Raytheon 2013 Annual Report Download - page 71

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The components of the FAS/CAS PRB Adjustment were as follows:
(In millions) 2013 2012 2011
FAS (expense) income $(10)$(16) $ (13)
CAS expense 14 16 16
FAS/CAS PRB Adjustment $ 4 $ — $ 3
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) 2013 2012 2011
Intersegment sales eliminations $(1,798)$(1,875) $ (1,739)
Corporate —— —
Total $(1,798)$(1,875) $ (1,739)
Total Operating Income (in millions) 2013 2012 2011
Intersegment profit eliminations $(160)$(177) $ (161)
Corporate (28)(11)(40)
Total $(188)$(188) $ (201)
Total net sales and operating income related to Corporate in 2013 remained relatively consistent with 2012 and 2011.
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.
In the divestiture of Flight Options LLC (Flight Options), we agreed to indemnify Flight Options in the event Flight Options
was 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. We contested the matter through litigation, and in the fourth quarter of
2013, we reached a settlement and recorded a $33 million gain, net of federal tax expense, in discontinued operations.
Additionally in the fourth quarter of 2013, we reached a settlement regarding certain tax audits associated with our divestiture
of Raytheon Aircraft Company (Raytheon Aircraft). As a result of this settlement, we recorded a $25 million gain, net of
federal tax expense, in discontinued operations.
We retained certain assets and liabilities of our previously-disposed businesses. At December 31, 2013 and December 31,
2012, we had $56 million and $7 million, respectively, of assets primarily related to the receivable associated with the Flight
Options excise tax settlement, and our retained interest in general aviation finance receivables previously sold by Raytheon
Aircraft. At December 31, 2013 and December 31, 2012, we had $16 million and $36 million, respectively, of liabilities
primarily related to certain environmental and product liabilities, non-income tax obligations, various contract obligations
and aircraft lease obligations. We also retained certain pension assets and obligations which we include in our pension
disclosures.