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Raytheon Reports Strong First Quarter Results
Highlights
- Strong bookings of $6.5 billion; net sales of $6.1 billion
- Earnings per share (EPS) from continuing operations of $1.18; FAS/CAS Adjusted EPS(1) of $1.27, up 17 percent
- Solid operating cash flow from continuing operations of $257 million
- As previously announced, increased annual dividend rate by 21 percent to $1.50 per share and authorized new $2.0 billion share repurchase program
WALTHAM, Mass., April 22, 2010 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE:RTN) announced first quarter 2010 income from continuing operations attributable to Raytheon of $453 million or $1.18 per diluted share, compared to $449 million or $1.11 per diluted share in the first quarter 2009. First quarter 2010 FAS/CAS Adjusted Income was $487 million or $1.27 per diluted share, compared to $442 million or $1.09 per diluted share in the first quarter 2009(1). First quarter 2010 FAS/CAS Adjusted EPS excluded ($0.09) per diluted share of FAS/CAS pension expense, compared to $0.02 per diluted share of FAS/CAS pension income in the first quarter 2009(1).
"We delivered strong results during the quarter and reaffirmed our positive outlook for the year," said William H. Swanson, Raytheon's Chairman and CEO. "We have strong competitive positions, a proven track record of performance, innovative solutions and technologies that are focused on our global customers."
Net sales in the first quarter 2010 were $6.1 billion, up 3 percent from $5.9 billion in the first quarter 2009.
The Company generated solid operating cash flow from continuing operations of $257 million in the first quarter 2010, which included federal and foreign tax payments of $59 million. Operating cash flow from continuing operations in the first quarter 2009 was $411 million, which included a net tax refund of $323 million. Excluding these tax items, operating cash flow from continuing operations in the first quarter 2010 increased by $228 million, primarily due to improved performance.
The Company ended the first quarter 2010 with $2.6 billion in cash and cash equivalents and $2.3 billion in total debt.
In the first quarter, 2010 the Company repurchased 5.5 million shares of common stock for $300 million, as part of its previously announced share repurchase program. As announced in March 2010, the Company's Board of Directors authorized the repurchase of up to an additional $2.0 billion of the Company's outstanding common stock and also increased the Company's annual dividend payout rate by 21 percent from $1.24 to $1.50 per share.
Summary Financial Results 1st Quarter %
-----------
($ in millions, except per share data) 2010 2009 Change
---- ---- ------
Net sales $6,053 $5,884 3%
Income from continuing operations
attributable to $453 $449 1%
Raytheon Company
FAS/CAS Adjusted Income(1) $487 $442 10%
EPS from continuing operations $1.18 $1.11 6%
FAS/CAS Adjusted EPS(1) $1.27 $1.09 17%
Operating cash flow from cont. ops. $257 $411
Workdays in fiscal reporting calendar 60 61
(1) FAS/CAS Adjusted Income is defined as income from continuing
operations attributable to Raytheon Company common stockholders
excluding the after-tax impact of the FAS/CAS pension adjustment.
FAS/CAS Adjusted EPS is defined as EPS from continuing operations
attributable to Raytheon Company common stockholders excluding the
EPS impact of the FAS/CAS pension adjustment. FAS/CAS Adjusted
EPS and FAS/CAS Adjusted Income are non-GAAP financial measures.
See attachment F for a reconciliation of these measures and a
discussion of why the Company is presenting this information.
Bookings and Backlog
1st Quarter
-----------
($ in millions) 2010 2009
---- ----
Bookings $6,526 $5,209
====== ======
Backlog Period Ending
-------------
($ in millions) 03/28/10 12/31/09
-------- --------
Backlog $36,984 $36,877
Funded Backlog $23,464 $23,479
----
Bookings exceeded net sales in the first quarter 2010. The Company reported total bookings in the first quarter 2010 of $6.5 billion, compared to $5.2 billion in the first quarter 2009.
The Company ended the first quarter 2010 with a backlog of $37.0 billion, compared to $36.9 billion at the end of 2009.
Outlook
2010 Financial Outlook
2009 Actual 2010 Outlook
----------- ------------
Net Sales ($B) 24.9 25.9 - 26.4
FAS/CAS Pension Inc./(Exp.)
