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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Raytheon Co | NYSE:RTN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 116.96 | 0 | 01:00:00 |
FORM 8-K |
Delaware (State of Incorporation) | 1-13699 (Commission File Number) | 95-1778500 (IRS Employer Identification Number) |
RAYTHEON COMPANY | ||||
Date: | July 23, 2015 | By: | /s/ Michael J. Wood | |
Michael J. Wood | ||||
Vice President, Controller and Chief Accounting Officer | ||||
Exhibit No. | Description | |
99.1 | Press release issued by Raytheon Company dated July 23, 2015. |
Raytheon Company | ||||
Global Headquarters | ||||
Waltham, Mass. | ||||
Investor Relations Contact | ||||
Todd Ernst | ||||
781.522.5141 | ||||
Media Contact | ||||
Pam Erickson | ||||
781.522.5822 |
• | Strong bookings of $7.6 billion; book-to-bill ratio of 1.30 |
• | Net sales of $5.8 billion, up 3 percent |
• | EPS from continuing operations of $1.65 |
• | Solid operating cash flow from continuing operations of $376 million |
• | Updated full-year 2015 guidance |
Summary Financial Results | |||||||||||||||||||
2nd Quarter | % | Six Months | % | ||||||||||||||||
($ in millions, except per share data) | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||
Bookings | $ | 7,580 | $ | 6,772 | 11.9% | $ | 12,051 | $ | 11,065 | 8.9% | |||||||||
Net Sales | $ | 5,848 | $ | 5,701 | 2.6% | $ | 11,136 | $ | 11,209 | -0.7% | |||||||||
Income from Continuing Operations attributable to Raytheon Company | $ | 504 | $ | 499 | 1.0% | $ | 1,055 | $ | 1,088 | -3.0% | |||||||||
EPS from Continuing Operations | $ | 1.65 | $ | 1.59 | 3.8% | $ | 3.44 | $ | 3.46 | -0.6% | |||||||||
Operating Cash Flow from Continuing Operations | $ | 376 | $ | 153 | $ | 431 | $ | 812 | |||||||||||
Workdays in Fiscal Reporting Calendar | 64 | 64 | 125 | 126 | |||||||||||||||
Raytheon|Websense Acquisition Accounting Adjustments and Acquisition Related Costs1 | |||||||
($ in millions, except per share data) | Operating Income | EPS | |||||
Deferred Revenue Adjustment2 | $ | (10 | ) | $ | (0.02 | ) | |
Amortization of Intangibles | $ | (8 | ) | $ | (0.01 | ) | |
Acquisition Related Costs | $ | (23 | ) | $ | (0.05 | ) | |
Amounts excluded from segment results | $ | (41 | ) | $ | (0.08 | ) | |
Restructuring Costs (recorded in Raytheon|Websense segment results) | $ | (5 | ) | $ | (0.01 | ) | |
Total | $ | (46 | ) | $ | (0.09 | ) | |
1See Attachment F for a reconciliation of how each of these items is calculated. | |||||||
2Deferred Revenue Adjustment represents the impact of fair value adjustments to deferred revenue related to Raytheon|Websense, including historical Raytheon Cyber Products acquisitions. |
($ in millions) | Period Ending | ||||||||||
Q2 2015 | Q2 2014 | 2014 | |||||||||
Backlog | $ | 34,494 | $ | 33,019 | $ | 33,571 | |||||
Funded Backlog | $ | 25,332 | $ | 23,580 | $ | 23,092 |
2015 Financial Outlook | |||
Current1 | Prior (4/23/15) | ||
Net Sales ($B) | 22.7 - 23.2* | 22.3 - 22.8 | |
RW Deferred Revenue Adjustment ($M)2 | (61)* | NA | |
RW Amortization of Intangibles ($M)2 | (58)* | NA | |
FAS/CAS Adjustment ($M) | 197 | 197 | |
Interest Expense, net ($M) | (225) - (235) | (225) - (235) | |
Diluted Shares (M) | 305 - 306* | 305 - 307 | |
Effective Tax Rate | Approx. 27.0% | Approx. 27.0% | |
EPS from Continuing Operations | $6.47 - $6.62* | $6.67 - $6.82 | |
Operating Cash Flow from Continuing Operations ($B) | 2.5 - 2.7* | 2.4 - 2.7 | |
1Updated to reflect the impact of the creation of Raytheon|Websense (RW) on May 29, 2015. | |||
