Raytheon 2007 Annual Report Download - page 123

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(1) All periods presented have been reclassified to show Raytheon Aircraft and Flight Options as discontinued operations.
(2) Earnings per share are computed independently for each of the quarters presented; therefore, the sum of the quarterly earnings per share may not
equal the total computed for the year.
(3) Number of workdays per our fiscal calendar, which excludes holidays and weekends.
(4) On June 29, 2006 our Board of Directors approved a quarterly dividend of $0.24 per share. As the approval occurred after the end of the second
quarter, the dividend was recorded in the third quarter of 2006. In addition, on September 22, 2006 our Board of Directors approved a quarterly
dividend of $0.24 per share, which was also recorded in the third quarter of 2006.
Note 17: Financial Instruments
At December 31, 2007, we recorded forward exchange contracts designated as cash flow hedges at their fair value.
Unrealized gains of $52 million were included in non-current assets and unrealized losses of $20 million were included in
current liabilities. For forward exchange contracts designated and qualified for hedge accounting, the offset was included
in other comprehensive income, net of tax, of which approximately $19 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, 2007 extend through 2017.
Certain immaterial contracts were not designated as effective hedges and therefore were included in other expense
(income), net. The amount charged to other expense related to these contracts was less than $1 million in 2007, 2006 and
2005.
We enter into interest rate swaps, as described in Note 8, Notes Payable and Long-Term Debt. These interest rate swaps
were designated as fair value hedges. There was no hedge ineffectiveness in 2007, 2006 or 2005.
Major currencies and the approximate amounts associated with foreign exchange contracts consisted of the following at
December 31:
2007 2006
(In millions) Buy Sell Buy Sell
British Pounds $278 $400 $ 696 $297
Canadian Dollars 240 61 219 41
European Euros 104 7 113 9
Australian Dollars 34 6 34 6
All other 122 4 20 7
Total $778 $478 $1,082 $360
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 2017 as follows:
$917 million in 2008, $181 million in 2009, $59 million in 2010, $46 million in 2011, and $53 million thereafter.
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