Raytheon 2010 Annual Report Download - page 97

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The adjustments to the principal amounts of long-term debt were as follows at December 31:
(In millions) 2010 2009
Principal $3,658 $2,336
Interest rate swaps —21
Unamortized issue discounts (35) (14)
Unamortized interest rate hedging costs (13) (14)
Total $3,610 $2,329
The aggregate amounts of principal payments due on long-term debt for the next five years are:
(In millions)
2011 $—
2012 —
2013 —
2014 —
2015 400
In November 2010, we entered into a $500 million revolving credit facility maturing in 2012, replacing the previous $500
million 364-day facility, which matured in November 2010. Under the facility we can borrow and backstop commercial
paper.
We also have a $1.0 billion facility maturing in November 2012, $150 million of which is available to Raytheon United
Kingdom Limited, our U.K. subsidiary. Under the facility we can borrow, issue letters of credit and backstop commercial
paper.
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, 2010, borrowings under the $1.0 billion and $500 million facilities would bear interest at LIBOR
plus 100 basis points and 75 basis points, respectively, the minimum margin. The credit facilities are comprised of
commitments from approximately 25 separate highly rated lenders, each committing no more than 10% of the aggregate
of the facilities. As of December 31, 2010 and December 31, 2009, there were no borrowings outstanding under these
credit facilities or our previous credit facilities. However, we had $3 million and $21 million of outstanding letters of
credit at December 31, 2010 and December 31, 2009, respectively, which effectively reduced our borrowing capacity
under these credit facilities and our previous credit facility by those same amounts.
Under the current and previous credit facilities, 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 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 these covenants during 2010 and 2009. Our ratio of
total debt to total capitalization, as defined in the current and previous credit facilities, was 26.7% and 19.0% at
December 31, 2010 and December 31, 2009, respectively. We are providing these ratios, which are financial covenants
under our current credit facilities, as these metrics are used by our lenders to monitor the Company’s leverage and debt
service capacity and are also thresholds that limit our ability to utilize these two facilities.
Certain of our foreign subsidiaries maintain revolving bank lines of credit to provide them with a limited amount of
short-term liquidity, including the $150 million Raytheon United Kingdom Limited facility described above. In addition,
other uncommitted bank lines totaled approximately $2 million and $15 million at December 31, 2010 and December 31,
2009, respectively. There were no amounts outstanding under these lines of credit at December 31, 2010 and
December 31, 2009. Compensating balance arrangements are not material.
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