Raytheon 2014 Annual Report Download - page 127

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
118
Operating Income (in millions) 2014 2013 2012
Integrated Defense Systems $ 974 $ 1,115 $ 1,047
Intelligence, Information and Services 508 510 536
Missile Systems 800 830 861
Space and Airborne Systems 846 920 988
FAS/CAS Adjustment 286 (249)(255)
Corporate and Eliminations (235)(188)(188)
Total $ 3,179 $ 2,938 $ 2,989
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 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 the FAS/CAS Adjustment were as follows:
(In millions) 2014 2013 2012
FAS/CAS Pension Adjustment $ 281 $(253) $ (255)
FAS/CAS PRB Adjustment 54 —
FAS/CAS Adjustment $ 286 $(249) $ (255)
The components of operating income related to Corporate and Eliminations were as follows:
(In millions) 2014 2013 2012
Intersegment profit eliminations $(157)$(160) $ (177)
Corporate (78)(28)(11)
Total $(235)$(188) $ (188)
Intersegment Operating Income (in millions) 2014 2013 2012
Integrated Defense Systems $ 8 $ 9 $ 8
Intelligence, Information and Services 83 72 72
Missile Systems 14 17 24
Space and Airborne Systems 52 62 73
Total $ 157 $ 160 $ 177
Capital Expenditures (in millions) 2014 2013 2012
Integrated Defense Systems $ 99 $ 69 $ 67
Intelligence, Information and Services 41 28 34
Missile Systems 56 55 66
Space and Airborne Systems 117 117 132
Corporate 13 11 40
Total $ 326 $ 280 $ 339