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Raytheon Reports Fourth Quarter 2003 EPS of $0.52 from Continuing Operations
    -- Earnings per share of $0.49 including the impact of discontinued
       operations
    -- Government and Defense bookings of  $7.1 billion in the quarter and $20
       billion for the year, backlog at all-time high of $25 billion
    -- Free cash flow from continuing operations of $906 million in the
       quarter and $1.6 billion for the year

WALTHAM, Mass., Jan. 27 /PRNewswire-FirstCall/-- Raytheon Company (NYSE: RTN) reported fourth quarter 2003 income from continuing operations of $217 million or $0.52 per diluted share compared to $155 million or $0.38 per diluted share in the fourth quarter 2002. Income from continuing operations includes a pre-tax charge of $77 million from the early redemption of debt and a $55 million gain from the sale of its remaining investment in the Company's former aviation support business, both of which were previously announced. Non-cash pension expense (FAS/CAS pension adjustment) negatively impacted the quarter by $0.14 per diluted share on a year-over-year basis.

Fourth quarter 2003 net income was $205 million or $0.49 per diluted share compared to a net loss of $68 million or $0.17 per diluted share in 2002. Net income for the fourth quarter of 2003 includes a $12 million after-tax loss in discontinued operations or $0.03 per diluted share versus a $223 million after-tax loss in discontinued operations or $0.54 per diluted share in 2002.

Net sales for the fourth quarter 2003 were $5.1 billion, up from $4.7 billion in the comparable period in 2002. The fourth quarter 2003 includes $177 million of sales resulting from the previously announced consolidation of Flight Options LLC. Government and Defense sales for the quarter (after the elimination of intercompany sales) increased 5 percent to $4.2 billion from $4.0 billion in the comparable quarter. Integrated Defense Systems and Missile Systems generated double-digit sales growth in the quarter.

Free cash flow from continuing operations for the fourth quarter was $906 million versus $1,017 million for the comparable period in 2002. Free cash flow, including discontinued operations, for the fourth quarter 2003 was $858 million versus $626 million in 2002. Free cash flow is a non-GAAP financial measure that the Company defines as operating cash flow less capital spending and internal use software spending. Attachment F contains a table reconciling this measure to operating cash flow, the most directly comparable GAAP measure.

"All of the businesses met or exceeded our expectations in the quarter and contributed to our strong performance," said William H. Swanson, Raytheon CEO and president. "We remain focused on delivering results that predictably meet our commitments."

Full Year Financial Results

For the full year the Company reported income from continuing operations of $535 million or $1.29 per diluted share compared to $755 million or $1.85 per diluted share in 2002. Income from continuing operations in 2003 was negatively impacted by performance issues in the third quarter at Network Centric Systems ($187 million or $0.32 per diluted share) related to cost

growth on risk programs identified earlier in the year and increased non-cash pension expense of $319 million or $0.54 per diluted share.

Including the impact of discontinued operations, the Company reported 2003 net income of $0.88 per diluted share compared to a net loss of $1.57 per diluted share in 2002.

Total 2003 sales for the Company were $18.1 billion compared to $16.8 billion for 2002, an increase of 8 percent. The full year results include $384 million of sales resulting from the previously announced consolidation of Flight Options. Government and Defense sales for the year (after the elimination of intercompany sales) increased 7 percent to $15.5 billion from $14.5 billion in 2002.

Free cash flow from continuing operations was $1.6 billion in both 2003 and 2002. Free cash flow, including discontinued operations, for the full year 2003 was $1.0 billion, versus $443 million in 2002.

Bookings and Backlog

The Government and Defense businesses recorded strong fourth quarter bookings of $7.1 billion and bookings for the full year 2003 of $20 billion, an increase of nearly 35 percent compared to bookings of $14.9 billion in 2002. Government and Defense backlog reached a record $25 billion, an increase of $4 billion over year end 2002.

RAC's fourth quarter bookings were $1.1 billion. Full year 2003 bookings were $2.2 billion versus $2.9 billion for 2002. During the quarter, NetJets Inc. placed a $360 million order for 50 new Hawker 400XP light jets and 8 new Hawker 800XP mid-size jets.

Revised Outlook

Earnings per share in 2004 from continuing operations are expected to be $1.25 to $1.35. This range has been adjusted from prior guidance of $1.50 to $1.60 to reflect a $0.25 per share increase in pension expense, resulting primarily from a change in the Company's discount rate assumption from 7 percent to 6.25 percent.

