Raytheon 2006 Annual Report Download - page 42

or 30 days (depending on the identity of the country that will utilize the equipment and services) prior to authorizing
such exports. During that time, the 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 international business is contained in Item 1A “Risk
Factors” of this Form 10-K.
Environmental Regulation
Our operations are subject to and affected by a variety of federal, state and local environmental protection laws and
regulations. We have provided for the estimated cost to complete remediation where we have determined that it is
probable that we will incur such costs in the future to address the environmental impact at current or formerly owned
operating facilities or at sites where we have been named a Potentially Responsible Party (PRP) by the Environmental
Protection Agency (EPA) or similarly designated by other environmental agencies. It is difficult to estimate the timing
and ultimate amount of environmental cleanup costs to be incurred in the future due to the uncertainties regarding the
extent of the required cleanup and the status of the law, regulations and their interpretations.
In order to assess the potential impact on our financial statements, management estimates the possible remediation costs
that reasonably could be incurred by us. Such estimates take into consideration the professional judgment of our
environmental professionals and, when necessary, consultation with outside environmental specialists.
If we are ultimately found to have liability at those sites where we have been designated a PRP, we expect that the actual
costs of remediation will be shared with other liable PRPs. Generally, PRPs that are 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 environmental laws,
however, responsible parties may be jointly and severally liable and, therefore, potentially liable for the full cost of
funding such remediation. 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 amounts 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,
because neither manner of recovery is deemed probable.
We manage various government-owned facilities on behalf of the U.S. government. At such facilities, environmental
compliance and remediation costs have historically been the responsibility of the government and we relied (and
continue to rely with respect to past practices) upon 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 environmental noncompliance are typically borne by either the 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 laws governing environmental matters include criminal provisions. If we were convicted of a violation of the
Federal Clean Air Act or 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 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 effect of compliance with environmental protection requirements and the
resolution of environmental claims against Raytheon and its operations is contained in Item 1A “Risk Factors,”
Item 3 “Legal Proceedings,” “Commitments and Contingencies” within Item 7 and “Note 12: Commitments and
Contingencies” within Item 8 of this Form 10-K.
Available Information and Stock Exchange Certification
Our Internet address is www.raytheon.com. The content on our website is available for information purposes only. It
should not be relied upon for investment purposes, nor is it incorporated by reference into this Form 10-K.
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