Raytheon Reports Second Quarter Results
- Net sales of $6.0 billion(1)
- Adjusted EPS of $1.36, up 11 percent; reported EPS from continuing operations was $0.56(1)
- Adjusted operating margin of 12.6 percent, up 30 basis points; reported operating margin was 5.8 percent(1)
- Solid operating cash flow from continuing operations of $400 million
WALTHAM, Mass., July 29, 2010 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE: RTN) announced second quarter 2010 Adjusted EPS of $1.36 per diluted share, compared to $1.22 per diluted share in the second quarter 2009(1). Second quarter 2010 income from continuing operations attributable to Raytheon was $0.56 per diluted share compared to $1.24 per diluted share in the second quarter 2009.
Second quarter 2010 income from continuing operations attributable to Raytheon included a ($395) million before-tax unfavorable adjustment, ($274) million after-tax or ($0.71) per diluted share, due to the previously announced program termination notice received by Raytheon Systems Limited on July 22, 2010 from the UK Border Agency. The Company believes that it performed well and delivered substantial capabilities to the customer under this program, and intends to pursue vigorously the collection of the unbilled receivables and damages and defend itself against the claims for losses and previous payments. Under U.S. Generally Accepted Accounting Principles (GAAP) the Company is required to recognize, in the second quarter 2010, the potential financial impact of the termination notice.
Second quarter 2010 income from continuing operations attributable to Raytheon also included ($0.09) per diluted share of FAS/CAS pension expense, compared to $0.02 per diluted share of FAS/CAS pension income in the second quarter 2009.
"Raytheon's underlying results during the quarter and execution of our strategy show continued growth for the year," said William H. Swanson, Raytheon's Chairman and CEO. "We continue to be well aligned with our customers' needs and we are well positioned for the future."
Net sales of $6.0 billion in the second quarter 2010 reflect the $316 million reduction for the UK Border Agency program termination. Net sales in the second quarter 2009 were $6.1 billion.
The Company generated operating cash flow from continuing operations of $400 million in the second quarter 2010 compared to $512 million in the second quarter 2009. Operating cash flow from continuing operations in the second quarter 2010 included $73 million in higher cash tax payments.
The Company ended the second quarter 2010 with $2.4 billion in cash and cash equivalents and $2.3 billion in total debt.
In the second quarter 2010, the Company repurchased 8.6 million shares of common stock for $475 million, as part of its previously announced share repurchase program. Year-to-date 2010, the Company repurchased 14.2 million shares of common stock for $775 million.
(1) A termination notice on a UK Border Agency program reduced second quarter 2010 net sales by $316 million, income from continuing operations before taxes by $395 million and EPS by $0.71 per share. Adjusted EPS is defined as EPS from continuing operations attributable to Raytheon Company common stockholders excluding the EPS impact of the FAS/CAS pension adjustment and the UK Border Agency program termination adjustment. Adjusted Operating Margin is defined as total operating margin excluding the margin impact of the FAS/CAS pension adjustment and the adjustment for the UK Border Agency program termination. Adjusted EPS and Adjusted Operating Margin are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.
