WALTHAM, Mass., July 28, 2016 /PRNewswire/ -- Raytheon
Company (NYSE: RTN) today announced net sales for the second
quarter 2016 of $6.0 billion, up 3
percent compared to $5.8 billion in
the second quarter 2015.
Second quarter 2016 EPS from continuing operations was
$2.38 compared to $1.65 in the second quarter 2015. Second
quarter 2016 EPS from continuing operations included a tax-free
gain of $0.53 related to the
ThalesRaytheonSystems (TRS) transaction, discussed further below,
which had been previously forecast in the third quarter of 2016. In
addition, as expected, second quarter 2016 included a tax benefit
of $0.10 from the new accounting
standard for stock compensation, previously adopted in the first
quarter of 2016. Second quarter 2015 EPS from continuing operations
included a $0.29 favorable impact
from a tax settlement. Second quarter 2016 EPS from continuing
operations included a favorable FAS/CAS Adjustment of $0.24 compared to a favorable FAS/CAS Adjustment
of $0.10 in the second quarter
2015.
"The Company had strong second quarter operating results, with
bookings, sales, operating margin, earnings per share, and cash
flow all ahead of our expectations," said Thomas A. Kennedy, Raytheon Chairman and CEO.
"We begin the second half of 2016 with continued confidence in our
growth outlook, and we have increased our guidance for earnings and
cash flow as a result of our strong year-to-date performance."
Operating cash flow from continuing operations for the second
quarter 2016 was $746 million
compared to $376 million for the
second quarter 2015. The increase in operating cash flow from
continuing operations in the second quarter 2016 was primarily due
to the timing of payments and cash taxes, as well as lower required
pension contributions. The second quarter 2015 included the
collection of $226 million from the
eBorders settlement.
Summary Financial
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
%
|
|
Six
Months
|
|
%
|
($ in millions,
except per share data)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
$
|
7,118
|
|
$
|
7,580
|
|
-6.1%
|
|
$
|
13,319
|
|
$
|
12,051
|
|
10.5%
|
Net Sales
|
$
|
6,035
|
|
$
|
5,848
|
|
3.2%
|
|
$
|
11,798
|
|
$
|
11,136
|
|
5.9%
|
Income from
Continuing Operations attributable to
Raytheon
Company
|
$
|
710
|
1
|
$
|
504
|
|
40.9%
|
|
$
|
1,138
|
1
|
$
|
1,055
|
2
|
7.9%
|
EPS from Continuing
Operations
|
$
|
2.38
|
1
|
$
|
1.65
|
|
44.2%
|
|
$
|
3.81
|
1
|
$
|
3.44
|
2
|
10.8%
|
Operating Cash Flow
from Continuing Operations
|
$
|
746
|
|
$
|
376
|
|
|
|
$
|
1,071
|
|
$
|
431
|
|
|
Workdays in Fiscal
Reporting Calendar
|
|
64
|
|
|
64
|
|
|
|
|
129
|
|
|
125
|
|
|
1
Second quarter and six months 2016 Income from Continuing
Operations attributable to Raytheon Company and EPS from Continuing
Operations included the tax-free gain of $158 million and $0.53
impact, respectively, for the TRS transaction.
|
2
Six months 2015 Income from Continuing Operations attributable
to Raytheon Company and EPS from Continuing Operations included the
favorable $181 million pretax ($131 million after-tax) and $0.42
impact, respectively, for the first quarter 2015 eBorders
settlement.
|
The Company had bookings of $7.1
billion in the second quarter 2016, resulting in a
book-to-bill ratio of 1.18 in the quarter. Second quarter 2015
bookings were $7.6 billion.
Year-to-date 2016 bookings were $13.3
billion, resulting in a book-to-bill ratio of 1.13.
Year-to-date 2015 bookings were $12.1
billion.
In the second quarter 2016, the Company repurchased 1.6 million
shares of common stock for $202
million. Year-to-date 2016, the Company repurchased 4.8
million shares of common stock for $602
million.
