Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - RAYTHEON CO/ | a8-kq32012.htm |
Exhibit 99.1
 | Raytheon Company |  | ||
Global Headquarters | ||||
Waltham, Mass. | ||||
Investor Relations Contact | ||||
Todd Ernst | ||||
781.522.5141 | ||||
Media Contact | ||||
Jon Kasle | ||||
781.522.5110 | ||||
For Immediate Release
Raytheon Reports Solid Third Quarter 2012 Results
• | Strong bookings of $7.3 billion; book-to-bill of 1.21 |
• | Adjusted EPS1 of $1.60, up 15 percent; EPS from continuing operations was $1.51, up 6 percent |
• | Adjusted Operating Margin1, of 13.8 percent, up 80 basis points; reported operating margin of 13.0 percent up 120 basis points |
• | Net sales of $6.0 billion, down 1 percent |
• | Strong operating cash flow from continuing operations of $1.1 billion |
• | Increased full-year 2012 guidance for EPS |
__________________________________________________________________________________________________
WALTHAM, Mass., (October 25, 2012) - Raytheon Company (NYSE: RTN) announced third quarter 2012 Adjusted EPS1 of $1.60 per diluted share compared to $1.39 per diluted share in the third quarter 2011, up 15 percent. The increase was primarily driven by operational improvements and capital deployment actions. Third quarter 2012 EPS from continuing operations was $1.51 compared to $1.42 in the third quarter 2011. Third quarter 2012 included an unfavorable FAS/CAS Adjustment of $0.09, compared with an unfavorable FAS/CAS Adjustment of $0.14 in the third quarter 2011. Third quarter 2011 also included a $0.17 per diluted share favorable tax settlement.
“Raytheon's strong operating performance in the third quarter reflects our continued focus on reducing cost, and increasing productivity,” said William H. Swanson, Raytheon’s Chairman and CEO. “Our bookings in the quarter were strong, and we have significant opportunities in both domestic and international markets for our innovative technologies and affordable solutions.”
____________________________________
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. Q3 2011 Adjusted EPS also excludes the impact of the favorable tax settlement as discussed above. 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.
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Q3 2011 vs. Q3 2012 EPS Variance | 3rd Quarter | Nine Months | |||||||||||||
EPS | Adjusted EPS* | EPS | Adjusted EPS* | ||||||||||||
Q3 2011 | $ | 1.42 | $ | 1.39 | $ | 3.68 | $ | 4.13 | |||||||
Operational Improvements | 0.07 | 0.07 | 0.24 | 0.24 | |||||||||||
Reduced Share Count | 0.08 | 0.08 | 0.27 | 0.27 | |||||||||||
Other Items, net | 0.06 | 0.06 | (0.05 | ) | (0.05 | ) | |||||||||
FAS/CAS Adjustment** | 0.05 | — | 0.10 | — | |||||||||||
UKBA LOC Adjustment | — | — | 0.17 | — | |||||||||||
2011 Tax Settlement | (0.17 | ) | — | (0.17 | ) | — | |||||||||
Q3 2012 | $ | 1.51 | $ | 1.60 | $ | 4.24 | $ | 4.61 | |||||||
* Adjusted EPS is a non-GAAP financial measure. See attachment F for a reconciliation of this measure and a discussion of why the Company is presenting this information. Amounts may not add due to rounding. | |||||||||||||||
** Represents the difference between the 3rd quarter 2012 and 3rd quarter 2011 FAS/CAS Adjustments of $(0.09) and $(0.14), respectively and the first nine months of 2012 and first nine months of 2011 FAS/CAS Adjustments of $(0.36) and $(0.46), respectively. | |||||||||||||||
Net sales for the third quarter 2012 were $6,045 million, compared to $6,116 million in the third quarter 2011. The Company reported strong bookings for the third quarter 2012 of $7,293 million, resulting in a book-to-bill ratio of 1.21. Bookings in the third quarter 2011 were $6,884 million.
The Company generated strong operating cash flow in the quarter. Operating cash flow from continuing operations for the third quarter 2012 was $1,111 million compared to $845 million for the third quarter 2011. The increase in operating cash from continuing operations in the third quarter 2012 was primarily due to the timing of collections and pension contributions, partially offset by higher tax payments.
