Raytheon 2004 Annual Report Download - page 41

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• our ability and the ability of our key suppliers to respond to changes in customer orders
• timing of our new product introductions and the new product introductions of our competitors
• changes in the mix of our products
• cost and availability of components and subsystems
• price erosion
• adoption of new technologies and industry standards
• competitive factors, including pricing, availability and demand for competing products
• fluctuations in foreign currency exchange rates
• conditions in the capital markets and the availability of project financing
• regulatory developments
• general economic conditions, particularly the cyclical nature of the general aviation market in which we
participate
• our ability to obtain licenses from the U.S. Government to sell products abroad.
A rating downgrade by credit agencies could limit our access to capital and cause our borrowing costs to increase.
A downgrade in our credit rating could negatively affect our ability to access capital. Credit ratings for the
Company were assigned by Fitch at F3 for short-term borrowing and BBB- for senior debt, by Moody’s at P-3 for
short-term borrowing and Baa3 for senior debt, and by S&P at A-3 for short-term borrowing and BBB- for senior
debt. If the rating agencies downgrade our ratings, particularly below investment grade, it may significantly limit
our access to capital and our borrowing costs would increase. In addition, we would likely be required to pay a
higher interest rate in future financings and our potential pool of investors and funding sources would likely
decrease.
Item 2. Properties
The Company and its subsidiaries operate in a number of plants, laboratories, warehouses, and office facilities in
the United States and abroad.
At December 31, 2004, the Company owned, leased, and utilized approximately 40 million square feet of floor
space for manufacturing, engineering, research, administration, sales, and warehousing, approximately 93% of
which was located in the United States. Of such total, approximately 41% was owned (or held under a long-term
ground lease with ownership of the improvements), approximately 50% was leased, and approximately 9% was
made available under facilities contracts for use in the performance of United States Government contracts. At
December 31, 2004, the Company had approximately 693,000 square feet of additional floor space that was not in
use, including approximately 202,000 square feet in Company-owned facilities.
There are no major encumbrances on any of the Company’s facilities other than financing arrangements which
in the aggregate are not material. In the opinion of management, the Company’s properties have been well
maintained, are suitable and adequate for the Company to operate at present levels, and the productive capacity
and extent of utilization of the facilities are appropriate for the existing real estate requirements of the Company.
At December 31, 2004, our business segments had major operations at the following locations:
• Network Centric Systems – Fullerton, CA; Goleta, CA; Largo, FL; St. Petersburg, FL; Ft. Wayne, IN; Towson,
MD; Marlboro, MA; Dallas, TX; McKinney, TX; Plano, TX; Richardson, TX; Sherman, TX; Midland, Ontario,
Canada; and Waterloo, Ontario, Canada;
• Raytheon Aircraft – Little Rock, AR; Salina, KS; Wichita, KS; and Dallas, TX;
• Space and Airborne Systems – El Segundo, CA; Goleta, CA; Forest, MS; and Dallas, TX;
• Integrated Defense Systems – San Diego, CA; Andover, MA; Woburn, MA; Sudbury, MA; Tewksbury, MA;
Waltham, MA; Portsmouth, RI; Poulsbo, WA; Huntsville, AL; and Kiel, Germany;