Cleveland Ship, LLC 6100 Oak Tree Blvd Suite 200, PMB 2123 Cleveland, OH Press Release

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1 Cleveland Ship, LLC October 12, 2010 Press Release Letters from Cleveland Shipbuilding Group s Senior Executives and Board of Directors to Governor Bobby Jindal of Louisiana, Governor Haley Barbour of Mississippi, and Governor Robert McDonnell of Virginia Cleveland Shipbuilding Group has forwarded the attached letter via Express Mail to Governor Bobby Jindal of Louisiana, providing the commitment of its senior executive team and Board of Directors that once we successfully complete our proposed acquisition we will work to ensure a long, robust and successful future for this once and future great shipyard. As long as there are ships and related equipment to build in support of our commercial customers or our nation s defense we will do everything in our power to ensure that the Avondale Shipyard is there to build them, with a strong, vibrant business and long-term ownership stability as a key element of the Cleveland Shipbuilding Group. Cleveland Shipbuilding Group hand delivered the attached letter to Governor Haley Barbour s senior staff during its October 12 meeting with certain members of the Governor s senior staff in Jackson, MS to discuss the Cleveland Ship offer to acquire Northrop Grumman Shipbuilding Sector. This letter provides the commitment of Cleveland Ship s senior executive team and Board of Directors that once we successfully complete our proposed acquisition we will work to ensure a long, robust and successful future for this once and future great shipbuilder. As long as there are ships to build in support of our nation s defense we will do everything in our power to ensure that the Ingalls Shipyard is there to build them, with a strong, vibrant business and long-term ownership stability as a key element of the Cleveland Shipbuilding Group. Cleveland Shipbuilding Group has forwarded the attached letter via Express Mail to Governor Robert McDonnell of Virginia, providing the commitment of its senior executive team and Board of Directors that once we successfully complete our proposed acquisition we will work to ensure a long, robust and successful future for this national asset. As long as there are ships to build in support of our nation s defense in particular, nuclear powered ships we will do everything in our power to ensure that the Newport News Shipyard is there to build, maintain and overhaul/refuel them, with a strong, vibrant business and long-term ownership stability as a key element of the Cleveland Shipbuilding Group.

2 Via Express Mail Governor Bobby Jindal State of Louisiana P.O. Box Baton Rouge, LA Subject: Cleveland Shipbuilding Group s Long Term Commitment to Louisiana Dear Governor Jindal, The purpose of this letter is to provide our letter of commitment to maintaining the Avondale Shipyard, and its associated facilities, as a strong and vibrant business for many years to come. As discussed with your Assistant Secretary of Economic Development, Donald Pierson, in our August 12 meeting in Baton Rouge and in our subsequent communications with him, we are totally committed to the long term success of the Avondale Shipyard as a hybrid commercial/ naval auxiliary shipbuilder with a steady employment level of about 5,000 personnel. To the best of our knowledge, our plan is the only plan that offers this commitment to long term employment stability from a committed long term owner. When we complete our proposed acquisition of the Northrop Grumman Shipbuilding Sector we will announce our intent to keep Avondale open. Concurrently we will cease all business shutdown preparations. We expect this to bring immediate economic benefits to the State of Louisiana, as well as to enable an immediate improvement in the productivity and performance of the business. By way of example, we are aware that the shipyard currently needs more than 100 additional qualified electricians for shipbuilding duties on LPD 23 and LPD 25 but that the business is having significant difficulties in filling these openings because of the shutdown announcement. We expect that the workforce, and potential new employees, will recognize that there is a long term future for the business and will join us in making it happen. We d like to note that in addition to the market opportunities outlined in our October 3 Press Release, we have since been contacted by an advanced technology wind energy company to partner in the production of offshore wind energy platforms. While this business won t mature for 3 to 5 years, this company s shipyard potential business forecast is in excess of $750 million per year in the second half of this decade. While the Newport News shipyard is currently teamed with another wind energy supplier in a similar program, to the extent contractually possible (i.e. that there is no exclusivity issue in the existing wind energy arrangement) we intend to aggressively pursue this business opportunity for Avondale. In the mean time, we will continue to work with the Louisiana Congressional delegation to get the absolutely essential fleet oiler legislation prepared by Senator Mary Landrieu enacted so that we can build fleet oilers for our affiliated company Cleveland Shipholding Group, to maintain Avondale employment levels at about 5,000 personnel in the years to come as other opportunities mature.