2RW Deferred Revenue Adjustment and RW Amortization of Intangibles represent the unfavorable impact of the acquisition accounting adjustments to record acquired deferred revenue at fair value and the amortization of acquired intangible assets, respectively, related to Raytheon|Websense, including historical Raytheon Cyber Products acquisitions | |||
NA = Not Applicable | |||
* Denotes change from prior guidance. |
Integrated Defense Systems | |||||||||||||||||||
2nd Quarter | Six Months | ||||||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||
Net Sales | $ | 1,698 | $ | 1,549 | 10% | $ | 3,131 | $ | 3,030 | 3% | |||||||||
Operating Income | $ | 215 | $ | 219 | -2% | $ | 410 | $ | 445 | -8% | |||||||||
Operating Margin | 12.7 | % | 14.1 | % | 13.1 | % | 14.7 | % |
Intelligence, Information and Services1 | |||||||||||||||||||
2nd Quarter | Six Months | ||||||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||
Net Sales | $ | 1,496 | $ | 1,493 | — | $ | 2,868 | $ | 2,922 | -2% | |||||||||
Operating Income2 | $ | 108 | $ | 123 | -12% | $ | 392 | $ | 246 | NM | |||||||||
Operating Margin | 7.2 | % | 8.2 | % | 13.7 | % | 8.4 | % | |||||||||||
1 Revised to exclude Raytheon Cyber Products (RCP), formerly part of IIS. As discussed on page 2, RCP was combined with Websense, Inc. to create Raytheon|Websense, a new commercial cybersecurity joint venture, which is reported as a separate business segment. | |||||||||||||||||||
2 Six Months 2015 operating income includes the favorable $181 million impact of the first quarter 2015 eBorders settlement. | |||||||||||||||||||
NM = Not Meaningful |
Missile Systems | |||||||||||||||||||
2nd Quarter | Six Months | ||||||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||
Net Sales | $ | 1,559 | $ | 1,539 | 1% | $ | 3,032 | $ | 3,113 | -3% | |||||||||
Operating Income | $ | 183 | $ | 190 | -4% | $ | 390 | $ | 398 | -2% | |||||||||
Operating Margin | 11.7 | % | 12.3 | % | 12.9 | % | 12.8 | % |
Space and Airborne Systems | |||||||||||||||||||
2nd Quarter | Six Months | ||||||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||
Net Sales | $ | 1,416 | $ | 1,505 | -6% | $ | 2,774 | $ | 2,903 | -4% | |||||||||
Operating Income | $ | 186 | $ | 202 | -8% | $ | 359 | $ | 392 | -8% | |||||||||
Operating Margin | 13.1 | % | 13.4 | % | 12.9 | % | 13.5 | % |
Raytheon|Websense1 | |||||||||||||||||||
2nd Quarter | Six Months | ||||||||||||||||||
($ in millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||
Net Sales | $ | 57 | $ | 28 | 104% | $ | 81 | $ | 51 | 59% | |||||||||
Operating Income/(loss) | $ | (1 | ) | $ | 3 | -133% | $ | (1 | ) | $ | 7 | -114% | |||||||
Operating Margin | (1.8 | )% | 10.7 | % | (1.2 | )% | 13.7 | % | |||||||||||
1 Excludes the unfavorable impact of the Raytheon|Websense acquisition accounting adjustments and certain acquisition related costs. See page 2 for more information on these items. |
Attachment A | ||||||||||||||||
Raytheon Company | ||||||||||||||||
Preliminary Statement of Operations Information | ||||||||||||||||
Second Quarter 2015 | ||||||||||||||||
(In millions, except per share amounts) | Three Months Ended | Six Months Ended | ||||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | |||||||||||||
Net sales | $ | 5,848 | $ | 5,701 | $ | 11,136 | $ | 11,209 | ||||||||
Operating expenses | ||||||||||||||||
Cost of sales | 4,525 | 4,301 | 8,358 | 8,462 | ||||||||||||
General and administrative expenses | 675 | 641 | 1,290 | 1,200 | ||||||||||||
Total operating expenses | 5,200 | 4,942 | 9,648 | 9,662 | ||||||||||||
Operating income | 648 | 759 | 1,488 | 1,547 | ||||||||||||
Non-operating (income) expense, net | ||||||||||||||||
Interest expense | 59 | 54 | 117 | 105 | ||||||||||||
