WALTHAM, Mass., July 24, 2014 /PRNewswire/ -- Raytheon
Company (NYSE: RTN) announced second quarter 2014 EPS from
continuing operations of $1.59
compared to $1.50 in the second
quarter 2013. Second quarter 2014 Adjusted EPS1
was $1.41 per diluted share compared
to $1.64 per diluted share in the
second quarter 2013. Second quarter 2014 Adjusted EPS1
excluded a favorable FAS/CAS Adjustment of $0.18, compared with an unfavorable FAS/CAS
Adjustment of $0.14 in the second
quarter 2013. Net sales for the second quarter 2014 were
$5.7 billion compared to $6.1 billion in the second quarter 2013.
"Demand for Raytheon's innovative and affordable solutions from
our global customers was strong in the quarter, and international
opportunities in the second half of the year are significant," said
Thomas A. Kennedy, Raytheon's CEO.
"Second quarter sales, earnings and cash flow all exceeded
our expectations, reflecting the continuing hard work and
dedication of the Raytheon team."
The Company had bookings of $6.8
billion in the second quarter 2014, resulting in a
book-to-bill ratio of 1.19. In the second quarter 2013, bookings
were $5.3 billion. Year-to-date 2014
bookings were $11.1 billion compared
to year-to-date 2013 bookings of $8.9
billion.
_____________________________
1 Adjusted EPS is diluted EPS from continuing
operations attributable to Raytheon Company common stockholders,
and Adjusted Operating Margin is total operating margin; in each
case, excluding the impact of the FAS/CAS Adjustment, and from time
to time, certain other items. Adjusted EPS and Adjusted Operating
Margin are non-GAAP financial measures. See attachment F for a
reconciliation of these measures and a discussion of why the
Company is presenting this information.
_____________________________
The Company generated solid operating cash flow for the second
quarter 2014. Operating cash flow from continuing operations for
the second quarter 2014 was $153
million compared to an outflow of $41
million for the second quarter 2013. The increase in
operating cash from continuing operations in the second quarter
2014 was primarily due to the timing of collections.
Summary Financial
Results
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|
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2nd
Quarter
|
|
%
|
|
Six
Months
|
|
%
|
($ in millions,
except per share data)
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
|
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|
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|
|
|
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|
|
|
|
Bookings
|
$
|
6,772
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|
$
|
5,324
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|
27.2%
|
|
$
|
11,065
|
|
$
|
8,930
|
|
23.9%
|
Net Sales
|
$
|
5,701
|
|
$
|
6,115
|
|
-6.8%
|
|
$
|
11,209
|
|
$
|
11,994
|
|
-6.5%
|
Income from
Continuing Operations attributable to Raytheon Company
|
$
|
499
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|
$
|
488
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|
2.3%
|
|
$
|
1,088
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|
$
|
978
|
|
11.2%
|
Adjusted
Income*
|
$
|
443
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|
$
|
535
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|
-17.2%
|
|
$
|
895
|
|
$
|
1,046
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-14.4%
|
EPS from Continuing
Operations
|
$
|
1.59
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|
$
|
1.50
|
|
6.0%
|
|
$
|
3.46
|
|
$
|
2.99
|
|
15.7%
|
Adjusted
EPS*
|
$
|
1.41
|
|
$
|
1.64
|
|
-14.0%
|
|
$
|
2.84
|
|
$
|
3.20
|
|
-11.3%
|
Operating Cash Flow
from Continuing Operations
|
$
|
153
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|
$
|
(41)
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|
|
|
$
|
812
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$
|
381
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Workdays in Fiscal
Reporting Calendar
|
64
|
|
64
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|
|
|
126
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|
127
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* Adjusted Income
is income from continuing operations attributable to Raytheon
Company common stockholders, and Adjusted EPS is diluted EPS from
continuing operations attributable to Raytheon Company common
stockholders; in each case, excluding the after-tax impact of the
FAS/CAS Adjustment and, from time to time, certain other items. Six
Months 2014 Adjusted Income and Adjusted EPS excluded the
approximately $80 million and $0.25 impact, respectively, of a
favorable tax impact resulting from cash repatriation in the first
quarter 2014. Six Months 2013 Adjusted Income and Adjusted EPS
excluded the $25 million and $0.08 impact, respectively, of the
2012 R&D tax credit. See attachment F for a reconciliation of
these measures and a discussion of why the Company is presenting
this information.
