Raytheon 2013 Annual Report Download - page 125

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
115
Segment total net sales and operating income generally include intersegment sales and profit recorded at cost plus a specified
fee, which may differ from what the selling entity would be able to obtain on sales to external customers. 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.
Segment financial results were as follows:
Total Net Sales (in millions) 2013 2012 2011
Integrated Defense Systems $ 6,489 $ 6,492 $ 6,441
Intelligence, Information and Services 6,045 6,335 6,470
Missile Systems 6,599 6,639 6,801
Space and Airborne Systems 6,371 6,823 6,818
Corporate and Eliminations (1,798)(1,875)(1,739)
Total $23,706 $24,414 $24,791
Intersegment Sales (in millions) 2013 2012 2011
Integrated Defense Systems $ 107 $ 91 $ 83
Intelligence, Information and Services 817 784 741
Missile Systems 163 161 182
Space and Airborne Systems 711 839 733
Total $ 1,798 $ 1,875 $ 1,739
Operating Income (in millions) 2013 2012 2011
Integrated Defense Systems $ 1,115 $ 1,047 $ 998
Intelligence, Information and Services 510 536 480
Missile Systems 830 861 939
Space and Airborne Systems 920 988 951
FAS/CAS Adjustment (249)(255)(337)
Corporate and Eliminations (188)(188)(201)
Total $ 2,938 $ 2,989 $ 2,830
We must calculate our pension and other postretirement benefits (PRB) costs under both Financial Accounting Standards
(FAS) requirements under GAAP and U.S. Government cost accounting standards (CAS). GAAP outlines the methodology
used to determine pension expense or income for financial reporting purposes, which is not indicative of the funding
requirements for pension and PRB plans that we determine by other factors. CAS prescribes the allocation to and recovery
of pension and other PRB costs on U.S. Government contracts. The results of each segment only include pension and PRB
expense as determined under CAS. The CAS requirements for pension costs and its calculation methodology differ from the
FAS requirements and calculation methodology. As a result, while both FAS and CAS use long-term assumptions in their
calculation methodologies, each method results in different calculated amounts of pension and PRB cost. The FAS/CAS
Adjustment, which is reported as a separate line in our segment results above, represents the difference between our pension
and PRB expense or income under FAS in accordance with GAAP and our pension and PRB expense under CAS.
The components of operating income related to Corporate and Eliminations were as follows:
(In millions) 2013 2012 2011
Intersegment profit eliminations $(160)$(177) $ (161)
Corporate (28)(11)(40)
Total $(188)$(188) $ (201)