Raytheon 2004 Annual Report Download - page 57

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39
Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets (SFAS No. 142). This accounting standard addresses financial accounting
and reporting for goodwill and other intangible assets and requires that periodic tests of goodwill impairment be
performed. In 2002, the Company recorded a goodwill impairment charge of $360 million related to its former
Aircraft Integration Systems business (AIS) as a cumulative effect of change in accounting principle. Due to the
non-deductibility of this goodwill, the Company did not record a tax benefit in connection with this impairment.
Also in 2002, the Company completed the transitional review of the other businesses for potential goodwill
impairment in accordance with SFAS No. 142 and recorded a goodwill impairment charge of $185 million pretax
or $149 million after-tax, which represented all of the goodwill at Raytheon Aircraft, as a cumulative effect of
change in accounting principle. The total goodwill impairment charge in 2002 was $545 million pretax, $509
million after-tax, or $1.25 per diluted share.
Net income was $417, million or $0.94 per diluted share in 2004 versus net income of $365 million or $0.88 per
diluted share in 2003 and a net loss of $640 million or $1.57 per diluted share in 2002.
 
Reportable segments have been determined based upon product lines and include the following: Integrated Defense
Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne
Systems, Technical Services, Aircraft, and Other.
Net Sales (In millions) 2004 2003 2002
Integrated Defense Systems $ 3,456 $ 2,864 $ 2,366
Intelligence and Information Systems 2,215 2,045 1,887
Missile Systems 3,844 3,538 3,038
Network Centric Systems 3,113 2,809 3,091
Space and Airborne Systems 4,068 3,677 3,243
Technical Services 2,075 1,963 2,133
Aircraft 2,421 2,088 2,040
Other 675 573 210
Corporate and Eliminations (1,622) (1,448) (1,248)
Total $20,245 $18,109 $16,760
Operating Income (In millions) 2004 2003 2002
Integrated Defense Systems $ 417 $ 331 $ 289
Intelligence and Information Systems 198 194 180
Missile Systems 436 424 373
Network Centric Systems 274 19 278
Space and Airborne Systems 568 492 428
Technical Services 151 107 116
Aircraft 63 2 (39)
Other (40) (34) (12)
FAS/CAS Pension Adjustment (474) (109) 210
Corporate and Eliminations (205) (110) (40)
Total $ 1,388 $ 1,316 $ 1,783