Raytheon 2012 Annual Report Download - page 100

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
92
Note 2: Accounting Standards
New pronouncements issued but not effective until after December 31, 2012, are not expected to have a material impact on
our financial position, results of operations or liquidity.
Note 3: Acquisitions
In pursuing our business strategies, we acquire and make investments in certain businesses that meet strategic and financial
criteria.
In December 2012, we acquired the Government Solutions business of SafeNet, Inc., subsequently renamed Raytheon Secure
Information Systems, LLC (RSIS) for approximately $280 million in cash, net of cash acquired and exclusive of retention
payments. RSIS will be integrated into our Network Centric Systems (NCS) business, within the Integrated Communication
Systems product line as the Secure Information Systems product area. RSIS provides advanced encryption capabilities needed
by government and industry customers to protect classified data. In connection with this transaction we have preliminarily
recorded $197 million of goodwill related to expected synergies from combining operations and the value of the existing
workforce, and $75 million of intangible assets, primarily related to technology with an estimated weighted-average life of
eight years. We expect to complete the purchase price allocation process in the first quarter of 2013 after the purchase price
adjustment process and our final reviews are completed.
Additionally, in 2012 we acquired Teligy, Inc., subsequently renamed Raytheon Teligy, Inc., and an Australian company,
Poseidon Scientific Instruments Pty Ltd., for an aggregate of $22 million in cash, net of cash acquired. Raytheon Teligy, Inc.
further extends our cybersecurity offerings in wireless communications at Intelligence and Information Systems (IIS). The
Poseidon Scientific Instruments Pty Ltd. acquisition is part of our strategy to extend and enhance our Integrated Defense
Systems (IDS) offerings. In connection with these acquisitions we recorded $15 million of goodwill, primarily related to
expected synergies from combining operations, and $5 million of intangible assets, primarily related to customer relationships
and technology with a weighted-average life of six years.
In 2011, we acquired Applied Signal Technology, Inc., subsequently renamed Raytheon Applied Signal Technology, Inc.
(RAST) for $500 million in cash, net of $25 million of cash and cash equivalents acquired, and exclusive of retention and
management incentive payments. RAST provides advanced intelligence, surveillance and reconnaissance (ISR) solutions to
enhance global security. The acquisition is part of our strategy to extend and enhance our Space and Airborne Systems (SAS)
offerings related to certain classified and Department of Defense markets. Pro forma financial information has not been
provided for this acquisition since it is not material. In connection with this acquisition, we recorded $387 million of goodwill,
all of which was allocated to our SAS segment, primarily related to expected synergies from combining operations and the
value of RAST's assembled workforce, and $89 million in intangible assets, primarily related to contractual relationships,
license agreements and trade names with a weighted-average life of seven years.
Additionally, in 2011 we acquired Henggeler Computer Consultants Inc., Pikewerks Corporation and substantially all of the
assets of Ktech Corporation for an aggregate of $145 million in cash, net of cash acquired. The Henggeler Computer Consultants
Inc. and Pikewerks Corporation acquisitions enhance our cybersecurity and information assurance capabilities at Intelligence
and Information Systems (IIS). The Ktech Corporation acquisition is part of our strategy to extend and enhance our Missile
Systems (MS) offerings. In connection with these acquisitions, we recorded $112 million of goodwill, primarily related to
expected synergies from combining operations and the value of the existing workforce, and $26 million of intangible assets,
primarily related to customer relationships, trade names and technology with an initial estimated weighted-average life of
seven years.
In 2010, we acquired Trusted Computer Solutions Inc., Technology Associates Inc. and substantially all of the assets of an
Australian company, Compucat Research Pty. Ltd, for an aggregate of $152 million in cash, net of cash acquired. These
acquisitions enhance our cybersecurity and information assurance capabilities at IIS. In connection with these acquisitions,
we recorded $125 million of goodwill, primarily related to expected synergies from combining operations and the value of
the existing workforce, and $28 million of intangible assets, primarily related to technology, trade names and customer
relationships with a weighted-average life of five years.
Pro forma financial information and revenue from the date of acquisition has not been provided for these acquisitions as they
are not material either individually or in the aggregate.