Raytheon Technologies (RTX) 2014年年度報告「NYSE」.pdf

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1、2 0 1 4 A N N U A L R E P O R T10 11 12 13 1410 11 12 13 1410 11 12 13 1410 11 12 13 14NET SALESOPERATING INCOMEEPS FROM CONTINUING OPERATIONSDIVIDENDS PER SHAREYEARS ENDED DECEMBER 31In millions,except per share amounts201220132014Net Sales$24,414$23,706$22,826Operating Income2,9892,9383,179EPS fro

2、m Continuing Operations5.655.966.97Adjusted Income12,0992,0691,913Adjusted EPS16.286.386.12Operating Cash Flow from Continuing Operations1,9512,3822,064Dividends Declared per Share2.002.202.421.Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders

3、and Adjusted EPS is EPS from continuing operations attributable to Raytheon Company common stockholders excluding,in both cases,the impact of the FAS/CAS adjustment and,from time to time,certain other items.Adjusted Income and Adjusted EPS are non-GAAP financial measures.Please see the page that pre

4、cedes the back cover of this report for information on the excluded items,a reconciliation of these measures to GAAP and a discussion of why the Company is presenting this information.R A Y T H E O N 2 0 1 4 F I N A N C I A L H I G H L I G H T SIn billions,except per share amounts$22.8$3.2$6.97$2.42

5、My 31 years with Raytheon have instilled in me a deep pride for what we do for our customers.Driven by purpose,we act as one global team creating trusted,innovative solutions to make the world a safer place.Therefore,on behalf of the Raytheon team worldwide,I am proud to present this record of Rayth

6、eons performance during 2014.Raytheon continued to deliver solid financial results in 2014,despite a challenging environment,and I am pleased with our overall performance.Bookings,operating income and earnings were all up compared to 2013,and cash flow was strong.In 2014,we had solid net sales of$22

7、.8 billion,and bookings totaled$24.1 billion.Our full-year 2014 EPS from continuing operations was$6.97,operating income was$3.2 billion,and operating cash flow from continuing operations was$2.1 billion after a$600 million pretax discretionary pension plan contribution.At the end of 2014,our backlo

8、g was$33.6 billion,and the funded backlog was$23.1 billion.Confidence in these results led to Raytheons stock outperforming the Standard&Poors 500 index again in 2014,the fourth consecutive year.As stewards for our shareholders,we continued to drive our balanced capital deployment strategy.For the f

9、ull-year 2014,the company repurchased 7.7 million shares of common stock for$750 million.Additionally,we increased our dividend by 10 percent in 2014our 10th consecutive year with an increase.Given the global threat environment,our international strategy continues to be a strength.I have heard again

10、 and again from customers I have met with around the world that national security remains a top priority.As a result,our international bookings in 2014 increased by 27 percent compared to 2013,and our backlog at the end of 2014 included 40 percent international business.A case in point,we added the

11、13th country to the global Patriot family with the$2.4 billion award to provide the State of Qatar with the Patriot Air and Missile Defense System.In 2014,we had solid net sales of$22.8 billion,and bookings totaled$24.1 billion.”Dear Fellow Shareholders,Global Demand for Our Advanced SolutionsOur st

12、rong bookings reflect the demand for our diverse range of advanced solutions from our domestic and international customers.This was evidenced by our many key contracts,competitive awards and technology achievements during the year.Furthermore,to stay aligned with our customers priorities for the lon

13、g term,we continue to make investments in game-changing technologies that differentiate our solutions in the marketplace.MISSILE DEFENSE:In the area of Missile Defense,the continued momentum for our combat-proven Patriot system also included a$655 million contract to provide Kuwait with two new-prod

14、uction Patriot fire units and a$160 million award to provide Patriot Guidance Enhanced Missile-Tactical(GEM-T)missiles for another international customer.Our many successful tests in 2014 included the Standard Missile-6 destroying a target in the longest-distance surface-to-air strike in naval histo

15、ry,the Exoatmospheric Kill Vehicle ground-based interceptor with the latest hardware and software upgrades,and the first flight test of the Standard Missile-3 from the Aegis Ashore weapon system.We also booked$634 million for the SM-3 for the Missile Defense Agency,and the U.S.Navy deployed the seco

16、nd-generation SM-3 Block IB for the first time.COMMAND,CONTROL,COMMUNICATIONS,COMPUTERS,INTELLIGENCE,SURVEILLANCE AND RECONNAISSANCE:We further strengthened our leading position in C4ISR systems when the U.S.Air Force selected Raytheon in the competitions for both the Family of Advanced Beyond Line

17、of Sight Terminals(FAB-T)program and the Three-Dimensional Expeditionary Long-Range Radar program.Additionally,the Federal Aviation Administration awarded us$350 million to modernize air traffic control centers at 135 airports with our Standard Terminal Automation System platform,and the U.S.Army be

18、gan an exercise in the National Capitol Region with our JLENS tethered radar blimp,which can detect cruise missile,drone and airplane threats at extremely long ranges.CYBERSECURITY:In the cyber market,we are winning new business and seeing significant opportunities developing both domestically and i

19、nternationally as we seek to unlock the value of our cyber capabilities to meet the growing global demand.For instance,we booked a$260 million award for an international cyber program during the year.We further enhanced our capabilities by acquiring Blackbird Technologiesstrengthening our offerings

20、in persistent surveillance,secure mobile communications and cybersecurity solutions in intelligence and special operations markets.In the cyber market,we are winning new business and seeing significant opportunities developing both domestically and internationally.”In the cyber market,we are winning

21、 new business and seeing significant opportunities developing both domestically and internationally.”Given the global threat environment,our international strategy continues to be a strength.I have heard again and again from customers I have met with around the world that national security remains a

22、 top priority.”ELECTRONIC WARFARE:For more than 50 years,our jammers,decoys and other electronic warfare products have earned a worldwide reputation for performance and reliability.Now we are innovating to develop the next generation of EW systems such as the Next Generation Jammer.In 2014 we establ

23、ished a new electronic warfare mission area,which combines technologies and capabilities to support our customers future vision of EW,including mission solutions that access and control the electromagnetic spectrum and equip them with the strategic advantage to operate unimpeded in the modern threat

24、 environment.PRECISION WEAPONS:In a new era of warfare,our precision weapons are accomplishing the mission with a level of accuracy once only imagined.Our systems incorporate satellite navigation,laser guidance,high-definition radars,advanced seekers and other technologies to continually enhance the

25、ir capabilities.Notable awards in this area included$893 million for our tube-launched,optically tracked,wireless-guided(TOW)missiles for the U.S.Army,U.S.Marines and international customers,$706 million for AMRAAM for the U.S.Air Force,U.S.Navy and international customers,and$316 million for Tomaha

26、wk for the U.S.Navy and international customers.TRAINING AND SERVICES:In 2014,Raytheon captured large new awards that build upon our leadership in training,design,contract manufacturing and other services for customers worldwide.Canada awarded us a contract to operate and maintain 47 radar sites acr

27、oss the Arctic for the North Warning System that supplies tracking data to the North American Aerospace Defense Command(NORAD).The U.S.Air Force awarded a joint venture of Raytheon and General Dynamics a$1.5 billion contract with nine additional one-year options to operate,maintain and sustain launc

28、h ranges at Floridas Space Coast and Vandenberg Air Force Base in California.Achieving Competitive AdvantageHaving advanced technology is a key discriminator;providing it at an affordable cost is just as crucial.To that end,we continue to aggressively implement lean manufacturing initiatives.We are

29、executing our strategic sourcing plan across our supply chain.We are optimizing our global shared services and pursuing operational excellence via commercial best practices.We are reducing our footprint.The bottom line is that we are focused on driving cost savings and affordability for customers an

30、d returns for shareholders,which enables us to drive competitive advantage.Committed to Our Core ValuesWe also believe that we gain a competitive advantage from our strong company culturea culture firmly rooted in our vision and values,which emphasize trust,respect,collaboration,innovation and accou

31、ntability.When our vision and values are put into action,they inspire our team to impressive results and recognition in areas such as ethics and integrity;diversity and inclusion;health and safety;and corporate responsibility.We were awarded the 2014 Corporate Leadership Award by Transparency Intern

32、ationalUSA for our commitment to shape initiatives that promote high business standards,transparency,and anti-corruption in the U.S.and internationally.We were named one of the 2014 Global Aon Hewitt Top Companies for Leaders and a 2015 Best Place to Work by the Human Rights Campaignmarking the 10th

33、 year in a row we have achieved a 100-percent rating.We achieved the best safety record in our history,significantly reducing both lost workdays and recordable injuries.We received the ENERGY STAR Partner of the Year-Sustained Excellence Award from the U.S.Environmental Protection Agency.We were als

34、o recognized as one of the 100 Best Corporate Citizens by Corporate Responsibility Magazine.To continue as a recognized leader in these areas,we know we need to continue to build on these successes.Ready for the FutureIn summary,we had another great year at Raytheon in 2014,and we have a solid outlo

35、ok for the future.Our strong position owes much to the dedicated service and leadership of William H.Swanson,who stepped down from the Raytheon Board of Directors in September 2014,after serving more than a decade as our chairman and CEO.We are deeply indebted to Bill for all he did for our company,

36、customers and shareholders during his 42 years with Raytheon.We would not be the company we are today without him,and we wish him all the best for the future.As we look ahead,we will continue our focus on top-line growth,investing in innovative technologies,building on our capabilities and maximizin

