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Raytheon Reports Strong Fourth Quarter and Full-Year 2016 Results
- Strong bookings of $7.6 billion in the quarter and a record $27.8 billion for the year; book-to-bill ratio of 1.21 in the quarter and 1.16 for the year
- Fourth quarter net sales of $6.2 billion; full-year net sales of $24.1 billion, up 3.5 percent for the year
- Fourth quarter EPS from continuing operations of $1.84; full-year EPS from continuing operations of $7.44
- Strong operating cash flow from continuing operations of $1.1 billion in the quarter and $2.9 billion for the year, including a $500 million pretax discretionary pension plan contribution in the fourth quarter
WALTHAM, Mass., Jan. 26, 2017 /PRNewswire/ -- Raytheon Company (NYSE: RTN) today announced net sales for the fourth quarter 2016 of $6.2 billion compared to $6.3 billion in the fourth quarter 20151. Fourth quarter 2016 EPS from continuing operations was $1.84 compared to $1.85 in the fourth quarter 2015. Fourth quarter 2016 EPS from continuing operations included a favorable FAS/CAS Adjustment of $0.26 compared to a favorable FAS/CAS Adjustment of $0.10 in the fourth quarter 2015.
The Company made a pretax discretionary pension plan contribution in both the fourth quarter 2016 and the fourth quarter 2015, discussed further below, which had an unfavorable tax-related EPS impact of $0.04 and $0.02, respectively. The 2016 discretionary pension plan contribution was not included in the Company's prior guidance.
Net sales in 2016 were $24.1 billion, up 3.5 percent compared to $23.2 billion in 2015. Full-year 2016 EPS from continuing operations was $7.44 compared to $6.75 for the full-year 2015.
"I'm pleased with the Company's operating performance in 2016. We delivered solid sales and earnings growth by executing our strategy and investing in advanced capabilities that align with our global customers' evolving requirements," said Thomas A. Kennedy, Raytheon Chairman and CEO. "Strong domestic and international bookings throughout the year drove an increase in our backlog, which positions us well for growth in the future."
The Company generated strong operating cash flow for both the fourth quarter and full-year. Operating cash flow from continuing operations for the fourth quarter 2016 was $1.1 billion compared to $0.8 billion for the fourth quarter 2015. Fourth quarter 2016 operating cash flow from continuing operations included a $500 million pretax discretionary cash contribution to the Company's pension plans compared to $200 million in the fourth quarter 2015. For the full-year 2016 and 2015, the Company generated $2.9 billion and $2.3 billion of operating cash flow from continuing operations, respectively.
|
1Fourth quarter 2016 had 4 fewer work days than fourth quarter 2015. |
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Summary Financial Results |
|||||||||||||||||||
|
4th Quarter |
% |
Twelve Months |
% | ||||||||||||||||
|
($ in millions, except per share data) |
2016 |
2015 |
Change |
2016 |
2015 |
Change | |||||||||||||
|
Bookings |
$ |
7,577 |
$ |
7,861 |
-3.6% |
$ |
27,836 |
$ |
25,227 |
10.3% | |||||||||
|
Net Sales |
$ |
6,238 |
$ |
6,328 |
-1.4% |
$ |
24,069 |
$ |
23,247 |
3.5% | |||||||||
|
Income from Continuing Operations attributable to Raytheon Company |
$ |
544 |
$ |
558 |
-2.5% |
$ |
2,210 |
1 |
$ |
2,061 |
2 |
7.2% | |||||||
|
EPS from Continuing Operations |
$ |
1.84 |
$ |
1.85 |
-0.5% |
$ |
7.44 |
1 |
$ |
6.75 |
2 |
10.2% | |||||||
|
Operating Cash Flow from Continuing Operations |
$ |
1,141 |
$ |
813 |
$ |
2,852 |
$ |
2,346 |
|||||||||||
|
Workdays in Fiscal Reporting Calendar |
57 |
61 |
249 |
249 |
|||||||||||||||
|
1 Twelve 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. | |||||||||||||||||||
|
2 Twelve months 2015 Income from Continuing Operations attributable to Raytheon Company and EPS from Continuing Operations included the favorable $181 million pretax ($143 million after-tax) and $0.47 impact, respectively, for the first quarter 2015 eBorders settlement. | |||||||||||||||||||
The Company had bookings of $7.6 billion in the fourth quarter 2016, resulting in a book-to-bill ratio of 1.21. Fourth quarter 2015 bookings were $7.9 billion. Full-year 2016 bookings were a record $27.8 billion, resulting in a book-to-bill ratio of 1.16. Full-year 2015 bookings were $25.2 billion.
|
Backlog |
|||||||
|
($ in millions) |
Period Ending | ||||||
|
2016 |
2015 | ||||||
|
Backlog |
$ |
36,855 |
$ |
34,669 |
|||
|
Funded Backlog |
$ |
25,604 |
$ |
25,060 |
|||
Backlog at the end of 2016 was $36.9 billion, an increase of approximately $2.2 billion or 6 percent compared to the end of 2015. Funded backlog was $25.6 billion, an increase of approximately $0.5 billion compared to the end of 2015.
In the fourth quarter 2016, the Company repurchased 0.7 million shares of common stock for $100 million. For the full-year 2016, the Company repurchased 6.9 million shares of common stock for $900 million.
Outlook
The Company has provided its financial outlook for 2017. Charts containing additional information on the Company's 2017 outlook are available on the Company's website at www.raytheon.com/ir.
Effective January 1, 2017, the Company adopted the new revenue recognition standard utilizing the full retrospective transition method. Under this method, the standard was applied to each prior reporting period presented and the cumulative effect of applying the standard was recognized at the earliest period shown. The impact of adopting the new standard on the Company's 2015 and 2016 net sales and operating income was not material. The 2016 net sales, effective tax rate and EPS from continuing operations in the financial outlook table below have been recast to reflect this change.
|
2017 Financial Outlook |
|||||
|
2016 Actual |
2017 | ||||
|
As Reported |
New Rev Rec1 |
Outlook1 | |||
|
Net Sales ($B) |
24.1 |
24.1 |
24.8 - 25.3 | ||
|
Deferred Revenue Adjustment ($M)2 |
(77) |
(77) |
(33) | ||
|
Amortization of Acquired Intangibles ($M)2 |
(121) |
(121) |
(127) | ||
|
FAS/CAS Adjustment ($M) |
435 |
435 |
428 | ||
|
Interest Expense, net ($M) |
(216) |
(216) |
(216) - (221) | ||
|
Diluted Shares (M) |
297 |
297 |
291 - 293 | ||
|
Effective Tax Rate |
28.3% |
28.3% |
~31.5% | ||
|
EPS from Continuing Operations3 |
$7.44 |
$7.55 |
$7.20 - $7.35 | ||
|
Operating Cash Flow from Continuing Operations ($B) |
2.9 |
2.9 |
2.8 - 3.1 | ||
|
1 Effective January 1, 2017, the Company adopted the new revenue recognition standard, Accounting Standards Update 2014-09. The 2016 Actuals - New Rev Rec and the 2017 Outlook above reflect this change. | |||||
|
2 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, respectively, for all of the business segments. | |||||
|
3 2016 EPS from Continuing Operations included the $0.53 tax-free gain for the second quarter TRS transaction.
| |||||
Segment Results
The Company's reportable segments are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint.
