RTN » Topics » Note 3: Acquisitions and Divestitures

This excerpt taken from the RTN 10-K filed Feb 22, 2007.

Note 3: Acquisitions and Divestitures

In July 2006, we acquired Virtual Technology Corporation for $40 million, net of cash received, subject to a purchase price adjustment. We recorded $9 million of intangible assets and $26 million of goodwill (at Network Centric Systems) in connection with this acquisition.

 

In January 2006, we acquired Houston Associates, Inc. for $47 million. In addition, we may be required to make certain performance-based incentive payments. We recorded $9 million of intangible assets and $34 million of goodwill (at Network Centric Systems) in connection with this acquisition.

 

In March 2005, we paid the third and final installment of $60 million related to the 2003 acquisition of Solypsis Corporation.

 

In August 2005, we acquired UTD, Inc. for $39 million, net of cash received. We recorded $2 million of intangible assets and $36 million of goodwill (at Intelligence and Information Systems) in connection with this acquisition.

 

In 2004, we acquired Photon Research Associates Inc. for $42 million, net of cash received. In addition, we may be required to make certain performance-based incentive payments. Assets acquired were $7 million and liabilities assumed were $5 million. We also recorded $5 million of intangible assets and $35 million of goodwill (at Space and Airborne Systems) in connection with this acquisition.

 

In 2004, we sold our commercial infrared business for $43 million and recorded a pretax gain of $10 million which was included in other income.

 

Pro forma financial information has not been provided for these acquisitions as they are not material either individually or in the aggregate. In addition, we have entered into other acquisition and divestiture agreements in the normal course of business that have not been separately disclosed as they are not material.

 

In 2002, we formed a joint venture with Flight Options, Inc. whereby we contributed our Raytheon Travel Air fractional ownership business and loaned the new entity $20 million. In June 2003, we participated in a financial recapitalization of Flight Options LLC and exchanged certain Flight Options LLC debt for equity. In December 2005, we settled all disputes with the Flight Options LLC minority shareholders and acquired the minority shares for $28 million in cash and assumed liabilities and now own 100% of Flight Options LLC.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

 

This excerpt taken from the RTN 10-K filed Mar 2, 2006.

Note C: Acquisitions and Divestitures

In August 2005, the Company acquired UTD, Inc. for $39 million, net of cash received, subject to a purchase price adjustment. The Company recorded $2 million of intangible assets and $36 million of goodwill (at Intelligence and Information Systems) in connection with this acquisition.

 

In 2004, the Company acquired Photon Research Associates Inc. for $42 million, net of cash received. In addition, the Company may be required to make certain performance-based incentive payments. Assets acquired included $5 million of contracts in process, $1 million of property, plant and equipment, and $1 million of other assets. Liabilities assumed included $2 million of accrued salaries and wages and $3 million of other accrued liabilities. The Company also recorded $5 million of intangible assets and $35 million of goodwill (at Space and Airborne Systems) in connection with this acquisition.

 

In 2004, the Company sold its commercial infrared business for $43 million and recorded a pretax gain of $10 million which was included in other income.

 

In 2003, the Company acquired Solipsys Corporation for $170 million, net of cash received, to be paid over two years. The Company made cash payments of $60 million in 2005, $70 million in 2004 and $40 million in 2003 related to this acquisition. In addition, the Company may be required to make certain performance-based incentive payments. Assets acquired included $7 million of contracts in process. Liabilities assumed included $2 million of accounts payable and $3 million of accrued salaries and wages. The Company also recorded $8 million of intangible assets and $160 million of goodwill (at Integrated Defense Systems) in connection with this acquisition.

 

In 2003, the Company acquired the Aerospace and Defence Services business unit of Honeywell International Inc. for $20 million in cash. Assets acquired included $4 million of contracts in process. Liabilities assumed included $1 million of accounts payable and $2 million of other accrued expenses. The Company also recorded $8 million of intangible assets and $11 million of goodwill (at Technical Services) in connection with this acquisition.

 

Pro forma financial information has not been provided for these acquisitions as they are not material either individually or in the aggregate. In addition, the Company has entered into other acquisition and divestiture agreements in the normal course of business that have not been separately disclosed as they are not material.

