Raytheon Reports Solid Second Quarter 2013 Results
-- Adjusted EPS(1) of $1.64, up 4 percent; EPS from continuing operations was $1.50, up 6 percent
-- Adjusted Operating Margin(1) of 13.7 percent and reported operating margin of 12.5 percent, both up 10 basis points
-- Net sales of $6.1 billion, up 2 percent
-- Increased full-year 2013 guidance for EPS
WALTHAM, Mass., July 25, 2013 /PRNewswire/ -- Raytheon Company (NYSE: RTN) announced second quarter 2013 Adjusted EPS1 of $1.64 per diluted share compared to $1.57 per diluted share in the second quarter 2012, up 4 percent. Second quarter 2013 EPS from continuing operations was $1.50 compared to $1.41 in the second quarter 2012, up 6 percent. The second quarter 2012 Adjusted EPS1 has been revised to include the favorable $0.02 impact for the 2012 research and development (R&D) tax credit approved by Congress in January 2013. In addition, an unfavorable FAS/CAS Adjustment of $0.14 has been excluded in both second quarters 2013 and 2012 Adjusted EPS1. The increase in both Adjusted EPS1 and EPS from continuing operations was primarily driven by operational improvements and capital deployment actions.
"Our world class technology and innovation have positioned us well to meet the global security needs of our customers, and strong program execution drove solid operating performance in the second quarter," said William H. Swanson, Raytheon's Chairman and CEO.
Net sales for the second quarter 2013 were $6,115 million, up 2 percent from $5,992 million in the second quarter 2012.
Operating cash flow from continuing operations for the second quarter 2013 was an outflow of $41 million compared to an outflow of $259 million for the second quarter 2012. The increase in operating cash flow from continuing operations in the second quarter 2013 compared to the second quarter 2012 was primarily due to the timing of required pension contributions.
In the second quarter 2013, the Company repurchased 3.4 million shares of common stock for $225 million as part of its previously announced share repurchase program. Year-to-date 2013, the Company repurchased 7.6 million shares of common stock for $450 million.
The Company ended the second quarter 2013 with $1.3 billion of net debt. Net debt is defined as total debt less cash and cash equivalents and short-term investments.
_________________________________
1 Adjusted EPS is diluted 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. In addition, the Q2 2012 Adjusted EPS amount has been revised to include the favorable $0.02 impact for the research and development (R&D) tax credit, approved by Congress in January 2013, that relates to 2012. Adjusted EPS and Adjusted Operating Margin are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.
Summary Financial Results |
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2nd Quarter |
% |
Six Months |
% |
||||||||||||||||
($ in millions, except per share data) |
2013 |
2012 |
Change |
2013 |
2012 |
Change |
|||||||||||||
Net Sales |
$ |
6,115 |
$ |
5,992 |
2.1% |
$ |
11,994 |
$ |
11,930 |
0.5% |
|||||||||
Income from Continuing Operations attributable to Raytheon Company |
$ |
488 |
$ |
472 |
3.4% |
$ |
978 |
$ |
922 |
6.1% |
|||||||||
Adjusted Income* |
$ |
535 |
$ |
524 |
2.1% |
$ |
1,046 |
$ |
1,026 |
1.9% |
|||||||||
EPS from Continuing Operations |
$ |
1.50 |
$ |
1.41 |
6.4% |
$ |
2.99 |
$ |
2.74 |
9.1% |
|||||||||
Adjusted EPS* |
$ |
1.64 |
$ |
1.57 |
4.5% |
$ |
3.20 |
$ |
3.05 |
4.9% |
|||||||||
Operating Cash Flow from Continuing Operations |
$ |
(41) |
$ |
(259) |
$ |
381 |
$ |
(148) |
|||||||||||
Workdays in Fiscal Reporting Calendar |
64 |
64 |
127 |
128 |
|||||||||||||||
* Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders and Adjusted EPS is diluted 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, Six Months 2013 Adjusted EPS excludes the $0.08 impact of the 2012 R&D tax credit. In addition, the Q2 2012 and Six Months 2012 Adjusted EPS amounts have been revised to include the favorable $0.02 and $0.04 impact, respectively, for the 2012 R&D tax credit. Adjusted Income and Adjusted EPS are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information. |
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Bookings and Backlog
Bookings |
||||||||||||||
($ in millions) |
2nd Quarter |
Six Months |
||||||||||||
2013 |
2012 |
2013 |
2012 |
|||||||||||
Bookings |
$ |
5,324 |
$ |
6,157 |
$ |
8,930 |
$ |
11,319 |
Backlog |
||||||||
($ in millions) |
Period Ending |
|||||||
Q2 2013 |
Q2 2012 |
2012 |
||||||
Backlog |
$ |
32,435 |
$ |
33,923 |
$ |
36,181 |
||
Funded Backlog |
$ |
22,169 |
$ |
23,085 |
$ |
24,047 |
The Company had bookings of $5.3 billion in the second quarter 2013 and ended the second quarter 2013 with a backlog of $32.4 billion, compared to $33.9 billion at the end of the second quarter 2012.
