EX-99.1 2 rtn-07272017xexhibit991x8k.htm PRESS RELEASE Exhibit
Exhibit 99.1

rtnlogo1a01a06a01a10.jpg
 
 
Raytheon Company
rtnline1a01a06a01a11.jpg
 
 
Global Headquarters
 
 
Waltham, Mass.
 
 
 
 
 
Investor Relations Contact
 
 
Todd Ernst
 
 
 
781.522.5141
 
 
 
 
 
 
 
Media Contact
 
 
 
Corinne Kovalsky
 
 
 
781.522.5899
For Immediate Release

Raytheon Reports Strong Second Quarter 2017 Results

•
Bookings of $6.5 billion; backlog of $36.2 billion
•
Net sales of $6.3 billion, up 4.2 percent
•
EPS from continuing operations of $1.89
•
Operating cash flow from continuing operations of $782 million
•
Increased full-year 2017 guidance for sales and EPS
__________________________________________________________________________________________________

WALTHAM, Mass., (July 27, 2017) - Raytheon Company (NYSE: RTN) today announced net sales for the second quarter 2017 of $6.3 billion, up 4.2 percent compared to $6.0 billion in the second quarter 2016. Second quarter 2017 EPS from continuing operations was $1.89 compared to $2.41 in the second quarter 2016. Second quarter 2017 EPS from continuing operations included a $0.09 charge associated with the early retirement of debt. Second quarter 2016 EPS from continuing operations included a tax-free gain of $0.53 related to the previously disclosed ThalesRaytheonSystems (TRS) transaction.
“Global customer demand for our advanced capabilities continues to drive growth, resulting in stronger than expected bookings, sales, EPS and operating cash flow for the quarter and supporting increased guidance for the year,” said Thomas A. Kennedy, Raytheon Chairman and CEO. “I am very proud of the Raytheon team and our continued strong operating performance as we serve the needs of our global customers and shareholders.”
Operating cash flow from continuing operations for the second quarter 2017 was $782 million compared to $746 million for the second quarter 2016.


1

Summary Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
%
 
Six Months
 
%
($ in millions, except per share data)
2017
 
2016
 
Change
 
2017
 
2016
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
$
6,532

 
$
7,103

 
-8.0%
 
$
12,220

 
$
13,304

 
-8.1%
Net Sales
$
6,281

 
$
6,029

 
4.2%
 
$
12,281

 
$
11,831

 
3.8%
Income from Continuing Operations attributable to Raytheon Company
$
553

1 
$
718

2 
-23.0%
 
$
1,056

1 
$
1,145

2 
-7.8%
EPS from Continuing Operations
$
1.89

1 
$
2.41

2 
-21.6%
 
$
3.62

1 
$
3.83

2 
-5.5%
Operating Cash Flow from Continuing Operations
$
782

 
$
746

 
 
 
$
741

 
$
1,071

 
 
Workdays in Fiscal Reporting Calendar
64

 
64

 
 
 
128

 
129

 
 
1 Second quarter and six months 2017 Income from Continuing Operations attributable to Raytheon Company and EPS from Continuing Operations included the $25 million after-tax ($39 million pretax) and $0.09 unfavorable impact, respectively, related to the early retirement of debt in the second quarter 2017.
2 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 second quarter 2016 TRS transaction.
 
 
 
 
 
 
 
 
 
 
 
 
Bookings in the second quarter 2017 were $6.5 billion compared to $7.1 billion in the second quarter 2016.
Backlog
 
 
 
 
 
 
 Period Ending
($ in millions)
Q2 2017
 
Q2 2016
 
2016
Backlog
$
36,168

 
$
35,038

 
$
36,709

Backlog at the end of the second quarter 2017 was $36.2 billion, an increase of approximately $1.1 billion compared to the second quarter 2016.
In the second quarter 2017, the company repurchased 0.6 million shares of common stock for $100 million. Year-to-date 2017, the company repurchased 3.3 million shares of common stock for $500 million.
As previously announced, the company repurchased $591 million of debt that was due in March and December of 2018. As a result, in the second quarter of 2017, the company recorded a non-operating charge of $25 million after-tax ($39 million pretax) or $0.09 per share associated with the early retirement of this debt.
Outlook
The company has updated its financial outlook for 2017 and increased guidance for sales and EPS. Charts containing additional information on the company's 2017 outlook are available at www.raytheon.com/ir.

