Raytheon 2010 Annual Report Download - page 27

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.
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.
Our business could be negatively impacted by security threats and other disruptions.
As a U.S. defense contractor, we face certain security threats, including threats to our information technology
infrastructure, attempts to gain access to our proprietary or classified information, and threats to physical security. These
types of events could disrupt our operations, require significant management attention and resources, and could
negatively impact our reputation among our customers and the public, which could have a negative impact on our
financial condition, results of operations and liquidity.
Some of our workforce is represented by labor unions so our business could be harmed in the event of a prolonged work
stoppage.
Approximately 5,800 of our employees are unionized, which represents approximately 8% of our employee-base at
December 31, 2010. As a result, we may experience work stoppages, which could adversely affect our business. We cannot
predict how stable our union relationships will be or whether we will be able to successfully negotiate successor
agreements without impacting our financial condition. In addition, the presence of unions may limit our flexibility in
dealing with our workforce. Work stoppages could negatively impact our ability to manufacture our products on a timely
basis, which could negatively impact our results of operations and financial condition.
We may be unable to adequately protect our intellectual property rights, which could affect our ability to compete.
We own many U.S. and foreign patents and patent applications, and have rights in unpatented know-how, data, software,
trademarks and copyrights. The U.S. Government has licenses under certain of our patents and certain other intellectual
property that are developed in performance of government contracts, and it may use or authorize others to use such
patents and intellectual property for government purposes. There can be no assurance that any of our patents and other
intellectual property will not be challenged, invalidated, misappropriated or circumvented by third parties. In some
instances, we have augmented our technology base by licensing the proprietary intellectual property of others. In the
future, we may not be able to obtain necessary licenses on commercially reasonable terms. We enter into confidentiality
and invention assignment agreements with our employees and enter into non-disclosure agreements with our suppliers
and appropriate customers so as to limit access to and prevent disclosure of our proprietary information. These measures
may not suffice to deter misappropriation or third party development of similar technologies. Moreover, the laws
concerning intellectual property vary among nations and the protection provided to our intellectual property by the laws
and courts of foreign nations may not be as advantageous to us as the remedies available under U.S. law.
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