Raytheon 2012 Annual Report Download - page 73

65
Corporate and Eliminations
Corporate and Eliminations includes corporate expenses and intersegment sales and profit eliminations. Corporate expenses
represent unallocated costs and certain other corporate costs not considered part of management’s evaluation of reportable
segment operating performance.
During the first quarter of 2012, we completed the disposal or abandonment of the remaining individual assets of our former
turbo-prop commuter aircraft portfolio, RAAS, and all operations have ceased. As a result, we have reported the results of
RAAS, which were formerly included in Corporate and Eliminations, as a discontinued operation for all periods presented.
The components of total net sales and operating income related to Corporate and Eliminations were as follows:
Total Net Sales (in millions) 2012 2011 2010
Intersegment sales eliminations $(1,958)$(1,876)$
(2,023)
Corporate —(1)(6)
Total $(1,958)$(1,877)$
(2,029)
Total Operating Income (in millions) 2012 2011 2010
Intersegment profit eliminations $(191)$(177)$
(189)
Corporate (10)(40)(39)
Total $(201)$(217)$
(228)
Total net sales and operating income related to Corporate in 2012 remained relatively consistent with 2011 and 2010.
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 first quarter of 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 through
litigation and, if successful, we would be entitled to recover substantially all of the amounts paid. We also have certain tax