2014

Raytheon Reports Third Quarter 2013 Results - Adjusted EPS1 of $1.60 compared to $1.62 in third quarter 2012; EPS from continuing operations of $1.51 consistent with $1.51 in third quarter 2012

- Adjusted Operating Margin1 of 13.7 percent and reported operating margin of 13.0 percent, consistent with third quarter 2012

- Third quarter net sales of $5.8 billion, down 3 percent; year-to-date net sales down less than 1 percent

- Solid operating cash flow from continuing operations of $895 million

- Increased full-year 2013 guidance for net sales, EPS and operating cash flow from continuing operations

WALTHAM, Mass., Oct. 24, 2013 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE: RTN) announced third quarter 2013 Adjusted EPS1 of $1.60 per diluted share compared to $1.62 per diluted share in the third quarter 2012.  EPS from continuing operations was $1.51 in both third quarters 2013 and 2012. The third quarter 2012 Adjusted EPS1 has been revised to include the favorable $0.02 impact for the 2012 research and development (R&D) tax credit approved by Congress in January 2013. In addition, the third quarter 2013 and the third quarter 2012 Adjusted EPS1 each excluded an unfavorable FAS/CAS Adjustment of $0.09.

"While the overall economic environment has been challenging, Raytheon's solid third quarter performance reflects our continued focus on the fundamentals," said William H. Swanson, Raytheon's Chairman and CEO. "Our company has continued to perform well by providing affordable solutions and advanced technology that meet our customers' current and future needs."

Net sales for the third quarter 2013 were $5,842 million compared to $6,045 million in the third quarter 2012. 

Operating cash flow from continuing operations for the third quarter 2013 was $895 million compared to $1,111 million for the third quarter 2012. The change in operating cash flow from continuing operations in the third quarter 2013 compared to the third quarter 2012 was primarily due to the timing of required pension contributions.

In the third quarter 2013, the Company repurchased 2.9 million shares of common stock for $225 million as part of its previously announced share repurchase program. Year-to-date 2013, the Company has repurchased 10.5 million shares of common stock for $675 million.

The Company ended the third quarter 2013 with $836 million of net debt. Net debt is defined as total debt less cash and cash equivalents and short-term investments.

_______________________________

1 Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon Company common stockholders and Adjusted Operating Margin is total operating margin, in each case, excluding the after-tax impact of the FAS/CAS Adjustment, and from time to time, certain other items. In addition, the Q3 2012 Adjusted EPS amount has been revised to include the favorable $0.02 impact for the research and development (R&D) tax credit, approved by Congress in January 2013, that relates to 2012. Adjusted EPS and Adjusted Operating Margin are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.

 

 


Summary Financial Results



3rd Quarter


%


Nine Months


%

($ in millions, except per share data)

2013


2012


Change


2013


2012


Change













Net Sales

$

5,842


$

6,045


-3.4%


$

17,836


$

17,975


-0.8%

Income from Continuing Operations attributable to

   Raytheon Company

$

487


$

501


-2.8%


$

1,465


$

1,423


3.0%

Adjusted Income*

$

517


$

538


-3.9%


$

1,563


$

1,563


-

EPS from Continuing Operations

$

1.51


$

1.51


-


$

4.50


$

4.24


6.1%

Adjusted EPS*

$

1.60


$

1.62


-1.2%


$

4.80


$

4.66


3.0%

Operating Cash Flow from Continuing Operations

$

895


$

1,111




$

1,276


$

963



Workdays in Fiscal Reporting Calendar

63


63




190


191















* Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders and Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon Company common stockholders, in each case, excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. In addition to the FAS/CAS Adjustment, Nine Months 2013 Adjusted EPS excludes the $0.08 impact of the 2012 R&D tax credit. In addition, the Q3 2012 and Nine Months 2012 Adjusted EPS amounts have been revised to include the favorable $0.02 and $0.05 impact, respectively, for the 2012 R&D tax credit. Adjusted Income and Adjusted EPS are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.













 

Bookings and Backlog


Bookings








($ in millions)

3rd Quarter


Nine Months


2013


2012


2013


2012

Bookings

$

5,685



$

7,293



$

14,615



$

18,612


























 

Backlog



($ in millions)

Period Ending


Q3 2013


Q3 2012


2012

Backlog

$

32,235



$

35,015



$

36,181


Funded Backlog

22,144



22,886



24,047


 

The Company had bookings of $5.7 billion in the third quarter 2013 and ended the third quarter 2013 with a backlog of $32.2 billion. The Company had a book-to-bill ratio of .97 in the third quarter 2013.

