U.S.
     government and agencies, or foreign governments and agencies denominated in
     U.S. dollars,  or group investment  contracts (GICs) issued by an insurance
     company or other financial institution.

     Growth  Fund--The  Growth Fund  intended to invest in stocks that  generate
     superior  sales and earnings  growth.  This Fund invested in common stocks;
     securities which were convertible into common stocks; warrants,  options or
     right  to  purchase   common   stocks;   and  other  equity   interests  or
     participations.  This Fund also held fixed income  securities  or preferred
     stocks,   futures  contracts  with  respect  to  financial  instruments  or
     securities indices and all forms of options.

     Money Market  Fund--The  Money Market Fund provided  stability of principal
     and produced  current income  consistent  with minimal risk of principal by
     investing in debt  securities  having an average  maturity of less than two
     years.   The  Money  Market  Fund  invested  in  obligations  of  the  U.S.
     government,  corporate debt obligations,  certificates of deposit and other
     short-term instruments.

     The S&P 500 Index  Fund--The  S&P 500 Index Fund  invested  in stocks  that
     replicate  the S&P 500 Index,  whose value is  calculated  according to the
     market  value  of  500  companies  across  four  major  industry   sectors:
     industrial,  utility, financial and transportation.  The S&P 500 Index Fund
     was capitalization  weighted,  in that the stocks are represented according
     to their market  capitalizations (price times number of shares outstanding)
     relative to the capitalization of the total index.

    Effective  October 15, 2002,  an employee  stock  ownership  fund option was
    added to the Plan to permit  participants  to elect  investment in a Company
    stock fund (the  "Northrop  Grumman  Fund").  On November 18, 2002, the Plan
    transferred  the FSSP Savings  Account  assets to the Savings  Master Trust,
    which has the investment  options as described  below.  Each participant may
    now  direct  his  or  her  employee   contributions   and  Company  matching
    contributions,  in 1%  increments,  in any of the  following  12  investment
    funds.

      U.S. Equity Fund--The U.S. Equity Fund consists  predominantly of holdings
      in large and medium sized U.S. company stocks.  The fund's  objectives are
      capital  appreciation  over the  long  term,  along  with  current  income
      (dividends).  The fund's stock  investments  are  selected by  independent
      professional  investment  managers  appointed  by  the  Plan's  Investment
      Committee.

                                      -6-


      U.S.  Fixed Income  Fund--The  Fixed  Income Fund  consists of holdings in
      marketable,  fixed  income  securities  rated  within  the  three  highest
      investment  grades  (i.e.,  A or  better)  assigned  by  Moody's  Investor
      Services or Standard & Poor's Corporation, U.S. Treasury or federal agency
      obligations,   or  cash  equivalent  instruments.   The  fund  is  broadly
      diversified and maintains an average  maturity of 10 years. The securities
      are selected by independent  professional investment managers appointed by
      the Plan's Investment Committee.

      Stable  Value  Fund--The  Plan holds an interest in the  Northrop  Grumman
      Stable Value Fund (the "Stable Value Fund";  see Note 4).  Investments  in
      the Stable Value Fund are diversified among U.S. government securities and
      obligations of government agencies,  bonds, short-term  investments,  cash
      and  investment  contracts  issued by insurance  companies and banks.  The
      Stable  Value Fund is managed by an  independent  professional  investment
      manager appointed by the Plan's Investment Committee.

      Northrop  Grumman  Fund--The  Northrop  Grumman Fund invests  primarily in
      Northrop Grumman Corporation common stock.

      Balanced  Fund--The  Balanced  Fund  is  a  fully  diversified   portfolio
      consisting  of fixed  portions of five of the savings  plan funds  (Stable
      Value Fund, U.S. Equity Fund, Fixed Income Fund, International Equity Fund
      and Small Cap  Fund).  The fund  seeks to  exceed  the  return of the bond
      market and  approach  the return of the stock  market,  but with less risk
      than an investment only in stocks.

      International  Equity  Fund--The  International  Equity  Fund  consists of
      stocks of a diversified group of companies in developed  countries outside
      the United States. The fund's objectives are capital appreciation over the
      long term, along with current income (dividends).

      Small Cap  Fund--The  Small Cap Fund  consists of stocks of a  diversified
      group of small capitalization U.S. companies.  The stocks purchased by the
      fund  typically have a market  capitalization  similar to companies in the
      Russell  2000  Index,   which  are  companies   with  an  average   market
      capitalization   of  $500  million.   The  fund's   objective  is  capital
      appreciation over the long term, rather than current income (dividends).

