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Raytheon Reports Strong Fourth Quarter and Full-Year 2018 Results
- Strong bookings of $8.4 billion in the quarter and $32.2 billion for the year; book-to-bill ratio of 1.15 in the quarter and 1.19 for the year
- Fourth quarter net sales of $7.4 billion, up 8.5 percent; full-year net sales of $27.1 billion, up 6.7 percent for the year
- Fourth quarter EPS from continuing operations of $2.93, up 117 percent; full-year EPS from continuing operations of $10.15, up 46 percent for the year
- Strong operating cash flow from continuing operations of $2.4 billion in the quarter and a record $3.4 billion for the year
WALTHAM, Mass., Jan. 31, 2019 /PRNewswire/ -- Raytheon Company (NYSE: RTN) today announced net sales for the fourth quarter 2018 of $7.4 billion, up 8.5 percent compared to $6.8 billion in the fourth quarter 2017. Fourth quarter 2018 EPS from continuing operations was $2.93 compared to $1.35 in the fourth quarter 2017. The increase in the fourth quarter 2018 EPS from continuing operations was primarily driven by operational improvements and lower taxes primarily associated with tax reform.
Net sales in 2018 were $27.1 billion, up 6.7 percent compared to $25.3 billion in 2017. Full-year 2018 EPS from continuing operations was $10.15 compared to $6.94 for the full-year 2017.
"Raytheon had a very successful year in 2018. We accelerated our sales growth yet again and achieved a new company record for operating cash flow," said Thomas A. Kennedy, Raytheon Chairman and CEO. "We ended the year with record bookings and backlog which positions us well for 2019 and beyond."
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 2018 was $2.4 billion. Operating cash flow from continuing operations for the full-year 2018 was a record $3.4 billion, after making the $1.25 billion pretax discretionary pension contribution in the third quarter 2018. Operating cash flow from continuing operations for the fourth quarter 2017 and full-year 2017 was $1.6 billion and $2.7 billion, respectively, after making the $1.0 billion pretax discretionary pension contribution in the fourth quarter 2017. Operating cash flow from continuing operations for the fourth quarter and full-year 2018 was better than the company's prior guidance primarily due to improved working capital.
In the fourth quarter 2018, the company repurchased 2.3 million shares of common stock for $400 million. For the full-year 2018, the company repurchased 6.7 million shares of common stock for $1,325 million.
The company had bookings of $8.4 billion in the fourth quarter 2018, resulting in a book-to-bill ratio of 1.15. Fourth quarter 2017 bookings were $8.5 billion. Full-year 2018 bookings were a record $32.2 billion, resulting in a book-to-bill ratio of 1.19. Full-year 2017 bookings were $27.7 billion.
Summary Financial Results | ||||||||||||
4th Quarter | % | Twelve Months | % | |||||||||
($ in millions, except per share data) | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||
Bookings | $ | 8,447 | $ | 8,541 | (1.1)% | $ | 32,162 | $ | 27,718 | 16.0% | ||
Net Sales | $ | 7,360 | $ | 6,783 | 8.5% | $ | 27,058 | $ | 25,348 | 6.7% | ||
Income from Continuing Operations attributable to | $ | 833 | $ | 3931 | 112.0% | $ | 2,9102 | $ | 2,0221 | 43.9% | ||
Raytheon Company | ||||||||||||
EPS from Continuing Operations | $ | 2.93 | $ | 1.351 | 117.0% | $ | 10.152 | $ | 6.941 | 46.3% | ||
Operating Cash Flow from Continuing Operations | $ | 2,433 | $ | 1,624 | $ | 3,428 | $ | 2,747 | ||||
Workdays in Fiscal Reporting Calendar | 58 | 58 | 249 | 248 | ||||||||
1Fourth quarter and twelve months 2017 Income from Continuing Operations attributable to Raytheon Company included a provisional tax-related expense of approximately $171 million due to the enactment of the Tax Cuts and Jobs Act of 2017, which had an EPS impact of $0.59. | ||||||||||||
2As 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, which is included in twelve months 2018 Income from Continuing Operations attributable to Raytheon Company. Twelve months 2018 EPS from Continuing Operations included an unfavorable $0.79 impact related to the settlement charge. | ||||||||||||
Backlog at the end of 2018 was a record $42.4 billion, an increase of $4.2 billion or 11 percent compared to the end of 2017.
