Raytheon 2015 Annual Report Download - page 31

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The outcome of litigation in which we have been named, or may in the future be named, as a defendant is unpredictable,
and an adverse decision in any such matter could have a material adverse effect on our financial condition or results of
operations.
We are the defendant in a number of litigation matters and are subject to various other claims, demands and investigations.
In addition, we may be subject to future litigation matters, claims, demands and investigations. These matters may divert
financial and management resources that would otherwise be used to benefit our operations. No assurances can be given that
the results of these matters will be favorable to us. An adverse resolution or outcome of any of these lawsuits, claims, demands
or investigations could have a negative impact on our financial condition, results of operations or liquidity.
Some of our workforce is represented by labor unions, so our business could be harmed in the event of a prolonged work
stoppage.
Approximately 4,000 of our employees are unionized, which represents approximately 7% of our employee base at
December 31, 2015. As a result, we may experience work stoppages, which could adversely affect our business. We cannot
predict how stable our union relationships will be or whether we will be able to successfully negotiate successor agreements
without impacting our financial condition. In addition, the presence of unions may limit our flexibility in dealing with our
workforce. Work stoppages could negatively impact our ability to manufacture our products on a timely basis, which could
negatively impact our results of operations and financial condition.
We may be unable to adequately protect our intellectual property rights, which could affect our ability to compete.
We own many U.S. and foreign patents and patent applications, and have rights in unpatented know-how, data, software,
trademarks and copyrights. The U.S. government has licenses under certain of our patents and certain other intellectual property
that are developed or used in performance of government contracts, and it may use or authorize others (including our
competitors) to use such patents and intellectual property for government and other purposes. The U.S. government may
challenge the sufficiency of intellectual property rights we have granted in U.S. government contracts and attempt to obtain
greater rights. There can be no assurance that any of our patents and other intellectual property will not be challenged,
invalidated, misappropriated or circumvented by third parties. In some instances, we have augmented our technology base by
licensing the proprietary intellectual property of others. In the future, we may not be able to obtain necessary licenses on
commercially reasonable terms. We enter into confidentiality and intellectual property assignment agreements with our
employees and enter into non-disclosure agreements with our suppliers and appropriate customers so as to limit access to and
prevent disclosure of our trade secrets and other proprietary information. These measures may not suffice to deter
misappropriation or third-party development of similar technologies. Moreover, the laws concerning intellectual property vary
among nations and the protection provided to our intellectual property by the laws and courts of foreign nations may not be
as advantageous to us as the remedies available under U.S. law.
Our operations expose us to the risk of material environmental liabilities.
We use hazardous substances and generate hazardous wastes in our manufacturing operations. As a result, we are subject to
potentially material liabilities related to personal injuries or property damage that may be caused by hazardous substance
releases and exposures. For example, we are investigating and remediating contamination related to past practices at a number
of properties and, in some cases, have in the past been named as a defendant in related “toxic tort” claims.
We are also subject to laws and regulations that: (i) impose requirements for the proper management, treatment, storage and
disposal of hazardous substances and wastes; (ii) restrict air and water emissions from our operations (including U.S.
government-owned facilities we manage); and (iii) require maintenance of a safe workplace. These laws and regulations can
lead to substantial fines and criminal sanctions for violations, and may require the installation of costly equipment or operational
changes to limit pollution emissions, decrease the likelihood of accidental hazardous substance releases and/or reduce the
risks of injury to people in our workplaces.
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 U.S. Environmental
Protection Agency (EPA) on the “Excluded Parties List” maintained by the Government Services Administration. The listing