($M) 27 (220)
Interest Expense, Net ($M) (109) (95) -(110)
Diluted Shares (M) 395.7 377 - 382
Effective Tax Rate 32.5% ~31.5%
EPS from Continuing Operations $4.89 $4.75 - $4.90
FAS/CAS Adjusted EPS(1) $4.85 $5.13 - $5.28
Operating Cash Flow from Cont.
Ops. ($B) 2.7 2.0 - 2.2
ROIC (%)(1) 12.2 12.2 - 12.6
(1) FAS/CAS Adjusted EPS is defined as EPS from continuing
operations attributable to Raytheon Company common stockholders
excluding the EPS impact of the FAS/CAS pension adjustment. FAS/
CAS Adjusted EPS and ROIC are non-GAAP financial measures. See
attachment F for a reconciliation of FAS/CAS Adjusted EPS to EPS
from continuing operations and attachment G for a calculation of
ROIC and discussions of why the Company is presenting this
information.
The Company is reaffirming its positive outlook for 2010. Charts containing additional information on the Company's 2010 financial outlook are available on the Company's website at www.raytheon.com/ir.
(1) FAS/CAS Adjusted Income is defined as income from continuing operations attributable to Raytheon Company common stockholders excluding the after-tax impact of the FAS/CAS pension adjustment. FAS/CAS Adjusted EPS is defined as EPS from continuing operations attributable to Raytheon Company common stockholders excluding the EPS impact of the FAS/CAS pension adjustment. FAS/CAS Adjusted Income and FAS/CAS Adjusted EPS are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.
Segment Results
Integrated Defense Systems
1st Quarter %
-----------
($ in millions) 2010 2009 Change
---- ---- ------
Net Sales $1,336 $1,262 6%
Operating
Income $210 $188 12%
Operating
Margin 15.7% 14.9%
Integrated Defense Systems (IDS) had first quarter 2010 net sales of $1,336 million, up 6 percent compared to $1,262 million in the first quarter 2009, primarily due to growth on international Patriot programs. IDS recorded $210 million of operating income compared to $188 million in the first quarter 2009. The increase in operating income was primarily due to higher volume on international Patriot programs.
During the quarter, IDS booked $162 million to provide engineering services support for a Patriot air and missile defense program for U.S. and international customers. IDS also booked $131 million on the Zumwalt-class destroyer program for the U.S. Navy, which included initial funding for the third ship.
Intelligence and Information Systems
1st Quarter %
-----------
($ in millions) 2010 2009 Change
---- ---- ------
Net Sales $730 $784 -7%
Operating Income $50 $61 -18%
Operating Margin 6.8% 7.8%
Intelligence and Information Systems (IIS) had first quarter 2010 net sales of $730 million compared to $784 million in the first quarter 2009. The change in net sales was primarily due to expected lower net sales on a classified program and an international advanced border control and security program. IIS recorded $50 million of operating income compared to $61 million in the first quarter 2009, primarily due to lower volume and increased requirements on an international program.
During the quarter, IIS booked $1,721 million, including $886 million on a contract to develop the next-generation Global Positioning System Advanced Control Segment (GPS-OCX) for the U.S. Air Force and $624 million on a number of classified contracts, including $340 million on a major classified program.
Missile Systems
1st Quarter %
-----------
($ in millions) 2010 2009 Change
---- ---- ------
Net Sales $1,361 $1,368 -1%
Operating Income $158 $158
Operating Margin 11.6% 11.5%
Missile Systems (MS) had first quarter 2010 net sales of $1,361 million compared to $1,368 million in the first quarter 2009. MS recorded $158 million of operating income in both the first quarter 2010 and the first quarter 2009.
During the quarter, MS booked $535 million on a classified program. MS also booked $212 million for the development of Standard Missile-3 (SM-3) and $111 million for development work on the Exoatmospheric Kill Vehicle (EKV) program for the Missile Defense Agency. In addition, MS booked $207 million for the production of Standard Missile-2 (SM-2) for an international customer and the U.S. Navy, $203 million for the production of Tomahawk missiles for the U.S. Navy, $102 million for the production of the Joint Stand-off Weapon (JSOW) for the U.S. Navy, and $95 million for the production of Tube Launched, Optically Tracked, Wireless (TOW) missiles for international customers and the U.S. Army.