 

In 2002, the Company formed a joint venture with Flight Options, Inc. whereby the Company contributed its Raytheon Travel Air fractional ownership business and loaned the new entity $20 million. In June 2003, the Company participated in a financial recapitalization of Flight Options LLC (FO) and exchanged certain FO debt for equity. In December 2005, the Company settled all disputes with the FO minority shareholders and acquired the minority shares for $28 million in cash and assumed liabilities and now owns 100% of FO. Employees of FO own an insignificant amount of FO stock and stock options.

 

This excerpt taken from the RTN 10-K filed Mar 15, 2005.

NOTE C: ACQUISITIONS AND DIVESTITURES

In 2004, the Company acquired Photon Research Associates Inc. for $42 million, net of cash received. In addition, the Company may be required to make certain performance-based incentive payments. Assets acquired included $5 million of contracts in process, $1 million of property, plant and equipment, and $1 million of other assets. Liabilities assumed included $2 million of accrued salaries and wages and $3 million of other accrued liabilities. The Company also recorded $5 million of intangible assets and $35 million of goodwill (at Space and Airborne Systems) in connection with this acquisition.

In 2004, the Company sold its commercial infrared business for $43 million and recorded a pretax gain of $10 million which is included in other income.

In 2003, the Company acquired Solipsys Corporation for $170 million, net of cash received, to be paid over two years. The Company paid $70 million in cash in 2004 and $40 million, net, in cash in 2003 and intends to make the final cash payment, which has been accrued, in the first quarter of 2005. In addition, the Company may be required to make certain performance-based incentive payments. Assets acquired included $7 million of contracts in process. Liabilities assumed included $2 million of accounts payable and $3 million of accrued salaries and wages.


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Notes to Consolidated Financial Statements (Continued)

 

The Company also recorded $8 million of intangible assets and $160 million of goodwill (at Integrated Defense Systems) in connection with this acquisition.

In 2003, the Company acquired the Aerospace and Defence Services business unit of Honeywell International Inc. for $20 million in cash. Assets acquired included $4 million of contracts in process. Liabilities assumed included $1 million of accounts payable and $2 million of other accrued expenses. The Company also recorded $8 million of intangible assets and $11 million of goodwill (at Technical Services) in connection with this acquisition.

In 2002, the Company acquired JPS Communications, Inc. for $10 million in cash. Assets acquired included $2 million of accounts receivable and $2 million of inventories. The Company also recorded $4 million of goodwill (at Network Centric Systems) and $2 million of intangible assets in connection with this acquisition.

Pro forma financial information has not been provided for these acquisitions as they are not material either individually or in the aggregate. In addition, the Company has entered into other acquisition and divestiture agreements in the normal course of business that have not been separately disclosed as they are not material.

In 2002, the Company formed a joint venture with Flight Options, Inc. whereby the Company contributed its Raytheon Travel Air fractional ownership business and loaned the new entity $20 million. In June 2003, the Company participated in a financial recapitalization of Flight Options LLC (FO) and exchanged certain FO debt for equity. The Company now owns approximately 65 percent of FO and is consolidating FO’s results in its financial statements. The Company is recording 100 percent of FO’s losses since the Company has been meeting all FO’s financing requirements. FO’s customers, in certain instances, have the contractual ability to require FO to buy back their fractional share based on its current fair market value. The estimated value of this potential obligation was approximately $575 million at December 31, 2004. Assets acquired included $83 million of inventories and $27 million of other current assets. Liabilities assumed included $97 million of notes payable and long-term debt, $90 million of advance payments, and $76 million of accounts payable and accrued expenses. The Company also recorded $26 million of intangible assets and $127 million of goodwill (at the Other Segment) in connection with this recapitalization.

In 2004, FO issued 7.4 million restricted common FO shares to certain key employees, representing 5.6 percent of the total outstanding common shares of FO at December 31, 2004. In 2004, the restrictions on 6.8 million restricted common shares lapsed. Also in 2004, FO issued 6.4 million stock options with an exercise price of $0.01 per share. In 2004, 1.5 million stock options expired and 0.1 million stock options were exercised, therefore, there were 4.8 million stock options outstanding at December 31, 2004.

The Company merged with the defense business of Hughes Electronics Corporation (Hughes Defense) in December 1997. In October 2001, the Company and Hughes Electronics agreed to a settlement regarding the purchase price adjustment related to the Company’s merger with Hughes Defense. Under the terms of the merger agreement, Hughes Electronics agreed to reimburse the Company approximately $635 million of its purchase price over time, with the final payment received in 2002.


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Notes to Consolidated Financial Statements (Continued)

 

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