Raytheon Reports Strong Third Quarter 2018 Results
- Strong bookings of $8.7 billion; book-to-bill ratio of 1.28
- Net sales of $6.8 billion, up 8.3 percent
- EPS from continuing operations of $2.25, up 14.2 percent
- Updated full-year 2018 guidance
WALTHAM, Mass., Oct. 25, 2018 /PRNewswire/ -- Raytheon Company (NYSE: RTN) today announced net sales for the third quarter 2018 of $6.8 billion, up 8.3 percent compared to $6.3 billion in the third quarter 2017. Third quarter 2018 EPS from continuing operations was $2.25 compared to $1.97 in the third quarter 2017. The increase in the third quarter 2018 EPS from continuing operations was primarily driven by operational improvements, and lower taxes primarily associated with tax reform. This was partially offset by the previously disclosed non-operating expense associated with the pension plan annuity transaction, which had an unfavorable $0.80 per share impact.
"I'm pleased with the company's operating performance in the third quarter. We delivered bookings, sales, EPS and cash flow ahead of our expectations," said Thomas A. Kennedy, Raytheon Chairman and CEO. "Strong domestic and international bookings throughout the year drove record backlog and positions us well for continued growth in 2019."
Operating cash flow from continuing operations for the third quarter 2018 was an outflow of $444 million compared to an inflow of $382 million for the third quarter 2017. The decrease in operating cash flow from continuing operations in the third quarter 2018 was primarily due to the previously disclosed $1.25 billion pretax discretionary pension contribution, partially offset by lower net cash taxes.
In the third quarter 2018, the company repurchased 0.6 million shares of common stock for $125 million. Year-to-date 2018, the company repurchased 4.5 million shares of common stock for $925 million.
The company had bookings of $8.7 billion in the third quarter 2018, resulting in a book-to-bill ratio of 1.28. Third quarter 2017 bookings were $7.0 billion.
Summary Financial Results |
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3rd Quarter |
% |
Nine Months |
% |
|||||||||||||||||
($ in millions, except per share data) |
2018 |
2017 |
Change |
2018 |
2017 |
Change |
||||||||||||||
Bookings |
$ |
8,710 |
$ |
6,957 |
25.2% |
$ |
23,715 |
$ |
19,177 |
23.7% |
||||||||||
Net Sales |
$ |
6,806 |
$ |
6,284 |
8.3% |
$ |
19,698 |
$ |
18,565 |
6.1% |
||||||||||
Income from Continuing Operations attributable to |
||||||||||||||||||||
Raytheon Company1 |
$ |
644 |
$ |
573 |
12.4% |
$ |
2,077 |
$ |
1,629 |
27.5% |
||||||||||
EPS from Continuing Operations1 |
$ |
2.25 |
$ |
1.97 |
14.2% |
$ |
7.23 |
$ |
5.59 |
29.3% |
||||||||||
Operating Cash Flow from Continuing Operations2 |
$ |
(444) |
$ |
382 |
$ |
995 |
$ |
1,123 |
||||||||||||
Workdays in Fiscal Reporting Calendar |
63 |
62 |
191 |
190 |
||||||||||||||||
1 As previously disclosed, in the third quarter 2018, some of the company's pension plans purchased a group annuity contract to transfer $923 million of outstanding pension benefit obligations related to certain U.S. retirees and beneficiaries of the company's previously discontinued operations. In connection with this transaction, the company recognized a non-cash, non-operating pension settlement charge of $288 million pretax, $228 million after tax, primarily related to the accelerated recognition of actuarial losses in those plans. Third quarter and nine months 2018 EPS from Continuing Operations included an unfavorable $0.80 and $0.79 impact, respectively, related to the settlement charge. |
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2 As previously disclosed, the company made a $1.25 billion pretax discretionary pension plan contribution in the third quarter 2018. |
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Backlog at the end of the third quarter 2018 was a record $41.6 billion, an increase of $4.9 billion or 13.4 percent compared to the end of the third quarter 2017.