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In the second quarter 2014, the Company repurchased 2.6 million
shares of common stock for $250
million. Year-to-date 2014, the Company repurchased
4.6 million shares of common stock for $450
million.
On May 12, 2014, Standard &
Poor's Rating Service upgraded the Company's senior unsecured
credit rating from A- to A, reflecting the Company's strong
financial position. The Company ended the second quarter 2014 with
$560 million of net debt. Net debt is
defined as total debt less cash and cash equivalents and short-term
investments.
Backlog
($ in
millions)
|
Period
Ending
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Q2
2014
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Q2
2013
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2013
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Backlog
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$
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33,019
|
|
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$
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32,435
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|
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$
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33,685
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Funded
Backlog
|
$
|
23,580
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$
|
22,169
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$
|
23,014
|
Backlog at the end of the second quarter was $33.0 billion and funded backlog was $23.6 billion, an increase of $1.4 billion compared to the second quarter
2013.
Outlook
The Company has reaffirmed its financial outlook for 2014.
Charts containing additional information on the Company's 2014
outlook are available on the Company's website at
www.raytheon.com/ir.
2014 Financial
Outlook1
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Net Sales
($B)
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22.5 -
23.0
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FAS/CAS Adjustment
($M)
|
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346
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Interest Expense, net
($M)
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(200) -
(210)
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Diluted Shares
(M)
|
|
312 - 314
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Effective Tax
Rate
|
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Approx.
28.5%
|
EPS from Continuing
Operations
|
|
$6.74 -
$6.89
|
Adjusted
EPS*
|
|
$5.76 -
$5.91
|
Operating Cash Flow
from Continuing Operations ($B)
|
|
2.3 -
2.5
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|
1The 2014 financial outlook does
not reflect the effects of either the potential extension of the
R&D tax credit or the potential enactment of pension funding
stabilization as part of the extension of the Highway Trust
Fund.
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* Adjusted EPS is
diluted EPS from continuing operations attributable to Raytheon
Company common stockholders, excluding the after-tax impact of the
FAS/CAS Adjustment and, from time to time, certain other items. In
addition to the FAS/CAS Adjustment, 2014 Adjusted EPS guidance also
excludes the $0.25 favorable tax impact of approximately $80
million resulting from cash repatriation in the first quarter 2014.
See attachment F for a reconciliation of this measure and a
discussion of why the Company is presenting this
information.
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Segment Results
The Company's reportable segments are: Integrated Defense
Systems (IDS); Intelligence, Information and Services (IIS);
Missile Systems (MS); and Space and Airborne Systems (SAS).
Integrated Defense
Systems
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2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2014
|
|
2013
|
|
%
Change
|
|
2014
|
|
2013
|
|
%
Change
|
Net Sales
|
$
|
1,549
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|
$
|
1,721
|
|
-10%
|
|
$
|
3,030
|
|
$
|
3,317
|
|
-9%
|
Operating
Income
|
$
|
219
|
|
$
|
326
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|
-33%
|
|
$
|
445
|
|
$
|
588
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|
-24%
|
Operating
Margin
|
14.1%
|
|
18.9%
|
|
|
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14.7%
|
|
17.7%
|
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|
Integrated Defense Systems (IDS) had second quarter 2014 net
sales of $1,549 million compared to
$1,721 million in the second quarter
2013. The change in net sales was primarily due to the scheduled
completion of production phases on certain international Patriot
programs, as well as lower sales on a combat tactical radar program
and the Australian Air Warfare Destroyer (AWD) program.
IDS recorded $219 million of
operating income compared to $326
million in the second quarter 2013. The change in operating
income was driven by lower volume and a $38
million adjustment from a decrease in estimated incentive
fees on the AWD program due to an increase in the shipbuilder's
expected cost to complete their portion of the program. In
addition, second quarter 2013 included a favorable contract
modification.
Intelligence,
Information and Services
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|
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2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2014
|
|
2013
|
|
%
Change
|
|
2014
|
|
2013
|
|
%
Change
|
Net Sales
|
$
|
1,518
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|
$
|
1,570
|
|
-3%
|
|
$
|
2,968
|
|
$
|
3,091
|
|
-4%
|
Operating
Income
|
$
|
127
|
|
$
|
131
|
|
-3%
|
|
$
|
252
|
|
$
|
255
|
|
-1%
|
Operating
Margin
|
8.4%
|
|
8.3%
|
|
|
|
8.5%
|
|
8.2%
|
|
|
Intelligence, Information and Services (IIS) had second quarter
2014 net sales of $1,518 million
compared to $1,570 million in the
second quarter 2013. The change in net sales included lower volume
on training and mission support programs, partially offset by
higher volume on domestic and international classified
programs.
