Raytheon Reports Solid First Quarter 2013 Results
- Adjusted EPS of $1.56, up 5 percent; EPS from continuing operations was $1.49(1), up 12 percent
- Adjusted operating margin of 13.2 percent, up 10 basis points; reported operating margin of 12.0 percent(1)
- Net sales of $5.9 billion, consistent with first quarter 2012
- Solid operating cash flow from continuing operations of $422 million
- As previously announced, increased annual dividend by 10 percent to $2.20 per share
- Updated full-year 2013 guidance
WALTHAM, Mass., April 25, 2013 /PRNewswire/ -- Raytheon Company (NYSE: RTN) announced first quarter 2013 Adjusted EPS1 of $1.56 per diluted share compared to $1.48 per diluted share in the first quarter 2012, up 5 percent. First quarter 2013 EPS from continuing operations was $1.49 compared to $1.33 in the first quarter 2012. First quarter 2013 included $0.08 associated with the favorable impact of the 2012 research and development (R&D) tax credit. In addition, an unfavorable FAS/CAS Adjustment of $0.14 was included in both the first quarter 2013 and the first quarter 2012.
"Strong program execution drove solid operating results in the first quarter," said William H. Swanson, Raytheon's Chairman and CEO. "Our innovation and technology, along with our focus on productivity, agility and affordability, continue to create value for our customers and shareholders."
Net sales for the first quarter 2013 were $5,879 million, compared to $5,938 million in the first quarter 2012.
Operating cash flow from continuing operations for the first quarter 2013 was $422 million compared to $111 million for the first quarter 2012. The increase in operating cash from continuing operations in the first quarter 2013 was primarily due to working capital improvements and the timing of tax payments.
In the first quarter 2013, the Company repurchased 4.2 million shares of common stock for $225 million as part of its previously announced share repurchase program. In addition, as announced in March 2013, the Company's Board of Directors voted to increase the Company's annual dividend rate by 10 percent from $2.00 to $2.20 per share, the ninth consecutive annual dividend increase.
The Company ended the first quarter 2013 with $719 million of net debt. Net debt is defined as total debt less cash and cash equivalents and short-term investments.
__________________________________________________________________________
(1) Adjusted EPS is EPS from continuing operations attributable to Raytheon Company common stockholders and Adjusted Operating Margin is total operating margin, in each case, excluding the impact of the FAS/CAS Adjustment, and from time to time, certain other items. Q1 2013 Adjusted EPS also excludes the impact of the research and development (R&D) tax credit, approved by Congress in January 2013, that relates to 2012 as discussed above. In addition, the Q1 2012 Adjusted EPS amount has been revised to include the favorable $0.02 impact for the R&D tax credit. Adjusted EPS and Adjusted Operating Margin are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.
| Summary Financial Results |
|||||||||
| 1st Quarter |
% |
||||||||
| ($ in millions, except per share data) |
2013 |
2012 |
Change |
||||||
| Net Sales |
$ |
5,879 |
$ |
5,938 |
-1.0% |
||||
| Income from Continuing Operations attributable to Raytheon Company |
$ |
490 |
$ |
450 |
8.9% |
||||
| Adjusted Income* |
$ |
511 |
$ |
502 |
1.8% |
||||
| EPS from Continuing Operations |
$ |
1.49 |
$ |
1.33 |
12.0% |
||||
| Adjusted EPS* |
$ |
1.56 |
$ |
1.48 |
5.4% |
||||
| Operating Cash Flow from Continuing Operations |
$ |
422 |
$ |
111 |
|||||
| Workdays in Fiscal Reporting Calendar |
63 |
64 |
|||||||
| * Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders and Adjusted EPS is EPS from continuing operations attributable to Raytheon Company common stockholders, in each case, excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. In addition to the FAS/CAS Adjustment, Q1 2013 Adjusted EPS excludes the impact of the R&D tax credit, approved by Congress in January 2013, that relates to 2012. In addition, the Q1 2012 Adjusted EPS amount has been revised to include the favorable $0.02 impact for the R&D tax credit. Adjusted Income and Adjusted EPS are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information. |
|||||||||
| Bookings and Backlog |
|||||||
| Bookings |
|||||||
| ($ in millions) |
1st Quarter |
||||||
| 2013 |
2012 |
||||||
| Bookings |
$ |
3,606 |
$ |
5,162 |
|||
| Backlog |
|||||||||||
| ($ in millions) |
Period Ending |
||||||||||
| Q1 2013 |
Q1 2012 |
2012 |
|||||||||
| Backlog |
$ |
33,546 |
$ |
34,303 |
$ |
36,181 |
|||||
| Funded Backlog |
$ |
22,523 |
$ |
22,970 |
$ |
24,047 |
|||||
The Company had bookings of $3.6 billion in the first quarter 2013 and ended the first quarter 2013 with a backlog of $33.5 billion, compared to $34.3 billion at the end of the first quarter 2012.