Backlog |
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Period Ending |
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($ in millions) |
Q3 2018 |
Q3 2017 |
2017 |
||||||||||||||||||||||||||||||||||||||
Backlog |
$ |
41,599 |
$ |
36,676 |
$ |
38,210 |
|||||||||||||||||||||||||||||||||||
Outlook
The company has updated its financial outlook for 2018. Charts containing additional information on the company's 2018 outlook are available on the company's website.
2018 Financial Outlook |
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Current |
Prior (7/26/18) |
|||
Net Sales ($B) |
27.0 - 27.3* |
26.7 - 27.2 |
||
Deferred Revenue Adjustment ($M) |
(10) |
(10) |
||
Amortization of Acquired Intangibles ($M) |
(118) |
(118) |
||
FAS/CAS Operating Adjustment ($M)1 |
1,430* |
1,416 |
||
Retirement Benefits Non-service Expense, non-operating ($M)2 |
(1,232)* |
(1,246) |
||
Interest Expense, net ($M) |
(165) - (170)* |
(180) - (185) |
||
Diluted Shares (M) |
~287 |
~287 |
||
Effective Tax Rate |
~10.5% |
~10.5% |
||
EPS from Continuing Operations |
$10.01 - $10.11* |
$9.77 - $9.97 |
||
Operating Cash Flow from Continuing Operations ($B) |
2.6 - 3.0 |
2.6 - 3.0 |
||
*Denotes change from prior guidance |
||||
1The full-year 2018 FAS/CAS Operating Adjustment had a $14 million ($0.04 per share) favorable adjustment, of which approximately $11 million ($0.03 per share) was recorded in the third quarter 2018 and approximately $3 million ($0.01 per share) is expected to be recorded in the fourth quarter 2018. This is due to the update in the third quarter 2018 of the actuarial estimates for pension and other postretirement benefit plans. |
||||
2The full-year 2018 Retirement Benefits Non-service Expense had a $14 million ($0.04 per share) favorable adjustment, all of which was recorded in the third quarter 2018. This is due to the update in the third quarter 2018 of the actuarial estimates for pension and other postretirement benefit plans. |
||||
Segment Results
The company's reportable segments are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint™.
Integrated Defense Systems |
|||||||||||||||||||
3rd Quarter |
Nine Months |
||||||||||||||||||
($ in millions) |
2018 |
2017 |
% Change |
2018 |
2017 |
% Change |
|||||||||||||
Net Sales |
$ |
1,493 |
$ |
1,391 |
7% |
$ |
4,496 |
$ |
4,251 |
6% |
|||||||||
Operating Income |
$ |
241 |
$ |
231 |
4% |
$ |
776 |
$ |
688 |
13% |
|||||||||
Operating Margin |
16.1% |
16.6% |
17.3% |
16.2% |
|||||||||||||||
Integrated Defense Systems (IDS) had third quarter 2018 net sales of $1,493 million, up 7 percent compared to $1,391 million in the third quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales from an international Patriot® program awarded in the first quarter 2018.
IDS recorded $241 million of operating income in the third quarter 2018 compared to $231 million in the third quarter 2017. The increase in operating income for the quarter was primarily driven by a favorable change in program mix and higher volume, partially offset by lower net program efficiencies.
During the quarter, IDS booked $1.3 billion to provide advanced Patriot air and missile defense capabilities for Poland. IDS also booked $191 million for the Forward Expeditionary Advanced Vehicle Radar (FEAVR) program for the U.S. Army and $75 million for a lightweight torpedo program for the U.S. Navy and international customers.
Intelligence, Information and Services |
|||||||||||||||||||
3rd Quarter |
Nine Months |
||||||||||||||||||
($ in millions) |
2018 |
2017 |
% Change |
2018 |
2017 |
% Change |
|||||||||||||
Net Sales |
$ |
1,742 |
$ |
1,543 |
13% |
$ |
5,011 |
$ |
4,605 |
9% |
|||||||||
Operating Income |
$ |
149 |
$ |
112 |
33% |
$ |
394 |
$ |
338 |
17% |
|||||||||
Operating Margin |
8.6% |
7.3% |
7.9% |
7.3% |
|||||||||||||||
Intelligence, Information and Services (IIS) had third quarter 2018 net sales of $1,742 million, up 13 percent compared to $1,543 million in the third quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs in both the cyber and space business areas, the Development, Operations and Maintenance (DOMino) cyber program, and the Warfighter FOCUS program.
