Raytheon 2014 Annual Report Download - page 28

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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 have 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.
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 condition or results of operations.
We are the defendant 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.
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, 2014. 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 intellectual property 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 trade secrets and other proprietary information. These measures may not suffice to deter
misappropriation or third-party development of similar technologies. Moreover, the laws concerning intellectual property vary