The Company expects net sales for 2004 of $19.5 billion to $20 billion and free cash flow of approximately $1 billion in 2004.

"2003 was a record year for bookings and backlog, with exceptional cash flow performance," Swanson said. "This performance is a direct result of our customer focus and will provide momentum for a solid 2004."

Further supporting information including reporting segment detail, quarterly detail, and cash flow detail has been provided in charts that will be posted to the Company's website and will be discussed during the conference call this morning.

Segment Results

Integrated Defense Systems

Integrated Defense Systems (IDS) fourth quarter 2003 net sales were $791 million, up 25 percent compared to $635 million in the fourth quarter 2002, due primarily to continued growth in DD(X), the Navy's future destroyer program, strong missile defense sales, and increased Patriot engineering support for Operation Iraqi Freedom. IDS generated $95 million of fourth quarter 2003 operating income compared to $76 million in the 2002 comparable quarter.

As previously announced, the U.S. Navy awarded IDS a $1 billion letter contract for the design, production, integration, and testing of Cobra Judy Replacement Mission Equipment (CJRME). Also in the quarter, the U.S. Army Space and Missile Defense Command awarded IDS JLENS Spiral 2 Development, a netted sensor system for cruise missile defense, on which work has begun.

Intelligence and Information Systems

Intelligence and Information Systems (IIS) fourth quarter 2003 net sales were $525 million compared to $528 million in the fourth quarter 2002. While full-year 2003 revenue increased by 8 percent, fourth quarter results were impacted by the acceleration of work into earlier quarters at the request of a classified customer. IIS earned $53 million of operating income compared to $56 million in the comparable quarter a year ago.

During the quarter, IIS was awarded a $157 million U.S. Air Force contract to upgrade an intelligence system called the Distributed Common Ground System (DCGS). The initial value of the contract, including options, is $157 million. With added U.S. Navy options, the contract value is expected to be nearly $360 million.

Missile Systems

Missile Systems (MS) fourth quarter 2003 net sales were $943 million, up 19 percent compared to $790 million in the fourth quarter 2002, driven by increased volume on the Tomahawk remanufacturing, Phalanx, Standard Missile-3, and Exoatmospheric Kill Vehicle programs. MS generated $108 million of operating income compared to $92 million in the comparable quarter a year ago.

In December, the Missile Defense Agency awarded the Kinetic Energy Interceptor system program to the Northrop Grumman - Raytheon team. This program has a potential value of over $2 billion for Raytheon during the next 8 years and will be added to bookings in the first quarter 2004.

Also during the quarter, MS was awarded a $111 million contract to overhaul 42 Phalanx Close-In Weapon Systems, a $264 million production contract for Standard Missile-2, and a $140 million production contract for Joint Standoff Weapon (JSOW).

Network Centric Systems

Network Centric Systems (NCS) fourth quarter 2003 net sales were $766 million, down 7 percent compared to $824 million in the fourth quarter 2002, as expected. This decline is attributable to reduced sales in the air traffic management and communications product lines. NCS recorded an operating profit of $75 million compared to $84 million in the comparable quarter a year ago.

The 10 risk programs that led to the significant profit adjustment in the third quarter of 2003 were on plan.

NCS booked $268 million in the quarter for its role as the Ground System Integrator on the Future Combat System.

Space and Airborne Systems

Space and Airborne Systems (SAS) fourth quarter 2003 net sales were $967 million, up 3 percent compared to $935 million in the fourth quarter 2002, due to stronger classified sales and Air Force programs including the Multi- platform Radar Technology Insertion Program (MPRTIP) and B-2. SAS generated $130 million of operating income compared to $126 million in the comparable quarter a year ago.

During the quarter, SAS was awarded a $298 million contract from the Naval Air Systems Command (NAVAIR) for full-rate production of the AN/ASQ-228 Advanced Targeting Forward Looking Infrared (ATFLIR) pod for the U.S. Navy and Marine Corps' F/A-18 fleet. SAS also received a major follow-on classified award.

Technical Services

Technical Services (TS) fourth quarter 2003 net sales were $560 million, up 3 percent from $544 million in the fourth quarter 2002. TS reported an operating profit of $39 million in the fourth quarters of both 2003 and 2002.