Interest income | (2 | ) | (2 | ) | (6 | ) | (5 | ) | ||||||||
Other (income) expense, net | (1 | ) | (6 | ) | (3 | ) | (6 | ) | ||||||||
Total non-operating (income) expense, net | 56 | 46 | 108 | 94 | ||||||||||||
Income from continuing operations before taxes | 592 | 713 | 1,380 | 1,453 | ||||||||||||
Federal and foreign income taxes | 90 | 212 | 324 | 359 | ||||||||||||
Income from continuing operations | 502 | 501 | 1,056 | 1,094 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 1 | 52 | 1 | 59 | ||||||||||||
Net income | 503 | 553 | 1,057 | 1,153 | ||||||||||||
Less: Net income (loss) attributable to noncontrolling | ||||||||||||||||
interests in subsidiaries | (2 | ) | 2 | 1 | 6 | |||||||||||
Net income attributable to Raytheon Company | $ | 505 | $ | 551 | $ | 1,056 | $ | 1,147 | ||||||||
Basic earnings (loss) per share attributable to Raytheon | ||||||||||||||||
Company common stockholders: | ||||||||||||||||
Income from continuing operations | $ | 1.65 | $ | 1.59 | $ | 3.44 | $ | 3.47 | ||||||||
Income (loss) from discontinued operations, net of tax | — | 0.17 | — | 0.19 | ||||||||||||
Net income | 1.65 | 1.76 | 3.44 | 3.65 | ||||||||||||
Diluted earnings (loss) per share attributable to Raytheon | ||||||||||||||||
Company common stockholders: | ||||||||||||||||
Income from continuing operations | $ | 1.65 | $ | 1.59 | $ | 3.44 | $ | 3.46 | ||||||||
Income (loss) from discontinued operations, net of tax | — | 0.17 | — | 0.19 | ||||||||||||
Net income | 1.65 | 1.76 | 3.44 | 3.65 | ||||||||||||
Amounts attributable to Raytheon Company common | ||||||||||||||||
stockholders: | ||||||||||||||||
Income from continuing operations | $ | 504 | $ | 499 | $ | 1,055 | $ | 1,088 | ||||||||
Income (loss) from discontinued operations, net of tax | 1 | 52 | 1 | 59 | ||||||||||||
Net income | $ | 505 | $ | 551 | $ | 1,056 | $ | 1,147 | ||||||||
Average shares outstanding | ||||||||||||||||
Basic | 305.4 | 312.9 | 306.8 | 313.9 | ||||||||||||
Diluted | 305.7 | 313.5 | 307.2 | 314.6 |
Attachment B | ||||||||||||||||||||||
Raytheon Company | ||||||||||||||||||||||
Preliminary Segment Information | ||||||||||||||||||||||
Second Quarter 2015 | ||||||||||||||||||||||
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 | |||||||||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | |||||||||||||||||
Integrated Defense Systems | $ | 1,698 | $ | 1,549 | $ | 215 | $ | 219 | 12.7 | % | 14.1 | % | ||||||||||
Intelligence, Information and Services | 1,496 | 1,493 | 108 | 123 | 7.2 | % | 8.2 | % | ||||||||||||||
Missile Systems | 1,559 | 1,539 | 183 | 190 | 11.7 | % | 12.3 | % | ||||||||||||||
Space and Airborne Systems | 1,416 | 1,505 | 186 | 202 | 13.1 | % | 13.4 | % | ||||||||||||||
Raytheon|Websense(1) | 57 | 28 | (1 | ) | 3 | (1.8 | )% | 10.7 | % | |||||||||||||
Eliminations | (368 | ) | (413 | ) | (39 | ) | (42 | ) | ||||||||||||||
Total business segment | 5,858 | 5,701 | 652 | 695 | 11.1 | % | 12.2 | % | ||||||||||||||
Raytheon|Websense Acquisition Accounting Adjustments | (10 | ) | — | (18 | ) | (1 | ) | |||||||||||||||
FAS/CAS Adjustment | — | — | 49 | 87 | ||||||||||||||||||
Corporate | — | — | (35 | ) | (22 | ) | ||||||||||||||||
Total | $ | 5,848 | $ | 5,701 | $ | 648 | $ | 759 | 11.1 | % | 13.3 | % | ||||||||||
Operating Income | ||||||||||||||||||||||
Net Sales | Operating Income | As a Percent of Net Sales | ||||||||||||||||||||
(In millions, except percentages) | Six Months Ended | Six Months Ended | Six Months Ended | |||||||||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | |||||||||||||||||
Integrated Defense Systems | $ | 3,131 | $ | 3,030 | $ | 410 | $ | 445 | 13.1 | % | 14.7 | % | ||||||||||