      Equity  Index  Fund--The  Equity  Index  Fund  consists  of a  diversified
      portfolio of stocks,  as defined by an  established  market  index.  These
      stocks  are  selected  by  independent  professional  investment  managers
      appointed  by the Plan's  Investment  Committee.  This fund is designed to
      provide  results  that  closely  match those of the  Standard & Poor's 500
      Stock Index.

      High   Yield  Bond   Fund--The   High   Yield   Bond  Fund   consists   of
      below-investment-grade securities (i.e., BBB or lower) assigned by Moody's
      Investor  Services  or  Standard & Poor's  Corporation.  The fund seeks to
      exceed the return of the high-quality (investment grade) bond market.

      International Bond Fund--The  International Bond Fund consists of non-U.S.
      dollar  denominated  debt  instruments  rated  within  the  three  highest
      investment  grades  (i.e.,  A or better) by Moody's  Investor  Services or
      Standard & Poor's Corporation. The fund's objective is to provide a higher
      level of income and capital  appreciation  than the domestic  fixed income
      market.

      Emerging Markets Fund--The Emerging Markets Fund consists of a diversified
      portfolio of stocks issued by companies based in developing countries. The
      fund's objective is capital appreciation over the long term.

                                      -7-


      Schwab  Personal  Choice  Retirement  Account--The  Schwab Personal Choice
      Retirement  Account  consists  of mutual  funds from over 300 mutual  fund
      companies.

      Contributions deposited into each investment fund buy a number of units in
      each  fund.  The  value of each  participant's  account  within  each fund
      depends on two factors: (1) the number of units purchased to date, and (2)
      the current value of each unit. Unit values are updated daily prior to any
      Plan transactions,  including contributions,  withdrawals,  distributions,
      and transfers. Participants may change their investment options daily.

    Participant  Loans--FSSP loans may be made only from an active participant's
    vested FSSP  Savings  Accounts to a maximum loan amount of the lesser of 50%
    of such account balances or $50,000.  The interest rate on such loans is the
    trustee's  prime  rate  plus 1% on the  first  day of the month in which the
    participant  applies for the loan.  Interest is computed based upon the loan
    recipient's pay period (e.g., monthly, bi-weekly).

    Active  participants'  FSSP loan  repayments  are generally made by means of
    payroll  deductions.  Loan repayments after termination may be made by check
    if the  participant's  account balance remains in the FSSP. The maximum loan
    repayment  period is fifteen years if the loan proceeds are used to purchase
    the  participant's  principal  residence;  otherwise,  the maximum repayment
    period for a loan is five years.  Outstanding loan balances can be repaid in
    full at any time.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Basis  of  Accounting--The   accompanying  financial  statements  have  been
    prepared in  accordance  with  principles  generally  accepted in the United
    States of America.

    Use of Estimates--The preparation of financial statements in conformity with
    generally  accepted  accounting   principles  requires  management  to  make
    estimates  and  assumptions  that affect the reported  amounts of assets and
    liabilities and disclosure of contingent  assets and liabilities at the date
    of the  financial  statements  and the  reported  amounts  of  revenues  and
    expenses during the reporting period. Actual results could differ from those
    estimates.

    Risks and  Uncertainties--The  Plan invests in various securities  including
    U.S. government securities, corporate debt instruments and corporate stocks.
    Investment  securities,  in general,  are normally exposed to various risks,
    such as interest  rate,  credit and overall  market  volatility.  Due to the
    ongoing level of risk associated with investment securities,  changes in the
    values of those securities may occur in the near term which could materially
    affect the amounts  reported in the  statements of net assets  available for
    plan benefits.

    Investment  Valuation  and  Income   Recognition--The   Plan's  investments,
    including the Plan's interest in the master trusts, are stated at fair value
    as determined by State Street Bank and Trust Company  ("State Street" or the
    "Trustee").  The  underlying  investments in the master trusts are valued as
    follows:  Investments in securities traded on a national securities exchange
    are  valued  at their  quoted  market  price  at the end of the  Plan  year.
    Securities that have no quoted market price are presented at their estimated
    fair value.

    Securities  are  valued at their  market  values  based on  information  and
    financial  publications  of general  circulation,  statistical and valuation
    services,  records of security  exchanges,  appraisals by qualified persons,
    transactions  and bona fide  offers in  assets of the type in  question  and
    other  information  customarily used in the valuation of assets or if market
    values are not available, at their fair values as provided to the Trustee by

                                      -8-


    the party with authority to trade such securities  (investment managers, the
    Investment  Committee,  or, in the case of  participant  directed  brokerage
    accounts,  the participant's  broker, as applicable).  The Trustee relies on
    the  prices  provided  by  pricing  sources  or  the  investment   managers,
    Investment  Committee or participant's broker as a certification as to value
    in performing any valuations or  calculations  required of the Trustee under
    this contract.

