Exhibit 99.1

rtnlogo1a01a06a01a23.jpg
 
 
Raytheon Company
rtnline1a01a06a01a22.jpg
 
 
Global Headquarters
 
 
Waltham, Mass.
 
 
 
 
 
Investor Relations Contact
 
 
Kelsey DeBriyn
 
 
 
781.522.5141
 
 
 
 
 
 
 
Media Contact
 
 
 
Corinne Kovalsky
 
 
 
781.522.5899
For Immediate Release

Raytheon Reports Strong Second Quarter 2018 Results

Strong bookings of $8.7 billion; book-to-bill ratio of 1.31
Net sales of $6.6 billion, up 5.5 percent
EPS from continuing operations of $2.78, up 47.1 percent
Operating cash flow from continuing operations of $1.2 billion
Updated full-year 2018 guidance
__________________________________________________________________________________________________

WALTHAM, Mass., (July 26, 2018) - Raytheon Company (NYSE: RTN) today announced net sales for the second quarter 2018 of $6.6 billion, up 5.5 percent compared to $6.3 billion in the second quarter 2017. Second quarter 2018 EPS from continuing operations was $2.78 compared to $1.89 in the second quarter 2017. The increase in the second quarter 2018 EPS from continuing operations was primarily driven by lower taxes associated with tax reform, and the impact of a $1.25 billion pretax discretionary pension contribution that the company will make by September 15, 2018, using cash on hand. This discretionary contribution had a favorable tax-related EPS impact of $0.33 in the second quarter 2018 and was not included in the prior guidance.
“Raytheon delivered strong bookings, sales growth, EPS and cash generation in the second quarter,” said Thomas A. Kennedy, Raytheon Chairman and CEO. “The strength of our bookings and record backlog demonstrate the company is well positioned for future growth.”
Operating cash flow from continuing operations for the second quarter 2018 was $1,156 million compared to $782 million for the second quarter 2017. The increase in operating cash flow from continuing operations in the second quarter 2018 was primarily due to favorable collections and lower net cash taxes.
In the second quarter 2018, the company repurchased 1.9 million shares of common stock for $400 million. Year-to-date 2018, the company repurchased 3.8 million shares of common stock for $800 million.
The company had bookings of $8.7 billion in the second quarter 2018, resulting in a book-to-to bill ratio of 1.31. Second quarter 2017 bookings were $6.5 billion.


1


Summary Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
%
 
Six Months
 
%
($ in millions, except per share data)
2018
 
2017
 
Change
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
$
8,694

 
$
6,532

 
33.1%
 
$
15,005

 
$
12,220

 
22.8%
Net Sales
$
6,625

 
$
6,281

 
5.5%
 
$
12,892

 
$
12,281

 
5.0%
Income from Continuing Operations attributable to Raytheon Company
$
799

 
$
553

 
44.5%
 
$
1,433

 
$
1,056

 
35.7%
EPS from Continuing Operations
$
2.78

 
$
1.89

 
47.1%
 
$
4.98

 
$
3.62

 
37.6%
Operating Cash Flow from Continuing Operations
$
1,156

 
$
782

 
 
 
$
1,439

 
$
741

 
 
Workdays in Fiscal Reporting Calendar
64

 
64

 
 
 
128

 
128

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Backlog at the end of the second quarter 2018 was a record $39.9 billion, an increase of approximately $3.7 billion or 10.3 percent compared to the end of the second quarter 2017.
Backlog
 
 
 
 
 
 
 Period Ending
($ in millions)
Q2 2018
 
Q2 2017
 
2017
Backlog
$
39,881

 
$
36,168

 
$
38,210

Outlook
The company has updated its financial outlook for 2018 for operating performance, pension, tax-related and other items. In addition to the impact of the discretionary pension plan contribution discussed above, some of the company’s pension plans purchased a group annuity contract on July 17, 2018 to transfer $923 million of outstanding pension benefit obligations related to certain U.S. retirees and beneficiaries of the company’s previously discontinued operations. In connection with this transaction, the company will recognize an unfavorable non-cash, non-operating pension settlement charge of $288 million pretax, $228 million after tax, in the third quarter 2018 primarily related to the accelerated recognition of actuarial losses in those plans. This will have an estimated unfavorable EPS impact of $0.79 in the third quarter and full-year 2018, and was not included in the prior guidance.
The company also decreased its effective tax rate to reflect the discretionary pension plan contribution and the pension plan annuity transaction discussed above, as well as other tax improvements.
Charts containing additional information on the company’s 2018 outlook are available on the company’s website.