In the third quarter 2012, the Company repurchased 2.2 million shares of common stock for $125 million as part of its previously announced share repurchase program. Year-to-date 2012, the Company repurchased 14.1 million shares of common stock for $725 million.
The Company ended the third quarter 2012 with $1.0 billion of net debt. Net debt is defined as total debt less cash and cash equivalents and short-term investments.
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Summary Financial Results | |||||||||||||||||||
3rd Quarter | % | Nine Months | % | ||||||||||||||||
($ in millions, except per share data) | 2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||
Net Sales | $ | 6,045 | $ | 6,116 | -1% | $ | 17,975 | $ | 18,369 | -2% | |||||||||
Income from Continuing Operations attributable to Raytheon Company | $ | 501 | $ | 498 | 1% | $ | 1,423 | $ | 1,309 | 9% | |||||||||
Adjusted Income* | $ | 532 | $ | 487 | 9% | $ | 1,545 | $ | 1,473 | 5% | |||||||||
EPS from Continuing Operations | $ | 1.51 | $ | 1.42 | 6% | $ | 4.24 | $ | 3.68 | 15% | |||||||||
Adjusted EPS* | $ | 1.60 | $ | 1.39 | 15% | $ | 4.61 | $ | 4.13 | 12% | |||||||||
Operating Cash Flow from Continuing Operations | $ | 1,111 | $ | 845 | $ | 963 | $ | 816 | |||||||||||
Workdays in Fiscal Reporting Calendar | 63 | 63 | 191 | 191 | |||||||||||||||
* 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. Q3 2011 Adjusted Income also excludes the favorable tax settlement discussed above. 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) | 3rd Quarter | Nine Months | ||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Bookings | $ | 7,293 | $ | 6,884 | $ | 18,612 | $ | 19,408 | ||||||||
Backlog | ||||||||||||
($ in millions) | Period Ending | |||||||||||
Q3 2012 | 2011 | Q3 2011 | ||||||||||
Backlog | $ | 35,015 | $ | 35,312 | $ | 34,985 | ||||||
Funded Backlog | $ | 22,886 | $ | 22,462 | $ | 21,734 | ||||||
The Company had bookings of $7.3 billion in the third quarter 2012 and had a period ending backlog of $35.0 billion.
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Outlook
The Company has updated its full-year 2012 outlook. Charts containing additional information on the Company's 2012 outlook are available on the Company's website at www.raytheon.com/ir.
2012 Financial Outlook | ||||
Current | Prior (7/26/12) | |||
Net Sales ($B) | 24.3 - 24.7* | 24.5 - 25.0 | ||
FAS/CAS Adjustment ($M) | (252)* | (284) | ||
Interest Expense, net ($M) | (190) - (200) | (190) - (200) | ||
Diluted Shares (M) | 334 - 335 | 334 - 335 | ||
Effective Tax Rate | ~32% | ~32% | ||
EPS from Continuing Operations | $5.36 - $5.46* | $5.15 - $5.30 | ||
Adjusted EPS** | $5.85 - $5.95* | $5.70 - $5.85 | ||
Operating Cash Flow from Continuing Operations ($B) | 1.8 - 2.0* | 1.7 - 1.9 | ||
* Denotes change from prior guidance. | ||||
** Adjusted EPS is a non-GAAP financial measure. See attachment F for a reconciliation of this measure and a discussion of why the Company is presenting this information. | ||||
Although it remains uncertain if sequestration under the Budget Control Act (BCA) will be implemented, sequestration could have a significant impact on the U.S. Military, the Aerospace and Defense Industry and Federal spending. Several industry associations estimate that sequestration, if implemented, could have a severe impact on U.S. Aerospace and Defense Industry employment nationwide. We believe that Raytheon's large international market presence, portfolio of programs, technology and focus on high priority areas should help to mitigate some of the potential overall impact.
Segment Results
The Company's reportable segments are: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services.
