UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported): July 23, 2015
________________________________________________________________________________
RAYTHEON COMPANY
(Exact name of Registrant as Specified in its Charter)
________________________________________________________________________________ 
Delaware
(State of Incorporation)
1-13699
(Commission File Number)
95-1778500
(IRS Employer
Identification Number)

870 Winter Street, Waltham, Massachusetts 02451
(Address of Principal Executive Offices) (Zip Code)
 
(781) 522-3000
(Registrant's telephone number, including area code)
________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
_____________________________________________________________________________________








Item 2.02. Results of Operations and Financial Condition

On July 23, 2015, Raytheon Company issued a press release announcing financial results for the fiscal quarter ended June 28, 2015. A copy of the press release is furnished with this report as Exhibit 99.1. The information in this report, including Exhibit 99.1, is furnished in accordance with SEC Release No. 33-8216 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

 
Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release issued by Raytheon Company dated July 23, 2015.

2




SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
RAYTHEON COMPANY
 
 
 
 
 
 
Date:
July 23, 2015
By:
/s/ Michael J. Wood
 
 
 
 
Michael J. Wood
 
 
 
 
Vice President, Controller and Chief Accounting Officer
 
 
 
 
 
 

3




EXHIBIT INDEX


Exhibit No.
 
 
Description 
 
99.1
 
Press release issued by Raytheon Company dated July 23, 2015.

4




Exhibit 99.1
 
 
Raytheon Company
 
 
Global Headquarters
 
 
Waltham, Mass.
 
 
 
 
 
Investor Relations Contact
 
 
Todd Ernst
 
 
 
781.522.5141
 
 
 
 
 
 
 
Media Contact
 
 
 
Pam Erickson
 
 
 
781.522.5822
For Immediate Release

Raytheon Reports Solid Second Quarter 2015 Results

Strong bookings of $7.6 billion; book-to-bill ratio of 1.30
Net sales of $5.8 billion, up 3 percent
EPS from continuing operations of $1.65
Solid operating cash flow from continuing operations of $376 million
Updated full-year 2015 guidance
__________________________________________________________________________________________________

WALTHAM, Mass., (July 23, 2015) - Raytheon Company (NYSE: RTN) announced net sales for the second quarter 2015 were $5.8 billion compared to $5.7 billion in the second quarter 2014. Second quarter 2015 EPS from continuing operations was $1.65 compared to $1.59 in the second quarter 2014. Second quarter 2015 EPS from continuing operations included a favorable FAS/CAS Adjustment of $0.10 compared to a favorable FAS/CAS Adjustment of $0.18 in the second quarter 2014. In addition, second quarter 2015 EPS from continuing operations included, as expected, a $0.29 favorable impact from a tax settlement. It also included a $0.09 unfavorable impact associated with Raytheon|Websense acquisition accounting adjustments and acquisition related costs discussed in further detail below.
The Company had bookings of $7.6 billion in the second quarter 2015, resulting in a book-to-bill ratio of 1.30. In the second quarter 2014, bookings were $6.8 billion. Year-to-date 2015 bookings were $12.1 billion, resulting in a book-to-bill ratio of 1.08. Year-to-date 2014 bookings were $11.1 billion.
"Our strategy to position the company for global growth is delivering results, which are reflected in the strong bookings and sales growth in the second quarter, as well as our improved growth outlook for 2015," said Thomas A. Kennedy, Raytheon Chairman and CEO. "Additionally, we continue to pursue a balanced capital deployment strategy to create value for our customers and shareholders."
Operating cash flow from continuing operations for the second quarter 2015 was $376 million compared to $153 million for the second quarter 2014. The increase in operating cash flow from continuing operations in the second quarter 2015 was primarily due to the timing of required pension contributions and the collection of the eBorders settlement with the U.K. Home Office, which was resolved in the first quarter 2015, partially offset by higher cash taxes.

1



Summary Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
%
 
Six Months
 
%
($ in millions, except per share data)
2015
 
2014
 
Change
 
2015
 
2014
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
$
7,580

 
$
6,772

 
11.9%
 
$
12,051

 
$
11,065

 
8.9%
Net Sales
$
5,848

 
$
5,701

 
2.6%
 
$
11,136

 
$
11,209

 
-0.7%
Income from Continuing Operations attributable to
   Raytheon Company
$
504

 
$
499

 
1.0%
 
$
1,055

 
$
1,088

 
-3.0%
EPS from Continuing Operations
$
1.65

 
$
1.59

 
3.8%
 
$
3.44

 
$
3.46

 
-0.6%
Operating Cash Flow from Continuing Operations
$
376

 
$
153

 
 
 
$
431

 
$
812

 
 
Workdays in Fiscal Reporting Calendar
64

 
64

 
 