37、g shareholder value.I want to thank the Raytheon team worldwide for making it all possible.Like me,they are proud of what they do every day,for our company,customers and shareholders.Thomas A.KennedyChairman and Chief Executive Officer March 2015We continue to make investments in game-changing techn

38、ologies that differentiate our solutions in the marketplace.”2 0 1 4 F O R M 1 0-KUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 _FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the fiscal year ended December 31,2014 orTRANSITION RE

39、PORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the transition period from to Commission File Number 1-13699_RAYTHEON COMPANY(Exact Name of Registrant as Specified in its Charter)_Delaware95-1778500(State or Other Jurisdiction of Incorporation or Organization)(I.R.S.Empl

40、oyer Identification No.)870 Winter Street,Waltham,Massachusetts 02451(Address of Principal Executive Offices)(Zip Code)(781)522-3000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of Each ClassName of Each Exchange on Which Registered

41、Common Stock,$.01 par valueNew York Stock Exchange Securities registered pursuant to Section 12(g)of the Act:None _Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to

42、file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the Registrant

43、was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pur

44、suant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the Registrant was required to submit and post such files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of thi

45、s chapter)is not contained herein,and will not be contained,to the best of Registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the Registrant is a large accelerat

46、ed filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting co

47、mpany Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 27,2014,was approximately$29.2 billion.The number of shares of Common Stock o

48、utstanding as of February 9,2015 was 307,323,000.Documents incorporated by reference and made a part of this Form 10-K:Portions of the Registrants Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K.INDEX Item 1.Item 1A.I

49、tem 1B.Item 2.Item 3.Item 4.Item 5.Item 6.Item 7.Item 7A.Item 8.Item 9.Item 9A.Item 9B.Item 10.Item 11.Item 12.Item 13.Item 14.Item 15.PART IBusiness.1Risk Factors.12Unresolved Staff Comments.21Properties.21Legal Proceedings.21Mine Safety Disclosures.23Executive Officers of the Registrant.23PART IIM

50、arket for Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity Securities.26Selected Financial Data.28Managements Discussion and Analysis of Financial Condition and Results of Operations.29Quantitative and Qualitative Disclosures About Market Risk.73Financial Statement

51、s and Supplementary Data.74Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.121Controls and Procedures.121Other Information.121PART IIIDirectors,Executive Officers and Corporate Governance.121Executive Compensation.122Security Ownership of Certain Beneficial Owner

52、s and Management and Related Stockholder Matters.122Certain Relationships and Related Transactions,and Director Independence.122Principal Accountant Fees and Services.122PART IVExhibits and Financial Statement Schedules.122SIGNATURES.1291PART I ITEM 1.BUSINESS GeneralRaytheon Company,together with i

53、ts subsidiaries,is a technology and innovation leader specializing in defense and other government markets throughout the world.The terms“we”,“us”,“our”,“Raytheon”and the“Company”mean Raytheon Company and its subsidiaries,unless the context indicates another meaning.We develop technologically advanc

54、ed and integrated products,services and solutions in our core markets:sensing;effects;command,control,communications and intelligence(C3I);and mission support,as well as cyber and information security.We serve both domestic and international customers,as both a prime contractor and subcontractor on

55、a broad portfolio of defense and related programs primarily for government customers.We were founded in 1922 and have grown internally and through a number of acquisitions.We are incorporated in the state of Delaware.Our principal executive offices are located at 870 Winter Street,Waltham,Massachuse

56、tts 02451.In this section,we describe our business,including our business segments,product lines,customers,operations and other considerations.Business SegmentsWe operate in four business segments:Integrated Defense Systems;Intelligence,Information and Services;Missile Systems;and Space and Airborne

57、 Systems.The following is a description of each of our business segments.As part of the description,we include a discussion of some of the segments notable initiatives and achievements in 2014,such as certain key contract awards,new product introductions and acquisitions.For a discussion of the fina

58、ncial performance of our business segments and other financial information,see pages 4963 of this Form 10-K.Integrated Defense Systems(IDS)IDS,headquartered in Tewksbury,Massachusetts,is a leader in integrated air and missile defense;radar solutions;naval combat and ship electronic systems;command,c

59、ontrol,communications,computers and intelligence(C4I)solutions;and international and domestic Air Traffic Management(ATM)systems.IDS delivers combat-proven performance against the complete spectrum of airborne and ballistic missile threats and is a world leader in the technology,development,and prod

60、uction of sensors and mission systems.IDS provides solutions to the U.S.Department of Defense(DoD),the U.S.Intelligence Community,and the Federal Aviation Administration(FAA),as well as more than 50 international customers which represent approximately half of IDS business.In 2014,IDS successfully d

61、elivered on orders for international Patriot Air and Missile Defense(A&MD)Systems and domestic and international missile defense radars.IDS continued to serve as the prime mission systems integrator for all electronic and combat systems of the U.S.Navys Zumwalt-class destroyer program(DDG-1000).IDS

62、also continued to deliver fully integrated command and control systems for domestic and international partners,including new awards for air traffic control systems for the FAA and the U.S.Air Force.IDS booked$2.0 billion for a contract to provide advanced Patriot air and missile defense capability f

63、or Qatar.Additionally,IDS received several contract awards to support Army Navy/Transportable Radars and Patriot A&MD systems from the Missile Defense Agency(MDA)and the U.S.Army,respectively.IDS has the following principal product lines:Global Integrated Sensors(GIS)GIS provides integrated whole-li

64、fe air and missile defense systems.GIS produces systems and solutions,including Upgraded Early Warning Radars(UEWR),such as the Army Navy/Transportable Radar Surveillance-Model 2(AN/TPY-2),the UEWR family of sensors,and other land-based surveillance and search radars,which provide threat detection,p

65、recision tracking,discrimination,and classification of ballistic missile threats.GIS also produces the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor(JLENS),which is a theater-based,advanced sensor system that provides 2long-endurance,over-the-horizon detection and tracking capabili

66、ties required to defeat threats such as manned and unmanned aircraft,cruise missiles,swarming boats and tanks.Key GIS customers include the U.S.Army and Air Force,the MDA,and international customers.Integrated Air&Missile Defense(IAMD)IAMD provides combat-proven air and missile defense systems,such

67、as the Patriot A&MD system which is the cornerstone of the air and missile defense architecture for thirteen nations around the globe,including the U.S.and five NATO nations.The National Advanced Surface-to-Air Missile System(NASAMS),also offered by IAMD,is a highly adaptable mid-range solution for

68、any operational air defense requirement.It is deployed in the U.S.and five other countries.IAMD also provides the Hawk XXI,an advanced air defense system against low-to-medium altitude air threats with advanced fire control and battle management for numerous international customers.Key IAMD customer

69、s include the U.S.Army and international customers.Total sales from this product line were approximately 10%of our consolidated revenues for 2014 and 2013,and were less than 10%of consolidated revenues for 2012.Seapower Capability Systems(SCS)SCS is a provider and integrator of maritime air and miss

70、ile defense radar systems,naval combat management,and airborne anti-submarine and mine warfare systems,as well as sensors,maritime naval navigation systems,and torpedoes for U.S.and international navies.As a naval radar provider,SCS produces the SPY-3,the U.S.Navys first shipboard active phased arra

71、y multifunction radar,and radar transmitters for the sea-and land-based Aegis weapon system radars,and is designing and will manufacture the low rate initial production of the U.S.Navys newest radar,AMDR.As a ship integrator for the U.S.Navy,SCS provides mission system equipment and serves as the co

72、mbat and mission systems integrator for the DDG-1000,the total ship electronics systems integrator for the LPD-17,the U.S.Navys latest amphibious warfare ship,and the warfare systems integrator for the CVN-78,the U.S.Navys next generation of aircraft carrier.Key SCS customers include the U.S.Navy an

73、d allied navies.Command,Control,Communications,Computers and Intelligence(C4I)C4I develops,delivers,and supports complex integrated,networked,actionable combat command and control(C2)solutions for air and land combatant commanders,domestic and international ATM,and border and critical infrastructure

74、 protection.C4I is a key provider of ATM solutions internationally through its AutoTrac III product line and surveillance radars,as well as its Standard Terminal Automation Replacement System(STARS)to the DoD and the FAA.C4I was awarded a contract for an All Electronic Tolling System(AETS)for Massac

75、husetts that will automatically toll vehicles as they travel under a gantry similar to an overhead sign.C4I also includes Thales-Raytheon Systems,LLC,the U.S.operating subsidiary of the Thales-Raytheon joint venture which focuses on battlefield radars,air command and control,including NATOs Air Comm

76、and and Control System(ACCS)program.Key C4I customers include the U.S.Army,the FAA,NATO and numerous allied nations.Intelligence,Information and Services(IIS)IIS,headquartered in Dulles,Virginia,provides a full range of technical and professional services to intelligence,defense,federal and commerci

77、al customers worldwide.IIS specializes in global Intelligence,Surveillance and Reconnaissance(ISR),navigation,DoD space and weather solutions,cybersecurity,analytics,training,logistics,mission support,and engineering and sustainment solutions.Key customers include the U.S.Intelligence Community,the

78、U.S.Armed Forces,the FAA,the National Oceanic and Atmospheric Administration(NOAA),Department of Homeland Security(DHS),the National Aeronautics and Space Administration(NASA)and an increasing number of international customers.During 2014,IIS won a variety of notable unclassified contracts.IIS will

79、be providing modifications to increase the capability and capacity of three satellites that support the Joint Polar Satellite System(JPSS),a collaborative program between NOAA and NASA;operation and maintenance services for radar systems in northern Canada;and security forces training in the Middle