Integrated Defense Systems | |||||||||||||||||||
3rd Quarter | Nine Months | ||||||||||||||||||
($ in millions) | 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||||||||
Net Sales | $ | 1,275 | $ | 1,176 | 8% | $ | 3,716 | $ | 3,667 | 1% | |||||||||
Operating Income | $ | 240 | $ | 204 | 18% | $ | 692 | $ | 600 | 15% | |||||||||
Operating Margin | 18.8 | % | 17.3 | % | 18.6 | % | 16.4 | % | |||||||||||
Integrated Defense Systems (IDS) had third quarter 2012 net sales of $1,275 million, up 8 percent compared to $1,176 million in the third quarter 2011. The increase in net sales was primarily due to higher sales on an international Patriot program. IDS recorded $240 million of operating income compared to $204 million in the third quarter 2011. The increase in operating income was primarily due to favorable contract mix and higher volume in the third quarter 2012.
During the quarter, IDS booked $123 million for the Upgraded Early Warning Radar (UEWR) system for the Missile Defense Agency (MDA) and the U.S. Air Force. IDS also booked $84 million to provide air and missile defense capability for the U.S. Army.
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Intelligence and Information Systems | |||||||||||||||||||
3rd Quarter | Nine Months | ||||||||||||||||||
($ in millions) | 2012 | 2011 | % Change | 2012 | 2011* | % Change | |||||||||||||
Net Sales | $ | 742 | $ | 760 | -2% | $ | 2,257 | $ | 2,262 | - | |||||||||
Operating Income | $ | 60 | $ | 58 | 3% | $ | 183 | $ | 85 | NM | |||||||||
Operating Margin | 8.1 | % | 7.6 | % | 8.1 | % | 3.8 | % | |||||||||||
* First quarter 2011 included an $80 million reduction to operating income due to the UKBA LOC Adjustment as described in attachment F. | |||||||||||||||||||
NM - Not Meaningful | |||||||||||||||||||
Intelligence and Information Systems (IIS) had third quarter 2012 net sales of $742 million compared to $760 million in the third quarter 2011. IIS recorded $60 million of operating income compared to $58 million in the third quarter 2011.
During the quarter, IIS booked $170 million on a contract to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force. IIS also booked $559 million on a number of classified contracts.
Missile Systems | |||||||||||||||||||
3rd Quarter | Nine Months | ||||||||||||||||||
($ in millions) | 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||||||||
Net Sales | $ | 1,443 | $ | 1,413 | 2% | $ | 4,149 | $ | 4,108 | 1% | |||||||||
Operating Income | $ | 189 | $ | 178 | 6% | $ | 538 | $ | 484 | 11% | |||||||||
Operating Margin | 13.1 | % | 12.6 | % | 13.0 | % | 11.8 | % | |||||||||||
Missile Systems (MS) had third quarter 2012 net sales of $1,443 million compared to $1,413 million in the third quarter 2011. The increase in net sales was primarily driven by higher sales on the Standard Missile 3 (SM-3) program. MS recorded $189 million of operating income compared to $178 million in the third quarter 2011. The increase in operating income was primarily due to improved program performance.
During the quarter, MS booked $1,242 million for the production and development of SM-3 for the Missile Defense Agency (MDA). MS also booked $350 million for the production of Tube-launched, Optically-tracked, Wireless-guided (TOW) missiles for the U.S. Army and Marines, $101 million for Phalanx weapon systems for the U.S. Navy and an international customer, and $87 million on Miniature Air-Launch Decoy (MALD®) for the U.S. Air Force.
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Network Centric Systems | |||||||||||||||||||
3rd Quarter | Nine Months | ||||||||||||||||||
($ in millions) | 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||||||||
Net Sales | $ | 963 | $ | 1,104 | -13% | $ | 2,925 | $ | 3,360 | -13% | |||||||||
Operating Income | $ | 131 | $ | 162 | -19% | $ | 370 | $ | 492 | -25% | |||||||||
Operating Margin | 13.6 | % | 14.7 | % | 12.6 | % | 14.6 | % | |||||||||||
Network Centric Systems (NCS) had third quarter 2012 net sales of $963 million compared to $1,104 million in the third quarter 2011. The change in net sales, as expected, was primarily due to lower sales on U.S. Army production programs. NCS recorded $131 million of operating income compared to $162 million in the third quarter 2011. The change in operating income was primarily due to a change in contract mix and lower volume in the third quarter 2012.
During the quarter, NCS booked $70 million on the Family of Advanced Beyond-Line-of-Sight Terminals (FAB-T) program for the U.S. Air Force.