The pro-forma attachments at the end of this release present prior period consolidated and segment data recast to reflect the adoption of the new revenue recognition standard discussed above. The business results discussed below do not reflect these changes, because they became effective January 1, 2017.
|
Integrated Defense Systems |
|||||||||||||||||||
|
4th Quarter |
Twelve Months |
||||||||||||||||||
|
($ in millions) |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | |||||||||||||
|
Net Sales |
$ |
1,406 |
$ |
1,558 |
-10% |
$ |
5,476 |
$ |
5,847 |
-6% | |||||||||
|
Operating Income1 |
$ |
219 |
$ |
281 |
-22% |
$ |
950 |
$ |
864 |
NM | |||||||||
|
Operating Margin1 |
15.6 |
% |
18.0 |
% |
17.3 |
% |
14.8 |
% |
|||||||||||
|
1 Twelve 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 fourth quarter 2016 net sales of $1,406 million compared to $1,558 million in the fourth quarter 2015. IDS had full-year 2016 net sales of $5,476 million compared to $5,847 million in 2015. The change in net sales for both the quarter and the full-year was primarily driven by lower net sales on an international communications program and on the Air Warfare Destroyer (AWD) program. In addition, the full-year was also driven by lower net sales on various missile defense radar production programs.
IDS recorded $219 million of operating income in the fourth quarter 2016 compared to $281 million in the fourth quarter 2015. The change in operating income for the quarter was primarily driven by a favorable contract modification on the AWD program in the fourth quarter 2015 and lower volume in the fourth quarter 2016. IDS recorded $950 million of operating income in 2016 compared to $864 million in 2015. Operating income for the full-year 2016 included the $158 million tax-free gain from the second quarter TRS transaction.
During the quarter, IDS booked approximately $1.0 billion to provide advanced Patriot air and missile defense capabilities for multiple international customers. IDS booked $189 million to provide Consolidated Contractor Logistics Support (CCLS) and $144 million on the AN/TPY-2 radar sustainment program for the Missile Defense Agency (MDA). IDS also booked $110 million on the Air and Missile Defense Radar (AMDR) program for the U.S. Navy.
|
Intelligence, Information and Services |
|||||||||||||||||||
|
4th Quarter |
Twelve Months |
||||||||||||||||||
|
($ in millions) |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | |||||||||||||
|
Net Sales |
$ |
1,518 |
$ |
1,537 |
-1% |
$ |
6,194 |
$ |
6,111 |
1% | |||||||||
|
Operating Income1 |
$ |
121 |
$ |
111 |
9% |
$ |
467 |
$ |
646 |
NM | |||||||||
|
Operating Margin1 |
8.0 |
% |
7.2 |
% |
7.5 |
% |
10.6 |
% |
|||||||||||
|
1 Twelve months 2015 operating income and operating margin include the favorable $181 million impact for the first quarter eBorders settlement. | |||||||||||||||||||
|
NM = Not Meaningful |
|||||||||||||||||||
Intelligence, Information and Services (IIS) had fourth quarter 2016 net sales of $1,518 million compared to $1,537 million in the fourth quarter 2015. IIS had full-year 2016 net sales of $6,194 million compared to $6,111 million in 2015. The change in net sales for the full-year was primarily driven by higher net sales on cybersecurity and special mission programs.
IIS recorded $121 million of operating income in the fourth quarter 2016 compared to $111 million in the fourth quarter 2015. The change in operating income for the quarter was primarily driven by higher net program efficiencies in the fourth quarter 2016. IIS recorded $467 million of operating income in 2016 compared to $646 million in 2015. Operating income for the full-year 2015 included the favorable $181 million impact for the first quarter eBorders settlement.
During the quarter, IIS booked $90 million on domestic and foreign training programs in support of Warfighter FOCUS activities. IIS also booked $448 million on a number of classified contracts.
|
Missile Systems |
|||||||||||||||||||
|
4th Quarter |
Twelve Months |
||||||||||||||||||
|
($ in millions) |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | |||||||||||||
|
Net Sales |
$ |
1,895 |
$ |
1,879 |
1% |
$ |
7,071 |
$ |
6,556 |
8% | |||||||||
|
Operating Income |
$ |
260 |
$ |
258 |
1% |
$ |
916 |
$ |
868 |
6% | |||||||||
|
Operating Margin |
13.7 |
% |
13.7 |
% |
13.0 |
% |
13.2 |
% |
|||||||||||
Missile Systems (MS) had fourth quarter 2016 net sales of $1,895 million compared to $1,879 million in the fourth quarter 2015. MS had full-year 2016 net sales of $7,071 million compared to $6,556 million in 2015. The increase in net sales for the full-year was primarily driven by higher net sales on the Paveway™ program.
MS recorded $260 million of operating income in the fourth quarter 2016 compared to $258 million in the fourth quarter 2015. MS recorded $916 million of operating income in 2016 compared to $868 million in 2015. The increase in operating income for the full-year was primarily due to higher volume in 2016.
During the quarter, MS booked $362 million for Paveway™, $309 million for Tomahawk, $259 million for the Rolling Airframe Missile (RAM™) program, $208 million for the Stinger® weapon system, $193 million for Evolved Seasparrow Missiles (ESSM®), $141 million for Standard Missile-3 (SM-3®), $114 million for Phalanx® close-in weapon systems, $76 million for Miniature Air Launched Decoy (MALD®), and $76 million for the David's Sling weapon system's Stunner Missile. MS also booked $175 million for the Hypersonic Air-breathing Weapon Concept (HAWC) program for the Defense Advanced Research Projects Agency (DARPA) and the U.S. Air Force.
|
Space and Airborne Systems |
|||||||||||||||||||
|
4th Quarter |
Twelve Months |
||||||||||||||||||
|
($ in millions) |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | |||||||||||||
|
Net Sales |
$ |
1,612 |
$ |
1,576 |
2% |
$ |
6,199 |
$ |
5,796 |
7% | |||||||||
|
Operating Income |
$ |
231 |
$ |
239 |
-3% |
$ |
817 |
$ |
829 |
-1% | |||||||||
|
Operating Margin |
14.3 |
% |
15.2 |
% |
13.2 |
% |
14.3 |
% |
|||||||||||
Space and Airborne Systems (SAS) had fourth quarter 2016 net sales of $1,612 million compared to $1,576 million in the fourth quarter 2015. The increase in net sales for the quarter was primarily driven by higher net sales on an electronic warfare systems program and an international classified program. SAS had full-year 2016 net sales of $6,199 million compared to $5,796 million in 2015. The increase in net sales for the full-year was primarily due to higher net sales on classified programs.
