WALTHAM, Mass., Oct. 27, 2016 /PRNewswire/ -- Raytheon Company
(NYSE: RTN) today announced net sales for the third quarter 2016 of
$6.0 billion, up 4 percent compared
to $5.8 billion in the third quarter
2015.
Third quarter 2016 EPS from continuing operations was
$1.79 compared to $1.47 in the third quarter 2015. Third quarter
2016 EPS from continuing operations included a favorable FAS/CAS
Adjustment of $0.23 compared to a
favorable FAS/CAS Adjustment of $0.09
in the third quarter 2015.
"The Company's strong operating performance in the third quarter
reflects our continued focus on driving global growth and creating
value for our customers and shareholders," said Thomas A. Kennedy, Raytheon Chairman and
CEO.
Operating cash flow from continuing operations for the third
quarter 2016 was $0.6 billion
compared to $1.1 billion for the
third quarter 2015. Operating cash flow from continuing operations
in the third quarter 2016 was lower than the third quarter 2015, as
expected, primarily due to the timing of collections and payments.
Year-to-date operating cash flow from continuing operations was
$1.7 billion in 2016 versus
$1.5 billion for the comparable
period in 2015. The increase in operating cash flow from continuing
operations in 2016 was primarily due to the timing of cash
taxes.
Summary Financial
Results
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
%
|
|
Nine
Months
|
%
|
|
($ in millions,
except per share data)
|
2016
|
|
2015
|
Change
|
|
2016
|
2015
|
Change
|
|
|
|
|
|
|
|
|
|
Bookings
|
$
|
6,940
|
|
|
$
|
5,315
|
|
30.6%
|
|
$
|
20,259
|
|
$
|
17,366
|
|
16.7%
|
Net Sales
|
$
|
6,033
|
|
|
$
|
5,783
|
|
4.3%
|
|
$
|
17,831
|
|
$
|
16,919
|
|
5.4%
|
Income from
Continuing Operations attributable to
Raytheon Company
|
$
|
528
|
|
|
$
|
448
|
|
17.9%
|
|
$
|
1,666
|
1
|
$
|
1,503
|
2
|
10.8%
|
EPS from Continuing
Operations
|
$
|
1.79
|
|
|
$
|
1.47
|
|
21.8%
|
|
$
|
5.60
|
1
|
$
|
4.91
|
2
|
14.1%
|
Operating Cash Flow
from Continuing Operations
|
$
|
640
|
|
|
$
|
1,102
|
|
|
|
$
|
1,711
|
|
$
|
1,533
|
|
|
Workdays in Fiscal
Reporting Calendar
|
63
|
|
|
63
|
|
|
|
192
|
|
188
|
|
|
1
Nine months 2016 Income from Continuing Operations attributable
to Raytheon Company and EPS from Continuing Operations included the
tax-free gain of $158 million and $0.53 impact, respectively, for
the TRS transaction.
|
2
Nine months 2015 Income from Continuing Operations attributable
to Raytheon Company and EPS from Continuing Operations included the
favorable $181 million pretax ($138 million after-tax) and $0.45
impact, respectively, for the first quarter 2015 eBorders
settlement.
|
|
|
|
|
|
|
|
|
|
The Company had bookings of $6.9
billion in the third quarter 2016, resulting in a
book-to-bill ratio of 1.15 in the quarter. Third quarter 2015
bookings were $5.3 billion.
Year-to-date 2016 bookings were $20.3
billion, resulting in a book-to-bill ratio of 1.14.
Year-to-date 2015 bookings were $17.4
billion.
In the third quarter 2016, the Company repurchased 1.4 million
shares of common stock for $198
million. Year-to-date 2016, the Company repurchased 6.2
million shares of common stock for $801
million.
Backlog
|
|
($ in
millions)
|
Period
Ending
|
|
Q3
2016
|
|
Q3
2015
|
|
2015
|
Backlog
|
$
|
35,811
|
|
|
$
|
33,571
|
|
|
$
|
34,669
|
|
Funded
Backlog
|
$
|
25,666
|
|
|
$
|
24,361
|
|
|
$
|
25,060
|
|
Backlog at the end of the third quarter 2016 was $35.8 billion, an increase of approximately
$2.2 billion compared to the end of
the third quarter 2015. Funded backlog was $25.7 billion, an increase of approximately
$1.3 billion compared to the end of
the third quarter 2015.