Summary Financial Results | 2nd Quarter | % | Six Months | % | ||||||||
($ in millions, except per share data) | 2010 | 2009 | Change | 2010 | 2009 | Change | ||||||
Net sales(1) | $ 5,973 | $ 6,125 | -2% | $ 12,026 | $ 12,009 | 0% | ||||||
Income from continuing operations attributable to Raytheon Company(1) | $ 212 | $ 492 | -57% | $ 665 | $ 941 | -29% | ||||||
Adjusted Income(2) | $ 522 | $ 485 | 8% | $ 1,009 | $ 927 | 9% | ||||||
EPS from continuing operations(1) | $ 0.56 | $ 1.24 | -55% | $ 1.73 | $ 2.35 | -26% | ||||||
Adjusted EPS(2) | $ 1.36 | $ 1.22 | 11% | $ 2.63 | $ 2.31 | 14% | ||||||
Operating cash flow from cont. ops. | $ 400 | $ 512 | $ 657 | $ 923 | ||||||||
Workdays in fiscal reporting calendar | 64 | 64 | 124 | 125 | ||||||||
(1) The unfavorable adjustment for the UK Border Agency program termination reduced net sales in the second quarter and YTD 2010 by $316 million; reduced income from | ||||||||||||
(2) Adjusted Income is defined as income from continuing operations attributable to Raytheon Company common stockholders excluding the after-tax impact of the FAS/CAS | ||||||||||||
Bookings and Backlog
Bookings | 2nd Quarter | Six Months | ||||||
($ in millions) | 2010 | 2009 | 2010 | 2009 | ||||
Bookings | $ 5,901 | $ 7,647 | $ 12,427 | $ 12,856 | ||||
Backlog | Period Ending | |||||||
($ in millions) | 06/27/10 | 12/31/09 | ||||||
Backlog(1) | $ 35,980 | $ 36,877 | ||||||
Funded Backlog(1) | $ 22,461 | $ 23,479 | ||||||
(1) Backlog and funded backlog for the period ending 06/27/10 was reduced by $556 million for the UK | ||||||||
Year-to-date 2010 bookings were $12.4 billion, resulting in a book-to-bill ratio slightly greater than 1.
Outlook
2010 Financial Outlook | |||||||
2010 Outlook | |||||||
2009 Actual | Current | Prior (4/22/10) | |||||
Net Sales ($B) | 24.9 | 25.6 - 26.1* | 25.9 - 26.4 | ||||
FAS/CAS Pension Inc./(Exp.) ($M) | 27 | (220) | (220) | ||||
Interest Expense, Net ($M) | (109) | (95) - (110) | (95) - (110) | ||||
Diluted Shares (M) | 395.7 | 377 - 382 | 377 - 382 | ||||
Effective Tax Rate | 32.5% | ~31.5% | ~31.5% | ||||
EPS from Continuing Operations | $4.89 | $4.00 - $4.15* | $4.75 - $4.90 | ||||
Adjusted EPS(1) | $4.85 | $5.13 - $5.28 | $5.13 - $5.28 | ||||
Operating Cash Flow from Cont. Ops. ($B) | 2.7 | 2.0 - 2.2 | 2.0 - 2.2 | ||||
ROIC (%)(1) | 12.2 | 12.2 - 12.6 | 12.2 - 12.6 | ||||
* Denotes change from prior guidance. | |||||||
(1) Adjusted EPS is defined as EPS from continuing operations attributable to Raytheon Company common stockholders | |||||||
The Company updated its full-year 2010 guidance to reflect the unfavorable impact of the UK Border Agency program termination. Charts containing additional information on the Company's 2010 financial outlook are available on the Company's website at www.raytheon.com/ir.
Segment Results
Integrated Defense Systems
2nd Quarter | % | Six Months | % | ||||||||||
($ in millions) | 2010 | 2009 | Change | 2010 | 2009 | Change | |||||||
Net Sales | $ 1,352 | $ 1,335 | 1% | $ 2,688 | $ 2,597 | 4% | |||||||
Operating Income | $ 221 | $ 205 | 8% | $ 431 | $ 393 | 10% | |||||||
Operating Margin | 16.3% | 15.4% | 16.0% | 15.1% | |||||||||
Integrated Defense Systems (IDS) had second quarter 2010 net sales of $1,352 million compared to $1,335 million in the second quarter 2009. IDS recorded $221 million of operating income compared to $205 million in the second quarter 2009. The increase in operating income was primarily due to international Patriot programs.
During the quarter, IDS booked $317 million to provide advanced Patriot air and missile defense capability for an international customer.
Intelligence and Information Systems
2nd Quarter | % | Six Months | % | ||||||||||
($ in millions) | 2010 | 2009 | Change | 2010 | 2009 | Change | |||||||
Net Sales | $ 472 | $812 | -42% | $ 1,202 | $ 1,596 | -25% | |||||||
Operating Income (Loss) | $(329) | $ 66 | NM | $ (279) | $ 127 | NM | |||||||
Operating Margin | NM | 8.1% | NM | 8.0% | |||||||||
NM = Not Meaningful | |||||||||||||
Intelligence and Information Systems (IIS) had second quarter 2010 net sales of $472 million compared to $812 million in the second quarter 2009. IIS recorded $329 million of operating loss in the second quarter 2010 and $66 million of operating income in the second quarter 2009. The impact of the UK Border Agency program termination reduced IIS' second quarter 2010 net sales and operating income by $316 million and $395 million, respectively.
