Raytheon 2012 Annual Report Download - page 27

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19
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 or 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 cybersecurity threats and other security threats and 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, threats to physical security, and possible domestic terrorism
events. Our information technology networks and related systems are critical to the operation of our business and essential to
our ability to successfully perform day-to-day operations. We are also involved with information technology systems for
certain customers and other third parties, which generally face similar security threats. Cybersecurity threats in particular, are
persistent, evolve quickly and include, but are not limited to, computer viruses, attempts to access information, denial of
service and other electronic security breaches. We believe we have implemented appropriate measures and controls and we
have invested in highly skilled IT resources to appropriately identify threats and mitigate potential risks, but there can be no
assurance that such actions will be sufficient to prevent disruptions to mission critical systems, the unauthorized release of
confidential information or corruption of data. Although we have in the past and will in the future be the subject of such
cybersecurity incidents, to date none had a material impact on our financial condition, results of operations or liquidity.
Nonetheless, these types of events could disrupt our operations or customer and other third party IT systems in which we are
involved. They also could 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 or
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 5,300 of our employees are unionized, which represents approximately 8% of our employee-base at
December 31, 2012. 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.