2


2018 Financial Outlook
 
 
 
 
Current
 
Prior (4/26/18)
Net Sales ($B)
26.7 - 27.2*
 
26.5 - 27.0
Deferred Revenue Adjustment ($M)
(10)
 
(10)
Amortization of Acquired Intangibles ($M)
(118)
 
(118)
FAS/CAS Operating Adjustment ($M)
1,416
 
1,416
Retirement Benefits Non-service Expense, non-operating ($M)1
(1,246)*
 
(958)
Interest Expense, net ($M)
 (180) - (185)
 
 (180) - (185)
Diluted Shares (M)
~287*
 
287 - 289
Effective Tax Rate2
 ~10.5%*
 
 ~18.0%
EPS from Continuing Operations1, 3
$9.77 - $9.97*
 
$9.70 - $9.90
Operating Cash Flow from Continuing Operations ($B)3
 2.6 - 3.0*
 
 3.6 - 4.0
*Denotes change from prior guidance
 
 
 
1Some of the company’s pension plans purchased a group annuity contract to transfer $923 million of outstanding pension benefit obligations related to certain U.S. retirees and beneficiaries of the company’s previously discontinued operations. This transaction closed on July 17, 2018. In connection with this transaction, the company will recognize an unfavorable non-cash, non-operating pension settlement charge of $288 million pretax, $228 million after tax, in the third quarter 2018 primarily related to the accelerated recognition of actuarial losses in those plans. This will have an estimated unfavorable EPS impact of $0.79 in the third quarter and full-year 2018. The outlook above reflects this change.
2The company decreased its effective tax rate to reflect a) the discretionary pension plan contribution, which had a favorable impact to the 2018 effective tax rate of 310 bps, b) the pension plan annuity transaction, which had a favorable impact to the 2018 effective tax rate of 30 bps, and c) other tax improvements, which had a favorable impact to the 2018 effective tax rate of 410 bps. The outlook above reflects this change.
3The company will make a $1.25 billion pretax discretionary pension plan contribution by September 15, 2018. As a result, the company recorded a $95 million net tax benefit in the second quarter of 2018, which had a favorable EPS impact of $0.33. In addition, the company expects to have a net unfavorable impact to 2018 operating cash flow from continuing operations of approximately $1.0 billion, consisting of approximately $250 million of lower cash taxes in the second quarter of 2018 and $1.25 billion for the discretionary pension plan contribution in the third quarter 2018. The outlook above reflects this change.
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)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
1,514

 
$
1,462

 
4%
 
$
3,003

 
$
2,860

 
5%
Operating Income
$
262

 
$
245

 
7%
 
$
535

 
$
457

 
17%
Operating Margin
17.3
%
 
16.8
%
 
 
 
17.8
%
 
16.0
%
 
 
Integrated Defense Systems (IDS) had second quarter 2018 net sales of $1,514 million, up 4 percent compared to $1,462 million in the second quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales from an international Patriot® program awarded in the first quarter 2018.
IDS recorded $262 million of operating income in the second quarter 2018 compared to $245 million in the second quarter 2017. The increase in operating income for the quarter was primarily driven by a favorable change in program mix and higher net program efficiencies.
During the quarter, IDS booked $329 million to provide advanced Patriot air and missile defense capabilities for Romania; $274 million for the Collins class submarine program for the Royal Australian Navy; $148 million on the Air and Missile Defense Radar (AMDR) program for the U.S. Navy; $95 million on the Multi-Function RF System (MFRFS) program for the U.S. Army; and $83 million for the Barracuda mine neutralization system for the U.S. Navy.