During the quarter, IIS booked $80 million on the Earth Observing System Data and Information System (EOSDIS) contract for NASA. IIS also booked $371 million on a number of classified contracts.
Missile Systems
2nd Quarter | % | Six Months | % | ||||||||||
($ in millions) | 2010 | 2009 | Change | 2010 | 2009 | Change | |||||||
Net Sales | $ 1,415 | $ 1,384 | 2% | $ 2,776 | $ 2,752 | 1% | |||||||
Operating Income | $ 164 | $ 147 | 12% | $ 322 | $ 305 | 6% | |||||||
Operating Margin | 11.6% | 10.6% | 11.6% | 11.1% | |||||||||
Missile Systems (MS) had second quarter 2010 net sales of $1,415 million compared to $1,384 million in the second quarter 2009. MS recorded $164 million of operating income compared to $147 million in the second quarter 2009. The increase in operating income was primarily due to improved program performance.
During the quarter, MS booked $234 million for Standard Missile-3 (SM-3) for the Missile Defense Agency, $223 million for Phalanx Weapon Systems for the U.S. Navy, U.S. Army and international customers, $150 million for Miniature Air Launched Decoys (MALD) for the U.S. Air Force, $123 million for Evolved Sea Sparrow Missiles (ESSM) for the U.S. Navy and international customers, $84 million for Standard Missile-2 (SM-2) for the U.S. Navy and an international customer and $81 million for AIM-9X short range air-to-air missiles for the U.S. Navy and international customers.
Network Centric Systems
2nd Quarter | % | Six Months | % | ||||||||||
($ in millions) | 2010 | 2009 | Change | 2010 | 2009 | Change | |||||||
Net Sales | $ 1,205 | $ 1,197 | 1% | $ 2,381 | $ 2,351 | 1% | |||||||
Operating Income | $ 166 | $ 170 | -2% | $ 331 | $ 333 | -1% | |||||||
Operating Margin | 13.8% | 14.2% | 13.9% | 14.2% | |||||||||
Network Centric Systems (NCS) had second quarter 2010 net sales of $1,205 million compared to $1,197 million in the second quarter 2009. NCS recorded $166 million of operating income compared to $170 million in the second quarter 2009.
During the quarter, NCS booked $100 million on a command and control program for an international customer.
Space and Airborne Systems
2nd Quarter | % | Six Months | % | ||||||||||
($ in millions) | 2010 | 2009 | Change | 2010 | 2009 | Change | |||||||
Net Sales | $ 1,197 | $ 1,136 | 5% | $ 2,292 | $ 2,182 | 5% | |||||||
Operating Income | $ 171 | $ 175 | -2% | $ 330 | $ 314 | 5% | |||||||
Operating Margin | 14.3% | 15.4% | 14.4% | 14.4% | |||||||||
Space and Airborne Systems (SAS) had second quarter 2010 net sales of $1,197 million, up 5 percent compared to $1,136 million in the second quarter 2009, primarily due to growth on classified business. SAS recorded $171 million of operating income compared to $175 million in the second quarter 2009. The change in operating income was primarily due to a favorable contractual settlement in the second quarter 2009.
During the quarter, SAS booked $160 million on two international AESA tactical radar programs. SAS also booked $563 million on a number of classified contracts, including $355 million on a major classified program.