Outlook

The Company has updated its financial outlook for 2013 and increased guidance for net sales, EPS and operating cash flow from continuing operations. The 2013 outlook reflects the Company's current expectations from the effects of sequestration under the Budget Control Act (BCA) of 2011 and the recent government shutdown. Charts containing additional information on the Company's 2013 outlook are available on the Company's website at www.raytheon.com/ir

 


2013 Financial Outlook







Current


Prior (7/25/13)

Net Sales ($B)


23.6 - 23.8*


23.5 - 23.7

FAS/CAS Adjustment ($M)


(255)*


(286)

Interest Expense, net ($M)


(200) - (205)*


(200) - (210)

Diluted Shares (M)


Approx. 324*


323 - 324

Effective Tax Rate


Approx. 29%


Approx. 29%

EPS from Continuing Operations


$5.67 - $5.77*


$5.51 - $5.61

Adjusted EPS**


$6.10 - $6.20*


$6.00 - $6.10

Operating Cash Flow from Continuing Operations ($B)


2.2 - 2.4*


2.1 - 2.3






* Denotes change from prior guidance.

 





** Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon Company common stockholders, excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. In addition to the FAS/CAS Adjustment, 2013 Adjusted EPS guidance also excludes the impact of the 2012 R&D tax credit. See attachment F for a reconciliation of this measure and a discussion of why the Company is presenting this information.

 

 

Segment Results

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

 

Integrated Defense Systems


3rd Quarter




Nine Months



($ in millions)

2013


2012


% Change


2013


2012


% Change

Net Sales

$

1,603


$

1,610


-


$

4,920


$

4,762


3%

Operating Income

$

286


$

278


3%


$

874


$

785


11%

Operating Margin

17.8%


17.3%




17.8%


16.5%



Integrated Defense Systems (IDS) had third quarter 2013 net sales of $1,603 million compared to $1,610 million in the third quarter 2012. IDS recorded $286 million of operating income compared to $278 million in the third quarter 2012. The increase in operating income was primarily driven by international programs.

During the quarter, IDS booked $353 million on the Aegis weapon system for the U.S. Navy and $84 million on an international radar contract.

As previously announced on October 10, 2013, IDS was awarded $386 million for the Engineering and Manufacturing Development (EMD) phase of the Air and Missile Defense Radar (AMDR) for the U.S. Navy and includes options which could bring the cumulative value of this contract to $1.6 billion. This award was protested on October 22, 2013.

Intelligence, Information and Services


3rd Quarter




Nine Months



($ in millions)

2013


2012


% Change


2013


2012


% Change

Net Sales

$

1,496


$

1,547


-3%


$

4,587


$

4,732


-3%

Operating Income

$

134


$

126


6%


$

389


$

400


-3%

Operating Margin

9.0%


8.1%




8.5%


8.5%



Intelligence, Information and Services (IIS) had third quarter 2013 net sales of $1,496 million compared to $1,547 million in the third quarter 2012. The change in net sales was primarily due to lower volume on classified and training programs. IIS recorded $134 million of operating income compared to $126 million in the third quarter 2012. The increase in operating income was primarily due to improved program performance.

During the quarter, IIS booked $253 million to design, develop and deliver technical training for a commercial customer, $162 million on a contract to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force, $145 million on domestic training programs and $85 million on foreign training programs in support of Warfighter FOCUS activities, and $87 million for a ground control system program for the U.S. Air Force. IIS also booked $417 million on a number of classified contracts.

Missile Systems


3rd Quarter




Nine Months



($ in millions)

2013


2012


% Change


2013


2012


% Change

Net Sales

$

1,635


$

1,677


-3%


$

4,961


$

4,858


2%

Operating Income

$

202


$

233


-13%


$

629


$

663


-5%

Operating Margin

12.4%


13.9%




12.7%


13.6%



Missile Systems (MS) had third quarter 2013 net sales of $1,635 million compared to $1,677 million in the third quarter 2012. The change in net sales was primarily driven by lower sales on U.S. Army sensor programs. MS recorded $202 million of operating income compared to $233 million in the third quarter 2012. The change in operating income was primarily due to a change in contract mix.

