Raytheon 2005 Annual Report Download - page 96

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In addition, the Act creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad
by providing a deduction for certain dividends from controlled foreign corporations equivalent to 85% of the dividends
received. The Company recorded a $5 million tax expense in 2005 in connection with a repatriation of $110 million
completed pursuant to the Act.
Deferred federal and foreign income taxes consisted of the following at December 31:
(In millions) 2005 2004
Current deferred tax assets (liabilities)
Other accrued expenses $ 311 $ 299
Accrued salaries and wages 152 122
Contracts in process and inventories (28) 48
Deferred federal and foreign income taxes—current $ 435 $ 469
Noncurrent deferred tax assets (liabilities)
Net operating loss and tax credit carryforwards $ 279 $ 428
Pension benefits 366 427
Other retiree benefits 238 123
Depreciation and amortization (946) (880)
Revenue on leases and other (62) (27)
Deferred federal and foreign income taxes—noncurrent $(125) $71
There were $3 million of taxes refundable included in prepaid expenses and other current assets at December 31, 2005
and 2004. Federal tax (expenses) benefits related to discontinued operations were $2 million and $(20) million at
December 31, 2005 and 2004, respectively, and were included in deferred federal and foreign income taxes in the table
above.
At December 31, 2005, the Company had foreign tax credit carryforwards of $90 million that expire in 2009 through
2015, research tax credit carryforwards of $37 million that expire in 2018 through 2025, and alternative minimum tax
credit carryforwards of $32 million that are carried forward indefinitely. The Company believes it will be able to utilize
substantially all of these carryforwards over the next 4 to 5 years.
Note L: Commitments and Contingencies
At December 31, 2005, the Company had commitments under long-term leases requiring annual rentals on a net lease
basis as follows:
(In millions)
2006 $318
2007 250
2008 191
2009 130
2010 104
Thereafter 212
Rent expense in 2005, 2004, and 2003 was $280 million, $266 million, and $263 million, respectively. In the normal
course of business, the Company leases equipment, office buildings, and other facilities under leases that include standard
escalation clauses for adjusting rent payments to reflect changes in price indices, as well as renewal options.
74