Raytheon 2010 Annual Report Download - page 72

Interest payments include interest on debt that is redeemable at our option.
As of December 31, 2010 and December 31, 2009, the total amount of unrecognized tax benefits for uncertain tax
positions and the accrual for the related interest, net of the federal benefit, was $211 million and $549 million,
respectively, and was included in accrued retiree benefits and other long-term liabilities. These amounts were not
included in the table above since we are unable to make a reasonably reliable estimate of when a cash settlement, if any,
will occur with a tax authority as the timing of examinations and ultimate resolutions of those examinations is uncertain.
OFF-BALANCE SHEET ARRANGEMENTS
At December 31, 2010, we had no significant off-balance sheet arrangements other than operating leases and guarantees
to third parties on behalf of our affiliates as described below in Commitments and Contingencies. Such arrangements are
not material to our overall liquidity or capital resources, market risk support or credit risk support as described below.
COMMITMENTS AND CONTINGENCIES
Environmental Matters—We are involved in various stages of investigation and cleanup related to remediation of various
environmental sites. Our estimate of the liability of total environmental remediation costs includes the use of a discount
rate and considers that a portion of these costs is eligible for future recovery through the pricing of our products and
services to the U.S. Government. We consider such recovery probable based on government contracting regulations and
our long history of receiving reimbursement for such costs and accordingly have recorded the estimated future recovery
of these costs from the U.S. Government within contracts in process. Our estimates of total remediation costs, weighted
average risk-free rate, total remediation costs—discounted and recoverable portion were as follows at December 31:
(In millions, except percentages) 2010 2009
Total remediation costs—undiscounted $225 $208
Weighted average risk-free rate 5.6% 5.7%
Total remediation costs – discounted $152 $139
Recoverable portion 107 97
We also lease certain government-owned properties and are generally not liable for remediation of preexisting
environmental contamination at these sites; as a result, we generally do not reflect the provision for these costs in our
consolidated financial statements.
Due to the complexity of environmental laws and regulations, the varying costs and effectiveness of alternative cleanup
methods and technologies, the uncertainty of insurance coverage and the unresolved extent of our responsibility, it is
difficult to determine the ultimate outcome of environmental matters; however, we do not expect any additional liability
to have a material adverse effect on our financial position, results of operations or liquidity.
Environmental remediation costs expected to be incurred are:
(In millions)
2011 $48
2012 23
2013 19
2014 14
2015 12
Thereafter 109
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