As previously announced, on June 29,
2016 the Company and Thales concluded the transaction to
transition the stakeholder positions each company held in the TRS
joint venture structure – with Raytheon acquiring 100 percent of
the TRS U.S. operations and Thales acquiring 100 percent of the
French operations. As a result of the transaction, Raytheon made a
net cash payment to Thales in the amount of $90 million and recorded a tax-free gain of
$158 million or $0.53 per diluted share in its second quarter
financial results.
Backlog
|
|
($ in
millions)
|
Period
Ending
|
|
Q2
2016
|
|
Q2
2015
|
|
2015
|
Backlog
|
$
|
35,310
|
|
|
$
|
34,494
|
|
|
$
|
34,669
|
|
Funded
Backlog
|
$
|
26,135
|
|
|
$
|
25,332
|
|
|
$
|
25,060
|
|
Backlog and funded backlog at the end of the second quarter 2016
was $35.3 billion and $26.1 billion, respectively, an increase for each
of approximately $0.8 billion
compared to the end of the second quarter 2015.
Outlook
The Company has updated its financial outlook for 2016 and
increased guidance for EPS and operating cash flow from continuing
operations. Charts containing additional information on the
Company's 2016 outlook are available on the Company's website at
www.raytheon.com/ir.
2016 Financial
Outlook
|
|
|
|
|
Current
|
|
Prior
(4/28/16)
|
Net Sales
($B)
|
24.0 -
24.5
|
|
24.0 -
24.5
|
Deferred Revenue
Adjustment ($M)1
|
(77)
|
|
(77)
|
Amortization of
Acquired Intangibles ($M)1
|
(121)
|
|
(121)
|
FAS/CAS Adjustment
($M)
|
428
|
|
428
|
Interest Expense, net
($M)
|
(215) -
(225)*
|
|
(220) -
(230)
|
Diluted Shares
(M)
|
296 - 298
|
|
296 - 298
|
Effective Tax
Rate
|
~28.0%*
|
|
~28.5%
|
EPS from Continuing
Operations
|
$7.13 -
$7.33*
|
|
$6.93 -
$7.13
|
Operating Cash Flow
from Continuing Operations ($B)
|
2.8 -
3.1*
|
|
2.7 -
3.0
|
|
|
|
|
* Denotes change
from prior guidance
|
|
|
|
1
Deferred Revenue Adjustment and Amortization of Intangibles
represent the unfavorable impact of the acquisition accounting
adjustments to record acquired deferred revenue at fair value and
the amortization of acquired intangible assets for all business
segments.
|
Segment Results
The Company's reportable segments are: Integrated Defense
Systems (IDS); Intelligence, Information and Services (IIS);
Missile Systems (MS); Space and Airborne Systems (SAS); and
Forcepoint.
Integrated Defense
Systems
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
Six
Months
|
|
($ in
millions)
|
2016
|
|
2015
|
%
Change
|
|
2016
|
|
2015
|
%
Change
|
Net Sales
|
$
|
1,399
|
|
$
|
1,565
|
-11 %
|
|
$
|
2,736
|
|
$
|
2,872
|
-5 %
|
Operating
Income1
|
$
|
375
|
|
$
|
202
|
NM
|
|
$
|
522
|
|
$
|
385
|
NM
|
Operating
Margin1
|
|
28.6 %
|
|
|
12.9 %
|
|
|
|
19.1 %
|
|
|
13.4 %
|
|
1
Second quarter 2016 operating income and operating margin
include the favorable $158 million impact of the TRS
transaction.
|
NM = Not
Meaningful
|
|
|
|
|
|
|
|
Integrated Defense Systems (IDS) had second quarter 2016 net
sales of $1,399 million compared to
$1,565 million in the second quarter
2015. The change in net sales for the quarter was primarily
driven by the recognition of previously deferred precontract costs
on an international Patriot program in the second quarter
2015.
IDS recorded $375 million of
operating income in the second quarter 2016 compared to
$202 million in the second quarter
2015. The increase in operating income for the quarter was
primarily driven by the TRS transaction discussed earlier, which
resulted in a $158 million tax-free
gain in the second quarter 2016. In addition, second quarter 2015
included a $33 million unfavorable
impact related to the Air Warfare Destroyer (AWD) program.
