Raytheon 2012 Annual Report Download - page 54

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46
taxes. The increase in federal and foreign income taxes of $192 million in 2011 compared to 2010 was primarily due to the
difference between the 2010 and 2011 Tax Settlement amounts described above and higher income from continuing operations
before taxes.
In January 2013, legislation was enacted that included the extension of the research and development tax credit. The legislation
retroactively reinstated the research and development tax credit for 2012 and extended it through December 31, 2013, resulting
in a total expected benefit of $50 million, approximately $25 million of which is for 2012 and will be recognized in the first
quarter of 2013. The remaining benefit relates to 2013 and will be recognized ratably during 2013.
Income from Continuing Operations
Income from continuing operations was $1,901 million, $1,878 million and $1,844 million in 2012, 2011 and 2010, respectively.
The increase in income from continuing operations of $23 million in 2012 compared to 2011 was primarily due to the $159
million increase in operating income, described above in Operating Income, partially offset by the $96 million increase in
federal and foreign income taxes, related primarily to higher levels of income and the change in the effective tax rate described
above in Federal and Foreign Income Taxes and the $40 million increase in total non-operating expenses, net, the primary
drivers of which are described above in Total Non-Operating (Income) Expense, Net.
The increase in income from continuing operations of $34 million in 2011 compared to 2010 was primarily due to the $217
million increase in operating income described above in Operating Income and the $9 million decrease in total non-operating
expenses, net, the primary drivers of which are described above in Total Non-Operating (Income) Expense, Net, partially
offset by the $192 million increase in federal and foreign income taxes, related primarily to higher levels of income and the
change in the effective tax rate described above in Federal and Foreign Income Taxes.
Income (loss) from Discontinued Operations, Net of Tax
The decrease in income (loss) from discontinued operations, net of tax, of $19 million in 2012 compared to 2011 was primarily
due to $19 million less of income, net of tax, related to our former turbo-prop commuter aircraft portfolio, Raytheon Airline
Aviation Services (RAAS), in 2012 compared to 2011.
The decrease in income (loss) from discontinued operations, net of tax, of $17 million in 2011 compared to 2010 was primarily
due to the 2010 Tax Settlement, described above, which included an $89 million decrease in tax expense from discontinued
operations, primarily related to our previous disposition of Raytheon Engineers and Constructors (RE&C), partially offset by
a $39 million, net of the federal tax benefit, excise tax assessment in 2010 related to our previous disposition of Flight Options
LLC (Flight Options), described below in Discontinued Operations, and $20 million more of income, net of tax, related to
RAAS in 2011 compared to 2010.
Net Income
Net income was $1,900 million, $1,896 million and $1,879 million in 2012, 2011 and 2010, respectively. The increase in net
income of $4 million in 2012 compared to 2011 was primarily due to the increase in income from continuing operations of
$23 million described above in Income from Continuing Operations, partially offset by the decrease in income (loss) from
discontinued operations, net of tax, of $19 million, the primary drivers of which are described above in Income (loss) from
Discontinued Operations, Net of Tax.
The increase in net income of $17 million in 2011 compared to 2010 was primarily due to the increase in income from
continuing operations of $34 million described above in Income from Continuing Operations, partially offset by the decrease
in income (loss) from discontinued operations, net of tax, of $17 million, the primary drivers of which are described above
in Income (loss) from Discontinued Operations, Net of Tax.
Diluted Earnings per Share (EPS) from Continuing Operations Attributable to Raytheon Company Common
Stockholders
Diluted EPS from continuing operations attributable to Raytheon Company common stockholders for the years ended 2012,
2011, and 2010 was as follows:
(In millions, except per share amounts) 2012 2011 2010
Income from continuing operations attributable to Raytheon Company $ 1,889 $ 1,848 $ 1,805
Diluted weighted-average shares outstanding 334.2 353.6 377.0
Diluted EPS from continuing operations attributable to Raytheon Company $ 5.65 $ 5.22 $ 4.79