Raytheon 2013 Annual Report Download - page 102

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
92
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, 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, 2013, 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, 2013 and December 31, 2012, there were no borrowings outstanding under this credit
facility. However, we had $2 million of outstanding letters of credit at December 31, 2013 and December 31, 2012, 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 2013 and 2012. Our ratio of total debt
to total capitalization, as those terms are defined in the credit facility, was 30.0% at December 31, 2013. 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.
Total cash paid for interest on notes payable and long-term debt was $210 million, $198 million and $167 million in 2013,
2012 and 2011, respectively.
Note 10: Commitments and Contingencies
Leases—At December 31, 2013, we had commitments under long-term leases requiring annual rentals on a net lease basis
as follows:
(In millions)
2014 $ 205
2015 173
2016 130
2017 102
2018 83
Thereafter 293
Rent expense was $248 million, $258 million and $271 million in 2013, 2012 and 2011, 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, 2013, we had commitments under agreements to outsource a portion of our information technology function,
which have no minimum annual payments.
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 takes into account 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, net. Our estimates regarding remediation costs to be incurred
were as follows at December 31:
(In millions, except percentages) 2013 2012
Total remediation costs—undiscounted $ 198 $ 202
Weighted average risk-free rate 5.6% 5.6%
Total remediation costs—discounted $ 133 $ 131
Recoverable portion 90 86