Network Centric Systems
1st Quarter %
-----------
($ in millions) 2010 2009 Change
---- ---- ------
Net Sales $1,176 $1,154 2%
Operating Income $165 $163 1%
Operating Margin 14.0% 14.1%
Network Centric Systems (NCS) had first quarter 2010 net sales of $1,176 million compared to $1,154 million in the first quarter 2009. NCS recorded $165 million of operating income compared to $163 million in the first quarter 2009.
During the quarter, NCS booked $138 million for Long Range Advanced Scout Surveillance Systems (LRAS3) for the U.S. Army.
Space and Airborne Systems
1st Quarter %
-----------
($ in millions) 2010 2009 Change
---- ---- ------
Net Sales $1,095 $1,046 5%
Operating Income $159 $139 14%
Operating Margin 14.5% 13.3%
Space and Airborne Systems (SAS) had first quarter 2010 net sales of $1,095 million, up 5 percent compared to $1,046 million in the first quarter 2009, primarily due to growth on classified business. SAS recorded $159 million of operating income compared to $139 million in the first quarter 2009. The increase in operating income was primarily due to improved program performance.
During the quarter, SAS booked $90 million for the production of Advanced Countermeasures Electronic System (ACES) for an international customer.
Technical Services
1st Quarter %
-----------
($ in millions) 2010 2009 Change
---- ---- ------
Net Sales $801 $696 15%
Operating Income $67 $44 52%
Operating Margin 8.4% 6.3%
Technical Services (TS) had first quarter 2010 net sales of $801 million, up 15 percent compared to $696 million in the first quarter 2009, primarily due to continued growth in domestic and foreign training programs supporting the U.S. Army's Warfighter Field Operations Customer Support (FOCUS) activities. TS recorded operating income of $67 million compared to $44 million in the first quarter 2009. The increase in operating income was primarily due to improved program performance, including higher award fees, and higher volume.
During the quarter, TS booked $155 million on domestic training programs and $25 million on foreign training programs in support of the Warfighter FOCUS activities. TS also booked $88 million on the Security Equipment Integration Services (SEIS) contract for the Transportation Security Administration (TSA) and $78 million to provide operational and logistics support to the National Science Foundation (NSF) Office of Polar Programs.
Raytheon Company (NYSE:RTN) , with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 88 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 75,000 people worldwide.
Conference Call on the First Quarter 2010 Financial Results
Raytheon's financial results conference call will be held on Thursday, April 22, 2010 at 9 a.m. ET. Participants will include William H. Swanson, Chairman and CEO; David C. Wajsgras, senior vice president and CFO; and other Company executives.
The dial-in number for the conference call will be (866) 543-6405 in the U.S. or (617) 213-8897 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 2010 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, uncertain funding of programs, potential termination of contracts, and difficulties in contract performance; the ability to procure new contracts; the risks of conducting business in foreign countries; the ability to comply with extensive governmental regulation, including import and export policies, the Foreign Corrupt Practices Act, the International Traffic in Arms Regulations, and procurement and other regulations; the impact of competition; the ability to develop products and technologies; the impact of changes in the financial markets and global economic conditions; the risk that actual pension returns, discount rates or other actuarial assumptions are significantly different than the Company's assumptions; the risk of cost overruns, particularly for the Company's fixed-price contracts; dependence on component availability, subcontractor performance and key suppliers; risks of a negative government audit; the use of accounting estimates in the Company's financial statements; risks associated with acquisitions, dispositions, joint ventures and other business arrangements; risks of an impairment of goodwill or other intangible assets; the outcome of contingencies and litigation matters, including government investigations; the ability to recruit and retain qualified personnel; the impact of potential security threats and other disruptions; 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. This release and the attachments also contain non-GAAP financial measures. A GAAP reconciliation and a discussion of the Company's use of these measures are included in this release or the attachments.