Outlook
The Company has updated its financial outlook for 2016 and
increased guidance for EPS. Charts containing additional
information on the Company's 2016 outlook are available on the
Company's website at www.raytheon.com/ir.
2016 Financial
Outlook
|
|
|
|
|
Current
|
|
Prior
(7/28/16)
|
Net Sales
($B)
|
24.2 -
24.5*
|
|
24.0 -
24.5
|
Deferred Revenue
Adjustment ($M)1
|
(77)
|
|
(77)
|
Amortization of
Acquired Intangibles ($M)1
|
(121)
|
|
(121)
|
FAS/CAS Adjustment
($M)
|
433*
|
|
428
|
Interest Expense, net
($M)
|
(215) -
(220)*
|
|
(215) -
(225)
|
Diluted Shares
(M)
|
~297*
|
|
296 - 298
|
Effective Tax
Rate
|
~28.0%
|
|
~28.0%
|
EPS from Continuing
Operations
|
$7.28 -
$7.38*
|
|
$7.13 -
$7.33
|
Operating Cash Flow
from Continuing Operations ($B)
|
2.8 -
3.1
|
|
2.8 -
3.1
|
* Denotes change
from prior guidance
|
|
|
|
1
Deferred Revenue Adjustment and Amortization of Intangibles
represent the unfavorable impact of the acquisition accounting
adjustments to record acquired deferred revenue at fair value and
the amortization of acquired intangible assets for all business
segments.
|
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 (FP).
Integrated Defense
Systems
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
|
Nine
Months
|
|
($ in
millions)
|
2016
|
|
2015
|
%
Change
|
|
2016
|
|
2015
|
%
Change
|
Net Sales
|
$
|
1,334
|
|
|
$
|
1,417
|
|
-6%
|
|
$
|
4,070
|
|
|
$
|
4,289
|
|
-5%
|
Operating
Income1
|
$
|
209
|
|
|
$
|
198
|
|
6%
|
|
$
|
731
|
|
|
$
|
583
|
|
NM
|
Operating
Margin1
|
15.7%
|
|
|
14.0%
|
|
|
|
18.0%
|
|
|
13.6%
|
|
|
1
Nine months 2016 operating income and operating margin include
the favorable $158 million impact of the TRS
transaction.
|
NM = Not
Meaningful
|
|
|
|
|
|
|
|
|
|
Integrated Defense Systems (IDS) had third quarter 2016 net
sales of $1,334 million compared to
$1,417 million in the third quarter
2015. The change in net sales for the quarter was primarily driven
by lower net sales on various radar production programs and on an
international communications program due to scheduled completion of
certain production phases on these programs.
IDS recorded $209 million of
operating income in the third quarter 2016 compared to $198 million in the third quarter 2015. The
increase in operating income for the quarter was primarily driven
by higher net program efficiencies, partially offset by lower
volume in the third quarter 2016.
During the quarter, IDS booked $265
million to provide advanced Patriot air and missile defense
capabilities for an international customer. IDS also booked
$92 million for the Engineering and
Manufacturing Development (EMD) phase on the competitively awarded
Enterprise Air Surveillance Radar (EASR) program for the U.S.
Navy.
Intelligence,
Information and Services
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
|
|
Nine
Months
|
|
|
($ in
millions)
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Net Sales
|
$
|
1,541
|
|
|
$
|
1,519
|
|
|
1%
|
|
$
|
4,676
|
|
|
$
|
4,574
|
|
|
2%
|
Operating
Income1
|
$
|
122
|
|
|
$
|
118
|
|
|
3%
|
|
$
|
346
|
|
|
$
|
535
|
|
|
NM
|
Operating
Margin1
|
7.9%
|
|
|
7.8%
|
|
|
|
|
7.4%
|
|
|
11.7%
|
|
|
|
1
Nine months 2015 operating income and operating margin include
the favorable $181 million impact of the eBorders
settlement.
|
NM = Not
Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
Intelligence, Information and Services (IIS) had third quarter
2016 net sales of $1,541 million, up
1 percent compared to $1,519 million
in the third quarter 2015.