Space and Airborne Systems | |||||||||||||||||||
3rd Quarter | Nine Months | ||||||||||||||||||
($ in millions) | 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||||||||
Net Sales | $ | 1,322 | $ | 1,305 | 1% | $ | 3,956 | $ | 3,914 | 1% | |||||||||
Operating Income | $ | 190 | $ | 171 | 11% | $ | 567 | $ | 503 | 13% | |||||||||
Operating Margin | 14.4 | % | 13.1 | % | 14.3 | % | 12.9 | % | |||||||||||
Space and Airborne Systems (SAS) had third quarter 2012 net sales of $1,322 million compared to $1,305 million in the third quarter 2011. SAS recorded $190 million of operating income compared to $171 million in the third quarter 2011. The increase in operating income was primarily due to a change in contract mix and improved program performance.
During the quarter, SAS booked $105 million for an international sensor program. SAS also booked $382 million on a number of classified contracts.
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Technical Services | |||||||||||||||||||
3rd Quarter | Nine Months | ||||||||||||||||||
($ in millions) | 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||||||||
Net Sales | $ | 785 | $ | 817 | -4% | $ | 2,408 | $ | 2,467 | -2% | |||||||||
Operating Income | $ | 64 | $ | 75 | -15% | $ | 210 | $ | 228 | -8% | |||||||||
Operating Margin | 8.2 | % | 9.2 | % | 8.7 | % | 9.2 | % | |||||||||||
Technical Services (TS) had third quarter 2012 net sales of $785 million compared to $817 million in the third quarter 2011. 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 $64 million compared to $75 million in the third quarter 2011.
During the quarter, TS booked $246 million for work on the Air Traffic Control Optimum Training Solution (ATCOTS) contract for the Federal Aviation Administration (FAA). TS also booked $252 million on domestic training programs and $137 million on foreign training programs in support of Warfighter FOCUS activities.
About Raytheon
Raytheon Company, with 2011 sales of $25 billion and 71,000 employees worldwide, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 90 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 at @raytheon.
Conference Call on the Third Quarter 2012 Financial Results
Raytheon's financial results conference call will be held on Thursday, October 25, 2012 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.
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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.
# # #
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Attachment A | ||||||||||||||||
Raytheon Company | ||||||||||||||||
Preliminary Statement of Operations Information | ||||||||||||||||
Third Quarter 2012 | ||||||||||||||||
(In millions, except per share amounts) | Three Months Ended | Nine Months Ended | ||||||||||||||
30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | |||||||||||||
Net sales | $ | 6,045 | $ | 6,116 | $ | 17,975 | $ | 18,369 | ||||||||
Operating expenses | ||||||||||||||||
Cost of sales | 4,689 | 4,815 | 14,000 | 14,646 | ||||||||||||
Administrative and selling expenses | 389 | 426 | 1,198 | 1,288 | ||||||||||||
Research and development expenses | 181 | 153 | 543 | 454 | ||||||||||||
Total operating expenses | 5,259 | 5,394 | 15,741 | 16,388 | ||||||||||||
Operating income | 786 | 722 | 2,234 | 1,981 | ||||||||||||
Non-operating (income) expense, net | ||||||||||||||||
Interest expense | 49 | 41 | 149 | 127 | ||||||||||||
Interest income | (3 | ) | (5 | ) | (6 | ) | (12 | ) | ||||||||
Other (income) expense | (5 | ) | 14 | (10 | ) | 15 | ||||||||||
Total non-operating (income) expense, net | 41 | 50 | 133 | 130 | ||||||||||||