Attachment A
Raytheon Company
Preliminary Statement of Operations Information
First Quarter 2010
(In millions, except per share amounts) Three Months Ended
------------------
28-Mar- 29-Mar-
10 09
-------- --------
Net sales $6,053 $5,884
------ ------
Operating expenses
Cost of sales 4,784 4,697
Administrative and selling expenses 408 364
Research and development expenses 152 111
--- ---
Total operating expenses 5,344 5,172
----- -----
Operating income 709 712
--- ---
Interest expense 32 32
Interest income (3) (4)
Other (income) expense (1) 5
--- ---
Non-operating (income) expense 28 33
--- ---
Income from continuing operations before
taxes 681 679
Federal and foreign income taxes 220 222
--- ---
Income from continuing operations 461 457
Income (loss) from discontinued
operations, net of tax (8) 3
--- ---
Net income 453 460
--- ---
Less: Net income (loss) attributable to
noncontrolling interests in
subsidiaries 8 8
--- ---
Net income attributable to Raytheon
Company $445 $452
==== ====
Basic earnings (loss) per share attributable to
Raytheon Company
common stockholders:
Income from continuing operations $1.20 $1.12
Income (loss) from discontinued
operations (0.02) 0.01
Net income 1.18 1.13
Diluted earnings (loss) per share attributable
to Raytheon Company
common stockholders:
Income from continuing operations $1.18 $1.11
Income (loss) from discontinued
operations (0.02) 0.01
Net income 1.16 1.12
Amounts attributable to Raytheon Company common
stockholders:
Income from continuing operations $453 $449
Income (loss) from discontinued
operations (8) 3
--- ---
Net income $445 $452
==== ====
Average shares outstanding
Basic 377.6 399.0
Diluted 384.4 404.0
Attachment B
Raytheon Company
Preliminary Segment Information
First Quarter 2010
Net Sales
(In millions, except
percentages) Three Months Ended
------------------
28-Mar- 29-Mar-
10 09
--------- --------
Integrated Defense
Systems $1,336 $1,262
Intelligence and
Information Systems 730 784
Missile Systems 1,361 1,368
Network Centric Systems 1,176 1,154
Space and Airborne
Systems 1,095 1,046
Technical Services 801 696
FAS/CAS Pension
Adjustment - -
Corporate and
Eliminations (446) (426)
---- ----
Total $6,053 $5,884
====== ======
Operating Income
(In millions, except
percentages) Three Months Ended
------------------
28-Mar- 29-Mar-
10 09
--------- --------
Integrated Defense
Systems $210 $188
Intelligence and
Information Systems 50 61
Missile Systems 158 158
Network Centric Systems 165 163
Space and Airborne
Systems 159 139
Technical Services 67 44
FAS/CAS Pension
Adjustment (53) 11
Corporate and
Eliminations (47) (52)
--- ---
Total $709 $712
==== ====
Operating Income
As a Percent of Net
Sales
(In millions, except
percentages) Three Months Ended
------------------
28-Mar- 29-Mar-
10 09
-------- --------
Integrated Defense
Systems 15.7% 14.9%
Intelligence and
Information Systems 6.8% 7.8%
Missile Systems 11.6% 11.5%
Network Centric Systems 14.0% 14.1%
Space and Airborne
Systems 14.5% 13.3%
Technical Services 8.4% 6.3%
FAS/CAS Pension
Adjustment
Corporate and
Eliminations
Total 11.7% 12.1%
Attachment C
Raytheon Company
Other Preliminary Information
First Quarter 2010
(In millions) Funded Backlog
--------------
28-Mar-10 31-Dec-09
--------- ---------
Integrated Defense
Systems $5,701 $5,595