Intelligence, Information and Services | 2,868 | 2,922 | 392 | 246 | 13.7 | % | 8.4 | % | ||||||||||||||
Missile Systems | 3,032 | 3,113 | 390 | 398 | 12.9 | % | 12.8 | % | ||||||||||||||
Space and Airborne Systems | 2,774 | 2,903 | 359 | 392 | 12.9 | % | 13.5 | % | ||||||||||||||
Raytheon|Websense(1) | 81 | 51 | (1 | ) | 7 | (1.2 | )% | 13.7 | % | |||||||||||||
Eliminations | (740 | ) | (810 | ) | (76 | ) | (82 | ) | ||||||||||||||
Total business segment | 11,146 | 11,209 | 1,474 | 1,406 | 13.2 | % | 12.5 | % | ||||||||||||||
Raytheon|Websense Acquisition Accounting Adjustments | (10 | ) | — | (20 | ) | (3 | ) | |||||||||||||||
FAS/CAS Adjustment | — | — | 98 | 174 | ||||||||||||||||||
Corporate | — | — | (64 | ) | (30 | ) | ||||||||||||||||
Total | $ | 11,136 | $ | 11,209 | $ | 1,488 | $ | 1,547 | 13.4 | % | 13.8 | % | ||||||||||
(1) Excludes the unfavorable impact of the Raytheon|Websense acquisition accounting adjustments and certain acquisition related costs. See Attachment F for more information on these items. |
Attachment B - Pro Forma | ||||||||||||||||||||||||||||
Raytheon Company | ||||||||||||||||||||||||||||
Pro Forma Segment Information | ||||||||||||||||||||||||||||
Full Year 2013, Quarters within and Full Year 2014, and First Quarter 2015 | ||||||||||||||||||||||||||||
As previously announced, on May 29, 2015, we acquired Websense, Inc. from Vista Equity Partners and combined it with Raytheon Cyber Products (RCP), formerly part of our IIS segment, to create Raytheon|Websense, a new cybersecurity joint venture company (with Vista Equity Partners). In connection with these transactions, we reorganized our operating and reporting structure with Raytheon|Websense as our fifth reporting segment. The amounts, discussion and presentation of our business segments, including corporate and eliminations for intersegment activity, as set forth in our Form 10-Q, reflect our new structure. The Raytheon|Websense results reflect RCP results for all periods and Websense results after the acquisition date of May 29, 2015. | ||||||||||||||||||||||||||||
Net Sales | Net Sales | |||||||||||||||||||||||||||
(In millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
29-Mar-15 | 31-Dec-14 | 28-Sep-14 | 29-Jun-14 | 30-Mar-14 | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||
Integrated Defense Systems | $ | 1,433 | $ | 1,627 | $ | 1,428 | $ | 1,549 | $ | 1,481 | $ | 6,085 | $ | 6,489 | ||||||||||||||
Intelligence, Information and Services | 1,372 | 1,517 | 1,450 | 1,493 | 1,429 | 5,889 | 5,970 | |||||||||||||||||||||
Missile Systems | 1,473 | 1,719 | 1,477 | 1,539 | 1,574 | 6,309 | 6,599 | |||||||||||||||||||||
Space and Airborne Systems | 1,358 | 1,660 | 1,509 | 1,505 | 1,398 | 6,072 | 6,371 | |||||||||||||||||||||
Raytheon|Websense(1) | 24 | 23 | 30 | 28 | 23 | 104 | 87 | |||||||||||||||||||||
Eliminations | (372 | ) | (403 | ) | (420 | ) | (413 | ) | (397 | ) | (1,633 | ) | (1,810 | ) | ||||||||||||||
Total business segment | 5,288 | 6,143 | 5,474 | 5,701 | 5,508 | 22,826 | 23,706 | |||||||||||||||||||||
Raytheon|Websense Acquisition Accounting Adjustments | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | $ | 5,288 | $ | 6,143 | $ | 5,474 | $ | 5,701 | $ | 5,508 | $ | 22,826 | $ | 23,706 | ||||||||||||||
Operating Income | Operating Income | |||||||||||||||||||||||||||
(In millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
29-Mar-15 | 31-Dec-14 | 28-Sep-14 | 29-Jun-14 | 30-Mar-14 | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||
Integrated Defense Systems | $ | 195 | $ | 299 | $ | 230 | $ | 219 | $ | 226 | $ | 974 | $ | 1,115 | ||||||||||||||
