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NEWPORT NEWS SHIPBUILDING BEGINS CVN 77 CONTRACT DESIGN PROCESS WITH U. S. NAVY

NEWPORT NEWS, Va., February 25, 1999 –Newport News Shipbuilding (NYSE: NNS), announced today that it has met with Navy officials to formally begin the contract design process for the final Nimitz-class aircraft carrier, CVN 77.

This meeting, held earlier this week at Newport News Shipbuilding, marks the first time in recent history that the company will work with the U. S. Navy to jointly develop the contract design for a carrier. The team includes representatives from Newport News Shipbuilding; Supervisor of Shipbuilding Newport News; Naval Sea Systems Command; Naval Air Force Atlantic; Naval Air Force Pacific; Naval Air Systems Command; Space and Naval Warfare System Command; and Navy laboratories.

"The team will work together to define the design of CVN 77. Our goal is to improve the process of contracting for the ship," said Irwin F. Edenzon, Director of Future Carrier Programs for Newport News. "The work we do over the next year will allow the Navy and Newport News to resolve important issues that affect the capability and affordability of the ship."

The contract design, once complete, will include items such as drawings, specifications and a list of equipment intended to go into the ship. The Navy and Newport News will subsequently use this information as the basis for the CVN 77 construction contract.

The CVN 77 will serve as the transition ship to a new class of carriers. The planning contract for CVN 77 was awarded in September 1998 and reduces the cost impact of the production gap between CVN 76 and CVN 77. This contract includes three options that, if exercised, would bring the total value of this contract to approximately $190 million. To date, the approximate total value of the contract is $106 million. Full construction funding is expected in Fiscal Year 2001.

It is planned that CVN 77 will include new sensor and communication systems technology in an integrated combat system, reducing the total ownership cost of the ship and improving operational capabilities.

Newport News Shipbuilding designs and constructs nuclear-powered aircraft carriers and submarines for the U.S. Navy and provides life-cycle maintenance services for ships in the Navy fleet. The company employs 18,000 people and has annual revenues of approximately $1.9 billion.