IIS recorded $149 million of operating income in the third quarter 2018 compared to $112 million in the third quarter 2017. The increase in operating income for the quarter was primarily driven by higher net program efficiencies and higher volume.
During the quarter, IIS booked $787 million on a number of classified contracts. IIS also booked $299 million on domestic and foreign training programs in support of Warfighter FOCUS activities; $108 million to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force; and $99 million on the Air and Space Operations Center Weapon System (AOC WS) program for the U.S. Air Force.
Missile Systems |
|||||||||||||||||||
3rd Quarter |
Nine Months |
||||||||||||||||||
($ in millions) |
2018 |
2017 |
% Change |
2018 |
2017 |
% Change |
|||||||||||||
Net Sales |
$ |
2,082 |
$ |
1,945 |
7% |
$ |
5,981 |
$ |
5,602 |
7% |
|||||||||
Operating Income |
$ |
257 |
$ |
280 |
(8)% |
$ |
700 |
$ |
732 |
(4)% |
|||||||||
Operating Margin |
12.3% |
14.4% |
11.7% |
13.1% |
|||||||||||||||
Missile Systems (MS) had third quarter 2018 net sales of $2,082 million, up 7 percent compared to $1,945 million in the third quarter 2017. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs.
MS recorded $257 million of operating income in the third quarter 2018 compared to $280 million in the third quarter 2017. The decrease in operating income for the quarter was primarily due to lower net program efficiencies, partially offset by higher volume.
During the quarter, MS booked $499 million for Phalanx® Close-In Defense Systems (CIDS); $424 million for Standard Missile-6 (SM-6®); $115 million for Javelin; $113 million on the High-speed Unmanned Long-range Kinetic-kill (HULK) program; $89 million for Paveway™; $84 million for Horizontal Technology Integration (HTI) forward looking infrared kits; and $84 million for Rolling Airframe Missile (RAM™). MS also booked $155 million on a number of classified contracts.
Space and Airborne Systems |
|||||||||||||||||||
3rd Quarter |
Nine Months |
||||||||||||||||||
($ in millions) |
2018 |
2017 |
% Change |
2018 |
2017 |
% Change |
|||||||||||||
Net Sales |
$ |
1,695 |
$ |
1,597 |
6% |
$ |
4,868 |
$ |
4,760 |
2% |
|||||||||
Operating Income |
$ |
223 |
$ |
212 |
5% |
$ |
622 |
$ |
620 |
- |
|||||||||
Operating Margin |
13.2% |
13.3% |
12.8% |
13.0% |
|||||||||||||||
Space and Airborne Systems (SAS) had third quarter 2018 net sales of $1,695 million, up 6 percent compared to $1,597 million in the third quarter 2017. The increase in net sales for the quarter was driven by higher net sales on surveillance and targeting systems programs.
SAS recorded $223 million of operating income in the third quarter 2018 compared to $212 million in the third quarter 2017. The increase in operating income for the quarter was primarily due to higher volume.
During the quarter, SAS booked $282 million on the Multi-Spectral Targeting System (MTS) for the U.S. Air Force; $136 million on the Next Generation Jammer (NGJ) program for the U.S. Navy; $103 million for Active Electronically Scanned Array (AESA) radars for the U.S. Air Force; and $92 million for radar components for the U.S. Navy. SAS also booked $374 million on a number of classified contracts.
Forcepoint |
|||||||||||||||||||||
3rd Quarter |
Nine Months |
||||||||||||||||||||
($ in millions) |
2018 |
2017 |
% Change |
2018 |
2017 |
% Change |
|||||||||||||||
Net Sales |
$ |
173 |
$ |
170 |
2% |
$ |
462 |
$ |
452 |
2% |
|||||||||||
Operating Income |
$ |
18 |
$ |
23 |
(22)% |
$ |
3 |
$ |
41 |
(93)% |
|||||||||||
Operating Margin |
10.4% |
13.5% |
0.6% |
9.1% |
|||||||||||||||||
Forcepoint had third quarter 2018 net sales of $173 million, up 2 percent compared to $170 million in the third quarter 2017.