IIS recorded $127 million of
operating income compared to $131
million in the second quarter 2013.
During the quarter, IIS booked $515
million on domestic training programs and $160 million on foreign training programs in
support of Warfighter FOCUS activities. IIS also booked
$521 million for a U.S. Air Force
program and approximately $160
million to provide operations and maintenance services on an
international radar system. IIS booked $379 million on a number of classified
contracts.
Missile
Systems
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2014
|
|
2013
|
|
%
Change
|
|
2014
|
|
2013
|
|
%
Change
|
Net Sales
|
$
|
1,539
|
|
$
|
1,690
|
|
-9%
|
|
$
|
3,113
|
|
$
|
3,326
|
|
-6%
|
Operating
Income
|
$
|
190
|
|
$
|
213
|
|
-11%
|
|
$
|
398
|
|
$
|
427
|
|
-7%
|
Operating
Margin
|
12.3%
|
|
12.6%
|
|
|
|
12.8%
|
|
12.8%
|
|
|
Missile Systems (MS) had second quarter 2014 net sales of
$1,539 million compared to
$1,690 million in the second quarter
2013. The change in net sales was primarily driven by lower sales
on U.S. Army programs.
MS recorded $190 million of
operating income compared to $213
million in the second quarter 2013. The change in operating
income was primarily due to lower volume and program mix, partially
offset by improved program performance in the second quarter
2014.
During the quarter, MS booked $764
million for Tube-launched, Optically-tracked,
Wireless-guided (TOW) missiles for the U.S. Army, U.S. Marines and
international customers, $289 million
for Standard Missile-6 (SM-6) for the U.S. Navy, $259 million for AIM-9X Sidewinder short range
air-to-air missiles for the U.S. Navy, U.S. Air Force and
international customers, $179 million
for Advanced Medium-Range Air-to-Air Missiles (AMRAAM) for the U.S.
Air Force, U.S. Navy and international customers, $130 million for Phalanx weapon systems for the
U.S. Navy and U.S. Army, $81 million
on Miniature Air-Launch Decoy (MALD®) for the U.S. Air Force,
$79 million for Rolling Airframe
Missile (RAM) program for the U.S. Navy and international
customers, and $75 million for
Standard Missile-3 (SM-3™) for the Missile Defense Agency (MDA). MS
also booked $140 million on a
classified program.
Space and Airborne
Systems
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2014
|
|
2013
|
|
%
Change
|
|
2014
|
|
2013
|
|
%
Change
|
Net Sales
|
$
|
1,505
|
|
$
|
1,620
|
|
-7%
|
|
$
|
2,903
|
|
$
|
3,202
|
|
-9%
|
Operating
Income
|
$
|
202
|
|
$
|
216
|
|
-6%
|
|
$
|
392
|
|
$
|
443
|
|
-12%
|
Operating
Margin
|
13.4%
|
|
13.3%
|
|
|
|
13.5%
|
|
13.8%
|
|
|
Space and Airborne Systems (SAS) had second quarter 2014 net
sales of $1,505 million compared to
$1,620 million in the second quarter
2013. The change in net sales was primarily due to lower volume on
intersegment sales related to a combat tactical radar program for
IDS and on classified programs.
SAS recorded $202 million of
operating income compared to $216
million in the second quarter 2013. The change in operating
income was primarily due to lower volume.
During the quarter, SAS booked $129
million to provide radar subsystems for the U.S. Navy. SAS
also booked $431 million on a number
of classified contracts.
About Raytheon
Raytheon Company, with 2013 sales of
$24 billion and 63,000 employees
worldwide, is a technology and innovation leader specializing in
defense, security and civil markets throughout the world. With a
history of innovation spanning 92 years, Raytheon provides
state-of-the-art electronics, mission systems integration and other
capabilities in the areas of sensing; effects; and command,
control, communications and intelligence systems, as well as cyber
security and a broad range of mission support services. Raytheon is
headquartered in Waltham, Mass.
For more about Raytheon, visit us at www.raytheon.com and follow us
on Twitter @raytheon.
