Raytheon 2011 Annual Report Download - page 121

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
113
The Plan limits the use of derivatives through direct or separate account investments such that the derivatives used are liquid
and able to be readily valued in the market. Derivative usage in separate account structures is limited to hedging purposes or
to gain market exposure in a non-speculative manner. The fair market value of the Plan’s derivatives through direct or separate
account investments was less than $1 million as of December 31, 2011 and December 31, 2010.
In addition, assets are held in trust for non-U.S. Pension Benefits plans, primarily in the U.K. and Canada which are governed
locally in accordance with specific jurisdictional requirements. These assets are overseen by local management in Canada
and by trustees with a combination of members representing plan participants and local management in the U.K. Investments
in the non-U.S. Pension Benefits plans consist primarily of fixed-income securities and equity securities and had a fair market
value of $621 million and $597 million at December 31, 2011 and December 31, 2010, respectively.
These investments are valued using quoted prices in active markets (Level 1) as well as significant observable inputs (Level
2). Investments with significant unobservable inputs (Level 3) are immaterial in the non-U.S. Pension Benefits plans.
The fair market value of assets related to our Other Benefits was $396 million and $433 million as of December 31, 2011 and
December 31, 2010, respectively. These assets included $172 million and $186 million at December 31, 2011 and
December 31, 2010, respectively, that were invested in the master trust described above and are therefore invested in the same
assets described above. The remaining investments are held within Voluntary Employees’ Beneficiary Association (VEBA)
trusts. The assets of the VEBAs are also overseen by the Investment Committee and managed by the same investment fiduciary
that manages the master trust’s investments. These assets are generally invested in mutual funds. These investments are valued
primarily using quoted prices in active markets (Level 1) as well as significant observable inputs (Level 2). There were no
Level 3 investments in the VEBAs at December 31, 2011 or December 31, 2010.
The table below details assets by category for our Other Benefits plans. These assets consist primarily of publicly-traded
equity securities and publicly-traded fixed-income securities.
Other Benefits Asset Information
Asset category
Fixed-income securities
U.S. equities
International equities
Cash and cash equivalents
Total
Percent of Plan Assets at Dec 31:
2011
47%
40%
10%
3%
100%
2010
51%
32%
11%
6%
100%
Note 15: Income Taxes
The provision for federal and foreign income taxes consisted of the following:
(In millions)
Current income tax expense
Federal
Foreign
Deferred income tax expense (benefit)
Federal
Foreign
Total
2011
$ 371
46
387
(11)
$ 793
2010
$ 205
39
465
(120)
$ 589
2009
$ 669
15
257
12
$ 953