Outlook
The Company has updated its financial outlook for 2013 and increased guidance for EPS. The 2013 outlook reflects the Company's current expectations of the effects of sequestration under the Budget Control Act (BCA) of 2011. Charts containing additional information on the Company's 2013 outlook are available on the Company's website at www.raytheon.com/ir.
2013 Financial Outlook |
||||||||
Current |
Prior (4/25/13) |
|||||||
Net Sales ($B) |
23.5 - 23.7* |
23.2 - 23.7 |
||||||
FAS/CAS Adjustment ($M) |
(286) |
(286) |
||||||
Interest Expense, net ($M) |
(200) - (210) |
(200) - (210) |
||||||
Diluted Shares (M) |
323 - 324* |
324 - 327 |
||||||
Effective Tax Rate |
~29%* |
~29.5% |
||||||
EPS from Continuing Operations |
$5.51 - $5.61* |
$5.26 - $5.41 |
||||||
Adjusted EPS** |
$6.00 - $6.10* |
$5.75 - $5.90 |
||||||
Operating Cash Flow from Continuing Operations ($B) |
2.1 - 2.3 |
2.1 - 2.3 |
||||||
* Denotes change from prior guidance. |
||||||||
** Adjusted EPS is diluted 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 Adjusted EPS guidance also excludes the impact of the 2012 R&D tax credit. 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, the Company consolidated its structure. The new structure consists of the following four businesses: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); and Space and Airborne Systems (SAS). The Company's reportable segments for the second quarter ending June 30, 2013 are consistent with the new structure. All segment data has been recast to reflect this consolidation.
Integrated Defense Systems |
||||||||||||||||||||||||||||||||||||||
2nd Quarter |
Six Months |
|||||||||||||||||||||||||||||||||||||
($ in millions) |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
||||||||||||||||||||||||||||||||
Net Sales |
$ |
1,721 |
$ |
1,574 |
9% |
$ |
3,317 |
$ |
3,152 |
5% |
||||||||||||||||||||||||||||
Operating Income |
$ |
326 |
$ |
269 |
21% |
$ |
588 |
$ |
507 |
16% |
||||||||||||||||||||||||||||
Operating Margin |
18.9% |
17.1% |
17.7% |
16.1% |
Integrated Defense Systems (IDS) had second quarter 2013 net sales of $1,721 million, up 9 percent compared to $1,574 million in the second quarter 2012. The increase in net sales was primarily due to higher sales on various international air and missile defense programs. IDS recorded $326 million of operating income compared to $269 million in the second quarter 2012. The increase in operating income was primarily driven by international programs.
During the quarter, IDS booked $93 million for in-service support for the Collins class submarine for the Royal Australian Navy and $85 million on the Standard Terminal Automation Replacement System (STARS) program for the Federal Aviation Administration (FAA).
Intelligence, Information and Services |
||||||||||||||||||||||||||||||||||||||||||
2nd Quarter |
Six Months |
|||||||||||||||||||||||||||||||||||||||||
($ in millions) |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
||||||||||||||||||||||||||||||||||||
Net Sales |
$ |
1,570 |
$ |
1,597 |
-2% |
$ |
3,091 |
$ |
3,185 |
-3% |
||||||||||||||||||||||||||||||||
Operating Income |
$ |
131 |
$ |
138 |
-5% |
$ |
255 |
$ |
274 |
-7% |
||||||||||||||||||||||||||||||||
Operating Margin |
8.3% |
8.6% |
8.2% |
8.6% |
Intelligence, Information and Services (IIS) had second quarter 2013 net sales of $1,570 million compared to $1,597 million in the second quarter 2012. IIS recorded $131 million of operating income compared to $138 million in the second quarter 2012.
During the quarter, IIS booked $582 million on domestic training programs and $117 million on foreign training programs in support of Warfighter FOCUS activities. IIS also booked $252 million on a number of classified contracts.
Missile Systems |
||||||||||||||||||||||||||||||||||||||||||
2nd Quarter |
Six Months |
|||||||||||||||||||||||||||||||||||||||||
($ in millions) |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
||||||||||||||||||||||||||||||||||||
Net Sales |
$ |
1,690 |
$ |
1,580 |
7% |
$ |
3,326 |
$ |
3,181 |
5% |
||||||||||||||||||||||||||||||||
Operating Income |
$ |
213 |
$ |
209 |
2% |
$ |
427 |
$ |
430 |
-1% |
||||||||||||||||||||||||||||||||
Operating Margin |
12.6% |
13.2% |
12.8% |
13.5% |
Missile Systems (MS) had second quarter 2013 net sales of $1,690 million, up 7 percent compared to $1,580 million in the second quarter 2012. The increase in net sales was primarily driven by higher sales on Standard Missile-3 (SM-3) and an international Paveway™ program. MS recorded $213 million of operating income compared to $209 million in the second quarter 2012.