SAS recorded $231 million of operating income in the fourth quarter 2016 compared to $239 million in the fourth quarter 2015. SAS recorded $817 million of operating income in 2016 compared to $829 million in 2015. The change in operating income for the quarter and the full-year was primarily driven by a change in program mix.
During the quarter, SAS booked $610 million for the production of Active Electronically Scanned Array (AESA) radars, $81 million to provide radar components and $75 million on a cryptographic modernization program, all for both U.S. and international customers. SAS also booked $467 million on a number of classified contracts.
|
Forcepoint |
|||||||||||||||||||
|
4th Quarter |
Twelve Months |
||||||||||||||||||
|
($ in millions) |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | |||||||||||||
|
Net Sales |
$ |
143 |
$ |
133 |
8% |
$ |
566 |
$ |
328 |
NM | |||||||||
|
Operating Income |
$ |
11 |
$ |
11 |
- |
$ |
51 |
$ |
30 |
NM | |||||||||
|
Operating Margin |
7.7 |
% |
8.3 |
% |
9.0 |
% |
9.1 |
% |
|||||||||||
|
NM = Not Meaningful |
|||||||||||||||||||
Forcepoint had fourth quarter 2016 net sales of $143 million, up 8 percent compared to $133 million in the fourth quarter 2015. The increase in net sales for the quarter was primarily driven by the acquisition of Stonesoft in the first quarter of 2016. Forcepoint recorded $11 million of operating income in both the fourth quarter 2016 and in the fourth quarter 2015.
Forcepoint had full-year 2016 net sales of $566 million compared to $328 million in 2015. Forcepoint recorded $51 million of operating income in 2016 compared to $30 million in 2015. The increase in both net sales and operating income for the full-year was primarily due to the acquisition of Websense in the second quarter of 2015 and Stonesoft in the first quarter of 2016.
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 Fourth Quarter and Full-Year 2016 Financial Results
Raytheon's financial results conference call will be held on Thursday, January 26, 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 (800) 510-9691 in the U.S. or (617) 614-3453 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 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.
|
Attachment A |
||||||||||||||||
|
Raytheon Company |
||||||||||||||||
|
Preliminary Statement of Operations Information |
||||||||||||||||
|
Fourth Quarter 2016 |
||||||||||||||||
|
(In millions, except per share amounts) |
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | |||||||||||||
|
Net sales |
$ |
6,238 |
$ |
6,328 |
$ |
24,069 |
$ |
23,247 |
||||||||
|
Operating expenses |
||||||||||||||||
|
Cost of sales |
4,655 |
4,808 |
17,947 |
17,574 |
||||||||||||
|
General and administrative expenses |
721 |
692 |
2,882 |
2,660 |
||||||||||||
|
Total operating expenses |
5,376 |
5,500 |
20,829 |
20,234 |
||||||||||||
|
Operating income |
862 |
828 |
3,240 |
3,013 |
||||||||||||
|
Non-operating (income) expense, net |
||||||||||||||||
|
Interest expense |
58 |
58 |
232 |
233 |
||||||||||||
|
Interest income |
(4) |
(2) |
(16) |
(11) |
||||||||||||
|
Other (income) expense, net |
1 |
(2) |
(6) |
4 |
||||||||||||
|
Total non-operating (income) expense, net |
55 |
54 |
210 |
226 |
||||||||||||
|
Income from continuing operations before taxes |
807 |
774 |
3,030 |
2,787 |
||||||||||||
|
Federal and foreign income taxes |
266 |
220 |
857 |
733 |
||||||||||||
|
Income from continuing operations |
541 |
554 |
2,173 |
2,054 |
||||||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
13 |
1 |
13 |
||||||||||||
|
Net income |
541 |
567 |
2,174 |
2,067 |
||||||||||||
|
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries |
(3) |
(4) |
(37) |
(7) |
||||||||||||
|
Net income attributable to Raytheon Company |
$ |
544 |
$ |
571 |
$ |
2,211 |
$ |
2,074 |
||||||||
|
Basic earnings per share attributable to Raytheon Company common stockholders: |
||||||||||||||||
|
Income from continuing operations |
$ |
1.84 |
$ |
1.85 |
$ |
7.45 |
$ |
6.76 |
||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
0.04 |
— |
0.04 |
||||||||||||
|
Net income |
1.84 |
1.89 |
7.45 |
6.81 |
||||||||||||
|
Diluted earnings per share attributable to Raytheon Company common stockholders: |
||||||||||||||||
|
Income from continuing operations |
$ |
1.84 |
$ |
1.85 |
$ |
7.44 |
$ |
6.75 |
||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
0.04 |
— |
0.04 |
||||||||||||
|
Net income |
1.84 |
1.89 |
7.44 |
6.80 |
||||||||||||
|
Amounts attributable to Raytheon Company common stockholders: |
||||||||||||||||
|
Income from continuing operations |
$ |
544 |
$ |
558 |
$ |
2,210 |
$ |
2,061 |
||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
13 |
1 |
13 |
||||||||||||
|
Net income |
$ |
544 |
$ |
571 |
$ |
2,211 |
$ |
2,074 |
||||||||
|
Average shares outstanding |
||||||||||||||||
|
Basic |
294.2 |
301.6 |
296.5 |
304.8 |
||||||||||||
|
Diluted |
294.5 |
302.1 |
296.8 |
305.2 |
||||||||||||
|
Attachment A - Pro Forma |
||||||||||||||||||||||||
|
Raytheon Company |
||||||||||||||||||||||||
|
Preliminary Statement of Operations Information |
||||||||||||||||||||||||
|
Full Year 2015, and Quarters within and Full Year 2016 |
||||||||||||||||||||||||
|