Outlook
The Company has updated its financial outlook for 2013 to reflect first quarter 2013 results and its current expectations of the effects of sequestration under the Budget Control Act (BCA) of 2011. Charts containing additional information on the Company's 2013 outlook are available on the Company's website at www.raytheon.com/ir.
| 2013 Financial Outlook |
||||
| Current |
Prior (1/24/13) |
|||
| Net Sales ($B) |
23.2 - 23.7* |
23.6 - 24.1 |
||
| FAS/CAS Adjustment ($M) |
(286) |
(286) |
||
| Interest Expense, net ($M) |
(200) - (210) |
(200) - (210) |
||
| Diluted Shares (M) |
324 - 327 |
324 - 327 |
||
| Effective Tax Rate |
~29.5%* |
~30% |
||
| EPS from Continuing Operations |
$5.26 - $5.41* |
$5.16 - $5.31 |
||
| Adjusted EPS** |
$5.75 - $5.90* |
$5.65 - $5.80 |
||
| Operating Cash Flow from Continuing Operations ($B) |
2.1 - 2.3* |
2.0 - 2.2 |
||
| * Denotes change from prior guidance. |
||||
| ** Adjusted EPS is EPS from continuing operations attributable to Raytheon Company common stockholders, excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. In addition to the FAS/CAS Adjustment, 2013 EPS guidance also excludes the impact of the R&D tax credit that relates to 2012. See attachment F for a reconciliation of this measure and a discussion of why the Company is presenting this information.
|
||||
Segment Results
As previously announced, effective April 1, 2013, in order to streamline operations, increase productivity and achieve stronger alignment with its customers' priorities, the Company consolidated its structure. The new structure consists of the following four businesses: the Intelligence, Information and Services business, resulting from the combination of the former Intelligence and Information Systems and former Raytheon Technical Services businesses; and the Integrated Defense Systems, Missile Systems, and Space and Airborne Systems businesses, each of which will be expanded by the realignment of the former Network Centric Systems business operations. These changes are not reflected in the amounts, discussion, or presentation of the Company's business segments as set forth in this news release. The Company will report second quarter 2013 financial results consistent with the new structure.
The Company's reportable segments for the first quarter ending March 31, 2013 were: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services.
| Integrated Defense Systems |
|||||||||
| 1st Quarter |
|||||||||
| ($ in millions) |
2013 |
2012 |
% Change |
||||||
| Net Sales |
$ |
1,263 |
$ |
1,220 |
4% |
||||
| Operating Income |
$ |
244 |
$ |
216 |
13% |
||||
| Operating Margin |
19.3 |
% |
17.7 |
% |
|||||
Integrated Defense Systems (IDS) had first quarter 2013 net sales of $1,263 million compared to $1,220 million in the first quarter 2012. The increase in net sales was primarily due to higher sales on a missile defense radar program for an international customer. IDS recorded $244 million of operating income compared to $216 million in the first quarter 2012. The increase in operating income was primarily driven by international programs.
During the quarter, IDS booked $208 million to provide advanced Patriot air and missile defense capability for an international customer. IDS also booked $160 million to provide Patriot engineering services support for U.S. and international customers.
| Intelligence and Information Systems |
|||||||||
| 1st Quarter |
|||||||||
| ($ in millions) |
2013 |
2012 |
% Change |
||||||
| Net Sales |
$ |
743 |
$ |
764 |
-3% |
||||
| Operating Income |
$ |
59 |
$ |
62 |
-5% |
||||
| Operating Margin |
7.9 |
% |
8.1 |
% |
|||||
Intelligence and Information Systems (IIS) had first quarter 2013 net sales of $743 million compared to $764 million in the first quarter 2012. The change in net sales was primarily due to lower net sales on classified programs. IIS recorded $59 million of operating income compared to $62 million in the first quarter 2012.
