LITTON INGALLS SHIPBUILDING, SEAAMERICA REACH AGREEMENT ON CRUISE SHIP PROGRAM

March 27, 2000 – Litton Ingalls Shipbuilding, a Litton Ship Systems (LSS) company in Pascagoula, Mississippi, has signed a Memorandum of Agreement (MOA) with SeaAmerica Cruise Lines, Inc., based in Hollywood, Florida. Under the MOA, LSS and SeaAmerica will develop a ship design leading to contract negotiations for the construction of two 42,000-ton, 1,000 passenger cruise ships. The program will include options for two additional ships.

Construction of the ships would utilize both of Litton Ship Systems’ production facilities, Litton Ingalls Shipbuilding in Pascagoula and Litton Avondale Industries in New Orleans, and would maximize the resources and experience of both shipyards to achieve operating synergies.

“SeaAmerica anticipates receiving MARAD Title XI financing for our new program,” said David W. Turner, Chairman and CEO of SeaAmerica. “These U.S.-built, U.S.-crewed ships will offer itineraries along the East, Gulf and West Coasts, targeted at the convention and business market, in addition to leisure travelers.” Turner said the first ship is expected to make its maiden voyage in late 2003 or early 2004.

“This new opportunity clearly validates Litton’s assessment of the growth potential of the U.S. cruise ship market,” said Jerry St. Pé, Chief Operating Officer of Litton Ship Systems and Executive Vice President of Litton Industries (NYSE:LIT). “This program presents an opportunity to grow this segment of our company’s business beyond the ships already under contract.”

SeaAmerica Cruise Lines, Inc., has been organized to own and operate a U.S. flagged cruise line -- primarily sailing U.S. port to U.S. port to meet the demands of the business meeting and convention business as well as the leisure cruise traveler. A business conference aboard a U.S.-flagged cruise ship may allow individuals to take a tax deduction for conference expenses. A business expense tax deduction for conference attendance aboard a foreign-flagged cruise ship is specifically not permitted.

The vessels will feature the largest, most elaborate and multi-functional conference centers afloat, designed to attract U.S. business, labor, public interest and civic groups known to want alternatives to land-based conventions and seminars. Also designed to attract U.S. and European luxury cruise travelers, accommodations will include 87 percent outside cabins (most with private balconies), one of the most luxurious spas afloat, full theater, both hospitality and luxury suites, casino, and alternative dining options.

In March 1999, Litton Ingalls Shipbuilding signed a contract with American Classic Voyages Co., worth a total potential value of $1.4 billion, to build two 1,900-passenger cruise ships, with an option for a third. Construction of the first ship will begin in July, with delivery scheduled in early 2003.