Raytheon 2010 Annual Report Download - page 98

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Total cash paid for interest on notes payable and long-term debt was $134 million, $147 million and $142 million in
2010, 2009 and 2008, respectively.
Note 11: Commitments and Contingencies
At December 31, 2010, we had commitments under long-term leases requiring annual rentals on a net lease basis as
follows:
(In millions)
2011 $254
2012 207
2013 156
2014 118
2015 96
Thereafter 385
Rent expense was $307 million, $290 million and $285 million in 2010, 2009 and 2008, respectively. In the normal course
of business, we lease 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.
At December 31, 2010, we had commitments under agreements to outsource a portion of our information technology
function, which have no minimum annual payments.
Insurance is purchased from third parties to cover aggregate liability exposure up to $1.5 billion.
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.
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