Backlog | ||||||||||||||||||||||
Period Ending | ||||||||||||||||||||||
($ in millions) | 2018 | 2017 | ||||||||||||||||||||
Backlog | $ | 42,420 | $ | 38,210 | ||||||||||||||||||
Outlook
The company has provided its financial outlook for 2019. Charts containing additional information on the company's 2019 outlook are available on the company's website.
2019 Financial Outlook | |||
2018 Actual | 2019 Outlook | ||
Net Sales ($B) | 27.1 | 28.6 - 29.1 | |
Deferred Revenue Adjustment ($M) | (10) | (2) | |
Amortization of Acquired Intangibles ($M) | (116) | (114) | |
FAS/CAS Operating Adjustment ($M) | 1,428 | 1,463 | |
Retirement Benefits Non-service Expense, non-operating ($M) | (1,230) | (726) | |
Interest Expense, net ($M) | (153) | (153) - (158) | |
Diluted Shares (M) | 287 | 279 - 281 | |
Effective Tax Rate | 8.4% | 17.0% - 17.5% | |
EPS from Continuing Operations | $10.15 | $11.40 - $11.60 | |
Operating Cash Flow from Continuing Operations ($B) | 3.4 | 3.9 - 4.1 |
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 | ||||||||||||||
4th Quarter | Twelve Months | |||||||||||||
($ in millions) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||
Net Sales | $ | 1,684 | $ | 1,553 | 8% | $ | 6,180 | $ | 5,804 | 6% | ||||
Operating Income | $ | 247 | $ | 247 | - | $ | 1,023 | $ | 935 | 9% | ||||
Operating Margin | 14.7% | 15.9% | 16.6% | 16.1% | ||||||||||
Integrated Defense Systems (IDS) had fourth quarter 2018 net sales of $1,684 million, up 8 percent compared to $1,553 million in the fourth quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on two international Patriot® programs awarded in 2018. IDS had full-year 2018 net sales of $6,180 million compared to $5,804 million in 2017. The increase in net sales for the full-year was primarily driven by higher net sales from an international Patriot program awarded in the first quarter 2018.
IDS recorded $247 million of operating income in both the fourth quarter 2018 and the fourth quarter 2017. IDS recorded $1,023 million of operating income in 2018 compared to $935 million in 2017. The increase in operating income for the full-year was primarily driven by a favorable change in mix.
During the quarter, IDS booked $676 million to provide advanced Patriot air and missile defense capability for Sweden. IDS also booked $380 million to provide Guidance Enhanced Missiles (GEM-T) for an international customer; $140 million to provide Consolidated Contractor Logistics Support (CCLS) for the Missile Defense Agency (MDA); and $95 million on the Army Navy/Transportable Radar Surveillance-Model 2 (AN/TPY-2) radar sustainment program for the MDA.
Intelligence, Information and Services | ||||||||||||||
4th Quarter | Twelve Months | |||||||||||||
($ in millions) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||
Net Sales | $ | 1,711 | $ | 1,572 | 9% | $ | 6,722 | $ | 6,177 | 9% | ||||
Operating Income | $ | 144 | $ | 117 | 23% | $ | 538 | $ | 455 | 18% | ||||
Operating Margin | 8.4% | 7.4% | 8.0% | 7.4% | ||||||||||
Intelligence, Information and Services (IIS) had fourth quarter 2018 net sales of $1,711 million, up 9 percent compared to $1,572 million in the fourth quarter 2017. IIS had full-year 2018 net sales of $6,722 million compared to $6,177 million in 2017. The increase in net sales for both the quarter and the full-year was primarily driven by higher net sales on classified programs in both cyber and space, and the Development, Operations and Maintenance (DOMino) cyber program.
IIS recorded $144 million of operating income in the fourth quarter 2018 compared to $117 million in the fourth quarter 2017. IIS recorded $538 million of operating income in 2018 compared to $455 million in 2017. The increase in operating income for both the quarter and full-year was primarily driven by higher net program efficiencies and higher volume.
During the quarter, IIS booked $545 million on a number of classified programs. IIS also booked $142 million on domestic and foreign training programs in support of Warfighter FOCUS activities.
Missile Systems | ||||||||||||||
4th Quarter | Twelve Months | |||||||||||||
($ in millions) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||
Net Sales | $ | 2,317 | $ | 2,185 | 6% | $ | 8,298 | $ | 7,787 | 7% | ||||
Operating Income | $ | 273 | $ | 278 | (2)% | $ | 973 | $ | 1,010 | (4)% | ||||
Operating Margin | 11.8% | 12.7% | 11.7% | 13.0% | ||||||||||
Missile Systems (MS) had fourth quarter 2018 net sales of $2,317 million, up 6 percent compared to $2,185 million in the fourth quarter 2017. MS had full-year 2018 net sales of $8,298 million compared to $7,787 million in 2017. The increase in net sales for both the quarter and full-year was primarily driven by higher net sales on classified programs.