 
125

 
126

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In the second quarter 2015, the Company repurchased 1.9 million shares of common stock for $200 million. Year-to-date 2015, the Company repurchased 4.6 million shares of common stock for $500 million. The Company now expects its share repurchases in 2015 to be $1.0 billion, an increase of $250 million from its original expectation.
The Company ended the second quarter 2015 with $2.8 billion of net debt. Net debt is defined as total debt less cash and cash equivalents and short-term investments.
As previously announced, on May 29, 2015, the Company and Vista Equity Partners completed a transaction creating a new joint venture company that combines Websense, Inc. (Websense), formerly a Vista Equity portfolio company, and Raytheon Cyber Products, formerly part of Raytheon's Intelligence, Information and Services business. The newly formed commercial cybersecurity company, which is 80.3 percent owned by Raytheon and 19.7 percent by Vista Equity Partners, is known on an interim basis as Raytheon|Websense.
Second quarter 2015 results include Websense restructuring costs, and items related to the Raytheon|Websense transaction which are excluded from segment operating performance since management does not consider those items in evaluating the segment.
Raytheon|Websense Acquisition Accounting Adjustments and Acquisition Related Costs1
 
 
 
 
($ in millions, except per share data)
Operating Income
 
EPS
 
 
 
 
Deferred Revenue Adjustment2
$
(10
)
 
$
(0.02
)
Amortization of Intangibles
$
(8
)
 
$
(0.01
)
Acquisition Related Costs
$
(23
)
 
$
(0.05
)
    Amounts excluded from segment results
$
(41
)
 
$
(0.08
)
 
 
 
 
Restructuring Costs (recorded in Raytheon|Websense segment results)
$
(5
)
 
$
(0.01
)
    Total
$
(46
)
 
$
(0.09
)
 
 
 
 
1See Attachment F for a reconciliation of how each of these items is calculated.
2Deferred Revenue Adjustment represents the impact of fair value adjustments to deferred revenue related to Raytheon|Websense, including historical Raytheon Cyber Products acquisitions.

2





Backlog
($ in millions)
 Period Ending
 
Q2 2015
 
Q2 2014
 
2014
Backlog
$
34,494

 
$
33,019

 
$
33,571

Funded Backlog
$
25,332

 
$
23,580

 
$
23,092

Backlog at the end of the second quarter 2015 was $34.5 billion, an increase of approximately $1.5 billion compared to the second quarter 2014. Funded backlog was $25.3 billion, an increase of approximately $1.8 billion compared to the second quarter 2014.
Outlook
The Company has updated its financial outlook for 2015 to reflect improved operating performance to date compared to prior guidance and the impact of the Raytheon|Websense transaction. Charts containing additional information on the Company's 2015 outlook are available on the Company's website at www.raytheon.com/ir.
2015 Financial Outlook
 
 
 
 
Current1
 
Prior (4/23/15)
Net Sales ($B)
22.7 - 23.2*
 
22.3 - 22.8
RW Deferred Revenue Adjustment ($M)2
(61)*
 
NA
RW Amortization of Intangibles ($M)2
(58)*
 
NA
FAS/CAS Adjustment ($M)
197
 
197
Interest Expense, net ($M)
 (225) - (235)
 
 (225) - (235)
Diluted Shares (M)
305 - 306*
 
305 - 307
Effective Tax Rate
 Approx. 27.0%
 
 Approx. 27.0%
EPS from Continuing Operations
$6.47 - $6.62*
 
$6.67 - $6.82
Operating Cash Flow from Continuing Operations ($B)
2.5 - 2.7*
 
2.4 - 2.7
 
 
 
 
1Updated to reflect the impact of the creation of Raytheon|Websense (RW) on May 29, 2015.

2RW Deferred Revenue Adjustment and RW 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, related to Raytheon|Websense, including historical Raytheon Cyber Products acquisitions
NA = Not Applicable
* Denotes change from prior guidance.


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 Raytheon|Websense (RW).
Integrated Defense Systems
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Net Sales
$
1,698

 
$
1,549

 
10%
 
$
3,131

 
$
3,030

 
3%
Operating Income
$
215

 
$
219

 
-2%
 
$
410

 
$
445

 
-8%
Operating Margin
12.7
%
 
14.1
%
 
 
 
13.1
%
 
14.7
%
 
 

3




Integrated Defense Systems (IDS) had second quarter 2015 net sales of $1,698 million compared to $1,549 million in the second quarter 2014. The increase in net sales was primarily driven by higher sales on international Patriot programs, including the recognition of previously deferred precontract costs and program activity in the quarter.
IDS recorded $215 million of operating income in the second quarter 2015 compared to $219 million in the second quarter 2014. The change in operating margin in the second quarter 2015 was primarily due to a change in program mix.
Included in operating income in the second quarter 2015 was an adjustment of $33 million to eliminate all remaining estimated incentive fees related to the Air Warfare Destroyer (AWD) program due to the shipbuilder extending the planned schedule and related increase in costs to complete its portion of the program. Included in operating income in the second quarter 2014 was an adjustment of $38 million from a decrease in estimated incentive fees on the AWD program driven by an increase in expected costs by the shipbuilder to complete its portion of the program.
During the quarter, IDS booked $2.0 billion to provide advanced Patriot air and missile defense capability for the Kingdom of Saudi Arabia. IDS also booked $132 million to provide satellite communication ground terminals for an international customer and $77 million on the NextGen Weather Processor (NWP) program for the Federal Aviation Administration (FAA).
Intelligence, Information and Services1
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Net Sales
$
1,496