Conference Call on the Second Quarter 2014 Financial
Results
Raytheon's financial results conference call will be
held on Thursday, July 24, 2014 at
9 a.m. ET. Participants will include
Thomas A. Kennedy, CEO; David C. Wajsgras, senior vice president and
CFO; and other Company executives.
The dial-in number for the conference call will be (866)
953-6856 in the U.S. or (617) 399-3480 outside of the U.S. The
conference call will also be audiocast on the Internet at
www.raytheon.com/ir. Individuals may listen to the call and
download charts that will be used during the call. These charts
will be available for printing prior to the call.
Interested parties are encouraged to check the website ahead of
time to ensure their computers are configured for the audio
stream. Instructions for obtaining the free required
downloadable software are posted on the site.
Disclosure Regarding Forward-looking Statements
This
release and the attachments contain forward-looking statements,
including information regarding the Company's financial outlook,
future plans, objectives, business prospects and anticipated
financial performance. These forward-looking statements are not
statements of historical facts and represent only the Company's
current expectations regarding such matters. These statements
inherently involve a wide range of known and unknown risks and
uncertainties. The Company's actual actions and results could
differ materially from what is expressed or implied by these
statements. Specific factors that could cause such a
difference include, but are not limited to: the Company's
dependence on the U.S. Government for a significant portion of its
business and the risks associated with U.S. Government sales,
including changes or shifts in defense spending due to budgetary
constraints, spending cuts resulting from sequestration under the
amended Budget Control Act of 2011, a government shutdown, or
otherwise, uncertain funding of programs, potential termination of
contracts, and difficulties in contract performance; the resolution
of program terminations; the ability to procure new contracts; the
risks of conducting business in foreign countries; the ability to
comply with extensive governmental regulation, including import and
export policies, the Foreign Corrupt Practices Act, the
International Traffic in Arms Regulations, and procurement and
other regulations; the impact of competition; the ability to
develop products and technologies; the impact of changes in the
financial markets and global economic conditions; the risk that
actual pension returns, discount rates or other actuarial
assumptions are significantly different than the Company's
assumptions; the risk of cost overruns, particularly for the
Company's fixed-price contracts; dependence on component
availability, subcontractor performance and key suppliers; risks of
a negative government audit; the use of accounting estimates in the
Company's financial statements; risks associated with acquisitions,
dispositions, joint ventures and other business arrangements; risks
of an impairment of goodwill or other intangible assets; the
outcome of contingencies and litigation matters, including
government investigations; the ability to recruit and retain
qualified personnel; the impact of potential security and cyber
threats, and other disruptions; and other factors as may be
detailed from time to time in the Company's public announcements
and Securities and Exchange Commission filings. The Company
undertakes no obligation to make any revisions to the
forward-looking statements contained in this release and the
attachments or to update them to reflect events or circumstances
occurring after the date of this release, including any
acquisitions, dispositions or other business arrangements that may
be announced or closed after such date. This release and the
attachments also contain non-GAAP financial measures. A GAAP
reconciliation and a discussion of the Company's use of these
measures are included in this release or the attachments.