Income from continuing operations before taxes | 745 | 672 | 2,101 | 1,851 | ||||||||||||
Federal and foreign income taxes | 237 | 165 | 668 | 521 | ||||||||||||
Income from continuing operations | 508 | 507 | 1,433 | 1,330 | ||||||||||||
Income (loss) from discontinued operations, net of tax | (1 | ) | 3 | (4 | ) | 14 | ||||||||||
Net income | 507 | 510 | 1,429 | 1,344 | ||||||||||||
Less: Net income (loss) attributable to noncontrolling | ||||||||||||||||
interests in subsidiaries | 7 | 9 | 10 | 21 | ||||||||||||
Net income attributable to Raytheon Company | $ | 500 | $ | 501 | $ | 1,419 | $ | 1,323 | ||||||||
Basic earnings (loss) per share attributable to Raytheon | ||||||||||||||||
Company common stockholders: | ||||||||||||||||
Income from continuing operations | $ | 1.51 | $ | 1.42 | $ | 4.26 | $ | 3.70 | ||||||||
Income (loss) from discontinued operations, net of tax | — | 0.01 | (0.01 | ) | 0.04 | |||||||||||
Net income | 1.51 | 1.43 | 4.25 | 3.73 | ||||||||||||
Diluted earnings (loss) per share attributable to Raytheon | ||||||||||||||||
Company common stockholders: | ||||||||||||||||
Income from continuing operations | $ | 1.51 | $ | 1.42 | $ | 4.24 | $ | 3.68 | ||||||||
Income (loss) from discontinued operations, net of tax | — | 0.01 | (0.01 | ) | 0.04 | |||||||||||
Net income | 1.50 | 1.43 | 4.23 | 3.71 | ||||||||||||
Amounts attributable to Raytheon Company common | ||||||||||||||||
stockholders: | ||||||||||||||||
Income from continuing operations | $ | 501 | $ | 498 | $ | 1,423 | $ | 1,309 | ||||||||
Income (loss) from discontinued operations, net of tax | (1 | ) | 3 | (4 | ) | 14 | ||||||||||
Net income | $ | 500 | $ | 501 | $ | 1,419 | $ | 1,323 | ||||||||
Average shares outstanding | ||||||||||||||||
Basic | 332.0 | 350.5 | 334.3 | 354.3 | ||||||||||||
Diluted | 333.0 | 351.4 | 335.4 | 356.4 | ||||||||||||
Attachment B | |||||||||||||||||||||
Raytheon Company | |||||||||||||||||||||
Preliminary Segment Information | |||||||||||||||||||||
Third Quarter 2012 | |||||||||||||||||||||
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 | ||||||||||||||||||
30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | ||||||||||||||||
Integrated Defense Systems | $ | 1,275 | $ | 1,176 | $ | 240 | $ | 204 | 18.8 | % | 17.3 | % | |||||||||
Intelligence and Information Systems | 742 | 760 | 60 | 58 | 8.1 | % | 7.6 | % | |||||||||||||
Missile Systems | 1,443 | 1,413 | 189 | 178 | 13.1 | % | 12.6 | % | |||||||||||||
Network Centric Systems | 963 | 1,104 | 131 | 162 | 13.6 | % | 14.7 | % | |||||||||||||
Space and Airborne Systems | 1,322 | 1,305 | 190 | 171 | 14.4 | % | 13.1 | % | |||||||||||||
Technical Services | 785 | 817 | 64 | 75 | 8.2 | % | 9.2 | % | |||||||||||||
FAS/CAS Adjustment | — | — | (47 | ) | (75 | ) | |||||||||||||||
Corporate and Eliminations | (485 | ) | (459 | ) | (41 | ) | (51 | ) | |||||||||||||
Total | $ | 6,045 | $ | 6,116 | $ | 786 | $ | 722 | 13.0 | % | 11.8 | % | |||||||||
Operating Income | |||||||||||||||||||||
Net Sales | Operating Income | As a Percent of Net Sales | |||||||||||||||||||
(In millions, except percentages) | Nine Months Ended | Nine Months Ended | Nine Months Ended | ||||||||||||||||||
30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | ||||||||||||||||
Integrated Defense Systems | $ | 3,716 | $ | 3,667 | $ | 692 | $ | 600 | 18.6 | % | 16.4 | % | |||||||||
Intelligence and Information Systems | 2,257 | 2,262 | 183 | 85 | 8.1 | % | 3.8 | % | |||||||||||||
Missile Systems | 4,149 | 4,108 | 538 | 484 | 13.0 | % | 11.8 | % | |||||||||||||
Network Centric Systems | 2,925 | 3,360 | 370 | 492 | 12.6 | % | 14.6 | % | |||||||||||||
Space and Airborne Systems | 3,956 | 3,914 | 567 | 503 | 14.3 | % | 12.9 | % | |||||||||||||