During the quarter, MS booked $543 million for Advanced Medium-Range Air-to-Air Missiles (AMRAAM) for the U.S. Air Force, the U.S. Navy and international customers, $228 million for SM-3 for the Missile Defense Agency (MDA), $224 million for the Exoatmospheric Kill Vehicle (EKV) for the MDA, $132 million for Paveway™ for international customers, and $98 million for the Joint Stand-off Weapon (JSOW) for the U.S. Navy and international customers.
Space and Airborne Systems |
||||||||||||||||||||||||||||||||||||||||||
2nd Quarter |
Six Months |
|||||||||||||||||||||||||||||||||||||||||
($ in millions) |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
||||||||||||||||||||||||||||||||||||
Net Sales |
$ |
1,620 |
$ |
1,709 |
-5% |
$ |
3,202 |
$ |
3,325 |
-4% |
||||||||||||||||||||||||||||||||
Operating Income |
$ |
216 |
$ |
246 |
-12% |
$ |
443 |
$ |
469 |
-6% |
||||||||||||||||||||||||||||||||
Operating Margin |
13.3% |
14.4% |
13.8% |
14.1% |
Space and Airborne Systems (SAS) had second quarter 2013 net sales of $1,620 million compared to $1,709 million in the second quarter 2012. The change in net sales was primarily due to lower volume on classified programs. SAS recorded $216 million of operating income compared to $246 million in the second quarter 2012. The change in operating income was primarily due to prior year favorable program efficiencies, a change in contract mix and lower volume.
During the quarter, SAS booked $78 million for the production of Electronic Warfare Systems for an international customer. SAS also booked $351 million on a number of classified contracts.
As previously announced on July 8, 2013, SAS was awarded $279 million to develop the Next Generation Jammer (NGJ) for the U.S. Navy.
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 Second Quarter 2013 Financial Results
Raytheon's financial results conference call will be held on Thursday, July 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 Second Quarter 2013 |
||||||||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) |
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
|||||||||||||||||||||||||||||||||||||
Net sales |
$ |
6,115 |
$ |
5,992 |
$ |
11,994 |
$ |
11,930 |
||||||||||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||||||||||
Cost of sales |
4,753 |
4,652 |
9,358 |
9,311 |
||||||||||||||||||||||||||||||||||||
Administrative and selling expenses |
420 |
404 |
828 |
809 |
||||||||||||||||||||||||||||||||||||
Research and development expenses |
176 |
194 |
336 |
362 |
||||||||||||||||||||||||||||||||||||
Total operating expenses |
5,349 |
5,250 |
10,522 |
10,482 |
||||||||||||||||||||||||||||||||||||
Operating income |
766 |
742 |
1,472 |
1,448 |
||||||||||||||||||||||||||||||||||||
Non-operating (income) expense, net |
||||||||||||||||||||||||||||||||||||||||
Interest expense |
53 |
50 |
106 |
100 |
||||||||||||||||||||||||||||||||||||
Interest income |
(3) |
(1) |
(6) |
(3) |
||||||||||||||||||||||||||||||||||||
Other (income) expense, net |
3 |
3 |
(4) |
(5) |
||||||||||||||||||||||||||||||||||||
Total non-operating (income) expense, net |
53 |
52 |
96 |
92 |
||||||||||||||||||||||||||||||||||||
Income from continuing operations before taxes |
713 |
690 |
1,376 |
1,356 |
||||||||||||||||||||||||||||||||||||
Federal and foreign income taxes |
220 |
219 |
387 |
431 |
||||||||||||||||||||||||||||||||||||
Income from continuing operations |
493 |
471 |
989 |
925 |
||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax |
— |
(1) |
(2) |
(3) |
||||||||||||||||||||||||||||||||||||
Net income |
493 |
470 |
987 |
922 |
||||||||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling |
||||||||||||||||||||||||||||||||||||||||
interests in subsidiaries |
5 |
(1) |
11 |
3 |
||||||||||||||||||||||||||||||||||||
Net income attributable to Raytheon Company |