80、East.IIS also received a follow-on contract award to provide field support for the U.S.Air Forces high altitude ISR and distributed common ground system mission.IIS continued to grow its classified business,receiving a number of significant contracts,including a nation-scale cyber security capabilit

81、y for an international customer.In addition to investments in mission analytics,Raytheon acquired Blackbird Technologies,a Herndon,Virginia-based leading provider of persistent surveillance,secure tactical communications and cybersecurity solutions to the Intelligence Community and special operation

82、s market.3IIS has the following principal product lines:Cybersecurity and Special Missions(CSM)CSM provides cybersecurity and advanced intelligence solutions to strengthen information systems and mission execution.CSM supports domestic,international government and commercial customers by delivering

83、cyber and quick-reaction solutions,and supporting high-consequence special missions.Raytheon is leveraging and incorporating the cyber capabilities within CSM across the Company by embedding information assurance technologies and know-how into our internal company systems and core solutions and prod

84、ucts.CSMs key customers include the U.S.Intelligence Community,the DoD,various other federal agencies and Fortune 500 companies.Global Training Solutions(GTS)GTS provides training solutions,logistics and engineering support worldwide,conducting integrated operational training through the U.S.Armys W

85、arfighter Field Operations Customer Support(FOCUS)contract.The GTS-led Warrior Training Alliance performs comprehensive support for live,virtual and constructive training exercises and operations,maintenance for all training and range systems,curriculum development and instruction,management oversig

86、ht and administration for contractor activities,and supply support for all government-owned property and material.Additionally,GTS provides air traffic controller training for the FAA,and designs,implements and manages highly complex training solutions that align an organizations training requiremen

87、ts with its core business needs.Using systems engineering practices,GTS applies commercial solutions,processes,tools and training experts to make its training programs available to domestic and international commercial customers through Raytheon Professional Services.Intelligence and Earth Observati

88、on(IEO)IEO primarily supports programs for the U.S.Intelligence Community,NASA,NOAA and the U.S.Air Force Space and Missile Center.IEO capabilities include ground systems for Geospatial Intelligence(GEOINT)and Signals Intelligence(SIGINT)systems,large-scale data processing and exploitation,storage a

89、rchitectures and high-performance data handling and processing systems.Key programs include JPSS,which supports multiple civil,defense and international polar-orbiting environmental satellites,and the Global Positioning System Next Generation Operational Control System(GPS-OCX).In 2014,IIS successfu

90、lly completed the fourth of five planned launch and early-orbit exercises to demonstrate launch readiness for GPS-OCX.Mission Support and Modernization(MSM)MSM provides full life-cycle mission operations,engineering,sustainment and modernization services for site and platform missions across all dom

91、ains,as well as multi-intelligence(multi-INT)ground systems and unmanned systems technology for civil agencies and the U.S.Air Force.MSMs core services are applied in two broad areas:proven models to support more efficiently missions at any site;and minimally invasive engineering practices that allo

92、w MSM to quickly and affordably modernize and sustain an array of systems,weapons or platforms.Programs include advanced ground solutions for tactical ISR missions,such as Global Hawk and the Air Forces U-2 reconnaissance aircraft;services for the U.S.Air Forces contractor field support and the V-22

93、 Osprey aircraft;and upgrades of airborne and sea-based weapons systems and podded aircraft reconnaissance systems.Missile Systems(MS)MS,headquartered in Tucson,Arizona,is a premier developer and producer of missile and combat systems for the armed forces of the U.S.and other allied nations.Leveragi

94、ng its capabilities in advanced airframes,guidance and navigation systems,high-resolution sensors,surveillance,targeting,and netted systems,MS develops and supports a broad range of advanced weapon systems,including missiles,smart munitions,close-in weapon systems,projectiles,kinetic kill vehicles,d

95、irected energy effectors and advanced combat sensor solutions.Key customers include the U.S.Navy,Army,Air Force and Marine Corps,the MDA and the armed forces of more than 40 allied nations.In 2014,MS continued to capture key contract awards from a broad international customer base,including awards t

96、otaling over$1 billion on the tube-launched,optically-tracked,wireless-guided(TOW)missile,the Paveway missile,and the Advanced Medium-Range Air-to-Air Missile(AMRAAM)programs.MS also secured more than$800 million in Missile Defense contracts,including over$500 million for the production of Standard

97、Missile-3(SM-3)IB missiles for the DoD.MS completed successful flight tests on the SM-3 program,the exoatmospheric kill vehicle(EKV)program and nine key successful flight tests on the Small Diameter Bomb II(SDB II)program,which is scheduled to enter low rate production beginning in 2015.4MS has the

98、following principal product lines:Air Warfare Systems(AWS)AWS products and services enable the U.S.armed forces and international customers to attack,suppress and destroy air-and ground-based targets.Products include AMRAAM,a state-of-the-art,highly dependable and battle-proven air-to-air missile th

99、at also has a surface-to-air launch application;the Tomahawk cruise missile,an advanced surface-or submarine-launched cruise missile with loitering and network communication capability;SDB II,an air-to-ground glide weapon designed to engage moving targets in adverse weather and through battlefield c

100、onditions;Joint Standoff Weapon(JSOW),a family of air-to-ground weapons that employ an integrated GPS/inertial navigation system that guides the weapon to the target;the Paveway family of laser-and GPS-guided smart bombs;the AIM-9X Sidewinder short-range air-to-air missile;the Miniature Air-Launched

101、 Decoy-Jammer(MALD-J),a stand-off,high endurance electronic warfare decoy/jammer used to deceive and degrade air defenses;the High-Speed Anti-Radiation Missile(HARM)and the HARM Targeting System;the Maverick precision strike missile;and the Griffin,a small lightweight missile that can be employed fr

102、om aircraft,unmanned aerial vehicles(UAVs),ships or ground launched against light targets.Air and Missile Defense Systems(AMDS)AMDS designs,develops,produces and supports air defense and ballistic missile defense interceptor systems.AMDS primary customers are the MDA,the U.S.Navy and various interna

103、tional customers around the world.The product line develops,manufactures,and supports the Standard Missile family of weapons with capabilities ranging from anti-air warfare to ballistic missile defense.AMDS is responsible for the first line of ship-defense weapons including the Standard Missile-6(SM

104、-6)and for multiple versions of the SM-3,which are core elements of the MDAs Phased Adaptive Approach to global missile defense.AMDS,as a sub-contractor to The Boeing Company,builds and supports the EKV,which is part of the U.S.ground-based midcourse defense system that defends against ballistic mis

105、sile attack.AMDS is also the U.S.design agent and partner with Raphael Advanced Defense Systems Ltd.on the Davids Sling missile defense system for Israel.The product line is also involved in a number of advanced missile defense concepts that seek to keep pace with the evolving ballistic missile thre

106、at.Naval and Area Mission Defense(NAMD)NAMD offers a complete family of mission solutions for customers around the world.NAMD provides highly effective layered ship defense for the navies of more than 30 countries across multiple platforms to counter the anti-ship threats of today and tomorrow.NAMD

107、leverages its proven capabilities to provide forward-operating base defense for the U.S.Army,Air Force and Marine Corps.NAMD produces the Phalanx Close-In Weapon System(employed afloat and ashore),the Rolling Airframe Missile(RAM)and Launcher System,the SeaRAM system,Standard Missile-2(SM-2),and the

108、 Evolved Seasparrow/Sparrow family of missiles(ESSM)for layered ship mission protection against air,subsurface and surface cruise/ballistic missile threats.Additionally,NAMD continues to expand its commitment to international cooperative endeavors with strategic international partners to evolve its

109、products and technologies to encompass the full spectrum of threats,including the protection of land bases and high-value infrastructure sites from terrorist threats.Land Warfare Systems(LWS)From precision missiles and munitions to advanced electro-optical(EO)/infrared(IR)sensors,LWS offers integrat

110、ed mission solutions in the land domain for the U.S.Army,Marine Corps and more than 40 allied nations,giving warfighters the power,mobility and situational awareness they need to stay a step ahead of evolving threats.LWS programs include the TOW weapon system,a long-range precision anti-armor/anti-f

111、ortification/anti-amphibious-landing weapon system;Javelin,a shoulder-fired,fire-and-forget anti-tank weapon;Stinger,a lightweight,self-contained,fire-and-forget,very short-range air defense system;TALON Laser-Guided Rocket,a precision guided rocket codeveloped with the United Arab Emirates that can

112、 be fired both air-to-ground and ground-to-air;Excalibur,a GPS-guided artillery round designed to provide indirect precision fire for ground forces;enhanced Long Range Advanced Scout Surveillance System(eLRAS3),a third-generation,multi-sensor system that provides the ability to detect,identify and g

113、eo-locate distant targets;a family of light to heavy Thermal Weapon Sights(TWS);and integrated system solutions for combat vehicle upgrade programs,including the U.S.Marine Corps Light Armored Vehicle Anti-Tank(LAV-AT)modernization program,and integrated system solutions for combat vehicle upgrade p

114、rograms,including the U.S.Marine Corps Light Armored Vehicle Anti-Tank(LAV-AT)modernization program.Advanced Missile Systems(AMS)AMS focuses on the development and early introduction of next-generation,end-to-end system solutions that support the AWS,NAMD,AMDS and LWS product lines.AMS also pursues

115、opportunities in directed energy and adjacent markets,including the development of force protection solutions,non-kinetic weapons(offensive and defensive),high-power microwave/millimeter technologies and applications,telemetry systems,space applications,and counterterrorism solutions.5Space and Airb