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our statement of operations information set forth below reflect these changes. | ||||||||||||||||||||||||
|
(In millions, except per share amounts) |
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||||
|
31-Dec-16 |
2-Oct-16 |
3-Jul-16 |
3-Apr-16 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||||
|
Net sales |
$ |
6,279 |
$ |
6,014 |
$ |
6,029 |
$ |
5,802 |
$ |
24,124 |
$ |
23,321 |
||||||||||||
|
Operating expenses |
||||||||||||||||||||||||
|
Cost of sales |
4,688 |
4,474 |
4,362 |
4,441 |
17,965 |
17,608 |
||||||||||||||||||
|
General and administrative expenses |
711 |
710 |
695 |
748 |
2,864 |
2,646 |
||||||||||||||||||
|
Total operating expenses |
5,399 |
5,184 |
5,057 |
5,189 |
20,829 |
20,254 |
||||||||||||||||||
|
Operating income |
880 |
830 |
972 |
613 |
3,295 |
3,067 |
||||||||||||||||||
|
Non-operating (income) expense, net |
||||||||||||||||||||||||
|
Interest expense |
58 |
58 |
58 |
58 |
232 |
233 |
||||||||||||||||||
|
Interest income |
(4) |
(4) |
(4) |
(4) |
(16) |
(11) |
||||||||||||||||||
|
Other (income) expense, net |
1 |
(4) |
(1) |
(2) |
(6) |
4 |
||||||||||||||||||
|
Total non-operating (income) expense, net |
55 |
50 |
53 |
52 |
210 |
226 |
||||||||||||||||||
|
Income from continuing operations before taxes |
825 |
780 |
919 |
561 |
3,085 |
2,841 |
||||||||||||||||||
|
Federal and foreign income taxes |
272 |
239 |
205 |
157 |
873 |
747 |
||||||||||||||||||
|
Income from continuing operations |
553 |
541 |
714 |
404 |
2,212 |
2,094 |
||||||||||||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
1 |
(1) |
1 |
1 |
13 |
||||||||||||||||||
|
Net income |
553 |
542 |
713 |
405 |
2,213 |
2,107 |
||||||||||||||||||
|
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries |
(2) |
(2) |
(4) |
(23) |
(31) |
(3) |
||||||||||||||||||
|
Net income attributable to Raytheon Company |
$ |
555 |
$ |
544 |
$ |
717 |
$ |
428 |
$ |
2,244 |
$ |
2,110 |
||||||||||||
|
Basic earnings per share attributable to Raytheon Company common stockholders: |
||||||||||||||||||||||||
|
Income from continuing operations |
$ |
1.88 |
$ |
1.84 |
$ |
2.41 |
$ |
1.43 |
$ |
7.55 |
$ |
6.88 |
||||||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
— |
— |
— |
— |
0.04 |
||||||||||||||||||
|
Net income |
1.88 |
1.84 |
2.41 |
1.43 |
7.56 |
6.92 |
||||||||||||||||||
|
Diluted earnings per share attributable to Raytheon Company common stockholders: |
||||||||||||||||||||||||
|
Income from continuing operations |
$ |
1.87 |
$ |
1.84 |
$ |
2.41 |
$ |
1.43 |
$ |
7.55 |
$ |
6.87 |
||||||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
— |
— |
— |
— |
0.04 |
||||||||||||||||||
|
Net income |
1.88 |
1.84 |
2.41 |
1.43 |
7.55 |
6.91 |
||||||||||||||||||
|
Amounts attributable to Raytheon Company common stockholders: |
||||||||||||||||||||||||
|
Income from continuing operations |
$ |
555 |
$ |
543 |
$ |
718 |
$ |
427 |
$ |
2,243 |
$ |
2,097 |
||||||||||||
|
Income (loss) from discontinued operations, net of tax |
— |
1 |
(1) |
1 |
1 |
13 |
||||||||||||||||||
|
Net income |
$ |
555 |
$ |
544 |
$ |
717 |
$ |
428 |
$ |
2,244 |
$ |
2,110 |
||||||||||||
|
Average shares outstanding |
||||||||||||||||||||||||
|
Basic |
294.2 |
295.2 |
297.3 |
299.2 |
296.5 |
304.8 |
||||||||||||||||||
|
Diluted |
294.5 |
295.5 |
297.6 |
299.6 |
296.8 |
305.2 |
||||||||||||||||||
|
Attachment B |
||||||||||||||||||||||
|
Raytheon Company |
||||||||||||||||||||||
|
Preliminary Segment Information |
||||||||||||||||||||||
|
Fourth 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 | |||||||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||
|
Integrated Defense Systems |
$ |
1,406 |
$ |
1,558 |
$ |
219 |
$ |
281 |
15.6 |
% |
18.0 |
% | ||||||||||
|
Intelligence, Information and Services |
1,518 |
1,537 |
121 |
111 |
8.0 |
% |
7.2 |
% | ||||||||||||||
|
Missile Systems |
1,895 |
1,879 |
260 |
258 |
13.7 |
% |
13.7 |
% | ||||||||||||||
|
Space and Airborne Systems |
1,612 |
1,576 |
231 |
239 |
14.3 |
% |
15.2 |
% | ||||||||||||||
|
Forcepoint |
143 |
133 |
11 |
11 |
7.7 |
% |
8.3 |
% | ||||||||||||||
|
Eliminations |
(323) |
(331) |
(32) |
(29) |
||||||||||||||||||
|
Total business segment |
6,251 |
6,352 |
810 |
871 |
13.0 |
% |
13.7 |
% | ||||||||||||||
|
Acquisition Accounting Adjustments |
(13) |
(24) |
(43) |
(59) |
||||||||||||||||||
|
FAS/CAS Adjustment |
— |
— |
117 |
44 |
||||||||||||||||||
|
Corporate |
— |
— |
(22) |
(28) |
||||||||||||||||||
|
Total |
$ |
6,238 |
$ |
6,328 |
$ |
862 |
$ |
828 |
13.8 |
% |
13.1 |
% | ||||||||||
|
Operating Income | ||||||||||||||||||||||
|
Net Sales |
Operating Income |
As a Percent of Net Sales | ||||||||||||||||||||
|
(In millions, except percentages) |
Twelve Months Ended |
Twelve Months Ended |
Twelve Months Ended | |||||||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||
|
Integrated Defense Systems |
$ |
5,476 |
$ |
5,847 |
$ |
950 |
$ |
864 |
17.3 |
% |
14.8 |
% | ||||||||||
|
Intelligence, Information and Services |
6,194 |
6,111 |
467 |
646 |
7.5 |
% |
10.6 |
% | ||||||||||||||
|
Missile Systems |
7,071 |
6,556 |
916 |
868 |
13.0 |
% |
13.2 |
% | ||||||||||||||
|
Space and Airborne Systems |
6,199 |
5,796 |
817 |
829 |
13.2 |
% |
14.3 |
% | ||||||||||||||
|
Forcepoint |
566 |
