Raytheon 2014 Annual Report Download - page 24

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addition, current U.S. Government budgetary constraints have and may continue to lead to changes in the procurement
environment. For example, the DoD continues initiatives focused on efficiencies, affordability and cost growth and other
changes to its procurement practices such as changes in payment term preferences. If and to the extent additional changes
occur as a result of these initiatives or otherwise, they could impact our results of operations, financial condition or liquidity,
and could affect whether and, if so, how we pursue certain opportunities and the terms under which we are able to do so.
In addition, failure to comply with the procurement regulations and requirements could result in reductions of the value of
contracts, contract modifications or termination, cash withholds on contract payments, and the assessment of penalties and
fines, which could negatively impact our results of operations, financial condition or liquidity. Our failure to comply with
these regulations and requirements could also lead to suspension or debarment, for cause, from U.S. Government contracting
or subcontracting for a period of time. Among the causes for debarment are violations of various statutes, including those
related to procurement integrity, export control, U.S. Government security regulations, employment practices, protection of
the environment, accuracy of records and the recording of costs, and foreign corruption. The termination of a U.S. Government
contract as a result of any of these acts could have a negative impact on our results of operations, financial condition or liquidity
and could have a negative impact on our reputation and ability to procure other U.S. Government contracts in the future.
Our future success depends on our ability to develop new offerings and technologies for our current and future markets.
To achieve our business strategies and continue to grow our revenues and operating profit, we must successfully develop new
offerings and technologies or adapt or modify our existing offerings and technologies for our current core defense markets
and our future markets, including new international, civil, commercial, growth and emerging markets. Accordingly, our future
performance depends on a number of factors, including our ability to:
- Identify the needs of, and growth opportunities in, new and emerging markets;
- Identify emerging technological and other trends in our current and future markets;
- Identify additional uses for our existing technology to address customer needs in our current and future markets;
- Develop and maintain competitive products and services for our current and future markets;
- Enhance our offerings by adding innovative features that differentiate our offerings from those of our competitors;
- Develop, manufacture and bring solutions to market quickly at cost-effective prices;
- Enhance product designs for export and releasability to international markets; and
- Effectively structure our businesses, through the use of joint ventures, collaborative agreements and other forms of
alliances, to reflect the competitive environment.
We believe that, in order to remain competitive in the future, we will need to continue to invest significant financial resources
to develop new offerings and technologies or to adapt or modify our existing offerings and technologies, including through
internal research and development, acquisitions and joint ventures or other teaming arrangements. We believe this is true to
meet demands and expand within both our domestic and international markets. These expenditures could divert our attention
and resources from other projects, and we cannot be sure that these expenditures will ultimately lead to the timely development
of new offerings and technologies or identification of and expansion into new markets. Due to the design complexity of our
products, we may in the future experience delays in completing the development and introduction of new products. Any delays
could result in increased costs of development or deflect resources from other projects. In addition, there can be no assurance
that the market for our offerings will develop or continue to expand or that we will be successful in newly identified markets
as we currently anticipate or that the acquisitions, joint ventures or other teaming arrangements we may enter into in pursuit
of developing new offerings and technologies will be successful. The failure of our technology to gain market acceptance
could significantly reduce our revenues and harm our business. Furthermore, we cannot be sure that our competitors will not
develop competing technologies which gain market acceptance in advance of our products.
Additionally, the possibility exists that our competitors might develop new technology or offerings that might cause our
existing technology and offerings to become obsolete. If we fail in our new product development efforts or our products or
services fail to achieve market acceptance more rapidly than our competitors, our ability to procure new contracts could be
negatively impacted, which would negatively impact our results of operations and financial condition.