Aircraft

Raytheon Aircraft Company (RAC) fourth quarter 2003 net sales were $717 million, up 9 percent from $660 million in the fourth quarter 2002. RAC recorded operating income of $29 million in the quarter compared to $4 million in the comparable quarter in 2002. Operating income in the fourth quarter 2003 benefited from a favorable $37 million profit adjustment on the JPATS program partially offset by a $17 million charge on the Premier program reflecting cost estimate increases.

RAC delivered 100 commercial aircraft in the fourth quarter of 2003, compared to 94 in the same quarter last year. Beginning this quarter, the RAC results exclude Flight Options LLC and Raytheon Airline Aviation Services (RAAS), which are now included in the "Other" reporting segment. RAAS is a unit formed to manage the Company's commuter and Starship portfolio.

During December, RAC received an order from NetJets Inc. for 50 new Hawker 400XP light jets and 8 new Hawker 800XP mid-sized jets. These aircraft will be delivered through 2009 and have an aggregate value of $360 million.

The Hawker Horizon program remains on schedule for first delivery in 2004. The flight test fleet of 3 aircraft has now completed over 850 hours of testing with over 50 percent of the flight test conditions completed.

Other

Net sales for this segment in the fourth quarter 2003 were $230 million compared to $48 million in the fourth quarter 2002. The segment recorded an operating loss of $21 million in the fourth quarter 2003 compared to break- even results a year ago. For the fourth quarter, Flight Options reported break-even operating results. For the quarter, RAAS reported an operating loss of $20 million, primarily due to an increase in a loan reserve on one major customer.

Discontinued Operations

The Company recorded an after-tax loss from discontinued operations for the quarter of $12 million, primarily related to program management and legal costs at its former engineering and construction businesses.

Raytheon Company (NYSE: RTN), with 2003 sales of $18.1 billion, is an industry leader in defense and government electronics, space, information technology, technical services, and business and special mission aircraft. With headquarters in Waltham, Mass., Raytheon employs 78,000 people worldwide.

Disclosure Regarding Forward-looking Statements

Certain statements made in this release, including any statements relating to the Company's future plans, objectives, and projected future financial performance, contain or are based on, forward-looking statements within the meaning of the federal securities laws. Specifically, statements that are not historical facts, including statements accompanied by words such as "believe," "expect," "estimate," "intend," or "plan," and variations of these words and similar expressions, are intended to identify forward-looking statements and convey the uncertainty of future events or outcomes. The Company cautions readers that any such forward-looking statements are based on assumptions that the Company believes are reasonable, but are subject to a wide range of risks, and actual results may differ materially. The Company expressly disclaims any current intention to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this release. Important factors that could cause actual results to differ include, but are not limited to: the ability to obtain or the timing of obtaining future government awards; the availability of government funding; changes in government or customer priorities due to program reviews or revisions to strategic objectives; difficulties in developing and producing operationally advanced technology systems; termination of government contracts; program performance, including resolution of claims, particularly at the Company's NCS business unit; timing of contract payments; the performance of critical subcontractors; government import and export policies and other government regulations; the ultimate resolution of contingencies and legal matters, including investigations; the effect of market conditions, particularly in relation to the general aviation and commuter aircraft markets; the uncertainty of the timing and amount of net realizable value of Boeing Business Jet-related assets; risks inherent with large long-term fixed price contracts, particularly the ability to contain cost growth and programs which anticipate significant future cost improvements; conflicts with other investors in joint ventures and less than wholly-owned businesses; the Company's lack of construction industry expertise resulting from the Company's sale of its former engineering and construction businesses; the timing of project completion and customer acceptance of two Massachusetts construction projects; delays and cost growth arising from testing and commissioning processes conducted at the Massachusetts projects; the final determination by the Company of the required expenditures to complete the Massachusetts projects; and the impact of change orders, the recoverability of the Company's claims and the outcome of defending claims asserted against the Company; among other things. Further information regarding the factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's SEC filings, including "Item 1-Business" of the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and in the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2003.

Conference Call on the Fourth Quarter 2003 Financial Results

Raytheon's financial results conference call will be Tuesday, Jan. 27, 2004 at 9 a.m. EST. Participants will be William Swanson, CEO and president, Edward Pliner, senior vice president and CFO, and other Company executives.

The dial-in number for the conference call will be (800) 299-9630. The conference call will also be audiocast on the Internet at www.raytheon.com. 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 urged 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.