During the quarter, IIS booked $266 million on a number of classified contracts.
| Missile Systems |
|||||||||
| 1st Quarter |
|||||||||
| ($ in millions) |
2013 |
2012 |
% Change |
||||||
| Net Sales |
$ |
1,453 |
$ |
1,351 |
8% |
||||
| Operating Income |
$ |
193 |
$ |
180 |
7% |
||||
| Operating Margin |
13.3 |
% |
13.3 |
% |
|||||
Missile Systems (MS) had first quarter 2013 net sales of $1,453 million, up 8 percent compared to $1,351 million in the first quarter 2012. The increase in net sales was primarily driven by higher sales on the Standard Missile-3 (SM-3) and Rolling Airframe Missile (RAM) programs. MS recorded $193 million of operating income compared to $180 million in the first quarter 2012. The increase in operating income was due to higher volume on U.S. Navy programs in the first quarter 2013.
During the quarter, MS booked $156 million for the production of RAM for the German Navy and $85 million on Miniature Air-Launch Decoy (MALD®) for the U.S. Air Force.
| Network Centric Systems |
|||||||||
| 1st Quarter |
|||||||||
| ($ in millions) |
2013 |
2012 |
% Change |
||||||
| Net Sales |
$ |
931 |
$ |
1,000 |
-7% |
||||
| Operating Income |
$ |
89 |
$ |
116 |
-23% |
||||
| Operating Margin |
9.6 |
% |
11.6 |
% |
|||||
Network Centric Systems (NCS) had first quarter 2013 net sales of $931 million compared to $1,000 million in the first quarter 2012. The change in net sales was primarily due to lower sales on sensor production programs for the U.S. Army. NCS recorded $89 million of operating income compared to $116 million in the first quarter 2012. The change in operating income was primarily due to a change in contract mix and lower volume in the first quarter 2013 as well as higher net program efficiencies in the first quarter 2012.
During the quarter, NCS booked $126 million on the Wide Area Augmentation System (WAAS) program for the Federal Aviation Administration (FAA).
| Space and Airborne Systems |
|||||||||
| 1st Quarter |
|||||||||
| ($ in millions) |
2013 |
2012 |
% Change |
||||||
| Net Sales |
$ |
1,205 |
$ |
1,257 |
-4% |
||||
| Operating Income |
$ |
181 |
$ |
173 |
5% |
||||
| Operating Margin |
15.0 |
% |
13.8 |
% |
|||||
Space and Airborne Systems (SAS) had first quarter 2013 net sales of $1,205 million compared to $1,257 million in the first quarter 2012. The change in net sales was primarily due to lower net sales on classified programs. SAS recorded $181 million of operating income compared to $173 million in the first quarter 2012. The increase in operating income was primarily due to improved program performance and a change in contract mix.
During the quarter, SAS booked $90 million for the production of Active Electronically Scanned Array (AESA) radars for the U.S. Air Force. SAS also booked $184 million on a number of classified contracts.
| Technical Services |
|||||||||
| 1st Quarter |
|||||||||
| ($ in millions) |
2013 |
2012 |
% Change |
||||||
| Net Sales |
$ |
755 |
$ |
802 |
-6% |
||||
| Operating Income |
$ |
63 |
$ |
71 |
-11% |
||||
| Operating Margin |
8.3 |
% |
8.9 |
% |
|||||
Technical Services (TS) had first quarter 2013 net sales of $755 million compared to $802 million in the first quarter 2012. The change in net sales was due to lower net sales on a National Science Foundation (NSF) Polar contract, which was completed in the first quarter 2012. TS recorded operating income of $63 million compared to $71 million in the first quarter 2012.
During the quarter, TS booked $135 million on foreign training programs and $64 million on domestic training programs in support of Warfighter FOCUS activities.
About Raytheon
Raytheon Company, with 2012 sales of $24 billion and 68,000 employees worldwide, is a technology and innovation leader specializing in defense, security and civil markets throughout the world. With a history of innovation spanning 91 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. 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 First Quarter 2013 Financial Results
Raytheon's financial results conference call will be held on Thursday, April 25, 2013 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) 510-0712 in the U.S. or (617) 597-5380 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 under the Budget Control Act of 2011, 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 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 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.