Technical Services
2nd Quarter | % | Six Months | % | ||||||||||
($ in millions) | 2010 | 2009 | Change | 2010 | 2009 | Change | |||||||
Net Sales | $ 834 | $ 780 | 7% | $ 1,635 | $ 1,476 | 11% | |||||||
Operating Income | $ 73 | $ 53 | 38% | $ 140 | $ 97 | 44% | |||||||
Operating Margin | 8.8% | 6.8% | 8.6% | 6.6% | |||||||||
Technical Services (TS) had second quarter 2010 net sales of $834 million, up 7 percent compared to $780 million in the second quarter 2009, primarily due to continued growth in domestic and foreign training programs supporting the U.S. Army's Warfighter Field Operations Customer Support (FOCUS) activities. TS recorded operating income of $73 million compared to $53 million in the second quarter 2009. The increase in operating income was primarily due to improved program performance and higher volume.
During the quarter, TS booked $399 million on domestic training programs and $136 million on foreign training programs in support of the Warfighter FOCUS activities. TS also booked $95 million to provide operational and logistics support to the National Science Foundation (NSF) Office of Polar Programs.
Raytheon Company (NYSE: RTN), with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 88 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. With headquarters in Waltham, Mass., Raytheon employs 75,000 people worldwide.
Conference Call on the Second Quarter 2010 Financial Results
Raytheon's financial results conference call will be held on Thursday, July 29, 2010 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) 543-6405 in the U.S. or (617) 213-8897 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 2010 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, 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 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.
Media Contact: | Investor Relations Contact: | |
Jon Kasle | Marc Kaplan | |
781-522-5110 | 781-522-5141 | |
Attachment A Raytheon Company Preliminary Statement of Operations Information Second Quarter 2010 | ||||||||||
(In millions, except per share amounts) | Three Months Ended | Six Months Ended | ||||||||
27-Jun-10 | 28-Jun-09 | 27-Jun-10 | 28-Jun-09 | |||||||
Net sales | $ 5,973 | $ 6,125 | $ 12,026 | $ 12,009 | ||||||
Operating expenses | ||||||||||
Cost of sales | 5,038 | 4,839 | 9,822 | 9,536 | ||||||
Administrative and selling expenses | 414 | 370 | 822 | 734 | ||||||
Research and development expenses | 176 | 151 | 328 | 262 | ||||||
Total operating expenses | 5,628 | 5,360 | 10,972 | 10,532 | ||||||
Operating income | 345 | 765 | 1,054 | 1,477 | ||||||
Interest expense | 33 | 31 | 65 | 63 | ||||||
Interest income | (4) | (3) | (7) | (7) | ||||||
Other (income) expense | 6 | (13) | 5 | (8) | ||||||
Non-operating (income) expense | 35 | 15 | 63 | 48 | ||||||
Income from continuing operations before taxes | 310 | 750 | 991 | 1,429 | ||||||
Federal and foreign income taxes | 91 | 246 | 311 | 468 | ||||||
Income from continuing operations | 219 | 504 | 680 | 961 | ||||||
Income (loss) from discontinued operations, net of tax | (4) | (3) | (12) | - | ||||||
Net income | 215 | 501 | 668 | 961 | ||||||
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries | 7 | 12 | 15 | 20 | ||||||
Net income attributable to Raytheon Company | $ 208 | $ 489 | $ 653 | $ 941 | ||||||
