UNITED STATES
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 333-61192
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
THE TRW CANADA STOCK SAVINGS PLAN
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
Financial Statements
THE TRW CANADA STOCK SAVINGS PLAN
December 31, 2002 and 2001
REPORT OF INDEPENDENT AUDITORS
To the Participants and the Board of Administration of
The TRW Canada Stock Savings Plan
We have audited the statements of financial condition of the Stock Fund,
Employees' Profit Sharing Plan Fund and Registered Retirement Savings Plan Fund
[collectively, representing the funds of The TRW Canada Stock Savings Plan] as
at December 31, 2002 and 2001 and the related statements of operations and
changes in fund equity for these funds for the years then ended. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial condition of the funds of The TRW Canada Stock Savings
Plan as at December 31, 2002 and 2001 and the results of their operations and
the changes in fund equity for the years then ended in accordance with Canadian
generally accepted accounting principles.
/s/ Ernst & Young LLP
Mississauga, Canada,
March 18, 2003. Chartered Accountants
The TRW Canada Stock Savings Plan
Stock Fund
STATEMENTS OF FINANCIAL CONDITION
[expressed in Canadian dollars]
As at December 31
2002 2001
$ $
--------------------------------------------------------------------------------
ASSETS
Receivable from TRW Canada Limited -- 107,658
Investments at quoted market value
Northrop Grumman Corporation common stock 1,476,494 --
TRW Inc. common stock -- 1,463,201
--------------------------------------------------------------------------------
1,476,494 1,570,859
--------------------------------------------------------------------------------
LIABILITIES AND FUND EQUITY
Withdrawals, terminations and short-term distributions 1,106,888 1,132,550
Fund equity [including net unrealized appreciation
of investments] 369,606 438,309
--------------------------------------------------------------------------------
1,476,494 1,570,859
--------------------------------------------------------------------------------
See accompanying notes
The TRW Canada Stock Savings Plan
Stock Fund
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
[expressed in Canadian dollars]
Years ended December 31
2002 2001
$ $
--------------------------------------------------------------------------------
Investment income
Dividends on TRW Inc. common stock 17,174 20,663
Interest -- 96
--------------------------------------------------------------------------------
17,174 20,759
--------------------------------------------------------------------------------
Contributions
Participants 684,207 700,895
TRW Canada Limited 488,777 595,469
--------------------------------------------------------------------------------
1,172,984 1,296,364
--------------------------------------------------------------------------------
Net realized and unrealized gain 268,109 74,763
--------------------------------------------------------------------------------
1,458,267 1,391,886
--------------------------------------------------------------------------------
Less withdrawals and terminations
Paid
Cash 94,607 12,351
TRW Inc. common stock 325,475 237,639
--------------------------------------------------------------------------------
420,082 249,990
--------------------------------------------------------------------------------
Payable
Cash 400,813 6,651
TRW Inc. common stock -- 1,125,899
Northrop Grumman Corporation common stock 706,075 --
--------------------------------------------------------------------------------
1,106,888 1,132,550
--------------------------------------------------------------------------------
1,526,970 1,382,540
--------------------------------------------------------------------------------
Net increase (decrease) in fund equity (68,703) 9,346
--------------------------------------------------------------------------------
Fund equity at January 1 438,309 428,963
--------------------------------------------------------------------------------
Fund equity at December 31 369,606 438,309
--------------------------------------------------------------------------------
See accompanying notes
The TRW Canada Stock Savings Plan
Employees' Profit Sharing Plan Fund
STATEMENTS OF FINANCIAL CONDITION
[expressed in Canadian dollars]
As at December 31
2002 2001
$ $
--------------------------------------------------------------------------------
ASSETS
Receivable from participants 3,314 --
Receivable from TRW Canada Limited 3,400 491
Investments, at market value
Clarica Trimark Equity Fund NR 3,165 --
Clarica Trimark Global Fund NR 4,993 --
Clarica McLean Budden Canadian Equity Growth Fund NR 1,764 --
Clarica McLean Budden Bond Fund NR 3,473 --
Clarica McLean Budden Core Balanced Fund NR 7,408 --
Clarica Perigee Axis Cash Fund NR 396,330 --
Clarica US Equity Index Fund NR 1,040 --
Clarica Perigee T-Plus Fund NR -- 279,016
--------------------------------------------------------------------------------
424,887 279,507