IIS recorded $122 million of
operating income in the third quarter 2016 compared to $118 million in the third quarter 2015.
During the quarter, IIS booked $255
million on the Joint Precision Approach and Landing System
(JPALS) program for the U.S. Navy, $286
million on domestic and foreign training programs in support
of Warfighter FOCUS activities, $107
million to provide intelligence, surveillance and
reconnaissance (ISR) support to the U.S. Air Force, and
$101 million to provide a common
ground station for unmanned vehicles for the U.S. Air Force. IIS
also booked $435 million on a number
of classified contracts.
Missile
Systems
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
|
Nine
Months
|
|
($ in
millions)
|
2016
|
|
2015
|
%
Change
|
|
2016
|
|
2015
|
%
Change
|
Net Sales
|
$
|
1,800
|
|
|
$
|
1,645
|
|
9%
|
|
$
|
5,176
|
|
|
$
|
4,677
|
|
11%
|
Operating
Income
|
$
|
241
|
|
|
$
|
219
|
|
10%
|
|
$
|
656
|
|
|
$
|
610
|
|
8%
|
Operating
Margin
|
13.4%
|
|
|
13.3%
|
|
|
|
12.7%
|
|
|
13.0%
|
|
|
Missile Systems (MS) had third quarter 2016 net sales of
$1,800 million, up 9 percent compared
to $1,645 million in the third
quarter 2015. The increase in net sales for the quarter was
primarily driven by higher sales on the Paveway™ and Advanced
Medium-Range Air-to-Air Missile (AMRAAM®) programs.
MS recorded $241 million of
operating income in the third quarter 2016 compared to $219 million in the third quarter 2015. The
increase in operating income for the quarter was primarily driven
by higher volume.
During the quarter, MS booked $538
million for Standard Missile-3 (SM-3®),
$376 million for Phalanx weapon
systems, and $176 million for
Tube-launched, Optically-tracked, Wireless-guided (TOW®)
missiles, all for both U.S. and international customers.
Space and Airborne
Systems
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
|
Nine
Months
|
|
($ in
millions)
|
2016
|
|
2015
|
%
Change
|
|
2016
|
|
2015
|
%
Change
|
Net Sales
|
$
|
1,590
|
|
|
$
|
1,446
|
|
10%
|
|
$
|
4,587
|
|
|
$
|
4,220
|
|
9%
|
Operating
Income
|
$
|
210
|
|
|
$
|
213
|
|
-1%
|
|
$
|
586
|
|
|
$
|
590
|
|
-1%
|
Operating
Margin
|
13.2%
|
|
|
14.7%
|
|
|
|
12.8%
|
|
|
14.0%
|
|
|
Space and Airborne Systems (SAS) had third quarter 2016 net
sales of $1,590 million, up 10
percent compared to $1,446 million in
the third quarter 2015. The increase in net sales for the quarter
was primarily driven by higher sales on an international classified
program.
SAS recorded $210 million of
operating income in the third quarter 2016 compared to $213 million in the third quarter 2015. The
decrease in operating income for the quarter was primarily due to a
change in program mix partially offset by higher volume.
During the quarter, SAS booked $164
million to provide integrated Sentinel support services for
the U.K. Royal Air Force. SAS also booked $922 million on a number of classified
contracts.
Forcepoint
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
|
Nine
Months
|
|
($ in
millions)
|
2016
|
|
2015
|
%
Change
|
|
2016
|
|
2015
|
%
Change
|
Net Sales
|
$
|
149
|
|
|
$
|
114
|
|
31%
|
|
$
|
423
|
|
|
$
|
195
|
|
NM
|
Operating
Income
|
$
|
19
|
|
|
$
|
20
|
|
-5%
|
|
$
|
40
|
|
|
$
|
19
|
|
NM
|
Operating
Margin
|
12.8%
|
|
|
17.5%
|
|
|
|
9.5%
|
|
|
9.7%
|
|
|
NM = Not
Meaningful
|
|
|
|
|
|
|
|
|
|
Forcepoint (FP) had third quarter 2016 net sales of $149 million, up 31 percent compared to
$114 million in the third quarter
2015. The increase in net sales for the quarter was primarily
driven by higher sales in Federal products and services, and the
acquisition of Stonesoft in the first quarter of 2016.