3 Governor Bobby Jindal acquisition we will work to ensure a long, robust and successful future for this once and future great shipyard. As long as there are ships and related equipment to build in support of our commercial customers or our nation s defense we will do everything in our power to ensure that the Avondale Shipyard is there to build them, with a strong, vibrant business and longterm ownership stability as a key element of the Cleveland Shipbuilding Group. Proprietary Page 2 of 2

4 Via Hand Delivery Governor Haley Barbour State of Mississippi P.O. Box 139 Jackson, MS Subject: Cleveland Shipbuilding Group s Long Term Commitment to Mississippi Dear Governor Barbour, The purpose of this letter is to provide our letter of commitment to maintaining the Ingalls Shipyard at Pascagoula, and its associated facilities, as a strong and vibrant business for many years to come. As noted in our October 3, 2010 Press Release, to the best of our knowledge we are the only offeror for this business who has forwarded an offer for the entire enterprise. Also, as noted in that same press release, our strategic intent is to own these shipyards for the long term, and not to re-sell them in a relatively short time as is likely to be the desire of a financial acquirer. When we complete our proposed acquisition of the Northrop Grumman Shipbuilding Sector our most immediate objective will be to promptly reach a satisfactory conclusion of the overly lengthy contract negotiations process for the approximately $5 billion in outstanding shipbuilding contracts. These outstanding ships not under contract include DDG 113, DDG 114 and LPD 26 for the US Navy and NSC 4 & NSC 5 for the US Coast Guard. As noted in the above referenced press release, we have already developed a plan to expedite this contracting process. We understand the vital urgency of this activity, and you can rest assured that we will do everything within our power to get these key contract negotiations completed in a fashion that both secures a successful future for the business and which minimizes the layoffs that would result from unnecessarily extended contract negotiations. acquisition we will work to ensure a long, robust and successful future for this once and future great shipbuilder. As long as there are ships to build in support of our nation s defense we will do everything in our power to ensure that the Ingalls Shipyard is there to build them, with a strong, vibrant business and long-term ownership stability as a key element of the Cleveland Shipbuilding Group.

5 Via Express Mail Governor Robert F. McDonnell Commonwealth of Virginia Patrick Henry Building, 3 rd Floor 1111 East Broad St. Richmond, VA Subject: Cleveland Shipbuilding Group s Long Term Commitment to Virginia Dear Governor McDonnell, The purpose of this letter is to provide our letter of commitment to maintaining the Newport News Shipyard, and its associated facilities, as a strong and vibrant business for many years to come. As noted in our October 3, 2010 Press Release, to the best of our knowledge we are the only offeror for this business who has forwarded an offer for the entire enterprise. Also, as noted in that same press release, our strategic intent is to own these shipyards for the long term, and not to re-sell them in a relatively short time as is likely to be the desire of a financial acquirer. When we complete our proposed acquisition of the Northrop Grumman Shipbuilding Sector our most immediate objective will be to upgrade the performance of the two Gulf Coast Shipyards. As has been reported in the press, our expectation is that most employees of Newport News Shipyard will not experience any significant changes. Our focus for Newport News will be on providing excellent stewardship for this national asset. As we move forward, we will be working to ensure that Newport News is and remains highly competitive, and delivers each ship/program on time. With regard to quality and profitability, we will be guided by Collis P. Huntington s direction that We shall build good ships here. At a profit if we can. At a loss if we must. But always good ships. With this, we will be prepared in the event that the Navy decides to compete future submarine production contracts. acquisition we will work to ensure a long, robust and successful future for this national asset. As long as there are ships to build in support of our nation s defense in particular, nuclear powered ships we will do everything in our power to ensure that the Newport News Shipyard is there to build, maintain and overhaul/refuel them, with a strong, vibrant business and long-term ownership stability as a key element of the Cleveland Shipbuilding Group.