116、orne Systems(SAS)SAS,headquartered in McKinney,Texas,is a leader in the design and development of integrated sensor and communication systems for advanced missions,including traditional and non-traditional ISR,precision engagement,unmanned aerial operations,and space.Leveraging advanced concepts,sta

117、te-of-the-art technologies and mission systems knowledge,SAS provides EO/IR sensors,airborne radars for surveillance and fire control applications,lasers,precision guidance systems,signals intelligence systems,processors,electronic warfare systems,communication systems,and space-qualified systems fo

118、r civil and military applications.Key customers include the U.S.Navy,Air Force and Army,as well as classified and international customers.In 2014,SAS continued to enhance Raytheons role in the area of electronic warfare(EW)technology with multiple awards,including the Armys Electronic Warfare Planni

119、ng and Management Tool(EWPMT),designed to provide field commanders the ability to both neutralize and exploit enemy signals.Further cementing Raytheons role as a leader in Advanced Extremely High Frequency(AEHF)satellite communications,SAS was awarded the Family of Beyond-Line-of-Sight Terminals(FAB

120、-T)contract,making Raytheon the only provider of AEHF terminals to every branch of the U.S.military utilizing the technology.This year,SAS delivered the 500th APG-79 Active Electronically Scanned Array(AESA)radar,achieving more than 500,000 operational flight hours;and the 2,500th Multi-Spectral Tar

121、geting System(MTS)system,logging over 2 million flight hours on more than 20 different platforms supporting military and civil operations worldwide.Under an Office of Naval Research program,SAS is advancing the technology of the future through development of a vehicle-based laser weapons system capa

122、ble of defeating low-flying threats.SAS has the following principal product lines:Intelligence,Surveillance and Reconnaissance Systems(ISRS)ISRS designs,manufactures and integrates sensor and targeting solutions that enable actionable information for strike,persistent surveillance,and special missio

123、n applications.ISRS not only provides maritime and overland surveillance radars,terrain following/terrain avoidance radars and EO/IR sensors,but also turnkey ISR solutions across unmanned,rotary,and fixed wing platforms for the DoD,DHS and international governments.The ISRS portfolio includes the AP

124、Y-10 radar on the U.S.Navys P-8A Poseidon;the SeaVue radar on the Predator Guardian unmanned aircraft system(UAS);the Multi-Platform Radar Technology Insertion Program(MP-RTIP)on the U.S.Air Forces Block 40 Global Hawk and NATO Alliance Ground Surveillance(AGS)system;the Multi-spectral Targeting Sys

125、tem on the U.S.Air Forces Reaper UAS and the U.S.Navys MH-60R/S Sea Hawk helicopter;and the DAS-2 Common Sensor Payload on the U.S.Armys Gray Eagle UAS.ISRS is also the systems integrator for the U.K.Ministry of Defences Sentinel surveillance program,which enables high-resolution images and the moni

126、toring of hostile forces.Tactical Airborne Systems(TAS)TAS designs,manufactures and develops cost-effective,high-performance integrated sensor solutions for tactical and strategic platforms,delivering trusted,actionable information for mission assurance.TAS provides integrated sensor systems with ad

127、vanced fire control radars and processor technologies to customers including the U.S.Navy,Marine Corps,and Air Force and international governments.TAS produces AESA radars for the U.S.Air Forces F-15 and B-2 aircraft,the U.S.Navys F/A-18E/F and EA-18G and radars for several international customers i

128、ncluding Australia,Canada,Japan,Saudi Arabia and Singapore.In addition,TAS advanced airborne processors form the basis of the secure mission computer/signal processing systems on the F-16,F-22 and F-35 aircraft.Electronic Warfare Systems(EWS)EWS designs and manufactures cost-effective,high-performan

129、ce EW systems and equipment for strategic and tactical aircraft,helicopters,surface ships and ground forces for the U.S.Air Force,U.S.Army,U.S.Navy,Special Operations Forces,U.S.intelligence agencies and international governments.EWS products deliver a range of non-kinetic effects ranging from radar

130、 jamming to information operations.The EWS portfolio includes the Next Generation Jammer program,integrated electronic warfare suites,development of EW planning and management tools(EW PMT),the Multi-function Integrated Receiver/Exciter System(MFIRES)product family,advanced classified programs,and p

131、roducts such as towed decoys,radar warning receivers,radar and communications countermeasures,and missile warning sensors.Integrated Communications Systems(ICS)ICS is a market leader in tactical airborne communications,software-defined radio technology,advanced tactical networking,and real-time sens

132、or networking.ICS is the only producer of AEHF satellite terminals for all branches of the U.S.military,making it the top provider of protected,highly secure satellite communications terminals for the U.S.military.Key capabilities in the ICS business also include high capacity beyond line-of-sight c

133、ommunications solutions.6Space Systems(SS)SS designs and manufactures space and space-qualified sensor payloads for large national programs and develops innovative solutions for emerging intelligence,defense and civil space applications.SS provides EO/IR,radio frequency,radar and laser space-based s

134、ensors to customers including branches of the DoD,MDA,NASA,classified customers and international governments.Its major non-classified program is the Joint Polar Satellite System(JPSS)program providing the Visible Infrared Imaging Radiometer Suite(VIIRS),an advanced imaging and radiometric sensor fo

135、r NASA and NOAA weather/environmental monitoring programs.Other SAS product lines include Advanced Concepts and Technologies(ACT)and Integrated Technology Programs(ITP).ACT conducts internal research and development for SAS and contract research and development for customers,including the U.S.Air Fo

136、rce Research Laboratory(AFRL)and the Defense Advanced Research Projects Agency(DARPA),and produces advanced products including the Boomerang sniper detection system and TransTalk,a smartphone application that automatically translates speech into another language.ITP develops sophisticated anti-jam G

137、PS solutions for many customers and provides a wide range of state-of-the-art product families and engineering services in support of the DoDs need to respond to a dynamic threat environment.International SubsidiariesWe conduct the operations and activities of our business segments in certain countr

138、ies through international subsidiaries,including Raytheon Systems Limited(RSL),Raytheon Australia(RA)and Raytheon Canada Limited(RCL).RSL designs,develops,manufactures and integrates a range of high technology electronic systems and software in the areas of sensing,effects,command&control,intelligen

139、ce systems as well as cyber security for defense and other government customers in the United Kingdom(U.K.),U.S.and around the world,and also designs and manufactures control actuation systems,guidance electronics and silicon carbide semiconductors.Key programs include ASTOR,a world-class strategic

140、ground surveillance capability,and Shadow,a tactical surveillance platform(both with SAS),and Paveway IV,the precision guided bomb(with MS).RA delivers integrated mission solutions and sustainment to the Australian Defence Force.With more than 20 programs in country,RA is the mission systems integra

141、tor for the Air Warfare Destroyer project and delivers in-service support for the Collins Class Submarine as well as the Australian Defence Air Traffic System(with IDS),and provides aerospace-related design,integration,operations and maintenance services to its customers as well as management of the

142、 Naval Communications Station Harold E.Holt(with IIS).RCL provides primary surveillance radar(PSR)for air traffic management systems ranging from individual airport installations to country-wide,multiple-site,turnkey solutions for over 40 countries,as well as coastal maritime surveillance high frequ

143、ency surface wave radar(HFSWR)systems that are operational for a number of international customers(primarily with IDS).Sales to the U.S.Government(In millions,except percentages)201420132012Sales to the U.S.Government(1)$16,083$17,019$17,861Sales to the U.S.Government as a Percentage of Total Net Sa

144、les(1)70%72%73%Foreign military sales through the U.S.Government$2,962$3,062$3,196Foreign military sales through the U.S.Government as a Percentage ofTotal Net Sales13%13%13%(1)Excludes foreign military sales through the U.S.Government.Our principal U.S.Government customer is the DoD;other U.S.Gover

145、nment customers include Intelligence Community agencies,NASA,the FAA and the Departments of Justice,State,and Energy.U.S.Government Contracts and RegulationWe act as a prime contractor or major subcontractor for numerous U.S.Government programs.As a result,we are subject to extensive regulations and

146、 requirements of the U.S.Government agencies and entities that govern these programs,including with respect to the award,administration and performance of contracts under such programs.We are also subject to certain unique business risks associated with U.S.Government program funding and appropriati

147、ons and government contracts,and with supplying technologically-advanced,cutting edge defense-related products and services to the U.S.Government.U.S.Government contracts generally are subject to the Federal Acquisition Regulation(FAR),which sets forth policies,procedures and requirements for the ac

148、quisition of goods and services by the U.S.Government,department-specific regulations that implement or supplement the FAR,such as the DoDs Defense Federal Acquisition Regulation Supplement(DFARS),and other applicable laws and regulations.These regulations impose a broad range of requirements,many o

149、f which are unique 7to government contracting,including various procurement,import and export,security,contract pricing and cost,contract termination and adjustment,audit and product integrity requirements.A contractors failure to comply with these regulations and requirements could result in reduct

150、ions to the value of contracts,contract modifications or termination,and the assessment of penalties and fines,and lead to suspension or debarment,for cause,from U.S.Government contracting or subcontracting for a period of time.In addition,government contractors are also subject to routine audits an

151、d investigations by U.S.Government agencies such as the Defense Contract Audit Agency(DCAA)and Defense Contract Management Agency(DCMA).These agencies review a contractors performance under its contracts,cost structure and compliance with applicable laws,regulations and standards.The DCAA and DCMA a