    Media Contact:
     James Fetig
     781-522-5111

    Investor Relations Contact:
     Tim Oliver
     781-522-5140


    Attachment A

    Raytheon Company
    Financial Information
    Fourth Quarter 2003


    (In millions, except per share amounts)
                                    Three Months Ended   Twelve Months Ended
                                    31-Dec-03 31-Dec-02 31-Dec-03  31-Dec-02

    Net sales                          $5,101  $4,662    $18,109    $16,760

    Cost of sales                       4,174   3,751     15,000     13,358
    Administrative and selling
     expenses                             354     278      1,306      1,170
    Research and development expenses     121     112        487        449

    Total operating expenses            4,649   4,141     16,793     14,977

    Operating income                      452     521      1,316      1,783

    Interest expense                      122     109        537        497
    Interest income                       (17)     (3)       (50)       (27)
    Other expense, net                     40     203         67        239

    Non-operating expense, net            145     309        554        709

    Income from continuing operations
     before taxes                         307     212        762      1,074

    Federal and foreign income taxes       90      57        227        319

    Income from continuing operations     217     155        535        755

    Loss from discontinued
     operations, net of tax               (12)   (223)      (170)      (887)

    Income (loss) before
     extraordinary item and
     accounting change                    205     (68)       365       (132)

    Extraordinary gain from debt
     repurchases, net of tax                -       -          -          1

    Cumulative effect of change in
     accounting principle, net of tax       -       -          -       (509)

    Net income (loss)                    $205    $(68)      $365      $(640)

    Earnings per share from
     continuing operations
     Basic                              $0.52   $0.38      $1.30      $1.88
     Diluted                            $0.52   $0.38      $1.29      $1.85

    Loss per share from discontinued
     operations
     Basic                             $(0.03) $(0.55)    $(0.41)    $(2.21)
     Diluted                           $(0.03) $(0.54)    $(0.41)    $(2.17)

    Loss per share from cumulative
     effect of change in accounting
     principle
     Basic                               $-      $-         $-       $(1.27)
     Diluted                             $-      $-         $-       $(1.25)

    Earnings (loss) per share
     Basic                              $0.49  $(0.17)     $0.88     $(1.59)
     Diluted                            $0.49  $(0.17)     $0.88     $(1.57)

    Average shares outstanding
     Basic                              416.3   406.4      412.7      401.4
     Diluted                            418.7   409.2      415.4      408.0


    Attachment B

     Raytheon Company
     Segment Information
     Fourth Quarter 2003

     (In millions)


                                                             Operating Income
                      Net Sales      Operating Income    As a Percent of Sales
                Three Months Ended   Three Months Ended    Three Months Ended
               31-Dec-03 31-Dec-02   31-Dec-03  31-Dec-02  31-Dec-03 31-Dec-02

    Integrated Defense
     Systems       $ 791     $ 635        $95       $76      12.0%     12.0%
    Intelligence and
     Information
     Systems         525       528         53        56      10.1%     10.6%
    Missile Systems  943       790        108        92      11.5%     11.6%

    Network Centric
     Systems         766       824         75        84       9.8%     10.2%
    Space and Airborne
     Systems         967       935        130       126      13.4%     13.5%
    Technical
     Services        560       544         39        39       7.0%      7.2%
    Aircraft         717       660         29         4       4.0%      0.6%
    Other            230        48        (21)       (1)     -9.1%     -2.1%
    FAS/CAS Pension
     Adjustment        -         -        (27)       53
    Corporate and
     Eliminations   (398)     (302)       (29)       (8)

    Total         $5,101    $4,662       $452      $521       8.9%     11.2%



                                                             Operating Income
                     Net Sales        Operating Income   As a Percent of Sales
                Twelve Months Ended   Twelve Months Ended  Twelve Months Ended
                 31-Dec-03 31-Dec-02  31-Dec-03  31-Dec-02 31-Dec-03 31-Dec-02

    Integrated Defense
     Systems      $2,864    $2,366       $331      $289      11.6%     12.2%
    Intelligence
     and Information
     Systems       2,045     1,887        194       180       9.5%      9.5%
    Missile
     Systems       3,538     3,038        424       373      12.0%     12.3%
    Network Centric
     Systems       2,809     3,091         19       278       0.7%      9.0%
    Space and Airborne
     Systems       3,677     3,243        492       428      13.4%     13.2%
    Technical
    Services       1,963     2,133        107       116       5.5%      5.4%
    Aircraft       2,088     2,040          2       (39)      0.1%     -1.9%
    Other            573       210        (34)      (12)     -5.9%     -5.7%
    FAS/CAS Pension
     Adjustment        -         -       (109)      210
    Corporate and
     Eliminations (1,448)   (1,248)      (110)      (40)