Basic earnings (loss) per share attributable to Raytheon Company common stockholders: | ||||||||||
Income from continuing operations | $ 0.56 | $ 1.25 | $ 1.76 | $ 2.38 | ||||||
Income (loss) from discontinued operations, net of tax | (0.01) | (0.01) | (0.03) | - | ||||||
Net income | 0.55 | 1.24 | 1.73 | 2.38 | ||||||
Diluted earnings (loss) per share attributable to Raytheon Company common stockholders: | ||||||||||
Income from continuing operations | $ 0.56 | $ 1.24 | $ 1.73 | $ 2.35 | ||||||
Income (loss) from discontinued operations, net of tax | (0.01) | (0.01) | (0.03) | - | ||||||
Net income | 0.55 | 1.23 | 1.70 | 2.35 | ||||||
Amounts attributable to Raytheon Company common stockholders: | ||||||||||
Income from continuing operations | $ 212 | $ 492 | $ 665 | $ 941 | ||||||
Income (loss) from discontinued operations, net of tax | (4) | (3) | (12) | - | ||||||
Net income | $ 208 | $ 489 | $ 653 | $ 941 | ||||||
Average shares outstanding | ||||||||||
Basic | 378.5 | 392.5 | 378.1 | 395.7 | ||||||
Diluted | 383.1 | 397.3 | 383.7 | 400.6 | ||||||
Attachment B Raytheon Company Preliminary Segment Information Second Quarter 2010 | ||||||||||||
Operating Income | ||||||||||||
Net Sales | Operating Income | As a Percent of Net Sales | ||||||||||
(In millions, except percentages) | Three Months Ended | Three Months Ended | Three Months Ended | |||||||||
27-Jun-10 | 28-Jun-09 | 27-Jun-10 | 28-Jun-09 | 27-Jun-10 | 28-Jun-09 | |||||||
Integrated Defense Systems | $ 1,352 | $ 1,335 | $ 221 | $ 205 | 16.3% | 15.4% | ||||||
Intelligence and Information Systems | 472 | 812 | (329) | 66 | -69.7% | 8.1% | ||||||
Missile Systems | 1,415 | 1,384 | 164 | 147 | 11.6% | 10.6% | ||||||
Network Centric Systems | 1,205 | 1,197 | 166 | 170 | 13.8% | 14.2% | ||||||
Space and Airborne Systems | 1,197 | 1,136 | 171 | 175 | 14.3% | 15.4% | ||||||
Technical Services | 834 | 780 | 73 | 53 | 8.8% | 6.8% | ||||||
FAS/CAS Pension Adjustment | - | - | (55) | 11 | ||||||||
Corporate and Eliminations | (502) | (519) | (66) | (62) | ||||||||
Total | $ 5,973 | $ 6,125 | $ 345 | $ 765 | 5.8% | 12.5% | ||||||
Operating Income | ||||||||||||
Net Sales | Operating Income | As a Percent of Net Sales | ||||||||||
(In millions, except percentages) | Six Months Ended | Six Months Ended | Six Months Ended | |||||||||
27-Jun-10 | 28-Jun-09 | 27-Jun-10 | 28-Jun-09 | 27-Jun-10 | 28-Jun-09 | |||||||
Integrated Defense Systems | $ 2,688 | $ 2,597 | $ 431 | $ 393 | 16.0% | 15.1% | ||||||
Intelligence and Information Systems | 1,202 | 1,596 | (279) | 127 | -23.2% | 8.0% | ||||||
Missile Systems | 2,776 | 2,752 | 322 | 305 | 11.6% | 11.1% | ||||||
Network Centric Systems | 2,381 | 2,351 | 331 | 333 | 13.9% | 14.2% | ||||||
Space and Airborne Systems | 2,292 | 2,182 | 330 | 314 | 14.4% | 14.4% | ||||||
Technical Services | 1,635 | 1,476 | 140 | 97 | 8.6% | 6.6% | ||||||
FAS/CAS Pension Adjustment | - | - | (108) | 22 | ||||||||
Corporate and Eliminations | (948) | (945) | (113) | (114) | ||||||||
Total | $ 12,026 | $ 12,009 | $ 1,054 | $ 1,477 | 8.8% | 12.3% | ||||||
Attachment C | |||||||||
Raytheon Company | |||||||||
Other Preliminary Information | |||||||||
Second Quarter 2010 | |||||||||
(In millions) | Funded Backlog | Total Backlog | |||||||
27-Jun-10 | 31-Dec-09 | 27-Jun-10 | 31-Dec-09 | ||||||
Integrated Defense Systems | $ 5,637 | $ 5,595 | $ 9,463 | $ 10,665 | |||||