152、lso review the adequacy of and a contractors compliance with its internal control systems and policies,including the contractors accounting,purchasing,property,estimating,earned value management and material management accounting systems.For a discussion of certain risks associated with compliance w

153、ith U.S.Government contract regulations and requirements,see Item 1A“Risk Factors”of this Form 10-K.U.S.Government contracts include both cost reimbursement and fixed-price contracts.Cost reimbursement contracts,subject to a contract-ceiling amount in certain cases,provide for the reimbursement of a

154、llowable costs plus the payment of a fee.These contracts fall into three basic types:(i)cost plus fixed fee contracts which provide for the payment of a fixed fee irrespective of the final cost of performance;(ii)cost plus incentive fee contracts which provide for increases or decreases in the fee,w

155、ithin specified limits,based upon actual cost results compared to contractual cost targets;and(iii)cost plus award fee contracts which provide for the payment of an award fee determined at the discretion of the customer based upon the performance of the contractor against pre-established criteria.Un

156、der cost reimbursement type contracts,the contractor is reimbursed periodically for allowable costs and is paid a portion of the fee based on contract progress.Some costs incidental to performing contracts have been made partially or wholly unallowable for reimbursement by statute,the FAR or other r

157、egulation.Examples of such costs include charitable contributions,certain merger and acquisition costs,lobbying costs,interest expense and certain litigation defense costs.Fixed-price contracts are either firm fixed-price(FFP)contracts or fixed-price incentive(FPI)contracts.Under FFP contracts,the c

158、ontractor agrees to perform a specific scope of work for a fixed price and as a result,benefits from cost savings and carries the burden of cost overruns.Under FPI contracts,the contractor shares with the U.S.Government savings accrued from contracts performed for less than target costs and costs in

159、curred in excess of targets up to a negotiated ceiling price(which is higher than the target cost)and carries the entire burden of costs exceeding the negotiated ceiling price.Accordingly,under such incentive contracts,the contractors profit may also be adjusted up or down depending upon whether spe

160、cified performance objectives are met.Under FFP and FPI incentive type contracts,the contractor usually receives either performance-based payments(PBPs)equaling up to 90%of the contract price or monthly progress payments from the U.S.Government generally in amounts equaling 80%of costs incurred unde

161、r U.S.Government contracts.The remaining amount,including profits or incentive fees,is billed upon delivery and acceptance of end items under the contract.The DoD has expressed a preference to utilize progress payments based on costs incurred on new fixed-price contract awards as opposed to PBPs unl

162、ess the contractor negotiates for PBPs.Generally speaking and subject to a number of factors,PBPs can provide improved cash flows as compared to progress payments but introduce risk to contractors in return.The DoD has also expressed a preference to utilize FPI as opposed to FFP type contracts.FPI c

163、ontracts may attract a lower target fee than might be anticipated under FFP contracts,but offer the opportunity to increase fees based on performance.In the event we experience a greater proportion of FPI type contracts and/or progress payments for our fixed-price DoD contracts in the future than hi

164、storically,it could have an adverse effect on our operating margins,cash flow and liquidity.For a discussion of certain risks associated with fixed price and cost reimbursement contracts and risks associated with changes in U.S.Government procurement rules,regulations and business practices,see Item

165、 1A“Risk Factors”of this Form 10-K.U.S.Government contracts generally also permit the government to terminate the contract,in whole or in part,without prior notice,at the U.S.Governments convenience or for default based on performance.If a contract is terminated for convenience,the contractor is gen

166、erally entitled to payments for its allowable costs and will receive some allowance for profit on the work performed.If a contract is terminated for default,the contractor is generally entitled to payments for its work that has been accepted by the U.S.Government.The U.S.Governments right to termina

167、te its contracts has not had a material adverse effect upon our operations,financial condition or liquidity.For a discussion of the risks associated with the U.S.Governments right to terminate its contracts,see Item 1A“Risk Factors”of this Form 10-K.U.S.Government programs generally are implemented

168、by the award of individual contracts and subcontracts.Congress generally appropriates funds on a fiscal year basis even though a program may extend across several fiscal years.Consequently,programs are often only partially funded initially and additional funds are committed only as Congress makes fu

169、rther appropriations.The contracts and subcontracts under a program generally are subject to termination for convenience or 8adjustment if appropriations for such programs are not available or change.The U.S.Government is required to equitably adjust a contract price for additions or reductions in s

170、cope or other changes ordered by it.For a discussion of the risks associated with program funding and appropriations,see Item 1A“Risk Factors”and“Overview”within Item 7 of this Form 10-K.In addition,because we are engaged in supplying technologically-advanced,cutting edge defense-related products an

171、d services to the U.S.Government,we are subject to certain business risks,some of which are specific to our industry.These risks include:the cost of obtaining and retaining trained and skilled employees;the uncertainty and instability of prices for raw materials and supplies;the problems associated

172、with advanced designs,which may result in unforeseen technological difficulties and cost overruns;and the intense competition and the constant necessity for improvement in facility utilization and personnel training.Our sales to the U.S.Government may be affected by changes in procurement policies,b

173、udget considerations,changing priorities for national defense,political developments abroad and other factors.See Item 1A“Risk Factors”and“Overview”within Item 7 of this Form 10-K for a more detailed discussion of these and other related risks.We are also involved in U.S.Government programs,principa

174、lly through our IIS and SAS business segments,that are classified by the U.S.Government and cannot be specifically described in this Form 10-K.The operating results of these classified programs are included in the applicable business segments and our consolidated results of operations.The business r

175、isks and considerations associated with these and our international classified programs generally do not differ materially from those of our other U.S.Government and international programs and products.Total classified sales were 15%in 2014 and 2013,and 16%in 2012.We are subject to government regula

176、tions and contract requirements that may differ from U.S.Government regulation with respect to our sales to non-U.S.customers.See“International Sales”below for more information regarding our sales outside of the U.S.and Item 1A“Risk Factors”for a discussion of the risks associated with international

177、 sales.See“Sales to the U.S.Government”on page 6 of this Form 10-K for information regarding the percentage of our revenues generated from sales to the U.S.Government.International Sales(In millions,except percentages)201420132012Total international sales(1)$6,541$6,446$6,232Total international sale

178、s as a Percentage of Total Net Sales(1)29%27%26%(1)Includes foreign military sales through the U.S.Government of$2,962 million,$3,062 million and$3,196 million in 2014,2013 and 2012,respectively.International sales were principally in the areas of air and missile defense systems,missile systems,airb

179、orne radars,naval systems,air traffic control systems,electronic equipment,computer software and systems,personnel training,equipment maintenance and microwave communications technology,and other products and services permitted under the International Traffic in Arms Regulations(ITAR).Generally,we i

180、nternally fund our foreign subsidiary working capital requirements in the applicable countries.Sales and income from international operations and investments are subject to U.S.Government laws,regulations and policies,including the ITAR and the Foreign Corrupt Practices Act(FCPA)and other anti-corru

181、ption laws and the export laws and regulations described below.They are also subject to foreign government laws,regulations and procurement policies and practices,which may differ from U.S.Government regulation,including import-export control,technology transfer,investments,exchange controls,repatri

182、ation of earnings and requirements to expend a portion of program funds in-country through manufacturing agreements or other financial support obligations,known as offset obligations.In addition,embargoes,international hostilities and changes in currency and commodity values can also impact our inte

183、rnational sales.Exchange restrictions imposed by various countries could restrict the transfer of funds between countries,us and our subsidiaries.We have acted to protect ourselves against various risks through insurance,foreign exchange contracts,contract provisions,government guarantees and/or pro

184、gress payments.Our international sales in functional currencies other than the U.S.dollar were approximately$1.1 billion and$1.2 billion in 2014 and 2013,respectively,the majority of which were in British pounds and Australian dollars with the remainder primarily in euros and Canadian dollars.See to

185、tal net sales and property,plant and equipment by geographical area set forth in“Note 15:Business Segment Reporting”within Item 8 of this Form In connection with certain foreign sales,we utilize the services of sales representatives who are paid commissions in return for services rendered.9Depending

186、 on the type of international sale,Raytheon must either seek various approvals from the U.S.Government under the foreign military sales process or may require an export authorization and the issuance of a license by either the U.S.Department of State under the Arms Export Control Act of 1976(formerl

187、y the Foreign Military Sales Act)and its implementing regulations under the ITAR,the U.S.Department of Commerce under the Export Administration Act and its implementing regulations as kept in force by the International Emergency Economic Powers Act of 1977(IEEPA),and/or the U.S.Department of the Tre

188、asury under IEEPA or the Trading with the Enemy Act of 1917.Such licenses may be denied for reasons of U.S.national security or foreign policy.In the case of certain exports of defense equipment and services,the Department of State must notify Congress at least 1530 days(depending on the identity of

189、 the importing country that will utilize the equipment and services)prior to authorizing such exports.During that time,Congress may take action to block or delay a proposed export by joint resolution which is subject to Presidential veto.Additional information regarding the risks associated with our

190、 international business is contained in Item 1A“Risk Factors”of this Form 10-K.Backlog%of Total Backlog(In millions,except percentages)2014201320142013Total backlog$33,571$33,685100%100%Total backlog to the U.S.Government(1)19,47720,98558%62%Total foreign military sales backlog6,3374,88419%14%Total

191、direct foreign government backlog6,6846,92620%21%Total non-government foreign backlog5295512%2%Total non-U.S.Government domestic backlog5443392%1%Total international backlog(2)13,55012,36140%37%(1)Excludes foreign military sales backlog through the U.S.Government.(2)Includes foreign military sales b