MS recorded $273 million of operating income in the fourth quarter 2018 compared to $278 million in the fourth quarter 2017. MS recorded $973 million of operating income in 2018 compared to $1,010 million in 2017. The decrease in operating margin for both the quarter and the full-year was primarily due to a change in mix.
During the quarter, MS booked $452 million for AIM-9X Sidewinder short-range air-to-air missiles; $193 million for Standard Missile-2 (SM-2); $149 million for StormBreaker™, formerly Small Diameter Bomb II (SDB II™); $132 million for Phalanx® Close-In Weapon Systems (CIWS); $132 million for Paveway™; $110 million for the Iron Dome Tamir production program; and $75 million for the David's Sling weapon system's Stunner Missile. MS also booked $563 million on a number of classified contracts.
Space and Airborne Systems | ||||||||||||||
4th Quarter | Twelve Months | |||||||||||||
($ in millions) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||
Net Sales | $ | 1,880 | $ | 1,670 | 13% | $ | 6,748 | $ | 6,430 | 5% | ||||
Operating Income | $ | 262 | $ | 242 | 8% | $ | 884 | $ | 862 | 3% | ||||
Operating Margin | 13.9% | 14.5% | 13.1% | 13.4% | ||||||||||
Space and Airborne Systems (SAS) had fourth quarter 2018 net sales of $1,880 million, up 13 percent compared to $1,670 million in the fourth quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs. SAS had full-year 2018 net sales of $6,748 million compared to $6,430 million in 2017. The increase in net sales for the full-year was primarily driven by higher net sales on a domestic tactical radar systems production program, and surveillance and targeting systems programs.
SAS recorded $262 million of operating income in the fourth quarter 2018 compared to $242 million in the fourth quarter 2017. The increase in operating income for the quarter was primarily due to higher volume. SAS recorded $884 million of operating income in 2018 compared to $862 million in 2017. The increase in operating income for the full-year was primarily due to higher net program efficiencies and higher volume, partially offset by mix.
During the quarter, SAS booked $429 million for the Next Generation Overhead Persistent Infrared (Next Gen OPIR) program for the U.S. Air Force; $347 million to provide support and sustainment services to the U.K. Royal Air Force's Shadow aircraft fleet; and $173 million for radar components for the U.S. Navy and the Royal Australian Air Force. SAS also booked $544 million on a number of classified contracts.
Forcepoint | ||||||||||||||
4th Quarter | Twelve Months | |||||||||||||
($ in millions) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||
Net Sales | $ | 172 | $ | 156 | 10% | $ | 634 | $ | 608 | 4% | ||||
Operating Income (Loss) | $ | 2 | $ | (8) | NM | $ | 5 | $ | 33 | NM | ||||
Operating Margin | 1.2% | (5.1)% | 0.8% | 5.4% | ||||||||||
NM = Not Meaningful | ||||||||||||||
Forcepoint had fourth quarter 2018 net sales of $172 million, up 10 percent compared to $156 million in the fourth quarter 2017. Forcepoint had full-year 2018 net sales of $634 million compared to $608 million in 2017.
Forcepoint recorded $2 million of operating income in the fourth quarter 2018 compared to a loss of $8 million in the fourth quarter 2017. Forcepoint recorded $5 million of operating income in 2018 compared to $33 million in 2017. The decrease in operating income for the full-year was primarily driven by higher operating costs.
