Exhibit 99.1

rtnlogo1a01a06a01a25.jpg
 
 
Raytheon Company
rtnline1a01a06a01a24.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 Third Quarter 2018 Results

Strong bookings of $8.7 billion; book-to-bill ratio of 1.28
Net sales of $6.8 billion, up 8.3 percent
EPS from continuing operations of $2.25, up 14.2 percent
Updated full-year 2018 guidance
__________________________________________________________________________________________________

WALTHAM, Mass., (October 25, 2018) - Raytheon Company (NYSE: RTN) today announced net sales for the third quarter 2018 of $6.8 billion, up 8.3 percent compared to $6.3 billion in the third quarter 2017. Third quarter 2018 EPS from continuing operations was $2.25 compared to $1.97 in the third quarter 2017. The increase in the third quarter 2018 EPS from continuing operations was primarily driven by operational improvements, and lower taxes primarily associated with tax reform. This was partially offset by the previously disclosed non-operating expense associated with the pension plan annuity transaction, which had an unfavorable $0.80 per share impact.
“I‘m pleased with the company’s operating performance in the third quarter. We delivered bookings, sales, EPS and cash flow ahead of our expectations,” said Thomas A. Kennedy, Raytheon Chairman and CEO. “Strong domestic and international bookings throughout the year drove record backlog and positions us well for continued growth in 2019.”
Operating cash flow from continuing operations for the third quarter 2018 was an outflow of $444 million compared to an inflow of $382 million for the third quarter 2017. The decrease in operating cash flow from continuing operations in the third quarter 2018 was primarily due to the previously disclosed $1.25 billion pretax discretionary pension contribution, partially offset by lower net cash taxes.
In the third quarter 2018, the company repurchased 0.6 million shares of common stock for $125 million. Year-to-date 2018, the company repurchased 4.5 million shares of common stock for $925 million.
The company had bookings of $8.7 billion in the third quarter 2018, resulting in a book-to-bill ratio of 1.28. Third quarter 2017 bookings were $7.0 billion.


1


Summary Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter
 
%
 
Nine Months
 
%
($ in millions, except per share data)
2018
 
2017
 
Change
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
$
8,710

 
$
6,957

 
25.2%
 
$
23,715

 
$
19,177

 
23.7%
Net Sales
$
6,806

 
$
6,284

 
8.3%
 
$
19,698

 
$
18,565

 
6.1%
Income from Continuing Operations attributable to Raytheon Company1
$
644

 
$
573

 
12.4%
 
$
2,077

 
$
1,629

 
27.5%
EPS from Continuing Operations1
$
2.25

 
$
1.97

 
14.2%
 
$
7.23

 
$
5.59

 
29.3%
Operating Cash Flow from Continuing Operations2
$
(444
)
 
$
382

 
 
 
$
995

 
$
1,123

 
 
Workdays in Fiscal Reporting Calendar
63

 
62

 
 
 
191

 
190

 
 
1 As previously disclosed, in the third quarter 2018, some 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. In connection with this transaction, the company recognized a non-cash, non-operating pension settlement charge of $288 million pretax, $228 million after tax, primarily related to the accelerated recognition of actuarial losses in those plans. Third quarter and nine months 2018 EPS from Continuing Operations included an unfavorable $0.80 and $0.79 impact, respectively, related to the settlement charge.
2 As previously disclosed, the company made a $1.25 billion pretax discretionary pension plan contribution in the third quarter 2018.
 
 
 
 
 
 
 
 
 
 
 
 
Backlog at the end of the third quarter 2018 was a record $41.6 billion, an increase of $4.9 billion or 13.4 percent compared to the end of the third quarter 2017.
Backlog
 
 
 
 
 
 
 Period Ending
($ in millions)
Q3 2018
 
Q3 2017
 
2017
Backlog
$
41,599

 
$
36,676

 
$
38,210

Outlook
The company has updated its financial outlook for 2018. Charts containing additional information on the company’s 2018 outlook are available on the company’s website.
2018 Financial Outlook
 
 
 
 
Current
 
Prior (7/26/18)
Net Sales ($B)
27.0 - 27.3*
 
26.7 - 27.2
Deferred Revenue Adjustment ($M)
(10)
 
(10)
Amortization of Acquired Intangibles ($M)
(118)
 