During the quarter, IDS booked $487
million to provide advanced Patriot air and missile defense
capabilities for Kuwait. IDS
also booked $354 million on the Aegis
weapon system for the U.S. Navy and international customers and
$117 million for in-service support
for the Collins class submarine for the Royal Australian Navy.
Intelligence,
Information and Services
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Net Sales
|
$
|
1,642
|
|
$
|
1,594
|
|
3%
|
|
$
|
3,135
|
|
$
|
3,055
|
|
3%
|
Operating
Income1
|
$
|
124
|
|
$
|
122
|
|
2%
|
|
$
|
224
|
|
$
|
417
|
|
NM
|
Operating
Margin1
|
|
7.6 %
|
|
|
7.7 %
|
|
|
|
|
7.1 %
|
|
|
13.6 %
|
|
|
1
First six months 2015 operating income and operating margin
include the favorable $181 million impact of the eBorders
settlement.
|
NM = Not
Meaningful
|
|
|
|
|
|
|
|
|
|
|
Intelligence, Information and Services (IIS) had second quarter
2016 net sales of $1,642 million, up
3 percent compared to $1,594 million
in the second quarter 2015. The increase in net sales for the
quarter was primarily driven by higher sales on cybersecurity and
special missions programs.
IIS recorded $124 million of
operating income in the second quarter 2016 compared to
$122 million in the second quarter
2015.
During the quarter, IIS booked $574
million on domestic and foreign training programs in support
of Warfighter FOCUS activities. IIS also booked $453 million on a number of classified
contracts.
Missile
Systems
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Net Sales
|
$
|
1,656
|
|
$
|
1,559
|
|
6%
|
|
$
|
3,376
|
|
$
|
3,032
|
|
11%
|
Operating
Income
|
$
|
223
|
|
$
|
184
|
|
21%
|
|
$
|
415
|
|
$
|
391
|
|
6%
|
Operating
Margin
|
|
13.5 %
|
|
|
11.8 %
|
|
|
|
|
12.3 %
|
|
|
12.9 %
|
|
|
Missile Systems (MS) had second quarter 2016 net sales of
$1,656 million, up 6 percent compared
to $1,559 million in the second
quarter 2015. The increase in net sales for the quarter was
primarily driven by higher sales on the Paveway™ program.
MS recorded $223 million of
operating income in the second quarter 2016 compared to
$184 million in the second quarter
2015. The increase in operating income for the quarter was
primarily driven by higher net program efficiencies and a favorable
change in program mix in the second quarter 2016.
During the quarter, MS booked $298
million for AIM-9X® Sidewinder short-range
air-to-air missiles, $292 million for
Paveway, $230 million for Standard
Missile-3 (SM-3®), $118
million for Evolved SeaSparrow Missiles (ESSM), and
$109 million for Advanced
Medium-Range Air-to-Air Missiles (AMRAAM®), all for U.S.
and international customers. MS also booked $186 million for the Woomera Mobile Range Upgrade
program for the Royal Australian Air Force and $122 million for the Miniature Air Launched Decoy
(MALD®) for the U.S. Air Force.
Space and Airborne
Systems
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Net Sales
|
$
|
1,547
|
|
$
|
1,416
|
|
9%
|
|
$
|
2,997
|
|
$
|
2,774
|
|
8%
|
Operating
Income
|
$
|
203
|
|
$
|
195
|
|
4%
|
|
$
|
376
|
|
$
|
377
|
|
-
|
Operating
Margin
|
|
13.1 %
|
|
|
13.8 %
|
|
|
|
|
12.5 %
|
|
|
13.6 %
|
|
|
Space and Airborne Systems (SAS) had second quarter 2016 net
sales of $1,547 million, up 9 percent
compared to $1,416 million in the
second quarter 2015. The increase in net sales for the quarter was
primarily driven by higher sales on classified programs.
SAS recorded $203 million of
operating income in the second quarter 2016 compared to
$195 million in the second quarter
2015. The increase in operating income for the quarter was
primarily due to improved program performance and higher volume,
partially offset by a change in program mix.
During the quarter, SAS booked $992
million on the Next Generation Jammer (NGJ) program for the
U.S. Navy and $90 million on the
next-generation Multi-Spectral Targeting System (MTS) for the U.S.