    Total        $18,109   $16,760     $1,316    $1,783       7.3%     10.6%



    Attachment C

     Raytheon Company
     Other Information
     Continuing Operations
     Fourth Quarter 2003


                                                          Backlog
                                                       (In millions)
                                                31-Dec-03          31-Dec-02

    Integrated Defense Systems                     $6,526             $5,011
    Intelligence and Information Systems            3,899              3,540
    Missile Systems                                 5,028              3,509
    Network Centric Systems                         3,259              2,853
    Space and Airborne Systems                      4,865              4,523
    Technical Services                              1,510              1,603
    Aircraft                                        2,279              4,396
    Other                                             176                231

                                                  $27,542            $25,666

    Government and Defense businesses             $25,087            $21,039

    U.S. government backlog included above        $21,353            $18,254




                                          Bookings             Bookings
                                       (In millions)        (In millions)
                                     Three months ended  Twelve Months Ended
                                    31-Dec-03  31-Dec-02 31-Dec-03   31-Dec-02

    Government and Defense
     businesses                       $7,065     $4,410   $19,967     $14,868
    Commercial businesses              1,319        743     2,726       3,052

                                      $8,384     $5,153   $22,693     $17,920


                                       New Aircraft          New Aircraft
                                    Deliveries (Units)    Deliveries (Units)
                                    Three Months Ended   Twelve Months Ended
                                   31-Dec-03  31-Dec-02 31-Dec-03   31-Dec-02

    Hawker                               19         17        47          46
    Premier I                            11         13        29          29
    Beechjet                              7          5        24          19
    King Air                             39         40        86          80
    1900D Commuter                        -          2         1          11
    Pistons                              26         27        82          83
    T-6A                                 18         20        68          60
      Total                             120        124       337         328




                                         New Aircraft         New Aircraft
                                       Bookings (Units)     Bookings (Units)
                                      Three Months Ended   Twelve Months Ended
                                      31-Dec-03 31-Dec-02  31-Dec-03 31-Dec-02

    Hawker                                   14       16       39       78
    Premier I                                 8        6       17       70
    Beechjet                                 54        7       70       53
    King Air                                 36       25       85       58
    1900D Commuter                            -        -        1        -
    Pistons                                  30       14       71       74
    T-6A                                     47       43       51       52
       Total                                189      111      334      385



    Attachment D

     Raytheon Company
     Preliminary Financial Information
     Fourth Quarter 2003

    (In millions)

    Balance sheets
                                                 31-Dec-03          31-Dec-02
    Assets
    Cash and cash equivalents                         $661               $544
    Accounts receivable                                485                675
    Contracts in process                             2,762              3,016
    Inventories                                      1,998              2,032
    Deferred federal and foreign income
     taxes                                             466                601
    Prepaid expenses and other current
     assets                                            154                247
    Assets from discontinued operations                 59                 75
      Total current assets                           6,585              7,190

    Property, plant and equipment, net               2,711              2,396
    Deferred federal and foreign income
     taxes                                             337                281
    Goodwill                                        11,479             11,170
    Other assets, net                                2,296              2,909
        Total assets                               $23,408            $23,946

    Liabilities and Stockholders' Equity
    Notes payable and current portion of
     long-term debt                                    $15             $1,153
    Advance payments, less contracts in
     process                                         1,038                819
    Accounts payable                                   833                776
    Accrued salaries and wages                         767                710
    Other accrued expenses                           1,153              1,316
    Liabilities from discontinued
     operations                                         43                333
      Total current liabilities                      3,849              5,107

    Accrued retiree benefits and other
     long-term liabilities                           3,021              2,831
    Long-term debt                                   6,517              6,280
    Subordinated notes payable                         859                858
    Stockholders' equity                             9,162              8,870
        Total liabilities and
         stockholders' equity                      $23,408            $23,946



    Attachment E

     Raytheon Company
     Preliminary Cash Flow Information
     Fourth Quarter 2003

    (In millions)

    Cash flow information
                                      Three Months Ended  Twelve Months Ended
                                      31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02