FP recorded $19 million of
operating income in the third quarter 2016 compared to $20 million in the third quarter 2015. The
decrease in operating margin for the quarter was primarily due to a
change in product mix and an increase in commissions expense due to
higher bookings.
About Raytheon
Raytheon Company, with 2015 sales of $23
billion and 61,000 employees, is a technology and innovation
leader specializing in defense, civil government and cybersecurity
solutions. With a history of innovation spanning 94 years, Raytheon
provides state-of-the-art electronics, mission systems integration,
C5ITM products and services, sensing, effects, and
mission support for customers in more than 80
countries. Raytheon is headquartered in Waltham, Massachusetts. Follow us on
Twitter.
Conference Call on the Third Quarter 2016 Financial
Results
Raytheon's financial results conference call will be held on
Thursday, October 27, 2016 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)
953-6856 in the U.S. or (617) 399-3480 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 difficulties in contract performance; the resolution
of program terminations; the ability to procure new contracts; the
risks of conducting business in foreign countries; the
unpredictability of timing of international bookings; the ability
to comply with extensive governmental regulation and obtain
approvals, including export and import requirements such as the
International Traffic in Arms Regulations and the Export
Administration Regulations, anti-bribery and anti-corruption
requirements including the Foreign Corrupt Practices Act,
industrial cooperation agreement obligations, and procurement and
other regulations; changes in government procurement practices; the
impact of competition; the ability to develop products and
technologies, and the impact of associated investments and costs;
the impact of potential security and cyber threats, and other
disruptions; the ability to recruit and retain qualified personnel;
the risk that actual pension returns, discount rates or other
actuarial assumptions, including the long-term return on asset
assumption, are significantly different than the Company's current
assumptions; the risk of cost overruns, particularly for the
Company's fixed-price contracts; dependence on component
availability, subcontractor and partner performance and key
suppliers; risks of a negative government audit; risks associated
with acquisitions, investments, dispositions, joint ventures and
other business arrangements; the ability to grow in the government
and commercial cybersecurity markets; risks of an impairment of
goodwill or other intangible assets; the impact of financial
markets and global economic conditions; the use of accounting
estimates in the Company's financial statements; the outcome of
contingencies and litigation matters, including government
investigations; the risk of environmental liabilities; and other
factors as may be detailed from time to time in the Company's
public announcements and Securities and Exchange Commission
filings. The Company undertakes no obligation to make any revisions
to the forward-looking statements contained in this release and the
attachments or to update them to reflect events or circumstances
occurring after the date of this release, including any
acquisitions, dispositions or other business arrangements that may
be announced or closed after such date.