Air Force. SAS also booked $424
million on a number of classified contracts.
Forcepoint
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
Six
Months
|
|
|
($ in
millions)
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Net Sales
|
$
|
138
|
|
$
|
57
|
|
NM
|
|
$
|
274
|
|
$
|
81
|
|
NM
|
Operating
Income
|
$
|
7
|
|
$
|
(1)
|
|
NM
|
|
$
|
21
|
|
$
|
(1)
|
|
NM
|
Operating
Margin
|
|
5.1 %
|
|
|
(1.8) %
|
|
|
|
|
7.7 %
|
|
|
(1.2) %
|
|
|
NM = Not
Meaningful
|
Forcepoint had second quarter 2016 net sales of $138 million compared to $57 million in the second quarter 2015.
Forcepoint recorded $7 million of
operating income in the second quarter 2016 compared to a loss of
$1 million in the second quarter
2015. The increase in net sales and operating income for the
quarter was primarily due to the acquisition of Websense in
May 2015.
About Raytheon
Raytheon Company, with 2015 sales of $23
billion and 61,000 employees, is a technology and innovation
leader specializing in defense, civil government and cybersecurity
solutions. With a history of innovation spanning 94 years, Raytheon
provides state-of-the-art electronics, mission systems integration,
C5ITM products and services, sensing, effects, and
mission support for customers in more than 80 countries. Raytheon
is headquartered in Waltham,
Massachusetts. Follow us on Twitter.
Conference Call on the Second Quarter 2016 Financial
Results
Raytheon's financial results conference call will be held on
Thursday, July 28, 2016 at
9 a.m. ET. Participants will include
Thomas A. Kennedy, Chairman and CEO;
Anthony F. O'Brien, vice president
and CFO; and other Company executives.
The dial-in number for the conference call will be (866)
700-6293 in the U.S. or (617) 213-8835 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, 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 unpredictability of timing of international
bookings; the ability to comply with extensive governmental
regulation and obtain approvals, including export and import
requirements such as the International Traffic in Arms Regulations
and the Export Administration Regulations, anti-bribery and
anti-corruption requirements including the Foreign Corrupt
Practices Act, industrial cooperation agreement obligations, and
procurement and other regulations; changes in government
procurement practices; the impact of competition; the ability to
develop products and technologies, and the impact of associated
investments and costs; the impact of potential security and cyber
threats, and other disruptions; the ability to recruit and retain
qualified personnel; 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 and partner performance and
key suppliers; risks of a negative government audit; risks
associated with acquisitions, investments, dispositions, joint
ventures and other business arrangements; the ability to grow in
the government and commercial cybersecurity markets; risks of an
impairment of goodwill or other intangible assets; the impact of
financial markets and global economic conditions; the use of
accounting estimates in the Company's financial statements; the
outcome of contingencies and litigation matters, including
government investigations; the risk of environmental liabilities;
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 may contain non-GAAP financial measures. In such event,
a GAAP reconciliation and a discussion of the Company's use of
these measures are included in this release or the attachments.