2

2017 Financial Outlook
 
 
 
 
Current
 
Prior (4/27/17)
Net Sales ($B)
25.1 - 25.6*
 
24.9 - 25.4
Deferred Revenue Adjustment ($M)1
(33)
 
(33)
Amortization of Acquired Intangibles ($M)1
(127)
 
(127)
FAS/CAS Adjustment ($M)
428
 
428
Interest Expense, net ($M)
 (196) - (201)
 
 (196) - (201)
Diluted Shares (M)
~292*
 
291 - 293
Effective Tax Rate
 ~30.5%*
 
 ~31.0%
EPS from Continuing Operations
$7.35 - $7.50*
 
$7.25 - $7.40
Operating Cash Flow from Continuing Operations ($B)
 2.8 - 3.1
 
 2.8 - 3.1
*Denotes change from prior guidance
1 Deferred Revenue Adjustment and Amortization of Acquired 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 ForcepointTM.
Integrated Defense Systems
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Net Sales
$
1,462

 
$
1,399

 
5%
 
$
2,860

 
$
2,735

 
5%
Operating Income1
$
245

 
$
376

 
NM
 
$
457

 
$
522

 
NM
Operating Margin1
16.8
%
 
26.9
%
 
 
 
16.0
%
 
19.1
%
 
 
1 Second quarter 2016 and six months 2016 operating income and operating margin include the $158 million tax-free gain from the second quarter TRS transaction.
NM = Not Meaningful
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems (IDS) had second quarter 2017 net sales of $1,462 million, up 5 percent compared to $1,399 million in the second quarter 2016. The increase in net sales for the quarter was primarily driven by higher net sales on an international early warning radar program awarded in the first quarter 2017.
IDS recorded $245 million of operating income in the second quarter 2017 compared to $376 million in the second quarter 2016. The second quarter 2016 included the tax-free gain of $158 million from the TRS transaction as previously disclosed, which had an approximate 1,130 basis points (11.3 percent) impact to IDS operating margin.
During the quarter, IDS booked $364 million on the Air and Missile Defense Radar (AMDR) program for the U.S. Navy and $146 million on the Multi-Function RF System (MFRFS) program for the U.S. Army. IDS also booked $178 million on two international Patriot contracts.


3

Intelligence, Information and Services
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Net Sales
$
1,555

 
$
1,587

 
-2%
 
$
3,062

 
$
3,119

 
-2%
Operating Income
$
115

 
$
120

 
-4%
 
$
226

 
$
224

 
1%
Operating Margin
7.4
%
 
7.6
%
 
 
 
7.4
%
 
7.2
%
 
 
Intelligence, Information and Services (IIS) had second quarter 2017 net sales of $1,555 million compared to $1,587 million in the second quarter 2016.
IIS recorded $115 million of operating income in the second quarter 2017 compared to $120 million in the second quarter 2016.
During the quarter, IIS booked $374 million on domestic and foreign training programs in support of Warfighter FOCUS activities. IIS also booked $555 million on a number of classified contracts.
Missile Systems
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Net Sales
$
1,901

 
$
1,706

 
11%
 
$
3,657

 
$
3,429

 
7%
Operating Income
$
236

 
$
233

 
1%
 
$
452

 
$
425

 
6%
Operating Margin
12.4
%
 
13.7
%
 
 
 