    All securities and cash or cash equivalents are quoted in the local currency
    and then  converted  into US dollars  using the  appropriate  exchange  rate
    obtained by the Trustee.

    The investment  contracts with  insurance  companies  included in the Stable
    Value Fund are  stated at  contract  value (see Notes 4 and 5).  Participant
    loans are valued at cost, which approximates fair value.

    Purchases  and sales of  investments  are  recorded on a  trade-date  basis.
    Interest  income is recorded on the accrual basis and dividends are recorded
    on the ex-dividend date.

    Broker  commissions,  transfer taxes and other charges and expenses incurred
    in connection with the purchase,  sale or other disposition of securities or
    other  investments held by the Pension Master Trust and Savings Master Trust
    are  added  to the  cost of such  securities  or  other  investments  or are
    deducted  from the  proceeds of the sale or other  disposition  thereof,  as
    appropriate.  Taxes  (if any) on the  assets  of the  funds,  or on any gain
    resulting  from the  sale or other  disposition  of such  assets,  or on the
    earnings of the funds,  are apportioned  among the  participants  and former
    participants  (if any) whose  interests  in the Plan are  affected,  and the
    share of such taxes  apportioned to each such person is charged  against his
    or her account in the Plan.

    The  Pension  Master  Trust and Savings  Master  Trust  allocate  investment
    income,   realized  gains  and  losses  and  unrealized   appreciation   and
    depreciation on the underlying securities to the participating plans monthly
    and  daily,  respectively,   based  on  the  market  value  of  each  plan's
    investment.  The unrealized  appreciation  or  depreciation in the aggregate
    current value of investments is the difference between current value and the
    cost of  investments.  The  realized  gain or  loss  on  investments  is the
    difference  between  the  proceeds  received  and  the  average  cost of the
    investments sold.

    Expenses--Administrative expenses of the Plan are paid by either the Plan or
    the Plan's sponsor as provided in the Plan document.

    Payment of Benefits--Benefits are recorded when paid.

3.  INVESTMENTS

    As of December 31, 2002,  the Plan's  investments  included a  proportionate
    interest in certain investments held by the Pension Master Trust and Savings
    Master Trust.  These  investments  are stated at fair values  determined and
    reported  by the  Trustee in  accordance  with the master  trust  agreements
    established  by the Company  (see Note 2).  Proportionate  interests of each
    participating  plan  are  ascertained  on the  basis of the  Trustee's  plan
    accounting method for master trust arrangements.  Plan assets represent 3.0%
    and 14.6% of total net assets as  reported  by the  Trustee  of the  Pension
    Master  Trust and Savings  Master  Trust,  respectively,  as of December 31,
    2002.  Only  investments  held in the FSSP Savings  Account are  participant
    directed in nature.

    As of December  31,  2002,  Pension  Master  Trust and Savings  Master Trust
    assets of  $1,209,014,315  million and $635,648,142  million,  respectively,
    were on loan to third party  borrowers  under security  lending  agreements.
    Such  assets  could be subject to sale  restrictions  in the event  security
    lending  agreements are terminated and the securities have not been returned
    to the Plan.

                                      -9-



    The net assets of the Pension  Master Trust and Savings Master Trust at fair
    value are as follows as of December 31, 2002:

                                                  Pension           Savings
                                               Master Trust      Master Trust

Assets:
  Temporary investments (See Note 4)         $ 1,048,047,128   $   298,243,357
  U.S. and foreign government securities       1,893,873,412       314,399,692
  Corporate debt instruments                   1,845,446,648       186,349,259
  Common stocks                                6,241,146,078     1,704,725,533
  Common/collective trust funds                  767,420,654       440,836,676
  Real estate                                     85,671,225
  Guaranteed and synthetic investment
      contracts (See Notes 4 and 5)                              1,690,110,231
  Other investments                            1,220,936,503         3,790,201
  Dividends, interest and taxes receivable        55,685,261         6,938,752
  Other receivables                                  766,961
  Receivables for investments sold               630,337,569        55,685,018
  Receivables for foreign exchange               248,255,892
                                             ---------------   ---------------
  Total assets                                14,037,587,331     4,701,078,719
                                             ---------------   ---------------
Liabilities:
  Payables for foreign exchange                  248,222,060
  Due to broker for securities purchased       1,285,315,934       151,289,439
  Other liabilities                                1,011,540
                                             ---------------   ---------------
  Total liabilities                            1,534,549,534       151,289,439
                                             ---------------   ---------------
Net assets of the Master Trust               $12,503,037,797   $ 4,549,789,280
                                             ===============   ===============














