Raytheon 2006 Annual Report Download - page 102

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 8: Notes Payable and Long-Term Debt
Notes payable and long-term debt consisted of the following at December 31:
(In millions) 2006 2005
Notes payable at a weighted-average interest rate of 6.36% for December 31, 2005 $— $79
Current portion of long-term debt 687 —
Notes payable and current portion of long-term debt 687 79
Notes due 2007, 4.50%, redeemable at any time 119 118
Notes due 2007, 6.75%, redeemable at any time 568 562
Notes due 2008, 6.15%, redeemable at any time 308 309
Debentures due 2010, 6.00%, redeemable at any time 86 86
Notes due 2010, 6.55%, redeemable at any time 244 244
Notes due 2010, 8.30%, redeemable at any time 399 399
Notes due 2011, 4.85%, redeemable at any time 441 450
Notes due 2012, 5.50%, redeemable at any time 330 329
Notes due 2013, 5.375%, redeemable at any time 337 341
Debentures due 2018, 6.40%, redeemable at any time 337 337
Debentures due 2018, 6.75%, redeemable at any time 250 249
Debentures due 2027, 7.20%, redeemable at any time 362 361
Debentures due 2028, 7.00%, redeemable at any time 184 184
Less installments due within one year (687) —
Long-term debt 3,278 3,969
Subordinated notes payable —408
Total debt issued and outstanding $3,965 $4,456
The notes and debentures redeemable at any time are at redemption prices equal to the present value of remaining
principal and interest payments. Information about the subordinated notes payable is included in Note 9, Equity Security
Units.
In 2005, we exercised our call rights to repurchase debentures with a par value of $196 million at a loss of $10 million
pretax which was included in other expense.
In 2004, we repurchased long-term debt with a par value of $1,773 million at a loss of $100 million pretax which was
included in other expense.
We enter into various interest rate swaps that correspond to a portion of our fixed-rate debt in order to effectively hedge
interest rate risk. The $600 million notional value of the interest rate swaps that remained outstanding at December 31,
2006 effectively converted that portion of our total fixed-rate debt to variable-rate debt based on LIBOR.
The principal amounts of long-term debt were reduced by debt issue discounts of $58 million at December 31, 2006 and
2005, and interest rate hedging costs of $36 million at December 31, 2006 and 2005, on the date of issuance, and are
reflected as follows at December 31:
(In millions) 2006 2005
Principal $4,002 $4,013
Unamortized issue discounts (19) (23)
Unamortized interest rate hedging costs (18) (21)
Installments due within one year (687) —
Total $3,278 $3,969
74