Attachment
A
|
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|
|
Raytheon
Company
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary Statement
of Operations Information
|
|
|
|
|
|
|
Second Quarter
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
5,701
|
|
$
|
6,115
|
|
$
|
11,209
|
|
$
|
11,994
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
4,301
|
|
4,753
|
|
8,462
|
|
9,358
|
General and administrative
expenses
|
|
641
|
|
596
|
|
1,200
|
|
1,164
|
Total operating
expenses
|
|
4,942
|
|
5,349
|
|
9,662
|
|
10,522
|
Operating
income
|
|
759
|
|
766
|
|
1,547
|
|
1,472
|
Non-operating
(income) expense, net
|
|
|
|
|
|
|
|
|
Interest expense
|
|
54
|
|
53
|
|
105
|
|
106
|
Interest income
|
|
(2)
|
|
(3)
|
|
(5)
|
|
(6)
|
Other (income) expense,
net
|
|
(6)
|
|
3
|
|
(6)
|
|
(4)
|
Total non-operating
(income) expense, net
|
|
46
|
|
53
|
|
94
|
|
96
|
Income from
continuing operations before taxes
|
|
713
|
|
713
|
|
1,453
|
|
1,376
|
Federal and foreign
income taxes
|
|
212
|
|
220
|
|
359
|
|
387
|
Income from
continuing operations
|
|
501
|
|
493
|
|
1,094
|
|
989
|
Income (loss) from
discontinued operations, net of tax
|
|
52
|
|
—
|
|
59
|
|
(2)
|
Net income
|
|
553
|
|
493
|
|
1,153
|
|
987
|
Less: Net income
attributable to noncontrolling
|
|
|
|
|
|
|
|
|
interests in subsidiaries
|
|
2
|
|
5
|
|
6
|
|
11
|
Net income
attributable to Raytheon Company
|
|
$
|
551
|
|
$
|
488
|
|
$
|
1,147
|
|
$
|
976
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share attributable to Raytheon
|
|
|
|
|
|
|
|
|
Company common
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
1.59
|
|
$
|
1.50
|
|
$
|
3.47
|
|
$
|
3.00
|
Income (loss) from
discontinued operations, net of tax
|
|
0.17
|
|
—
|
|
0.19
|
|
(0.01)
|
Net income
|
|
1.76
|
|
1.50
|
|
3.65
|
|
2.99
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share attributable to Raytheon
|
|
|
|
|
|
|
|
|
Company common
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
1.59
|
|
$
|
1.50
|
|
$
|
3.46
|
|
$
|
2.99
|
Income (loss) from
discontinued operations, net of tax
|
|
0.17
|
|
—
|
|
0.19
|
|
(0.01)
|
Net income
|
|
1.76
|
|
1.50
|
|
3.65
|
|
2.99
|
|
|
|
|
|
|
|
|
|
Amounts attributable
to Raytheon Company common
|
|
|
|
|
|
|
|
|
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
499
|
|
$
|
488
|
|
$
|
1,088
|
|
$
|
978
|
Income (loss) from
discontinued operations, net of tax
|
|
52
|
|
—
|
|
59
|
|
(2)
|
Net income
|
|
$
|
551
|
|
$
|
488
|
|
$
|
1,147
|
|
$
|
976
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
312.9
|
|
324.9
|
|
313.9
|
|
326.1
|
Diluted
|
|
313.5
|
|
325.6
|
|
314.6
|
|
326.9
|
Attachment
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary Segment
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
Net Sales
|
|
Operating
Income
|
|
As a Percent of Net
Sales
|
(In millions, except
percentages)
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
$
|
1,549
|
|
$
|
1,721
|
|
$
|
219
|
|
$
|
326
|
|
14.1
|
%
|
|
18.9
|
%
|
Intelligence,
Information and Services
|
|
1,518
|
|
1,570
|
|
127
|
|
131
|
|
8.4
|
%
|
|
8.3
|
%
|
Missile
Systems
|
|
1,539
|
|
1,690
|
|
190
|
|
213
|
|
12.3
|
%
|
|
12.6
|
%
|
Space and Airborne
Systems
|
|
1,505
|
|
1,620
|
|
202
|
|
216
|
|
13.4
|
%
|
|
13.3
|
%
|
FAS/CAS
Adjustment
|
|
—
|
|
—
|
|
87
|
|
(72)
|
|
|
|
|
|
|
Corporate and
Eliminations
|
|
(410)
|
|
(486)
|
|
(66)
|
|
(48)
|
|
|
|
|
|
|
Total
|
|
$
|
5,701
|
|
$
|
6,115
|
|
$
|
759
|
|
$
|
766
|
|
13.3
|
%
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
Net Sales
|
|
Operating
Income
|
|
As a Percent of Net
Sales
|
(In millions, except
percentages)
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
$
|
3,030
|
|
$
|
3,317
|
|
$
|
445
|
|
$
|
588
|
|