Intelligence and
Information Systems 1,574 1,588
Missile Systems 6,244 6,454
Network Centric Systems 4,388 4,389
Space and Airborne
Systems 3,549 3,402
Technical Services 2,008 2,051
----- -----
Total $23,464 $23,479
======= =======
Bookings
Three Months Ended
------------------
28-Mar-10 29-Mar-09
--------- ---------
Total Bookings $6,526 $5,209
====== ======
(In millions) Total Backlog
-------------
28-Mar-10 31-Dec-09
--------- ---------
Integrated Defense
Systems $10,046 $10,665
Intelligence and
Information Systems 5,295 4,360
Missile Systems 7,868 7,657
Network Centric Systems 5,301 5,501
Space and Airborne
Systems 5,760 5,921
Technical Services 2,714 2,773
----- -----
Total $36,984 $36,877
======= =======
Total Bookings
Attachment D
Raytheon Company
Preliminary Balance Sheet Information
First Quarter 2010
(In millions)
28-Mar- 31-Dec-
10 09
-------- --------
Assets
Cash and cash equivalents $2,613 $2,642
Accounts receivable, net 113 120
Contracts in process 4,742 4,373
Inventories 329 344
Deferred taxes 266 273
Prepaid expenses and other current assets 116 116
--- ---
Total current assets 8,179 7,868
Property, plant and equipment, net 1,969 2,001
Deferred taxes 363 436
Prepaid retiree benefits 121 111
Goodwill 11,925 11,922
Other assets, net 1,243 1,269
----- -----
Total assets $23,800 $23,607
======= =======
Liabilities and Equity
Current liabilities
Advance payments and billings in excess of
costs incurred $2,173 $2,224
Accounts payable 1,310 1,397
Accrued employee compensation 656 868
Other accrued expenses 1,220 1,034
----- -----
Total current liabilities 5,359 5,523
Accrued retiree benefits and other long-
term liabilities 5,854 5,793
Deferred taxes 23 23
Long-term debt 2,328 2,329
Equity
Raytheon Company stockholders' equity
Common stock 4 4
Additional paid-in capital 11,186 10,991
Accumulated other comprehensive loss (4,768) (4,824)
Treasury stock, at cost (5,712) (5,446)
Retained earnings 9,406 9,102
----- -----
Total Raytheon Company stockholders'
equity 10,116 9,827
Noncontrolling interests in subsidiaries 120 112
--- ---
Total equity 10,236 9,939
------ -----
Total liabilities and equity $23,800 $23,607
======= =======
Attachment E
Raytheon Company
Preliminary Cash Flow Information
First Quarter 2010
(In millions) Three Months Ended
------------------
28-Mar- 29-Mar-
10 09
-------- ---------
Net income (loss) $453 $460
(Income) loss from discontinued
operations, net of tax 8 (3)
--- ---
Income (loss) from continuing
operations 461 457
Depreciation 74 71
Amortization 29 26
Working capital (excluding pension
and taxes)* (677) (938)
Discontinued operations 2 (6)
Net activity in financing
receivables 16 9
Other 354 786
--- ---
Net operating cash flow 259 405
Capital spending (45) (33)
Internal use software spending (14) (13)
Acquisitions (12) -
Dividends (117) (112)
Repurchases of common stock (300) (300)
Warrants exercised 163 -
Other 37 4
--- ---
Total cash flow $(29) $(49)
==== ====
* Working capital (excluding pension and taxes) is a summation of
changes in: accounts receivable, net, contracts in process and
advance payments and billings in excess of costs incurred,
inventories, prepaid expenses and other current assets, accounts
payable, accrued employee compensation, and other accrued expenses
from the Statements of Cash Flows.