3


Intelligence, Information and Services
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
1,687

 
$
1,555

 
8%
 
$
3,269

 
$
3,062

 
7%
Operating Income
$
128

 
$
115

 
11%
 
$
245

 
$
226

 
8%
Operating Margin
7.6
%
 
7.4
%
 
 
 
7.5
%
 
7.4
%
 
 
Intelligence, Information and Services (IIS) had second quarter 2018 net sales of $1,687 million, up 8 percent compared to $1,555 million in the second quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs, the Development, Operations and Maintenance (DOMino) cyber program, and the Air and Space Operations Center Weapon System (AOC WS) program.
IIS recorded $128 million of operating income in the second quarter 2018 compared to $115 million in the second quarter 2017. The increase in operating income for the quarter was primarily driven by a favorable change in program mix.
During the quarter, IIS booked $802 million on a number of classified contracts. IIS also booked $298 million on domestic and foreign training programs in support of Warfighter FOCUS activities.
Missile Systems
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
2,051

 
$
1,901

 
8%
 
$
3,899

 
$
3,657

 
7%
Operating Income
$
231

 
$
236

 
(2)%
 
$
443

 
$
452

 
(2)%
Operating Margin
11.3
%
 
12.4
%
 
 
 
11.4
%
 
12.4
%
 
 
Missile Systems (MS) had second quarter 2018 net sales of $2,051 million, up 8 percent compared to $1,901 million in the second quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs.
MS recorded $231 million of operating income in the second quarter 2018 compared to $236 million in the second quarter 2017. The decrease in operating margin for the quarter was primarily due to a change in mix.
During the quarter, MS booked $933 million for Standard Missile-3 (SM-3®); $237 million for Rolling Airframe Missile (RAM®); $205 million for Tube-launched, Optically-tracked, Wireless-guided (TOW®) missiles; $167 million for Tomahawk; $109 million for Miniature Air Launched Decoy (MALD®); $99 million for Excalibur®; and $78 million for Evolved Seasparrow Missiles (ESSM®). MS also booked $707 million on a number of classified contracts.
Space and Airborne Systems
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
1,605

 
$
1,608

 
-
 
$
3,173

 
$
3,163

 
-
Operating Income
$
206

 
$
218

 
(6)%
 
$
399

 
$
408

 
(2)%
Operating Margin
12.8
%
 
13.6
%
 
 
 
12.6
%
 
12.9
%
 
 


4


Space and Airborne Systems (SAS) had second quarter 2018 net sales of $1,605 million compared to $1,608 million in the second quarter 2017.
SAS recorded $206 million of operating income in the second quarter 2018 compared to $218 million in the second quarter 2017. The decrease in operating income for the quarter was primarily due to a change in program mix and other performance.
During the quarter, SAS booked $1,121 million on a number of classified contracts.
Forcepoint
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
148

 
$
138

 
7%
 
$
289

 
$
282

 
2%
Operating Income (Loss)
$
(8
)
 
$
2

 
NM
 
$
(15
)
 
$
18

 
NM
Operating Margin
(5.4
)%
 
1.4
%
 
 
 
(5.2
)%
 
6.4
%
 
 
NM = Not Meaningful
 
 
 
 
 
 
 
 
 
 
 
Forcepoint had second quarter 2018 net sales of $148 million, up 7 percent compared to $138 million in the second quarter 2017.
Forcepoint recorded a loss of $8 million in the second quarter 2018 compared to operating income of $2 million in the second quarter 2017. As expected, the decrease in operating income for the quarter was primarily driven by higher operating costs.
During the quarter, Forcepoint had bookings of $148 million compared to $115 million in the second quarter 2017, an increase of 29 percent.