Attachment
A
|
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
Preliminary Statement
of Operations Information
|
|
|
|
|
|
|
|
|
Third Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
6,033
|
|
|
$
|
5,783
|
|
|
$
|
17,831
|
|
|
$
|
16,919
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
4,512
|
|
|
4,408
|
|
|
13,292
|
|
|
12,766
|
|
General and
administrative expenses
|
|
715
|
|
|
678
|
|
|
2,161
|
|
|
1,968
|
|
Total operating
expenses
|
|
5,227
|
|
|
5,086
|
|
|
15,453
|
|
|
14,734
|
|
Operating
income
|
|
806
|
|
|
697
|
|
|
2,378
|
|
|
2,185
|
|
Non-operating
(income) expense, net
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
58
|
|
|
58
|
|
|
174
|
|
|
175
|
|
Interest
income
|
|
(4)
|
|
|
(3)
|
|
|
(12)
|
|
|
(9)
|
|
Other (income)
expense, net
|
|
(4)
|
|
|
9
|
|
|
(7)
|
|
|
6
|
|
Total non-operating
(income) expense, net
|
|
50
|
|
|
64
|
|
|
155
|
|
|
172
|
|
Income from
continuing operations before taxes
|
|
756
|
|
|
633
|
|
|
2,223
|
|
|
2,013
|
|
Federal and foreign
income taxes
|
|
233
|
|
|
189
|
|
|
591
|
|
|
513
|
|
Income from
continuing operations
|
|
523
|
|
|
444
|
|
|
1,632
|
|
|
1,500
|
|
Income (loss) from
discontinued operations, net of tax
|
|
1
|
|
|
(1)
|
|
|
1
|
|
|
—
|
|
Net income
|
|
524
|
|
|
443
|
|
|
1,633
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to noncontrolling
interests in subsidiaries
|
|
(5)
|
|
|
(4)
|
|
|
(34)
|
|
|
(3)
|
|
Net income
attributable to Raytheon Company
|
|
$
|
529
|
|
|
$
|
447
|
|
|
$
|
1,667
|
|
|
$
|
1,503
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Raytheon Company
common stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
1.79
|
|
|
$
|
1.47
|
|
|
$
|
5.60
|
|
|
$
|
4.91
|
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
|
1.79
|
|
|
1.47
|
|
|
5.61
|
|
|
4.92
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Raytheon Company
common stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
1.79
|
|
|
$
|
1.47
|
|
|
$
|
5.60
|
|
|
$
|
4.91
|
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
|
1.79
|
|
|
1.47
|
|
|
5.60
|
|
|
4.91
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable
to Raytheon Company common
stockholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
528
|
|
|
$
|
448
|
|
|
$
|
1,666
|
|
|
$
|
1,503
|
|
Income (loss) from
discontinued operations, net of tax
|
|
1
|
|
|
(1)
|
|
|
1
|
|
|
—
|
|
Net income
|
|
$
|
529
|
|
|
$
|
447
|
|
|
$
|
1,667
|
|
|
$
|
1,503
|
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
295.2
|
|
|
303.9
|
|
|
297.2
|
|
|
305.8
|
|
Diluted
|
|
295.5
|
|
|
304.3
|
|
|
297.5
|
|
|
306.2
|
|
Attachment
B
|
|
|
|
|
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
|
|
Preliminary Segment
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
Net Sales
|
|
Operating
Income
|
|
As a Percent of Net
Sales
|
(In millions, except
percentages)
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
$
|
1,334
|
|
|
$
|
1,417
|
|
|
$
|
209
|
|
|
$
|
198
|
|
|
15.7
|
%
|
|
14.0
|
%
|
Intelligence,
Information and Services
|
|
1,541
|
|
|
1,519
|
|
|
122
|
|
|
118
|
|
|
7.9
|
%
|
|
7.8
|
%
|
Missile
Systems
|
|
1,800
|
|
|
1,645
|
|
|
241
|
|
|
219
|
|
|
13.4
|
%
|
|
13.3
|
%
|
Space and Airborne