192、acklog through the U.S.Government.Approximately$17.2 billion of the December 31,2014 year-end backlog is not expected to be filled during the following twelve months.These amounts include both funded backlog(unfilled orders for which funding is authorized,appropriated and contractually obligated by

193、the customer)and unfunded backlog(firm orders for which funding has not been appropriated or obligated to us).For additional information related to backlog figures,see“Segment Results”within Item 7 of this Form 10-K.Research and DevelopmentWe conduct extensive research and development activities to

194、continually enhance our existing products and services,and develop new products and services to meet our customers changing needs and requirements,and address new market opportunities.During 2014 we expended$500 million on research and development efforts compared to$465 million and$451 million in 2

195、013 and 2012,respectively.These expenditures principally have been for product development for the U.S.Government.We also conduct funded research and development activities under U.S.Government contracts which are included in total net sales.For additional information related to our research and dev

196、elopment activities,see“Note 1:Summary of Significant Accounting Policies”within Item 8 of this Form 10-K.Raw Materials,Suppliers and SeasonalityWe are dependent upon the delivery of materials by suppliers,and the assembly of major components and subsystems by subcontractors used in our products.Som

197、e products require relatively scarce raw materials.In addition,we must comply with specific procurement requirements which may,in effect,limit the suppliers and subcontractors we may utilize.In some instances,for a variety of reasons,we are dependent on sole-source suppliers.We enter into long-term

198、or volume purchase agreements with certain suppliers and take other actions to ensure the availability of needed materials,components and subsystems.We are also dependent on suppliers to provide genuine original equipment manufacturer parts and have a robust set of standardized policies to detect co

199、unterfeit material,especially electronic components,throughout our supply chain.We generally have not experienced significant difficulties in procuring the necessary raw materials,components and other supplies for our products.We also are subject to rules promulgated by the Securities Exchange Commi

200、ssion(SEC)in 2012 pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that require us to conduct due diligence on and disclose if we are able to determine whether certain materials(including tantalum,tin,gold and tungsten),known as conflict minerals,that originate from

201、mines in the Democratic Republic of the Congo or certain adjoining countries(DRC),are used 10in our products.We timely filed our first DRC minerals report on Form SD in 2014 stating that we were not able to determine the country of origin of conflict minerals contained in our manufactured products.I

202、n recent years,our revenues in the second half of the year have generally exceeded revenues in the first half.The timing of new program awards,the availability of U.S.Government funding,the timing of international contract awards and approvals,and product delivery schedules are among the factors aff

203、ecting the periods in which revenues are recorded.We expect this trend to continue in 2015.CompetitionWe directly participate in most major areas of development in the defense and government electronics,space,information technology and technical services and support markets.Technical superiority,rep

204、utation,price,past performance,delivery schedules,financing and reliability are among the principal competitive factors considered by customers in these markets.We compete worldwide with a number of U.S.and international companies in these markets,some of which may have more extensive or more specia

205、lized engineering,manufacturing and marketing capabilities than we do in some areas.We frequently partner on various programs with our major suppliers,some of whom are,from time to time,competitors on other programs.In addition,U.S.defense spending levels in the near future are increasingly difficul

206、t to predict.Changes in U.S.defense spending may potentially limit certain future market opportunities.See Item 1A“Risk Factors”and“Overview”within Item 7 of this Form 10-K for a more detailed discussion of these and other related risks.Patents and LicensesWe own an intellectual property portfolio t

207、hat includes many U.S.and foreign patents,as well as unpatented trade secrets and know-how,data,software,trademarks and copyrights,all of which contribute to the preservation of our competitive position in the market.In certain instances,we have augmented our technology base by licensing the proprie

208、tary intellectual property of others.We also license our intellectual property to others,including our customers,in certain instances.The U.S.Government has licenses in certain of our intellectual property,including certain patents,developed in the performance of U.S.Government contracts,and has the

209、 right to use and authorize others to use such intellectual property,including the inventions covered by such patents for U.S.Government purposes.While our intellectual property rights in the aggregate are important to our operations,we do not believe that any particular trade secret,patent,trademar

210、k,copyright,license or other intellectual property right is of such importance that its loss or termination would have a material adverse effect on our business.EmploymentAs of December 31,2014,we had approximately 61,000 employees.Approximately 8%of our employees are unionized.We consider our union

211、-management relationships to be generally satisfactory.Environmental RegulationOur operations are subject to and affected by a variety of international,federal,state and local environmental protection laws and regulations.We have provided for the estimated cost to complete remediationor,in the case

212、of multi-party sites,our reasonably expected share thereofwhere we have determined that it is probable that we will incur such costs in the future in connection with(i)facilities that are now,or were previously,owned or operated by us,(ii)sites where we have been named a Potentially Responsible Part

213、y(PRP)by the Environmental Protection Agency(EPA)or similarly designated by other environmental agencies,or(iii)sites where we have been named in a cost recovery or contribution claim by a non-governmental third-party.It is difficult to estimate the timing and ultimate amount of environmental cleanu

214、p costs to be incurred in the future due to the uncertainties regarding the extent of the required cleanup,the discovery and application of innovative remediation technologies,and the status and interpretation of laws and regulations.In order to assess the potential impact on our consolidated financ

215、ial statements,we estimate the possible remediation costs that we could reasonably incur.Such estimates take into consideration the professional judgment of our environmental professionals and,in most cases,consultations with outside environmental specialists.If we are ultimately found to have liabi

216、lity at a multi-party site where we have been designated a PRP or have been named in a cost recovery or contribution claim from a non-governmental third-party,we expect that the actual costs of remediation will be shared with other PRPs.Generally in the U.S.and certain other countries,PRPs that are

217、ultimately determined to be responsible parties are strictly liable for site clean-up and usually agree among themselves to share,on an allocated basis,the costs and expenses for investigation and remediation of hazardous materials.Under existing U.S.environmental laws,responsible parties are usuall

218、y jointly and severally liable and,therefore,potentially liable for the full cost of funding such 11remediation.In the unlikely event that we are required to fund the entire cost of such remediation,the statutory framework provides that we may pursue rights of contribution from the other PRPs.The am

219、ounts we record do not reflect the unlikely event that we would be required to fund the entire cost of such remediation,nor do they reflect the possibility that we may recover some of these environmental costs from insurance policies or from other PRPs.However,a portion of these costs is eligible fo

220、r future recovery through the pricing of our products and services to the U.S.Government.We manage various government-owned facilities on behalf of the U.S.Government.At such facilities,environmental compliance and remediation costs have historically been primarily the responsibility of the U.S.Gove

221、rnment and we relied(and continue to rely with respect to past practices)upon U.S.Government funding to pay such costs.While the government remains responsible for capital and operating costs associated with environmental compliance,responsibility for fines and penalties associated with environmenta

222、l noncompliance is typically borne by either the U.S.Government or the contractor,depending on the contract and the relevant facts.Fines and penalties are unallowable costs under the contracts pursuant to which such facilities are managed.Most of the U.S.laws governing environmental matters include

223、criminal provisions.If we were to be 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 Parties List”maintained by

224、the Government Services Administration.The listing would continue until the EPA concluded that the cause of the violation had been cured.Listed facilities cannot be used in performing any U.S.Government contract awarded during any period of listing by the EPA.Additional information regarding the eff

225、ect of compliance with environmental protection requirements and the resolution of environmental claims against us and our operations is contained in Item 1A“Risk Factors,”“Commitments and Contingencies”within Item 7 and“Note 10:Commitments and Contingencies”within Item 8 of this Form 10-K.Available

226、 InformationOur internet address is .We use our Investor Relations website as a routine channel for distribution of important information,including news releases,analyst presentations and financial information.We make available free of charge on or through our Investor Relations website our annual r

227、eports and quarterly reports on Forms 10-K and 10-Q(including related filings in XBRL format),current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with,or furnish it to,the SEC.Our SEC filings are also at the Public

228、Reference Room of the SEC at 100 F Street,N.E.,Washington,D.C.20549.You may obtain information on the operation of the Public Reference Room by calling 1-800-SEC-0330.In addition,the SEC also maintains an internet site at www.sec.gov that contains reports,proxy statements and other information regar

229、ding registrants that file electronically,including Raytheon.Additionally,we also make available on or through our website copies of our key corporate governance documents,including our Governance Principles,Certificate of Incorporation,By-laws and charters for the Audit Committee,Management Develop

230、ment and Compensation Committee,Governance and Nominating Committee,Public Affairs Committee and Special Activities Committee of the Board of Directors and our code of ethics entitled“Code of Conduct.”Raytheon stockholders may request free copies of these documents from our Investor Relations Depart

231、ment by writing to Raytheon Company,Investor Relations,870 Winter Street,Waltham,MA 02451,or by calling(781)522-5123 or by sending an email request to .The content on any website referred to in this Form 10-K is not incorporated by reference into this Form 10-K unless expressly noted.12ITEM 1A.RISK

232、FACTORSThis Form 10-K and the information we are incorporating by reference contain forward-looking statements within the meaning of federal securities laws,including information regarding our financial outlook,future plans,objectives,business prospects,products and services,trends and anticipated f

233、inancial performance including with respect to our liquidity and capital resources,our backlog,our pension expense and funding,the impact of new accounting pronouncements,our unrecognized tax benefits and the impact and outcome of audits and legal and administrative proceedings,claims,investigations

234、,commitments and contingencies,as well as information regarding domestic and international defense spending and budgets.You can identify these statements by the fact that they include words such as“will,”“believe,”“anticipate,”“expect,”“estimate,”“intend,”“plan,”or variations of these words,or simil

