Raytheon 2013 Annual Report Download - page 29

19
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.
Some of our workforce is represented by labor unions so our business could be harmed in the event of a prolonged work
stoppage.
Approximately 5,000 of our employees are unionized, which represents approximately 8% of our employee-base at
December 31, 2013. 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 or used in performance of government contracts, and it may use or authorize others, including
our competitors, to use such patents and intellectual property for government and other purposes. The U.S. Government may
challenge the sufficiency of intellectual property rights we have granted in U.S. Government contracts and attempt to obtain
greater rights. 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.
Our operations expose us to the risk of material environmental liabilities.
We use hazardous substances and generate hazardous wastes in our manufacturing operations. As a result, we are subject to
potentially material liabilities related to personal injuries or property damages that may be caused by hazardous substance
releases and exposures. For example, we are investigating and remediating contamination related to past practices at a number
of properties and, in some cases, have been named as a defendant in related “toxic tort” claims for costs of cleanup and property
damages.
We are also subject to laws and regulations that: (i) impose requirements for the proper management, treatment, storage and
disposal of hazardous substances and wastes; (ii) restrict air and water emissions from our operations (including U.S.
Government-owned facilities we manage); and (iii) require maintenance of a safe workplace. These laws and regulations can
impose substantial fines and criminal sanctions for violations, and may require the installation of costly pollution control
equipment or operational changes to limit pollution emissions and/or decrease the likelihood of accidental hazardous substance
releases.
If we were convicted of a criminal violation of certain U.S. federal environmental statutes, including the Federal Clean Air
Act and the Clean Water Act, the facility or facilities involved in the violation would be placed by the EPA on the “Excluded