Raytheon 2004 Annual Report Download - page 113

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95
Notes to Consolidated Financial Statements (Continued)
 :  
At December 31, 2004, the Company recorded forward exchange contracts designated as cash flow hedges at their
fair value. Unrealized gains of $106 million were included in noncurrent assets and unrealized losses of $50 million
were included in current liabilities. The offset was included in other comprehensive income, net of tax, of which
approximately $14 million of net unrealized gains are expected to be reclassified to earnings over the next twelve
months as the underlying transactions mature. Gains and losses resulting from these cash flow hedges offset the
foreign exchange gains and losses on the underlying assets or liabilities being hedged. The maturity dates of the
forward exchange contracts outstanding at December 31, 2004 extend through 2013. Certain immaterial contracts
were not designated as effective hedges and therefore were included in other expense. The amount charged to other
expense related to these contracts was less than $1 million in 2004, 2003, and 2002.
The Company enters into interest rate swaps, as described in Note H, Notes Payable and Long-term Debt. These
interest rate swaps were designated as fair value hedges. There was no hedge ineffectiveness in 2004, 2003, or 2002.
Major currencies and the approximate amounts associated with foreign exchange contracts consisted of the
following at December 31:
2004 2003
(In millions) Buy Sell Buy Sell
British Pounds $566 $354 $485 $210
Canadian Dollars 117 31 95 38
European Euros 77 36 47 31
Australian Dollars 35 13 14 9
Norwegian Kroner 21 10 41
Arab Emirates Dirham 93120 45
Swiss Francs 218 444
All other 421–
Total $831 $495 $670 $378
Buy amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies and sell
amounts represent the U.S. dollar equivalent of commitments to sell foreign currencies. Foreign exchange contracts
that do not involve U.S. dollars have been converted to U.S. dollars for disclosure purposes.
Foreign currency forward contracts, used to fix the dollar value of specific commitments and payments to
international vendors and the value of foreign currency denominated receipts, have maturities at various dates
through 2013 as follows: $879 million in 2005, $257 million in 2006, $83 million in 2007, $86 million in 2008, and
$21 million thereafter.