Intelligence and Information Systems * | 1,013 | 1,588 | 4,619 | 4,360 | |||||
Missile Systems | 6,296 | 6,454 | 7,838 | 7,657 | |||||
Network Centric Systems | 4,221 | 4,389 | 5,143 | 5,501 | |||||
Space and Airborne Systems | 3,215 | 3,402 | 5,930 | 5,921 | |||||
Technical Services | 2,079 | 2,051 | 2,987 | 2,773 | |||||
Total | $ 22,461 | $ 23,479 | $ 35,980 | $ 36,877 | |||||
* Backlog and funded backlog for the period ending June 27, 2010 was reduced by a net $556 million for the UK Border Agency program | |||||||||
Bookings | |||||
Three Months Ended | |||||
27-Jun-10 | 28-Jun-09 | ||||
Total Bookings | $ 5,901 | $ 7,647 | |||
Attachment D | ||||||
Raytheon Company | ||||||
Preliminary Balance Sheet Information | ||||||
Second Quarter 2010 | ||||||
(In millions) | ||||||
27-Jun-10 | 31-Dec-09 | |||||
Assets | ||||||
Cash and cash equivalents | $ 2,385 | $ 2,642 | ||||
Accounts receivable, net | 131 | 120 | ||||
Contracts in process | 4,461 | 4,373 | ||||
Inventories | 330 | 344 | ||||
Deferred taxes | 301 | 273 | ||||
Prepaid expenses and other current assets | 112 | 116 | ||||
Total current assets | 7,720 | 7,868 | ||||
Property, plant and equipment, net | 1,953 | 2,001 | ||||
Deferred taxes | 326 | 436 | ||||
Prepaid retiree benefits | 130 | 111 | ||||
Goodwill | 11,921 | 11,922 | ||||
Other assets, net | 1,231 | 1,269 | ||||
Total assets | $ 23,281 | $ 23,607 | ||||
Liabilities and Equity | ||||||
Current liabilities | ||||||
Advance payments and billings in excess of costs incurred | $ 2,159 | $ 2,224 | ||||
Accounts payable | 1,330 | 1,397 | ||||
Accrued employee compensation | 972 | 868 | ||||
Other accrued expenses | 1,214 | 1,034 | ||||
Total current liabilities | 5,675 | 5,523 | ||||
Accrued retiree benefits and other long-term liabilities | 5,261 | 5,793 | ||||
Deferred taxes | 23 | 23 | ||||
Long-term debt | 2,327 | 2,329 | ||||
Equity | ||||||
Raytheon Company stockholders' equity | ||||||
Common stock | 4 | 4 | ||||
Additional paid-in capital | 11,332 | 10,991 | ||||
Accumulated other comprehensive loss | (4,712) | (4,824) | ||||
Treasury stock, at cost | (6,222) | (5,446) | ||||
Retained earnings | 9,473 | 9,102 | ||||
Total Raytheon Company stockholders' equity | 9,875 | 9,827 | ||||
Noncontrolling interests in subsidiaries | 120 | 112 | ||||
Total equity | 9,995 | 9,939 | ||||
Total liabilities and equity | $ 23,281 | $ 23,607 | ||||
Attachment E Raytheon Company Preliminary Cash Flow Information Second Quarter 2010 | ||||||||
(In millions) | Three Months Ended | Six Months Ended | ||||||
27-Jun-10 | 28-Jun-09 | 27-Jun-10 | 28-Jun-09 | |||||
Net income (loss) | $ 215 | $ 501 | $ 668 | $ 961 | ||||
(Income) loss from discontinued operations, net of tax | 4 | 3 | 12 | - | ||||
Income (loss) from continuing operations | 219 | 504 | 680 | 961 | ||||
Depreciation | 75 | 73 | 149 | 144 | ||||
Amortization | 28 | 24 | 57 | 50 | ||||
Working capital (excluding pension and taxes)* | 651 | 313 | (26) | (625) | ||||
Discontinued operations | - | (3) | 2 | (9) | ||||
Net activity in financing receivables | 6 | 6 | 22 | 15 | ||||
Other | (579) | (408) | (225) | 378 | ||||
Net operating cash flow | 400 | 509 | 659 | 914 | ||||
Capital spending | (64) | (48) | (109) | (81) | ||||
Internal use software spending | (17) | (21) | (31) | (34) | ||||