Forcepoint recorded $18 million of operating income in the third quarter 2018 compared to $23 million in the third quarter 2017. As expected, the decrease in operating income for the quarter was primarily driven by higher operating costs.
About Raytheon
Raytheon Company, with 2017 sales of $25 billion and 64,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 96 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5I™ 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 2018 Financial Results
Raytheon's financial results conference call will be held on Thursday, October 25, 2018 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) 588-8312 in the U.S. or (409) 220-9941 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 performance under undefinitized contract awards; 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, 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; the ability to obtain timely U.S. government approvals for international contracts; 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 ability to recruit and retain qualified personnel; the impact of potential security and cyber threats, and other disruptions; 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, including with respect to the provisional impact of the Tax Cuts and Jobs Act of 2017; 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 Third Quarter 2018 |
|||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
||||||||||||||
Net sales |
$ |
6,806 |
$ |
6,284 |
$ |
19,698 |
$ |
18,565 |
|||||||||
Operating expenses |
|||||||||||||||||
Cost of sales |
4,871 |
4,468 |
14,180 |
13,355 |
|||||||||||||
General and administrative expenses |
752 |
688 |
2,194 |
2,079 |
|||||||||||||
Total operating expenses |
5,623 |
5,156 |
16,374 |
15,434 |
|||||||||||||
Operating income |
1,183 |
1,128 |
3,324 |
3,131 |
|||||||||||||
Non-operating (income) expense, net |
|||||||||||||||||
Retirement benefits non-service expense |
516 |
270 |
993 |
683 |
|||||||||||||
Interest expense |
45 |
48 |
138 |
157 |
|||||||||||||
Interest income |
(6) |
(4) |
(21) |
(14) |
|||||||||||||
Other (income) expense, net |
(8) |
(2) |
(6) |
26 |
|||||||||||||
Total non-operating (income) expense, net |
547 |
312 |
1,104 |
852 |
|||||||||||||
Income from continuing operations before taxes |
636 |
816 |
2,220 |
2,279 |
|||||||||||||
Federal and foreign income taxes |
(5) |
248 |
165 |
667 |
|||||||||||||
Income from continuing operations |
641 |
568 |
2,055 |
1,612 |
|||||||||||||
Income (loss) from discontinued operations, net of tax |
— |
(1) |
— |
2 |
|||||||||||||
Net income |
641 |
567 |
2,055 |
1,614 |
|||||||||||||
Less: Net income (loss) attributable to noncontrolling interests |
|||||||||||||||||
in subsidiaries |
(3) |
(5) |
(22) |
(17) |
|||||||||||||
Net income attributable to Raytheon Company |
$ |
644 |
$ |
572 |
$ |
2,077 |
$ |
1,631 |
|||||||||
Basic earnings per share attributable to Raytheon Company |
|||||||||||||||||
common stockholders: |
|||||||||||||||||
Income from continuing operations |
$ |
2.25 |
$ |
1.97 |
$ |
7.24 |
$ |
5.59 |
|||||||||
Income (loss) from discontinued operations, net of tax |
— |
— |
— |
0.01 |
|||||||||||||
Net income |
2.25 |
1.97 |
7.23 |
5.60 |
|||||||||||||
Diluted earnings per share attributable to Raytheon Company |
|||||||||||||||||
common stockholders: |
|||||||||||||||||
Income from continuing operations |
$ |
2.25 |
$ |
1.97 |
$ |
7.23 |
$ |
5.59 |
|||||||||
Income (loss) from discontinued operations, net of tax |
