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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
93
In June 2013, we acquired Visual Analytics, Incorporated, subsequently renamed Raytheon Visual Analytics Incorporated
(RVAI). RVAI further extends our capabilities to meet the data analytics, data visualization and information sharing needs of
our customers. In connection with this acquisition, we have recorded $12 million of goodwill, primarily related to expected
synergies from combining operations and the value of the existing workforce, and $3 million of intangible assets, primarily
related to technology and customer relationships with a weighted-average life of seven years.
Pro forma financial information and revenue from the date of acquisition has not been provided for these acquisitions as they
are not material either individually or in the aggregate.
We funded each of the above acquisitions using cash on hand. The operating results of these businesses have been included
in our consolidated results as of the respective closing dates of the acquisitions. The purchase price of these businesses has
been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded
as goodwill.
The total amount of goodwill that is expected to be deductible for tax purposes related to these acquisitions was $312 million
at December 31, 2015.
A rollforward of goodwill by segment was as follows:
(In millions)
Integrated
Defense
Systems
Intelligence,
Information
and Services(1) Missile
Systems
Space and
Airborne
Systems Forcepoint(1) Total
Balance at December 31, 2013 $ 1,800 $ 2,523 $ 4,150 $ 4,106 $ 185 $ 12,764
Acquisitions — 301 — — — 301
Effect of foreign exchange rates and
other (3) (1) — — — (4)
Balance at December 31, 2014 1,797 2,823 4,150 4,106 185 13,061
Acquisitions(2) — 48 4 — 1,624 1,676
Effect of foreign exchange rates
and other (3) (3) — — — (6)
Balance at December 31, 2015 $ 1,794 $ 2,868 $ 4,154 $ 4,106 $ 1,809 $ 14,731
(1) In connection with the reclassification of Raytheon Cyber Products (RCP) from our IIS segment, goodwill of $185 million was allocated to the Forcepoint
segment on a relative fair value basis.
(2) In addition to the acquisitions of Websense and Foreground Security, we acquired Sensintel, Inc. at Missile Systems (MS) and finalized the purchase
price allocation for RBT at IIS in 2015.
For information on our intangible assets, see "Note 9: Other Assets, Net".
Note 5: Forcepoint Joint Venture
In May 2015, we created Raytheon|Websense, a new cybersecurity joint venture company (with Vista Equity Partners), through
a series of transactions by which we acquired Websense, Inc. (Websense) from Vista Equity Partners and combined it with
RCP, formerly part of our IIS segment. We then sold 19.7% of the equity interest in the combined company to Vista Equity
Partners for $343 million. Raytheon|Websense was later renamed Forcepoint.
The joint venture agreement between Raytheon and Vista Equity Partners provides Vista Equity Partners with certain rights
to require Forcepoint to pursue an initial public offering at any time after four years and three months following the closing
date of May 29, 2015, or pursue a sale of the company at any time after five years following the closing date. In either of these
events, Raytheon has the option to purchase all (but not less than all) of Vista Equity Partners’ interest in Forcepoint for cash
at a price equal to fair value as determined under the joint venture agreement. Additionally, Vista Equity Partners has the
ability to liquidate its ownership through a put option any time after two years following the closing date. In the event of a
put option, Vista Equity Partners could require Raytheon to purchase all (but not less than all) of Vista Equity Partners’ interest
in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Lastly, at any time after
three years following the closing date, Raytheon has the option to purchase all (but not less than all) of Vista Equity Partners’
interest in Forcepoint at a price equal to fair value as determined under the joint venture agreement. Vista Equity Partners'