Raytheon 2012 Annual Report Download - page 115

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
107
The following table summarizes information about stock options outstanding and exercisable at December 31, 2012:
Exercise Price Range
Shares
(in thousands)
Weighted-
Average
Remaining
Contractual
Life (in
years)
Weighted-
Average
Exercise
Price
27.29 to 30.50 50 0.6 $28.93
30.51 to 31.55 762 0.4 $31.44
31.56 to 41.50 77 1.6 $34.41
Total 889 0.5 $31.56
Shares exercisable at the corresponding weighted-average exercise price at December 31, 2012, 2011 and 2010, were 0.9
million at $31.56, 4.4 million at $38.98 and 6.5 million at $37.23, respectively.
Note 14: Pension and Other Employee Benefits
We have pension plans covering the majority of our employees, including certain employees in foreign countries (Pension
Benefits). Our primary pension obligations relate to our domestic IRS qualified pension plans. We also provide certain health
care and life insurance benefits to retired employees and to eligible employees upon retirement through other postretirement
benefit plans (Other Benefits).
The fair value of plan assets for our domestic and foreign Pension Benefit plans was $16,733 million and $717 million at
December 31, 2012, respectively, and $14,931 million and $621 million at December 31, 2011, respectively.
We maintain a defined contribution plan that includes a 401(k) plan. Covered employees hired or rehired after January 1,
2007, are eligible for a Company contribution based on age and service, instead of participating in our pension plans. These
and other covered employees are eligible to contribute up to a specific percentage of their pay to the 401(k) plan. We match
the employee’s contribution, generally up to 3% or 4% of the employee’s pay, which is invested in the same way as employee
contributions. Total expense for our match was $272 million, $273 million and $275 million in 2012, 2011 and 2010,
respectively.
At December 31, 2012 and December 31, 2011, there was $12.1 billion and $11.0 billion invested in our defined contribution
plan, respectively. At December 31, 2012 and December 31, 2011, $1.0 billion and $1.1 billion of these amounts were invested
in our stock fund, respectively.
We also maintain additional contractual pension benefits agreements for certain of our executive officers. The liability
associated with such agreements was $36 million and $35 million at December 31, 2012 and December 31, 2011, respectively.
Contributions and Benefit Payments
We may make both required and discretionary contributions to our pension plans. Required contributions are primarily
determined in accordance with the Pension Protection Act (PPA), which amended the Employee Retirement Income Security
Act of 1974 (ERISA) rules and are affected by the actual return on plan assets and plan funded status. The funding requirements
under PPA require us to fully fund our pension plans over a rolling seven-year period as determined annually based upon the
funded status at the beginning of the year. In July 2012, the Surface Transportation Extension act, which is also referred to
as the Moving ahead for Progress in the 21st Century Act (STE Act), was passed by Congress and signed by the President.
The STE Act includes a provision for temporary pension funding relief due to the low interest rate environment. The provision
reduced our cash funding requirements in 2012. We made required contributions of $740 million, $1,096 million and $1,184
million in 2012, 2011 and 2010, respectively, to our pension and other postretirement benefit plans. We made discretionary
contributions of $500 million in 2012 and $750 million in both 2011 and 2010. We periodically evaluate whether to make
additional discretionary contributions. We expect to make required contributions of approximately $775 million and $25
million to our pension and other postretirement benefit plans, respectively, in 2013.