 
$
1,493

 
 
$
2,868

 
$
2,922

 
-2%
Operating Income2
$
108

 
$
123

 
-12%
 
$
392

 
$
246

 
NM
Operating Margin
7.2
%
 
8.2
%
 
 
 
13.7
%
 
8.4
%
 
 
1 Revised to exclude Raytheon Cyber Products (RCP), formerly part of IIS. As discussed on page 2, RCP was combined with Websense, Inc. to create Raytheon|Websense, a new commercial cybersecurity joint venture, which is reported as a separate business segment.
2 Six Months 2015 operating income includes the favorable $181 million impact of the first quarter 2015 eBorders settlement.
NM = Not Meaningful
 
 
 
 
 
 
 
 
 
 
 

Intelligence, Information and Services (IIS) had second quarter 2015 net sales of $1,496 million compared to $1,493 million in the second quarter 2014.
IIS recorded $108 million of operating income in the second quarter 2015 compared to $123 million in the second quarter 2014. The change in operating income was primarily due to program mix.
During the quarter, IIS booked $387 million on domestic training programs and $151 million on foreign training programs in support of Warfighter FOCUS activities. IIS also booked $376 million on a number of classified contracts.

4



Missile Systems
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Net Sales
$
1,559

 
$
1,539

 
1%
 
$
3,032

 
$
3,113

 
-3%
Operating Income
$
183

 
$
190

 
-4%
 
$
390

 
$
398

 
-2%
Operating Margin
11.7
%
 
12.3
%
 
 
 
12.9
%
 
12.8
%
 
 

Missile Systems (MS) had second quarter 2015 net sales of $1,559 million compared to $1,539 million in the second quarter 2014.
MS recorded $183 million of operating income in the second quarter 2015 compared to $190 million in the second quarter 2014. The change in operating margin was primarily due to higher net program efficiencies in the second quarter 2014.
During the quarter, MS booked $529 million for Standard Missile-3 (SM-3®) for the Missile Defense Agency (MDA), $511 million on Evolved SeaSparrow Missile (ESSM) for the U.S. Navy and international customers, $363 million for Paveway™ for international customers, and $143 million for Standard Missile-6 (SM-6™) for the U.S. Navy. MS also booked $99 million on a classified program.
Space and Airborne Systems
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Net Sales
$
1,416

 
$
1,505

 
-6%
 
$
2,774

 
$
2,903

 
-4%
Operating Income
$
186

 
$
202

 
-8%
 
$
359

 
$
392

 
-8%
Operating Margin
13.1
%
 
13.4
%
 
 
 
12.9
%
 
13.5
%
 
 

Space and Airborne Systems (SAS) had second quarter 2015 net sales of $1,416 million compared to $1,505 million in the second quarter 2014. The change in net sales was primarily due to lower sales on international tactical radar systems programs.
SAS recorded $186 million of operating income in the second quarter 2015 compared to $202 million in the second quarter 2014. The change in operating income was primarily due to lower volume in the second quarter 2015 combined with higher net program efficiencies in the second quarter 2014.
During the quarter, SAS booked $153 million on a multimission radar program for the U.S. Navy and an international customer, $99 million on an Active Electronically Scanned Array (AESA) radar Performance Based Logistics (PBL) contract for an international customer, and $82 million to provide communication subsystems for the U.S. Navy and an international customer. SAS also booked $250 million on a number of classified contracts.

5



Raytheon|Websense1
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
Six Months
 
 
($ in millions)
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Net Sales
$
57

 
$
28

 
104%
 
$
81

 
$
51

 
59%
Operating Income/(loss)
$
(1
)
 
$
3

 
-133%
 
$
(1
)
 
$
7

 
-114%
Operating Margin
(1.8
)%
 
10.7
%
 
 
 
(1.2
)%
 
13.7
%
 
 
1 Excludes the unfavorable impact of the Raytheon|Websense acquisition accounting adjustments and certain acquisition related costs. See page 2 for more information on these items.

Raytheon|Websense (RW) is a new joint venture company that was created on May 29, 2015 through the combination of Websense, Inc. and Raytheon Cyber Products (RCP), formerly part of Raytheon's Intelligence, Information and Services business. The RW segment results have been presented to reflect RCP results for all periods and Websense results after the acquisition date.
RW had second quarter 2015 net sales of $57 million compared to $28 million in the second quarter 2014.
RW recorded a loss of $1 million in the second quarter 2015 compared to $3 million of operating income in the second quarter 2014. The second quarter 2015 operating loss reflects higher RCP research and development and selling and marketing expenses to develop and launch new commercial products compared to second quarter 2014, as well as approximately $5 million of restructuring costs associated with the combination of Websense and RCP.

About Raytheon
Raytheon Company, with 2014 sales of $23 billion and 61,000 employees worldwide, is a technology and innovation leader specializing in defense, civil government and cybersecurity markets throughout the world. With a history of innovation spanning 93 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 cybersecurity and a broad range of mission support services. Raytheon is headquartered in Waltham, Mass. For more about Raytheon, visit us at www.raytheon.com and follow us on Twitter @raytheon.