About Raytheon
Raytheon Company, with 2018 sales of $27 billion and 67,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 97 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 Fourth Quarter and Full-Year 2018 Financial Results
Raytheon's financial results conference call will be held on Thursday, January 31, 2019 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 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; dependence on 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 material and 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 2018 (In millions, except per share amounts) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | ||||||||||||||
Net sales | $ | 7,360 | $ | 6,783 | $ | 27,058 | $ | 25,348 | |||||||||
Operating expenses | |||||||||||||||||
Cost of sales | 5,393 | 4,985 | 19,573 | 18,340 | |||||||||||||
General and administrative expenses | 753 | 698 | 2,947 | 2,777 | |||||||||||||
Total operating expenses | 6,146 | 5,683 | 22,520 | 21,117 | |||||||||||||
Operating income | 1,214 | 1,100 | 4,538 | 4,231 | |||||||||||||
Non-operating (income) expense, net | |||||||||||||||||
Retirement benefits non-service expense | 237 | 230 | 1,230 | 913 | |||||||||||||
Interest expense | 46 | 48 | 184 | 205 | |||||||||||||
Interest income | (10) | (7) | (31) | (21) | |||||||||||||
Other (income) expense, net | 14 | (5) | 8 | 21 | |||||||||||||
Total non-operating (income) expense, net | 287 | 266 | 1,391 | 1,118 | |||||||||||||
Income from continuing operations before taxes | 927 | 834 | 3,147 | 3,113 | |||||||||||||
Federal and foreign income taxes | 99 | 447 | 264 | 1,114 | |||||||||||||
Income from continuing operations | 828 | 387 | 2,883 | 1,999 | |||||||||||||
Income (loss) from discontinued operations, net of tax | (1) | — | (1) | 2 | |||||||||||||
Net income | 827 | 387 | 2,882 | 2,001 | |||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | |||||||||||||||||
in subsidiaries | (5) | (6) | (27) | (23) | |||||||||||||
Net income attributable to Raytheon Company | $ | 832 | $ | 393 | $ | 2,909 | $ | 2,024 | |||||||||
Basic earnings per share attributable to Raytheon Company | |||||||||||||||||
common stockholders: | |||||||||||||||||
Income from continuing operations | $ | 2.93 | $ | 1.35 | $ | 10.16 | $ | 6.95 | |||||||||
Income (loss) from discontinued operations, net of tax | — | — | — | 0.01 | |||||||||||||
Net income | 2.93 | 1.35 | 10.16 | 6.96 | |||||||||||||
Diluted earnings per share attributable to Raytheon Company | |||||||||||||||||
common stockholders: | |||||||||||||||||
Income from continuing operations | $ | 2.93 | $ | 1.35 | $ | 10.15 | $ | 6.94 | |||||||||
Income (loss) from discontinued operations, net of tax | — | — | — | 0.01 | |||||||||||||
Net income | 2.93 | 1.35 | 10.15 | 6.95 | |||||||||||||
Amounts attributable to Raytheon Company common | |||||||||||||||||
stockholders: | |||||||||||||||||
Income from continuing operations | $ | 833 | $ | 393 | $ | 2,910 | $ | 2,022 | |||||||||
Income (loss) from discontinued operations, net of tax | (1) | — | (1) | 2 | |||||||||||||
Net income | $ | 832 | $ | 393 | $ | 2,909 | $ | 2,024 | |||||||||
Average shares outstanding | |||||||||||||||||
Basic | 284.4 | 289.6 | 286.5 | 291.1 | |||||||||||||
Diluted | 284.7 | 290.0 | 286.8 | 291.4 | |||||||||||||
Attachment B Raytheon Company Preliminary Segment Information Fourth Quarter 2018 (In millions, except percentages) | |||||||||||||||||||||
Net Sales | Operating Income | Operating Income As a Percent of Net Sales | |||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||
31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | ||||||||||||||||
Integrated Defense Systems | $ | 1,684 | $ | 1,553 | $ | 247 | $ | 247 | 14.7% | 15.9% | |||||||||||
Intelligence, Information and Services | 1,711 | 1,572 | 144 | 117 | 8.4% | 7.4% | |||||||||||||||
Missile Systems | 2,317 | 2,185 | 273 | 278 | 11.8% | 12.7% | |||||||||||||||
Space and Airborne Systems | 1,880 | 1,670 | 262 | 242 | 13.9% | 14.5% | |||||||||||||||
Forcepoint | 172 | 156 | 2 | (8) | 1.2% | (5.1)% | |||||||||||||||
Eliminations | (404) | (346) | (44) | (35) | |||||||||||||||||