235、ar expressions.These forward-looking statements are not statements of historical facts and represent only our current expectations regarding such matters.These statements inherently involve a wide range of known and unknown uncertainties.Our actual actions and results could differ materially from wh

236、at is expressed or implied by these statements.Specific factors that could cause such a difference include,but are not limited to,those set forth below and other important factors disclosed previously and from time to time in our other filings with the SEC.Given these factors,as well as other variab

237、les that may affect our operating results,you should not rely on forward-looking statements,assume that past financial performance will be a reliable indicator of future performance,or use historical trends to anticipate results or trends in future periods.We expressly disclaim any obligation or int

238、ention to provide updates to the forward-looking statements and the estimates and assumptions associated with them.We depend on the U.S.Government for a substantial portion of our business,and changes in government defense spending and priorities could have consequences on our financial position,res

239、ults of operations and business.In 2014,U.S.Government sales,excluding foreign military sales,accounted for approximately 70%of our total net sales.Our revenues from the U.S.Government largely result from contracts awarded to us under various U.S.Government programs,primarily defense-related program

240、s with the DoD,as well as a broad range of programs with the Intelligence Community and other departments and agencies.The funding of our programs is subject to the overall U.S.Government budget and appropriation decisions and processes which are driven by numerous factors,including geo-political ev

241、ents,macroeconomic conditions,and the ability of the U.S.Government to enact relevant legislation,such as appropriations bills and accords on the debt ceiling.U.S.Government appropriations have and likely will continue to be affected by larger U.S.Government budgetary issues and related legislation.

242、In 2011,the Congress enacted the Budget Control Act of 2011,as amended by the American Taxpayer Relief Act of 2012(BCA),and the Bipartisan Budget Act of 2013.Pursuant to the terms of the BCA,a sequestration went into effect on March 1,2013 resulting in a 7.8%reduction to the DoD budget for fiscal ye

243、ar(FY)2013 to$495.5 billion,excluding funding for military personnel.The FY 2014 DoD base budget was essentially flat at$496 billion and FY 2015 remains at a similar level.Unless Congress and the Administration agree to further amend or revoke the BCA,the DoD base budget is expected to increase very

244、 modestly to approximately$500 billion for FY 2016.In the years beyond FY 2016,the BCA permits annual increases for DoD base budget funding of about 2.4 percent with such caps remaining in effect through FY 2023.The Administration has publicly signaled its intent to submit budget requests that are s

245、ignificantly higher than the BCA caps,as it did in submitting the FY 2016 budget request and the associated FY 2016 FYDP on February 2,2015 with all years exceeding the caps under the BCA.Such levels of DoD budget funding would require the Congress to enact legislation to raise the BCA caps.In the e

246、vent that DoD appropriations exceed the BCA caps in any fiscal year through FY 2023,an across-the-board sequestration would go into effect,as occurred in FY 2013.Conversely,the Congress could choose to reduce any above-BCA cap budget request,as it did for FY 2014 appropriations.In addition,the U.S.G

247、overnment has,on a number of occasions,been unable to complete its budget process before the end of its fiscal year(September 30),which resulted in it operating under a Continuing Resolution(CR)for extended periods,as well as a brief partial shutdown of the U.S.Government in October 2013.As a result

248、,future U.S.Government defense spending levels are difficult to predict.Significant changes in defense spending or changes in U.S.Government priorities,policies and requirements could have a material adverse effect on our results of operations,financial condition or liquidity.13In addition,we are in

249、volved in programs that are classified by the U.S.Government,principally through our IIS and SAS business segments,which have security requirements that place limits on our ability to discuss our performance on these programs,including any risks,disputes and claims.Our financial results largely are

250、dependent on our ability to perform on our U.S.Government contracts,which are subject to uncertain levels of funding and timing,as well as termination.Our financial results largely are dependent on our performance under our U.S.Government contracts.While we are involved in numerous programs and are

251、party to thousands of U.S.Government contracts,the termination of one or more of such contracts,or the occurrence of delays,cost overruns and product failures in connection with one or more large contracts,could negatively impact our results of operations,financial condition or liquidity.Furthermore

252、,we can give no assurance that we would be awarded new U.S.Government contracts to offset the revenues lost as a result of termination of any of our contracts.The funding of U.S.Government programs is subject to congressional appropriations.Congress generally appropriates funds on a fiscal year basi

253、s even though a program may extend over several fiscal years.Consequently,programs are often only partially funded initially and additional funds are committed only as Congress makes further appropriations.The U.S.Government programs in which we participate also must compete with other programs and

254、priorities for consideration and funding during the budget and appropriations process.See the discussion above for more information on the risks relating to changes in U.S.defense spending levels and priorities.In addition,when a formal appropriation bill has not been signed into law before the end

255、of the fiscal year,Congress may pass a CR that authorizes agencies of the U.S.Government to continue to operate,generally at the same funding levels from the prior year,but typically does not authorize new spending initiatives during this period.If Congress fails to enact a CR,the U.S.Government may

256、 shut down,which likely would result in the closure of government offices and furlough of government workers and the lack of funds to pay its contractors for work performed.In addition,if the national debt reaches the statutory debt ceiling,which is currently expected to occur in the first half of 2

257、015,the Congress must enact legislation to increase the statutory debt ceiling.If Congress fails to do so,then the U.S.Government may default on its debts,which would likely have a material adverse effect on the global financial markets.Until regular appropriation bills are passed,delays can occur i

258、n procurement of products and services due to lack of funding,and these delays can affect our results of operations,financial position or liquidity during the period of delay.Under certain circumstances,we may continue to perform under our U.S.Government contracts without funding and use our own fun

259、ds in order to meet our customers desired delivery dates or other requirements.Furthermore,if appropriations for one of our programs become unavailable,or are reduced or delayed,our contract or subcontract under such program may be terminated or adjusted by the U.S.Government,which could have a nega

260、tive impact on our future sales under such contract or subcontract.In addition,U.S.Government contracts generally also permit the government to terminate the contract,in whole or in part,without prior notice,at the U.S.Governments convenience or for default based on performance.If one of our contrac

261、ts is terminated for convenience,we would generally be entitled to payments for our allowable costs and would receive some allowance for profit on the work performed.If one of our contracts is terminated for default,we would generally be entitled to payments for our work that has been accepted by th

262、e U.S.Government.A termination arising out of our default could expose us to liability and have a negative impact on our ability to obtain future contracts and orders.Furthermore,on contracts for which we are a subcontractor and not the prime contractor,the U.S.Government could terminate the prime c

263、ontract for convenience or otherwise,irrespective of our performance as a subcontractor.Our U.S.Government contracts also typically involve the development,application and manufacture of advanced defense and technology systems and products aimed at achieving challenging goals.New technologies may be

264、 untested or unproven.In some instances,product requirements or specifications may be modified.As a result,we may experience technological and other performance difficulties,which may result in delays,setbacks,cost overruns and product failures,in connection with performing our U.S.Government contra

265、cts.Additionally,in order to win certain U.S.Government contracts,we may be required to invest in development prior to award as our customers demand more mature and proven solutions.These additional investment amounts may not be recouped if we are not chosen for new contract awards.14Our internation

266、al business is subject to geopolitical and economic factors,regulatory requirements and other risks.Our international business exposes us to geopolitical and economic factors,regulatory requirements,increasing competition and other risks associated with doing business in foreign countries.These risk

267、s differ from and potentially may be greater than those associated with our domestic business.In 2014,our sales to customers outside the U.S.(including foreign military sales through the U.S.Government)accounted for 29%of our total net sales.Our exposure to such risks may increase if our internation

268、al business continues to grow as we anticipate.Our international business is sensitive to changes in the priorities and budgets of international customers,which may be driven by changes in threat environments,geopolitical uncertainties,volatility in worldwide economic conditions,and various regional

269、 and local economic and political factors,including volatility in energy prices,changes in U.S.foreign policy,and other risks and uncertainties.Our international sales are subject to U.S.laws,regulations and policies,including the ITAR,the FCPA,and other anti-corruption and export laws and regulatio

270、ns.We maintain policies and controls to comply with such laws and regulations and exercise oversight of such compliance.However,any failure by us or others working on our behalf to comply with these laws and resolutions could result in criminal,civil or administrative penalties,including fines,suspe

271、nsion or debarment from government contracts or suspension of our ability to export our products.In addition,due to the nature of our products,we must first obtain licenses and authorizations from various U.S.Government agencies before we are permitted to sell our products outside of the U.S.We can

272、give no assurance that we will continue to be successful in obtaining the necessary licenses or authorizations or that certain sales will not be prevented or delayed.Any significant impairment of our ability to sell products outside of the U.S.could negatively impact our results of operations,financ

273、ial condition or liquidity.Our international sales are also subject to local government laws,regulations,and procurement policies and practices which may differ from U.S.Government regulations.These include regulations relating to import-export control,technology transfer,investments,exchange contro

274、ls and repatriation of earnings.Furthermore,our international sales contracts may be subject to non-U.S.contract laws and regulations and include contractual terms that differ from those of similar contracts in the U.S.or terms that may be interpreted differently by foreign courts.These contracts ma

275、y also be subject to termination at the customers convenience or for default based on performance,and may be subject to funding risks.In addition,the timing of orders,customer negotiations,governmental approvals and notifications from our international customers can be less predictable than from our

276、 domestic customers,and this may lead to variations in international bookings and sales each year.We must also manage a certain degree of exposure to the risk of currency fluctuations.Our international business faces substantial competition from both U.S.companies and foreign companies.In some insta

