Raytheon 2004 Annual Report Download - page 67

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complaint and discovery is proceeding. In April 2003, the court conditionally certified the class and defined the
class period as that between April 17, 2000 and March 2, 2001, inclusive.
In July 2001, the Company was named as a nominal defendant and all of its directors at the time were named as
defendants in two identical purported derivative lawsuits. These lawsuits were consolidated into one action (the
“Consolidated Amended Derivative Complaint”) in January 2004 and contain allegations similar to those included
in the WGI Complaint and further allege that the individual defendants breached fiduciary duties to the Company
and failed to maintain systems necessary for prudent management and control of the Company’s operations. In
March 2004, the defendants filed a motion to dismiss the Consolidated Amended Derivative Complaint. In
November 2004, without admitting any liability or wrongdoing, the individual defendants and the Company
reached a tentative agreement to settle this derivative action. The settlement, which is subject to court approval, will
resolve all claims in the case and is not expected to have a material effect on the Company’s financial position or
results of operations.
In May 2003, two purported class action lawsuits were filed on behalf of participants in the Company’s savings
and investment plans who invested in the Company’s stock between August 19, 1999 and May 27, 2003. The two
class action complaints are brought pursuant to the Employee Retirement Income Security Act (ERISA). Both
lawsuits are substantially similar and have been consolidated into a single action. In April 2004, a second
consolidated amended complaint (the “Second Consolidated Amended ERISA Complaint”) was filed on behalf of
participants and beneficiaries in the Company’s savings and investment plans who invested in the Company’s stock
since October 7, 1998. The Second Consolidated Amended ERISA Complaint alleges that the Company, its Pension
and Investment Group, and its Investment Committee breached ERISA fiduciary duties by failing to: (1) prudently
and loyally manage plan assets, (2) monitor the Pension and Investment Group and the Investment Committee and
provide them with accurate information, (3) provide complete and accurate information to plan participants and
beneficiaries, and (4) avoid conflicts of interest. In October 2004, the defendants filed a motion to dismiss the
Second Consolidated Amended ERISA Complaint.
Although the Company believes that it and the other defendants have meritorious defenses to each and all of the
aforementioned class action and derivative complaints and intends, except as to the tentative settlements noted
above, to contest each lawsuit vigorously, an adverse resolution of any of the lawsuits could have a material adverse
effect on the Company’s financial position and results of operations. The Company is not presently able to
reasonably estimate potential losses, if any, related to any of the lawsuits, except as noted above.
In addition, various claims and legal proceedings generally incidental to the normal course of business are
pending or threatened against the Company. While the ultimate liability from these proceedings is presently
indeterminable, any additional liability is not expected to have a material adverse effect on the Company’s financial
position or results of operations.
The following is a schedule of the Company’s contractual obligations outstanding (excluding working capital
items) at December 31, 2004:
(In millions) Total
Less
than 1
Year
1–3
years
4–5
years
After 5
years
Debt $4,779 $ 516 $ 685 $ 310 $3,268
Subordinated notes payable 382 – 382 – –
Interest payments 2,803 323 552 433 1,495
Operating leases 1,359 340 470 266 283
IT outsourcing 343 71 136 136 –
Total $9,666 $1,250 $2,225 $1,145 $5,046
Interest payments include interest on debt that is redeemable at the option of the Company.