Raytheon 2007 Annual Report Download - page 49

the diversion of our attention and resources from our operations and other initiatives, the potential impairment of
acquired assets and the potential loss of key employees of the acquired businesses.
We have entered, and expect to continue to enter, into joint venture, teaming and other arrangements, and these activities
involve risks and uncertainties.
We have entered, and expect to continue to enter, into joint venture, teaming and other arrangements. These activities
involve risks and uncertainties, including the risk of the joint venture or applicable entity failing to satisfy its obligations,
which may result in certain liabilities to us for guarantees and other commitments, the challenges in achieving strategic
objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and
the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such
business arrangements.
Goodwill and other intangible assets represent a significant portion of our assets and any impairment of these assets could
negatively impact our results of operations.
At December 31, 2007, we had goodwill and other intangible assets of approximately $12.1 billion, net of accumulated
amortization, which represented approximately 52% of our total assets. Our goodwill is subject to an impairment test on
an annual basis and is also tested whenever events and circumstances indicate that goodwill may be impaired. Any excess
goodwill resulting from the impairment test must be written off in the period of determination. Intangible assets (other
than goodwill) are generally amortized over the useful life of such assets. In addition, from time to time, we may acquire
or make an investment in a business which will require us to record goodwill based on the purchase price and the value of
the acquired assets. We may subsequently experience unforeseen issues with such business which adversely affect the
anticipated returns of the business or value of the intangible assets and trigger an evaluation of the recoverability of the
recorded goodwill and intangible assets for such business. Future determinations of significant write-offs of goodwill or
intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have a
negative impact on our results of operations and financial condition.
The outcome of litigation in which we have been named as a defendant is unpredictable and an adverse decision in any
such matter could have a material adverse effect on our financial position or results of operations.
We are defendants in a number of litigation matters and are subject to various other claims, demands and investigations.
These matters may divert financial and management resources that would otherwise be used to benefit our operations.
Although we believe that we have meritorious defenses to the claims made in the litigation matters to which we have been
named a party and intend to contest each lawsuit vigorously, no assurances can be given that the results of these matters
will be favorable to us. An adverse resolution or outcome of any of these lawsuits, claims, demands or investigations
could have a negative impact on our financial condition, results of operations and liquidity.
We depend on the recruitment and retention of qualified personnel, and our failure to attract and retain such personnel
could seriously harm our business.
Due to the specialized nature of our business, our future performance is highly dependent upon the continued services of
our key engineering personnel and executive officers, the development of additional management personnel and the
hiring of new qualified engineering, manufacturing, marketing, sales and management personnel for our operations.
Competition for personnel is intense, and we may not be successful in attracting or retaining qualified personnel. In
addition, certain personnel may be required to receive security clearance and substantial training in order to work on
certain programs or perform certain tasks. The loss of key employees, our inability to attract new qualified employees or
adequately train employees, or the delay in hiring key personnel could seriously harm our business, results of operations
and financial condition.
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