$ |
488 |
$ |
471 |
$ |
976 |
$ |
919 |
||||||||||||||||||||||||||||||||
Basic earnings (loss) per share attributable to Raytheon |
||||||||||||||||||||||||||||||||||||||||
Company common stockholders: |
||||||||||||||||||||||||||||||||||||||||
Income from continuing operations |
$ |
1.50 |
$ |
1.41 |
$ |
3.00 |
$ |
2.75 |
||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax |
— |
— |
(0.01) |
(0.01) |
||||||||||||||||||||||||||||||||||||
Net income |
1.50 |
1.41 |
2.99 |
2.74 |
||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share attributable to Raytheon |
||||||||||||||||||||||||||||||||||||||||
Company common stockholders: |
||||||||||||||||||||||||||||||||||||||||
Income from continuing operations |
$ |
1.50 |
$ |
1.41 |
$ |
2.99 |
$ |
2.74 |
||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax |
— |
— |
(0.01) |
(0.01) |
||||||||||||||||||||||||||||||||||||
Net income |
1.50 |
1.41 |
2.99 |
2.73 |
||||||||||||||||||||||||||||||||||||
Amounts attributable to Raytheon Company common |
||||||||||||||||||||||||||||||||||||||||
stockholders: |
||||||||||||||||||||||||||||||||||||||||
Income from continuing operations |
$ |
488 |
$ |
472 |
$ |
978 |
$ |
922 |
||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax |
— |
(1) |
(2) |
(3) |
||||||||||||||||||||||||||||||||||||
Net income |
$ |
488 |
$ |
471 |
$ |
976 |
$ |
919 |
||||||||||||||||||||||||||||||||
Average shares outstanding |
||||||||||||||||||||||||||||||||||||||||
Basic |
324.9 |
333.4 |
326.1 |
335.4 |
||||||||||||||||||||||||||||||||||||
Diluted |
325.6 |
334.4 |
326.9 |
336.5 |
Attachment B Raytheon Company Preliminary Segment Information Second Quarter 2013 |
||||||||||||||||||||
Operating Income |
||||||||||||||||||||
Net Sales (1) |
Operating Income (1) |
As a Percent of Net Sales (1) |
||||||||||||||||||
(In millions, except percentages) |
Three Months Ended |
Three Months Ended |
Three Months Ended |
|||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
|||||||||||||||
Integrated Defense Systems |
$ |
1,721 |
$ |
1,574 |
$ |
326 |
$ |
269 |
18.9% |
17.1% |
||||||||||
Intelligence, Information and Services |
1,570 |
1,597 |
131 |
138 |
8.3% |
8.6% |
||||||||||||||
Missile Systems |
1,690 |
1,580 |
213 |
209 |
12.6% |
13.2% |
||||||||||||||
Space and Airborne Systems |
1,620 |
1,709 |
216 |
246 |
13.3% |
14.4% |
||||||||||||||
FAS/CAS Adjustment |
— |
— |
(72) |
(71) |
||||||||||||||||
Corporate and Eliminations |
(486) |
(468) |
(48) |
(49) |
||||||||||||||||
Total |
$ |
6,115 |
$ |
5,992 |
$ |
766 |
$ |
742 |
12.5% |
12.4% |
||||||||||
(1) These amounts are revised to reflect our segment consolidation. |
||||||||||||||||||||
Operating Income |
||||||||||||||||||||
Net Sales (1) |
Operating Income (1) |
As a Percent of Net Sales (1) |
||||||||||||||||||
(In millions, except percentages) |
Six Months Ended |
Six Months Ended |
Six Months Ended |
|||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
|||||||||||||||
Integrated Defense Systems |
$ |
3,317 |
$ |
3,152 |
$ |
588 |
$ |
507 |
17.7% |
16.1% |
||||||||||
Intelligence, Information and Services |
3,091 |
3,185 |
255 |
274 |
8.2% |
8.6% |
||||||||||||||
Missile Systems |
3,326 |
3,181 |
427 |
430 |
12.8% |
13.5% |
||||||||||||||
Space and Airborne Systems |
3,202 |
3,325 |
443 |
469 |
13.8% |
14.1% |
||||||||||||||
FAS/CAS Adjustment |
— |
— |
(143) |
(141) |
||||||||||||||||
Corporate and Eliminations |
(942) |
(913) |
(98) |
(91) |
||||||||||||||||
Total |
$ |
11,994 |
$ |
11,930 |
$ |
1,472 |
$ |
1,448 |
12.3% |
12.1% |
||||||||||
(1) These amounts are revised to reflect our segment consolidation. |
Attachment B - Pro Forma Raytheon Company Pro-Forma Segment Information Full Year 2011, Quarters within and Full Year 2012, and First Quarter 2013 |
|||||||||||||||||||||
