News Release

Raytheon Reports Strong Second Quarter 2019 Results

WALTHAM, Mass., July 25, 2019 /PRNewswire/ -- Raytheon Company (NYSE: RTN) today announced net sales for the second quarter 2019 of $7.2 billion, up 8.1 percent compared to $6.6 billion in the second quarter 2018. Second quarter 2019 EPS from continuing operations was $2.92 compared to $2.78 in the second quarter 2018. The increase in the second quarter 2019 EPS from continuing operations was primarily driven by operational improvements and pension-related items, partially offset by a favorable tax-related EPS impact of $0.33 in the second quarter 2018 related to a discretionary pension plan contribution.

"The company had very strong second quarter operating results, with our bookings, sales, operating margin, EPS, and cash flow all exceeding our expectations," said Thomas A. Kennedy, Raytheon Chairman and CEO. "We begin the second half with continued confidence in our growth outlook given our innovative technologies, breadth of franchises, and record backlog.

"Integration planning for the merger with United Technologies is progressing well, with the integration team developing detailed execution plans to capture revenue and cost synergies rapidly and ensure seamless operations post close. We continue to expect the transaction to close in the first half of 2020."

Operating cash flow from continuing operations for the second quarter 2019 was $823 million compared to $1,156 million for the second quarter 2018. The decrease in operating cash flow from continuing operations in the second quarter 2019 was primarily due to the timing of collections. Operating cash flow from continuing operations for the second quarter 2019 was better than the company's prior guidance.

In the second quarter 2019, the company repurchased 1.7 million shares of common stock for $300 million. Year-to-date 2019, the company repurchased 4.4 million shares of common stock for $800 million.

The company had record bookings of $9.5 billion in the second quarter 2019, resulting in a book-to-bill ratio of 1.32. Second quarter 2018 bookings were $8.7 billion.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Summary Financial Results











2nd Quarter

%


Six Months

%


($ in millions, except per share data)

2019

2018

Change


2019

2018

Change


Bookings

$

9,475

$

8,694

9.0%


$

14,843

$

15,005

(1.1)%


Net Sales

$

7,159

$

6,625

8.1%


$

13,888

$

12,892

7.7%


Income from Continuing Operations attributable to













Raytheon Company

$

817

$

799

2.3%


$

1,598

$

1,433

11.5%


EPS from Continuing Operations

$

2.92

$

2.78

5.0%


$

5.69

$

4.98

14.3%


Operating Cash Flow from Continuing Operations

$

823

$

1,156



$

412

$

1,439



Workdays in Fiscal Reporting Calendar

64

64



127

128



 
 

Backlog at the end of the second quarter 2019 was a record $43.1 billion, an increase of $3.3 billion or 8 percent compared to the end of the second quarter 2018.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Backlog


























































Period Ending


($ in millions)



























Q2 2019

Q2 2018

2018


Backlog



























$

43,131

$

39,881

$

42,420




































 
 

Outlook

The company has increased its financial outlook for 2019. Charts containing additional information on the company's 2019 outlook are available on the company's website.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

2019 Financial Outlook



























Current


Prior (4/25/19)

Net Sales ($B)












28.8 - 29.3*


28.6 - 29.1

Deferred Revenue Adjustment ($M)












(2)


(2)

Amortization of Acquired Intangibles ($M)












(110)


(110)

FAS/CAS Operating Adjustment ($M)












1,463


1,463

Retirement Benefits Non-service Expense, non-operating ($M)












(726)


(726)

Interest Expense, net ($M)












~(145)*


(153) - (158)

Diluted Shares (M)












~281*


279 - 281

Effective Tax Rate












17.0% - 17.5%


17.0% - 17.5%

EPS from Continuing Operations












$11.50 - $11.70*


$11.40 - $11.60

Operating Cash Flow from Continuing Operations ($B)












4.0 - 4.2*


3.9 - 4.1

*Denotes change from prior guidance















 
 

Segment Results

The company's reportable segments are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint™.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Integrated Defense Systems











2nd Quarter



Six Months



($ in millions)



2019

2018

% Change


2019

2018

% Change


Net Sales



$

1,641

$

1,514

8%


$

3,191

$

3,003

6%


Operating Income



$

264

$

262

1%


$

522

$

535

(2)%


Operating Margin



16.1%

17.3%



16.4%

17.8%



 
 

Integrated Defense Systems (IDS) had second quarter 2019 net sales of $1,641 million, up 8 percent compared to $1,514 million in the second quarter 2018. The increase in net sales for the quarter was primarily driven by higher net sales on various international Patriot® programs.