Intelligence, Information and Services | 284 | 131 | 118 | 123 | 123 | 495 | 507 | |||||||||||||||||||||
Missile Systems | 207 | 212 | 190 | 190 | 208 | 800 | 830 | |||||||||||||||||||||
Space and Airborne Systems | 173 | 217 | 237 | 202 | 190 | 846 | 920 | |||||||||||||||||||||
Raytheon|Websense(1) | — | (1 | ) | 5 | 3 | 4 | 11 | 13 | ||||||||||||||||||||
Eliminations | (37 | ) | (41 | ) | (43 | ) | (42 | ) | (40 | ) | (166 | ) | (170 | ) | ||||||||||||||
Total business segment | 822 | 817 | 737 | 695 | 711 | 2,960 | 3,215 | |||||||||||||||||||||
Raytheon|Websense Acquisition Accounting Adjustments | (2 | ) | (2 | ) | (1 | ) | (1 | ) | (2 | ) | (6 | ) | (9 | ) | ||||||||||||||
FAS/CAS Adjustment | 49 | 70 | 42 | 87 | 87 | 286 | (249 | ) | ||||||||||||||||||||
Corporate | (29 | ) | (16 | ) | (15 | ) | (22 | ) | (8 | ) | (61 | ) | (19 | ) | ||||||||||||||
Total | $ | 840 | $ | 869 | $ | 763 | $ | 759 | $ | 788 | $ | 3,179 | $ | 2,938 | ||||||||||||||
Operating Income | Operating Income | |||||||||||||||||||||||||||
As a Percentage of Net Sales | As a Percentage of Net Sales | |||||||||||||||||||||||||||
(In millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
29-Mar-15 | 31-Dec-14 | 28-Sep-14 | 29-Jun-14 | 30-Mar-14 | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||
Integrated Defense Systems | 13.6% | 18.4% | 16.1% | 14.1% | 15.3% | 16.0% | 17.2% | |||||||||||||||||||||
Intelligence, Information and Services | 20.7% | 8.6% | 8.1% | 8.2% | 8.6% | 8.4% | 8.5% | |||||||||||||||||||||
Missile Systems | 14.1% | 12.3% | 12.9% | 12.3% | 13.2% | 12.7% | 12.6% | |||||||||||||||||||||
Space and Airborne Systems | 12.7% | 13.1% | 15.7% | 13.4% | 13.6% | 13.9% | 14.4% | |||||||||||||||||||||
Raytheon|Websense(1) | —% | (4.3)% | 16.7% | 10.7% | 17.4% | 10.6% | 14.9% | |||||||||||||||||||||
Eliminations | 9.9% | 10.2% | 10.2% | 10.2% | 10.1% | 10.2% | 9.4% | |||||||||||||||||||||
Total business segment | 15.5% | 13.3% | 13.5% | 12.2% | 12.9% | 13.0% | 13.6% | |||||||||||||||||||||
Raytheon|Websense Acquisition Accounting Adjustments | ||||||||||||||||||||||||||||
FAS/CAS Adjustment | ||||||||||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||||
Total | 15.9% | 14.1% | 13.9% | 13.3% | 14.3% | 13.9% | 12.4% | |||||||||||||||||||||
(1) Excludes the unfavorable impact of the Raytheon|Websense acquisition accounting adjustments and certain acquisition related costs. See Attachment F for more information on these items. |
Attachment C | |||||||||||||||||||||||||||
Raytheon Company | |||||||||||||||||||||||||||
Other Preliminary Information | |||||||||||||||||||||||||||
Second Quarter 2015 | |||||||||||||||||||||||||||
(In millions) | Funded Backlog | Total Backlog | |||||||||||||||||||||||||
28-Jun-15 | 31-Dec-14 | 28-Jun-15 | 31-Dec-14 | ||||||||||||||||||||||||
Integrated Defense Systems | $ | 10,398 | $ | 8,939 | $ | 12,544 | $ | 11,495 | |||||||||||||||||||
Intelligence, Information and Services | 2,739 | 2,854 | 5,423 | 5,825 | |||||||||||||||||||||||
Missile Systems | 7,316 | 6,992 | 9,880 | 9,269 | |||||||||||||||||||||||
Space and Airborne Systems | 4,456 | 4,259 | 6,221 | 6,930 | |||||||||||||||||||||||
Raytheon|Websense | 423 | 48 | 426 | 52 | |||||||||||||||||||||||
Total | $ | 25,332 | $ | 23,092 | $ | 34,494 | $ | 33,571 | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | ||||||||||||||||||||||||
Total Bookings | $ | 7,580 | $ | 6,772 | $ | 12,051 | $ | 11,065 | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | ||||||||||||||||||||||||
Administrative and selling expenses | $ | 489 | $ | 517 | $ | 962 | $ | 965 | |||||||||||||||||||
Research and development expenses | $ | 186 | $ | 124 | $ | 328 | $ | 235 | |||||||||||||||||||