328 |
51 |
30 |
9.0 |
% |
9.1 |
% | ||||||||||||||
|
Eliminations |
(1,360) |
(1,330) |
(141) |
(140) |
||||||||||||||||||
|
Total business segment |
24,146 |
23,308 |
3,060 |
3,097 |
12.7 |
% |
13.3 |
% | ||||||||||||||
|
Acquisition Accounting Adjustments |
(77) |
(61) |
(198) |
(168) |
||||||||||||||||||
|
FAS/CAS Adjustment |
— |
— |
435 |
185 |
||||||||||||||||||
|
Corporate |
— |
— |
(57) |
(101) |
||||||||||||||||||
|
Total |
$ |
24,069 |
$ |
23,247 |
$ |
3,240 |
$ |
3,013 |
13.5 |
% |
13.0 |
% | ||||||||||
|
Attachment B - Pro Forma |
||||||||||||||||||||||||
|
Raytheon Company |
||||||||||||||||||||||||
|
Preliminary Segment Information |
||||||||||||||||||||||||
|
Full Year 2015, and Quarters within and Full Year 2016 |
||||||||||||||||||||||||
|
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our segment information set forth below reflect these changes. | ||||||||||||||||||||||||
|
Net Sales |
Net Sales | |||||||||||||||||||||||
|
(In millions) |
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||||
|
31-Dec-16 |
2-Oct-16 |
3-Jul-16 |
3-Apr-16 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||||
|
Integrated Defense Systems |
$ |
1,460 |
$ |
1,334 |
$ |
1,399 |
$ |
1,336 |
$ |
5,529 |
$ |
5,848 |
||||||||||||
|
Intelligence, Information and Services |
1,516 |
1,534 |
1,587 |
1,532 |
6,169 |
6,137 |
||||||||||||||||||
|
Missile Systems |
1,897 |
1,770 |
1,706 |
1,723 |
7,096 |
6,569 |
||||||||||||||||||
|
Space and Airborne Systems |
1,600 |
1,590 |
1,547 |
1,445 |
6,182 |
5,814 |
||||||||||||||||||
|
Forcepoint |
143 |
167 |
137 |
139 |
586 |
344 |
||||||||||||||||||
|
Eliminations |
(324) |
(364) |
(326) |
(347) |
(1,361) |
(1,330) |
||||||||||||||||||
|
Total business segment |
6,292 |
6,031 |
6,050 |
5,828 |
24,201 |
23,382 |
||||||||||||||||||
|
Acquisition Accounting Adjustments |
(13) |
(17) |
(21) |
(26) |
(77) |
(61) |
||||||||||||||||||
|
Total |
$ |
6,279 |
$ |
6,014 |
$ |
6,029 |
$ |
5,802 |
$ |
24,124 |
$ |
23,321 |
||||||||||||
|
Operating Income |
Operating Income | |||||||||||||||||||||||
|
(In millions) |
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||||
|
31-Dec-16 |
2-Oct-16 |
3-Jul-16 |
3-Apr-16 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||||
|
Integrated Defense Systems |
$ |
238 |
$ |
211 |
$ |
376 |
$ |
146 |
$ |
971 |
$ |
859 |
||||||||||||
|
Intelligence, Information and Services |
120 |
123 |
120 |
104 |
467 |
648 |
||||||||||||||||||
|
Missile Systems |
261 |
235 |
233 |
192 |
921 |
877 |
||||||||||||||||||
|
Space and Airborne Systems |
221 |
215 |
205 |
167 |
808 |
851 |
||||||||||||||||||
|
Forcepoint |
21 |
41 |
10 |
18 |
90 |
56 |
||||||||||||||||||
|
Eliminations |
(33) |
(42) |
(34) |
(33) |
(142) |
(140) |
||||||||||||||||||
|
Total business segment |
828 |
783 |
910 |
594 |
3,115 |
3,151 |
||||||||||||||||||
|
Acquisition Accounting Adjustments |
(43) |
(46) |
(51) |
(58) |
(198) |
(168) |
||||||||||||||||||
|
FAS/CAS Adjustment |
117 |
104 |
109 |
105 |
435 |
185 |
||||||||||||||||||
|
Corporate |
(22) |
(11) |
4 |
(28) |
(57) |
(101) |
||||||||||||||||||
|
Total |
$ |
880 |
$ |
830 |
$ |
972 |
$ |
613 |
$ |
3,295 |
$ |
3,067 |
||||||||||||
|
Operating Income As a Percentage of Net Sales |
Operating Income As a Percentage of Net Sales | |||||||||||||||||||||||
|
Three Months Ended |
Twelve Months Ended | |||||||||||||||||||||||
|
31-Dec-16 |
2-Oct-16 |
3-Jul-16 |
3-Apr-16 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||||
|
Integrated Defense Systems |
16.3% |
15.8% |
26.9% |
10.9% |
17.6% |
14.7% | ||||||||||||||||||
|
Intelligence, Information and Services |
7.9% |
8.0% |
7.6% |
6.8% |
7.6% |
10.6% | ||||||||||||||||||
|
Missile Systems |
13.8% |
13.3% |
13.7% |
11.1% |
13.0% |
13.4% | ||||||||||||||||||
|
Space and Airborne Systems |
13.8% |
13.5% |
13.3% |
11.6% |
13.1% |
14.6% | ||||||||||||||||||
|
Forcepoint |
14.7% |
24.6% |
7.3% |
12.9% |
15.4% |
16.3% | ||||||||||||||||||
|
Eliminations |
||||||||||||||||||||||||
|
Total business segment |
13.2% |
13.0% |
15.0% |
10.2% |
12.9% |
13.5% | ||||||||||||||||||
|
Acquisition Accounting Adjustments |
||||||||||||||||||||||||
|
FAS/CAS Adjustment |
||||||||||||||||||||||||
|
Corporate |
||||||||||||||||||||||||
|
Total |
14.0% |
13.8% |
16.1% |
10.6% |
13.7% |
13.2% | ||||||||||||||||||
|
Attachment C |
|||||||||||||||||||||
|
Raytheon Company |
|||||||||||||||||||||
|
Other Preliminary Information |
|||||||||||||||||||||
|
Fourth Quarter 2016 |
|||||||||||||||||||||
|
(In millions) |
Funded Backlog |
Total Backlog | |||||||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | ||||||||||||||||||
|
Integrated Defense Systems |
$ |
8,438 |
$ |
8,961 |
$ |
10,224 |
$ |
10,629 |
|||||||||||||
|
Intelligence, Information and Services |
2,340 |
2,933 |
5,663 |
6,367 |
|||||||||||||||||
|
Missile Systems |
9,008 |
7,998 |
11,617 |
10,885 |
|||||||||||||||||
|
Space and Airborne Systems |
5,286 |
4,692 |
8,819 |
6,309 |
|||||||||||||||||
|
Forcepoint |
532 |
476 |
532 |
479 |
|||||||||||||||||
|
Total |
$ |
25,604 |
$ |
25,060 |
$ |
36,855 |
$ |
34,669 |
|||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | ||||||||||||||||||
|
Total Bookings |
$ |
7,577 |
$ |
7,861 |
$ |
27,836 |
$ |
25,227 |