12.4
%
 
12.4
%
 
 
Missile Systems (MS) had second quarter 2017 net sales of $1,901 million, up 11 percent compared to $1,706 million in the second quarter 2016. The increase in net sales for the quarter was primarily driven by higher net sales on the Standard Missile-2 (SM-2), Standard Missile-3 (SM-3®), and Paveway™ programs.
MS recorded $236 million of operating income in the second quarter 2017 compared to $233 million in the second quarter 2016. The change in operating margin was primarily due to a change in program mix.
During the quarter, MS booked $690 million for Paveway, $619 million for SM-2, $436 million for SM-3, $116 million for the Long Range Precision Fires (LRPF) Missile system, $113 million for AIM-9X Sidewinder™ short-range air-to-air missiles, and $90 million for Advanced Medium-Range Air-to-Air Missiles (AMRAAM®). MS also booked $214 million on a number of classified contracts.
Space and Airborne Systems
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Net Sales
$
1,608

 
$
1,547

 
4%
 
$
3,163

 
$
2,992

 
6%
Operating Income
$
218

 
$
205

 
6%
 
$
408

 
$
372

 
10%
Operating Margin
13.6
%
 
13.3
%
 
 
 
12.9
%
 
12.4
%
 
 
Space and Airborne Systems (SAS) had second quarter 2017 net sales of $1,608 million, up 4 percent compared to $1,547 million in the second quarter 2016. The increase in net sales for the quarter was primarily driven by higher net sales on a domestic classified program.

4

SAS recorded $218 million of operating income in the second quarter 2017 compared to $205 million in the second quarter 2016. The increase in operating income for the quarter was primarily driven by higher volume and a favorable change in mix and other performance.
During the quarter, SAS booked $91 million for radar components for the U.S. Navy. SAS also booked $137 million on a number of classified contracts.
Forcepoint
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Net Sales
$
138

 
$
137

 
1%
 
$
282

 
$
276

 
2%
Operating Income
$
2

 
$
10

 
-80%
 
$
18

 
$
28

 
-36%
Operating Margin
1.4
%
 
7.3
%
 
 
 
6.4
%
 
10.1
%
 
 
Forcepoint had second quarter 2017 net sales of $138 million compared to $137 million in the second quarter 2016.
Forcepoint recorded $2 million of operating income in the second quarter 2017 compared to $10 million in the second quarter 2016. The decrease in operating income for the quarter was primarily driven by planned investments in sales and marketing.

About Raytheon
Raytheon Company, with 2016 sales of $24 billion and 63,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 95 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 2017 Financial Results
Raytheon's financial results conference call will be held on Thursday, July 27, 2017 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) 202-3048 in the U.S. or (617) 213-8843 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.




5

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 and potential termination of contracts; 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 ability to recruit and retain qualified personnel; the impact of potential security and cyber threats, and other disruptions; the risk that actual pension returns, discount rates or other actuarial assumptions, including the long-term return on asset assumption, are significantly different than the company's current 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.

# # #

6

Attachment A
 
 
 
 
 
 
 
 
Raytheon Company
 

 
 
 
 
Preliminary Statement of Operations Information
 
 
 
 
 
 
 
 
Second Quarter 2017
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
 
 
 
 
 
 
 
 
Net sales
 
$
6,281

 
$
6,029

 
$
12,281

 
$
11,831

Operating expenses
 
 
 
 
 
 
 
 
Cost of sales
 
4,685

 
4,362

 
9,215

 
8,803

General and administrative expenses
 
747

 
695

 
1,476

 
1,443

Total operating expenses
 
5,432

 
5,057

 
10,691

 
10,246

Operating income
 
849

 
972

 
1,590

 
1,585

Non-operating (income) expense, net
 
 
 
 
 
 
 
 
Interest expense
 
51

 
58

 
109

 
116

Interest income
 
(5
)
 
(4
)
 
(10
)
 
(8
)
Other (income) expense, net
 
35

 
(1
)
 