Total general and administrative expenses | $ | 675 | $ | 641 | $ | 1,290 | $ | 1,200 | |||||||||||||||||||
Attachment C - Pro Forma | |||||||||||||||||||||||||||
Raytheon Company | |||||||||||||||||||||||||||
Pro Forma Other Information | |||||||||||||||||||||||||||
Full Year 2013, Quarters within and Full Year 2014, and First Quarter 2015 | |||||||||||||||||||||||||||
As previously announced, on May 29, 2015, we acquired Websense, Inc. from Vista Equity Partners and combined it with Raytheon Cyber Products (RCP), formerly part of our IIS segment, to create Raytheon|Websense, a new cybersecurity joint venture company (with Vista Equity Partners). In connection with these transactions, we reorganized our operating and reporting structure with Raytheon|Websense as our fifth reporting segment. The amounts, discussion and presentation of our business segments, including corporate and eliminations for intersegment activity, as set forth in our Form 10-Q, reflect our new structure. The Raytheon|Websense results reflect RCP results for all periods and Websense results after the acquisition date of May 29, 2015. | |||||||||||||||||||||||||||
(In millions) | Funded Backlog | Total Backlog | |||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||||
Integrated Defense Systems | $ | 8,939 | $ | 9,397 | $ | 11,495 | $ | 10,916 | |||||||||||||||||||
Intelligence, Information and Services | 2,854 | 2,550 | 5,825 | 5,811 | |||||||||||||||||||||||
Missile Systems | 6,992 | 6,859 | 9,269 | 9,162 | |||||||||||||||||||||||
Space and Airborne Systems | 4,259 | 4,166 | 6,930 | 7,751 | |||||||||||||||||||||||
Raytheon|Websense | 48 | 42 | 52 | 45 | |||||||||||||||||||||||
Total | $ | 23,092 | $ | 23,014 | $ | 33,571 | $ | 33,685 | |||||||||||||||||||
Bookings | Bookings | ||||||||||||||||||||||||||
(In millions) | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
29-Mar-15 | 31-Dec-14 | 28-Sep-14 | 29-Jun-14 | 30-Mar-14 | 31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||
Integrated Defense Systems | $ | 1,483 | $ | 3,352 | $ | 1,764 | $ | 657 | $ | 1,180 | $ | 6,953 | $ | 5,869 | |||||||||||||
Intelligence, Information and Services | 933 | 993 | 1,185 | 2,030 | 997 | 5,205 | 4,964 | ||||||||||||||||||||
Missile Systems | 1,405 | 1,388 | 1,430 | 2,482 | 1,083 | 6,383 | 5,221 | ||||||||||||||||||||
Space and Airborne Systems | 631 | 1,356 | 1,454 | 1,581 | 1,019 | 5,410 | 5,996 | ||||||||||||||||||||
Raytheon|Websense | 19 | 20 | 45 | 22 | 14 | 101 | 82 | ||||||||||||||||||||
Total | $ | 4,471 | $ | 7,109 | $ | 5,878 | $ | 6,772 | $ | 4,293 | $ | 24,052 | $ | 22,132 | |||||||||||||
Attachment D | |||||||
Raytheon Company | |||||||
Preliminary Balance Sheet Information | |||||||
Second Quarter 2015 | |||||||
(In millions) | |||||||
28-Jun-15 | 31-Dec-14 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 1,828 | $ | 3,222 | |||
Short-term investments | 666 | 1,497 | |||||
Contracts in process, net | 5,514 | 4,985 | |||||
Inventories | 519 | 414 | |||||
Prepaid expenses and other current assets | 177 | 174 | |||||
Total current assets | 8,704 | 10,292 | |||||
Property, plant and equipment, net | 1,929 | 1,935 | |||||
Goodwill | 14,683 | 13,061 | |||||
Other assets, net | 3,121 | 2,612 | |||||
Total assets | $ | 28,437 | $ | 27,900 | |||
Liabilities, Redeemable Noncontrolling Interest, and Equity | |||||||
Current liabilities | |||||||
Advance payments and billings in excess of costs incurred | $ | 1,975 | $ | 2,284 | |||
Accounts payable | 1,171 | 1,250 | |||||
Accrued employee compensation | 964 | 1,059 | |||||
Accrued income taxes | 103 | 31 | |||||