(118)
FAS/CAS Operating Adjustment ($M)1
1,430*
 
1,416
Retirement Benefits Non-service Expense, non-operating ($M)2
(1,232)*
 
(1,246)
Interest Expense, net ($M)
 (165) - (170)*
 
 (180) - (185)
Diluted Shares (M)
~287
 
~287
Effective Tax Rate
 ~10.5%
 
 ~10.5%
EPS from Continuing Operations
$10.01 - $10.11*
 
$9.77 - $9.97
Operating Cash Flow from Continuing Operations ($B)
 2.6 - 3.0
 
 2.6 - 3.0
*Denotes change from prior guidance
 
 
 
1The full-year 2018 FAS/CAS Operating Adjustment had a $14 million ($0.04 per share) favorable adjustment, of which approximately $11 million ($0.03 per share) was recorded in the third quarter 2018 and approximately $3 million ($0.01 per share) is expected to be recorded in the fourth quarter 2018. This is due to the update in the third quarter 2018 of the actuarial estimates for pension and other postretirement benefit plans.
2The full-year 2018 Retirement Benefits Non-service Expense had a $14 million ($0.04 per share) favorable adjustment, all of which was recorded in the third quarter 2018. This is due to the update in the third quarter 2018 of the actuarial estimates for pension and other postretirement benefit plans.


2


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
 
 
 
 
 
 
 
 
 
 
 
3rd Quarter
 
 
 
Nine Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
1,493

 
$
1,391

 
7%
 
$
4,496

 
$
4,251

 
6%
Operating Income
$
241

 
$
231

 
4%
 
$
776

 
$
688

 
13%
Operating Margin
16.1
%
 
16.6
%
 
 
 
17.3
%
 
16.2
%
 
 
Integrated Defense Systems (IDS) had third quarter 2018 net sales of $1,493 million, up 7 percent compared to $1,391 million in the third 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 $241 million of operating income in the third quarter 2018 compared to $231 million in the third quarter 2017. The increase in operating income for the quarter was primarily driven by a favorable change in program mix and higher volume, partially offset by lower net program efficiencies.
During the quarter, IDS booked $1.3 billion to provide advanced Patriot air and missile defense capabilities for Poland. IDS also booked $191 million for the Forward Expeditionary Advanced Vehicle Radar (FEAVR) program for the U.S. Army and $75 million for a lightweight torpedo program for the U.S. Navy and international customers.
Intelligence, Information and Services
 
 
 
 
 
 
 
 
 
3rd Quarter
 
 
 
Nine Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
1,742

 
$
1,543

 
13%
 
$
5,011

 
$
4,605

 
9%
Operating Income
$
149

 
$
112

 
33%
 
$
394

 
$
338

 
17%
Operating Margin
8.6
%
 
7.3
%
 
 
 
7.9
%
 
7.3
%
 
 
Intelligence, Information and Services (IIS) had third quarter 2018 net sales of $1,742 million, up 13 percent compared to $1,543 million in the third quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs in both the cyber and space business areas, the Development, Operations and Maintenance (DOMino) cyber program, and the Warfighter FOCUS program.
IIS recorded $149 million of operating income in the third quarter 2018 compared to $112 million in the third quarter 2017. The increase in operating income for the quarter was primarily driven by higher net program efficiencies and higher volume.
During the quarter, IIS booked $787 million on a number of classified contracts. IIS also booked $299 million on domestic and foreign training programs in support of Warfighter FOCUS activities; $108 million to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force; and $99 million on the Air and Space Operations Center Weapon System (AOC WS) program for the U.S. Air Force.


3


Missile Systems
 
 
 
 
 
 
 
 
 
3rd Quarter
 
 
 
Nine Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
2,082

 
$
1,945

 
7%
 
$
5,981

 
$
5,602

 
7%
Operating Income
$
257

 
$
280

 
(8)%
 
$
700

 
$
732

 
(4)%
Operating Margin
12.3
%
 
14.4
%
 
 
 
11.7
%
 
13.1
%
 
 
Missile Systems (MS) had third quarter 2018 net sales of $2,082 million, up 7 percent compared to $1,945 million in the third quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs.
MS recorded $257 million of operating income in the third quarter 2018 compared to $280 million in the third quarter 2017. The decrease in operating income for the quarter was primarily due to lower net program efficiencies, partially offset by higher volume.
During the quarter, MS booked $499 million for Phalanx® Close-In Defense Systems (CIDS); $424 million for Standard Missile-6 (SM-6®); $115 million for Javelin; $113 million on the High-speed Unmanned Long-range Kinetic-kill (HULK) program; $89 million for Paveway™; $84 million for Horizontal Technology Integration (HTI) forward looking infrared kits; and $84 million for Rolling Airframe Missile (RAM™). MS also booked $155 million on a number of classified contracts.
Space and Airborne Systems
 
 
 
 
 
 
 
 
 
