Northrop Grumman 2011 Annual Report Download - page 18

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NORTHROP GRUMMAN CORPORATION
needed to deliver those products and services affordably and efficiently. Like most of our competitors, we are
vertically integrated but also have a high reliance on the supply chain. We must continue to maintain dependable
sources for raw materials, fabricated parts, electronic components, and major subassemblies. In this increasingly
complex manufacturing and systems integration environment, effective oversight of subcontractors and suppliers is
vital to our success.
Similarly, there is intense competition among many companies in the information and services markets, which are
generally more labor intensive with highly competitive margin rates and contract performance periods of shorter
duration. Competitors in the information and services markets include the defense industry participants mentioned
above as well as many other large and small entities with specialized expertise. Our ability to successfully compete
in the information and services markets depends on a number of factors. The most important factor is the ability to
deploy skilled professionals, many requiring security clearances, at competitive prices across the diverse spectrum of
these markets. Accordingly, we have implemented various workforce initiatives to enhance our success in
attracting, developing and retaining these skilled professionals in sufficient numbers to maintain or improve our
competitive position within these markets.
In both the U.S. defense industry and information and services markets, the federal government has stressed
competition and affordability in connection with its future procurement of products and services. This may lead to
fewer sole source awards, as well as more emphasis on cost competitiveness. In addition, the DoD has announced
several initiatives to improve efficiency, refocus priorities, modify contract terms, and enhance DoD best practices
including those used to procure goods and services from defense contractors. See Overview and the Economic
Opportunities, Challenges, and Risks sections in Part II, Item 7, as well as Risk Factors in Part I, Item 1A. These
initiatives, when implemented, together with planned reductions in defense spending levels, are likely to result in
fewer new opportunities for our industry as a whole with more demanding terms. A reduced opportunity set is
likely to intensify competition within the industry as companies compete for a more limited set of new programs.
EXECUTIVE OFFICERS
See Part III, Item 10, for information about our executive officers.
AVAILABLE INFORMATION
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy
statement for the annual shareholders’ meeting, as well as any amendments to those reports, are available free of
charge through our website as soon as reasonably practicable after we file them with the SEC. You can learn more
about us by reviewing our SEC filings on the investor relations page of our web site at
www.northropgrumman.com.
The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information
about SEC registrants, including Northrop Grumman. You may also obtain these materials at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
References to our website and the SEC’s website in this report are provided as a convenience and do not
constitute, and should not be viewed as, incorporation by reference of the information contained on, or available
through, such websites.
Item1A. Risk Factors
Our consolidated financial position, results of operations and cash flows are subject to various risks, many of which
are not exclusively within our control, that may cause actual performance to differ materially from historical or
projected future performance. We urge you to carefully consider the risk factors described below in evaluating the
information contained in this report.
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