Raytheon 2014 Annual Report Download - page 103

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
94
In December 2014, we issued $600 million of fixed-rate long-term debt with half maturing in 10 years and the other half
maturing in 30 years. In conjunction with the debt issuance, we entered into interest rate lock agreements with a total notional
value of $100 million to manage interest rate risk, which resulted in an increase to AOCL of less than $1 million to be amortized
over the term of the debt issued.
In December 2012, we issued $1.1 billion of fixed-rate long-term debt with a maturity of 10 years. In conjunction with the
debt issuance, we entered into interest rate lock agreements with a total notional value of $700 million to manage interest rate
risk, which resulted in a decrease to AOCL of $3 million to be amortized over the term of the debt issued. As of December
31, 2012, the above referenced interest rate locks were closed out.
Note 9: Notes Payable and Long-term Debt
Notes payable and long-term debt consisted of the following at December 31:
(In millions, except percentages) 2014 2013
$251 notes due 2018, 6.75% $ 251 $ 251
$340 notes due 2018, 6.40% 339 339
$500 notes due 2020, 4.40% 498 497
$1,000 notes due 2020, 3.125% 993 992
$1,100 notes due 2022, 2.50% 1,093 1,092
$300 notes due 2024, 3.15% 297 —
$382 notes due 2027, 7.20% 370 369
$185 notes due 2028, 7.00% 184 184
$600 notes due 2040, 4.875% 591 591
$425 notes due 2041, 4.70% 419 419
$300 notes due 2044, 4.20% 295 —
Total debt issued and outstanding $ 5,330 $ 4,734
The notes are redeemable by us at any time at redemption prices based on U.S. Treasury rates. The carrying value of long-
term debt was recorded at amortized cost. The fair value of long-term debt was determined on quoted prices in inactive
markets, which falls within Level 2 of the fair value hierarchy.
The estimated fair value of long-term debt was the following at December 31:
(In millions) 2014 2013
Fair value of long-term debt $ 5,936 $ 5,036
In the fourth quarter of 2014, we received proceeds of $592 million for the issuance of $600 million fixed-rate long-term
debt.
In the fourth quarter of 2012, we received proceeds of $1,092 million for the issuance of $1.1 billion fixed-rate long-term
debt and exercised our call rights to repurchase, at prices based on fixed spreads to the U.S. Treasuries, $970 million of our
long-term debt due 2014 and 2015 at a loss of $29 million pretax, $19 million after-tax, which is included in other (income)
expense, net.