Attachment
A
|
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
Preliminary Statement
of Operations Information
|
|
|
|
|
|
Second Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
6,035
|
|
|
$
|
5,848
|
|
|
$
|
11,798
|
|
|
$
|
11,136
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
4,380
|
|
|
4,525
|
|
|
8,780
|
|
|
8,358
|
|
General and administrative
expenses
|
|
695
|
|
|
675
|
|
|
1,446
|
|
|
1,290
|
|
Total operating
expenses
|
|
5,075
|
|
|
5,200
|
|
|
10,226
|
|
|
9,648
|
|
Operating
income
|
|
960
|
|
|
648
|
|
|
1,572
|
|
|
1,488
|
|
Non-operating
(income) expense, net
|
|
|
|
|
|
|
|
|
Interest expense
|
|
58
|
|
|
59
|
|
|
116
|
|
|
117
|
|
Interest income
|
|
(4)
|
|
|
(2)
|
|
|
(8)
|
|
|
(6)
|
|
Other (income) expense,
net
|
|
(1)
|
|
|
(1)
|
|
|
(3)
|
|
|
(3)
|
|
Total non-operating
(income) expense, net
|
|
53
|
|
|
56
|
|
|
105
|
|
|
108
|
|
Income from
continuing operations before taxes
|
|
907
|
|
|
592
|
|
|
1,467
|
|
|
1,380
|
|
Federal and foreign
income taxes
|
|
202
|
|
|
90
|
|
|
358
|
|
|
324
|
|
Income from
continuing operations
|
|
705
|
|
|
502
|
|
|
1,109
|
|
|
1,056
|
|
Income (loss) from
discontinued operations, net of tax
|
|
(1)
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Net income
|
|
704
|
|
|
503
|
|
|
1,109
|
|
|
1,057
|
|
Less: Net income
(loss) attributable to noncontrolling
|
|
|
|
|
|
|
|
|
interests in subsidiaries
|
|
(5)
|
|
|
(2)
|
|
|
(29)
|
|
|
1
|
|
Net income
attributable to Raytheon Company
|
|
$
|
709
|
|
|
$
|
505
|
|
|
$
|
1,138
|
|
|
$
|
1,056
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Raytheon
|
|
|
|
|
|
|
|
|
Company common
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
2.39
|
|
|
$
|
1.65
|
|
|
$
|
3.81
|
|
|
$
|
3.44
|
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
|
2.39
|
|
|
1.65
|
|
|
3.81
|
|
|
3.44
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Raytheon
|
|
|
|
|
|
|
|
|
Company common
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
2.38
|
|
|
$
|
1.65
|
|
|
$
|
3.81
|
|
|
$
|
3.44
|
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
|
2.38
|
|
|
1.65
|
|
|
3.81
|
|
|
3.44
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable
to Raytheon Company common
|
|
|
|
|
|
|
|
|
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
710
|
|
|
$
|
504
|
|
|
$
|
1,138
|
|
|
$
|
1,055
|
|
Income (loss) from
discontinued operations, net of tax
|
|
(1)
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Net income
|
|
$
|
709
|
|
|
$
|
505
|
|
|
$
|
1,138
|
|
|
$
|
1,056
|
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
297.3
|
|
|
305.4
|
|
|
298.2
|
|
|
306.8
|
|
Diluted
|
|
297.6
|
|
|
305.7
|
|
|
298.6
|
|
|
307.2
|
|
Attachment
B
|
Raytheon
Company
|
Preliminary Segment
Information
|
Second Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul 16
|
|
28-Jun-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
$
|
1,399
|
|
|
$
|
1,565
|
|
|
$
|
375
|
|
|
$
|
202
|
|
|
26.8%
|
|
12.9%
|
Intelligence,
Information and Services
|
|
1,642
|
|
|
1,594
|
|
|
124
|
|
|
122
|
|
|
7.6%
|
|
7.7%
|
Missile
Systems
|
|
1,656
|
|
|
1,559
|
|
|
223
|
|
|
184
|
|
|
13.5%
|
|
11.8%
|
Space and Airborne
Systems
|
|
1,547
|
|
|
1,416
|
|
|
203
|
|
|
195
|
|
|
13.1%