3rd Quarter
 
 
 
Nine Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
1,695

 
$
1,597

 
6%
 
$
4,868

 
$
4,760

 
2%
Operating Income
$
223

 
$
212

 
5%
 
$
622

 
$
620

 
-
Operating Margin
13.2
%
 
13.3
%
 
 
 
12.8
%
 
13.0
%
 
 
Space and Airborne Systems (SAS) had third quarter 2018 net sales of $1,695 million, up 6 percent compared to $1,597 million in the third quarter 2017. The increase in net sales for the quarter was driven by higher net sales on surveillance and targeting systems programs.
SAS recorded $223 million of operating income in the third quarter 2018 compared to $212 million in the third quarter 2017. The increase in operating income for the quarter was primarily due to higher volume.
During the quarter, SAS booked $282 million on the Multi-Spectral Targeting System (MTS) for the U.S. Air Force; $136 million on the Next Generation Jammer (NGJ) program for the U.S. Navy; $103 million for Active Electronically Scanned Array (AESA) radars for the U.S. Air Force; and $92 million for radar components for the U.S. Navy. SAS also booked $374 million on a number of classified contracts.


4


Forcepoint
 
 
 
 
 
 
 
 
 
3rd Quarter
 
 
 
Nine Months
 
 
($ in millions)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Net Sales
$
173

 
$
170

 
2%
 
$
462

 
$
452

 
2%
Operating Income
$
18

 
$
23

 
(22)%
 
$
3

 
$
41

 
(93)%
Operating Margin
10.4
%
 
13.5
%
 
 
 
0.6
%
 
9.1
%
 
 
Forcepoint had third quarter 2018 net sales of $173 million, up 2 percent compared to $170 million in the third quarter 2017.
Forcepoint recorded $18 million of operating income in the third quarter 2018 compared to $23 million in the third quarter 2017. As expected, the decrease in operating income for the quarter was primarily driven by higher operating costs.

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, C5I™ 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 Third Quarter 2018 Financial Results
Raytheon’s financial results conference call will be held on Thursday, October 25, 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) 588-8312 in the U.S. or (409) 220-9941 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


5


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
 
 
 
 
 
 
 
 
Third Quarter 2018
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
 
 
 
 
 
 
 
 
Net sales
 
$
6,806

 
$
6,284

 
$
19,698

 
$
18,565

Operating expenses
 
 
 
 
 
 
 
 
Cost of sales
 
4,871

 
4,468

 
14,180

 
13,355

General and administrative expenses
 
752

 
688

 
2,194

 
2,079

Total operating expenses
 
5,623

 
5,156

 
16,374

 
15,434

Operating income
 
1,183

 
1,128

 
3,324

 
3,131

Non-operating (income) expense, net
 
 
 
 
 
 
 
 
Retirement benefits non-service expense
 
516

 
270

 
993

 
683

Interest expense
 
45

 
48

 
138

 
157

Interest income
 
(6
)
 
(4
)
 
(21
)
 
(14
)
Other (income) expense, net
 
(8
)
 
(2
)
 
(6
)
 
26

Total non-operating (income) expense, net
 
547

 
312

 
1,104

 
852

Income from continuing operations before taxes
 
636

 
816

 
2,220

 
2,279

Federal and foreign income taxes
 
(5
)
 
248

 
165

 
667

Income from continuing operations
 
641

 
568

 
2,055

 
1,612

Income (loss) from discontinued operations, net of tax
 

 
(1
)
 

 
2

Net income
 
641

 
567

 
2,055

 
1,614

Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
 
(3
)
 
(5
)
 
(22
)
 
(17
)
Net income attributable to Raytheon Company
 
$
644

 
$
572

 
$
2,077

 
$
1,631

 
 
 
 
 
 
 
 
 
Basic earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
2.25

 
$
1.97

 
$
7.24

 
$
5.59

Income (loss) from discontinued operations, net of tax
 

 

 

 
0.01

Net income
 
2.25

 
1.97

 
7.23

 
5.60

 
 
 
 
 
 
 
 
 
Diluted earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
2.25

 
$
1.97

 
$
7.23

 
$
5.59

Income (loss) from discontinued operations, net of tax
 

 

 

 
0.01

Net income
 
2.25

 
1.97

 
7.23

 
5.60

 
 
 
 
 
 
 
 
 
Amounts attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
644

 
$
573

 
$
2,077

 
$
1,629

Income (loss) from discontinued operations, net of tax
 

 
(1
)
 