As previously announced, effective April 1, 2013, we consolidated our structure. Our new structure consists of the following four businesses: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); and Space and Airborne Systems (SAS). The amounts, discussion and presentation of our business segments, including eliminations for intersegment activity as set forth in our Form 10-Q, reflect our new structure. |
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Net Sales |
Net Sales |
||||||||||||||||||||
(In millions) |
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
31-Mar-13 |
31-Dec-12 |
30-Sep-12 |
01-Jul-12 |
01-Apr-12 |
31-Dec-12 |
31-Dec-11 |
|||||||||||||||
Integrated Defense Systems |
$ |
1,596 |
$ |
1,730 |
$ |
1,610 |
$ |
1,574 |
$ |
1,578 |
$ |
6,492 |
$ |
6,441 |
|||||||
Intelligence, Information and Services |
1,521 |
1,603 |
1,547 |
1,597 |
1,588 |
6,335 |
6,470 |
||||||||||||||
Missile Systems |
1,636 |
1,781 |
1,677 |
1,580 |
1,601 |
6,639 |
6,801 |
||||||||||||||
Space and Airborne Systems |
1,582 |
1,820 |
1,678 |
1,709 |
1,616 |
6,823 |
6,818 |
||||||||||||||
Corporate and Eliminations |
(456) |
(495) |
(467) |
(468) |
(445) |
(1,875) |
(1,739) |
||||||||||||||
Total |
$ |
5,879 |
$ |
6,439 |
$ |
6,045 |
$ |
5,992 |
$ |
5,938 |
$ |
24,414 |
$ |
24,791 |
|||||||
Operating Income |
Operating Income |
||||||||||||||||||||
(In millions) |
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
31-Mar-13 |
31-Dec-12 |
30-Sep-12 |
01-Jul-12 |
01-Apr-12 |
31-Dec-12 |
31-Dec-11 |
|||||||||||||||
Integrated Defense Systems |
$ |
262 |
$ |
262 |
$ |
278 |
$ |
269 |
$ |
238 |
$ |
1,047 |
$ |
998 |
|||||||
Intelligence, Information and Services |
124 |
136 |
126 |
138 |
136 |
536 |
480 |
||||||||||||||
Missile Systems |
214 |
198 |
233 |
209 |
221 |
861 |
939 |
||||||||||||||
Space and Airborne Systems |
227 |
283 |
236 |
246 |
223 |
988 |
951 |
||||||||||||||
FAS/CAS Adjustment |
(71) |
(67) |
(47) |
(71) |
(70) |
(255) |
(337) |
||||||||||||||
Corporate and Eliminations |
(50) |
(57) |
(40) |
(49) |
(42) |
(188) |
(201) |
||||||||||||||
Total |
$ |
706 |
$ |
755 |
$ |
786 |
$ |
742 |
$ |
706 |
$ |
2,989 |
$ |
2,830 |
|||||||
Operating Income |
Operating Income |
||||||||||||||||||||
As a Percent of Net Sales |
As a Percent of Net Sales |
||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||||
31-Mar-13 |
31-Dec-12 |
30-Sep-12 |
01-Jul-12 |
01-Apr-12 |
31-Dec-12 |
31-Dec-11 |
|||||||||||||||
Integrated Defense Systems |
16.4% |
15.1% |
17.3% |
17.1% |
15.1% |
16.1% |
15.5% |
||||||||||||||
Intelligence, Information and Services |
8.2% |
8.5% |
8.1% |
8.6% |
8.6% |
8.5% |
7.4% |
||||||||||||||
Missile Systems |
13.1% |
11.1% |
13.9% |
13.2% |
13.8% |
13.0% |
13.8% |
||||||||||||||
Space and Airborne Systems |
14.3% |
15.5% |
14.1% |
14.4% |
13.8% |
14.5% |
13.9% |
||||||||||||||
FAS/CAS Adjustment |
|||||||||||||||||||||
Corporate and Eliminations |
|||||||||||||||||||||
Total |
12.0% |
11.7% |
13.0% |
12.4% |
11.9% |
12.2% |
11.4% |
Attachment C Raytheon Company Other Preliminary Information Second Quarter 2013 |
|||||||||||
(In millions) |
Funded Backlog (1) |
Total Backlog (1) |
|||||||||
30-Jun-13 |
31-Dec-12 |
30-Jun-13 |
31-Dec-12 |
||||||||
Integrated Defense Systems |
$ |
8,295 |
$ |
9,188 |
$ |
9,913 |
$ |
11,656 |
|||
Intelligence, Information and Services |
2,531 |
2,848 |
5,754 |
6,409 |
|||||||
Missile Systems |
6,789 |
7,535 |
9,695 |
10,676 |
|||||||
Space and Airborne Systems |
4,554 |
4,476 |
7,073 |
7,440 |
|||||||
Total |
$ |
22,169 |
$ |
24,047 |
$ |
32,435 |
$ |
36,181 |
|||
(1) These amounts are revised to reflect segment consolidation. |
|||||||||||
Bookings |
Bookings |
||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
||||||||
Total Bookings |
$ |
5,324 |
$ |
6,157 |
$ |
8,930 |
$ |
11,319 |
Attachment C - Pro Forma |