Systems
|
|
1,590
|
|
|
1,446
|
|
|
210
|
|
|
213
|
|
|
13.2
|
%
|
|
14.7
|
%
|
Forcepoint
|
|
149
|
|
|
114
|
|
|
19
|
|
|
20
|
|
|
12.8
|
%
|
|
17.5
|
%
|
Eliminations
|
|
(364)
|
|
|
(331)
|
|
|
(42)
|
|
|
(42)
|
|
|
|
|
|
Total business
segment
|
|
6,050
|
|
|
5,810
|
|
|
759
|
|
|
726
|
|
|
12.5
|
%
|
|
12.5
|
%
|
Acquisition
Accounting Adjustments
|
|
(17)
|
|
|
(27)
|
|
|
(46)
|
|
|
(63)
|
|
|
|
|
|
FAS/CAS
Adjustment
|
|
—
|
|
|
—
|
|
|
104
|
|
|
43
|
|
|
|
|
|
Corporate
|
|
—
|
|
|
—
|
|
|
(11)
|
|
|
(9)
|
|
|
|
|
|
Total
|
|
$
|
6,033
|
|
|
$
|
5,783
|
|
|
$
|
806
|
|
|
$
|
697
|
|
|
13.4
|
%
|
|
12.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
Net Sales
|
|
Operating
Income
|
|
As a Percent of Net
Sales
|
(In millions, except
percentages)
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
$
|
4,070
|
|
|
$
|
4,289
|
|
|
$
|
731
|
|
|
$
|
583
|
|
|
18.0
|
%
|
|
13.6
|
%
|
Intelligence,
Information and Services
|
|
4,676
|
|
|
4,574
|
|
|
346
|
|
|
535
|
|
|
7.4
|
%
|
|
11.7
|
%
|
Missile
Systems
|
|
5,176
|
|
|
4,677
|
|
|
656
|
|
|
610
|
|
|
12.7
|
%
|
|
13.0
|
%
|
Space and Airborne
Systems
|
|
4,587
|
|
|
4,220
|
|
|
586
|
|
|
590
|
|
|
12.8
|
%
|
|
14.0
|
%
|
Forcepoint
|
|
423
|
|
|
195
|
|
|
40
|
|
|
19
|
|
|
9.5
|
%
|
|
9.7
|
%
|
Eliminations
|
|
(1,037)
|
|
|
(999)
|
|
|
(109)
|
|
|
(111)
|
|
|
|
|
|
Total business
segment
|
|
17,895
|
|
|
16,956
|
|
|
2,250
|
|
|
2,226
|
|
|
12.6
|
%
|
|
13.1
|
%
|
Acquisition
Accounting Adjustments
|
|
(64)
|
|
|
(37)
|
|
|
(155)
|
|
|
(109)
|
|
|
|
|
|
FAS/CAS
Adjustment
|
|
—
|
|
|
—
|
|
|
318
|
|
|
141
|
|
|
|
|
|
Corporate
|
|
—
|
|
|
—
|
|
|
(35)
|
|
|
(73)
|
|
|
|
|
|
Total
|
|
$
|
17,831
|
|
|
$
|
16,919
|
|
|
$
|
2,378
|
|
|
$
|
2,185
|
|
|
13.3
|
%
|
|
12.9
|
%
|
Attachment
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
|
|
|
|
Other Preliminary
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
Funded
Backlog
|
|
Total
Backlog
|
|
|
|
|
|
|
|
2-Oct-16
|
|
31-Dec-15
|
|
2-Oct-16
|
|
31-Dec-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Defense
Systems
|
|
|
|
|
|
|
$
|
7,996
|
|
|
$
|
8,961
|
|
|
$
|
9,667
|
|
|
$
|
10,629
|
|
Intelligence,
Information and Services
|
|
|
|
|
|
2,833
|
|
|
2,933
|
|
|
6,127
|
|
|
6,367
|
|
Missile
Systems
|
|
|
|
|
|
|
8,998
|
|
|
7,998
|
|
|
11,077
|
|
|
10,885
|
|
Space and Airborne
Systems
|
|
|
|
|
|
|
5,336
|
|
|
4,692
|
|
|
8,435
|
|
|
6,309
|
|
Forcepoint
|
|
|
|
|
|
|
503
|
|
|
476
|
|
|
505
|
|
|
479
|
|
Total
|
|
|
|
|
|
|
$
|
25,666
|
|
|
$
|
25,060
|
|
|
$
|
35,811
|
|
|
$
|
34,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Bookings
|
|
|
|
|
|
|
$
|
6,940
|
|
|
$
|
5,315
|
|
|
$
|
20,259
|
|
|
$
|
17,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative and
selling expenses
|
|
|
|
|
|
$
|
536
|
|
|
$
|
495
|
|
|
$
|
1,602
|
|
|
$
|
1,457
|
|
Research and
development expenses
|
|
|
|
|
|
179
|
|
|
183
|
|
|
559
|
|
|
511
|
|
Total general and
administrative expenses
|
|
|
|
|
|
$
|
715
|
|
|
$
|
678
|
|
|
$
|
2,161
|
|
|
$
|
1,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
D
|
|
|
|
Raytheon
Company
|
|
Preliminary Balance
Sheet Information
|
|
Third Quarter
2016
|
|
|
|
|
(In
millions)
|
|
|
|
|
2-Oct-16
|
|