Attachment F
Raytheon Company
Non-GAAP Financial Measures - FAS/CAS Adjusted Measures
First Quarter 2010
FAS/CAS Adjusted EPS Non-GAAP Reconciliation
(In millions, except per share amounts)
First Quarter
-------------
2010 2009
---- ----
Diluted earnings per share from continuing
operations
attributable to Raytheon Company common
stockholders $1.18 $1.11
Less: Per share impact of the FAS/CAS
Pension Adjustment* (0.09) 0.02
FAS/CAS Adjusted EPS ** $1.27 $1.09
===== =====
*FAS/CAS Pension Adjustment $(53) $11
19 (4)
Tax effect (at 35% federal statutory rate) --- ---
(34) 7
After-tax FAS/CAS Pension Adjustment
384.4 404.0
Diluted Shares
$(0.09) $0.02
Per share impact of the FAS/CAS Pension
Adjustment ====== =====
(In millions, except per share amounts) 2010 Guidance
-------------
Low end High end
of range of range
-------- --------
Diluted earnings per share from continuing
operations
attributable to Raytheon Company common
stockholders $4.75 $4.90
Less: Per share impact of the FAS/CAS
Pension Adjustment* (0.38) (0.38)
FAS/CAS Adjusted EPS ** $5.13 $5.28
===== =====
*FAS/CAS Pension Adjustment $(220) $(220)
77 77
Tax effect (at 35% federal statutory rate) --- ---
(143) (143)
After-tax FAS/CAS Pension Adjustment
382.0 377.0
Diluted Shares
$(0.38) $(0.38)
Per share impact of the FAS/CAS Pension
Adjustment ====== ======
FAS/CAS Adjusted Income from Continuing Operations attributable to
Raytheon Company common stockholders Non-GAAP Reconciliation
First Quarter
-------------
2010 2009
---- ----
Income from Continuing Operations
attributable to Raytheon Company
common stockholders $453 $449
FAS/CAS Pension Adjustment (Tax effected
at 35% federal statutory rate) 34 (7)
--- ---
FAS/CAS Adjusted Income from Continuing
Operations attributable to
Raytheon Company common stockholders** $487 $442
==== ====
** These amounts are not measures of financial performance under
U.S. generally accepted accounting principles (GAAP). They should
be considered supplemental to and not a substitute for financial
performance in accordance with GAAP and may not be defined and
calculated by other companies in the same manner. FAS/CAS Adjusted
EPS is defined as diluted EPS from continuing operations
attributable to Raytheon Company common stockholders excluding the
earnings per share impact of the FAS/CAS pension adjustment. FAS/
CAS Adjusted Income from Continuing Operations attributable to
Raytheon Company common stockholders is defined as income from
continuing operations attributable to Raytheon Company common
stockholders excluding the after-tax impact of the FAS/CAS pension
adjustment. We are providing these measures, which exclude the
impact of the FAS/CAS pension adjustment, because management uses
them for the purposes of evaluating and forecasting the Company's
financial performance and we believe it allows investors to benefit
from being able to assess our operating performance in the context
of how our principal customer, the U.S. Government, allows us to
recover pension costs and to better compare our operating
performance to others in the industry on that same basis.
Attachment G
Raytheon Company
Preliminary Return on Invested Capital Non-GAAP Financial Measure
First Quarter 2010
The Company defines Return on Invested Capital (ROIC) as income from
continuing operations excluding the after-tax effect of the FAS/
CAS Pension Adjustment plus after-tax net interest expense plus
one-third of operating lease expense after-tax (estimate of
interest portion of operating lease expense) divided by average
invested capital after capitalizing operating leases (operating
lease expense times a multiplier of 8), adding financial guarantees
less net investment in Discontinued Operations, and adding back the
impact of the accounting standard for employers' accounting for
defined benefit pension and other postretirement plans. ROIC is not
a measure of financial performance under generally accepted
accounting principles (GAAP) and may not be defined and calculated
by other companies in the same manner. ROIC should be considered
supplemental to and not a substitute for financial information
prepared in accordance with GAAP. The Company uses ROIC as a measure
of efficiency and effectiveness of its use of capital and as an
element of management compensation.
Return on Invested Capital
(In millions, except 2010 Initial
percentages) 2009 Guidance
---- -------------
High
Low end end
of of
range range
------ ------
Income from continuing
operations $1,977
FAS/CAS Pension
Adjustment, after-tax
* (18)
Net interest expense,
after-tax * 71 Combined Combined
Lease expense, after-
tax * 66
---
Return $2,096 $2,155 $2,200
------ ------ ------
Net debt
** $(132)
Equity less investment
in discontinued
operations 9,560
Lease expense x 8, plus
financial guarantees 2,815 Combined Combined
Minimum pension
liability 5,007
Invested capital from
continuing operations
*** $17,250 $17,700 $17,500
------- ------- -------
ROIC 12.2% 12.2% 12.6%
---- ---- ----
* Federal statutory tax rate of 35%
** Net debt is defined as total debt less cash and cash equivalents
and is calculated using a 2 point average
*** Calculated using a 2 point average
Media Contact: Investor Relations Contact:
Jon Kasle Marc Kaplan
781-522-5110 781-522-5141
Source: Raytheon Company