Raytheon 2009 Annual Report Download - page 26

components and subsystems. We generally have not experienced material difficulties in procuring the necessary raw
materials, components and other supplies for our products.
In recent years, our revenues in the second half of the year have generally exceeded revenues in the first half. The timing
of U.S. Government awards, the availability of U.S. Government funding and product deliveries are among the factors
affecting the periods in which revenues are recorded. We expect this trend to continue in 2010.
Competition
We 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, reputation, 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 specialized engineering, manufacturing and marketing capabilities than
we do in some areas. The on-going consolidation of the U.S. and global defense, space and aerospace industries continues
to intensify competition and has reduced the number of principal prime contractors in the U.S. As a result of this
consolidation, we frequently partner on various programs with our major suppliers, some of whom are, from time to
time, competitors on other programs. In addition, projected U.S. defense spending levels for periods beyond the near-
term are uncertain and difficult 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 Licenses
We own an intellectual property portfolio which includes many United States and foreign patents, as well as unpatented
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 proprietary
intellectual property of others. We also license our intellectual property to others. While our intellectual property rights
in the aggregate are important to the operation of Raytheon, we do not believe that any existing patent, license or other
intellectual property right is of such importance that its loss or termination would have a material adverse effect on our
business, taken as a whole.
Employment
As of December 31, 2009, we had approximately 75,000 employees. Approximately 7% of our employees are unionized.
We consider our union-management relationships to be generally satisfactory.
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, the discovery and application of innovative remediation technologies, and the status of the
law, regulations and their interpretations.
In order to assess the potential impact on our consolidated financial 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 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
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