|||||||||||||||||||||||||||||||||||||||||
As previously announced, effective April 1, 2013, we consolidated our structure. Our new structure consists of the following four businesses: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); and Space and Airborne Systems (SAS). The amounts, discussion and presentation of our business segments, including eliminations for intersegment activity as set forth in our Form 10-Q, reflect our new structure. |
|||||||||||||||||||||||||||||||||||||||||
(In millions) |
Funded Backlog |
||||||||||||||||||||||||||||||||||||||||
31-Mar-13 |
31-Dec-12 |
30-Sep-12 |
01-Jul-12 |
01-Apr-12 |
31-Dec-11 |
||||||||||||||||||||||||||||||||||||
Integrated Defense Systems |
$ |
8,841 |
$ |
9,188 |
$ |
8,171 |
$ |
8,530 |
$ |
8,714 |
$ |
8,512 |
|||||||||||||||||||||||||||||
Intelligence, Information and Services |
2,459 |
2,848 |
3,029 |
2,991 |
2,878 |
2,821 |
|||||||||||||||||||||||||||||||||||
Missile Systems |
6,656 |
7,535 |
7,069 |
7,037 |
7,171 |
6,957 |
|||||||||||||||||||||||||||||||||||
Space and Airborne Systems |
4,567 |
4,476 |
4,617 |
4,527 |
4,207 |
4,172 |
|||||||||||||||||||||||||||||||||||
Total |
$ |
22,523 |
$ |
24,047 |
$ |
22,886 |
$ |
23,085 |
$ |
22,970 |
$ |
22,462 |
|||||||||||||||||||||||||||||
(In millions) |
Total Backlog |
||||||||||||||||||||||||||||||||||||||||
31-Mar-13 |
31-Dec-12 |
30-Sep-12 |
01-Jul-12 |
01-Apr-12 |
31-Dec-11 |
||||||||||||||||||||||||||||||||||||
Integrated Defense Systems |
$ |
10,924 |
$ |
11,656 |
$ |
10,150 |
$ |
10,358 |
$ |
10,863 |
$ |
11,547 |
|||||||||||||||||||||||||||||
Intelligence, Information and Services |
5,831 |
6,409 |
6,853 |
6,413 |
6,441 |
7,027 |
|||||||||||||||||||||||||||||||||||
Missile Systems |
9,648 |
10,676 |
10,476 |
9,655 |
9,300 |
9,446 |
|||||||||||||||||||||||||||||||||||
Space and Airborne Systems |
7,143 |
7,440 |
7,536 |
7,497 |
7,699 |
7,292 |
|||||||||||||||||||||||||||||||||||
Total |
$ |
33,546 |
$ |
36,181 |
$ |
35,015 |
$ |
33,923 |
$ |
34,303 |
$ |
35,312 |
|||||||||||||||||||||||||||||
Bookings |
Bookings |
||||||||||||||||||||||||||||||||||||||||
(In millions) |
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||||||||||||||||||
31-Mar-13 |
31-Dec-12 |
30-Sep-12 |
01-Jul-12 |
01-Apr-12 |
31-Dec-12 |
31-Dec-11 |
|||||||||||||||||||||||||||||||||||
Integrated Defense Systems |
$ |
926 |
$ |
3,229 |
$ |
1,361 |
$ |
1,148 |
$ |
895 |
$ |
6,633 |
$ |
7,605 |
|||||||||||||||||||||||||||
Intelligence, Information and Services |
830 |
1,189 |
1,870 |
1,520 |
891 |
5,470 |
6,158 |
||||||||||||||||||||||||||||||||||
Missile Systems |
811 |
1,947 |
2,418 |
1,977 |
1,452 |
7,794 |
6,747 |
||||||||||||||||||||||||||||||||||
Space and Airborne Systems |
1,039 |
1,527 |
1,644 |
1,512 |
1,924 |
6,607 |
6,045 |
||||||||||||||||||||||||||||||||||
Total |
$ |
3,606 |
$ |
7,892 |
$ |
7,293 |
$ |
6,157 |
$ |
5,162 |
$ |
26,504 |
$ |
26,555 |
|||||||||||||||||||||||||||
Attachment D Raytheon Company Preliminary Balance Sheet Information Second Quarter 2013 |
|||||||||||||||
(In millions) |
|||||||||||||||
30-Jun-13 |
31-Dec-12 |
||||||||||||||
Assets |
|||||||||||||||
Current assets |
|||||||||||||||
Cash and cash equivalents |
$ |
2,467 |
$ |
3,188 |
|||||||||||
Short-term investments |
995 |
856 |
|||||||||||||
Contracts in process, net |
5,156 |
4,543 |
|||||||||||||
Inventories |
454 |
381 |
|||||||||||||
Deferred taxes |
90 |
96 |
|||||||||||||
Prepaid expenses and other current assets |
114 |
182 |
|||||||||||||
Total current assets |
9,276 |
9,246 |
|||||||||||||
Property, plant and equipment, net |
1,924 |
1,986 |
|||||||||||||
Deferred taxes |
1,140 |
1,367 |
|||||||||||||
Goodwill |
12,764 |
12,756 |
|||||||||||||
Other assets, net |
1,272 |
1,331 |
|||||||||||||
Total assets |
$ |
26,376 |
$ |
26,686 |
|||||||||||