— |
— |
— |
0.01 |
|||||||||||||
Net income |
2.25 |
1.97 |
7.23 |
5.60 |
|||||||||||||
Amounts attributable to Raytheon Company common |
|||||||||||||||||
stockholders: |
|||||||||||||||||
Income from continuing operations |
$ |
644 |
$ |
573 |
$ |
2,077 |
$ |
1,629 |
|||||||||
Income (loss) from discontinued operations, net of tax |
— |
(1) |
— |
2 |
|||||||||||||
Net income |
$ |
644 |
$ |
572 |
$ |
2,077 |
$ |
1,631 |
|||||||||
Average shares outstanding |
|||||||||||||||||
Basic |
285.7 |
290.7 |
287.2 |
291.6 |
|||||||||||||
Diluted |
286.0 |
291.0 |
287.5 |
291.9 |
|||||||||||||
Attachment B Raytheon Company Preliminary Segment Information Third Quarter 2018 (In millions, except percentages) |
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Operating Income |
|||||||||||||||||||||
Net Sales |
Operating Income |
As a Percent of Net Sales |
|||||||||||||||||||
Three Months Ended |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
||||||||||||||||
Integrated Defense Systems |
$ |
1,493 |
$ |
1,391 |
$ |
241 |
$ |
231 |
16.1% |
16.6% |
|||||||||||
Intelligence, Information and Services |
1,742 |
1,543 |
149 |
112 |
8.6% |
7.3% |
|||||||||||||||
Missile Systems |
2,082 |
1,945 |
257 |
280 |
12.3% |
14.4% |
|||||||||||||||
Space and Airborne Systems |
1,695 |
1,597 |
223 |
212 |
13.2% |
13.3% |
|||||||||||||||
Forcepoint |
173 |
170 |
18 |
23 |
10.4% |
13.5% |
|||||||||||||||
Eliminations |
(377) |
(355) |
(45) |
(39) |
|||||||||||||||||
Total business segment |
6,808 |
6,291 |
843 |
819 |
12.4% |
13.0% |
|||||||||||||||
Acquisition Accounting Adjustments |
(2) |
(7) |
(30) |
(39) |
|||||||||||||||||
FAS/CAS Operating Adjustment |
— |
— |
365 |
348 |
|||||||||||||||||
Corporate |
— |
— |
5 |
— |
|||||||||||||||||
Total |
$ |
6,806 |
$ |
6,284 |
$ |
1,183 |
$ |
1,128 |
17.4% |
18.0% |
|||||||||||
Operating Income |
|||||||||||||||||||||
Net Sales |
Operating Income |
As a Percent of Net Sales |
|||||||||||||||||||
Nine Months Ended |
Nine Months Ended |
Nine Months Ended |
|||||||||||||||||||
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
||||||||||||||||
Integrated Defense Systems |
$ |
4,496 |
$ |
4,251 |
$ |
776 |
$ |
688 |
17.3% |
16.2% |
|||||||||||
Intelligence, Information and Services |
5,011 |
4,605 |
394 |
338 |
7.9% |
7.3% |
|||||||||||||||
Missile Systems |
5,981 |
5,602 |
700 |
732 |
11.7% |
13.1% |
|||||||||||||||
Space and Airborne Systems |
4,868 |
4,760 |
622 |
620 |
12.8% |
13.0% |
|||||||||||||||
Forcepoint |
462 |
452 |
3 |
41 |
0.6% |
9.1% |
|||||||||||||||
Eliminations |
(1,110) |
(1,077) |
(126) |
(113) |
|||||||||||||||||
Total business segment |
19,708 |
18,593 |
2,369 |
2,306 |
12.0% |
12.4% |
|||||||||||||||
Acquisition Accounting Adjustments |
(10) |
(28) |
(97) |
(123) |
|||||||||||||||||
FAS/CAS Operating Adjustment |
— |
— |
1,072 |
978 |
|||||||||||||||||
Corporate |
— |
— |
(20) |
(30) |
|||||||||||||||||
Total |
$ |
19,698 |
$ |
18,565 |
$ |
3,324 |
$ |
3,131 |
16.9% |
16.9% |
|||||||||||
Attachment C Raytheon Company Other Preliminary Information Third Quarter 2018 (In millions) |
||||||||||||||||||
Backlog |
30-Sep-18 |
31-Dec-17 |
||||||||||||||||
Integrated Defense Systems |
$ |
11,148 |
$ |
9,186 |
||||||||||||||
Intelligence, Information and Services |
6,563 |
6,503 |
||||||||||||||||
Missile Systems |
13,906 |
13,426 |
||||||||||||||||
Space and Airborne Systems |
9,483 |
8,611 |
||||||||||||||||
Forcepoint |
499 |
484 |
||||||||||||||||
Total backlog |
$ |
41,599 |
$ |