During the quarter, MS booked $312 million for Standard Missile-3 (SM-3) for the Missile Defense Agency (MDA), $232 million for AIM-9X Sidewinder short range air-to-air missiles for the U.S. Navy, U.S. Air Force and international customers, $222 million for Standard Missile-6 (SM-6) for the U.S. Navy, and $177 million for Phalanx Weapon Systems for the U.S. Navy and international customers. 

Space and Airborne Systems


3rd Quarter




Nine Months



($ in millions)

2013


2012


% Change


2013


2012


% Change

Net Sales

$

1,556


$

1,678


-7%


$

4,758


$

5,003


-5%

Operating Income

$

224


$

236


-5%


$

667


$

705


-5%

Operating Margin

14.4%


14.1%




14.0%


14.1%



Space and Airborne Systems (SAS) had third quarter 2013 net sales of $1,556 million compared to $1,678 million in the third quarter 2012. The change in net sales was primarily due to lower volume on intelligence, surveillance and reconnaissance systems programs and on classified programs. SAS recorded $224 million of operating income compared to $236 million in the third quarter 2012. The change in operating income was primarily due to lower volume.

During the quarter, SAS booked $271 million to develop the Next Generation Jammer (NGJ) for the U.S. Navy, an award which is currently under protest. SAS also booked $170 million on the Joint Polar Satellite System (JPSS) program for NASA and $164 million on a number of classified contracts.

About Raytheon

Raytheon Company, with 2012 sales of $24 billion and 68,000 employees worldwide, is a technology and innovation leader specializing in defense, security and civil markets throughout the world. With a history of innovation spanning 91 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. Raytheon is headquartered in Waltham, Mass. For more about Raytheon, visit us at www.raytheon.com and follow us on Twitter @Raytheon.

Conference Call on the Third Quarter 2013 Financial Results

Raytheon's financial results conference call will be held on Thursday, October 24, 2013, at 9 a.m. ET. Participants will include William H. Swanson, Chairman and CEO; David C. Wajsgras, senior vice president and CFO; and other Company executives. 

The dial-in number for the conference call will be (866) 510-0712 in the U.S. or (617) 597-5380 outside of the U.S. The conference call will also be audiocast on the Internet at www.raytheon.com/ir. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for printing prior to the call.

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

Disclosure Regarding Forward-looking Statements

This release and the attachments contain forward-looking statements, including information regarding the Company's financial outlook, future plans, objectives, business prospects and anticipated financial performance. These forward-looking statements are not statements of historical facts and represent only the Company's current expectations regarding such matters. These statements inherently involve a wide range of known and unknown risks and uncertainties. The Company's actual actions and results could differ materially from what is expressed or implied by these statements. Specific factors that could cause such a difference include, but are not limited to: the Company's dependence on the U.S. Government for a significant portion of its business and the risks associated with U.S. Government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration under the Budget Control Act of 2011, a government shutdown, or otherwise, uncertain funding of programs, potential termination of contracts, and difficulties in contract performance; the resolution of program terminations; the ability to procure new contracts; the risks of conducting business in foreign countries; the ability to comply with extensive governmental regulation, including import and export policies, the Foreign Corrupt Practices Act, the International Traffic in Arms Regulations, and procurement and other regulations; the impact of competition; the ability to develop products and technologies; the impact of changes in the financial markets and global economic conditions; the risk that actual pension returns, discount rates or other actuarial assumptions are significantly different than the Company's assumptions; the risk of cost overruns, particularly for the Company's fixed-price contracts; dependence on component availability, subcontractor performance and key suppliers; risks of a negative government audit; the use of accounting estimates in the Company's financial statements; risks associated with acquisitions, dispositions, joint ventures and other business arrangements; risks of an impairment of goodwill or other intangible assets; the outcome of contingencies and litigation matters, including government investigations; the ability to recruit and retain qualified personnel; the impact of potential security and cyber threats, and other disruptions; and other factors as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission filings. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release and the attachments or to update them to reflect events or circumstances occurring after the date of this release, including any acquisitions, dispositions or other business arrangements that may be announced or closed after such date. This release and the attachments also contain non-GAAP financial measures. A GAAP reconciliation and a discussion of the Company's use of these measures are included in this release or the attachments.