Other current liabilities | 1,428 | 1,306 | |||||
Total current liabilities | 5,641 | 5,930 | |||||
Accrued retiree benefits and other long-term liabilities | 6,865 | 6,919 | |||||
Long-term debt | 5,333 | 5,330 | |||||
Redeemable noncontrolling interest | 343 | — | |||||
Equity | |||||||
Raytheon Company stockholders' equity | |||||||
Common stock | 3 | 3 | |||||
Additional paid-in capital | 834 | 1,309 | |||||
Accumulated other comprehensive loss | (7,095 | ) | (7,458 | ) | |||
Retained earnings | 16,314 | 15,671 | |||||
Total Raytheon Company stockholders' equity | 10,056 | 9,525 | |||||
Noncontrolling interests in subsidiaries | 199 | 196 | |||||
Total equity | 10,255 | 9,721 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 28,437 | $ | 27,900 |
Attachment E | |||||||||||||||
Raytheon Company | |||||||||||||||
Preliminary Cash Flow Information | |||||||||||||||
Second Quarter 2015 | |||||||||||||||
(In millions) | Three Months Ended | Six Months Ended | |||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | ||||||||||||
Net income | $ | 503 | $ | 553 | $ | 1,057 | $ | 1,153 | |||||||
(Income) loss from discontinued operations, net of tax | (1 | ) | (52 | ) | (1 | ) | (59 | ) | |||||||
Income from continuing operations | 502 | 501 | 1,056 | 1,094 | |||||||||||
Depreciation | 76 | 76 | 149 | 149 | |||||||||||
Amortization | 40 | 33 | 74 | 67 | |||||||||||
Working capital (excluding pension and income taxes)* | 56 | (181 | ) | (1,076 | ) | (711 | ) | ||||||||
Other long-term liabilities | (38 | ) | (5 | ) | (43 | ) | (17 | ) | |||||||
Pension and other postretirement benefit plans | 141 | (208 | ) | 408 | (28 | ) | |||||||||
Other, net | (401 | ) | (63 | ) | (137 | ) | 258 | ||||||||
Net operating cash flow from continuing operations | $ | 376 | $ | 153 | $ | 431 | $ | 812 | |||||||
Supplemental Cash Flow Information | |||||||||||||||
Capital spending | $ | (88 | ) | $ | (62 | ) | $ | (143 | ) | $ | (101 | ) | |||
Internal use software spending | (13 | ) | (14 | ) | (26 | ) | (26 | ) | |||||||
Acquisitions | (1,886 | ) | — | (1,892 | ) | — | |||||||||
Purchases of short-term investments | — | (26 | ) | (148 | ) | (1,371 | ) | ||||||||
Sales of short-term investments | 74 | 425 | 209 | 882 | |||||||||||
Maturities of short-term investments | 524 | 195 | 774 | 595 | |||||||||||
Dividends | (205 | ) | (189 | ) | (391 | ) | (363 | ) | |||||||
Repurchases of common stock under stock repurchase programs | (200 | ) | (250 | ) | (500 | ) | (450 | ) | |||||||
Sale of noncontrolling interest in Raytheon|Websense | 343 | — | 343 | — | |||||||||||
Cash Flow related to Raytheon|Websense Transaction | |||||||||||||||
Acquisition of Websense | $ | (1,891 | ) | $ | — | $ | (1,891 | ) | $ | — | |||||
Sale of noncontrolling interest in Raytheon|Websense | 343 | — | 343 | — | |||||||||||
Net cash flow related to Raytheon|Websense | $ | (1,548 | ) | $ | — | $ | (1,548 | ) | $ | — | |||||
* 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 current liabilities from the Consolidated Statements of Cash Flows. | |||||||||||||||
Attachment F | |||||||||||||||||||
Raytheon Company | |||||||||||||||||||
Supplemental EPS Information | |||||||||||||||||||
Second Quarter 2015 | |||||||||||||||||||
(In millions, except per share amounts) | Three Months Ended | Six Months Ended | |||||||||||||||||
28-Jun-15 | 29-Jun-14 | 28-Jun-15 | 29-Jun-14 | ||||||||||||||||
Per share impact of the FAS/CAS Adjustment (A) | $ | 0.10 | $ | 0.18 | $ | 0.21 | $ | 0.36 | |||||||||||
Per share impact of Raytheon|Websense deferred revenue adjustment (B) | (0.02 | ) | — | (0.02 | ) | — | |||||||||||||