38,210 |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||
Bookings |
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
||||||||||||||
Total bookings |
$ |
8,710 |
$ |
6,957 |
$ |
23,715 |
$ |
19,177 |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||
General and Administrative Expenses |
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
||||||||||||||
Administrative and selling expenses |
$ |
533 |
$ |
510 |
$ |
1,601 |
$ |
1,547 |
||||||||||
Research and development expenses |
219 |
178 |
593 |
532 |
||||||||||||||
Total general and administrative expenses |
$ |
752 |
$ |
688 |
$ |
2,194 |
$ |
2,079 |
||||||||||
Cash, Cash Equivalents and Restricted Cash |
30-Sep-18 |
31-Dec-17 |
||||||||||||||||
Cash and cash equivalents |
$ |
2,073 |
$ |
3,103 |
||||||||||||||
Restricted cash |
12 |
12 |
||||||||||||||||
Cash, cash equivalents and restricted cash shown in Attachment E |
$ |
2,085 |
$ |
3,115 |
||||||||||||||
Attachment D Raytheon Company Preliminary Balance Sheet Information Third Quarter 2018 (In millions) |
||||||||
30-Sep-18 |
31-Dec-17 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ |
2,073 |
$ |
3,103 |
||||
Short-term investments |
— |
297 |
||||||
Receivables, net |
1,527 |
1,324 |
||||||
Contract assets |
5,715 |
5,247 |
||||||
Inventories |
804 |
594 |
||||||
Prepaid expenses and other current assets |
516 |
761 |
||||||
Total current assets |
10,635 |
11,326 |
||||||
Property, plant and equipment, net |
2,639 |
2,439 |
||||||
Goodwill |
14,865 |
14,871 |
||||||
Other assets, net |
1,995 |
2,224 |
||||||
Total assets |
$ |
30,134 |
$ |
30,860 |
||||
Liabilities, Redeemable Noncontrolling Interest and Equity |
||||||||
Current liabilities |
||||||||
Commercial paper |
$ |
300 |
$ |
300 |
||||
Contract liabilities |
2,931 |
2,927 |
||||||
Accounts payable |
1,392 |
1,519 |
||||||
Accrued employee compensation |
1,252 |
1,342 |
||||||
Other current liabilities |
1,281 |
1,260 |
||||||
Total current liabilities |
7,156 |
7,348 |
||||||
Accrued retiree benefits and other long-term liabilities |
6,355 |
8,287 |
||||||
Long-term debt |
4,753 |
4,750 |
||||||
Redeemable noncontrolling interest |
560 |
512 |
||||||
Equity |
||||||||
Raytheon Company stockholders' equity |
||||||||
Common stock |
3 |
3 |
||||||
Additional paid-in capital |
— |
— |
||||||
Accumulated other comprehensive loss(1) |
(8,413) |
(7,935) |
||||||
Retained earnings(1) |
19,720 |
17,895 |
||||||
Total Raytheon Company stockholders' equity |
11,310 |
9,963 |
||||||
Noncontrolling interests in subsidiaries |
— |
— |
||||||
Total equity |
11,310 |
9,963 |
||||||
Total liabilities, redeemable noncontrolling interest and equity |
$ |
30,134 |
$ |
30,860 |
||||
(1) |
In the first quarter 2018 we adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. As a result, we reclassified $1,451 million from accumulated other comprehensive loss to retained earnings related to the reclassification of stranded income tax effects of the Tax Cuts and Jobs Act of 2017. |
Attachment E Raytheon Company Preliminary Cash Flow Information Third Quarter 2018 (In millions) |
||||||||
Nine Months Ended |
||||||||
30-Sep-18 |
1-Oct-17 |
|||||||
Cash flows from operating activities |
||||||||
Net income |
$ |
2,055 |
$ |
1,614 |
||||
(Income) loss from discontinued operations, net of tax |
— |
(2) |
||||||
Income from continuing operations |
2,055 |
1,612 |
||||||
Adjustments to reconcile to net cash provided by (used in) operating activities from continuing |
||||||||