Technical Services | 2,408 | 2,467 | 210 | 228 | 8.7 | % | 9.2 | % | |||||||||||||
FAS/CAS Adjustment | — | — | (188 | ) | (254 | ) | |||||||||||||||
Corporate and Eliminations | (1,436 | ) | (1,409 | ) | (138 | ) | (157 | ) | |||||||||||||
Total | $ | 17,975 | $ | 18,369 | $ | 2,234 | $ | 1,981 | 12.4 | % | 10.8 | % | |||||||||
Attachment C | |||||||||||||||
Raytheon Company | |||||||||||||||
Other Preliminary Information | |||||||||||||||
Third Quarter 2012 | |||||||||||||||
(In millions) | Funded Backlog | Total Backlog | |||||||||||||
30-Sep-12 | 31-Dec-11 | 30-Sep-12 | 31-Dec-11 | ||||||||||||
Integrated Defense Systems | $ | 6,757 | $ | 7,100 | $ | 8,404 | $ | 9,766 | |||||||
Intelligence and Information Systems | 1,051 | 829 | 4,002 | 4,366 | |||||||||||
Missile Systems | 6,436 | 6,205 | 9,784 | 8,570 | |||||||||||
Network Centric Systems | 3,159 | 3,267 | 3,941 | 4,160 | |||||||||||
Space and Airborne Systems | 3,553 | 3,104 | 6,091 | 5,864 | |||||||||||
Technical Services | 1,930 | 1,957 | 2,793 | 2,586 | |||||||||||
Total | $ | 22,886 | $ | 22,462 | $ | 35,015 | $ | 35,312 | |||||||
Bookings | Bookings | ||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | ||||||||||||
Total Bookings | $ | 7,293 | $ | 6,884 | $ | 18,612 | $ | 19,408 | |||||||
Attachment D | |||||||
Raytheon Company | |||||||
Preliminary Balance Sheet Information | |||||||
Third Quarter 2012 | |||||||
(In millions) | |||||||
30-Sep-12 | 31-Dec-11 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 3,032 | $ | 4,000 | |||
Short-term investments | 614 | — | |||||
Contracts in process, net | 4,789 | 4,526 | |||||
Inventories | 482 | 336 | |||||
Deferred taxes | 83 | 221 | |||||
Prepaid expenses and other current assets | 260 | 226 | |||||
Total current assets | 9,260 | 9,309 | |||||
Property, plant and equipment, net | 1,929 | 2,006 | |||||
Deferred taxes | 720 | 657 | |||||
Goodwill | 12,546 | 12,544 | |||||
Other assets, net | 1,242 | 1,338 | |||||
Total assets | $ | 25,697 | $ | 25,854 | |||
Liabilities and Equity | |||||||
Current liabilities | |||||||
Advance payments and billings in excess of costs incurred | $ | 2,169 | $ | 2,542 | |||
Accounts payable | 1,190 | 1,507 | |||||
Accrued employee compensation | 1,130 | 941 | |||||
Other accrued expenses | 1,179 | 1,140 | |||||
Total current liabilities | 5,668 | 6,130 | |||||
Accrued retiree benefits and other long-term liabilities | 6,192 | 6,774 | |||||
Deferred taxes | 3 | 5 | |||||
Long-term debt | 4,609 | 4,605 | |||||
Equity | |||||||
Raytheon Company stockholders' equity | |||||||
Common stock | 3 | 3 | |||||
Additional paid-in capital | 11,900 | 11,676 | |||||
Accumulated other comprehensive loss | (6,506 | ) | (7,001 | ) | |||
Treasury stock, at cost | (8,913 | ) | (8,153 | ) | |||
Retained earnings | 12,578 | 11,656 | |||||
Total Raytheon Company stockholders' equity | 9,062 | 8,181 | |||||
Noncontrolling interests in subsidiaries | 163 | 159 | |||||
Total equity | 9,225 | 8,340 | |||||
Total liabilities and equity | $ | 25,697 | $ | 25,854 | |||
Attachment E | |||||||||||||||
Raytheon Company | |||||||||||||||
Preliminary Cash Flow Information | |||||||||||||||
Third Quarter 2012 | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
30-Sep-12 | 02-Oct-11 | 30-Sep-12 | 02-Oct-11 | ||||||||||||
Net income | $ | 507 | $ | 510 | $ | 1,429 | $ | 1,344 | |||||||
Loss (Income) from discontinued operations, net of tax | 1 | (3 | ) | 4 | (14 | ) | |||||||||
Income from continuing operations | 508 | 507 | 1,433 | 1,330 | |||||||||||
Depreciation | 80 | 79 | 238 | 230 | |||||||||||
Amortization | 33 | 34 | 103 | 98 | |||||||||||