Conference Call on the Second Quarter 2015 Financial Results
Raytheon's financial results conference call will be held on Thursday, July 23, 2015 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) 884-5695 in the U.S. or (617) 786-2960 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.

6




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 under the amended Budget Control Act of 2011, a government shutdown, or otherwise, uncertain funding of programs, potential termination of contracts, and 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 import and export policies, the Foreign Corrupt Practices Act, the International Traffic in Arms Regulations, industrial cooperation agreement obligations, 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 and partner 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 and cyber 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.

# # #

7



Attachment A
 
 
 
 
 
 
 
 
Raytheon Company
 

Preliminary Statement of Operations Information
 
 
 
 
 
 
 
 
Second Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
Three Months Ended
 
Six Months Ended
 
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15

29-Jun-14
 
 
 
 
 
 
 
 
 
Net sales
 
$
5,848

 
$
5,701

 
$
11,136

 
$
11,209

Operating expenses
 
 
 
 
 
 
 
 
     Cost of sales
 
4,525

 
4,301

 
8,358

 
8,462

     General and administrative expenses
 
675

 
641

 
1,290

 
1,200

Total operating expenses
 
5,200

 
4,942

 
9,648

 
9,662

Operating income
 
648

 
759

 
1,488

 
1,547

Non-operating (income) expense, net
 
 
 
 
 
 
 
 
     Interest expense
 
59

 
54

 
117

 
105

     Interest income
 
(2
)
 
(2
)
 
(6
)
 
(5
)
     Other (income) expense, net
 
(1
)
 
(6
)
 
(3
)
 
(6
)
Total non-operating (income) expense, net
 
56

 
46

 
108

 
94

Income from continuing operations before taxes
 
592

 
713

 
1,380

 
1,453

Federal and foreign income taxes
 
90

 
212

 
324

 
359

Income from continuing operations
 
502

 
501

 
1,056

 
1,094

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

 
52

 
1

 
59

Net income
 
503

 
553

 
1,057

 
1,153

Less: Net income (loss) attributable to noncontrolling
 
 
 
 
 
 
 
 
   interests in subsidiaries
 
(2
)
 
2

 
1

 
6

Net income attributable to Raytheon Company
 
$
505

 
$
551

 
$
1,056

 
$
1,147

 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share attributable to Raytheon
 
 
 
 
 
 
 
 
  Company common stockholders:
 
 
 
 
 
 
 
 
     Income from continuing operations
 
$
1.65

 
$
1.59

 
$
3.44

 
$
3.47

     Income (loss) from discontinued operations, net of tax
 

 
0.17

 

 
0.19

     Net income
 
1.65

 
1.76

 
3.44

 
3.65

 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share attributable to Raytheon
 
 
 
 
 
 
 
 
  Company common stockholders:
 
 
 
 
 
 
 
 
     Income from continuing operations
 
$
1.65

 
$
1.59

 
$
3.44

 
$
3.46

     Income (loss) from discontinued operations, net of tax
 

 
0.17

 

 
0.19

     Net income
 
1.65

 
1.76

 
3.44

 
3.65

 
 
 
 
 
 
 
 
 
Amounts attributable to Raytheon Company common
 
 
 
 
 
 
 
 
  stockholders:
 
 
 
 
 
 
 
 
     Income from continuing operations
 
$
504

 
$
499

 
$
1,055

 
$
1,088

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

 
52

 
1

 
59

     Net income
 
$
505

 
$
551

 
$
1,056

 
$
1,147

 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
     Basic
 
305.4

 
312.9

 
306.8

 
313.9

     Diluted
 
305.7

 
313.5

 
307.2

 
314.6







Attachment B
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 

 
 
Preliminary Segment Information
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
1,698

 
$
1,549

 
$
215

 
$
219

 
12.7
 %
 
14.1
%
Intelligence, Information and Services
 
1,496

 
1,493

 
108

 
123

 
7.2
 %
 
8.2
%
Missile Systems
 
1,559

 
1,539

 
183

 
190

 
11.7
 %
 
12.3
%
Space and Airborne Systems
 
1,416

 
1,505

 
186

 
202

 
13.1
 %
 
13.4
%
Raytheon|Websense(1)
 
57

 
28

 
(1
)
 
3

 
(1.8
)%
 
10.7
%
Eliminations
 
(368
)
 
(413
)
 
(39
)
 
(42
)
 


 


Total business segment
 
5,858

 
5,701

 
652

 
695

 
11.1
 %
 
12.2
%
Raytheon|Websense Acquisition Accounting Adjustments
 
(10
)
 

 
(18
)
 
(1
)
 
 
 
 
FAS/CAS Adjustment
 

 

 
49

 
87

 
 
 
 
Corporate
 

 

 
(35
)
 
(22
)
 
 
 
 
Total
 
$
5,848

 
$
5,701

 
$
648

 
$
759

 
11.1
 %
 
13.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
(In millions, except percentages)
 
