Raytheon 2012 Annual Report Download - page 101

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
93
We funded each of the above acquisitions using cash on hand. The operating results of these businesses have been included
in our consolidated results as of the respective closing dates of the acquisitions. The purchase price of these businesses has
been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded
as goodwill.
The total amount of goodwill that is expected to be deductible for tax purposes related to these acquisitions was $312 million
at December 31, 2012.
A rollforward of goodwill by segment is as follows:
(In millions)
Integrated
Defense
Systems
Intelligence
and
Information
Systems
Missile
Systems
Network
Centric
Systems
Space
and
Airborne
Systems
Technical
Services Total
Balance at December 31, 2010 $ 765 $ 1,698 $ 3,432 $ 2,616 $ 2,663 $ 871 $ 12,045
Increase for acquisitions — 77 35 — 387 — 499
Effect of foreign exchange
rates and other — ——————
Balance at December 31, 2011 765 1,775 3,467 2,616 3,050 871 12,544
Increase for acquisitions 2 13 — 197 — — 212
Effect of foreign exchange
rates and other — ——————
Balance at December 31, 2012 $ 767 $ 1,788 $ 3,467 $ 2,813 $ 3,050 $ 871 $12,756
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.
During the three months ended April 1, 2012, we completed the disposal or abandonment of the remaining individual assets
of our former turbo-prop commuter aircraft portfolio, Raytheon Airline Aviation Services (RAAS), and all operations have
ceased. As a result, we have reported the results of RAAS as a discontinued operation for all periods presented. The sale of
the remaining operating assets in the year ended December 31, 2012, resulted in a gain of less than $1 million.
Income (loss) from discontinued operations included the following results of RAAS at December 31:
(In millions) 2012 2011 2010
Pretax $— $ 30 $ (2)
After-tax —19 (1)
No interest expense relating to RAAS was allocated to discontinued operations for the twelve months ended December 31,
2012 and 2011 because there was no debt specifically attributable to discontinued operations.
We retained certain assets and liabilities of our previously-disposed businesses. At December 31, 2012 and December 31,
2011, we had $7 million and $19 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, 2012 and
December 31, 2011, we had $36 million and $44 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
retained certain pension assets and obligations which we include in our pension disclosures.
In the divestiture of Flight Options LLC (Flight Options), we agreed to indemnify Flight Options in the event they were
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