277、nces,foreign companies may receive loans,marketing subsidies and other assistance from their governments which may not be available to U.S.Government contractors.In addition,foreign companies may be subject to fewer restrictions on technology transfer than U.S.Government contractors.Our internationa

278、l contracts may include industrial cooperation agreements requiring specific in-country purchases,manufacturing agreements or financial support obligations,known as offset obligations,and provide for penalties if we fail to meet such requirements.Approvals of offset thresholds and requirements may b

279、e subjective,time consuming and may delay contract awards,and may,in certain countries,require the creation of a joint venture with a local company,which may control the venture.This may result in our being liable for violations of law for actions taken by these entities such as laws related to anti

280、-corruption,import and export,or local laws which may differ from U.S.laws and requirements.Such offset obligations are generally multi-year arrangements and may provide for penalties in the event we fail to perform in accordance with the offset requirements.We also are exposed to risks associated w

281、ith using third-party foreign representatives and consultants for international sales and operations,and teaming with international subcontractors,partners and suppliers in connection with international programs.As a result of these factors,we could experience financial penalties,award and funding d

282、elays on international programs and could incur losses on such programs which could negatively impact our results of operations,financial condition or liquidity.As a U.S.Government contractor,we are subject to extensive procurement rules and regulations,and changes in such rules,regulations and busi

283、ness practice could negatively affect current programs and potential awards.Government contractors must also comply with specific procurement regulations and other requirements including import and export,security,contract pricing and cost,contract termination and adjustment,audit and product integr

284、ity requirements.These requirements,although customary in U.S.Government contracts,impact our performance and compliance costs.In 15addition,current U.S.Government budgetary constraints have and may continue to lead to changes in the procurement environment.For example,the DoD continues initiatives

285、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

286、 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 terminati

287、on,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.Govern

288、ment 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

289、 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.Gove

290、rnment 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

291、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 nee

292、ds 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

293、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 releasabilit

294、y 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 significa

295、nt 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 b

296、oth 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 market

297、s.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 marke

298、t 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 successf

299、ul.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 exi

300、sts 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 t

301、o procure new contracts could be negatively impacted,which would negatively impact our results of operations and financial condition.16Competition within our markets may reduce our revenues and market share.We operate in highly competitive markets and our competitors may have more extensive or more

302、specialized engineering,manufacturing and marketing capabilities than we do in some areas.We anticipate increasing competition in our core markets as a result of continued defense industry consolidation,including cross-border consolidation of competition,which has enabled companies to enhance their

303、competitive position and ability to compete against us.We are also facing heightened competition in our domestic and international markets from foreign and multinational firms.In addition,as discussed in more detail above,increased pressure to limit U.S.defense spending and changes in the U.S.Govern

304、ment procurement environment may limit certain future market opportunities.For example,the DoD increasingly is committed to awarding contracts through competitive bidding and relying on competitive contract award types.Additionally,some customers,including the DoD,are increasingly turning to commerc

305、ial contractors,rather than traditional defense contractors,for information technology and other support work.If we are unable to continue to compete successfully against our current or future competitors,we may experience declines in revenues and market share which could negatively impact our resul

306、ts of operations,financial condition or liquidity.In addition,due to the current competitive environment,we continue to see an increase in bid protests from unsuccessful bidders on new program awards.Generally,a bid protest will delay the start of contract activities,delay earnings,and could result

307、in the award decision being overturned,requiring a re-bid of the contract.We enter into fixed-price and other contracts which could subject us to losses in the event that we experience cost growth that cannot be billed to customers.Generally,our customer contracts are either fixed-priced or cost rei

308、mbursable contracts.Under fixed-priced contracts,which represent approximately 60%of our backlog,we receive a fixed price irrespective of the actual costs we incur and,consequently,we carry the burden of any cost overruns.Due to their nature,fixed-priced contracts inherently have more risk than cost

309、 reimbursable contracts,particularly fixed-price development contracts where the costs to complete the development stage of the program can be highly variable,uncertain and difficult to estimate.Under cost reimbursable contracts,subject to a contract-ceiling amount in certain cases,we are reimbursed

310、 for allowable costs and paid a fee,which may be fixed or performance based.If our costs exceed the contract ceiling and are not authorized by the customer or are not allowable under the contract or applicable regulations,we may not be able to obtain reimbursement for all such costs and our fees may

311、 be reduced or eliminated.Because many of our contracts involve advanced designs and innovative technologies,we may experience unforeseen technological difficulties and cost overruns.Under both types of contracts,if we are unable to control costs or if our initial cost estimates are incorrect,we can

312、 lose money on these contracts.In addition,some of our contracts have provisions relating to cost controls and audit rights,and if we fail to meet the terms specified in those contracts,we may not realize their full benefits.Lower earnings caused by cost overruns and cost controls would have a negat

313、ive impact on our results of operations.Our business could be adversely affected by a negative audit or investigatory finding by the U.S.Government.As a government contractor,we are subject to audits and investigations by U.S.Government agencies including the DCAA,the DCMA,the Inspector General of t

314、he DoD and other departments and agencies,the Government Accountability Office,the Department of Justice(DoJ)and Congressional Committees.From time to time,these and other agencies investigate or conduct audits to determine whether a contractors operations are being conducted in accordance with appl

315、icable requirements.The DCAA and DCMA also review the adequacy of and a contractors compliance with its internal control systems and policies,including the contractors accounting,purchasing,property,estimating,earned value management and material management accounting systems.Our final allowable inc

316、urred costs for each year are also subject to audit and have from time to time resulted in disputes between us and the U.S.Government.In addition,the DoJ has,from time to time,convened grand juries to investigate possible irregularities by us.Any costs found to be improperly allocated to a specific

317、contract will not be reimbursed or must be refunded if already reimbursed.If an audit or investigation uncovers improper or illegal activities,we may be subject to civil and criminal penalties and administrative sanctions,which may include termination of contracts,forfeiture of profits,suspension of

318、 payments,fines and suspension or prohibition from doing business with the U.S.Government.In addition,we could suffer serious reputational harm if allegations of impropriety were made against us.17We depend on component availability,subcontractor performance and our key suppliers to manufacture and

319、deliver our products and services.We are dependent upon the delivery by suppliers of materials and the assembly by subcontractors of major components and subsystems used in our products in a timely and satisfactory manner and in full compliance with applicable terms and conditions.Some products requ

320、ire relatively scarce raw materials.We also are subject to specific procurement requirements that may,in effect,limit the suppliers and subcontractors we may utilize,including requirements for genuine original equipment manufacturer parts.As we continue to seek further cost efficiencies throughout t

321、he enterprise,we may centralize procurements in order to attain better pricing through strategic sourcing.In some instances,we are dependent on sole-source suppliers.If any of these suppliers or subcontractors fails to meet our needs or becomes insolvent,we may not have readily available alternative

322、s or alternatives at prices that meet the demands of our customers.While we enter into long-term or volume purchase agreements with certain suppliers and take other actions,such as accelerating supplier payments commensurate with value delivered,to ensure financial viability and the availability of

323、needed materials,components and subsystems,we cannot be sure that such items will be available in the quantities we require,if at all.In addition,some of our suppliers or subcontractors,especially smaller entities,may continue to be impacted by global economic conditions,which could impair their abi

324、lity to meet their obligations to us.If we experience a material supplier or subcontractor problem,our ability to satisfactorily and timely complete our customer obligations could be negatively impacted which could result in reduced sales,termination of contracts and damage to our reputation and rel

325、ationships with our customers.We could also incur additional costs in addressing such a problem.Any of these events could have a negative impact on our results of operations,financial condition or liquidity.In addition,we must comply with other procurement requirements,including restrictions on the

326、use of certain chemicals in the European Union and conducting diligence and providing disclosure regarding the use of certain minerals,known as conflict minerals,which may impact our procurement practices and increase our costs.We use estimates in accounting for many of our programs,and changes in o

327、ur estimates could adversely affect our future financial results.Contract accounting requires judgment relative to assessing risks,including risks associated with customer-directed delays and reductions in scheduled deliveries,unfavorable resolutions of claims and contractual matters,judgments assoc

328、iated with estimating contract revenues and costs,and assumptions for schedule and technical issues.Due to the size and nature of many of our contracts,the estimation of total revenues and cost at completion is complicated and subject to many variables.For example,we must make assumptions regarding

329、the length of time to complete the contract because costs also include expected increases in wages and prices for materials;consider whether the intent of entering into multiple contracts was effectively to enter into a single project in order to determine whether such contracts should be combined o

330、r segmented;consider incentives or penalties related to performance on contracts in estimating sales and profit rates,and record them when there is sufficient information for us to assess anticipated performance;and use estimates of award fees in estimating sales and profit rates based on actual and

331、 anticipated awards.Because of the significance of the judgments and estimation processes described above,it is likely that materially different amounts could be recorded if we used different assumptions or if the underlying circumstances were to change.Changes in underlying assumptions,circumstance

332、s or estimates may adversely affect our future results of operations and financial condition.For a complete discussion regarding how our financial statements can be affected by contract accounting policies,see“Critical Accounting Estimates”beginning on page 34 within Item 7 of this Form 10-K.Signifi

333、cant changes in key estimates and assumptions,such as discount rates and assumed long-term return on assets(ROA),as well as our actual investment returns on our pension plan assets and other actuarial factors,could affect our earnings,equity and pension contributions in future periods.We must determine our pension and other postretirement benefit plans expense or income which involves significant