Raytheon 2013 Annual Report Download - page 77

67
CONTRACTUAL OBLIGATIONS
The following is a schedule of our contractual obligations outstanding at December 31, 2013:
Payment due by period
(In millions) Total
Less than
1 year
(2014) 1–3 years (2015–2016) 3–5 years (2017–2018)
After 5 years
(2019 and
thereafter)
Debt(1) $ 4,783 $ — $ — $ 591 $ 4,192
Interest payments 2,723 209 418 410 1,686
Operating leases 986 205 303 185 293
Purchase obligations 6,526 5,194 1,144 119 69
Total $15,018 $ 5,608 $ 1,865 $ 1,305 $ 6,240
(1) Debt includes scheduled principal payments only.
Purchase obligations in the table above represent enforceable and legally binding agreements with suppliers to purchase goods
or services. We enter into contracts with customers, primarily the U.S. Government, which entitle us to full recourse for costs
incurred, including purchase obligations, in the event the contract is terminated by the customer for convenience. These
purchase obligations are included above notwithstanding the amount for which we are entitled to full recourse from our
customers. The table above does not include required pension and other postretirement benefit contributions. We expect to
make required pension and other postretirement benefit contributions of approximately $900 million in 2014, exclusive of
any U.S. Government recovery. Amounts beyond 2014 for required pension and other postretirement benefit contributions
depend upon actuarial assumptions, actual plan asset performance and other factors described under pension costs in Critical
Accounting Estimates beginning on page 33. However, based solely on our current assumptions, we expect our funding
requirements to be approximately $1 billion in 2015, exclusive of any U.S. Government recovery, and decreasing thereafter.
Interest payments include interest on debt that is redeemable at our option.
As of December 31, 2013 and December 31, 2012, the total amount of unrecognized tax benefits for uncertain tax positions
and the accrual for the related interest, net of the federal benefit, was $121 million and $141 million, respectively, and was
included in accrued retiree benefits and other long-term liabilities. These amounts were not included in the table above because
we are unable to make a reasonably reliable estimate of when a cash settlement, if any, will occur with a tax authority as the
timing of examinations and ultimate resolutions of those examinations is uncertain.
OFF-BALANCE SHEET ARRANGEMENTS
At December 31, 2013, we had no significant off-balance sheet arrangements other than operating leases and guarantees to
third parties on behalf of our affiliates as described below in Commitments and Contingencies. Such arrangements are not
material to our overall liquidity or capital resources, market risk support or credit risk support as described below.
COMMITMENTS AND CONTINGENCIES
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
We also lease certain government-owned properties and generally are not liable for remediation of preexisting environmental
contamination at these sites. As a result, we generally do not provide for these costs in our consolidated financial statements.