1047122--2/22/2007--RAYTHEON

related topics

{regulation, government, change}

{financial, litigation, operation}

{cost, contract, operation}

{regulation, change, law}

{acquisition, growth, future}

{tax, income, asset}

{product, market, service}

{product, candidate, development}

{property, intellectual, protect}

{cost, operation, labor}

{customer, product, revenue}

{personnel, key, retain}

{operation, international, foreign}

{cost, regulation, environmental}

{product, liability, claim}

The consummation of our sale of Raytheon Aircraft Company is subject to risks and uncertainties, including the satisfaction or waiver of specified closing conditions by both parties. We depend on the U.S. government for a significant portion of our business and changes in government defense spending could have severe consequences on our financial position, results of operations and business. Our financial performance is dependent on our ability to perform our U.S. government contracts which are subject to uncertain levels of funding and termination. Our international sales are a significant portion of our business and such sales may expand in the future; accordingly, we may increasingly become subject to the risks of doing business in foreign countries. We may not be successful in obtaining the necessary licenses to conduct operations abroad, and Congress may prevent proposed sales to foreign governments. Competition within our markets may reduce our revenues and market share. Our future success depends on our ability to develop new offerings and technologies for our current and future markets. We enter into fixed-price contracts which could subject us to losses in the event that we have cost overruns. Our business could be adversely affected by a negative audit by the U.S. government. As a U.S. government contractor, we are subject to a number of procurement rules and regulations. We depend on component availability, subcontractor performance and our key suppliers to manufacture and deliver our products and services. We use estimates in accounting for many of our programs and changes in our estimates could adversely affect our future financial results. Goodwill and other intangible assets represent a significant portion of our assets and any impairment of these assets could negatively impact our results of operations. We remain subject to certain risks and uncertainties with respect to Raytheon Aircraft Company while we continue to operate the business. If Flight Options is unable to meet its projected future financial performance or otherwise support its carrying value, we could record additional impairment charges which could have a negative impact on our results of operations. We use estimates in accounting for our pension plan and changes in our estimates could adversely affect our results of operations. We have entered, and expect to continue to enter, into joint venture, teaming and other arrangements, and these activities involve risks and uncertainties. We have made, and expect to continue to make, strategic acquisitions and investments, and these activities involve risks and uncertainties. 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 depend on the recruitment and retention of qualified personnel, and our failure to attract and retain such 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. We may be unable to adequately protect our intellectual property rights, which could affect our ability to compete. Our operations expose us to the risk of material environmental liabilities. We face certain significant risk exposures and potential liabilities that may not be adequately covered by indemnity or insurance. New accounting standards could result in changes to GAAP that could impact our reported results of operations, financial condition and other financial measures.

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1047122--2/22/2007--RAYTHEON_CO/