Six Months Ended
 
Six Months Ended
 
Six Months Ended
 
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
3,131

 
$
3,030

 
$
410

 
$
445

 
13.1
 %
 
14.7
%
Intelligence, Information and Services
 
2,868

 
2,922

 
392

 
246

 
13.7
 %
 
8.4
%
Missile Systems
 
3,032

 
3,113

 
390

 
398

 
12.9
 %
 
12.8
%
Space and Airborne Systems
 
2,774

 
2,903

 
359

 
392

 
12.9
 %
 
13.5
%
Raytheon|Websense(1)
 
81

 
51

 
(1
)
 
7

 
(1.2
)%
 
13.7
%
Eliminations
 
(740
)
 
(810
)
 
(76
)
 
(82
)
 


 


Total business segment
 
11,146

 
11,209

 
1,474

 
1,406

 
13.2
 %
 
12.5
%
Raytheon|Websense Acquisition Accounting Adjustments
 
(10
)
 

 
(20
)
 
(3
)
 
 
 
 
FAS/CAS Adjustment
 

 

 
98

 
174

 
 
 
 
Corporate
 

 

 
(64
)
 
(30
)
 
 
 
 
Total
 
$
11,136

 
$
11,209

 
$
1,488

 
$
1,547

 
13.4
 %
 
13.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Excludes the unfavorable impact of the Raytheon|Websense acquisition accounting adjustments and certain acquisition related costs. See Attachment F for more information on these items.

 




 
Attachment B - Pro Forma
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 
 
 
 
 
 
Pro Forma Segment Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Full Year 2013, Quarters within and Full Year 2014, and First Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As previously announced, on May 29, 2015, we acquired Websense, Inc. from Vista Equity Partners and combined it with Raytheon Cyber Products (RCP), formerly part of our IIS segment, to create Raytheon|Websense, a new cybersecurity joint venture company (with Vista Equity Partners). In connection with these transactions, we reorganized our operating and reporting structure with Raytheon|Websense as our fifth reporting segment. The amounts, discussion and presentation of our business segments, including corporate and eliminations for intersegment activity, as set forth in our Form 10-Q, reflect our new structure. The Raytheon|Websense results reflect RCP results for all periods and Websense results after the acquisition date of May 29, 2015.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
Net Sales
 
(In millions)
Three Months Ended
 
Twelve Months Ended
 
 
29-Mar-15
 
31-Dec-14
 
28-Sep-14
 
29-Jun-14
 
30-Mar-14
 
31-Dec-14
 
31-Dec-13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
$
1,433

 
$
1,627

 
$
1,428

 
$
1,549

 
$
1,481

 
$
6,085

 
$
6,489

 
Intelligence, Information and Services
1,372

 
1,517

 
1,450

 
1,493

 
1,429

 
5,889

 
5,970

 
Missile Systems
1,473

 
1,719

 
1,477

 
1,539

 
1,574

 
6,309

 
6,599

 
Space and Airborne Systems
1,358

 
1,660

 
1,509

 
1,505

 
1,398

 
6,072

 
6,371

 
Raytheon|Websense(1)
24

 
23

 
30

 
28

 
23

 
104

 
87

 
Eliminations
(372
)
 
(403
)
 
(420
)
 
(413
)
 
(397
)
 
(1,633
)
 
(1,810
)
 
Total business segment
5,288

 
6,143

 
5,474

 
5,701

 
5,508

 
22,826

 
23,706

 
Raytheon|Websense Acquisition Accounting Adjustments

 

 

 

 

 

 

 
Total
$
5,288

 
$
6,143

 
$
5,474

 
$
5,701

 
$
5,508

 
$
22,826

 
$
23,706

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
Operating Income
 
(In millions)
Three Months Ended
 
Twelve Months Ended
 
 
29-Mar-15
 
31-Dec-14
 
28-Sep-14
 
29-Jun-14
 
30-Mar-14
 
31-Dec-14
 
31-Dec-13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
$
195

 
$
299

 
$
230

 
$
219

 
$
226

 
$
974

 
$
1,115

 
Intelligence, Information and Services
284

 
131

 
118

 
123

 
123

 
495

 
507

 
Missile Systems
207

 
212

 
190

 
190

 
208

 
800

 
830

 
Space and Airborne Systems
173

 
217

 
237

 
202

 
190

 
846

 
920

 
Raytheon|Websense(1)

 
(1
)
 
5

 
3

 
4

 
11

 
13

 
Eliminations
(37
)
 
(41
)
 
(43
)
 
(42
)
 
(40
)
 
(166
)
 
(170
)
 
Total business segment
822

 
817

 
737

 
695

 
711

 
2,960

 
3,215

 
Raytheon|Websense Acquisition Accounting Adjustments
(2
)
 
(2
)
 
(1
)
 
(1
)
 
(2
)
 
(6
)
 
(9
)
 
FAS/CAS Adjustment
49

 
70

 
42

 
87

 
87

 
286

 
(249
)
 
Corporate
(29
)
 
(16
)
 
(15
)
 
(22
)
 
(8
)
 
(61
)
 
(19
)
 