|
|
13.8%
|
Forcepoint
|
|
138
|
|
|
57
|
|
|
7
|
|
|
(1)
|
|
|
5.1%
|
|
(1.8)%
|
Eliminations
|
|
(326)
|
|
|
(333)
|
|
|
(34)
|
|
|
(36)
|
|
|
|
|
|
Total business
segment
|
|
6,056
|
|
|
5,858
|
|
|
898
|
|
|
666
|
|
|
14.8%
|
|
11.4%
|
Acquisition
Accounting Adjustments
|
|
(21)
|
|
|
(10)
|
|
|
(51)
|
|
|
(32)
|
|
|
|
|
|
FAS/CAS
Adjustment
|
|
—
|
|
|
—
|
|
|
109
|
|
|
49
|
|
|
|
|
|
Corporate
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(35)
|
|
|
|
|
|
Total
|
|
$
|
6,035
|
|
|
$
|
5,848
|
|
|
$
|
960
|
|
|
$
|
648
|
|
|
15.9%
|
|
11.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
$
|
2,736
|
|
|
$
|
2,872
|
|
|
$
|
522
|
|
|
$
|
385
|
|
|
19.1%
|
|
13.4%
|
Intelligence,
Information and Services
|
|
3,135
|
|
|
3,055
|
|
|
224
|
|
|
417
|
|
|
7.1%
|
|
13.6%
|
Missile
Systems
|
|
3,376
|
|
|
3,032
|
|
|
415
|
|
|
391
|
|
|
12.3%
|
|
12.9%
|
Space and Airborne
Systems
|
|
2,997
|
|
|
2,774
|
|
|
376
|
|
|
377
|
|
|
12.5%
|
|
13.6%
|
Forcepoint
|
|
274
|
|
|
81
|
|
|
21
|
|
|
(1)
|
|
|
7.7%
|
|
(1.2)%
|
Eliminations
|
|
(673)
|
|
|
(668)
|
|
|
(67)
|
|
|
(69)
|
|
|
|
|
|
Total business
segment
|
|
11,845
|
|
|
11,146
|
|
|
1,491
|
|
|
1,500
|
|
|
12.6%
|
|
13.5%
|
Acquisition
Accounting Adjustments
|
|
(47)
|
|
|
(10)
|
|
|
(109)
|
|
|
(46)
|
|
|
|
|
|
FAS/CAS
Adjustment
|
|
—
|
|
|
—
|
|
|
214
|
|
|
98
|
|
|
|
|
|
Corporate
|
|
—
|
|
|
—
|
|
|
(24)
|
|
|
(64)
|
|
|
|
|
|
Total
|
|
$
|
11,798
|
|
|
$
|
11,136
|
|
|
$
|
1,572
|
|
|
$
|
1,488
|
|
|
13.3%
|
|
13.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
C
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
|
Other Preliminary
Information
|
|
|
|
|
|
|
|
|
|
Second Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
Funded
Backlog
|
|
Total
Backlog
|
|
|
|
|
3-Jul-16
|
|
31-Dec-15
|
|
3-Jul-16
|
|
31-Dec-15
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
|
|
$
|
8,584
|
|
|
$
|
8,961
|
|
|
$
|
9,959
|
|
|
$
|
10,629
|
|
Intelligence,
Information and Services
|
|
|
2,745
|
|
|
2,933
|
|
|
6,060
|
|
|
6,367
|
|
Missile
Systems
|
|
|
|
8,646
|
|
|
7,998
|
|
|
10,943
|
|
|
10,885
|
|
Space and Airborne
Systems
|
|
|
|
5,691
|
|
|
4,692
|
|
|
7,877
|
|
|
6,309
|
|
Forcepoint
|
|
|
|
469
|
|
|
476
|
|
|
471
|
|
|
479
|
|
Total
|
|
|
|
$
|
26,135
|
|
|
$
|
25,060
|
|
|
$
|
35,310
|
|
|
$
|
34,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
|
|
|
|
|
|
|
|
|
|
|
Total
Bookings
|
|
|
|
$
|
7,118
|
|
|
$
|
7,580
|
|
|
$
|
13,319
|
|
|
$
|
12,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
|
|
|
|
|
|
|
|
|
|
|
Administrative and
selling expenses
|
|
|
$
|
514
|
|
|
$
|
489
|
|
|
$
|
1,066
|
|
|
$
|
962
|
|
Research and
development expenses
|
|
|
181
|
|
|
186
|
|
|
380
|
|
|
328
|
|
Total general and
administrative expenses
|
|
|
$
|
695
|
|
|
$
|
675
|
|
|
$
|
1,446
|
|
|
$
|
1,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
D
|
|
|
|
Raytheon
Company
|
|
Preliminary Balance
Sheet Information
|
|
Second Quarter
2016
|
|
|
|
|
(In
millions)
|
|
|
|
|
3-Jul-16
|
|
31-Dec-15
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
2,016
|
|
|
$
|
2,328
|
|
Short-term
investments
|
703
|
|
|
872
|
|
Contracts in process,
net
|
6,249
|
|
|
5,564
|
|
Inventories
|
671
|
|
|
635
|
|
