Raytheon 2009 Annual Report Download - page 93

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ⳮThe earnings per share (EPS) impact of instruments granted in share-based payment transactions as discussed in Note
12;
ⳮThe disclosure of postretirement benefit plan assets as discussed in Note 14; and
ⳮThe accounting for business combinations, which we have applied prospectively to business combinations with
acquisition dates after January 1, 2009.
As discussed in Note 7: Other Assets, in January 2010, we adopted the required new accounting standards which amend
the accounting and disclosure requirements for transfers of financial assets and consolidation of variable interest entities
(VIEs). Among other things, these accounting standards eliminate the concept of a qualifying special-purpose entity
(QSPE) and the related exception for applying the consolidation guidance. As a result, on January 1, 2010 we
consolidated our QSPE, General Aviation Receivables Corporation (GARC), which did not have a material impact on our
consolidated financial statements and resulted in:
ⳮThe removal of our $67 million investment in GARC previously reported in other assets, net, and
ⳮThe addition of long and short-term notes receivable, net of $68 million, current and long-term notes payable of $2
million, and an increase in retained earnings of less than $1 million, net of tax.
Further, the new accounting standard related to consolidation of VIEs requires an enterprise to perform a qualitative
analysis when determining whether or not it must consolidate a VIE. It also requires an enterprise to continuously
reassess whether it must consolidate a VIE. Additionally, it requires enhanced disclosures about an enterprise’s
involvement with VIEs and any significant change in risk exposure due to that involvement, as well as how its
involvement with VIEs impacts the enterprise’s financial statements. Finally, an enterprise is required to disclose
significant judgments and assumptions used to determine whether or not to consolidate a VIE. With the exception of
GARC discussed above, the adoption of this accounting standard did not change any of our previous conclusions
regarding our VIEs and thus did not have an effect on our financial position, results of operations or liquidity.
Other new pronouncements issued but not effective until after December 31, 2009, are not expected to have a material
impact on our financial position, results of operations or liquidity.
Note 3: Acquisitions
In October 2009, we acquired BBN Technologies Corp. and related entities (BBN) which enhances our advanced
networking, speech and language technologies, information technologies, sensor systems and cybersecurity at Network
Centric Systems (NCS) for $334 million in cash, net of $22 million of cash acquired, exclusive of retention and
management incentive payments. We recorded $254 million of goodwill, primarily related to expected synergies from
combining operations and the value of the workforce, and $70 million in intangible assets, primarily related to
technology, contractual backlog and trade name with a weighted-average life of eight years, in connection with this
acquisition.
In 2008, we acquired Telemus Solutions, Inc. and SI Government Solutions at Intelligence Information Systems (IIS) for
a total of $52 million in cash. We recorded $39 million of goodwill and $9 million in intangible assets in connection with
these acquisitions.
In 2007, we acquired Oakley Networks, Inc. at IIS and the robotics technologies and capabilities of Sarcos at Integrated
Defense Systems (IDS) for a total of $211 million in cash. We recorded $165 million of goodwill and $38 million in
intangible assets, primarily related to completed technology and customer relationships with a weighted-average life of six
years, in connection with these acquisitions.
Pro forma financial information has not been provided for these acquisitions as they are not material either individually
or in the aggregate.
We funded each of the above acquisitions using cash on hand. The operating results of these businesses have been
included with our consolidated results as of the respective closing dates of the acquisitions. The purchase price of these
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