Total
$
840

 
$
869

 
$
763

 
$
759

 
$
788

 
$
3,179

 
$
2,938

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
Operating Income
 
 
As a Percentage of Net Sales
 
As a Percentage of Net Sales
 
(In millions)
Three Months Ended
 
Twelve Months Ended
 
 
29-Mar-15
 
31-Dec-14
 
28-Sep-14
 
29-Jun-14
 
30-Mar-14
 
31-Dec-14
 
31-Dec-13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
13.6%
 
18.4%
 
16.1%
 
14.1%
 
15.3%
 
16.0%
 
17.2%
 
Intelligence, Information and Services
20.7%
 
8.6%
 
8.1%
 
8.2%
 
8.6%
 
8.4%
 
8.5%
 
Missile Systems
14.1%
 
12.3%
 
12.9%
 
12.3%
 
13.2%
 
12.7%
 
12.6%
 
Space and Airborne Systems
12.7%
 
13.1%
 
15.7%
 
13.4%
 
13.6%
 
13.9%
 
14.4%
 
Raytheon|Websense(1)
—%
 
(4.3)%
 
16.7%
 
10.7%
 
17.4%
 
10.6%
 
14.9%
 
Eliminations
9.9%
 
10.2%
 
10.2%
 
10.2%
 
10.1%
 
10.2%
 
9.4%
 
Total business segment
15.5%
 
13.3%
 
13.5%
 
12.2%
 
12.9%
 
13.0%
 
13.6%
 
Raytheon|Websense Acquisition Accounting Adjustments

 

 

 

 

 

 

 
FAS/CAS Adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
15.9%
 
14.1%
 
13.9%
 
13.3%
 
14.3%
 
13.9%
 
12.4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Excludes the unfavorable impact of the Raytheon|Websense acquisition accounting adjustments and certain acquisition related costs. See Attachment F for more information on these items.




Attachment C
 
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company

 
 
 
 
 
 
 
 
Other Preliminary Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
Funded Backlog
 
Total Backlog
 
 
 
 
 
 
 
28-Jun-15
 
31-Dec-14
 
28-Jun-15
 
31-Dec-14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
$
10,398

 
$
8,939

 
$
12,544

 
$
11,495

Intelligence, Information and Services
 
 
 
 
 
2,739

 
2,854

 
5,423

 
5,825

Missile Systems
 
 
 
 
 
 
7,316

 
6,992

 
9,880

 
9,269

Space and Airborne Systems
 
 
 
 
 
 
4,456

 
4,259

 
6,221

 
6,930

Raytheon|Websense
 
 
 
 
 
 
423

 
48

 
426

 
52

Total
 
 
 
 
 
 
$
25,332

 
$
23,092

 
$
34,494

 
$
33,571

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
 
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Bookings
 
 
 
 
 
 
$
7,580

 
$
6,772

 
$
12,051

 
$
11,065

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
 
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Administrative and selling expenses
 
 
 
 
 
$
489

 
$
517

 
$
962

 
$
965

Research and development expenses
 
 
 
 
 
$
186

 
$
124

 
$
328

 
$
235

Total general and administrative expenses
 
 
 
 
 
$
675

 
$
641

 
$
1,290

 
$
1,200

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Attachment C - Pro Forma
 
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 
 
 
 
 
 
 
 
 
 
 
 
 
Pro Forma Other Information
 
 
 
 
 
 
 
 
 
 
 
 
Full Year 2013, Quarters within and Full Year 2014, and First Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As previously announced, on May 29, 2015, we acquired Websense, Inc. from Vista Equity Partners and combined it with Raytheon Cyber Products (RCP), formerly part of our IIS segment, to create Raytheon|Websense, a new cybersecurity joint venture company (with Vista Equity Partners). In connection with these transactions, we reorganized our operating and reporting structure with Raytheon|Websense as our fifth reporting segment. The amounts, discussion and presentation of our business segments, including corporate and eliminations for intersegment activity, as set forth in our Form 10-Q, reflect our new structure. The Raytheon|Websense results reflect RCP results for all periods and Websense results after the acquisition date of May 29, 2015.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
Funded Backlog
 
Total Backlog
 
 
 
 
 
 
 
31-Dec-14
 
31-Dec-13
 
31-Dec-14
 
31-Dec-13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
$
8,939

 
$
9,397

 
$
11,495

 
$
10,916

Intelligence, Information and Services
 
 
 
 
 
 
2,854

 
2,550

 
5,825

 
5,811

Missile Systems
 
 
 
 
 
 
6,992

 
6,859

 
9,269

 
9,162

Space and Airborne Systems
 
 
 
 
 
 
4,259

 
4,166

 
6,930

 
7,751

Raytheon|Websense
 
 
 
 
 
 
48

 
42

 
52

 
45

Total
 
 
 
 
 