operations, net of the effect of acquisitions and divestitures |
||||||||
Depreciation and amortization |
417 |
401 |
||||||
Stock-based compensation |
137 |
127 |
||||||
Loss on repayment of long-term debt |
— |
39 |
||||||
Deferred income taxes |
(16) |
(137) |
||||||
Changes in assets and liabilities |
||||||||
Receivables, net |
(205) |
(226) |
||||||
Contract assets and contract liabilities |
(468) |
(962) |
||||||
Inventories |
(212) |
(83) |
||||||
Prepaid expenses and other current assets |
72 |
148 |
||||||
Income taxes receivable/payable |
194 |
66 |
||||||
Accounts payable |
(64) |
(191) |
||||||
Accrued employee compensation |
(91) |
(68) |
||||||
Other current liabilities |
(44) |
35 |
||||||
Accrued retiree benefits |
(748) |
452 |
||||||
Other, net |
(32) |
(90) |
||||||
Net cash provided by (used in) operating activities from continuing operations |
995 |
1,123 |
||||||
Net cash provided by (used in) operating activities from discontinued operations |
1 |
(1) |
||||||
Net cash provided by (used in) operating activities |
996 |
1,122 |
||||||
Cash flows from investing activities |
||||||||
Additions to property, plant and equipment |
(546) |
(323) |
||||||
Proceeds from sales of property, plant and equipment |
— |
31 |
||||||
Additions to capitalized internal use software |
(42) |
(49) |
||||||
Purchases of short-term investments |
— |
(399) |
||||||
Maturities of short-term investments |
309 |
517 |
||||||
Payments for purchases of acquired companies, net of cash received |
— |
(93) |
||||||
Proceeds from sale of business, net of transaction costs |
11 |
— |
||||||
Other |
(9) |
(2) |
||||||
Net cash provided by (used in) investing activities |
(277) |
(318) |
||||||
Cash flows from financing activities |
||||||||
Dividends paid |
(728) |
(679) |
||||||
Net borrowings (payments) on commercial paper |
— |
300 |
||||||
Repayments of long-term debt |
— |
(591) |
||||||
Loss on repayment of long-term debt |
— |
(38) |
||||||
Repurchases of common stock under share repurchase programs |
(925) |
(700) |
||||||
Repurchases of common stock to satisfy tax withholding obligations |
(91) |
(84) |
||||||
Contribution from noncontrolling interests in Forcepoint |
— |
8 |
||||||
Other |
(5) |
— |
||||||
Net cash provided by (used in) financing activities |
(1,749) |
(1,784) |
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,030) |
(980) |
||||||
Cash, cash equivalents and restricted cash at beginning of the year |
3,115 |
3,303 |
||||||
Cash, cash equivalents and restricted cash at end of period |
$ |
2,085 |
$ |
2,323 |
||||
Attachment F Raytheon Company Supplemental EPS Information Third Quarter 2018 (In millions, except per share amounts) |
||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
30-Sep-18 |
1-Oct-17 |
30-Sep-18 |
1-Oct-17 |
|||||||||||||||||
Per share impact of the pension settlement charge (A) |
$ |
0.80 |
$ |
— |
$ |
0.79 |
$ |
— |
||||||||||||
(A) |
Pension settlement charge |
$ |
288 |
$ |
— |
$ |
288 |
$ |
— |
|||||||||||
Tax effect (at 21% statutory rate) |
(60) |
— |
(60) |
— |
||||||||||||||||
After-tax impact |
228 |
— |
228 |
— |
||||||||||||||||
Diluted shares |
286.0 |
— |
287.5 |
— |
||||||||||||||||
Per share impact |
$ |
0.80 |
$ |
— |
$ |
0.79 |
$ |
— |
||||||||||||
Raytheon Company
Global Headquarters
Waltham, Mass.
Investor Relations Contact
Kelsey DeBriyn
781.522.5141
Media Contact
Corinne Kovalsky
781.522.5899
SOURCE Raytheon Company
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