--------------------------------------------------------------------------------
LIABILITIES AND FUND EQUITY
Withdrawals, terminations and short-term distributions 371,366 201,447
Fund equity 53,521 78,060
--------------------------------------------------------------------------------
424,887 279,507
--------------------------------------------------------------------------------
See accompanying notes
The TRW Canada Stock Savings Plan
Employees' Profit Sharing Plan Fund
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
[expressed in Canadian dollars]
Years ended December 31
2002 2001
$ $
--------------------------------------------------------------------------------
Interest income -- 7,909
--------------------------------------------------------------------------------
Contributions
Participants 316,750 234,571
Employer 71,472 --
--------------------------------------------------------------------------------
388,222 242,480
--------------------------------------------------------------------------------
Net realized and unrealized gain 3,703 --
--------------------------------------------------------------------------------
391,925 242,480
--------------------------------------------------------------------------------
Less cash withdrawals and terminations
Paid 45,098 19,319
Payable 371,366 201,447
--------------------------------------------------------------------------------
416,464 220,766
--------------------------------------------------------------------------------
Net increase (decrease) in fund equity (24,539) 21,714
--------------------------------------------------------------------------------
Fund equity at January 1 78,060 56,346
--------------------------------------------------------------------------------
Fund equity at December 31 53,521 78,060
--------------------------------------------------------------------------------
See accompanying notes
The TRW Canada Stock Savings Plan
Registered Retirement Savings Plan Fund
STATEMENTS OF FINANCIAL CONDITION
[expressed in Canadian dollars]
As at December 31
2002 2001
$ $
--------------------------------------------------------------------------------
ASSETS
Receivable from participants 3,485 3,081
Investments, at quoted market value
Clarica CC&L Balanced Fund 2,429 --
Clarica Trimark Equity Fund 41,583 --
Clarica Perigee International Fund 3,429 --
Clarica Trimark Global Fund 48,686 --
Clarica Synthetic US Equity Index Fund 7,934 --
3 Year Interest Account 2,851 --
5 Year Interest Account 825 --
Clarica McLean Budden Canadian Equity Growth Fund 9,529 --
Clarica McLean Budden Bond Fund 30,659 --
Clarica McLean Budden Core Balanced Fund 874,976 --
Clarica Perigee Axis Cash Fund 301,691 --
Clarica Brinson Canada, Balanced Fund -- 925,022
--------------------------------------------------------------------------------
Clarica Perigee T-Plus Fund -- 302,189
--------------------------------------------------------------------------------
1,328,077 1,230,292
--------------------------------------------------------------------------------
LIABILITIES AND FUND EQUITY
Withdrawals, terminations and short-term distributions -- 17,834
Fund equity [including net unrealized appreciation
of investments] 1,328,077 1,212,458
--------------------------------------------------------------------------------
1,328,077 1,230,292
--------------------------------------------------------------------------------
See accompanying notes
The TRW Canada Stock Savings Plan
Registered Retirement Savings Plan Fund
STATEMENTS OF OPERATIONS AND
CHANGES IN FUND EQUITY
[expressed in Canadian dollars]
Years ended December 31
2002 2001
$ $
--------------------------------------------------------------------------------
Income 31 13,947
--------------------------------------------------------------------------------
Contributions
Participants 296,451 281,695
--------------------------------------------------------------------------------
Net realized and unrealized loss (45,564) (45,151)
--------------------------------------------------------------------------------
250,918 250,491
--------------------------------------------------------------------------------
Less cash withdrawals and terminations
Paid 135,299 189,270
Payable -- 17,834
--------------------------------------------------------------------------------
135,299 207,104
--------------------------------------------------------------------------------
Net increase in fund equity 115,619 43,387
Fund equity at January 1 1,212,458 1,169,071
--------------------------------------------------------------------------------
Fund equity at December 31 1,328,077 1,212,458
--------------------------------------------------------------------------------
See accompanying notes
The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
1. GENERAL PLAN PROVISIONS
The TRW Canada Stock Savings Plan [the "Plan"] is a qualified employee profit
sharing and retirement savings plan sponsored by TRW Canada Limited. The Plan
was originally established effective January 1, 1968 as a stock savings plan.