14.7
|
%
|
|
17.7
|
%
|
Intelligence,
Information and Services
|
|
2,968
|
|
3,091
|
|
252
|
|
255
|
|
8.5
|
%
|
|
8.2
|
%
|
Missile
Systems
|
|
3,113
|
|
3,326
|
|
398
|
|
427
|
|
12.8
|
%
|
|
12.8
|
%
|
Space and Airborne
Systems
|
|
2,903
|
|
3,202
|
|
392
|
|
443
|
|
13.5
|
%
|
|
13.8
|
%
|
FAS/CAS
Adjustment
|
|
—
|
|
—
|
|
174
|
|
(143)
|
|
|
|
|
|
|
Corporate and
Eliminations
|
|
(805)
|
|
(942)
|
|
(114)
|
|
(98)
|
|
|
|
|
|
|
Total
|
|
$
|
11,209
|
|
$
|
11,994
|
|
$
|
1,547
|
|
$
|
1,472
|
|
13.8
|
%
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
|
|
|
|
|
Other Preliminary
Information
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
Funded
Backlog
|
|
Total
Backlog
|
|
|
|
29-Jun-14
|
|
31-Dec-13
|
|
29-Jun-14
|
|
31-Dec-13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
|
$
|
8,365
|
|
|
$
|
9,397
|
|
|
$
|
9,639
|
|
|
$
|
10,916
|
|
Intelligence,
Information and Services
|
|
3,147
|
|
|
2,592
|
|
|
6,298
|
|
|
5,856
|
|
Missile
Systems
|
|
|
7,267
|
|
|
6,859
|
|
|
9,635
|
|
|
9,162
|
|
Space and Airborne
Systems
|
|
|
4,801
|
|
|
4,166
|
|
|
7,447
|
|
|
7,751
|
|
Total
|
|
|
$
|
23,580
|
|
|
$
|
23,014
|
|
|
$
|
33,019
|
|
|
$
|
33,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Bookings
|
|
|
$
|
6,772
|
|
|
$
|
5,324
|
|
|
$
|
11,065
|
|
|
$
|
8,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
Administrative Expenses
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative and
selling expenses
|
|
$
|
517
|
|
|
$
|
471
|
|
|
$
|
965
|
|
|
$
|
932
|
|
Research and
development expenses
|
|
$
|
124
|
|
|
$
|
125
|
|
|
$
|
235
|
|
|
$
|
232
|
|
Total general and
administrative expenses
|
|
$
|
641
|
|
|
$
|
596
|
|
|
$
|
1,200
|
|
|
$
|
1,164
|
|
Attachment
D
|
|
|
|
Raytheon
Company
|
|
|
|
|
Preliminary Balance
Sheet Information
|
|
|
|
Second Quarter
2014
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
29-Jun-14
|
|
31-Dec-13
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
3,261
|
|
$
|
3,296
|
Short-term
investments
|
915
|
|
1,001
|
Contracts in process,
net
|
5,366
|
|
4,870
|
Inventories
|
430
|
|
363
|
Prepaid expenses and other
current assets
|
327
|
|
286
|
Total current assets
|
10,299
|
|
9,816
|
|
|
|
|
Property, plant and
equipment, net
|
1,878
|
|
1,937
|
Goodwill
|
12,765
|
|
12,764
|
Other assets,
net
|
1,438
|
|
1,450
|
Total assets
|
$
|
26,380
|
|
$
|
25,967
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Advance payments and
billings in excess of costs incurred
|
$
|
2,558
|
|
$
|
2,350
|
Accounts payable
|
1,113
|
|
1,178
|
Accrued employee
compensation
|
926
|
|
1,068
|
Other accrued
expenses
|
1,299
|
|
1,214
|
Total current liabilities
|
5,896
|
|
5,810
|
|
|
|
|
Accrued retiree
benefits and other long-term liabilities
|
3,854
|
|
4,226
|
Long-term
debt
|
4,736
|
|
4,734
|
|
|
|
|
Equity
|
|
|
|
Raytheon
Company stockholders' equity
|
|
|
|
Common stock
|
3
|
|
3
|
Additional paid-in
capital
|
1,566
|
|
1,972
|
Accumulated other
comprehensive loss
|
(4,786)
|
|
(5,113)
|
Retained earnings
|
14,945
|
|
14,173
|
Total Raytheon Company stockholders' equity
|
11,728
|
|
11,035
|
Noncontrolling interests in
subsidiaries
|
166
|
|
162
|
Total equity
|
11,894
|
|
11,197
|
Total liabilities and equity
|
$
|
26,380
|
|
$
|
25,967
|
Attachment
E
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
|
|
|
Preliminary Cash Flow
Information
|
|
|
|
|
|
|
|
Second Quarter
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
Three Months
Ended
|
|
Six Months
Ended
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
|
|
|
|
Net income
|
$
|
553
|
|
$
|
493
|
|
$
|
1,153
|
|
$
|
987
|
(Income) loss from
discontinued operations, net of tax
|
(52)
|
|
—
|
|
(59)
|
|
2
|
Income from
continuing operations
|