IDS recorded $264 million of operating income in the second quarter 2019 compared to $262 million in the second quarter 2018.

During the quarter, IDS booked $485 million and $375 million to provide advanced Patriot air and missile defense capability for Romania and the State of Qatar, respectively. IDS also booked $506 million for National Advanced Surface-to-Air Missile System (NASAMS™) for Australia; $344 million on the Army Navy/Transportable Radar Surveillance-Model 2 (AN/TPY-2) radar program for the Kingdom of Saudi Arabia; $206 million on the Multi-Function Radio Frequency System (MFRFS) program for the U.S. Army; and $93 million to provide engineering support services for an international customer.

Shortly after the quarter close, as previously announced, IDS received a direct commercial contract worth approximately $1.8 billion to provide NASAMS to the State of Qatar.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Intelligence, Information and Services









2nd Quarter



Six Months



($ in millions)



2019

2018

% Change


2019

2018

% Change


Net Sales



$

1,777

$

1,687

5%


$

3,554

$

3,269

9%


Operating Income



$

161

$

128

26%


$

348

$

245

42%


Operating Margin



9.1%

7.6%



9.8%

7.5%



 
 

Intelligence, Information and Services (IIS) had second quarter 2019 net sales of $1,777 million, up 5 percent compared to $1,687 million in the second quarter 2018. The increase in net sales for the quarter was primarily driven by higher net sales on classified programs in both cyber and space.

IIS recorded $161 million of operating income in the second quarter 2019 compared to $128 million in the second quarter 2018. The increase in operating income for the quarter was primarily driven by higher net program efficiencies.

During the quarter, IIS booked $821 million on a number of classified programs. IIS also booked $146 million on domestic and foreign training programs in support of Warfighter FOCUS activities, and $105 million to provide cybersecurity support for an international customer.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Missile Systems











2nd Quarter



Six Months



($ in millions)



2019

2018

% Change


2019

2018

% Change


Net Sales



$

2,210

$

2,051

8%


$

4,216

$

3,899

8%


Operating Income



$

253

$

231

10%


$

443

$

443

-


Operating Margin



11.4%

11.3%



10.5%

11.4%



 
 

Missile Systems (MS) had second quarter 2019 net sales of $2,210 million, up 8 percent compared to $2,051 million in the second quarter 2018. The increase in net sales for the quarter was primarily due to higher net sales on classified programs, the High-speed Anti-radiation Missile (HARM®) program, and the Phalanx® program.

MS recorded $253 million of operating income in the second quarter 2019 compared to $231 million in the second quarter 2018. The increase in operating income for the quarter was primarily due to a favorable change in program mix and higher volume.

During the quarter, MS booked $477 million for AIM-9X Sidewinder short-range air-to-air missiles for the U.S. Navy, U.S. Air Force and international customers; $232 million for Tube-launched, Optically-tracked, Wireless-guided (TOW®) missiles for the U.S. Army, U.S. Marine Corps and international customers; $200 million for Excalibur® for the U.S. Army; $190 million for the Coyote® Rapid Development Program (CRDP) for a U.S. customer; $120 million for StormBreaker™ for the U.S. Air Force; and $101 million for HARM for the U.S. Air Force and international customers. MS also booked $448 million on a number of classified contracts.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Space and Airborne Systems











2nd Quarter



Six Months



($ in millions)



2019

2018

% Change


2019

2018

% Change


Net Sales



$

1,817

$

1,605

13%


$

3,470

$

3,173

9%


Operating Income



$

229

$

206

11%


$

441

$

399

11%


Operating Margin



12.6%

12.8%



12.7%

12.6%



 
 

Space and Airborne Systems (SAS) had second quarter 2019 net sales of $1,817 million, up 13 percent compared to $1,605 million in the second quarter 2018. The increase in net sales for the quarter included higher net sales on classified programs, the Next Generation Overhead Persistent Infrared (Next Gen OPIR) program, and an international tactical radar systems program.

