Raytheon 2006 Annual Report Download - page 101

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
assumptions, including collection period and a discount rate of 7.3%, 6.8% and 6.2%, respectively. At December 31,
2006, a 10 and 20% adverse change in the collection period and discount rate would not have a material effect on our
financial position or results of operations.
At December 31, 2006 and 2005, the outstanding balance of securitized accounts receivable held by the third party
conduit totaled $173 million and $157 million, respectively, of which our subordinated retained interest was $60 million
and $59 million, respectively, net and the fair value of the servicing liability was $1 million and the servicing asset was $2
million, respectively.
Computer software amortization expense was $71 million, $67 million and $56 million in 2006, 2005 and 2004,
respectively. Accumulated amortization of computer software was $419 million and $360 million at December 31, 2006
and 2005, respectively.
Investments, which are included in other assets, consisted of the following at December 31:
(In millions)
2006
Ownership % 2006 2005
Equity method investments:
Thales-Raytheon Systems Co. Ltd. 50 $150 $102
HRL Laboratories, LLC — —31
Other various 76
157 139
Other investments 47
Total $161 $146
In 2001, we formed a joint venture, Thales-Raytheon Systems (TRS) that has two major operating subsidiaries, one of
which we control and consolidate. TRS is a system of systems integrator and provides fully customized solutions through
the integration of command and control centers, radars and communication networks. HRL Laboratories is a scientific
research facility whose staff engages in the areas of space and defense technologies.
In 2006, we sold our investment in HRL Laboratories, LLC for $28 million and recorded a loss of $4 million in other
(income) expense.
In addition, we have entered into certain joint ventures formed specifically to facilitate a teaming arrangement between
two contractors for the benefit of the customer, generally the U.S. government, whereby we receive a subcontract from
the joint venture in the joint venture’s capacity as prime contractor. Accordingly, we record the work we perform for the
joint venture as an operating activity.
Certain joint ventures and equity and cost method investments are not listed separately in the table above as our
investment in these entities is less than $5 million. Information for these joint ventures and investments has not been
separately disclosed since they are not material either individually or in the aggregate. In general, we record our share of
the income or loss in our equity method investments as a component of cost of sales.
73