|||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | ||||||||||||||||||
|
Administrative and selling expenses |
$ |
525 |
$ |
497 |
$ |
2,127 |
$ |
1,954 |
|||||||||||||
|
Research and development expenses |
196 |
195 |
755 |
706 |
|||||||||||||||||
|
Total general and administrative expenses |
$ |
721 |
$ |
692 |
$ |
2,882 |
$ |
2,660 |
|||||||||||||
|
Attachment C - Pro Forma |
||||||||||||||||||||||||
|
Raytheon Company |
||||||||||||||||||||||||
|
Other Preliminary Information |
||||||||||||||||||||||||
|
Full Year 2015, and Quarters within and Full Year 2016 |
||||||||||||||||||||||||
|
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our other information set forth below reflect these changes. | ||||||||||||||||||||||||
|
(In millions) |
Remaining Performance Obligations (Total Backlog) | |||||||||||||||||||||||
|
31-Dec-16 |
||||||||||||||||||||||||
|
Integrated Defense Systems |
$ |
10,159 |
||||||||||||||||||||||
|
Intelligence, Information and Services |
5,662 |
|||||||||||||||||||||||
|
Missile Systems |
11,568 |
|||||||||||||||||||||||
|
Space and Airborne Systems |
8,834 |
|||||||||||||||||||||||
|
Forcepoint |
486 |
|||||||||||||||||||||||
|
Total |
$ |
36,709 |
||||||||||||||||||||||
|
Bookings |
Bookings | |||||||||||||||||||||||
|
(In millions) |
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||||
|
31-Dec-16 |
2-Oct-16 |
3-Jul-16 |
3-Apr-16 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||||
|
Integrated Defense Systems |
$ |
2,062 |
$ |
1,025 |
$ |
1,273 |
$ |
1,017 |
$ |
5,377 |
$ |
6,389 |
||||||||||||
|
Intelligence, Information and Services |
980 |
1,731 |
1,599 |
1,253 |
5,563 |
5,319 |
||||||||||||||||||
|
Missile Systems |
2,439 |
1,932 |
1,891 |
1,632 |
7,894 |
8,149 |
||||||||||||||||||
|
Space and Airborne Systems |
1,935 |
2,060 |
2,217 |
2,202 |
8,414 |
4,936 |
||||||||||||||||||
|
Forcepoint |
166 |
175 |
123 |
97 |
561 |
352 |
||||||||||||||||||
|
Total |
$ |
7,582 |
$ |
6,923 |
$ |
7,103 |
$ |
6,201 |
$ |
27,809 |
$ |
25,145 |
||||||||||||
|
Attachment D |
|||||||
|
Raytheon Company |
|||||||
|
Preliminary Balance Sheet Information |
|||||||
|
Fourth Quarter 2016 | |||||||
|
(In millions) |
|||||||
|
31-Dec-16 |
31-Dec-15 | ||||||
|
Assets |
|||||||
|
Current assets |
|||||||
|
Cash and cash equivalents |
$ |
3,303 |
$ |
2,328 |
|||
|
Short-term investments |
100 |
872 |
|||||
|
Contracts in process, net |
6,202 |
5,564 |
|||||
|
Inventories |
659 |
635 |
|||||
|
Prepaid expenses and other current assets |
414 |
413 |
|||||
|
Total current assets |
10,678 |
9,812 |
|||||
|
Property, plant and equipment, net |
2,166 |
2,005 |
|||||
|
Goodwill |
14,788 |
14,731 |
|||||
|
Other assets, net |
2,420 |
2,733 |
|||||
|
Total assets |
$ |
30,052 |
$ |
29,281 |
|||
|
Liabilities, Redeemable Noncontrolling Interest and Equity |
|||||||
|
Current liabilities |
|||||||
|
Advance payments and billings in excess of costs incurred |
$ |
2,239 |
$ |
2,193 |
|||
|
Accounts payable |
1,520 |
1,402 |
|||||
|
Accrued employee compensation |
1,234 |
1,154 |
|||||
|
Other current liabilities |
1,434 |
1,377 |
|||||
|
Total current liabilities |
6,427 |
6,126 |
|||||
|
Accrued retiree benefits and other long-term liabilities |
7,775 |
7,140 |
|||||
|
Long-term debt |
5,335 |
5,330 |
|||||
|
Redeemable noncontrolling interest |
449 |
355 |
|||||
|
Equity |
|||||||
|
Raytheon Company stockholders' equity |
|||||||
|
Common stock |
3 |
3 |
|||||
|
Additional paid-in capital |
— |
398 |
|||||
|
Accumulated other comprehensive loss |
(7,411) |
(7,176) |
|||||
|
Retained earnings |
17,474 |
16,903 |
|||||
|
Total Raytheon Company stockholders' equity |
10,066 |
10,128 |
|||||
|
Noncontrolling interests in subsidiaries |
— |
202 |
|||||
|
Total equity |
10,066 |
10,330 |
|||||
|
Total liabilities, redeemable noncontrolling interest and equity |
$ |
30,052 |
$ |
29,281 |
|||
|
Attachment D - Pro Forma |
|||
|
Raytheon Company |
|||
|
Preliminary Balance Sheet Information |
|||
|
December 31, 2016 | |||
|
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our balance sheet information set forth below reflect these changes. | |||
|
(In millions) |
|||
|
31-Dec-16 | |||
|
Assets |
|||
|
Current assets |
|||
|
Cash and cash equivalents |
$ |
3,303 |
|
|
Short-term investments |
100 |
||
|
Receivables, net |
1,163 |
||
|
Contract assets |
5,041 |
||
|
Inventories |
608 |
||
|
Prepaid expenses and other current assets |
670 |
||
|
Total current assets |
10,885 |
||
|
Property, plant and equipment, net |
2,166 |
||
|
Goodwill |
14,788 |
||
|
Other assets, net |
2,399 |
||
|
Total assets |
$ |
30,238 |
|
|
Liabilities, Redeemable Noncontrolling Interest and Equity |
|||
|
Current liabilities |
|||
|
Contract liabilities |
$ |
2,646 |
|
|
Accounts payable |
1,520 |
||
|
Accrued employee compensation |
1,234 |
||
|
Other current liabilities |
1,139 |
||
|
Total current liabilities |
6,539 |
||
|
Accrued retiree benefits and other long-term liabilities |
7,758 |
||
|
Long-term debt |
5,335 |
||
|
Redeemable noncontrolling interest |
449 |
||
|
Equity |
|||
|
Raytheon Company stockholders' equity |
|||
|
Common stock |
3 |
||
|
Additional paid-in capital |
— |
||
|
Accumulated other comprehensive loss |
(7,411) |
||
|
Retained earnings |
17,565 |