Total business segment | 7,360 | 6,790 | 884 | 841 | 12.0% | 12.4% | |||||||||||||||
Acquisition Accounting Adjustments | — | (7) | (29) | (37) | |||||||||||||||||
FAS/CAS Operating Adjustment | — | — | 356 | 325 | |||||||||||||||||
Corporate | — | — | 3 | (29) | |||||||||||||||||
Total | $ | 7,360 | $ | 6,783 | $ | 1,214 | $ | 1,100 | 16.5% | 16.2% | |||||||||||
Operating Income As a Percent of Net Sales | |||||||||||||||||||||
Net Sales | Operating Income | ||||||||||||||||||||
Twelve Months Ended | Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||
31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | ||||||||||||||||
Integrated Defense Systems | $ | 6,180 | $ | 5,804 | $ | 1,023 | $ | 935 | 16.6% | 16.1% | |||||||||||
Intelligence, Information and Services | 6,722 | 6,177 | 538 | 455 | 8.0% | 7.4% | |||||||||||||||
Missile Systems | 8,298 | 7,787 | 973 | 1,010 | 11.7% | 13.0% | |||||||||||||||
Space and Airborne Systems | 6,748 | 6,430 | 884 | 862 | 13.1% | 13.4% | |||||||||||||||
Forcepoint | 634 | 608 | 5 | 33 | 0.8% | 5.4% | |||||||||||||||
Eliminations | (1,514) | (1,423) | (170) | (148) | |||||||||||||||||
Total business segment | 27,068 | 25,383 | 3,253 | 3,147 | 12.0% | 12.4% | |||||||||||||||
Acquisition Accounting Adjustments | (10) | (35) | (126) | (160) | |||||||||||||||||
FAS/CAS Operating Adjustment | — | — | 1,428 | 1,303 | |||||||||||||||||
Corporate | — | — | (17) | (59) | |||||||||||||||||
Total | $ | 27,058 | $ | 25,348 | $ | 4,538 | $ | 4,231 | 16.8% | 16.7% | |||||||||||
Attachment C Raytheon Company Other Preliminary Information Fourth Quarter 2018 (In millions) | ||||||||||||||||||
Backlog | 31-Dec-18 | 31-Dec-17 | ||||||||||||||||
Integrated Defense Systems | $ | 11,557 | $ | 9,186 | ||||||||||||||
Intelligence, Information and Services | 6,233 | 6,503 | ||||||||||||||||
Missile Systems | 13,976 | 13,426 | ||||||||||||||||
Space and Airborne Systems | 10,126 | 8,611 | ||||||||||||||||
Forcepoint | 528 | 484 | ||||||||||||||||
Total backlog | $ | 42,420 | $ | 38,210 | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
Bookings | 31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | ||||||||||||||
Total bookings | $ | 8,447 | $ | 8,541 | $ | 32,162 | $ | 27,718 | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
General and Administrative Expenses | 31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | ||||||||||||||
Administrative and selling expenses | $ | 505 | $ | 530 | $ | 2,106 | $ | 2,077 | ||||||||||
Research and development expenses | 248 | 168 | 841 | 700 | ||||||||||||||
Total general and administrative expenses | $ | 753 | $ | 698 | $ | 2,947 | $ | 2,777 | ||||||||||
Cash, Cash Equivalents and Restricted Cash | 31-Dec-18 | 31-Dec-17 | ||||||||||||||||
Cash and cash equivalents | $ | 3,608 | $ | 3,103 | ||||||||||||||
Restricted cash | 16 | 12 | ||||||||||||||||
Cash, cash equivalents and restricted cash shown in Attachment E | $ | 3,624 | $ | 3,115 | ||||||||||||||
Attachment D Raytheon Company Preliminary Balance Sheet Information Fourth Quarter 2018 (In millions) | ||||||||
31-Dec-18 | 31-Dec-17 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 3,608 | $ | 3,103 | ||||
Short-term investments | — | 297 | ||||||
Receivables, net | 1,648 | 1,324 | ||||||
Contract assets | 5,594 | 5,247 | ||||||
Inventories | 758 | 594 | ||||||
Prepaid expenses and other current assets | 528 | 761 | ||||||
Total current assets | 12,136 | 11,326 | ||||||
Property, plant and equipment, net | 2,840 | 2,439 | ||||||
Goodwill | 14,864 | 14,871 | ||||||
Other assets, net | 2,024 | 2,224 | ||||||
Total assets | $ | 31,864 | $ | 30,860 | ||||
Liabilities, Redeemable Noncontrolling Interest and Equity | ||||||||
Current liabilities | ||||||||
Commercial paper | $ | 300 | $ | 300 | ||||
Contract liabilities | 3,309 | 2,927 | ||||||
Accounts payable | 1,964 | 1,519 | ||||||
Accrued employee compensation | 1,509 | 1,342 | ||||||
Other current liabilities | 1,206 | 1,260 | ||||||
Total current liabilities | 8,288 | 7,348 | ||||||
Accrued retiree benefits and other long-term liabilities | 6,938 | 8,287 | ||||||
Long-term debt | 4,755 | 4,750 | ||||||
Redeemable noncontrolling interest | 411 | 512 | ||||||