Effective January 1, 1990, the Plan was amended to immediately vest TRW Canada
Limited's contributions and the group retirement savings portion was added to
the Plan. The eligibility of employees to participate in the Plan is based on
the provisions as included in the Plan document. A participant may join the Plan
upon becoming a permanent part-time or full-time employee. The provisions of the
Plan require certain employees to have been employed for a period of 90 days
before joining the Plan.
The Plan's assets are held by Clarica Trust as Trustee and administrator of the
Plan.
Effective December 11, 2002, TRW Inc. ["TRW"] was acquired by Northrop Grumman
Corporation ["NGC"] and TRW shares held in the Plan were converted into shares
of NGC common stock based on a ratio of 0.5357 NGC share per TRW share. In
connection with the acquisition of TRW by NGC, the Plan was amended to provide
that any NGC common stock held in the Plan on March 1, 2003 would be distributed
to participants in the form of share certificates.
The investment programs of the Plan are as follows:
Participant contributions
Upon enrolment or re-enrolment, each participant directs that his/her basic
contributions [computed in increments of one percent, from one percent to six
percent of qualifying compensation] are to be invested in a range of
professionally managed funds with different objectives, risk factors and return
expectations. A participant may, at any time, change his/her contribution rate,
temporarily suspend contributions, the way he/she invests future contributions
or existing assets at any time, at no cost. If a participant temporarily
suspends contributions, TRW Canada Limited's matching contributions [see TRW
Canada Limited's contributions below] are also temporarily suspended.
A participant may make cash withdrawals from his/her accounts at any time.
However, if the participant withdraws his/her basic contribution or TRW Canada
Limited's matching contribution made on or after January 1, 2003, the
participant will not be able to contribute to the Plan or receive TRW Canada
Limited's matching contribution for a period of three months.
1
The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
TRW Canada Limited's contributions
TRW Canada Limited shall contribute cash to the Plan for each month, out of
current or accumulated earnings, an amount equal to 50% of the participant
contributions [to a maximum of 3% of the participant's compensation] for such
month. TRW Canada Limited's contributions vest immediately.
All TRW Canada Limited's cash contributions were invested in TRW stock purchased
on the open market up until December 11, 2002 at which point the sponsor
contributions were directed to Clarica Perigee Axis Cash Fund NR.
The number of participants in each of the funds at December 31 is as follows:
2002 2001
--------------------------------------------------------------------------------
Clarica Trimark Equity Fund NR [Non-registered] 4 --
Clarica Trimark Global Fund NR 3 --
Clarica McLean Budden Canadian Equity Growth Fund NR 5 --
Clarica McLean Budden Bond Fund NR 6 --
Clarica McLean Budden Core Balanced Fund NR 7 --
Clarica Perigee Axis Cash Fund NR 493 --
Clarica US Equity Index Fund NR 2 --
NGC common stock 528 --
Clarica CC&L Balanced Fund 9 --
Clarica Trimark Equity Fund 15 --
Clarica Perigee International Fund 8 --
Clarica Trimark Global Fund 22 --
Clarica Synthetic US Equity Index Fund 12 --
Clarica McLean Budden Canadian Equity Growth Fund 14 --
Clarica McLean Budden Bond Fund 12 --
Clarica McLean Budden Core Balanced Fund 128 --
Clarica Perigee Axis Cash Fund 50 --
TRW Stock Fund -- 511
Pooled Money Market Fund Employees' Profit Sharing Plan -- 92
Pooled Balanced Fund Registered Retirement Savings Plan -- 131
Pooled Money Market Fund Registered Retirement Savings Plan -- 54
--------------------------------------------------------------------------------
The total number of participants in the Plan is less than the sum of the number
of participants shown above because many are participating in more than one
fund.
