Northrop Grumman 2009 Annual Report Download - page 26

jurisdictions in which we operate, including laws governing payments to government officials, competition
and data privacy. However we cannot ensure that we will prevent all such reckless or criminal acts committed
by our employees, agents or business partners. Any improper actions could subject us to civil or criminal
investigations, monetary and non-monetary penalties and could have a material adverse effect on our ability
to conduct business, our results of operations and our reputation.
쐍Our business could be negatively impacted by security threats and other disruptions.
As a defense contractor, we face certain security threats, including threats to our information technology
infrastructure and unlawful attempts to gain access to our proprietary or classified information. Our
information technology networks and related systems are critical to the smooth operation of our business and
essential to our ability to perform day to day operations. Loss of security within this critical operational
infrastructure could disrupt our operations, require significant management attention and resources and could
have a material adverse effect on our performance.
We also manage information technology systems for various customers. While we maintain information
security policies and procedures for managing these systems, we face generally the same security threats for
these systems as for our own systems. Computer viruses, attempts to gain access to our customers’ data or
other electronic security breaches could lead to disruptions in mission critical systems for our customers,
unauthorized release of confidential or personally identifiable information and corruption of customer data.
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 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;
쐍limitations on the amounts and types of insurance commercially available to cover losses that might arise
in connection with nuclear operations; 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 Public Law 85-804 and the
Price-Anderson Nuclear Indemnities Act for certain of our nuclear operations risks. Our nuclear operations
are subject to various safety-related requirements imposed by the U.S. Navy, Department of Energy, and
Nuclear Regulatory Commission. In the event of non-compliance, 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.
쐍Unforeseen environmental costs could have a material adverse effect on our financial condition or results of
operations.
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 capital and operating costs, but is not expected to have a material
adverse effect on our financial condition.
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NORTHROP GRUMMAN CORPORATION
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