Equity | ||||||||
Raytheon Company stockholders' equity | ||||||||
Common stock | 3 | 3 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated other comprehensive loss(1) | (8,618) | (7,935) | ||||||
Retained earnings(1) | 20,087 | 17,895 | ||||||
Total Raytheon Company stockholders' equity | 11,472 | 9,963 | ||||||
Noncontrolling interests in subsidiaries | — | — | ||||||
Total equity | 11,472 | 9,963 | ||||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 31,864 | $ | 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 Fourth Quarter 2018 (In millions) | ||||||||
Twelve Months Ended | ||||||||
31-Dec-18 | 31-Dec-17 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 2,882 | $ | 2,001 | ||||
(Income) loss from discontinued operations, net of tax | 1 | (2) | ||||||
Income from continuing operations | 2,883 | 1,999 | ||||||
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 | 568 | 550 | ||||||
Stock-based compensation | 165 | 173 | ||||||
Loss on repayment of long-term debt | — | 39 | ||||||
Deferred income taxes | (24) | 252 | ||||||
Changes in assets and liabilities | ||||||||
Receivables, net | (327) | (157) | ||||||
Contract assets and contract liabilities | 28 | 88 | ||||||
Inventories | (166) | 14 | ||||||
Prepaid expenses and other current assets | 73 | 204 | ||||||
Income taxes receivable/payable | 174 | (193) | ||||||
Accounts payable | 406 | (94) | ||||||
Accrued employee compensation | 165 | 111 | ||||||
Other current liabilities | (108) | 106 | ||||||
Accrued retiree benefits | (421) | (250) | ||||||
Other, net | 12 | (95) | ||||||
Net cash provided by (used in) operating activities from continuing operations | 3,428 | 2,747 | ||||||
Net cash provided by (used in) operating activities from discontinued operations | — | (2) | ||||||
Net cash provided by (used in) operating activities | 3,428 | 2,745 | ||||||
Cash flows from investing activities | ||||||||
Additions to property, plant and equipment | (763) | (543) | ||||||
Proceeds from sales of property, plant and equipment | 2 | 46 | ||||||
Additions to capitalized internal use software | (58) | (68) | ||||||
Purchases of short-term investments | — | (696) | ||||||
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 | (22) | 20 | ||||||
Net cash provided by (used in) investing activities | (521) | (817) | ||||||
Cash flows from financing activities | ||||||||
Dividends paid | (975) | (910) | ||||||
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 | (1,325) | (800) | ||||||
Repurchases of common stock to satisfy tax withholding obligations | (93) | (85) | ||||||
Contribution from noncontrolling interests in Forcepoint | — | 8 | ||||||
Other | (5) | — | ||||||
Net cash provided by (used in) financing activities | (2,398) | (2,116) | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 509 | (188) | ||||||
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 | $ | 3,624 | $ | 3,115 | ||||
Attachment F Raytheon Company Supplemental EPS Information Fourth Quarter 2018 (In millions, except per share amounts) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
31-Dec-18 | 31-Dec-17 | 31-Dec-18 | 31-Dec-17 | |||||||||||||||||
Per share impact of the pension settlement charge (A) | $ | — | $ | — | $ | 0.79 | $ | — | ||||||||||||
Per share impact of the enactment of the Tax Cuts and Jobs Act of 2017 (B) | $ | — | $ | 0.59 | $ | — | $ | 0.59 | ||||||||||||
(A) | Pension settlement charge | $ | — | $ | — | $ | 288 | $ | — | |||||||||||
Tax effect (at 21% statutory rate) | — | — | (60) | — | ||||||||||||||||
After-tax impact | — | — | 228 | — | ||||||||||||||||
Diluted shares | — | — | 286.8 | — | ||||||||||||||||
Per share impact | $ | — | $ | — | $ | 0.79 | $ | — | ||||||||||||
(B) | Tax impact of the enactment of the Tax Cuts and Jobs Act of 2017 | $ | — | $ | 171 | $ | — | $ | 171 | |||||||||||
Diluted shares | — | 290.0 | — | 291.4 | ||||||||||||||||
Per share impact | $ | — | $ | 0.59 | $ | — | $ | 0.59 | ||||||||||||
Raytheon Company
Global Headquarters
Waltham, Mass.
Investor Relations Contact
Kelsey DeBriyn
781.522.5141
Media Contact
Corinne Kovalsky
781.522.5899
SOURCE Raytheon Company