28

 
(3
)
Total non-operating (income) expense, net
 
81

 
53

 
127

 
105

Income from continuing operations before taxes
 
768

 
919

 
1,463

 
1,480

Federal and foreign income taxes
 
221

 
205

 
419

 
362

Income from continuing operations
 
547

 
714

 
1,044

 
1,118

Income (loss) from discontinued operations, net of tax
 
—

 
(1
)
 
3

 
—

Net income
 
547

 
713

 
1,047

 
1,118

Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
 
(6
)
 
(4
)
 
(12
)
 
(27
)
Net income attributable to Raytheon Company
 
$
553

 
$
717

 
$
1,059

 
$
1,145

 
 
 
 
 
 
 
 
 
Basic earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.90

 
$
2.41

 
$
3.62

 
$
3.84

Income (loss) from discontinued operations, net of tax
 
—

 
—

 
0.01

 
—

Net income
 
1.90

 
2.41

 
3.63

 
3.84

 
 
 
 
 
 
 
 
 
Diluted earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.89

 
$
2.41

 
$
3.62

 
$
3.83

Income (loss) from discontinued operations, net of tax
 
—

 
—

 
0.01

 
—

Net income
 
1.89

 
2.41

 
3.63

 
3.84

 
 
 
 
 
 
 
 
 
Amounts attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
553

 
$
718

 
$
1,056

 
$
1,145

Income (loss) from discontinued operations, net of tax
 
—

 
(1
)
 
3

 
—

Net income
 
$
553

 
$
717

 
$
1,059

 
$
1,145

 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
Basic
 
291.7

 
297.3

 
292.1

 
298.2

Diluted
 
292.0

 
297.6

 
292.4

 
298.6





Attachment B
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 

 
 
Preliminary Segment Information
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter 2017
 
 
 
 
 
 
 
 
 
 
 
 
(In millions, except percentages)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
 
 
Three Months Ended
 
Three Months Ended
 
Three Months Ended
 
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
1,462

 
$
1,399

 
$
245

 
$
376

 
16.8
%
 
26.9
%
Intelligence, Information and Services
 
1,555

 
1,587

 
115

 
120

 
7.4
%
 
7.6
%
Missile Systems
 
1,901

 
1,706

 
236

 
233

 
12.4
%
 
13.7
%
Space and Airborne Systems
 
1,608

 
1,547

 
218

 
205

 
13.6
%
 
13.3
%
Forcepoint
 
138

 
137

 
2

 
10

 
1.4
%
 
7.3
%
Eliminations
 
(372
)
 
(326
)
 
(37
)
 
(34
)
 


 


Total business segment
 
6,292

 
6,050

 
779

 
910

 
12.4
%
 
15.0
%
Acquisition Accounting Adjustments
 
(11
)
 
(21
)
 
(42
)
 
(51
)
 
 
 
 
FAS/CAS Adjustment
 
—

 
—

 
109

 
109

 
 
 
 
Corporate
 
—

 
—

 
3

 
4

 
 
 
 
Total
 
$
6,281

 
$
6,029

 
$
849

 
$
972

 
13.5
%
 
16.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
 
 
Six Months Ended
 
Six Months Ended
 
Six Months Ended
 
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
2,860

 
$
2,735

 
$
457

 
$
522

 
16.0
%
 
19.1
%
Intelligence, Information and Services
 
3,062

 
3,119

 
226

 
224

 
7.4
%
 
7.2
%
Missile Systems
 
3,657

 
3,429

 
452

 
425

 
12.4
%
 
12.4
%
Space and Airborne Systems
 
3,163

 
2,992

 
408

 
372

 
12.9
%
 
12.4
%
Forcepoint
 
282

 
276

 
18

 
28

 
6.4
%
 
10.1
%
Eliminations
 
(722
)
 
(673
)
 
(74
)
 
(67
)
 
 
 
 
Total business segment
 
12,302

 
11,878

 
1,487

 
1,504

 
12.1
%
 
12.7
%
Acquisition Accounting Adjustments
 
(21
)
 