Liabilities and Equity |
|||||||||||||||
Current liabilities |
|||||||||||||||
Advance payments and billings in excess of costs incurred |
$ |
2,140 |
$ |
2,398 |
|||||||||||
Accounts payable |
1,164 |
1,348 |
|||||||||||||
Accrued employee compensation |
927 |
1,014 |
|||||||||||||
Other accrued expenses |
1,223 |
1,142 |
|||||||||||||
Total current liabilities |
5,454 |
5,902 |
|||||||||||||
Accrued retiree benefits and other long-term liabilities |
7,443 |
7,854 |
|||||||||||||
Deferred taxes |
10 |
9 |
|||||||||||||
Long-term debt |
4,732 |
4,731 |
|||||||||||||
Equity |
|||||||||||||||
Raytheon Company stockholders' equity |
|||||||||||||||
Common stock |
3 |
3 |
|||||||||||||
Additional paid-in capital |
2,526 |
2,928 |
|||||||||||||
Accumulated other comprehensive loss |
(7,464) |
(7,788) |
|||||||||||||
Retained earnings |
13,503 |
12,883 |
|||||||||||||
Total Raytheon Company stockholders' equity |
8,568 |
8,026 |
|||||||||||||
Noncontrolling interests in subsidiaries |
169 |
164 |
|||||||||||||
Total equity |
8,737 |
8,190 |
|||||||||||||
Total liabilities and equity |
$ |
26,376 |
$ |
26,686 |
Attachment E Raytheon Company Preliminary Cash Flow Information Second Quarter 2013 |
||||||||||||||||||||||||||||||||||||||||||||||
(In millions) |
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||||||||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
|||||||||||||||||||||||||||||||||||||||||||
Net income |
$ |
493 |
$ |
470 |
$ |
987 |
$ |
922 |
||||||||||||||||||||||||||||||||||||||
Loss (income) from discontinued operations, net of tax |
— |
1 |
2 |
3 |
||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations |
493 |
471 |
989 |
925 |
||||||||||||||||||||||||||||||||||||||||||
Depreciation |
77 |
81 |
151 |
158 |
||||||||||||||||||||||||||||||||||||||||||
Amortization |
36 |
35 |
70 |
70 |
||||||||||||||||||||||||||||||||||||||||||
Working capital (excluding pension and income taxes)* |
(489) |
(442) |
(1,282) |
(1,343) |
||||||||||||||||||||||||||||||||||||||||||
Other long-term liabilities |
4 |
(28) |
(11) |
(26) |
||||||||||||||||||||||||||||||||||||||||||
Pension and other postretirement benefit plans |
(45) |
(313) |
246 |
(59) |
||||||||||||||||||||||||||||||||||||||||||
Other, net |
(117) |
(63) |
218 |
127 |
||||||||||||||||||||||||||||||||||||||||||
Net operating cash flow from continuing operations |
$ |
(41) |
$ |
(259) |
381 |
(148) |
||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information |
||||||||||||||||||||||||||||||||||||||||||||||
Capital spending |
$ |
(56) |
$ |
(67) |
(105) |
(137) |
||||||||||||||||||||||||||||||||||||||||
Internal use software spending |
(12) |
(26) |
(21) |
(46) |
||||||||||||||||||||||||||||||||||||||||||
Acquisitions |
(14) |
— |
(14) |
— |
||||||||||||||||||||||||||||||||||||||||||
Dividends |
(179) |
(167) |
(343) |
(313) |
||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock |
(225) |
(200) |
(450) |
(600) |
||||||||||||||||||||||||||||||||||||||||||
* 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 Raytheon Company Non-GAAP Financial Measures - Adjusted EPS, Adjusted Income and Adjusted Operating Margin Second Quarter 2013 |
||||||||||||||||||||||||||||||||||||
Adjusted EPS Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||||||||
2013 |
2013 |
|||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) |
Current Guidance |
Prior Guidance |
||||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
Low end |
High end |
Low end |
High end |
|||||||||||||||||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
of range |
of range |
of range |
of range |
|||||||||||||||||||||||||||||
Diluted EPS from continuing operations attributable to |
||||||||||||||||||||||||||||||||||||
Raytheon Company common stockholders |
$ |
1.50 |
$ |
1.41 |
$ |
2.99 |
$ |
2.74 |
$ |