 

Attachment A

Raytheon Company

Preliminary Statement of Operations Information

Third Quarter 2013












(In millions, except per share amounts)


Three Months Ended


Nine Months Ended



29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12










Net sales


$

5,842



$

6,045



$

17,836



$

17,975


Operating expenses









     Cost of sales


4,534



4,689



13,892



14,000


     Administrative and selling expenses


387



389



1,215



1,198


     Research and development expenses


164



181



500



543


Total operating expenses


5,085



5,259



15,607



15,741


Operating income


757



786



2,229



2,234


Non-operating (income) expense, net









     Interest expense


53



49



159



149


     Interest income


(3)



(3)



(9)



(6)


     Other (income) expense, net


(5)



(5)



(9)



(10)


Total non-operating (income) expense, net


45



41



141



133


Income from continuing operations before taxes


712



745



2,088



2,101


Federal and foreign income taxes


221



237



608



668


Income from continuing operations


491



508



1,480



1,433


Income (loss) from discontinued operations, net of tax


2



(1)





(4)


Net income


493



507



1,480



1,429


Less: Net income (loss) attributable to noncontrolling









   interests in subsidiaries


4



7



15



10


Net income attributable to Raytheon Company


$

489



$

500



$

1,465



$

1,419











Basic earnings (loss) per share attributable to Raytheon









  Company common stockholders:









     Income from continuing operations


$

1.51



$

1.51



$

4.51



$

4.26


     Income (loss) from discontinued operations, net of tax








(0.01)


     Net income


1.52



1.51



4.51



4.25











Diluted earnings (loss) per share attributable to Raytheon









  Company common stockholders:









     Income from continuing operations


$

1.51



$

1.51



$

4.50



$

4.24


     Income (loss) from discontinued operations, net of tax








(0.01)


     Net income


1.51



1.50



4.50



4.23











Amounts attributable to Raytheon Company common









  stockholders:









     Income from continuing operations


$

487



$

501



$

1,465



$

1,423


     Income (loss) from discontinued operations, net of tax


2



(1)





(4)


     Net income


$

489



$

500



$

1,465



$

1,419











Average shares outstanding









     Basic


322.5



332.0



324.9



334.3


     Diluted


323.3



333.0



325.7



335.4


 

Attachment B

Raytheon Company

Preliminary Segment Information

Third Quarter 2013








































Operating Income




Net Sales (1)


Operating Income (1)


As a Percent of Net Sales(1)

(In millions, except percentages)



Three Months Ended


Three Months Ended


Three Months Ended




29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12















Integrated Defense Systems



$

1,603



$

1,610



$

286



$

278



17.8%


17.3%

Intelligence, Information and Services


1,496



1,547



134



126



9.0%


8.1%

Missile Systems



1,635



1,677



202



233



12.4%


13.9%

Space and Airborne Systems



1,556



1,678



224



236



14.4%


14.1%

FAS/CAS Adjustment







(46)



(47)






Corporate and Eliminations



(448)



(467)



(43)



(40)






Total



$

5,842



$

6,045



$

757



$

786



13.0%


13.0%

(1) These amounts are revised to reflect our April 1, 2013 segment consolidation.








































Operating Income




Net Sales (1)


Operating Income (1)


As a Percent of Net Sales (1)

(In millions, except percentages)



Nine Months Ended


Nine Months Ended


Nine Months Ended




29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12















Integrated Defense Systems



$

4,920



$

4,762



$

874



$

785



17.8%


16.5%

Intelligence, Information and Services


4,587



4,732



389



400



8.5%


8.5%

Missile Systems



4,961



4,858



629



663



12.7%


13.6%

Space and Airborne Systems



4,758



5,003



667



705



14.0%


14.1%

FAS/CAS Adjustment







(189)



(188)






Corporate and Eliminations



(1,390)



(1,380)



(141)



(131)






Total



$

17,836



$

17,975



$

2,229



$

2,234



12.5%


12.4%

(1) These amounts are revised to reflect our April 1, 2013 segment consolidation.









 


Attachment C

Raytheon Company

Other Preliminary Information

Third Quarter 2013





















(In millions)



Funded Backlog (1)


Total Backlog (1)




29-Sep-13


31-Dec-12


29-Sep-13


31-Dec-12











Integrated Defense Systems



$

7,985



$

9,188



$

9,573



$

11,656


Intelligence, Information and Services


2,689



2,848



5,888



6,409


Missile Systems



7,119



7,535



9,619



10,676


Space and Airborne Systems



4,351



4,476



7,155



7,440


Total



$

22,144



$

24,047



$

32,235



$

36,181


(1) These amounts are revised to reflect our April 1, 2013 segment consolidation.