SAS recorded $229 million of operating income in the second quarter 2019 compared to $206 million in the second quarter 2018. The increase in operating income for the quarter was primarily due to higher volume.

During the quarter, SAS booked $218 million for radar components for the U.S. Navy; $93 million for the Multi-Spectral Targeting System (MTS) for the U.S. Air Force; $88 million for radar warning receivers for the U.S. Air Force; and $77 million for missile seekers for the U.S. Navy and an international customer. SAS also booked $876 million on a number of classified contracts.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Forcepoint












2nd Quarter



Six Months



($ in millions)



2019

2018

% Change


2019

2018

% Change


Net Sales



$

156

$

148

5%


$

314

$

289

9%


Operating Income (Loss)



$

(3)

$

(8)

NM


$

(12)

$

(15)

NM


Operating Margin



(1.9)%

(5.4)%



(3.8)%

(5.2)%



NM = Not Meaningful











 
 

Forcepoint had second quarter 2019 net sales of $156 million, up 5 percent compared to $148 million in the second quarter 2018.

Forcepoint recorded a loss of $3 million in the second quarter 2019 compared to a loss of $8 million in the second quarter 2018.

About Raytheon
Raytheon Company, with 2018 sales of $27 billion and 67,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 97 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5I® products and services, sensing, effects, and mission support for customers in more than 80 countries. Raytheon is headquartered in Waltham, Massachusetts. Follow us on Twitter.

Conference Call on the Second Quarter 2019 Financial Results
Raytheon's financial results conference call will be held on Thursday, July 25, 2019 at 9 a.m. ET. Participants will include Thomas A. Kennedy, Chairman and CEO; Anthony F. O'Brien, vice president and CFO; and other company executives.

The dial-in number for the conference call will be (866) 219-7829 in the U.S. or (478) 205-0667 outside of the U.S. The conference call will also be audiocast on the Internet at www.raytheon.com/ir. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for printing prior to the call.

Interested parties are encouraged to check the website ahead of time to ensure their computers are configured for the audio stream. Instructions for obtaining the free required downloadable software are posted on the site.

Disclosure Regarding Forward-looking Statements
This release and the attachments contain forward-looking statements, including information regarding the company's (sometimes referred to as Raytheon) 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: risks associated with the announcement of the proposed merger with United Technologies Corporation (UTC), including its effect on our customer, supplier and other business relationships, employee retention and hiring, resources and management's attention, our ability to pursue new business and investment opportunities, our operating results and business generally, and the market price of our common stock; risks associated with the successful and timely completion of the proposed merger with UTC and the related integration, as described in more detail below; the company's dependence on the U.S. government for a significant portion of its business and the risks associated with U.S. government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration, a government shutdown, or otherwise, uncertain funding of programs, potential termination of contracts and performance under undefinitized contract awards; difficulties in contract performance; the resolution of program terminations; the ability to procure new contracts; the risks of conducting business in foreign countries; the unpredictability of timing of international bookings; the ability to comply with extensive governmental regulation, including export and import requirements such as the International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anti-corruption requirements including the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and other regulations; dependence on U.S. government approvals for international contracts; changes in government procurement practices; the impact of competition; the ability to develop products and technologies, and the impact of associated investments and costs; the ability to recruit and retain qualified personnel; the impact of potential security and cyber threats, and other disruptions; the risk that actual pension returns, discount rates or other actuarial assumptions, including the long-term return on asset assumption, are significantly different than the company's current assumptions; the risk of cost overruns, particularly for the company's fixed-price contracts; dependence on material and component availability, subcontractor and partner performance and key suppliers; risks of a negative government audit; risks associated with acquisitions, investments, dispositions, joint ventures and other business arrangements; the ability to grow in the government and commercial cybersecurity markets; risks of an impairment of goodwill or other intangible assets; the impact of financial markets and global economic conditions; the use of accounting estimates in the company's financial statements; the outcome of contingencies and litigation matters, including government investigations; the risk of environmental liabilities; changes in tax laws and regulations, or their interpretation; and other factors as may be detailed from time to time in the company's public announcements and Securities and Exchange Commission filings.

