Raytheon 2004 Annual Report Download - page 85

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67
Notes to Consolidated Financial Statements (Continued)
AIS in which the purchaser has claimed a purchase price adjustment of $85 million. The Company disputes this
claim and expects the matter to be resolved in arbitration. There was no pretax gain or loss on the sale of AIS,
however, due to the non-deductible goodwill associated with AIS, the company recorded a tax provision of $212
million, resulting in a $212 million after-tax loss on the sale of AIS. As part of the transaction, the Company
retained the responsibility for performance of the Boeing Business Jet (BBJ) program and retained certain assets
related to the BBJ program, which is now essentially complete.
In 2004, 2003, and 2002, the pretax loss from discontinued operations related to AIS was $23 million, $30
million and $47 million, respectively, primarily related to the completion of the BBJ program.
The income (loss) from discontinued operations related to AIS, including the $212 million after-tax loss on the
sale, was as follows:
(In millions) 2004 2003 2002
Net sales $– $ – $ 202
Operating expenses –– 196
Income before taxes ––6
Federal and foreign income taxes ––2
Income (loss) from discontinued operations ––4
Loss on disposal of discontinued operations, net of tax –– (212)
Adjustments, net of tax (15) (19) (34)
Total $(15) $(19) $(242)
Assets and liabilities related to AIS included net current assets of $19 million and $59 million and net current
liabilities of $7 million and $6 million as of December 31, 2004 and 2003, respectively.
In 2004, the total loss from discontinued operations was $65 million pretax, $63 million after-tax, or $0.14 per
basic and diluted share versus $261 million pretax, $170 million after-tax, or $0.41 per basic and diluted share in
2003 and $1,013 million pretax, $887 million after-tax, or $2.21 per basic share and $2.17 per diluted share in 2002.
 :   
In 2004, the Company acquired Photon Research Associates Inc. for $42 million, net of cash received. In addition,
the Company may be required to make certain performance-based incentive payments. Assets acquired included $5
million of contracts in process, $1 million of property, plant and equipment, and $1 million of other assets.
Liabilities assumed included $2 million of accrued salaries and wages and $3 million of other accrued liabilities. The
Company also recorded $5 million of intangible assets and $35 million of goodwill (at Space and Airborne Systems)
in connection with this acquisition.
In 2004, the Company sold its commercial infrared business for $43 million and recorded a pretax gain of $10
million which is included in other income.
In 2003, the Company acquired Solipsys Corporation for $170 million, net of cash received, to be paid over two
years. The Company paid $70 million in cash in 2004 and $40 million, net, in cash in 2003 and intends to make the
final cash payment, which has been accrued, in the first quarter of 2005. In addition, the Company may be required
to make certain performance-based incentive payments. Assets acquired included $7 million of contracts in
process. Liabilities assumed included $2 million of accounts payable and $3 million of accrued salaries and wages.