31-Dec-15
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
2,342
|
|
|
$
|
2,328
|
|
Short-term
investments
|
462
|
|
|
872
|
|
Contracts in process,
net
|
6,469
|
|
|
5,564
|
|
Inventories
|
651
|
|
|
635
|
|
Prepaid expenses and
other current assets
|
231
|
|
|
413
|
|
Total current
assets
|
10,155
|
|
|
9,812
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,053
|
|
|
2,005
|
|
Goodwill
|
14,791
|
|
|
14,731
|
|
Other assets,
net
|
2,453
|
|
|
2,733
|
|
Total
assets
|
$
|
29,452
|
|
|
$
|
29,281
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest and Equity
|
|
|
|
Current
liabilities
|
|
|
|
Advance payments and
billings in excess of costs incurred
|
$
|
2,063
|
|
|
$
|
2,193
|
|
Accounts
payable
|
1,415
|
|
|
1,402
|
|
Accrued employee
compensation
|
1,131
|
|
|
1,154
|
|
Other current
liabilities
|
1,392
|
|
|
1,377
|
|
Total current
liabilities
|
6,001
|
|
|
6,126
|
|
|
|
|
|
Accrued retiree
benefits and other long-term liabilities
|
7,284
|
|
|
7,140
|
|
Long-term
debt
|
5,334
|
|
|
5,330
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
366
|
|
|
355
|
|
|
|
|
|
Equity
|
|
|
|
Raytheon Company
stockholders' equity
|
|
|
|
Common
stock
|
3
|
|
|
3
|
|
Additional paid-in
capital
|
—
|
|
|
398
|
|
Accumulated other
comprehensive loss
|
(6,856)
|
|
|
(7,176)
|
|
Retained
earnings
|
17,320
|
|
|
16,903
|
|
Total Raytheon Company
stockholders' equity
|
10,467
|
|
|
10,128
|
|
Noncontrolling
interests in subsidiaries
|
—
|
|
|
202
|
|
Total
equity
|
10,467
|
|
|
10,330
|
|
Total liabilities,
redeemable noncontrolling interest and equity
|
$
|
29,452
|
|
|
$
|
29,281
|
|
Attachment
E
|
|
|
|
Raytheon
Company
|
|
Preliminary Cash Flow
Information
|
|
|
|
Third Quarter
2016
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
(In
millions)
|
2-Oct-16
|
|
27-Sep-15
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
|
1,633
|
|
|
$
|
1,500
|
|
(Income) loss from
discontinued operations, net of tax
|
(1)
|
|
|
—
|
|
Income from
continuing operations
|
1,632
|
|
|
1,500
|
|
|
|
|
|
|
|
Adjustments to
reconcile to net cash provided by (used in) operating activities
from continuing operations, net of acquisitions and
divestitures
|
|
|
|
Depreciation and
amortization
|
377
|
|
|
353
|
|
Stock-based
compensation
|
120
|
|
|
114
|
|
Gain on sale of
equity method investment
|
(158)
|
|
|
—
|
|
Deferred income
taxes
|
(102)
|
|
|
(248)
|
|
Tax benefit from
stock-based awards
|
—
|
|
|
(43)
|
|
Changes in assets and
liabilities
|
|
|
|
Contracts in process,
net and advance payments and billings in excess of costs
incurred
|
(1,016)
|
|
|
(700)
|
|
Inventories
|
(15)
|
|
|
(207)
|
|
Prepaid expenses and
other current assets
|
276
|
|
|
7
|
|
Income taxes
receivable/payable
|
(78)
|
|
|
3
|
|
Accounts
payable
|
52
|
|
|
63
|
|
Accrued employee
compensation
|
(25)
|
|
|
109
|
|
Other current
liabilities
|
(47)
|
|
|
47
|
|
Accrued retiree
benefits
|
693
|
|
|
583
|
|
Other, net
|
2
|
|
|
(48)
|
|
Net cash provided by
(used in) operating activities from continuing
operations
|
1,711
|
|
|
1,533
|
|
Net cash provided by
(used in) operating activities from discontinued
operations
|
—
|
|
|
—
|
|
Net cash provided by
(used in) operating activities
|
1,711