Risks associated with the successful and timely completion of the proposed merger with UTC and the related integration include (1) the effect of economic conditions in the industries and markets in which UTC and Raytheon operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end-market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of commercial airlines, the impact of weather conditions and natural disasters, the financial condition of our customers and suppliers, and the risks associated with U.S. government sales (including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration, a government shutdown, or otherwise, and uncertain funding of programs); (2) challenges in the development, production, delivery, support, performance and realization of the anticipated benefits (including our expected returns under customer contracts) of advanced technologies and new products and services; (3) the scope, nature, impact or timing of the proposed merger and the spin-offs by UTC of its Otis and Carrier businesses into separate companies (the separation transactions) and other merger, acquisition and divestiture activity, including among other things the integration of or with other businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs and expenses; (4) future levels of indebtedness, including indebtedness that may be incurred in connection with the proposed merger and the separation transactions, and capital spending and research and development spending; (5) future availability of credit and factors that may affect such availability, including credit market conditions and our capital structure; (6) the timing and scope of future repurchases by the combined company of its common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; (7) delays and disruption in delivery of materials and services from suppliers; (8) company and customer-directed cost reduction efforts and restructuring costs and savings and other consequences thereof (including the potential termination of U.S. government contracts and performance under undefinitized contract awards and the potential inability to recover termination costs); (9) new business and investment opportunities; (10) the ability to realize the intended benefits of organizational changes; (11) the anticipated benefits of diversification and balance of operations across product lines, regions and industries; (12) the outcome of legal proceedings, investigations and other contingencies; (13) pension plan assumptions and future contributions; (14) the impact of the negotiation of collective bargaining agreements and labor disputes; (15) the effect of changes in political conditions in the U.S. and other countries in which UTC, Raytheon and the businesses of each operate, including the effect of changes in U.S. trade policies or the U.K.'s pending withdrawal from the European Union, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; (16) the effect of changes in tax (including U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory and other laws and regulations (including, among other things, export and import requirements such as the International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anti-corruption requirements, including the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and other regulations) in the U.S. and other countries in which UTC, Raytheon and the businesses of each operate; (17) negative effects of the announcement or pendency of the proposed merger or the separation transactions on the market price of UTC's and/or Raytheon's respective common stock and/or on their respective financial performance; (18) the ability of the parties to receive the required regulatory approvals for the proposed merger (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) and approvals of UTC's stockholders and Raytheon's stockholders and to satisfy the other conditions to the closing of the merger on a timely basis or at all; (19) the occurrence of events that may give rise to a right of one or both of the parties to terminate the merger agreement; (20) risks relating to the value of the UTC shares to be issued in the proposed merger, significant transaction costs and/or unknown liabilities; (21) the possibility that the anticipated benefits from the proposed merger cannot be realized in full or at all or may take longer to realize than expected, including risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; (22) risks associated with transaction-related litigation; (23) the possibility that costs or difficulties related to the integration of UTC's and Raytheon's operations will be greater than expected; (24) risks relating to completed merger, acquisition and divestiture activity, including UTC's integration of Rockwell Collins, including the risk that the integration may be more difficult, time-consuming or costly than expected or may not result in the achievement of estimated synergies within the contemplated time frame or at all; (25) the ability of each of Raytheon, UTC, the companies resulting from the separation transactions and the combined company to retain and hire key personnel; (26) the expected benefits and timing of the separation transactions, and the risk that conditions to the separation transactions will not be satisfied and/or that the separation transactions will not be completed within the expected time frame, on the expected terms or at all; (27) the intended qualification of (i) the merger as a tax-free reorganization and (ii) the separation transactions as tax-free to UTC and UTC's stockholders, in each case, for U.S. federal income tax purposes; (28) the possibility that any opinions, consents, approvals or rulings required in connection with the separation transactions will not be received or obtained within the expected time frame, on the expected terms or at all; (29) expected financing transactions undertaken in connection with the proposed merger and the separation transactions and risks associated with additional indebtedness; (30) the risk that dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the separation transactions will exceed UTC's estimates; and (31) the impact of the proposed merger and the separation transactions on the respective businesses of Raytheon and UTC and the risk that the separation transactions may be more difficult, time-consuming or costly than expected, including the impact on UTC's resources, systems, procedures and controls, diversion of its management's attention and the impact on relationships with customers, suppliers, employees and other business counterparties.