| Attachment A |
||||||||
| Raytheon Company |
||||||||
| Preliminary Statement of Operations Information |
||||||||
| First Quarter 2013 |
||||||||
| (In millions, except per share amounts) |
Three Months Ended |
|||||||
| 31-Mar-13 |
01-Apr-12 |
|||||||
| Net sales |
$ |
5,879 |
$ |
5,938 |
||||
| Operating expenses |
||||||||
| Cost of sales |
4,605 |
4,659 |
||||||
| Administrative and selling expenses |
408 |
405 |
||||||
| Research and development expenses |
160 |
168 |
||||||
| Total operating expenses |
5,173 |
5,232 |
||||||
| Operating income |
706 |
706 |
||||||
| Non-operating (income) expense, net |
||||||||
| Interest expense |
53 |
50 |
||||||
| Interest income |
(3) |
(2) |
||||||
| Other expense (income) |
(7) |
(8) |
||||||
| Total non-operating (income) expense, net |
43 |
40 |
||||||
| Income from continuing operations before taxes |
663 |
666 |
||||||
| Federal and foreign income taxes |
167 |
212 |
||||||
| Income from continuing operations |
496 |
454 |
||||||
| Income (loss) from discontinued operations, net of tax |
(2) |
(2) |
||||||
| Net income |
494 |
452 |
||||||
| Less: Net income (loss) attributable to noncontrolling |
||||||||
| interests in subsidiaries |
6 |
4 |
||||||
| Net income attributable to Raytheon Company |
$ |
488 |
$ |
448 |
||||
| Basic earnings (loss) per share attributable to Raytheon |
||||||||
| Company common stockholders: |
||||||||
| Income from continuing operations |
$ |
1.50 |
$ |
1.33 |
||||
| Income (loss) from discontinued operations, net of tax |
(0.01) |
— |
||||||
| Net income |
1.49 |
1.33 |
||||||
| Diluted earnings (loss) per share attributable to Raytheon |
||||||||
| Company common stockholders: |
||||||||
| Income from continuing operations |
$ |
1.49 |
$ |
1.33 |
||||
| Income (loss) from discontinued operations, net of tax |
(0.01) |
— |
||||||
| Net income |
1.49 |
1.32 |
||||||
| Amounts attributable to Raytheon Company common |
||||||||
| stockholders: |
||||||||
| Income from continuing operations |
$ |
490 |
$ |
450 |
||||
| Income (loss) from discontinued operations, net of tax |
(2) |
(2) |
||||||
| Net income |
$ |
488 |
$ |
448 |
||||
| Average shares outstanding |
||||||||
| Basic |
327.4 |
337.5 |
||||||
| Diluted |
328.2 |
338.7 |
||||||
| Attachment B |
|||||||||||||||||||||
| Raytheon Company |
|||||||||||||||||||||
| Preliminary Segment Information |
|||||||||||||||||||||
| First Quarter 2013 |
|||||||||||||||||||||
| Operating Income |
|||||||||||||||||||||
| Net Sales |
Operating Income |
As a Percent of Net Sales |
|||||||||||||||||||
| (In millions, except percentages) |
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||||||||||
| 31-Mar-13 |
01-Apr-12 |
31-Mar-13 |
01-Apr-12 |
31-Mar-13 |
01-Apr-12 |
||||||||||||||||
| Integrated Defense Systems |
$ |
1,263 |
$ |
1,220 |
$ |
244 |
$ |
216 |
19.3 |
% |
17.7 |
% |
|||||||||
| Intelligence and Information Systems |
743 |
764 |
59 |
62 |
7.9 |
% |
8.1 |
% |
|||||||||||||
| Missile Systems |
1,453 |
1,351 |
193 |
180 |
13.3 |
% |
13.3 |
% |
|||||||||||||
| Network Centric Systems |
931 |
1,000 |
89 |
116 |
9.6 |
% |
11.6 |
% |
|||||||||||||
| Space and Airborne Systems |
1,205 |
1,257 |
181 |
173 |
15.0 |
% |
13.8 |
% |
|||||||||||||
| Technical Services |
755 |
802 |
63 |
71 |
8.3 |
% |
8.9 |
% |
|||||||||||||
| FAS/CAS Adjustment |
— |
— |
(71) |
(70) |
|||||||||||||||||
| Corporate and Eliminations |
(471) |
(456) |
(52) |
(42) |
|||||||||||||||||
| Total |
$ |
5,879 |
$ |
5,938 |
$ |
706 |
$ |
706 |
12.0 |
% |
11.9 |
% |
|||||||||
| Attachment C |
|||||||||||||||
| Raytheon Company |
|||||||||||||||
| Other Preliminary Information |
|||||||||||||||
| First Quarter 2013 |
|||||||||||||||
