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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Investments, which are included in other assets, net, consisted of the following at December 31:
(In millions)
2007
Ownership % 2007 2006
Equity method investments:
Thales-Raytheon Systems Co. Ltd. 50 $165 $150
Other various 47
169 157
Other investments 44
Total $173 $161
In general, we record our share of the income or loss in our equity method investments as a component of cost of sales.
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.
In 2001, we formed a joint venture, Thales-Raytheon Systems Co. Ltd. (TRS), which we account for using the equity
method. TRS is a system of systems integrator and provides fully customized solutions through the integration of
command and control centers, radars and communication networks. TRS has two major operating subsidiaries, one of
which, Thales-Raytheon Systems Co. LLC (TRS LLC), we control and consolidate. The minority interest on TRS LLC is
reflected as a component of cost of sales. Amounts included in cost of sales were $53 million, $46 million and $20 million
in 2007, 2006 and 2005, respectively. Of the $165 million investment in TRS, $127 million represents undistributed
earnings at December 31, 2007.
Note 8: Notes Payable and Long-term Debt
Notes payable and long-term debt consisted of the following at December 31:
(In millions) 2007 2006
Current portion of long-term debt $ — $ 687
Notes due 2007, 4.50%, redeemable at any time —119
Notes due 2007, 6.75%, redeemable at any time —568
Notes due 2008, 6.15%, redeemable at any time —308
Debentures due 2010, 6.00%, redeemable at any time —86
Notes due 2010, 6.55%, redeemable at any time —244
Notes due 2010, 8.30%, redeemable at any time —399
Notes due 2011, 4.85%, redeemable at any time 452 441
Notes due 2012, 5.50%, redeemable at any time 331 330
Notes due 2013, 5.375%, redeemable at any time 351 337
Debentures due 2018, 6.40%, redeemable at any time 337 337
Debentures due 2018, 6.75%, redeemable at any time 250 250
Debentures due 2027, 7.20%, redeemable at any time 363 362
Debentures due 2028, 7.00%, redeemable at any time 184 184
Less installments due within one year —(687)
Long-term debt 2,268 3,278
Total debt issued and outstanding $2,268 $3,965
The notes and debentures redeemable at any time are at redemption prices based on U.S. Treasury rates. Information
about the subordinated notes payable is included in Note 9, Equity Security Units.
73