Raytheon 2009 Annual Report Download - page 74

In October 2008, our Board of Directors authorized the repurchase of up to an additional $2.0 billion of our outstanding
common stock. As of December 31, 2009, approximately $1,130 million of our common stock had been repurchased and
approximately $870 million remained under this program. All previous repurchase programs had been completed as of
December 31, 2009.
Cash Dividends—Our Board of Directors declared the following cash dividends:
(In millions, except per share amounts) 2009 2008 2007
Cash dividends per share $1.24 $1.12 $1.02
Total dividends paid 473 460 440
In March 2009, our Board of Directors authorized an 11% increase in our annual dividend payout rate from $1.12 to
$1.24 per share. In March 2008, our Board of Directors authorized a 10% increase in our annual dividend payout rate
from $1.02 to $1.12 per share. Although we do not have a formal dividend policy we believe that a reasonable dividend
payout ratio is approximately one third of our income from continuing operations excluding the FAS/CAS Pension
Adjustment. Dividends are subject to quarterly approval by our Board of Directors.
CAPITAL RESOURCES
Total debt was $2.3 billion at December 31, 2009 and 2008. Our outstanding debt bears contractual interest at fixed
interest rates ranging from 4.4% to 7.2% and matures at various dates through 2028.
Cash and Cash Equivalents—Cash and cash equivalents were $2.6 billion and $2.3 billion at December 31, 2009 and
December 31, 2008, respectively. We invest cash in U.S. Treasuries; commercial paper of financial institutions and
corporations with AA-/Aa3 or better long-term and A-1+/P-1 short-term debt ratings, or guaranteed by the U.S.
Government’s Temporary Liquidity Guarantee Program; AAA/Aaa U.S. Treasury money market funds; bank certificates
of deposit; and time deposits with AA- or Aa3 long-term debt ratings. Cash balances held at our foreign subsidiaries were
approximately 15% of our total cash balance at December 31, 2009 and December 31, 2008, and are deemed to be
indefinitely reinvested.
Credit Facilities—In November 2009, we entered into two new bank revolving credit facilities in the amount of $1.5
billion in the aggregate replacing the previous $2.2 billion bank revolving credit facility which was set to mature in March
2010.
The first new credit facility is a $1.0 billion, three-year facility maturing in November 2012, $150 million of which is
available to Raytheon United Kingdom Limited, our U.K. subsidiary. The second new credit facility is a $500 million
364-day facility maturing in November 2010. Borrowings under these facilities bear interest at various rate options,
including LIBOR plus a margin based on our credit default swap spread, with minimum and maximum margins that are
adjusted for our credit ratings. Based on our credit ratings at December 31, 2009, borrowings under these facilities would
bear interest at LIBOR plus 100 basis points, the minimum margin.
Under the $1.0 billion facility, we can borrow, issue letters of credit and backstop commercial paper. Under the $500
million facility, we can borrow and backstop commercial paper. The credit facilities are comprised of commitments from
approximately twenty-five separate highly rated lenders, each committing no more than 10% of the aggregate of the
facilities. As of December 31, 2009 and December 31, 2008, there were no borrowings outstanding under these credit
facilities or our previous facility. However, we had approximately $20 million and $40 million of outstanding letters of
credit at December 31, 2009 and December 31, 2008, respectively, which effectively reduced our borrowing capacity
under these credit facilities and our previous credit facility by that same amount.
Under the two new facilities and the previous credit facility, we must comply with certain covenants, including a ratio of
total debt to total capitalization of no more than 50% and a ratio of consolidated earnings attributable to Raytheon
Company before interest, taxes, depreciation and amortization (EBITDA) to consolidated net interest expense, for any
period of four consecutive fiscal quarters, of no less than 3 to 1. We were in compliance with the covenants during 2009
and 2008. Our ratio of total debt to total capitalization, as defined in the credit facilities, was 19.0% and 20.1% at
December 31, 2009 and 2008, respectively.
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