||
|
Total Raytheon Company stockholders' equity |
10,157 |
||
|
Noncontrolling interests in subsidiaries |
— |
||
|
Total equity |
10,157 |
||
|
Total liabilities, redeemable noncontrolling interest and equity |
$ |
30,238 |
|
|
Attachment E |
|||||||
|
Raytheon Company |
|||||||
|
Preliminary Cash Flow Information |
|||||||
|
Fourth Quarter 2016 |
|||||||
|
Twelve Months Ended | |||||||
|
(In millions) |
31-Dec-16 |
31-Dec-15 | |||||
|
Cash flows from operating activities |
|||||||
|
Net income |
$ |
2,174 |
$ |
2,067 |
|||
|
(Income) loss from discontinued operations, net of tax |
(1) |
(13) |
|||||
|
Income from continuing operations |
2,173 |
2,054 |
|||||
|
Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of acquisitions and divestitures |
|||||||
|
Depreciation and amortization |
515 |
489 |
|||||
|
Stock-based compensation |
151 |
140 |
|||||
|
Gain on sale of equity method investment |
(158) |
— |
|||||
|
Deferred income taxes |
109 |
(56) |
|||||
|
Tax benefit from stock-based awards |
— |
(47) |
|||||
|
Changes in assets and liabilities |
|||||||
|
Contracts in process, net and advance payments and billings in excess of costs incurred |
(593) |
(637) |
|||||
|
Inventories |
(23) |
(223) |
|||||
|
Prepaid expenses and other current assets |
181 |
(28) |
|||||
|
Income taxes receivable/payable |
(185) |
(181) |
|||||
|
Accounts payable |
152 |
107 |
|||||
|
Accrued employee compensation |
77 |
72 |
|||||
|
Other current liabilities |
(6) |
58 |
|||||
|
Accrued retiree benefits |
419 |
637 |
|||||
|
Other, net |
40 |
(39) |
|||||
|
Net cash provided by (used in) operating activities from continuing operations |
2,852 |
2,346 |
|||||
|
Net cash provided by (used in) operating activities from discontinued operations |
— |
13 |
|||||
|
Net cash provided by (used in) operating activities |
2,852 |
2,359 |
|||||
|
Cash flows from investing activities |
|||||||
|
Additions to property, plant and equipment |
(561) |
(406) |
|||||
|
Proceeds from sales of property, plant and equipment |
34 |
59 |
|||||
|
Additions to capitalized internal use software |
(64) |
(51) |
|||||
|
Purchases of short-term investments |
(472) |
(1,392) |
|||||
|
Sales of short-term investments |
— |
209 |
|||||
|
Maturities of short-term investments |
1,184 |
1,793 |
|||||
|
Payments for purchases of acquired companies, net of cash received |
(57) |
(1,954) |
|||||
|
Other |
(11) |
(2) |
|||||
|
Net cash provided by (used in) investing activities |
53 |
(1,744) |
|||||
|
Cash flows from financing activities |
|||||||
|
Dividends paid |
(850) |
(797) |
|||||
|
Repurchases of common stock under share repurchase programs |
(900) |
(1,000) |
|||||
|
Repurchases of common stock to satisfy tax withholding obligations |
(96) |
(99) |
|||||
|
Acquisition of noncontrolling interest in RCCS LLC |
(90) |
— |
|||||
|
Contribution from noncontrolling interests in Forcepoint |
11 |
— |
|||||
|
Tax benefit from stock-based awards |
— |
47 |
|||||
|
Sale of noncontrolling interest in Forcepoint |
— |
343 |
|||||
|
Other |
(5) |
(3) |
|||||
|
Net cash provided by (used in) financing activities |
(1,930) |
(1,509) |
|||||
|
Net increase (decrease) in cash and cash equivalents |
975 |
(894) |
|||||
|
Cash and cash equivalents at beginning of the year |
2,328 |
3,222 |
|||||
|
Cash and cash equivalents at end of period |
$ |
3,303 |
$ |
2,328 |
|||
|
Attachment E - Pro Forma |
|||||||||||||||||||||||
|
Raytheon Company |
|||||||||||||||||||||||
|
Preliminary Cash Flow Information |
|||||||||||||||||||||||
|
Full Year 2015, and Quarters within and Full Year 2016 |
|||||||||||||||||||||||
|
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our cash flow information set forth below reflect these changes. | |||||||||||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||||||||||
|
(In millions) |
31-Dec-16 |
2-Oct-16 |
3-Jul-16 |
3-Apr-16 |
31-Dec-16 |
31-Dec-15 | |||||||||||||||||
|
Cash flows from operating activities |
|||||||||||||||||||||||
|
Net income |
$ |
553 |
$ |
542 |
$ |
713 |
$ |
405 |
$ |
2,213 |
$ |
2,107 |
|||||||||||
|
(Income) loss from discontinued operations, net of tax |
— |
(1) |
1 |
(1) |
(1) |
(13) |
|||||||||||||||||
|
Income from continuing operations |
553 |
541 |
714 |
404 |
2,212 |
2,094 |
|||||||||||||||||
|
Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of acquisitions and divestitures |
|||||||||||||||||||||||
|
Depreciation and amortization |
138 |
130 |
123 |
124 |
515 |
489 |
|||||||||||||||||
|
Stock-based compensation |
31 |
31 |
35 |
54 |
151 |
140 |
|||||||||||||||||
|
Gain on sale of equity method investment |
— |
— |
(158) |
— |
(158) |
— |
|||||||||||||||||
|
Deferred income taxes |
217 |
(31) |
(23) |
(30) |
133 |
(42) |
|||||||||||||||||
|
Tax benefit from stock-based awards |
— |
— |
— |
— |
— |
(47) |
|||||||||||||||||
|
Changes in assets and liabilities |
|||||||||||||||||||||||
|
Receivables, net |
82 |
186 |
(156) |
(94) |
18 |
12 |
|||||||||||||||||
|
Contracts assets and contract liabilities |
280 |
(433) |
(197) |
(295) |
(645) |
(656) |
|||||||||||||||||
|
Inventories |
27 |
(23) |
(55) |
41 |
(10) |
(187) |
|||||||||||||||||
|
Prepaid expenses and other current assets |
(47) |
122 |
(13) |
143 |
205 |
(61) |
|||||||||||||||||