                                      -10-


    Investment  income  (loss) for the Pension  Master Trust and Savings  Master
    Trust is as follows:


                                                       Pension             Savings
                                                    Master Trust         Master Trust
                                                    May 1, 2002        October 1, 2002
                                                      through              through
                                                  December 31, 2002    December 31, 2002
                                                                
        Investment income (loss):
          Net (depreciation) appreciation in fair value
            of investments:
          Temporary investments                    $        78,961    $        22,284
          U.S. and foreign government securities       153,522,126          8,700,588
          Corporate debt instruments                    10,606,693          9,554,251
          Common stocks                             (1,719,819,746)       (30,332,026)
          Common/collective trust funds               (122,219,998)        26,222,283
          Real estate                                  (25,673,046)
          Other investments                            (78,479,873)         1,252,568
                                                   ---------------    ---------------
        Net (depreciation) appreciation             (1,781,984,883)        15,419,948

        Interest                                       151,295,784         32,361,722
        Dividends                                       77,841,638          7,234,555
        Other income                                    31,987,218            214,021
        Investment manager fees                        (33,211,408)          (219,834)
        Other expenses/fees                                                  (498,006)
                                                   ---------------    ---------------
        Total investment (loss) income             $(1,554,071,651)   $    54,512,406
                                                   ===============    ===============


    The schedule below presents the fair value of the assets held for investment
    and  investments  which  represent  5% or more of the  FSSP's  net assets at
    December 31, 2001.


                                                                      
        Investments at Fair Value as Determined by Quoted Market Price

        U.S. government securities-U.S. Treasury Notes dated 8/15/95        $108,187,000

        Registered Investment Companies Long Leaf Partners                  $ 82,236,618

        Investments at Estimated Fair Value

        Tempororary investments:
          Common/Collective Trust
          Short Term Interest II
          TBC Inc. Pooled Employee Funds                                    $ 94,628,418


4.  INTEREST IN NORTHROP GRUMMAN STABLE VALUE FUND

    A portion of the Plan's  investments is in the Northrop Grumman Stable Value
    Fund, which was established for the investment of the assets of the Plan and
    two  other  Northrop  Grumman  Corporation  sponsored  savings  plans.  Each
    participating  savings  plan has an  undivided  interest in the Stable Value
    Fund.  At December  31, 2002,  the Plan's  interest in the net assets of the


                                      -11-


    Stable  Value  Fund  was  approximately  12.5%  of  the  total  fund  value.
    Investment income and  administrative  expenses relating to the Stable Value
    Fund are allocated among the participating plans on a daily basis.

    The Plan has an arrangement with the investment  manager of the Stable Value
    Fund whereby the  investment  manager has the ability to borrow amounts from
    third  parties  to satisfy  liquidity  needs of the Stable  Value  Fund,  if
    necessary.  As of December 31, 2002,  no borrowings  under this  arrangement
    were outstanding.

    Investments held in the Stable Value Fund were as follows as of December 31,
    2002:


                                                                             
        Guaranteed and Synthetic Investment Contracts (at contract value)         $ 1,690,110,231
        Northrop Retirement Savings Temporary Investment Fund                          49,488,133
                                                                                  ---------------
        Total                                                                     $ 1,739,598,364
                                                                                  ===============


    Investment income of the Stable Value Fund totaled  $84,068,657 for the year
    ended December 31, 2002.

5.  INVESTMENT CONTRACTS WITH INSURANCE COMPANIES

    All investment  contracts held by the Stable Value Fund are considered to be
    fully  benefit  responsive  and  therefore  are recorded at contract  value.
    Contract  value  represents  contributions  made  under the  contract,  plus
    interest at the contract rate, less withdrawals and administrative expenses.

    The Stable Value Fund holds wrapper  contracts in order to manage the market
    risk and return of certain  securities  held by the Stable  Value Fund.  The
    wrapper contracts generally modify the investment characteristics of certain
    underlying  securities similar to those of guaranteed  investment contracts.
    Each wrapper contract and its related underlying assets are referred to as a
    Synthetic  Investment  Contract  ("SIC") and are recorded at contract value.
    The SICs  held by the  Stable  Value  Fund  had a  contract  value  totaling
    $1,646,981,826 at December 31, 2002. The fair value of the underlying assets
    related to the wrapper contracts  totaled  $1,207,120,225 as of December 31,
    2002.