About Raytheon
Raytheon Company, with 2017 sales of $25 billion and 64,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 96 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 2018 Financial Results
Raytheon’s financial results conference call will be held on Thursday, July 26, 2018 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) 270-6057 in the U.S. or (617) 213-8891 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


5


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 performance under undefinitized contract awards; 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, 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; the ability to obtain timely U.S. government approvals for international contracts; 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, including with respect to the provisional impact of the Tax Cuts and Jobs Act of 2017; 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 2018
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
 
 
 
 
 
 
 
 
Net sales
 
$
6,625

 
$
6,281

 
$
12,892

 
$
12,281

Operating expenses
 
 
 
 
 
 
 
 
Cost of sales
 
4,777

 
4,521

 
9,309

 
8,887

General and administrative expenses
 
748

 
705

 
1,442

 
1,391

Total operating expenses
 
5,525

 
5,226

 
10,751

 
10,278

Operating income
 
1,100

 
1,055

 
2,141

 
2,003

Non-operating (income) expense, net
 
 
 
 
 
 
 
 
Retirement benefits non-service expense
 
238

 
206

 
477

 
413

Interest expense
 
46

 
51

 
93

 
109

Interest income
 
(8
)
 
(5
)
 
(15
)
 
(10
)
Other (income) expense, net
 
(3
)
 
35

 
2

 
28

Total non-operating (income) expense, net
 
273

 
287

 
557

 
540

Income from continuing operations before taxes
 
827

 
768

 
1,584

 
1,463

Federal and foreign income taxes
 
37

 
221

 
170

 
419

Income from continuing operations
 
790

 
547

 
1,414

 
1,044

Income (loss) from discontinued operations, net of tax
 
1

 

 

 
3

Net income
 
791

 
547

 
1,414

 
1,047

Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
 
(9
)
 
(6
)
 
(19
)
 
(12
)
Net income attributable to Raytheon Company
 
$
800

 
$
553

 
$
1,433

 
$
1,059

 
 
 
 
 
 
 
 
 
Basic earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
2.78

 
$
1.90

 
$
4.98

 
$
3.62

Income (loss) from discontinued operations, net of tax
 

 

 

 
0.01

Net income
 
2.78

 
1.90

 
4.98

 
3.63

 
 
 
 
 
 
 
 
 
Diluted earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
2.78

 
$
1.89

 
$
4.98

 
$
3.62

Income (loss) from discontinued operations, net of tax
 

 

 

 
0.01

Net income
 
2.78

 
1.89

 
4.97

 
3.63

 
 
 
 
 
 
 
 
 
Amounts attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
799

 
$
553

 
$
1,433

 
$
1,056

Income (loss) from discontinued operations, net of tax
 
1

 

 

 
3

Net income
 
$
800

 
$
553

 
$
1,433

 
$
1,059

 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
Basic
 
287.3

 
291.7

 
287.9

 
292.1

Diluted
 
287.6

 
292.0

 
288.2

 
292.4






Attachment B
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 

 
 
Preliminary Segment Information
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
 
 
(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
 
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
1,514

 
$
1,462

 
$
262

 
$
245

 
17.3
 %
 
16.8
%
Intelligence, Information and Services
 
1,687

 
1,555

 
128

 
115

 
7.6
 %
 
7.4
%
Missile Systems
 
2,051

 
1,901

 
231

 
236

 
11.3
 %
 
12.4
%
Space and Airborne Systems
 
1,605

 
1,608

 
206

 
218

 
12.8
 %
 
13.6
%
Forcepoint
 
148

 
138

 
(8
)
 
2

 
(5.4
)%
 
1.4
%
Eliminations
 
(376
)
 
(372
)
 
(41
)
 
(37
)
 


 


Total business segment
 
6,629

 
6,292

 
778

 
779

 
11.7
 %
 
12.4
%
Acquisition Accounting Adjustments
 
(4
)
 
(11
)
 
(34
)
 
(42
)
 
 
 
 
FAS/CAS Operating Adjustment
 

 

 
353

 
315

 
 
 
 
Corporate
 

 

 
3

 
3

 
 
 
 