 
2

Net income
 
$
644

 
$
572

 
$
2,077

 
$
1,631

 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
Basic
 
285.7

 
290.7

 
287.2

 
291.6

Diluted
 
286.0

 
291.0

 
287.5

 
291.9






Attachment B
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 

 
 
Preliminary Segment Information
 
 
 
 
 
 
 
 
 
 
 
 
Third 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
 
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
1,493

 
$
1,391

 
$
241

 
$
231

 
16.1
%
 
16.6
%
Intelligence, Information and Services
 
1,742

 
1,543

 
149

 
112

 
8.6
%
 
7.3
%
Missile Systems
 
2,082

 
1,945

 
257

 
280

 
12.3
%
 
14.4
%
Space and Airborne Systems
 
1,695

 
1,597

 
223

 
212

 
13.2
%
 
13.3
%
Forcepoint
 
173

 
170

 
18

 
23

 
10.4
%
 
13.5
%
Eliminations
 
(377
)
 
(355
)
 
(45
)
 
(39
)
 


 


Total business segment
 
6,808

 
6,291

 
843

 
819

 
12.4
%
 
13.0
%
Acquisition Accounting Adjustments
 
(2
)
 
(7
)
 
(30
)
 
(39
)
 
 
 
 
FAS/CAS Operating Adjustment
 

 

 
365

 
348

 
 
 
 
Corporate
 

 

 
5

 

 
 
 
 
Total
 
$
6,806

 
$
6,284

 
$
1,183

 
$
1,128

 
17.4
%
 
18.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
 
 
Nine Months Ended
 
Nine Months Ended
 
Nine Months Ended
 
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
4,496

 
$
4,251

 
$
776

 
$
688

 
17.3
%
 
16.2
%
Intelligence, Information and Services
 
5,011

 
4,605

 
394

 
338

 
7.9
%
 
7.3
%
Missile Systems
 
5,981

 
5,602

 
700

 
732

 
11.7
%
 
13.1
%
Space and Airborne Systems
 
4,868

 
4,760

 
622

 
620

 
12.8
%
 
13.0
%
Forcepoint
 
462

 
452

 
3

 
41

 
0.6
%
 
9.1
%
Eliminations
 
(1,110
)
 
(1,077
)
 
(126
)
 
(113
)
 
 
 
 
Total business segment
 
19,708

 
18,593

 
2,369

 
2,306

 
12.0
%
 
12.4
%
Acquisition Accounting Adjustments
 
(10
)
 
(28
)
 
(97
)
 
(123
)
 
 
 
 
FAS/CAS Operating Adjustment
 

 

 
1,072

 
978

 
 
 
 
Corporate
 

 

 
(20
)
 
(30
)
 
 
 
 
Total
 
$
19,698

 
$
18,565

 
$
3,324

 
$
3,131

 
16.9
%
 
16.9
%

 



Attachment C
 
 
 
 
 
 
 
 
 
Raytheon Company

Other Preliminary Information
 
 
 
 
 
 
 
 
 
Third Quarter 2018
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Backlog
 
 
 
 
 
 
30-Sep-18
 
31-Dec-17
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
$
11,148

 
$
9,186

Intelligence, Information and Services
 
 
 
 
 
6,563

 
6,503

Missile Systems
 
 
 
 
 
 
13,906

 
13,426

Space and Airborne Systems
 
 
 
 
 
 
9,483

 
8,611

Forcepoint
 
 
 
 
 
 
499

 
484

Total backlog
 
 
 
 
 
 
$
41,599

 
$
38,210

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
Bookings
 
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
 
 
 
 
 
 
 
 
 
Total bookings
 
 
$
8,710

 
$
6,957

 
$
23,715

 
$
19,177

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
General and Administrative Expenses
 
 
30-Sep-18
 
1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
 
 
 
 
 
 
 
 
 
Administrative and selling expenses
 
$
533

 
$
510

 
$
1,601

 
$
1,547

Research and development expenses
 
219

 
178

 
593

 
532

Total general and administrative expenses
 
$
752

 
$
688

 
$
2,194

 
$
2,079

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash, Cash Equivalents and Restricted Cash
 
 
 
 
 
 
30-Sep-18
 
31-Dec-17
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
$
2,073

 
$
3,103

Restricted cash
 
 
 
12

 
12

Cash, cash equivalents and restricted cash shown in Attachment E
 
 
 
$
2,085

 
$
3,115






Attachment D
 
 
 
Raytheon Company

Preliminary Balance Sheet Information
 
Third Quarter 2018
(In millions)
 
 
 
 
 
 
 
 
30-Sep-18
 
31-Dec-17
 
 
 