(47
)
 
(84
)
 
(109
)
 
 
 
 
FAS/CAS Adjustment
 
—

 
—

 
217

 
214

 
 
 
 
Corporate
 
—

 
—

 
(30
)
 
(24
)
 
 
 
 
Total
 
$
12,281

 
$
11,831

 
$
1,590

 
$
1,585

 
12.9
%
 
13.4
%

 


Attachment C
 
 
 
 
 
 
 
 
 
Raytheon Company

 
 
 
 
Other Preliminary Information
 
 
 
 
 
 
 
 
 
Second Quarter 2017
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Backlog
 
 
 
 
 
 
2-Jul-17
 
31-Dec-16
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
$
10,055

 
$
10,159

Intelligence, Information and Services
 
 
 
 
 
5,908

 
5,662

Missile Systems
 
 
 
 
 
 
11,382

 
11,568

Space and Airborne Systems
 
 
 
 
 
 
8,398

 
8,834

Forcepoint
 
 
 
 
 
 
425

 
486

Total backlog
 
 
 
 
 
 
$
36,168

 
$
36,709

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
Bookings
 
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
 
 
 
 
 
 
 
 
 
Total bookings
 
 
$
6,532

 
$
7,103

 
$
12,220

 
$
13,304

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
General and Administrative Expenses
 
 
2-Jul-17
 
3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
 
 
 
 
 
 
 
 
 
Administrative and selling expenses
 
$
547

 
$
514

 
$
1,105

 
$
1,063

Research and development expenses
 
200

 
181

 
371

 
380

Total general and administrative expenses
 
$
747

 
$
695

 
$
1,476

 
$
1,443

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash, Cash Equivalents and Restricted Cash
 
 
 
 
 
 
2-Jul-17
 
31-Dec-16
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
$
2,167

 
$
3,303

Restricted cash
 
 
 
8

 
—

Total cash, cash equivalents and restricted cash shown in Attachment E
 
 
 
$
2,175

 
$
3,303





Attachment D
 
 
 
Raytheon Company

Preliminary Balance Sheet Information
 
Second Quarter 2017
(In millions)
 
 
 
 
 
 
 
 
2-Jul-17
 
31-Dec-16
 
 
 
 
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
2,167

 
$
3,303

Short-term investments
410

 
100

Receivables, net
1,560

 
1,163

Contract assets
5,728

 
5,041

Inventories
581

 
608

Prepaid expenses and other current assets
491

 
670

Total current assets
10,937

 
10,885

 
 
 
 
Property, plant and equipment, net
2,172

 
2,166

Goodwill
14,827

 
14,788

Other assets, net
2,293

 
2,399

Total assets
$
30,229

 
$
30,238

 
 
 
 
Liabilities, Redeemable Noncontrolling Interest and Equity
 
 
 
Current liabilities
 
 
 
Commercial paper
$
300

 
$
—

Contract liabilities
2,704

 
2,646

Accounts payable
1,278

 
1,520

Accrued employee compensation
1,179

 
1,234

Other current liabilities
1,126

 
1,139

Total current liabilities
6,587

 
6,539

 
 
 
 
Accrued retiree benefits and other long-term liabilities
7,731

 
7,758

Long-term debt
4,747

 
5,335

 
 
 
 
Redeemable noncontrolling interest
349

 
449

 
 
 
 
Equity
 
 
 
Raytheon Company stockholders' equity
 
 
 
Common stock
3

 
3

Additional paid-in capital
—

 
—

Accumulated other comprehensive loss
(6,994
)
 
(7,411
)
Retained earnings
17,806

 
17,565

Total Raytheon Company stockholders' equity
10,815

 
10,157

Noncontrolling interests in subsidiaries
—

 
—

Total equity
10,815

 
10,157

Total liabilities, redeemable noncontrolling interest and equity
$
30,229

 
$
30,238



Attachment E
 
 
 