Prepaid expenses and other
current assets
|
211
|
|
|
413
|
|
Total current assets
|
9,850
|
|
|
9,812
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,028
|
|
|
2,005
|
|
Goodwill
|
14,791
|
|
|
14,731
|
|
Other assets,
net
|
2,429
|
|
|
2,733
|
|
Total assets
|
$
|
29,098
|
|
|
$
|
29,281
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest and Equity
|
|
|
|
Current
liabilities
|
|
|
|
Advance payments and
billings in excess of costs incurred
|
$
|
2,136
|
|
|
$
|
2,193
|
|
Accounts payable
|
1,405
|
|
|
1,402
|
|
Accrued employee
compensation
|
1,113
|
|
|
1,154
|
|
Other current
liabilities
|
1,360
|
|
|
1,377
|
|
Total current liabilities
|
6,014
|
|
|
6,126
|
|
|
|
|
|
Accrued retiree
benefits and other long-term liabilities
|
7,092
|
|
|
7,140
|
|
Long-term
debt
|
5,333
|
|
|
5,330
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
343
|
|
|
355
|
|
|
|
|
|
Equity
|
|
|
|
Raytheon
Company stockholders' equity
|
|
|
|
Common stock
|
3
|
|
|
3
|
|
Additional paid-in
capital
|
—
|
|
|
398
|
|
Accumulated other
comprehensive loss
|
(6,899)
|
|
|
(7,176)
|
|
Retained earnings
|
17,212
|
|
|
16,903
|
|
Total Raytheon Company stockholders' equity
|
10,316
|
|
|
10,128
|
|
Noncontrolling interests in
subsidiaries
|
—
|
|
|
202
|
|
Total equity
|
10,316
|
|
|
10,330
|
|
Total liabilities, redeemable noncontrolling interest and
equity
|
$
|
29,098
|
|
|
$
|
29,281
|
|
Attachment
E
|
|
|
|
Raytheon
Company
|
|
Preliminary Cash Flow
Information
|
|
|
|
Second Quarter
2016
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
(In
millions)
|
3-Jul-16
|
|
28-Jun-15
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
|
1,109
|
|
|
$
|
1,057
|
|
(Income) loss from
discontinued operations, net of tax
|
—
|
|
|
(1)
|
|
Income from
continuing operations
|
1,109
|
|
|
1,056
|
|
Adjustments to
reconcile to net cash provided by (used in) operating activities
from
continuing operations, net of acquisitions and
divestitures
|
|
|
|
Depreciation and
amortization
|
247
|
|
|
223
|
|
Stock-based
compensation
|
89
|
|
|
87
|
|
Gain on sale of
equity method investment
|
(158)
|
|
|
—
|
|
Deferred income
taxes
|
(67)
|
|
|
(232)
|
|
Tax benefit from
stock-based awards
|
—
|
|
|
(42)
|
|
Changes in assets and
liabilities
|
|
|
|
Contracts in process,
net and advance payments and billings in excess of costs
incurred
|
(734)
|
|
|
(795)
|
|
Inventories
|
(35)
|
|
|
(106)
|
|
Prepaid expenses and
other current assets
|
155
|
|
|
29
|
|
Income taxes
receivable/payable
|
64
|
|
|
92
|
|
Accounts
payable
|
49
|
|
|
(99)
|
|
Accrued employee
compensation
|
(43)
|
|
|
(117)
|
|
Other current
liabilities
|
(76)
|
|
|
13
|
|
Accrued retiree
benefits
|
445
|
|
|
408
|
|
Other, net
|
26
|
|
|
(86)
|
|
Net cash provided by
(used in) operating activities from continuing
operations
|
1,071
|
|
|
431
|
|
Net cash provided by
(used in) operating activities from discontinued
operations
|
—
|
|
|
1
|
|
Net cash provided by
(used in) operating activities
|
1,071
|
|
|
432
|
|
Cash flows from
investing activities
|
|
|
|
Additions to
property, plant and equipment
|
(237)
|
|
|
(143)
|
|
Proceeds from sales
of property, plant and equipment
|
1
|
|
|
19
|
|
Additions to
capitalized internal use software
|
(26)
|
|
|
(26)
|