Total
 
$
6,625

 
$
6,281

 
$
1,100

 
$
1,055

 
16.6
 %
 
16.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
 
 
Six Months Ended
 
Six Months Ended
 
Six Months Ended
 
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
3,003

 
$
2,860

 
$
535

 
$
457

 
17.8
 %
 
16.0
%
Intelligence, Information and Services
 
3,269

 
3,062

 
245

 
226

 
7.5
 %
 
7.4
%
Missile Systems
 
3,899

 
3,657

 
443

 
452

 
11.4
 %
 
12.4
%
Space and Airborne Systems
 
3,173

 
3,163

 
399

 
408

 
12.6
 %
 
12.9
%
Forcepoint
 
289

 
282

 
(15
)
 
18

 
(5.2
)%
 
6.4
%
Eliminations
 
(733
)
 
(722
)
 
(81
)
 
(74
)
 
 
 
 
Total business segment
 
12,900

 
12,302

 
1,526

 
1,487

 
11.8
 %
 
12.1
%
Acquisition Accounting Adjustments
 
(8
)
 
(21
)
 
(67
)
 
(84
)
 
 
 
 
FAS/CAS Operating Adjustment
 

 

 
707

 
630

 
 
 
 
Corporate
 

 

 
(25
)
 
(30
)
 
 
 
 
Total
 
$
12,892

 
$
12,281

 
$
2,141

 
$
2,003

 
16.6
 %
 
16.3
%

 



Attachment C
 
 
 
 
 
 
 
 
 
Raytheon Company

Other Preliminary Information
 
 
 
 
 
 
 
 
 
Second Quarter 2018
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Backlog
 
 
 
 
 
 
1-Jul-18
 
31-Dec-17
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
$
10,225

 
$
9,186

Intelligence, Information and Services
 
 
 
 
 
6,197

 
6,503

Missile Systems
 
 
 
 
 
 
13,867

 
13,426

Space and Airborne Systems
 
 
 
 
 
 
9,138

 
8,611

Forcepoint
 
 
 
 
 
 
454

 
484

Total backlog
 
 
 
 
 
 
$
39,881

 
$
38,210

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
Bookings
 
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
 
 
 
 
 
 
 
 
 
Total bookings
 
 
$
8,694

 
$
6,532

 
$
15,005

 
$
12,220

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
General and Administrative Expenses
 
 
1-Jul-18
 
2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
 
 
 
 
 
 
 
 
 
Administrative and selling expenses
 
$
540

 
$
514

 
$
1,068

 
$
1,037

Research and development expenses
 
208

 
191

 
374

 
354

Total general and administrative expenses
 
$
748

 
$
705

 
$
1,442

 
$
1,391

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash, Cash Equivalents and Restricted Cash
 
 
 
 
 
 
1-Jul-18
 
31-Dec-17
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
$
3,094

 
$
3,103

Restricted cash
 
 
 
8

 
12

Total cash, cash equivalents and restricted cash shown in Attachment E
 
 
 
$
3,102

 
$
3,115






Attachment D
 
 
 
Raytheon Company

Preliminary Balance Sheet Information
 
Second Quarter 2018
(In millions)
 
 
 
 
 
 
 
 
1-Jul-18
 
31-Dec-17
 
 
 
 
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
3,094

 
$
3,103

Short-term investments

 
297

Receivables, net
1,317

 
1,324

Contract assets
5,642

 
5,247

Inventories
725

 
594

Prepaid expenses and other current assets
537

 
761

Total current assets
11,315

 
11,326

 
 
 
 
Property, plant and equipment, net
2,554

 
2,439

Goodwill
14,865

 
14,871

Other assets, net
2,004

 
2,224

Total assets
$
30,738

 
$
30,860

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

 
$
300

Contract liabilities
2,886

 
2,927

Accounts payable
1,380

 
1,519

Accrued employee compensation
1,245

 
1,342

Other current liabilities
1,206

 
1,260

Total current liabilities
7,017

 
7,348

 
 
 
 
Accrued retiree benefits and other long-term liabilities
7,850

 
8,287

Long-term debt
4,752

 
4,750

 
 
 
 
Redeemable noncontrolling interest
512

 
512

 
 
