Raytheon 2011 Annual Report Download - page 97

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
89
A rollforward of goodwill by segment is as follows:
(In millions)
Balance at December 31, 2009
Increase for acquisitions
Effect of foreign exchange
rates and other
Balance at December 31, 2010
Increase for acquisitions
Effect of foreign exchange
rates and other
Balance at December 31, 2011
Integrated
Defense
Systems
$ 767
—
(2)
765
—
—
$ 765
Intelligence
and
Information
Systems
$ 1,575
125
(2)
1,698
77
—
$ 1,775
Missile
Systems
$ 3,432
—
—
3,432
35
—
$ 3,467
Network
Centric
Systems
$ 2,616
—
—
2,616
—
—
$ 2,616
Space
and
Airborne
Systems
$ 2,663
—
—
2,663
387
—
$ 3,050
Technical
Services
$ 869
—
2
871
—
—
$ 871
Total
$11,922
125
(2)
12,045
499
—
$12,544
Note 4: Discontinued Operations
In pursuing our business strategies we have divested certain non-core businesses, investments and assets when appropriate.
All residual activity relating to our previously-disposed businesses appears in discontinued operations.
We retained certain assets and liabilities of our previously-disposed businesses. At December 31, 2011 and December 31,
2010, we had $19 million and $41 million, respectively, of assets primarily related to our retained interest in general aviation
finance receivables previously sold by Raytheon Aircraft Company (Raytheon Aircraft). At December 31, 2011 and
December 31, 2010, we had $44 million and $113 million, respectively, of liabilities primarily related to non-income tax
obligations, certain environmental and product liabilities, various contract obligations and aircraft lease obligations. We also
retain certain U.K. pension assets and obligations for a limited number of U.K. pension plan participants as part of the Raytheon
Aircraft sale, which we include in out pension disclosures.
In the divestiture of Flight Options LLC (Flight Options), Raytheon agreed to indemnify Flight Options in the event Flight
Options was assessed and paid excise taxes. In the fourth quarter of 2010, Internal Revenue Service (IRS) appeals proceedings
failed to resolve the federal excise tax dispute, and as a result, the IRS assessed Flight Options for excise taxes. As a result,
in the fourth quarter of 2010 we recorded a $39 million charge, net of federal tax benefit, in discontinued operations. In the
first quarter of 2011, Flight Options paid the assessment. On behalf of Flight Options, we intend to vigorously contest the
matter through litigation and, if successful, we would be entitled to recover substantially all of the amounts paid. We also
have certain tax obligations relating to disposed businesses.
As further described in Note 15: Income Taxes, during the year ended December 31, 2010, we recorded a $281 million
reduction in our unrecognized tax benefits, which included a decrease of $89 million in tax expense from discontinued
operations, including interest, primarily related to our previous disposition of Raytheon Engineers and Constructors (RE&C).