| (In millions) |
Funded Backlog |
Total Backlog |
|||||||||||||
| 31-Mar-13 |
31-Dec-12 |
31-Mar-13 |
31-Dec-12 |
||||||||||||
| Integrated Defense Systems |
$ |
7,167 |
$ |
7,313 |
$ |
8,796 |
$ |
9,431 |
|||||||
| Intelligence and Information Systems |
888 |
1,067 |
3,661 |
3,989 |
|||||||||||
| Missile Systems |
6,158 |
6,939 |
9,109 |
10,030 |
|||||||||||
| Network Centric Systems |
3,226 |
3,583 |
4,081 |
4,364 |
|||||||||||
| Space and Airborne Systems |
3,543 |
3,409 |
5,790 |
6,031 |
|||||||||||
| Technical Services |
1,541 |
1,736 |
2,109 |
2,336 |
|||||||||||
| Total |
$ |
22,523 |
$ |
24,047 |
$ |
33,546 |
$ |
36,181 |
|||||||
| Bookings |
|||||||||||||||
| Three Months Ended |
|||||||||||||||
| 31-Mar-13 |
01-Apr-12 |
||||||||||||||
| Total Bookings |
$ |
3,606 |
$ |
5,162 |
|||||||||||
| Attachment D |
|||||||
| Raytheon Company |
|||||||
| Preliminary Balance Sheet Information |
|||||||
| First Quarter 2013 |
|||||||
| (In millions) |
|||||||
| 31-Mar-13 |
31-Dec-12 |
||||||
| Assets |
|||||||
| Cash and cash equivalents |
$ |
3,125 |
$ |
3,188 |
|||
| Short-term investments |
887 |
856 |
|||||
| Contracts in process, net |
4,808 |
4,543 |
|||||
| Inventories |
442 |
381 |
|||||
| Deferred taxes |
102 |
96 |
|||||
| Prepaid expenses and other current assets |
94 |
182 |
|||||
| Total current assets |
9,458 |
9,246 |
|||||
| Property, plant and equipment, net |
1,954 |
1,986 |
|||||
| Deferred taxes |
1,245 |
1,367 |
|||||
| Goodwill |
12,757 |
12,756 |
|||||
| Other assets, net |
1,273 |
1,331 |
|||||
| Total assets |
$ |
26,687 |
$ |
26,686 |
|||
| Liabilities and Equity |
|||||||
| Current liabilities |
|||||||
| Advance payments and billings in excess of costs incurred |
$ |
2,187 |
$ |
2,398 |
|||
| Accounts payable |
1,221 |
1,348 |
|||||
| Accrued employee compensation |
865 |
1,014 |
|||||
| Other accrued expenses |
1,416 |
1,142 |
|||||
| Total current liabilities |
5,689 |
5,902 |
|||||
| Accrued retiree benefits and other long-term liabilities |
7,797 |
7,854 |
|||||
| Deferred taxes |
10 |
9 |
|||||
| Long-term debt |
4,731 |
4,731 |
|||||
| Equity |
|||||||
| Raytheon Company stockholders' equity |
|||||||
| Common stock |
3 |
3 |
|||||
| Additional paid-in capital |
2,740 |
2,928 |
|||||
| Accumulated other comprehensive loss |
(7,646) |
(7,788) |
|||||
| Retained earnings |
13,193 |
12,883 |
|||||
| Total Raytheon Company stockholders' equity |
8,290 |
8,026 |
|||||
| Noncontrolling interests in subsidiaries |
170 |
164 |
|||||
| Total equity |
8,460 |
8,190 |
|||||
| Total liabilities and equity |
$ |
26,687 |
$ |
26,686 |
|||
| Attachment E |
|||||||
| Raytheon Company |
|||||||
| Preliminary Cash Flow Information |
|||||||
| First Quarter 2013 |
|||||||
| (In millions) |
Three Months Ended |
||||||
| 31-Mar-13 |
01-Apr-12 |
||||||
| Net income |
$ |
494 |
$ |
452 |
|||
| Loss (income) from discontinued operations, net of tax |
2 |
2 |
|||||
| Income from continuing operations |
496 |
454 |
|||||
| Depreciation |
74 |
77 |
|||||
| Amortization |
34 |
35 |
|||||
| Working capital (excluding pension and income taxes)* |
(793) |
(901) |
|||||
| Other long-term liabilities |
(15) |
2 |
|||||
| Pension and other postretirement benefits |
291 |
254 |
|||||
| Other, net |
335 |
190 |
|||||
| Net operating cash flow from continuing operations |
422 |
111 |
|||||
| Supplemental Cash Flow Information |
|||||||
| Capital spending |
(49) |
(70) |
|||||
| Internal use software spending |
(9) |
(20) |
|||||
| Dividends |
(164) |
(146) |
|||||
| Repurchases of common stock |
(225) |
(400) |
|||||
| * 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 accrued expenses from the Consolidated Statements of Cash Flows. |
|||||||