Raytheon Company

Preliminary Cash Flow Information
 
 
 
Second Quarter 2017
 
 
 
(In millions)
 
 
 
 
Six Months Ended
 
2-Jul-17
 
3-Jul-16
 
 
 
 
Cash flows from operating activities
 
 
 
Net income
$
1,047

 
$
1,118

(Income) loss from discontinued operations, net of tax
(3
)
 
—

Income from continuing operations
1,044

 
1,118

Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of the effect of acquisitions and divestitures
 
 
 
Depreciation and amortization
263

 
247

Stock-based compensation
92

 
89

Gain on sale of equity method investment
—

 
(158
)
Loss on repayment of long-term debt
39

 
—

Deferred income taxes
(105
)
 
(53
)
Changes in assets and liabilities
 
 
 
Receivables, net
(393
)
 
(250
)
Contract assets and contract liabilities
(622
)
 
(492
)
Inventories
27

 
(14
)
Prepaid expenses and other current assets
112

 
130

Income taxes receivable/payable
99

 
64

Accounts payable
(238
)
 
49

Accrued employee compensation
(54
)
 
(43
)
Other current liabilities
(25
)
 
(76
)
Accrued retiree benefits
564

 
445

Other, net
(62
)
 
15

Net cash provided by (used in) operating activities
741

 
1,071

Cash flows from investing activities
 
 
 
Additions to property, plant and equipment
(181
)
 
(237
)
Proceeds from sales of property, plant and equipment
31

 
1

Additions to capitalized internal use software
(33
)
 
(26
)
Purchases of short-term investments
(399
)
 
(472
)
Maturities of short-term investments
100

 
599

Payments for purchases of acquired companies, net of cash received
(39
)
 
(57
)
Other
(1
)
 
6

Net cash provided by (used in) investing activities
(522
)
 
(186
)
Cash flows from financing activities
 
 
 
Dividends paid
(447
)
 
(419
)
Net borrowings (payments) on commercial paper
300

 
—

Repayments of long-term debt
(591
)
 
—

Loss on repayment of long-term debt
(38
)
 
—

Repurchases of common stock under share repurchase programs
(500
)
 
(602
)
Repurchases of common stock to satisfy tax withholding obligations
(79
)
 
(92
)
Acquisition of noncontrolling interest in RCCS LLC
—

 
(90
)
Contribution from noncontrolling interests in Forcepoint
8

 
11

Other
—

 
(5
)
Net cash provided by (used in) financing activities
(1,347
)
 
(1,197
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(1,128
)
 
(312
)
Cash, cash equivalents and restricted cash at beginning of the year
3,303

 
2,328

Cash, cash equivalents and restricted cash at end of period
$
2,175

 
$
2,016



Attachment F

 
 
 
 
Raytheon Company
 
 
 
 
 
 
 
Supplemental EPS Information
 
 
 
 
 
 
 
 
Second Quarter 2017
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
2-Jul-17

3-Jul-16
 
2-Jul-17
 
3-Jul-16
 
 
 
 
 
 
 
 
Per share impact of early debt retirement (A)
$
0.09

 
$
—

 
$
0.09

 
$
—

Per share impact of TRS transaction (B)
—

 
0.53

 
—

 
0.53

 
 
 
 
 
 
 
 
 
 
 
 
(A)
Early debt retirement
$
39

 
$
—

 
$
39

 
$
—

 
 
Tax effect (at 35% statutory rate)
(14
)
 
—

 
(14
)
 
—

 
After-tax impact
25

 
—

 
25

 
—

 
Diluted shares
292.0

 
—

 
292.4

 
—

 
Per share impact
$
0.09

 
$
—

 
$
0.09

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
(B)
TRS transaction
 
$
—

 
$
158

 
$
—

 
$
158

 
Diluted shares
 
—

 
297.6

 
—

 
298.6

 
Per share impact
 
$
—

 
$
0.53

 
$
—

 
$
0.53