501
|
|
493
|
|
1,094
|
|
989
|
|
|
|
|
|
|
|
|
Depreciation
|
76
|
|
77
|
|
149
|
|
151
|
Amortization
|
33
|
|
36
|
|
67
|
|
70
|
Working capital
(excluding pension and income taxes)*
|
(181)
|
|
(489)
|
|
(711)
|
|
(1,282)
|
Other long-term
liabilities
|
(5)
|
|
4
|
|
(17)
|
|
(11)
|
Pension and other
postretirement benefit plans
|
(208)
|
|
(45)
|
|
(28)
|
|
246
|
Other, net
|
(63)
|
|
(117)
|
|
258
|
|
218
|
Net operating cash
flow from continuing operations
|
$
|
153
|
|
$
|
(41)
|
|
812
|
|
381
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
spending
|
$
|
(62)
|
|
$
|
(56)
|
|
(101)
|
|
(105)
|
Internal use software
spending
|
(14)
|
|
(12)
|
|
(26)
|
|
(21)
|
Acquisitions
|
—
|
|
(14)
|
|
—
|
|
(14)
|
Purchases of
short-term investments
|
(26)
|
|
(638)
|
|
(1,371)
|
|
(839)
|
Sales of short-term
investments
|
425
|
|
325
|
|
882
|
|
325
|
Maturities of
short-term investments
|
195
|
|
209
|
|
595
|
|
362
|
Dividends
|
(189)
|
|
(179)
|
|
(363)
|
|
(343)
|
Repurchases of common
stock under stock repurchase
programs
|
(250)
|
|
(225)
|
|
(450)
|
|
(450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Working capital
(excluding pension and income taxes) is a summation of changes in:
contracts in process, net and advance payments and billings in
excess of costs incurred, inventories, prepaid expenses and other
current assets, accounts payable, accrued employee compensation,
and other accrued expenses from the Consolidated Statements of Cash
Flows.
|
Attachment
F
|
|
Raytheon
Company
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures - Adjusted EPS, Adjusted Income and Adjusted Operating
Margin
|
Second Quarter
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS
Non-GAAP Reconciliation
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
2014
Guidance
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Low end
|
|
High end
|
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
of range
|
|
of range
|
Diluted EPS from
continuing operations
attributable to Raytheon
Company
common
stockholders
|
$
|
1.59
|
|
$
|
1.50
|
|
$
|
3.46
|
|
$
|
2.99
|
|
$
|
6.74
|
|
$
|
6.89
|
Per share impact of
the FAS/CAS
Adjustment (A)
|
(0.18)
|
|
0.14
|
|
(0.36)
|
|
0.28
|
|
(0.72)
|
|
(0.72)
|
Per share impact of
the tax benefit of
cash repatriation (B)
|
—
|
|
—
|
|
(0.25)
|
|
—
|
|
(0.25)
|
|
(0.26)
|
Per share impact of
the 2012 research
and development (R&D) tax credit (C)
|
—
|
|
—
|
|
—
|
|
(0.08)
|
|
—
|
|
—
|
Adjusted EPS (2),
(3)
|
$
|
1.41
|
|
$
|
1.64
|
|
$
|
2.84
|
|
$
|
3.20
|
|
$
|
5.76
|
|
$
|
5.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
FAS/CAS
Adjustment
|
$
|
(87)
|
|
$
|
72
|
|
$
|
(174)
|
|
$
|
143
|
|
$
|
(346)
|
|
$
|
(346)
|
|
|
Tax effect
(1)
|
31
|
|
(25)
|
|
61
|
|
(50)
|
|
121
|
|
121
|
|
After-tax
impact
|
(56)
|
|
47
|
|
(113)
|
|
93
|
|
(225)
|
|
(225)
|
|
Diluted
shares
|
313.5
|
|
325.6
|
|
314.6
|
|
326.9
|
|
314.0
|
|
312.0
|
|
Per share
impact
|
$
|
(0.18)
|
|
$
|
0.14
|
|
$
|
(0.36)
|
|
$
|
0.28
|
|
$
|
(0.72)
|
|
$
|
(0.72)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(B)
|
Tax benefit of cash
repatriation
|
$
|
—
|
|
$
|
—
|
|
$
|
(80)
|
|
$
|
—
|
|
$
|
(80)
|
|
$
|
(80)
|
|
Diluted
shares
|
—
|
|
—
|
|
314.6
|
|
—
|
|
314.0
|
|
312.0
|
|
Per share
impact
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.25)
|
|
$
|
—
|
|
$
|
(0.25)
|
|
$
|
(0.26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(C)
|
2012 R&D tax
credit
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(25)
|
|
$
|
—
|
|
$
|
—
|
|
Diluted
shares
|
—
|
|
—
|
|
—
|
|
326.9
|
|
—
|
|
—
|
|
Per share
impact
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.08)
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Income