| Attachment F (Page 1 of 2) |
||||||||||||||||||||||||||||
| Raytheon Company |
||||||||||||||||||||||||||||
| Non-GAAP Financial Measures - Adjusted EPS, Adjusted Income and Adjusted Operating Margin |
||||||||||||||||||||||||||||
| First Quarter 2013 |
||||||||||||||||||||||||||||
| Adjusted EPS Non-GAAP Reconciliation |
||||||||||||||||||||||||||||
| 2013 |
2013 |
|||||||||||||||||||||||||||
| (In millions, except per share amounts) |
Current Guidance |
Prior Guidance |
||||||||||||||||||||||||||
| Three Months Ended |
Low end |
High end |
Low end |
High end |
||||||||||||||||||||||||
| 31-Mar-13 |
01-Apr-12 |
of range |
of range |
of range |
of range |
|||||||||||||||||||||||
| Diluted earnings per share from continuing operations attributable to Raytheon Company |
||||||||||||||||||||||||||||
| common stockholders |
$ |
1.49 |
$ |
1.33 |
$ |
5.26 |
$ |
5.41 |
$ |
5.16 |
$ |
5.31 |
||||||||||||||||
| Per share impact of the FAS/CAS Adjustment (A) |
0.14 |
0.14 |
0.57 |
0.57 |
0.57 |
0.57 |
||||||||||||||||||||||
| Per share impact of the 2012 research and development (R&D) tax credit (B) |
(0.08) |
0.02 |
(0.08) |
(0.08) |
(0.08) |
(0.08) |
||||||||||||||||||||||
| Adjusted EPS (2), (3) |
$ |
1.56 |
$ |
1.48 |
$ |
5.75 |
$ |
5.90 |
$ |
5.65 |
$ |
5.80 |
||||||||||||||||
| (A) FAS/CAS Adjustment |
$ |
71 |
$ |
70 |
$ |
286 |
$ |
286 |
$ |
286 |
$ |
286 |
||||||||||||||||
| Tax effect (1) |
(25) |
(24) |
(100) |
(100) |
(100) |
(100) |
||||||||||||||||||||||
| After-tax impact |
46 |
46 |
186 |
186 |
186 |
186 |
||||||||||||||||||||||
| Diluted shares |
328.2 |
338.7 |
327.0 |
324.0 |
327.0 |
324.0 |
||||||||||||||||||||||
| Per share impact |
$ |
0.14 |
$ |
0.14 |
$ |
0.57 |
$ |
0.57 |
$ |
0.57 |
$ |
0.57 |
||||||||||||||||
| (B) 2012 R&D tax credit |
$ |
(25) |
$ |
6 |
$ |
(25) |
$ |
(25) |
$ |
(25) |
$ |
(25) |
||||||||||||||||
| Diluted shares |
328.2 |
338.7 |
327.0 |
324.0 |
327.0 |
324.0 |
||||||||||||||||||||||
| Per share impact |
$ |
(0.08) |
$ |
0.02 |
$ |
(0.08) |
$ |
(0.08) |
$ |
(0.08) |
$ |
(0.08) |
||||||||||||||||
| Adjusted Income Non-GAAP Reconciliation |
||||||||||||||||||||||||||||
| (In millions) |
||||||||||||||||||||||||||||
| Three Months Ended |
||||||||||||||||||||||||||||
| 31-Mar-13 |
01-Apr-12 |
|||||||||||||||||||||||||||
| Income from continuing operations attributable to Raytheon Company common stockholders |
$ |
490 |
$ |
450 |
||||||||||||||||||||||||
| FAS/CAS Adjustment (1) |
46 |
46 |
||||||||||||||||||||||||||
| 2012 R&D tax credit |
(25) |
6 |
||||||||||||||||||||||||||
| Adjusted Income (2), (4) |
$ |
511 |
$ |
502 |
||||||||||||||||||||||||
| Adjusted Operating Margin Non-GAAP Reconciliation |
||||||||||||||||||||||||||||
| 2013 |
2013 |
|||||||||||||||||||||||||||
| Current Guidance |
Prior Guidance |
|||||||||||||||||||||||||||
| Three Months Ended |
Low end |
High end |
Low end |
High end |
||||||||||||||||||||||||
| 31-Mar-13 |
01-Apr-12 |
of range |
of range |
of range |
of range |
|||||||||||||||||||||||
| Operating Margin |
12.0 |
% |
11.9 |
% |
11.4 |
% |
11.6 |
% |
11.1 |
% |
11.3 |
% |
||||||||||||||||
| Impact of the FAS/CAS Adjustment |
1.2 |
% |
1.2 |
% |
1.2 |
% |
1.2 |
% |
1.2 |
% |
1.2 |
% |
||||||||||||||||
| Adjusted Operating Margin (2), (5) |
13.2 |
% |
13.1 |
% |
12.6 |
% |
12.8 |
% |
12.3 |
% |
12.5 |
% |
||||||||||||||||
| (1) Tax effected at 35% federal statutory tax rate. |
||||||||||||||||||||||||||||
