Raytheon 2012 Annual Report Download - page 78

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In May 2010, our stockholders approved the Raytheon 2010 Stock Plan. Under the plan, we may grant restricted stock awards,
restricted stock units, stock grants, stock options and stock appreciation rights.
Cash Dividends—Our Board of Directors authorized the following cash dividends:
(In millions, except per share amounts) 2012 2011 2010
Cash dividends per share $2.00 $1.72 $1.50
Total dividends paid 643 588 536
In March 2012, our Board of Directors authorized a 16% increase to our annual dividend payout rate from $1.72 to $2.00 per
share. In March 2011, our Board of Directors authorized a 15% increase in our annual dividend payout rate from $1.50 to
$1.72 per share. Dividends are subject to quarterly approval by our Board of Directors.
CAPITAL RESOURCES
Total debt was $4.7 billion at December 31, 2012, $4.6 billion at December 31, 2011 and $3.6 billion at December 31, 2010.
Our outstanding debt bears contractual interest at fixed interest rates ranging from 2.5% to 7.2% and matures at various dates
from 2018 through 2041.
Cash and Cash Equivalents and Short-term Investments—Cash and cash equivalents and short-term investments were $4.0
billion at December 31, 2012 and December 31, 2011. We may invest in U.S. Treasuries; AAA/Aaa rated money market funds;
certificates of deposit, time deposits and commercial paper of banks with a minimum long-term debt rating of A or A2 and
minimum short-term debt rating of A-1 and P-1, and commercial paper of corporations with a minimum long-term debt rating
of A+ or A1 and minimum short-term debt rating of A-1 and P-1. Cash and cash equivalents and short-term investments
balances held at our foreign subsidiaries were approximately $725 million and $450 million at December 31, 2012 and
December 31, 2011, respectively. Earnings from our foreign subsidiaries are currently deemed to be indefinitely reinvested.
We do not expect such reinvestment to affect our liquidity and capital resources, and we continuously evaluate our liquidity
needs and ability to meet global cash requirements as a part of our overall capital deployment strategy. Factors that affect our
global capital deployment strategy include anticipated cash flows, the ability to repatriate cash in a tax efficient manner,
funding requirements for operations and investment activities, acquisitions and divestitures, and capital market conditions.
Credit Facilities—In December 2011, we entered into a $1.4 billion revolving credit facility maturing in 2016, replacing the
previous $500 million and $1.0 billion credit facilities, which were both scheduled to mature in November 2012.
Under the $1.4 billion credit facility, we can borrow, issue letters of credit and backstop commercial paper. Borrowings under
this facility bear interest at various rate options, including LIBOR plus a margin based on our credit ratings. Based on our
credit ratings at December 31, 2012, borrowings would generally bear interest at LIBOR plus 90 basis points. The credit
facility is comprised of commitments from approximately 25 separate highly rated lenders, each committing no more than
10% of the facility. As of December 31, 2012 and December 31, 2011, there were no borrowings outstanding under this credit
facility. However, we had $2 million and $3 million of outstanding letters of credit at December 31, 2012 and December 31,
2011, respectively, which effectively reduced our borrowing capacity under this credit facility by those same amounts.
Under the $1.4 billion credit facility we must comply with certain covenants, including a ratio of total debt to total capitalization
of no more than 60%. We were in compliance with the credit facility covenants during 2012 and 2011. Our ratio of total debt
to total capitalization, as those terms are defined in the credit facility, was 36.6% at December 31, 2012. We are providing
this ratio as this metric is used by our lenders to monitor our leverage and is also a threshold that limits our ability to utilize
this facility. We were also required to comply with certain covenants in connection with our previous credit facilities and were
in compliance with such covenants in 2011.