 
 
Equity
 
 
 
Raytheon Company stockholders’ equity
 
 
 
Common stock
3

 
3

Additional paid-in capital

 

Accumulated other comprehensive loss(1)
(8,863
)
 
(7,935
)
Retained earnings(1)
19,467

 
17,895

Total Raytheon Company stockholders’ equity
10,607

 
9,963

Noncontrolling interests in subsidiaries

 

Total equity
10,607

 
9,963

Total liabilities, redeemable noncontrolling interest and equity
$
30,738

 
$
30,860

(1)
In the first quarter 2018 we adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. As a result, we reclassified $1,451 million from accumulated other comprehensive loss to retained earnings related to the reclassification of stranded income tax effects of the Tax Cuts and Jobs Act of 2017.




Attachment E
 
 
 
Raytheon Company

Preliminary Cash Flow Information
 
 
 
Second Quarter 2018
 
 
 
(In millions)
 
 
 
 
Six Months Ended
 
1-Jul-18
 
2-Jul-17
 
 
 
 
Cash flows from operating activities
 
 
 
Net income
$
1,414

 
$
1,047

(Income) loss from discontinued operations, net of tax

 
(3
)
Income from continuing operations
1,414

 
1,044

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
274

 
263

Stock-based compensation
101

 
92

Loss on repayment of long-term debt

 
39

Deferred income taxes
8

 
(105
)
Changes in assets and liabilities
 
 
 
Receivables, net
7

 
(393
)
Contract assets and contract liabilities
(442
)
 
(622
)
Inventories
(133
)
 
27

Prepaid expenses and other current assets
62

 
112

Income taxes receivable/payable
168

 
99

Accounts payable
(73
)
 
(238
)
Accrued employee compensation
(98
)
 
(54
)
Other current liabilities
(70
)
 
(25
)
Accrued retiree benefits
239

 
564

Other, net
(18
)
 
(62
)
Net cash provided by (used in) operating activities from continuing operations
1,439

 
741

Net cash provided by (used in) operating activities from discontinued operations
1

 

Net cash provided by (used in) operating activities
1,440

 
741

Cash flows from investing activities
 
 
 
Additions to property, plant and equipment
(366
)
 
(181
)
Proceeds from sales of property, plant and equipment

 
31

Additions to capitalized internal use software
(28
)
 
(33
)
Purchases of short-term investments

 
(399
)
Maturities of short-term investments
309

 
100

Payments for purchases of acquired companies, net of cash received

 
(39
)
Proceeds from sale of business, net of transaction costs
11

 

Other
(3
)
 
(1
)
Net cash provided by (used in) investing activities
(77
)
 
(522
)
Cash flows from financing activities
 
 
 
Dividends paid
(480
)
 
(447
)
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
(800
)
 
(500
)
Repurchases of common stock to satisfy tax withholding obligations
(91
)
 
(79
)
Contribution from noncontrolling interests in Forcepoint

 
8

Other
(5
)
 

Net cash provided by (used in) financing activities
(1,376
)
 
(1,347
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(13
)
 
(1,128
)
Cash, cash equivalents and restricted cash at beginning of the year
3,115

 
3,303

Cash, cash equivalents and restricted cash at end of period
$
3,102

 
$
2,175




Attachment F

 
 
 
 
Raytheon Company
 
 
 
 
 
 
 
Supplemental EPS Information
 
 
 
 
 
 
 
 
Second Quarter 2018
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
1-Jul-18

2-Jul-17
 
1-Jul-18
 
2-Jul-17
 
 
 
 
 
 
 
 
 
 
 
 
Per share impact of tax benefit from third quarter 2018 discretionary pension contribution (A)
$
0.33

 
$

 
$
0.33

 
$

 
 
 
 
 
 
 
 
 
 
 
 
(A)
Tax benefit from third quarter 2018 discretionary pension contribution
$
95

 
$

 
$
95

 
$

 
Diluted shares
287.6

 

 
288.2

 

 
Per share impact
$
0.33

 
$

 
$
0.33

 
$


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