    Income from continuing operations      $217      $155     $535      $755
    Depreciation                             97        83      333       305
    Amortization                             17        14       60        59
    Working capital                         726       792      860       512
    Discontinued operations                 (48)     (391)    (533)   (1,196)
    Capital spending                       (185)     (172)    (428)     (458)
    Internal use software spending          (27)      (44)     (98)     (138)
    Other                                    61       189      314       604
        Subtotal - free cash flow (a)       858       626    1,043       443

    Net activity in financing receivables   309    (1,207)     465    (1,388)
    Acquisitions                              -       (10)     (60)      (10)
    Divestitures and sale of investments     57         -      111     1,166
    Dividends                               (84)      (81)    (331)     (321)
    Issuance of common stock                 11        24       74       147
    Debt (repayments) issuances            (706)      570     (965)     (891)
    Space Imaging debt guarantee              -         -     (130)        -
    Synthetic lease maturity                  -         -     (125)        -
    Hughes Defense settlement                 -         -        -       134
    Other                                    13         3       35        50
          Total cash flow                  $458      $(75)    $117     $(670)


    Segment free cash flow information
                                       Three Months Ended Twelve Months Ended
                                      31-Dec-03 31-Dec-02  31-Dec-03 31-Dec-02

    Integrated Defense Systems              $99      $203     $318      $194
    Intelligence and Information Systems     71       111       88       121
    Missile Systems                         327       237      244       176
    Network Centric Systems                 131       123      115        88
    Space and Airborne Systems              131        (6)     365       153
    Technical Services                       28        43      104       174
    Aircraft                                 89        72       20        24
    Other                                   (37)       (4)     (55)      (61)
    Discontinued operations                 (48)     (391)    (533)   (1,196)
    Corporate                                67       238      377       770
                                           $858      $626   $1,043      $443

    (a) See Attachment F for a description of free cash flow.


    Attachment F

     Raytheon Company
     Reconciliation of Non-GAAP Financial Measures and Other Information
     Fourth Quarter 2003

    (In millions except share and per share amounts)

    Operating cash flow

                                    Three Months Ended    Twelve Months Ended
                                   31-Dec-03 31-Dec-02  31-Dec-03   31-Dec-02
    Operating cash flow               $1,070      $842     $1,569      $1,039
    Less: Capital spending              (185)     (172)      (428)       (458)
          Internal use software
           spending                      (27)      (44)       (98)       (138)
            Free cash flow              $858      $626     $1,043        $443

    Note:  Free cash flow represents a non-GAAP financial measure defined as
           operating cash flow less capital spending and internal use software
           spending.  The Company's management uses non-GAAP financial
           measures to evaluate the operating performance of its business and
           as a component for determining incentive-based compensation.  In
           addition, the Company believes that free cash flow is an important
           measure of performance used by some investors, equity analysts and
           others to make informed investment decisions.  The definitions used
           here may differ from those used by other companies.


    Debt-to-capital ratio

                                                31-Dec-03          31-Dec-02
    Notes payable and current portion
     of long-term debt                                $15             $1,153
    Long-term debt                                  6,517              6,280
    Subordinated notes payable                        859                858
            Total debt                             $7,391             $8,291

    Notes payable and current portion
     of long-term debt                                $15             $1,153
    Long-term debt                                  6,517              6,280
    Subordinated notes payable                        859                858
    Stockholders' equity                            9,162              8,870
            Total capital                         $16,553            $17,161

            Debt-to-capital ratio                   44.7%              48.3%


    EPS impact of certain 2003 items


                                   Q4 Loss on  Q4 Gain on
                                     Debt       Sale of    Q3 Charge Q3 Charge
                                   Retirement  Investment    at NCS    at TS
            Operating income impact    $(77)       $55       $(187)    $(39)
            Effective tax rate for the
             twelve months ended
             December 31, 2003         29.8%      29.8%      29.8%    29.8%
            After-tax impact            $(54)       $39      $(131)    $(27)

            2003 diluted shares
             outstanding               415.4      415.4      415.4    415.4

            EPS impact                $(0.13)     $0.09     $(0.32)  $(0.06)

SOURCE  Raytheon Company
    -0-                             01/27/2004
    /CONTACT: Media, James Fetig, +1-781-522-5111, or Investor Relations, Tim
Oliver, +1-781-522-5140, both of Raytheon Company /
    /Web site:  http:// www.raytheon.com/
    (RTN)

CO:  Raytheon Company
ST:  Massachusetts, District of Columbia
IN:  ARO
SU:  ERN CCA




CP-ES 
-- NETU009 --
2580 01/27/2004 07:05 EST http://www.prnewswire.com

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