Bookings


Bookings




Three Months Ended


Nine Months Ended




29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12











Total Bookings



$

5,685



$

7,293



$

14,615



$

18,612













Attachment D

Raytheon Company

Preliminary Balance Sheet Information

Third Quarter 2013








(In millions)





29-Sep-13


31-Dec-12

Assets




Current assets




   Cash and cash equivalents

$

2,942



$

3,188


   Short-term investments

955



856


   Contracts in process, net

5,248



4,543


   Inventories

405



381


   Deferred taxes

75



96


   Prepaid expenses and other current assets

127



182


     Total current assets

9,752



9,246






Property, plant and equipment, net

1,907



1,986


Deferred taxes

1,106



1,367


Goodwill

12,765



12,756


Other assets, net

1,248



1,331


           Total assets

$

26,778



$

26,686






Liabilities and Equity




Current liabilities




   Advance payments and billings in excess of costs incurred

$

2,232



$

2,398


   Accounts payable

1,143



1,348


   Accrued employee compensation

1,153



1,014


   Other accrued expenses

1,311



1,142


      Total current liabilities

5,839



5,902






Accrued retiree benefits and other long-term liabilities

7,194



7,854


Deferred taxes

1



9


Long-term debt

4,733



4,731






Equity




  Raytheon Company stockholders' equity




     Common stock

3



3


     Additional paid-in capital

2,335



2,928


     Accumulated other comprehensive loss

(7,314)



(7,788)


     Retained earnings

13,817



12,883


        Total Raytheon Company stockholders' equity

8,841



8,026


     Noncontrolling interests in subsidiaries

170



164


        Total equity

9,011



8,190


           Total liabilities and equity

$

26,778



$

26,686


 



Attachment E

Raytheon Company

Preliminary Cash Flow Information

Third Quarter 2013









(In millions)

Three Months Ended


Nine Months Ended


29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12









Net income

$

493



$

507



$

1,480



$

1,429


Loss (income) from discontinued operations, net of tax

(2)



1





4


Income from continuing operations

491



508



1,480



1,433










Depreciation

76



80



227



238


Amortization

35



33



105



103


Working capital (excluding pension and income taxes)*

265



432



(1,017)



(911)


Other long-term liabilities

(5)



(12)



(16)



(38)


Pension and other postretirement benefit plans

(71)



179



175



120


Other, net

104



(109)



322



18


     Net operating cash flow from continuing operations

$

895



$

1,111



$

1,276



$

963










Supplemental Cash Flow Information
















Capital spending

$

(60)



$

(67)



$

(165)



$

(204)


Internal use software spending

(13)



(14)



(34)



(60)


Acquisitions



(7)



(14)



(7)


Purchases of short-term investments

(100)



(125)



(939)



(831)


Sales of short-term investments





325



150


Maturities of short-term investments

156



75



518



75


Dividends

(177)



(165)



(520)



(478)


Repurchases of common stock

(225)



(125)



(675)



(725)


















* Working capital (excluding pension and income taxes) is a summation of changes in: contracts in process, net and advance payments and billings in excess of costs incurred, inventories, prepaid expenses and other current assets, accounts payable, accrued employee compensation, and other accrued expenses from the Consolidated Statements of Cash Flows.









 



Attachment F

Raytheon Company

Non-GAAP Financial Measures - Adjusted EPS, Adjusted Income and Adjusted Operating Margin

Third Quarter 2013





















Adjusted EPS Non-GAAP Reconciliation

























2013


2013

(In millions, except per share amounts)









Current Guidance


Prior Guidance


Three Months Ended



Nine Months Ended


Low end


High end


Low end


High end


29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12


of range


of range


of range


of range

Diluted EPS from continuing operations attributable to

















Raytheon Company common stockholders

$

1.51



$

1.51



$

4.50



$

4.24



$

5.67



$

5.77



$

5.51



$

5.61


Per share impact of the FAS/CAS Adjustment (A)

0.09



0.09



0.38



0.36



0.51



0.51



0.57



0.58


Per share impact of the 2012 research and development

















(R&D) tax credit (B)



0.02



(0.08)



0.05



(0.08)



(0.08)



(0.08)



(0.08)


Adjusted EPS (2), (3)