There can be no assurance that the proposed merger, the separation transactions or any other transaction described above will in fact be consummated in the manner described or at all. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the preliminary joint proxy statement/prospectus (defined below) and the reports of UTC and Raytheon on Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the "SEC") from time to time.

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.

Additional Information and Where to Find It

In connection with the proposed merger, on July 17, 2019, UTC filed with the SEC a registration statement on Form S-4, which includes a preliminary joint proxy statement of UTC and Raytheon that also constitutes a preliminary prospectus of UTC (the "preliminary joint proxy statement/prospectus"), which will be mailed to stockholders of UTC and stockholders of Raytheon once the registration statement becomes effective and the preliminary joint proxy statement/prospectus is in definitive form (the "definitive joint proxy statement/prospectus"), and each party will file other documents regarding the proposed merger with the SEC. In addition, in connection with the separation transactions, subsidiaries of UTC will file registration statements on Form 10 or Form S-1. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain copies of the registration statements and the definitive joint proxy statement/prospectus free of charge from the SEC's website or from UTC or Raytheon. The documents filed by UTC with the SEC may be obtained free of charge at UTC's website at www.utc.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from UTC by requesting them by mail at UTC Corporate Secretary, 10 Farm Springs Road, Farmington, CT, 06032, by telephone at 1-860-728-7870 or by email at corpsec@corphq.utc.com. The documents filed by Raytheon with the SEC may be obtained free of charge at Raytheon's website at www.raytheon.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from Raytheon by requesting them by mail at Raytheon Company, Investor Relations, 870 Winter Street, Waltham, MA, 02541, by telephone at 1-781-522-5123 or by email at invest@raytheon.com.

Participants in the Solicitation

Raytheon and UTC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger. Information about Raytheon's directors and executive officers is available in Raytheon's proxy statement dated April 16, 2019, for its 2019 Annual Meeting of Shareholders. Information about UTC's directors and executive officers is available in UTC's proxy statement dated March 18, 2019, for its 2019 Annual Meeting of Shareowners. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the preliminary joint proxy statement/prospectus and will be contained in the definitive joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction when they become available. Investors should carefully read the preliminary joint proxy statement/prospectus and the definitive joint proxy statement/prospectus when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Raytheon or UTC as indicated above.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Attachment A

Raytheon Company

Preliminary Statement of Operations Information

Second Quarter 2019

(In millions, except per share amounts)














Three Months Ended


Six Months Ended




30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18












Net sales


$

7,159



$

6,625



$

13,888



$

12,892



Operating expenses










Cost of sales


5,205



4,777



10,082



9,309



General and administrative expenses


778



748



1,517



1,442



Total operating expenses


5,983



5,525



11,599



10,751



Operating income


1,176



1,100



2,289



2,141



Non-operating (income) expense, net










Retirement benefits non-service expense


181



238



362



477



Interest expense


45



46



89



93



Interest income


(7)



(8)



(20)



(15)



Other (income) expense, net


(8)



(3)



(28)



2



Total non-operating (income) expense, net


211



273



403



557



Income from continuing operations before taxes


965



827



1,886



1,584



Federal and foreign income taxes


152



37



298



170



Income from continuing operations


813



790



1,588



1,414



Income (loss) from discontinued operations, net of tax




1







Net income


813



791



1,588



1,414



Less: Net income (loss) attributable to noncontrolling interests


  in subsidiaries


(4)



(9)



(10)



(19)



Net income attributable to Raytheon Company


$

817



$

800



$

1,598



$

1,433













Basic earnings per share attributable to Raytheon Company










  common stockholders:










Income from continuing operations


$

2.92



$

2.78



$

5.69



$

4.98



Income (loss) from discontinued operations, net of tax










Net income


2.92



2.78



5.69



4.98













Diluted earnings per share attributable to Raytheon Company










  common stockholders:










Income from continuing operations


$

2.92



$

2.78



$

5.69



$

4.98



Income (loss) from discontinued operations, net of tax










Net income


2.92



2.78



5.69



4.97













Amounts attributable to Raytheon Company common










  stockholders:










Income from continuing operations


$

817



$

799



$

1,598



$

1,433



Income (loss) from discontinued operations, net of tax




1







Net income


$

817



$

800



$

1,598



$

1,433













Average shares outstanding










Basic


279.7



287.3



280.8



287.9



Diluted


279.9



287.6



281.0



288.2



 
 
 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Attachment B

Raytheon Company

Preliminary Segment Information

Second Quarter 2019

(In millions, except percentages)












Operating Income As a
Percent of Net Sales




Net Sales


Operating Income





Three Months Ended


Three Months Ended


Three Months Ended




30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18
















Integrated Defense Systems


$

1,641



$

1,514



$

264



$

262



16.1%


17.3%


Intelligence, Information and Services


1,777



1,687



161



128



9.1%


7.6%


Missile Systems


2,210



2,051



253



231



11.4%


11.3%


Space and Airborne Systems


1,817



1,605



229



206



12.6%


12.8%


Forcepoint


156



148



(3)



(8)



(1.9)%


(5.4)%


Eliminations


(442)



(376)



(46)



(41)







Total business segment


7,159



6,629



858



778



12.0%


11.7%


Acquisition Accounting Adjustments




(4)



(27)



(34)







FAS/CAS Operating Adjustment






363



353







Corporate






(18)



3







Total


$

7,159



$

6,625



$

1,176



$

1,100



16.4%


16.6%


























Operating Income As a
Percent of Net Sales




Net Sales


Operating Income





Six Months Ended


Six Months Ended


Six Months Ended




30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18
















Integrated Defense Systems


$

3,191



$

3,003



$

522



$

535



16.4%


17.8%


Intelligence, Information and Services


3,554



3,269



348



245



9.8%


7.5%


Missile Systems


4,216



3,899



443



443



10.5%


11.4%


Space and Airborne Systems


3,470



3,173



441



399



12.7%


12.6%


Forcepoint


314



289



(12)



(15)



(3.8)%


(5.2)%


Eliminations


(856)



(733)



(93)



(81)







Total business segment


13,889



12,900



1,649



1,526



11.9%


11.8%


Acquisition Accounting Adjustments


(1)



(8)



(55)



(67)







FAS/CAS Operating Adjustment






729



707







Corporate






(34)



(25)







Total


$

13,888



$

12,892



$

2,289



$

2,141



16.5%


16.6%




 
 
 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Attachment C

Raytheon Company

Other Preliminary Information

Second Quarter 2019

(In millions)






















Backlog







30-Jun-19


31-Dec-18













Integrated Defense Systems







$

12,260



$

11,557



Intelligence, Information and Services






6,652



6,233



Missile Systems







12,778



13,976



Space and Airborne Systems







10,947



10,126



Forcepoint







494



528



Total backlog







$

43,131



$

42,420




























Three Months Ended


Six Months Ended


Bookings



30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18













Total bookings



$

9,475



$

8,694



$

14,843



$

15,005




























Three Months Ended


Six Months Ended


General and Administrative Expenses



30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18













Administrative and selling expenses


$

578



$

540



$

1,122



$

1,068



Research and development expenses


200



208



395



374



Total general and administrative expenses


$

778



$

748



$

1,517



$

1,442

























Cash, Cash Equivalents and Restricted Cash







30-Jun-19


31-Dec-18













Cash and cash equivalents






$

2,173



$

3,608



Restricted cash




13



16



Cash, cash equivalents and restricted cash shown in Attachment E




$

2,186



$

3,624















 
 
 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Attachment D

Raytheon Company

Preliminary Balance Sheet Information

Second Quarter 2019

(In millions)








30-Jun-19


31-Dec-18


Assets





Current assets





Cash and cash equivalents

$

2,173



$

3,608



Receivables, net

1,607



1,648



Contract assets

6,130



5,594



Inventories

932



758



Prepaid expenses and other current assets(1)

684



529



Total current assets

11,526



12,137








Property, plant and equipment, net

2,982



2,840



Operating lease right-of-use assets(1)

888



805



Goodwill

14,882



14,864



Other assets, net

1,908



2,024



Total assets

$

32,186



$

32,670








Liabilities, Redeemable Noncontrolling Interests and Equity





Current liabilities





Commercial paper and current portion of long-term debt

$

800



$

300



Contract liabilities

2,944



3,309



Accounts payable

1,368



1,964



Accrued employee compensation

1,361



1,509



Other current liabilities(1)