 
$
23,092

 
$
23,014

 
$
33,571

 
$
33,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
 
Bookings
(In millions)
Three Months Ended
 
Twelve Months Ended
 
29-Mar-15
 
31-Dec-14
 
28-Sep-14
 
29-Jun-14
 
30-Mar-14
 
31-Dec-14
 
31-Dec-13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
$
1,483

 
$
3,352

 
$
1,764

 
$
657

 
$
1,180

 
$
6,953

 
$
5,869

Intelligence, Information and Services
933

 
993

 
1,185

 
2,030

 
997

 
5,205

 
4,964

Missile Systems
1,405

 
1,388

 
1,430

 
2,482

 
1,083

 
6,383

 
5,221

Space and Airborne Systems
631

 
1,356

 
1,454

 
1,581

 
1,019

 
5,410

 
5,996

Raytheon|Websense
19

 
20

 
45

 
22

 
14

 
101

 
82

Total
$
4,471

 
$
7,109

 
$
5,878

 
$
6,772

 
$
4,293

 
$
24,052

 
$
22,132

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





Attachment D
 
 
 
Raytheon Company

Preliminary Balance Sheet Information
 
Second Quarter 2015
 
 
 
 
(In millions)
 
 
 
 
28-Jun-15
 
31-Dec-14
Assets
 
 
 
Current assets
 
 
 
     Cash and cash equivalents
$
1,828

 
$
3,222

     Short-term investments
666

 
1,497

     Contracts in process, net
5,514

 
4,985

     Inventories
519

 
414

     Prepaid expenses and other current assets
177

 
174

          Total current assets
8,704

 
10,292

 
 
 
 
Property, plant and equipment, net
1,929

 
1,935

Goodwill
14,683

 
13,061

Other assets, net
3,121

 
2,612

               Total assets
$
28,437

 
$
27,900

 
 
 
 
Liabilities, Redeemable Noncontrolling Interest, and Equity

 
 
 
Current liabilities
 
 
 
     Advance payments and billings in excess of costs incurred
$
1,975

 
$
2,284

     Accounts payable
1,171

 
1,250

     Accrued employee compensation
964

 
1,059

     Accrued income taxes
103

 
31

     Other current liabilities
1,428

 
1,306

          Total current liabilities
5,641

 
5,930

 
 
 
 
Accrued retiree benefits and other long-term liabilities
6,865

 
6,919

Long-term debt
5,333

 
5,330

 
 
 
 
Redeemable noncontrolling interest
343

 

 
 
 
 
Equity
 
 
 
  Raytheon Company stockholders' equity
 
 
 
     Common stock
3

 
3

     Additional paid-in capital
834

 
1,309

     Accumulated other comprehensive loss
(7,095
)
 
(7,458
)
     Retained earnings
16,314

 
15,671

          Total Raytheon Company stockholders' equity
10,056

 
9,525

     Noncontrolling interests in subsidiaries
199

 
196

          Total equity
10,255

 
9,721

               Total liabilities, redeemable noncontrolling interest and equity
$
28,437

 
$
27,900





Attachment E
 
 
 
 
 
 
 
Raytheon Company

Preliminary Cash Flow Information
 
 
 
 
 
 
 
Second Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Three Months Ended
 
Six Months Ended
 
28-Jun-15
 
29-Jun-14
 
28-Jun-15
 
29-Jun-14
 
 
 
 
 
 
 
 
Net income
$
503

 
$
553

 
$
1,057

 
$
1,153

(Income) loss from discontinued operations, net of tax
(1
)
 
(52
)
 
(1
)
 
(59
)
Income from continuing operations
502

 
501

 
1,056

 
1,094

 
 
 
 
 
 
 
 
Depreciation
76

 
76

 
149

 
149

Amortization
40

 
33

 
74

 
67

Working capital (excluding pension and income taxes)*
56

 
(181
)
 
(1,076
)
 
(711
)
Other long-term liabilities
(38
)
 
(5
)
 
(43
)
 
(17
)
Pension and other postretirement benefit plans
141

 
(208
)
 
408

 
(28
)
Other, net
(401
)
 
(63
)
 
(137
)
 
258

Net operating cash flow from continuing operations
$
376

 
$
153

 
$
431

 
$
812

 
 
 
 
 
 
 
 
Supplemental Cash Flow Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital spending
$
(88
)
 
$
(62
)
 
$
(143
)
 
$
(101
)
Internal use software spending
(13
)
 
(14
)
 
(26
)
 
(26
)
Acquisitions
(1,886
)
 

 
(1,892
)
 

Purchases of short-term investments

 
(26
)
 
(148
)
 
(1,371
)
Sales of short-term investments
74

 
425

 
209

 
882

Maturities of short-term investments
524

 
195

 
774

 
595

Dividends
(205
)
 
(189
)
 
(391
)
 
(363
)
Repurchases of common stock under stock repurchase programs
(200
)
 
(250
)
 
(500
)
 
(450
)
Sale of noncontrolling interest in Raytheon|Websense
343

 

 
343

 

 
 
 
 
 
 
 
 
Cash Flow related to Raytheon|Websense Transaction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition of Websense
$
(1,891
)
 
$

 
$
(1,891
)
 
$

Sale of noncontrolling interest in Raytheon|Websense
343

 

 
343

 

Net cash flow related to Raytheon|Websense
$
(1,548
)
 
$

 
$
(1,548
)
 
$

 
 
 
 
 
 
 
 
* Working capital (excluding pension and income taxes) is a summation of changes in: contracts in process, net and advance payments and billings in excess of costs incurred, inventories, prepaid expenses and other current assets, accounts payable, accrued employee compensation, and other current liabilities from the Consolidated Statements of Cash Flows.
 