Non-GAAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
|
|
|
Income from continuing
operations
attributable to Raytheon Company
common stockholders
|
$
|
499
|
|
$
|
488
|
|
$
|
1,088
|
|
$
|
978
|
|
|
|
|
FAS/CAS Adjustment
(1)
|
(56)
|
|
47
|
|
(113)
|
|
93
|
|
|
|
|
Tax benefit of cash
repatriation
|
—
|
|
—
|
|
(80)
|
|
—
|
|
|
|
|
2012 R&D tax
credit
|
—
|
|
—
|
|
—
|
|
(25)
|
|
|
|
|
Adjusted Income (2),
(4)
|
$
|
443
|
|
$
|
535
|
|
$
|
895
|
|
$
|
1,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Margin Non-GAAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
Guidance
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Low end
|
|
High end
|
|
|
|
29-Jun-14
|
|
30-Jun-13
|
|
29-Jun-14
|
|
30-Jun-13
|
|
of range
|
|
of range
|
Operating
Margin
|
13.3%
|
|
12.5%
|
|
13.8%
|
|
12.3%
|
|
14.1%
|
|
14.3%
|
FAS/CAS
Adjustment
|
(1.5)%
|
|
1.2%
|
|
(1.6)%
|
|
1.2%
|
|
(1.5)%
|
|
(1.5)%
|
Adjusted Operating
Margin (2), (5)
|
11.8%
|
|
13.7%
|
|
12.2%
|
|
13.5%
|
|
12.6%
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Tax effected at 35%
federal statutory tax rate.
|
|
|
(2)
|
These amounts are not
measures of financial performance under U.S. generally accepted
accounting principles (GAAP). They should be considered
supplemental to and not a substitute for financial performance in
accordance with GAAP and may not be defined and calculated by other
companies in the same manner. These amounts exclude the FAS/CAS
Adjustment and, from time to time, certain other items. We are
providing these measures because management uses them for the
purposes of evaluating and forecasting the Company's financial
performance and believes that they provide additional insights into
the Company's underlying business performance. We also believe that
they allow investors to benefit from being able to assess our
operating performance in the context of how our principal customer,
the U.S. Government, allows us to recover pension and
postretirement benefit (PRB) costs and to better compare our
operating performance to others in the industry on that same basis.
Amounts may not recalculate directly due to rounding.
|
|
|
(3)
|
Adjusted EPS is
diluted EPS from continuing operations attributable to Raytheon
Company common stockholders excluding the after-tax impact of the
FAS/CAS Adjustment and, from time to time, certain other items. Six
Months Ended June 29, 2014 and Guidance Adjusted EPS excludes the
$0.25 impact of a net tax benefit of approximately $80 million
resulting from cash repatriation in connection with a transaction
with a foreign subsidiary in January 2014. Six Months Ended June
30, 2013 Adjusted EPS excludes the earnings per share impact of an
R&D tax credit that relates to 2012. In January 2013, Congress
approved legislation that included the extension of the R&D tax
credit. The legislation retroactively reinstated the R&D tax
credit for 2012 and extended it through December 31, 2013. As a
result, we recorded the 2012 benefit in the first quarter of
2013.
|
|
|
(4)
|
Adjusted Income is
income from continuing operations attributable to Raytheon Company
common stockholders excluding the after-tax impact of the FAS/CAS
Adjustment and, from time to time, certain other items. Six Months
Ended June 29, 2014 Adjusted Income also excludes the net tax
benefit as discussed above. Six Months Ended June 30, 2013 Adjusted
Income also excludes the R&D tax credit that relates to 2012,
as discussed above.
|
|
|
(5)
|
Adjusted Operating
Margin is defined as total operating margin excluding the margin
impact of the FAS/CAS Adjustment and, from time to time, certain
other items.
|
|
|
Investor Relations
Contact
Todd
Ernst
781.522.5141
Media
Contact
Pam
Erickson
781.522.5822
SOURCE Raytheon Company