5.51 |
$ |
5.61 |
$ |
5.26 |
$ |
5.41 |
||||||||||||||||||||
Per share impact of the FAS/CAS Adjustment (A) |
0.14 |
0.14 |
0.28 |
0.27 |
0.57 |
0.58 |
0.57 |
0.57 |
||||||||||||||||||||||||||||
Per share impact of the 2012 research and development |
||||||||||||||||||||||||||||||||||||
(R&D) tax credit (B) |
— |
0.02 |
(0.08) |
0.04 |
(0.08) |
(0.08) |
(0.08) |
(0.08) |
||||||||||||||||||||||||||||
Adjusted EPS (2), (3) |
$ |
1.64 |
$ |
1.57 |
$ |
3.20 |
$ |
3.05 |
$ |
6.00 |
$ |
6.10 |
$ |
5.75 |
$ |
5.90 |
||||||||||||||||||||
(A) |
FAS/CAS Adjustment |
$ |
72 |
$ |
71 |
$ |
143 |
$ |
141 |
$ |
286 |
$ |
286 |
$ |
286 |
$ |
286 |
|||||||||||||||||||
Tax effect (1) |
(25) |
(25) |
(50) |
(49) |
(100) |
(100) |
(100) |
(100) |
||||||||||||||||||||||||||||
After-tax impact |
47 |
46 |
93 |
92 |
186 |
186 |
186 |
186 |
||||||||||||||||||||||||||||
Diluted shares |
325.6 |
334.4 |
326.9 |
336.5 |
324.0 |
323.0 |
327.0 |
324.0 |
||||||||||||||||||||||||||||
Per share impact |
$ |
0.14 |
$ |
0.14 |
$ |
0.28 |
$ |
0.27 |
$ |
0.57 |
$ |
0.58 |
$ |
0.57 |
$ |
0.57 |
||||||||||||||||||||
(B) |
2012 R&D tax credit |
$ |
— |
$ |
6 |
$ |
(25) |
$ |
12 |
$ |
(25) |
$ |
(25) |
$ |
(25) |
$ |
(25) |
|||||||||||||||||||
Diluted shares |
— |
334.4 |
326.9 |
336.5 |
324.0 |
323.0 |
327.0 |
324.0 |
||||||||||||||||||||||||||||
Per share impact |
$ |
— |
$ |
0.02 |
$ |
(0.08) |
$ |
0.04 |
$ |
(0.08) |
$ |
(0.08) |
$ |
(0.08) |
$ |
(0.08) |
||||||||||||||||||||
Adjusted Income Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
|||||||||||||||||||||||||||||||||
Income from continuing operations attributable to Raytheon Company common stockholders |
$ |
488 |
$ |
472 |
$ |
978 |
$ |
922 |
||||||||||||||||||||||||||||
FAS/CAS Adjustment (1) |
47 |
46 |
93 |
92 |
||||||||||||||||||||||||||||||||
2012 R&D tax credit |
— |
6 |
(25) |
12 |
||||||||||||||||||||||||||||||||
Adjusted Income (2), (4) |
$ |
535 |
$ |
524 |
$ |
1,046 |
$ |
1,026 |
||||||||||||||||||||||||||||
Adjusted Operating Margin Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||||||||
2013 |
2013 |
|||||||||||||||||||||||||||||||||||
Current Guidance |
Prior Guidance |
|||||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
Low end |
High end |
Low end |
High end |
|||||||||||||||||||||||||||||||
30-Jun-13 |
01-Jul-12 |
30-Jun-13 |
01-Jul-12 |
of range |
of range |
of range |
of range |
|||||||||||||||||||||||||||||
Operating Margin |
12.5% |
12.4% |
12.3% |
12.1% |
11.7 |
% |
11.8 |
% |
11.4 |
% |
11.6 |
% |
||||||||||||||||||||||||
Impact of the FAS/CAS Adjustment |
1.2% |
1.2% |
1.2% |
1.2% |
1.2 |
% |
1.2 |
% |
1.2 |
% |
1.2 |
% |
||||||||||||||||||||||||
Adjusted Operating Margin (2), (5) |
13.7% |
13.6% |
13.5% |
13.3% |
12.9 |
% |
13.0 |
% |
12.6 |
% |
12.8 |
% |
(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. |
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(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. Six Months Ended 2013 Adjusted EPS also excludes the earnings per share impact of an R&D tax credit that relates to 2012. In addition, the Q2 2012 and Six Months Ended 2012 Adjusted EPS amount has been revised to include the favorable impact for the 2012 R&D tax credit. 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. |
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(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. Six Months Ended 2013 Adjusted Income also excludes the R&D tax credit that relates to 2012, as discussed above. Q2 2012 and Six Months Ended 2012 Adjusted Income also includes the 2012 R&D tax credit as discussed above. |
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(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. |
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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