 
 
 
 
 
 
 






Attachment F

 
 
Raytheon Company
 
 
 
 
 
Supplemental EPS Information
 
 
 
 
 
 
 
 
Second Quarter 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
28-Jun-15

29-Jun-14
 
28-Jun-15
 
29-Jun-14
Per share impact of the FAS/CAS Adjustment (A)
$
0.10

 
$
0.18

 
$
0.21

 
$
0.36

Per share impact of Raytheon|Websense deferred revenue adjustment (B)
(0.02
)
 

 
(0.02
)
 

Per share impact of Raytheon|Websense amortization of acquired intangible assets (C)
(0.01
)
 

 
(0.02
)
 

Per share impact of Raytheon|Websense acquisition related costs (D)
(0.05
)
 

 
(0.05
)
 

Per share impact of Raytheon|Websense restructuring costs (E)
(0.01
)
 

 
(0.01
)
 

Per share impact of the IRS tax settlement (F)
0.29

 

 
0.29

 

 
 
 
 
 
 
 
 
 
 
 
 
(A)
FAS/CAS Adjustment
$
49

 
$
87

 
$
98

 
$
174

 
 
Tax effect (at 35% statutory rate)
(17
)
 
(31
)
 
(34
)
 
(61
)
 
After-tax impact
32

 
56

 
64

 
113

 
Diluted shares
305.7

 
313.5

 
307.2

 
314.6

 
Per share impact
$
0.10

 
$
0.18

 
$
0.21

 
$
0.36

 
 
 
 
 
 
 
 
 
 
 
 
(B)
Raytheon|Websense deferred revenue adjustment (1)
$
(10
)
 
$

 
$
(10
)
 
$

 
 
 
 
 
 
 
 
 
 
Amount attributable to Raytheon Company (80.3%)
(8
)
 

 
(8
)
 

 
 
Tax effect (at 35% statutory rate)
3

 

 
3

 

 
After-tax impact
(5
)
 

 
(5
)
 

 
Diluted shares
305.7

 
313.5

 
307.2

 
314.6

 
Per share impact
$
(0.02
)
 
$

 
$
(0.02
)
 
$

 
 
 
 
 
 
 
 
 
(C)
Raytheon|Websense amortization of intangibles(1)
$
(8
)
 
$
(1
)
 
$
(10
)
 
$
(3
)
 
 
 
 
 
 
 
 
 
 
Amount attributable to Raytheon Company (80.3%)
(6
)
 
(1
)
 
(8
)
 
(2
)
 
 
Tax effect (at 35% statutory rate)
2

 

 
3

 
1

 
After-tax impact
(4
)
 
(1
)
 
(5
)
 
(1
)
 
Diluted shares
305.7

 
313.5

 
307.2

 
314.6

 
Per share impact
$
(0.01
)
 
$

 
$
(0.02
)
 
$

 
 
 
 
 
 
 
 
 
 
 
 
(D)
Raytheon|Websense acquisition related costs
$
(23
)
 
$

 
$
(25
)
 
$

 
 
 
 
 
 
 
 
 
 
Amount attributable to Raytheon Company (80.3%) (2)
(22
)
 

 
(24
)
 

 
 
Tax effect (at 35% statutory rate)
8

 

 
8

 

 
After-tax impact
(14
)
 

 
(16
)
 

 
Diluted shares
305.7

 
313.5

 
307.2

 
314.6

 
Per share impact
$
(0.05
)
 
$

 
$
(0.05
)
 
$

 
 
 
 
 
 
 
 
 
 
 
 
 (E)
Raytheon|Websense restructuring costs
$
(5
)
 
$

 
$
(5
)
 
$

 
 
 
 
 
 
 
 
 
 
 
Amount attributable to Raytheon Company (80.3%)
(4
)
 

 
(4
)
 

 
 
Tax effect (at 35% statutory rate)
1

 

 
1

 

 
After-tax impact
(3
)
 

 
(3
)
 

 
Diluted shares
305.7

 
313.5

 
307.2

 
314.6

 
Per share impact
$
(0.01
)
 
$

 
$
(0.01
)
 
$

 
 
 
 
 
 
 
 
 
 
 
 
(F)
IRS tax settlement
$
88

 
$

 
$
88

 
$

 
Diluted shares
305.7

 
313.5

 
307.2

 
314.6

 
Per share impact
$
0.29

 
$

 
$
0.29

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Raytheon|Websense deferred revenue adjustment and Raytheon|Websense 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, related to Raytheon|Websense, including historical Raytheon Cyber Products acquisitions.
(2)
Raytheon|Websense acquisition related costs include $6 million of costs for the three and six months ended June 28, 2015 for which 80.3% is attributable to Raytheon Company. The remaining $17 million and $19 million for the three and six months ended June 28, 2015, respectively, were 100% attributable to Raytheon Company.

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