|
Purchases of
short-term investments
|
(472)
|
|
|
(148)
|
|
Sales of short-term
investments
|
—
|
|
|
209
|
|
Maturities of
short-term investments
|
599
|
|
|
774
|
|
Payments for
purchases of acquired companies, net of cash received
|
(57)
|
|
|
(1,892)
|
|
Other
|
6
|
|
|
(15)
|
|
Net cash provided by
(used in) investing activities
|
(186)
|
|
|
(1,222)
|
|
Cash flows from
financing activities
|
|
|
|
Dividends
paid
|
(419)
|
|
|
(391)
|
|
Repurchases of common
stock under share repurchase programs
|
(602)
|
|
|
(500)
|
|
Repurchases of common
stock to satisfy tax withholding obligations
|
(92)
|
|
|
(96)
|
|
Acquisition of
noncontrolling interest in RCCS LLC
|
(90)
|
|
|
—
|
|
Contribution from
noncontrolling interests in Forcepoint
|
11
|
|
|
—
|
|
Tax benefit from
stock-based awards
|
—
|
|
|
42
|
|
Sale of
noncontrolling interest in Forcepoint
|
—
|
|
|
343
|
|
Other
|
(5)
|
|
|
(2)
|
|
Net cash provided by
(used in) financing activities
|
(1,197)
|
|
|
(604)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(312)
|
|
|
(1,394)
|
|
Cash and cash
equivalents at beginning of the year
|
2,328
|
|
|
3,222
|
|
Cash and cash
equivalents at end of period
|
$
|
2,016
|
|
|
$
|
1,828
|
|
Attachment
F
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
Supplemental EPS
Information
|
|
|
|
|
|
|
|
Second Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
3-Jul-16
|
|
28-Jun-15
|
|
3-Jul-16
|
|
28-Jun-15
|
Per share impact of
the FAS/CAS Adjustment (A)
|
$
|
0.24
|
|
|
$
|
0.10
|
|
|
$
|
0.47
|
|
|
$
|
0.21
|
|
Per share impact of
the TRS transaction (B)
|
0.53
|
|
|
—
|
|
|
0.53
|
|
|
—
|
|
Per share impact
of adoption of new accounting
standard for stock compensation
(C)
|
0.10
|
|
|
—
|
|
|
0.15
|
|
|
—
|
|
Per share impact of
the IRS tax settlement (D)
|
—
|
|
|
0.29
|
|
|
—
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
FAS/CAS
Adjustment
|
$
|
109
|
|
|
$
|
49
|
|
|
$
|
214
|
|
|
$
|
98
|
|
|
|
Tax effect (at 35%
statutory rate)
|
(38)
|
|
|
(17)
|
|
|
(75)
|
|
|
(34)
|
|
|
After-tax
impact
|
71
|
|
|
32
|
|
|
139
|
|
|
64
|
|
|
Diluted
shares
|
297.6
|
|
|
305.7
|
|
|
298.6
|
|
|
307.2
|
|
|
Per share
impact
|
$
|
0.24
|
|
|
$
|
0.10
|
|
|
$
|
0.47
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(B)
|
TRS
transaction
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
Diluted
shares
|
|
297.6
|
|
|
—
|
|
|
298.6
|
|
|
—
|
|
|
Per share
impact
|
|
$
|
0.53
|
|
|
$
|
—
|
|
|
$
|
0.53
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(C)
|
Adoption of new
accounting standard for stock compensation
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
Diluted
shares
|
297.6
|
|
|
—
|
|
|
298.6
|
|
|
—
|
|
|
Per share
impact
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
0.15
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(D)
|
IRS tax
settlement
|
$
|
—
|
|
|
$
|
88
|
|
|
$
|
—
|
|
|
$
|
88
|
|
|
Diluted
shares
|
—
|
|
|
305.7
|
|
|
—
|
|
|
307.2
|
|
|
Per share
impact
|
$
|
—
|
|
|
$
|
0.29
|
|
|
$
|
—
|
|
|
$
|
0.29
|
|
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Corinne
Kovalsky
781.522.5899
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/raytheon-reports-strong-second-quarter-2016-results-300305435.html
SOURCE Raytheon Company