Per share impact of Raytheon|Websense amortization of acquired intangible assets (C) | (0.01 | ) | — | (0.02 | ) | — | |||||||||||||
Per share impact of Raytheon|Websense acquisition related costs (D) | (0.05 | ) | — | (0.05 | ) | — | |||||||||||||
Per share impact of Raytheon|Websense restructuring costs (E) | (0.01 | ) | — | (0.01 | ) | — | |||||||||||||
Per share impact of the IRS tax settlement (F) | 0.29 | — | 0.29 | — | |||||||||||||||
(A) | FAS/CAS Adjustment | $ | 49 | $ | 87 | $ | 98 | $ | 174 | ||||||||||
Tax effect (at 35% statutory rate) | (17 | ) | (31 | ) | (34 | ) | (61 | ) | |||||||||||
After-tax impact | 32 | 56 | 64 | 113 | |||||||||||||||
Diluted shares | 305.7 | 313.5 | 307.2 | 314.6 | |||||||||||||||
Per share impact | $ | 0.10 | $ | 0.18 | $ | 0.21 | $ | 0.36 | |||||||||||
(B) | Raytheon|Websense deferred revenue adjustment (1) | $ | (10 | ) | $ | — | $ | (10 | ) | $ | — | ||||||||
Amount attributable to Raytheon Company (80.3%) | (8 | ) | — | (8 | ) | — | |||||||||||||
Tax effect (at 35% statutory rate) | 3 | — | 3 | — | |||||||||||||||
After-tax impact | (5 | ) | — | (5 | ) | — | |||||||||||||
Diluted shares | 305.7 | 313.5 | 307.2 | 314.6 | |||||||||||||||
Per share impact | $ | (0.02 | ) | $ | — | $ | (0.02 | ) | $ | — | |||||||||
(C) | Raytheon|Websense amortization of intangibles(1) | $ | (8 | ) | $ | (1 | ) | $ | (10 | ) | $ | (3 | ) | ||||||
Amount attributable to Raytheon Company (80.3%) | (6 | ) | (1 | ) | (8 | ) | (2 | ) | |||||||||||
Tax effect (at 35% statutory rate) | 2 | — | 3 | 1 | |||||||||||||||
After-tax impact | (4 | ) | (1 | ) | (5 | ) | (1 | ) | |||||||||||
Diluted shares | 305.7 | 313.5 | 307.2 | 314.6 | |||||||||||||||
Per share impact | $ | (0.01 | ) | $ | — | $ | (0.02 | ) | $ | — | |||||||||
(D) | Raytheon|Websense acquisition related costs | $ | (23 | ) | $ | — | $ | (25 | ) | $ | — | ||||||||
Amount attributable to Raytheon Company (80.3%) (2) | (22 | ) | — | (24 | ) | — | |||||||||||||
Tax effect (at 35% statutory rate) | 8 | — | 8 | — | |||||||||||||||
After-tax impact | (14 | ) | — | (16 | ) | — | |||||||||||||
Diluted shares | 305.7 | 313.5 | 307.2 | 314.6 | |||||||||||||||
Per share impact | $ | (0.05 | ) | $ | — | $ | (0.05 | ) | $ | — | |||||||||
(E) | Raytheon|Websense restructuring costs | $ | (5 | ) | $ | — | $ | (5 | ) | $ | — | ||||||||
Amount attributable to Raytheon Company (80.3%) | (4 | ) | — | (4 | ) | — | |||||||||||||
Tax effect (at 35% statutory rate) | 1 | — | 1 | — | |||||||||||||||
After-tax impact | (3 | ) | — | (3 | ) | — | |||||||||||||
Diluted shares | 305.7 | 313.5 | 307.2 | 314.6 | |||||||||||||||
Per share impact | $ | (0.01 | ) | $ | — | $ | (0.01 | ) | $ | — | |||||||||
(F) | IRS tax settlement | $ | 88 | $ | — | $ | 88 | $ | — | ||||||||||
Diluted shares | 305.7 | 313.5 | 307.2 | 314.6 | |||||||||||||||
Per share impact | $ | 0.29 | $ | — | $ | 0.29 | $ | — | |||||||||||
(1) | Raytheon|Websense deferred revenue adjustment and Raytheon|Websense amortization of intangibles represent the unfavorable impact of the acquisition accounting adjustments to record acquired deferred revenue at fair value and the amortization of acquired intangible assets, respectively, related to Raytheon|Websense, including historical Raytheon Cyber Products acquisitions. | ||||||||||||||||||
(2) | Raytheon|Websense acquisition related costs include $6 million of costs for the three and six months ended June 28, 2015 for which 80.3% is attributable to Raytheon Company. The remaining $17 million and $19 million for the three and six months ended June 28, 2015, respectively, were 100% attributable to Raytheon Company. |
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