Working capital (excluding pension and income taxes)** | 432 | 257 | (911 | ) | (873 | ) | |||||||||
Other long-term liabilities | (12 | ) | (74 | ) | (38 | ) | (55 | ) | |||||||
Pension and other postretirement benefits | 179 | (268 | ) | 120 | (260 | ) | |||||||||
Other | (109 | ) | 310 | 18 | 346 | ||||||||||
Net operating cash flow from continuing operations | 1,111 | 845 | 963 | 816 | |||||||||||
Supplemental Cash Flow Information | |||||||||||||||
Capital spending | (67 | ) | (90 | ) | (204 | ) | (197 | ) | |||||||
Internal use software spending | (14 | ) | (24 | ) | (60 | ) | (74 | ) | |||||||
Acquisitions | (7 | ) | (1 | ) | (7 | ) | (551 | ) | |||||||
Dividends | (165 | ) | (152 | ) | (478 | ) | (440 | ) | |||||||
Repurchases of common stock | (125 | ) | (312 | ) | (725 | ) | (937 | ) | |||||||
** Working capital (excluding pension and income taxes) is a summation of changes in: contracts in process 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 Statements of Cash Flows. | |||||||||||||||
Attachment F | ||||||||||||||||||||||||||||||||||||
Raytheon Company | ||||||||||||||||||||||||||||||||||||
Non-GAAP Financial Measures - Adjusted EPS, Adjusted Income and Adjusted Operating Margin | ||||||||||||||||||||||||||||||||||||
Third Quarter 2012 | ||||||||||||||||||||||||||||||||||||
Adjusted EPS Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||
2012 | 2012 | |||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | Current Guidance | Prior Guidance | ||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Low end | High end | Low end | High end | |||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | of range | of range | of range | of range | |||||||||||||||||||||||||||||
Diluted earnings per share from continuing operations | ||||||||||||||||||||||||||||||||||||
attributable to Raytheon Company common stockholders | $ | 1.51 | $ | 1.42 | $ | 4.24 | $ | 3.68 | $ | 5.36 | $ | 5.46 | $ | 5.15 | $ | 5.30 | ||||||||||||||||||||
Per share impact of the FAS/CAS Adjustment (A) | 0.09 | 0.14 | 0.36 | 0.46 | 0.49 | 0.49 | 0.55 | 0.55 | ||||||||||||||||||||||||||||
Per share impact of the UK Border Agency (UKBA) LOC Adjustment (B) | — | — | — | 0.17 | — | — | — | — | ||||||||||||||||||||||||||||
Per share impact of the favorable tax settlement (C) | — | (0.17 | ) | — | (0.17 | ) | — | — | — | — | ||||||||||||||||||||||||||
Adjusted EPS (3), (4) | $ | 1.60 | $ | 1.39 | $ | 4.61 | $ | 4.13 | $ | 5.85 | $ | 5.95 | $ | 5.70 | $ | 5.85 | ||||||||||||||||||||
(A) | FAS/CAS Adjustment | $ | 47 | $ | 75 | $ | 188 | $ | 254 | $ | 252 | $ | 252 | $ | 284 | $ | 284 | |||||||||||||||||||
Tax effect (1) | (16 | ) | (26 | ) | (66 | ) | (89 | ) | (88 | ) | (88 | ) | (99 | ) | (99 | ) | ||||||||||||||||||||
After-tax impact | 31 | 49 | 122 | 165 | 164 | 164 | 185 | 185 | ||||||||||||||||||||||||||||
Diluted shares | 333.0 | 351.4 | 335.4 | 356.4 | 335.0 | 334.0 | 335.0 | 334.0 | ||||||||||||||||||||||||||||
Per share impact | $ | 0.09 | $ | 0.14 | $ | 0.36 | $ | 0.46 | $ | 0.49 | $ | 0.49 | $ | 0.55 | $ | 0.55 | ||||||||||||||||||||
(B) | UKBA LOC Adjustment | $ | — | $ | — | $ | — | $ | 80 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Tax effect (2) | — | — | — | (21 | ) | — | — | — | — | |||||||||||||||||||||||||||
After-tax impact | — | — | — | 59 | — | — | — | — | ||||||||||||||||||||||||||||
Diluted shares | — | — | — | 356.4 | — | — | — | — | ||||||||||||||||||||||||||||
Per share impact | $ | — | $ | — | $ | — | $ | 0.17 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
(C) | Favorable tax settlement | $ | — | $ | (60 | ) | $ | — | $ | (60 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Diluted shares | — | 351.4 | — | 356.4 | — | — | — | — | ||||||||||||||||||||||||||||