$

1.60



$

1.62



$

4.80



$

4.66



$

6.10



$

6.20



$

6.00



$

6.10






















(A)

FAS/CAS Adjustment

$

46



$

47



$

189



$

188



$

255



$

255



$

286



$

286



    Tax effect (1)

(16)



(16)



(66)



(66)



(89)



(89)



(100)



(100)



After-tax impact

30



31



123



122



166



166



186



186



Diluted shares

323.3



333.0



325.7



335.4



324.0



324.0



324.0



323.0



Per share impact

$

0.09



$

0.09



$

0.38



$

0.36



$

0.51



$

0.51



$

0.57



$

0.58






















(B)

2012 R&D tax credit

$



$

6



$

(25)



$

18



$

(25)



$

(25)



$

(25)



$

(25)



Diluted shares



333.0



325.7



335.4



324.0



324.0



324.0



323.0



Per share impact

$



$

0.02



$

(0.08)



$

0.05



$

(0.08)



$

(0.08)



$

(0.08)



$

(0.08)










































Adjusted Income Non-GAAP Reconciliation




































(In millions)





















Three Months Ended



Nine Months Ended














29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12









Income from continuing operations attributable to Raytheon

   Company common stockholders

$

487



$

501



$

1,465



$

1,423










FAS/CAS Adjustment (1)

30



31



123



122










2012 R&D tax credit



6



(25)



18










Adjusted Income (2), (4)

$

517



$

538



$

1,563



$

1,563






























Adjusted Operating Margin Non-GAAP Reconciliation





























2013


2013














Current Guidance


Prior Guidance






Three Months Ended



Nine Months Ended


Low end


High end


Low end


High end






29-Sep-13


30-Sep-12


29-Sep-13


30-Sep-12


of range


of range


of range


of range

Operating Margin

13.0%


13.0%


12.5%


12.4%


12.0%


12.1%


11.7%


11.8%

FAS/CAS Adjustment

0.8%


0.8%


1.1%


1.0%


1.1%


1.1%


1.2%


1.2%

Adjusted Operating Margin (2), (5)

13.7%


13.8%


13.6%


13.5%


13.1%


13.2%


12.9%


13.0%









































(1)

Tax effected at 35% federal statutory tax rate.


(2)

These amounts are not measures of financial performance under U.S. generally accepted accounting principles (GAAP).  They should be considered supplemental to and not a substitute for financial performance in accordance with GAAP and may not be defined and calculated by other companies in the same manner. These amounts exclude the FAS/CAS Adjustment and, from time to time, certain other items. We are providing these measures because management uses them for the purposes of evaluating and forecasting the Company's financial performance and believes that they provide additional insights into the Company's underlying business performance. We also believe that they allow investors to benefit from being able to assess our operating performance in the context of how our principal customer, the U.S. Government, allows us to recover pension and postretirement benefit (PRB) costs and to better compare our operating performance to others in the industry on that same basis. Amounts may not recalculate directly due to rounding.


(3)

Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon Company common stockholders excluding the EPS impact of the FAS/CAS Adjustment and, from time to time, certain other items. Nine Months Ended 2013 Adjusted EPS also excludes the earnings per share impact of an R&D tax credit that relates to 2012. In addition, the Q3 2012 and Nine Months Ended 2012 Adjusted EPS amounts have been revised to include the favorable impact for the 2012 R&D tax credit. In January 2013, Congress approved legislation that included the extension of the R&D tax credit. The legislation retroactively reinstated the R&D tax credit for 2012 and extended it through December 31, 2013. As a result, we recorded the 2012 benefit in the first quarter of 2013.


(4)

Adjusted Income is income from continuing operations attributable to Raytheon Company common stockholders excluding the after-tax impact of the FAS/CAS Adjustment and, from time to time, certain other items. Nine Months Ended 2013 Adjusted Income also excludes the R&D tax credit that relates to 2012, as discussed above. Q3 2012 and Nine Months Ended 2012 Adjusted Income also includes the 2012 R&D tax credit as discussed above.


(5)

Adjusted Operating Margin is defined as total operating margin excluding the margin impact of the FAS/CAS Adjustment and, from time to time, certain other items.

 

Investor Relations Contact

Todd Ernst

781.522.5141


Media Contact

Pam Erickson

781.522.5822

 

SOURCE Raytheon Company



RELATED LINKS
http://www.raytheon.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.