 
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
2,073

 
$
3,103

Short-term investments

 
297

Receivables, net
1,527

 
1,324

Contract assets
5,715

 
5,247

Inventories
804

 
594

Prepaid expenses and other current assets
516

 
761

Total current assets
10,635

 
11,326

 
 
 
 
Property, plant and equipment, net
2,639

 
2,439

Goodwill
14,865

 
14,871

Other assets, net
1,995

 
2,224

Total assets
$
30,134

 
$
30,860

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

 
$
300

Contract liabilities
2,931

 
2,927

Accounts payable
1,392

 
1,519

Accrued employee compensation
1,252

 
1,342

Other current liabilities
1,281

 
1,260

Total current liabilities
7,156

 
7,348

 
 
 
 
Accrued retiree benefits and other long-term liabilities
6,355

 
8,287

Long-term debt
4,753

 
4,750

 
 
 
 
Redeemable noncontrolling interest
560

 
512

 
 
 
 
Equity
 
 
 
Raytheon Company stockholders’ equity
 
 
 
Common stock
3

 
3

Additional paid-in capital

 

Accumulated other comprehensive loss(1)
(8,413
)
 
(7,935
)
Retained earnings(1)
19,720

 
17,895

Total Raytheon Company stockholders’ equity
11,310

 
9,963

Noncontrolling interests in subsidiaries

 

Total equity
11,310

 
9,963

Total liabilities, redeemable noncontrolling interest and equity
$
30,134

 
$
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
 
 
 
Third Quarter 2018
 
 
 
(In millions)
 
 
 
 
Nine Months Ended
 
30-Sep-18
 
1-Oct-17
 
 
 
 
Cash flows from operating activities
 
 
 
Net income
$
2,055

 
$
1,614

(Income) loss from discontinued operations, net of tax

 
(2
)
Income from continuing operations
2,055

 
1,612

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
417

 
401

Stock-based compensation
137

 
127

Loss on repayment of long-term debt

 
39

Deferred income taxes
(16
)
 
(137
)
Changes in assets and liabilities
 
 
 
Receivables, net
(205
)
 
(226
)
Contract assets and contract liabilities
(468
)
 
(962
)
Inventories
(212
)
 
(83
)
Prepaid expenses and other current assets
72

 
148

Income taxes receivable/payable
194

 
66

Accounts payable
(64
)
 
(191
)
Accrued employee compensation
(91
)
 
(68
)
Other current liabilities
(44
)
 
35

Accrued retiree benefits
(748
)
 
452

Other, net
(32
)
 
(90
)
Net cash provided by (used in) operating activities from continuing operations
995

 
1,123

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

 
(1
)
Net cash provided by (used in) operating activities
996

 
1,122

Cash flows from investing activities
 
 
 
Additions to property, plant and equipment
(546
)
 
(323
)
Proceeds from sales of property, plant and equipment

 
31

Additions to capitalized internal use software
(42
)
 
(49
)
Purchases of short-term investments

 
(399
)
Maturities of short-term investments
309

 
517

Payments for purchases of acquired companies, net of cash received

 
(93
)
Proceeds from sale of business, net of transaction costs
11

 

Other
(9
)
 
(2
)
Net cash provided by (used in) investing activities
(277
)
 
(318
)
Cash flows from financing activities
 
 
 
Dividends paid
(728
)
 
(679
)
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
(925
)
 
(700
)
Repurchases of common stock to satisfy tax withholding obligations
(91
)
 
(84
)
Contribution from noncontrolling interests in Forcepoint

 
8

Other
(5
)
 

Net cash provided by (used in) financing activities
(1,749
)
 
(1,784
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(1,030
)
 
(980
)
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
$
2,085

 
$
2,323




Attachment F

 
 
 
 
Raytheon Company
 
 
 
 
 
 
 
Supplemental EPS Information
 
 
 
 
 
 
 
 
Third Quarter 2018
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
 
30-Sep-18

1-Oct-17
 
30-Sep-18
 
1-Oct-17
 
 
 
 
 
 
 
 
 
 
 
 
Per share impact of the pension settlement charge (A)
$
0.80

 
$

 
$
0.79

 
$

 
 
 
 
 
 
 
 
 
 
 
 
(A)
Pension settlement charge
$
288

 
$

 
$
288

 
$

 
 
Tax effect (at 21% statutory rate)
(60
)
 

 
(60
)
 

 
After-tax impact
228

 

 
228

 

 
Diluted shares
286.0

 

 
287.5

 

 
Per share impact
$
0.80

 
$

 
$
0.79

 
$

 
 
 
 
 
 
 
 
 
 
 
 

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