|
Income taxes receivable/payable |
(107) |
(142) |
(125) |
189 |
(185) |
(181) |
|||||||||||||||||
|
Accounts payable |
100 |
3 |
92 |
(43) |
152 |
107 |
|||||||||||||||||
|
Accrued employee compensation |
102 |
18 |
308 |
(351) |
77 |
72 |
|||||||||||||||||
|
Other current liabilities |
18 |
17 |
(33) |
(43) |
(41) |
17 |
|||||||||||||||||
|
Accrued retiree benefits |
(274) |
248 |
224 |
221 |
419 |
637 |
|||||||||||||||||
|
Other, net |
21 |
(27) |
10 |
5 |
9 |
(48) |
|||||||||||||||||
|
Net cash provided by (used in) operating activities from continuing operations |
1,141 |
640 |
746 |
325 |
2,852 |
2,346 |
|||||||||||||||||
|
Net cash provided by (used in) operating activities from discontinued operations |
— |
— |
(1) |
1 |
— |
13 |
|||||||||||||||||
|
Net cash provided by (used in) operating activities |
1,141 |
640 |
745 |
326 |
2,852 |
2,359 |
|||||||||||||||||
|
Cash flows from investing activities |
|||||||||||||||||||||||
|
Additions to property, plant and equipment |
(217) |
(107) |
(87) |
(150) |
(561) |
(406) |
|||||||||||||||||
|
Proceeds from sales of property, plant and equipment |
9 |
24 |
— |
1 |
34 |
59 |
|||||||||||||||||
|
Additions to capitalized internal use software |
(17) |
(21) |
(14) |
(12) |
(64) |
(51) |
|||||||||||||||||
|
Purchases of short-term investments |
— |
— |
(472) |
— |
(472) |
(1,392) |
|||||||||||||||||
|
Sales of short-term investments |
— |
— |
— |
— |
— |
209 |
|||||||||||||||||
|
Maturities of short-term investments |
362 |
223 |
472 |
127 |
1,184 |
1,793 |
|||||||||||||||||
|
Payments for purchases of acquired companies, net of cash received |
— |
— |
— |
(57) |
(57) |
(1,954) |
|||||||||||||||||
|
Other |
(2) |
(15) |
6 |
— |
(11) |
(2) |
|||||||||||||||||
|
Net cash provided by (used in) investing activities |
135 |
104 |
(95) |
(91) |
53 |
(1,744) |
|||||||||||||||||
|
Cash flows from financing activities |
|||||||||||||||||||||||
|
Dividends paid |
(215) |
(216) |
(218) |
(201) |
(850) |
(797) |
|||||||||||||||||
|
Repurchases of common stock under share repurchase programs |
(99) |
(199) |
(202) |
(400) |
(900) |
— |
|||||||||||||||||
|
Repurchases of common stock to satisfy tax withholding obligations |
(1) |
(3) |
(58) |
(34) |
(96) |
(1,000) |
|||||||||||||||||
|
Acquisition of noncontrolling interest in RCCS LLC |
— |
— |
(90) |
— |
(90) |
(99) |
|||||||||||||||||
|
Contribution from noncontrolling interests in Forcepoint |
— |
— |
— |
11 |
11 |
— |
|||||||||||||||||
|
Tax benefit from stock-based awards |
— |
— |
— |
— |
— |
47 |
|||||||||||||||||
|
Sale of noncontrolling interest in Forcepoint |
— |
— |
— |
— |
— |
343 |
|||||||||||||||||
|
Other |
— |
— |
— |
(5) |
(5) |
(3) |
|||||||||||||||||
|
Net cash provided by (used in) financing activities |
(315) |
(418) |
(568) |
(629) |
(1,930) |
(1,509) |
|||||||||||||||||
|
Net increase (decrease) in cash and cash equivalents |
961 |
326 |
82 |
(394) |
975 |
(894) |
|||||||||||||||||
|
Cash and cash equivalents at beginning of the year |
2,342 |
2,016 |
1,934 |
2,328 |
2,328 |
3,222 |
|||||||||||||||||
|
Cash and cash equivalents at end of period |
$ |
3,303 |
$ |
2,342 |
$ |
2,016 |
$ |
1,934 |
$ |
3,303 |
$ |
2,328 |
|||||||||||
|
Attachment F |
|||||||||||||||||||
|
Raytheon Company |
|||||||||||||||||||
|
Supplemental EPS Information |
|||||||||||||||||||
|
Fourth Quarter 2016 |
|||||||||||||||||||
|
(In millions, except per share amounts) |
Three Months Ended |
Twelve Months Ended | |||||||||||||||||
|
31-Dec-16 |
31-Dec-15 |
31-Dec-16 |
31-Dec-15 | ||||||||||||||||
|
Per share impact of the FAS/CAS Adjustment (A) |
$ |
0.26 |
$ |
0.10 |
$ |
0.95 |
$ |
0.39 |
|||||||||||
|
Per share impact of the TRS transaction (B) |
— |
— |
0.53 |
— |
|||||||||||||||
|
Per share impact of the eBorders settlement (C) |
— |
0.02 |
— |
0.47 |
|||||||||||||||
|
Per share impact of discretionary pension contributions (D) |
0.04 |
0.02 |
0.04 |
0.02 |
|||||||||||||||
|
(A) |
FAS/CAS Adjustment |
$ |
117 |
$ |
44 |
$ |
435 |
$ |
185 |
||||||||||
|
Tax effect (at 35% statutory rate) |
(41) |
(15) |
(152) |
(65) |
|||||||||||||||
|
After-tax impact |
76 |
29 |
283 |
120 |
|||||||||||||||
|
Diluted shares |
294.5 |
302.1 |
296.8 |
305.2 |
|||||||||||||||
|
Per share impact |
$ |
0.26 |
$ |
0.10 |
$ |
0.95 |
$ |
0.39 |
|||||||||||
|
(B) |
TRS transaction |
$ |
— |
$ |
— |
$ |
158 |
$ |
— |
||||||||||
|
Diluted shares |
— |
— |
296.8 |
— |
|||||||||||||||
|
Per share impact |
$ |
— |
$ |
— |
$ |
0.53 |
$ |
— |
|||||||||||
|
(C) |
eBorders settlement |
$ |
— |
$ |
— |
$ |
— |
$ |
181 |
||||||||||
|
Tax effect (at 21% blended global tax rate)
|
— |
5 |
— |
(38) |
|||||||||||||||
|
After-tax impact |
— |
5 |
— |
143 |
|||||||||||||||
|
Diluted shares |
— |
302.1 |
— |
305.2 |
|||||||||||||||
|
Per share impact |
$ |
— |
$ |
0.02 |
$ |
— |
$ |
0.47 |
|||||||||||
|
(D) |
Tax impact of discretionary pension contribution |
$ |
13 |
$ |
5 |
$ |
13 |
$ |
5 |
||||||||||
|
Diluted shares |
294.5 |
302.1 |
296.8 |
305.2 |
|||||||||||||||
|
Per share impact |
$ |
0.04 |
$ |
0.02 |
$ |
0.04 |
$ |
0.02 |
|||||||||||
Raytheon Company
Global Headquarters
Waltham, Mass.
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Corinne Kovalsky
781.522.5899
SOURCE Raytheon Company