| (2) 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. These amounts exclude the FAS/CAS Adjustment and, from time to time, certain other items. We are providing these measures because management uses them for the purposes of evaluating and forecasting the Company's financial performance and believes that they provide additional insights into the Company's underlying business performance. We also believe that they allow 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 and postretirement benefit (PRB) costs and to better compare our operating performance to others in the industry on that same basis. Amounts may not recalculate directly due to rounding. |
||||||||||||||||||||||||||||
| (3) Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon Company common stockholders excluding the EPS impact of the FAS/CAS Adjustment and, from time to time, certain other items. Q1 2013 Adjusted EPS also excludes the earnings per share impact of an R&D tax credit that relates to 2012. In January 2013, Congress approved legislation that included the extension of the R&D tax credit. The legislation retroactively reinstated the R&D tax credit for 2012 and extended it through December 31, 2013. As a result, we recorded the 2012 benefit in the first quarter of 2013. In addition, the Q1 2012 Adjusted EPS amount has been revised to include the favorable impact for the 2012 R&D tax credit as described on the next page. |
||||||||||||||||||||||||||||
| (4) Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. Q1 2013 Adjusted Income also excludes the R&D tax credit that relates to 2012, as discussed above. Q1 2012 Adjusted Income also includes the R&D tax credit as discussed above. |
||||||||||||||||||||||||||||
| (5) Adjusted Operating Margin is defined as total operating margin excluding the margin impact of the FAS/CAS Adjustment and, from time to time, certain other items. |
||||||||||||||||||||||||||||
| Attachment F (Page 2 of 2) |
||||||||||||||||||||||||
| Raytheon Company |
||||||||||||||||||||||||
| Non-GAAP Financial Measures - Adjusted EPS and Adjusted Income |
||||||||||||||||||||||||
| Quarters and Full Year 2012 |
||||||||||||||||||||||||
| The Company has revised its 2012 Adjusted EPS and Adjusted Income amounts to include the favorable impact from the $25 million ($0.07 per diluted share) 2012 R&D tax credit that was recognized for GAAP reporting in the first quarter of 2013 in order to provide a more meaningful comparison between periods. The revised Adjusted EPS and Adjusted Income amounts for each of the four quarters and full-year 2012 are below. Please note that the amounts may not recalculate due to rounding, and the difference between the first quarter of 2013 ($0.08 per share) and full-year 2012 ($0.07 per share) impact of the 2012 R&D tax credit is due to a higher number of diluted shares for the full-year 2012 as compared to the first quarter of 2013. |
||||||||||||||||||||||||
| Adjusted EPS Non-GAAP Reconciliation |
||||||||||||||||||||||||
| (In millions, except per share amounts) |
Twelve |
|||||||||||||||||||||||
| Three Months Ended |
Months Ended |
|||||||||||||||||||||||
| 01-Apr-12 |
01-Jul-12 |
30-Sep-12 |
31-Dec-12 |
31-Dec-12 |
||||||||||||||||||||
| Diluted earnings per share from continuing operations attributable to Raytheon Company |
||||||||||||||||||||||||
| common stockholders |
$ |
1.33 |
$ |
1.41 |
$ |
1.51 |
$ |
1.41 |
$ |
5.65 |
||||||||||||||
| Per share impact of the FAS/CAS Adjustment (A) |
0.14 |
0.14 |
0.09 |
0.13 |
0.50 |
|||||||||||||||||||
| Per share impact of the early debt retirement make-whole provision (B) |
— |
— |
— |
0.06 |
0.06 |
|||||||||||||||||||
| Per share impact of the 2012 research and development (R&D) tax credit (C) |
0.02 |
0.02 |
0.02 |
0.02 |
0.07 |
|||||||||||||||||||
| Adjusted EPS (2), (3) |
$ |
1.48 |
$ |
1.57 |
$ |
1.62 |
$ |
1.62 |
$ |
6.28 |
||||||||||||||
| (A) FAS/CAS Adjustment |
$ |
70 |
$ |
71 |
$ |
47 |
$ |
67 |
$ |
255 |
