Raytheon 2012 Annual Report Download - page 76

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Additions to property plant and equipment and capitalized internal use software—Additions to property, plant and equipment
and capitalized internal use software were as follows:
(In millions) 2012 2011 2010
Additions to property, plant and equipment $ 339 $ 340 $ 319
Additions to capitalized internal use software 76 97 67
We expect our property, plant and equipment and capitalized internal use software expenditures to be approximately $360
million and $70 million, respectively, in 2013, consistent with the anticipated needs of our business and for specific investments
including program capital assets and facility improvements.
Short-term investments activity—We invest in marketable securities in accordance with our short-term investment policy.
These marketable securities are classified as available-for-sale and are recorded at fair value as short-term investments in our
consolidated balance sheets. During 2012, we made purchases of short-term investments, comprised of highly rated bank
certificates of deposit, of $1,505 million, while sales of short-term investments amounted to $150 million and maturities of
short-term investments amounted to $505 million. As of December 31, 2012, our short-term investments had an average
maturity of approximately six months.
Acquisitions and Divestitures—In pursuing our business strategies, we acquire and invest in certain businesses that meet
strategic and financial criteria, and divest of certain non-core businesses, investments and assets when appropriate. Payments
for purchases of acquired companies, net of cash acquired were as follows:
(In millions) 2012 2011 2010
Payments for purchases of acquired companies, net of cash acquired $ 301 $ 645 $ 152
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