2
The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in accordance with Canadian
generally accepted accounting principles, within the framework of the
significant accounting policies summarized below:
Basis of accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting.
Investment valuation and income recognition
All investments are recorded at fair market value based on quoted market prices.
Purchase and sale transactions are recorded on a settlement date basis. Interest
income is recorded on the accrual basis. Unrealized appreciation or depreciation
of investments is the difference between the 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 investments sold.
Payment of benefits
Benefit payments are recorded when paid.
Gains or losses on investments
The realized gains or losses on disposition or transfer of an investment is
determined from the market value of the investment at the date of disposition or
transfer and the average cost base of that specific pool of investments prior to
the disposition or transfer.
Unrealized gains or losses are determined as the net effect of the change in
appreciation (depreciation) of investments from January 1 to December 31, based
on market value and the average cost base of each investment at those respective
dates.
Income recognition
Dividend income is recognized as earned.
Interest income is recognized as it is earned consistent with the accrual basis
of accounting.
3
The TRW Canada Stock Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
3. INCOME TAXES
The Plan is exempt from Canadian federal income taxes under the provisions of
the Income Tax Act (Canada) [the "Act"]. Federal income tax consequences to the
participants under the Plan are as provided in the Act. TRW Canada Limited's
contributions are taxable to the participants as is the income and all post-1971
capital gains, less post-1971 capital losses of the Plan, all of which are
allocated to the participants by the Trustee during the year, whether or not
such amounts are paid to the participants by the Trustee during the year. The
amount of foreign non-business income taxes paid on foreign source income by the
trusts under the Plan for the year is allocated to and deemed to have been paid
by the participants for Canadian federal income tax purposes. Participants who
are non-resident taxpayers are subject to special rules depending on whether
they have performed duties in Canada during the year and are subject to
withholding tax on amounts paid or credited to them under the Plan.
4. RELATED PARTY TRANSACTIONS
All expenses related to the Plan are paid by TRW Canada Limited.
5. STATEMENT DISCLOSURES
The costs of the investments have not been shown parenthetically as cost is not
tracked or disclosed by the Trustee when reporting to us.
The realized and unrealized gains and losses have not been disclosed separately
as the Trustee does not segregate this information when reporting to us.
6. COMPARATIVE FINANCIAL STATEMENTS
The comparative financial statements have been reclassified from statements
previously presented to conform to the presentation of the 2002 financial
statements.
7. UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES
The Plan's accounting policies do not materially differ from United States
generally accepted accounting principles.
4
SIGNATURES
The Plan. Pursuant to requirements of the Securities Exchange Act of
1934, the Board of Administration of the Plan has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
The TRW Canada Stock Savings Plan
Date: March 21, 2003 By: /s/ J. Ross Cooper
_______________________________
J. Ross Cooper
Member, Board of Administration
By: /s/ Steven M. Kiwicz
_______________________________
Steven M. Kiwicz
Member, Board of Administration
Exhibit 23
__________
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statement (No.
333-61192) of Northrop Grumman Space & Mission Systems Corp. (formerly known as
TRW Inc.) on Form S-8 of our report dated March 18, 2003, with respect to the
financial statements of The TRW Canada Stock Savings Plan included in this
annual report on Form 11-K for the year ended December 31, 2002.
/s/ Ernst & Young LLP
______________________
ERNST & Young LLP
Mississauga, Canada,
March 24, 2003