Northrop Grumman (NOC) risk factors, FY2025 10-K

Northrop Grumman's FY2025 10-K, filed Jan 27, 2026, lists 12 risk factors in 3 groups. Against the prior year's 6: 7 new, 1 dropped, 5 substantially reworded.

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Risk factors listed
123 groups
New this year
7vs 6 last year
Dropped
1since the prior 10-K
Substantially reworded
5of those kept
Section length
11k wordsItem 1A

What the changes say

  • Federal budget uncertainties, debt limits, and statutory risks increasingly threaten operations and contract performance.
  • Intense competition, complex contract accounting, and talent retention challenges heavily impact profitability.
  • Supply chain vulnerabilities and cybersecurity compliance obligations create significant ongoing risks.

What changed since the prior 10-K

New

  • NewIndustry and Economic Risks

    In addition, high deficit levels and high debt servicing costs could drive cuts to federal spending. If the statutory debt limit is reached and not increased adequately, we could be obligated to work without receiving timely payments, and a prolonged breach could have far-reaching adverse consequences

    High federal debt levels and potential statutory debt limit breaches could delay payments or drive spending cuts.

  • NewIndustry and Economic Risks

    strategies (e.g., multiple awardees, short lifecycles) or be more inclined to take on increased risk. In addition, some customers continue to utilize small business contractors or determine to source work internally

    Intense competition from domestic and foreign firms, alongside foreign government subsidies, threatens pricing power and supplier access.

  • NewLegal and Regulatory Risks

    adequate funding for our programs or obtain adequate supplies or insurance in the future. See Note 10 to the consolidated financial statements for information regarding the company’s investigations, claims and litigation

    Strict procurement laws expose the company to contract terminations, suspension, debarment, or financial penalties for non-compliance.

  • NewBusiness and Operational Risks

    NORTHROP GRUMMAN CORPORATION

    Failures by suppliers or partners to maintain adequate cybersecurity controls can cause financial and reputational harm.

  • NewBusiness and Operational Risks

    Additionally, we may be held responsible not only for our own compliance with legal, contractual and customer requirements, but that of our suppliers, including with respect to counterfeit, unauthorized or otherwise non-compliant parts or materials

    The company faces heightened competition for talent with required security clearances and STEM skills, leading to rising wage rates.

  • NewBusiness and Operational Risks

    adequate legal remedies. In addition, our trade secrets or other proprietary information may otherwise become known or be independently developed by competitors

    Inability to secure necessary third-party intellectual property rights or challenges to proprietary trade secrets could hinder contract performance.

  • NewBusiness and Operational Risks

    FORWARD-LOOKING STATEMENTS AND PROJECTIONS

    Forward-looking statements involve inherent uncertainties and assumptions that may cause actual financial results to differ materially.

Dropped

  • DroppedLegal and Regulatory Risks

    incentive-based fee arrangements; fixed price development or long-term production programs; different award criteria; and non-traditional contract provisions have affected and may in the future affect our profitability and predictability

Reworded

  • 100% rewrittenIndustry and Economic Risks

    NORTHROP GRUMMAN CORPORATION

    Expanded to explicitly cite continuing resolutions, government shutdowns, and debt ceiling breaches as threats to U.S. government funding.

  • 100% rewrittenLegal and Regulatory Risks

    NORTHROP GRUMMAN CORPORATION

    Substantially reorganized or removed specific default and re-procurement liability disclosures.

    Was: NORTHROP GRUMMAN CORPORATION

  • 96% rewrittenLegal and Regulatory Risks

    Government and private parties also seek to hold us responsible for liabilities or obligations related to former operations that have been divested or spun-off and/or for which we believe other parties have agreed to be responsible and/or to indemnify us. These rights may not be sufficient to protect us

    Added risks regarding divested or spun-off operations and liabilities related to the measurement of benefit plan obligations and uncertain tax positions.

  • 35% rewrittenBusiness and Operational Risks

    In addition, our customers, or others, may use, handle or test our products and services in ways that can be unusually hazardous or risky, or in ways that are not intended, not authorized or inconsistent with guidance and warnings, which may create potential liabilities for our company, as well as reputational harm

    Added specific risks regarding customer misuse or unauthorized handling of products leading to potential liabilities and reputational harm.

    Was: In addition, our customers may use, handle or test our products and services in ways that can be unusually hazardous or risky, or in ways that are not intended, not authorized or inconsistent with guidance and warnings, which may create potential liabilities for our company, as well as reputational harm

  • 25% rewrittenBusiness and Operational Risks

    General and Other Risk Factors

    Minor phrasing updates regarding the availability and limits of insurance coverage from counterparties for hazardous operations and cybersecurity.

All 12 risk factors

Headings as the filing states them, in filing order.

Industry and Economic Risks

  1. 01NORTHROP GRUMMAN CORPORATION100% rewritten
  2. 02In addition, high deficit levels and high debt servicing costs could drive cuts to federal spending. If the statutory debt limit is reached and not increased adequately, we could be obligated to work without receiving timely payments, and a prolonged breach could have far-reaching adverse consequencesNew
  3. 03strategies (e.g., multiple awardees, short lifecycles) or be more inclined to take on increased risk. In addition, some customers continue to utilize small business contractors or determine to source work internallyNew

Legal and Regulatory Risks

  1. 04NORTHROP GRUMMAN CORPORATION100% rewritten
  2. 05adequate funding for our programs or obtain adequate supplies or insurance in the future. See Note 10 to the consolidated financial statements for information regarding the company’s investigations, claims and litigationNew
  3. 06Government and private parties also seek to hold us responsible for liabilities or obligations related to former operations that have been divested or spun-off and/or for which we believe other parties have agreed to be responsible and/or to indemnify us. These rights may not be sufficient to protect us96% rewritten

Business and Operational Risks

  1. 07NORTHROP GRUMMAN CORPORATIONNew
  2. 08Additionally, we may be held responsible not only for our own compliance with legal, contractual and customer requirements, but that of our suppliers, including with respect to counterfeit, unauthorized or otherwise non-compliant parts or materialsNew
  3. 09In addition, our customers, or others, may use, handle or test our products and services in ways that can be unusually hazardous or risky, or in ways that are not intended, not authorized or inconsistent with guidance and warnings, which may create potential liabilities for our company, as well as reputational harm35% rewritten
  4. 10adequate legal remedies. In addition, our trade secrets or other proprietary information may otherwise become known or be independently developed by competitorsNew
  5. 11General and Other Risk Factors25% rewritten
  6. 12FORWARD-LOOKING STATEMENTS AND PROJECTIONSNew

Other Northrop Grumman 10-Ks

  • FY2024 10-K risk factors
    Risk factors section under review

    Northrop Grumman faces heavy reliance on U.S. government defense contracts, fixed-price development risks, and complex regulatory compliance burdens. Liabilities from divested operations, hazardous product uses, and inadequate insurance or indemnification pose additional financial threats.

    Filed Jan 30, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.