|
|
|
1,533
|
|
Cash flows from
investing activities
|
|
|
|
Additions to
property, plant and equipment
|
(344)
|
|
|
(239)
|
|
Proceeds from sales
of property, plant and equipment
|
25
|
|
|
45
|
|
Additions to
capitalized internal use software
|
(47)
|
|
|
(37)
|
|
Purchases of
short-term investments
|
(472)
|
|
|
(658)
|
|
Sales of short-term
investments
|
—
|
|
|
209
|
|
Maturities of
short-term investments
|
822
|
|
|
1,336
|
|
Payments for
purchases of acquired companies, net of cash received
|
(57)
|
|
|
(1,892)
|
|
Other
|
(9)
|
|
|
(6)
|
|
Net cash provided by
(used in) investing activities
|
(82)
|
|
|
(1,242)
|
|
Cash flows from
financing activities
|
|
|
|
Dividends
paid
|
(635)
|
|
|
(595)
|
|
Repurchases of common
stock under share repurchase programs
|
(801)
|
|
|
(750)
|
|
Repurchases of common
stock to satisfy tax withholding obligations
|
(95)
|
|
|
(98)
|
|
Acquisition of
noncontrolling interest in RCCS LLC
|
(90)
|
|
|
—
|
|
Contribution from
noncontrolling interests in Forcepoint
|
11
|
|
|
—
|
|
Tax benefit from
stock-based awards
|
—
|
|
|
43
|
|
Sale of
noncontrolling interest in Forcepoint
|
—
|
|
|
343
|
|
Other
|
(5)
|
|
|
(3)
|
|
Net cash provided by
(used in) financing activities
|
(1,615)
|
|
|
(1,060)
|
|
Net increase
(decrease) in cash and cash equivalents
|
14
|
|
|
(769)
|
|
Cash and cash
equivalents at beginning of the year
|
2,328
|
|
|
3,222
|
|
Cash and cash
equivalents at end of period
|
$
|
2,342
|
|
|
$
|
2,453
|
|
Attachment
F
|
|
|
|
Raytheon
Company
|
|
|
|
|
|
Supplemental EPS
Information
|
|
|
|
|
|
|
|
|
Third Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
2-Oct-16
|
|
27-Sep-15
|
|
2-Oct-16
|
|
27-Sep-15
|
Per share impact of
the FAS/CAS Adjustment (A)
|
$
|
0.23
|
|
|
$
|
0.09
|
|
|
$
|
0.70
|
|
|
$
|
0.30
|
|
Per share impact of
the TRS transaction (B)
|
—
|
|
|
—
|
|
|
0.53
|
|
|
—
|
|
Per share impact of
the eBorders settlement (C)
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
FAS/CAS
Adjustment
|
$
|
104
|
|
|
$
|
43
|
|
|
$
|
318
|
|
|
$
|
141
|
|
|
|
Tax effect (at 35%
statutory rate)
|
(36)
|
|
|
(15)
|
|
|
(111)
|
|
|
(49)
|
|
|
After-tax
impact
|
68
|
|
|
28
|
|
|
207
|
|
|
92
|
|
|
Diluted
shares
|
295.5
|
|
|
304.3
|
|
|
297.5
|
|
|
306.2
|
|
|
Per share
impact
|
$
|
0.23
|
|
|
$
|
0.09
|
|
|
$
|
0.70
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(B)
|
TRS
transaction
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
Diluted
shares
|
|
—
|
|
|
—
|
|
|
297.5
|
|
|
—
|
|
|
Per share
impact
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.53
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(C)
|
eBorders
settlement
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
181
|
|
|
|
Tax effect (at 23.7%
blended global tax rate)
|
—
|
|
|
4
|
|
|
—
|
|
|
(43)
|
|
|
After-tax
impact
|
—
|
|
|
4
|
|
|
—
|
|
|
138
|
|
|
Diluted
shares
|
|
—
|
|
|
304.3
|
|
|
—
|
|
|
306.2
|
|
|
Per share
impact
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.45
|
|
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Corinne
Kovalsky
781.522.5899
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/raytheon-reports-strong-third-quarter-2016-results-300352043.html
SOURCE Raytheon Company