Per share impact | $ | — | $ | (0.17 | ) | $ | — | $ | (0.17 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Adjusted Income Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||||||
Income from continuing operations attributable to Raytheon | ||||||||||||||||||||||||||||||||||||
Company common stockholders | $ | 501 | $ | 498 | $ | 1,423 | $ | 1,309 | ||||||||||||||||||||||||||||
FAS/CAS Adjustment (1) | 31 | 49 | 122 | 165 | ||||||||||||||||||||||||||||||||
UKBA LOC Adjustment (2) | — | — | — | 59 | ||||||||||||||||||||||||||||||||
Favorable tax settlement | — | (60 | ) | — | (60 | ) | ||||||||||||||||||||||||||||||
Adjusted Income (3), (5) | $ | 532 | $ | 487 | $ | 1,545 | $ | 1,473 | ||||||||||||||||||||||||||||
Adjusted Operating Margin Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||
2012 | 2012 | |||||||||||||||||||||||||||||||||||
Current Guidance | Prior Guidance | |||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Low end | High end | Low end | High end | |||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | of range | of range | of range | of range | |||||||||||||||||||||||||||||
Operating Margin | 13.0 | % | 11.8 | % | 12.4 | % | 10.8 | % | 11.8 | % | 12.0 | % | 11.3 | % | 11.5 | % | ||||||||||||||||||||
Impact of the FAS/CAS Adjustment | 0.8 | % | 1.2 | % | 1.0 | % | 1.4 | % | 1.0 | % | 1.0 | % | 1.2 | % | 1.2 | % | ||||||||||||||||||||
Impact of the UKBA LOC Adjustment | — | % | — | % | — | % | 0.4 | % | — | % | — | % | — | % | — | % | ||||||||||||||||||||
Adjusted Operating Margin (3), (6) | 13.8 | % | 13.0 | % | 13.5 | % | 12.6 | % | 12.8 | % | 13.0 | % | 12.5 | % | 12.7 | % | ||||||||||||||||||||
(1 | ) | Tax effected at 35% federal statutory tax rate. | ||||||||||||||||||||||||||||||||||
(2 | ) | Tax effected at approximately 27% blended global tax rate. | ||||||||||||||||||||||||||||||||||
(3 | ) | 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 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. | ||||||||||||||||||||||||||||||||||
(4 | ) | 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. In addition to the FAS/CAS Adjustment, nine months ended 2011 Adjusted EPS also excludes the impact of the UKBA LOC Adjustment, as previously disclosed. This adjustment was based on the UKBA’s decision to draw down on the previously disclosed letters of credit provided by Raytheon Systems Limited (RSL). The determination of the validity of the draw down is now a subject of the ongoing arbitration proceedings related to the UKBA program. Three months and nine months ended 2011 Adjusted EPS also excludes the earnings per share impact of a favorable tax settlement in the third quarter of 2011 as a result of our receipt of final approval from the IRS and the U.S. Congressional Joint Committee on Taxation of the IRS examination of our tax returns for the 2006-2008 tax years. | ||||||||||||||||||||||||||||||||||
(5 | ) | 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. In addition to the FAS/CAS Adjustment, nine months ended 2011 Adjusted Income also excludes the after-tax impact of the UKBA LOC Adjustment, as described above. Three months and nine months ended 2011 Adjusted Income also excludes the impact of the favorable tax settlement in the third quarter of 2011, as described above. | ||||||||||||||||||||||||||||||||||
(6 | ) | 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. In addition to the FAS/CAS Adjustment, nine months ended 2011 Adjusted Operating Margin also excludes the impact of the UKBA LOC Adjustment, as described above. | ||||||||||||||||||||||||||||||||||