Northrop Grumman 2011 Annual Report Download - page 30

NORTHROP GRUMMAN CORPORATION
our historical repurchase activity level). If such tax were incurred, the tax liability would be substantial. HII has
agreed not to undertake transactions that would reasonably be expected to trigger such tax, and we intend to
avoid any such transactions.
䡲The spin-off of our former Shipbuilding business may expose us to potential claims and liabilities.
In connection with the spin-off transaction, we entered into a number of agreements with HII setting forth
certain rights and obligations of the parties after the separation. For example, under the Separation and
Distribution Agreement, from and after the spin-off transaction, each of HII and Northrop Grumman is
generally responsible for the debts, liabilities and other obligations related to the business or businesses that it
owns and operates following the consummation of the spin-off. It is possible that a court would disregard the
allocation agreed to between us and HII, and require that we assume responsibility for certain obligations
allocated to HII (for example, tax and/or environmental liabilities), particularly if HII were to refuse or were
unable to pay or perform such obligations.
In addition, third parties could seek to hold us responsible for any of the liabilities or obligations for which HII
has agreed to be responsible and/or to indemnify us. The indemnity rights we have under our agreements
with HII may not be sufficient to protect us against such liabilities. Even if we ultimately succeed in recovering
from HII any amounts for which we are held liable, we may be required to record these losses ourselves until
such time as the indemnity contribution is paid. In addition, certain indemnities that we may be required to
provide HII are not subject to a cap, may be significant, and could negatively impact our business. These risks
could negatively affect our business and could have a material adverse effect on our financial position, results of
operations or cash flows.
Item 1B. Unresolved Staff Comments
No information is required in response to this item.
FORWARD-LOOKING STATEMENTS AND PROJECTIONS
This Form 10-K and the information we are incorporating by reference contain statements, other than statements
of historical fact, that constitute “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Words such as “expect,” “intend,” “may,” “could,” “plan,” “project,” “forecast,”
“believe,” “estimate,” “outlook,” “anticipate,” “trends” and similar expressions generally identify these forward-
looking statements. Forward-looking statements are based upon assumptions, expectations, plans and projections
that we believe to be reasonable when made. These statements are not guarantees of future performance and
inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific factors that could
cause actual results to differ materially from those expressed or implied in the forward-looking statements include,
but are not limited to, those identified under Risk Factors in Part I, Item 1A and other important factors disclosed
in this report and from time to time in our other filings with the SEC.
You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly
rely on the accuracy of predictions contained in such forward-looking statements. These forward-looking
statements speak only as of the date this report is first filed or, in the case of any document incorporated by
reference, the date of that document. We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise, except as required by
applicable law.
Item 2. Properties
At December 31, 2011, we owned or leased approximately 37 million square feet of floor space at approximately
655 separate locations, primarily in the U.S., for manufacturing, warehousing, research and testing, administration
and various other uses. At December 31, 2011, we leased to third parties approximately 469,000 square feet of our
owned and leased facilities, and had vacant floor space of approximately 403,000 square feet.
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