    The fair value of the non-synthetic  guaranteed investment contracts totaled
    $48,732,748 at December 31, 2002.

    The following  information is disclosed for the investment  contracts within
    the Stable Value Fund as of December 31, 2002:

      Average yield of assets                           5.53%
      Average crediting interest rate of assets         5.53%
      Average duration                                  2.58 years

6.  PARTIES-IN-INTEREST TRANSACTIONS

      During  2002  and  2001,   the  Plan   incurred   $121,419   and  $97,493,
      respectively,  in fees related to services rendered by the Trustee and the
      Former Trustee.  The FSSP had transactions with both entities'  short-term
      investment  funds,  a  liquidity  pooled  funds  in  which   participation
      commences and terminates on a daily basis. In Plan  management's  opinion,
      fees paid during the year for  services  rendered  by  parties-in-interest
      were based upon customary and reasonable rates for such services.


                                      -12-


7.  PLAN TERMINATION

    Although it has not expressed any intent to do so, the Company has the right
    under the Plan to discontinue its contributions at any time and to terminate
    the Plan  subject  to the  provisions  of  ERISA.  In the  event the FSSP is
    terminated,  all  participants  will  become 100% vested in their total FSSP
    account balances.

8.  FEDERAL INCOME TAXES STATUS

    The IRS has  determined  and  informed the Company by a letter dated May 14,
    2003 that the Plan, as amended, and related trust are designed in accordance
    with applicable sections of the Internal Revenue Code (the "Code"). The Plan
    has  been  amended  since  receiving  the  determination  letter.  The  Plan
    administrator  and the Plan's  counsel  believe  that the Plan is  currently
    designed and being operated in compliance  with the applicable  requirements
    of the  Code  and the  related  trust  was tax  exempt  as of the  financial
    statement date. Therefore, no provision of income taxes has been included in
    the Plan's financial statements.

9.  RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

    The following is a reconciliation  of net assets available for Plan benefits
    per the financial statements to the Form 5500 as of December 31:


                                                                               2002                      2001
                                                                                             
        Net assets available for Plan benefits per the
          financial statements                                           $ 1,060,034,999           $ 1,209,152,573
        Less:  Amounts allocated to withdrawing participants                 (10,098,576)              (10,951,041)
                                                                         ---------------           ---------------
        Net assets available for Plan benefits per the Form 5500         $ 1,049,936,423           $ 1,198,201,532
                                                                         ===============           ===============


    The following is a  reconciliation  of benefits paid to participants per the
    financial statements to the Form 5500 for the year ended December 31, 2002:


                                                                                             
        Benefits paid to participants per the financial statements                                 $ 89,632,846
        Add:  Amounts allocated to withdrawing participants at December 31, 2002                     10,098,576
        Less:  Amounts allocated to withdrawing participants at December 31, 2001                   (10,951,041)
                                                                                                   ------------
        Benefits paid to participants per the Form 5500                                            $ 88,780,381
                                                                                                   ============


    Amounts allocated to withdrawing  participants are recorded on the Form 5500
    for benefit  claims that have been  processed and approved for payment prior
    to December 31, but not yet paid as of that date.


                                      -13-



LITTON FINANCIAL SECURITY AND SAVINGS PROGRAM

FORM 5500, SCHEDULE H, PART IV, LINE 4i,
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2002
--------------------------------------------------------------------------------------------------------------

          Identity of Issue,
         Borrower, Lessor, or                                 Description of                      Current
             Similar Party                                      Investment                         Value
                                                                                        
*Northrop Grumman Employee Benefit               Participation in Northrop Grumman
    Plan Master Trust                              Employee Benefit Plan Master Trust         $   369,013,143

*Northrop Grumman Defined Contribution           Participation in Northrop Grumman
    Plans Master Trust                             Defined Contribution Plans Master Trust        665,220,727

*Northrop Grumman Corporation                    Participant loans (prime plus 1%)                 26,082,904
                                                                                              ---------------
TOTAL                                                                                         $ 1,060,316,774
                                                                                              ===============

*Party-in-interest

































                                      -14-

                                 EXHIBIT INDEX


Exhibit No.            Document
-----------            --------

23                     Independent Auditors' Consent

99.1                   Certification pursuant to 18 U.S.C. Section 1350
                       as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                       Act of 2002

99.2                   Certification pursuant to 18 U.S.C. Section 1350
                       as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                       Act of 2002