1,398



1,381



Total current liabilities

7,871



8,463








Accrued retiree benefits and other long-term liabilities(1)

6,699



6,922



Long-term debt

4,257



4,755



Operating lease liabilities(1)

720



647








Redeemable noncontrolling interests

435



411








Equity





Raytheon Company stockholders' equity





  Common stock

3



3



  Additional paid-in capital





  Accumulated other comprehensive loss

(8,182)



(8,618)



  Retained earnings

20,383



20,087



Total Raytheon Company stockholders' equity

12,204



11,472



  Noncontrolling interests in subsidiaries





Total equity

12,204



11,472



Total liabilities, redeemable noncontrolling interests and equity

$

32,186



$

32,670



 
 
 
 
                                                          


(1)

In the first quarter 2019 we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). As a result we recast certain amounts on our balance sheet to reflect the recognition of operating lease right-of-use assets and operating lease liabilities and other reclassifications. Included in other current liabilities is $207 million and $194 million at June 30, 2019 and December 31, 2018, respectively, related to the current portion of operating lease liabilities.

 
 
 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

Attachment E

Raytheon Company

Preliminary Cash Flow Information

Second Quarter 2019

(In millions)



Six Months Ended



30-Jun-19


1-Jul-18


Cash flows from operating activities





Net income

$

1,588



$

1,414



(Income) loss from discontinued operations, net of tax





Income from continuing operations

1,588



1,414



Adjustments to reconcile to net cash provided by (used in) operating activities from continuing





  operations, net of the effect of acquisitions and divestitures





Depreciation and amortization

291



274



Stock-based compensation

91



101



Deferred income taxes

3



8



Changes in assets and liabilities





Receivables, net

53



7



Contract assets and contract liabilities

(865)



(442)



Inventories

(174)



(133)



Prepaid expenses and other current assets

(17)



62



Income taxes receivable/payable

(203)



168



Accounts payable

(502)



(73)



Accrued employee compensation

(157)



(98)



Other current liabilities

17



(70)



Accrued retiree benefits

365



239



Other, net

(78)



(18)



Net cash provided by (used in) operating activities from continuing operations

412



1,439



Net cash provided by (used in) operating activities from discontinued operations



1



Net cash provided by (used in) operating activities

412



1,440



Cash flows from investing activities





Additions to property, plant and equipment

(438)



(366)



Additions to capitalized internal-use software

(25)



(28)



Maturities of short-term investments



309



Payments for purchases of acquired companies, net of cash received

(8)





Proceeds from sale of business, net of transaction costs



11



Other

2



(3)



Net cash provided by (used in) investing activities

(469)



(77)



Cash flows from financing activities





Dividends paid

(510)



(480)



Net borrowings (payments) on commercial paper





Repurchases of common stock under share repurchase programs

(800)



(800)



Repurchases of common stock to satisfy tax withholding obligations

(66)



(91)



Other

(5)



(5)



Net cash provided by (used in) financing activities

(1,381)



(1,376)



Net increase (decrease) in cash, cash equivalents and restricted cash

(1,438)



(13)



Cash, cash equivalents and restricted cash at beginning of the year

3,624



3,115



Cash, cash equivalents and restricted cash at end of period

$

2,186



$

3,102





 
 


 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Attachment F

Raytheon Company

Supplemental EPS Information

Second Quarter 2019

(In millions, except per share amounts)













Three Months Ended


Six Months Ended




30-Jun-19


1-Jul-18


30-Jun-19


1-Jul-18


Per share impact of tax benefit from third quarter 2018 discretionary


















  pension contribution (A)


$



$

0.33



$



$

0.33














(A)   Tax benefit from third quarter 2018 discretionary pension


















           contribution


$



$

95



$



$

95



        Diluted shares




287.6





288.2



        Per share impact


$



$

0.33



$



$

0.33





 
 

Raytheon Company
Global Headquarters
Waltham, Mass.

Investor Relations Contact
Kelsey DeBriyn
781.522.5141

Media Contact
Corinne Kovalsky
781.522.5899

SOURCE Raytheon Company

Related Links

http://www.raytheon.com