Northrop Grumman 2010 Annual Report Download - page 27

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These events could damage our reputation and lead to financial losses from remedial actions we must take,
potential liability to customers and litigation expenses.
쐍Our nuclear operations subject us to various environmental, regulatory, financial and other risks.
The development and operation of nuclear-powered aircraft carriers, nuclear-powered submarines, nuclear
facilities and other nuclear operations subject us to various risks, including:
쐍potential liabilities relating to harmful effects on the environment and human health resulting from
nuclear operations and the storage, handling and disposal of radioactive materials;
쐍unplanned expenditures relating to maintenance, operation, security and repair, including repairs required
by the Nuclear Regulatory Commission;
쐍reputational harm; and
쐍potential liabilities arising out of a nuclear incident whether or not it is within our control.
The U.S. Government provides indemnity protection against specified risks under our contracts pursuant to
Public Law 85-804 and the Price-Anderson Nuclear Industries Indemnity Act for certain of our nuclear
operations risks. Our nuclear operations are subject to various safety-related requirements imposed by the
U.S. Navy, DoE, and Nuclear Regulatory Commission. In the event of noncompliance, these agencies may
increase regulatory oversight, impose fines or shut down our operations, depending upon the assessment of
the severity of the situation. Revised security and safety requirements promulgated by these agencies could
necessitate substantial capital and other expenditures. Additionally, while we maintain insurance for certain
risks related to transportation of low level nuclear materials and waste, such as contaminated clothing, and for
regulatory changes in the health, safety and fire protection areas, there can be no assurances that such
insurance will be sufficient to cover our costs in the event of an accident or business interruption relating to
our nuclear operations, which could have a material adverse effect on our financial position, results of
operations, or cash flows.
쐍Unforeseen environmental costs could have a material adverse effect on our financial position, results of
operations, or cash flows.
Our operations are subject to and affected by a variety of federal, state, local and foreign environmental
protection laws and regulations. In addition, we could be affected by future laws or regulations, including
those imposed in response to climate change concerns and other actions commonly referred to as “green
initiatives.” Compliance with current and future environmental laws and regulations currently requires and is
expected to continue to require significant operating and capital costs.
Environmental laws and regulations can impose substantial fines and criminal sanctions for violations, and
may require the installation of costly pollution control equipment or operational changes to limit pollution
emissions or discharges and/or decrease the likelihood of accidental hazardous substance releases. We also
incur, and expect to continue to incur, costs to comply with current federal and state environmental laws and
regulations related to the cleanup of pollutants previously released into the environment. In addition, if we
were found to be in violation of the Federal Clean Air Act or the Clean Water Act, the facility or facilities
involved in the violation could be placed by the EPA on the “Excluded Parties List” maintained by the
General Services Administration. The listing would continue until the EPA concludes that the cause of the
violation had been cured. Listed facilities cannot be used in performing any U.S. Government contract while
they are listed by the EPA.
The adoption of new laws and regulations, stricter enforcement of existing laws and regulations, imposition
of new cleanup requirements, discovery of previously unknown or more extensive contamination, litigation
involving environmental impacts, our ability to recover such costs under previously priced contracts or
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NORTHROP GRUMMAN CORPORATION