||||||||||||||
| Tax effect (1) |
(24) |
(25) |
(16) |
(23) |
(89) |
|||||||||||||||||||
| After-tax impact |
46 |
46 |
31 |
44 |
166 |
|||||||||||||||||||
| Diluted shares |
338.7 |
334.4 |
333.0 |
330.8 |
334.2 |
|||||||||||||||||||
| Per share impact |
$ |
0.14 |
$ |
0.14 |
$ |
0.09 |
$ |
0.13 |
$ |
0.50 |
||||||||||||||
| (B) Early debt retirement make-whole provision |
$ |
— |
$ |
— |
$ |
— |
$ |
29 |
$ |
29 |
||||||||||||||
| Tax effect (1) |
— |
— |
— |
(10) |
(10) |
|||||||||||||||||||
| After-tax impact |
— |
— |
— |
19 |
19 |
|||||||||||||||||||
| Diluted shares |
— |
— |
— |
330.8 |
334.2 |
|||||||||||||||||||
| Per share impact |
$ |
— |
$ |
— |
$ |
— |
$ |
0.06 |
$ |
0.06 |
||||||||||||||
| (C) 2012 R&D tax credit |
$ |
6 |
$ |
6 |
$ |
6 |
$ |
7 |
$ |
25 |
||||||||||||||
| Diluted shares |
338.7 |
334.4 |
333.0 |
330.8 |
334.2 |
|||||||||||||||||||
| Per share impact |
$ |
0.02 |
$ |
0.02 |
$ |
0.02 |
$ |
0.02 |
$ |
0.07 |
||||||||||||||
| Adjusted Income Non-GAAP Reconciliation |
||||||||||||||||||||||||
| (In millions) |
Twelve |
|||||||||||||||||||||||
| Three Months Ended |
Months Ended |
|||||||||||||||||||||||
| 01-Apr-12 |
01-Jul-12 |
30-Sep-12 |
31-Dec-12 |
31-Dec-12 |
||||||||||||||||||||
| Income from continuing operations attributable to Raytheon Company common stockholders |
$ |
450 |
$ |
472 |
$ |
501 |
$ |
466 |
$ |
1,889 |
||||||||||||||
| FAS/CAS Adjustment (1) |
46 |
46 |
31 |
44 |
166 |
|||||||||||||||||||
| Early debt retirement make-whole provision |
— |
— |
— |
19 |
19 |
|||||||||||||||||||
| 2012 R&D tax credit |
6 |
6 |
6 |
7 |
25 |
|||||||||||||||||||
| Adjusted Income (2), (4) |
$ |
502 |
$ |
524 |
$ |
538 |
$ |
536 |
$ |
2,099 |
||||||||||||||
| (1) Tax effected at 35% federal statutory tax rate. |
||||||||||||||||||||||||
| (2) 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. These amounts exclude the FAS/CAS Adjustment and, from time to time, certain other items. We are providing these measures because management uses them for the purposes of evaluating and forecasting the Company's financial performance and believes that they provide additional insights into the Company's underlying business performance. We also believe that they allow 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 and postretirement benefit (PRB) costs and to better compare our operating performance to others in the industry on that same basis. Amounts may not recalculate directly due to rounding. |
||||||||||||||||||||||||
| (3) Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon Company common stockholders excluding the EPS impact of the FAS/CAS Adjustment and, from time to time, certain other items. Q1 2013 Adjusted EPS also excludes the earnings per share impact of an R&D tax credit that relates to 2012. In January 2013, Congress approved legislation that included the extension of the R&D tax credit. The legislation retroactively reinstated the R&D tax credit for 2012 and extended it through December 31, 2013. As a result, we recorded the 2012 benefit in the first quarter of 2013. In addition, the Q1 2012 Adjusted EPS amount has been revised to include the favorable impact for the 2012 R&D tax credit as described above. |
||||||||||||||||||||||||
| (4) Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. Q1 2013 Adjusted Income also excludes the R&D tax credit that relates to 2012, as discussed above. Q1 2012 Adjusted Income also includes the R&D tax credit as discussed above. |
||||||||||||||||||||||||
Raytheon Company
Global Headquarters
Waltham, Mass.
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Jon Kasle
781.522.5110
SOURCE Raytheon Company
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