Acquisitions | - | - | (12) | - | ||||
Dividends | (143) | (122) | (260) | (234) | ||||
Repurchases of common stock | (475) | (300) | (775) | (600) | ||||
Warrants exercised | 87 | - | 250 | - | ||||
Other | (16) | (29) | 21 | (25) | ||||
Total cash flow | $ (228) | $ (11) | $ (257) | $ (60) | ||||
* Working capital (excluding pension and taxes) is a summation of changes in: accounts receivable, net, contracts in process and advance | ||||||||
Attachment F Raytheon Company Non-GAAP Financial Measures - Adjusted Measures Second Quarter 2010 | ||||||||||||||||||||
Adjusted EPS Non-GAAP Reconciliation | ||||||||||||||||||||
(In millions, except per share amounts) | 2010 Current Guidance | 2010 Prior Guidance | ||||||||||||||||||
Three Months Ended | Six Months Ended | Low end | High end | Low end | High end | |||||||||||||||
2010 | 2009 | 2010 | 2009 | of range | of range | of range | of range | |||||||||||||
Diluted earnings per share from continuing operations | $ 0.56 | $ 1.24 | $ 1.73 | $ 2.35 | $ 4.00 | $ 4.15 | $ 4.75 | $ 4.90 | ||||||||||||
Less: Per share impact of the FAS/CAS Pension Adjustment (A) | (0.09) | 0.02 | (0.18) | 0.04 | (0.38) | (0.38) | (0.38) | (0.38) | ||||||||||||
Less: Per share impact of United Kingdom (UK) Border Agency | (0.71) | - | (0.72) | - | (0.75) | (0.75) | - | - | ||||||||||||
Adjusted EPS (1) | $ 1.36 | $ 1.22 | $ 2.63 | $ 2.31 | $ 5.13 | $ 5.28 | $ 5.13 | $ 5.28 | ||||||||||||
(A) FAS/CAS Pension Adjustment | $ (55) | $ 11 | $ (108) | $ 22 | $ (220) | $ (220) | $ (220) | $ (220) | ||||||||||||
Tax effect (at 35% federal statutory rate) | 19 | (4) | 38 | (8) | 77 | 77 | 77 | 77 | ||||||||||||
After-tax impact | (36) | 7 | (70) | 14 | (143) | (143) | (143) | (143) | ||||||||||||
Diluted Shares | 383.1 | 397.3 | 383.7 | 400.6 | 382.0 | 377.0 | 382.0 | 377.0 | ||||||||||||
Per share impact (2) | $ (0.09) | $ 0.02 | $ (0.18) | $ 0.04 | $ (0.38) | $ (0.38) | $ (0.38) | $ (0.38) | ||||||||||||
(B) UK Border Agency program termination | $ (395) | $ - | $ (395) | $ - | $ (395) | $ (395) | $ - | $ - | ||||||||||||
Tax effect (actual at 30.6% blended global tax rate and guidance at 28% UK statutory rate) | 121 | - | 121 | - | 111 | 111 | - | - | ||||||||||||
After-tax adjustment | (274) | - | (274) | - | (284) | (284) | - | - | ||||||||||||
Diluted Shares | 383.1 | 397.3 | 383.7 | 400.6 | 382.0 | 377.0 | 382.0 | 377.0 | ||||||||||||
Per share impact (2) | $ (0.71) | $ - | $ (0.72) | $ - | $ (0.75) | $ (0.75) | $ - | $ - | ||||||||||||
Adjusted Income from Continuing Operations attributable to Raytheon Company common stockholders Non-GAAP Reconciliation | ||||||||
Three Months Ended | Six Months Ended | |||||||
2010 | 2009 | 2010 | 2009 | |||||
Income from Continuing Operations attributable to Raytheon Company common stockholders | $ 212 | $ 492 | $ 665 | $ 941 | ||||
FAS/CAS Pension Adjustment (Tax effected at 35% federal statutory rate) | 36 | (7) | 70 | (14) | ||||
UK Border Agency program termination (Tax effected at 30.6% blended global tax rate) | 274 | - | 274 | - | ||||
Adjusted Income (1) | $ 522 | $ 485 | $ 1,009 | $ 927 | ||||
Adjusted operating margin Non-GAAP Reconciliation | ||||||||||||
(In millions, except per share amounts) | 2010 Current Guidance | |||||||||||
Three Months Ended | Six Months Ended | Low end | High end | |||||||||
2010 | 2009 | 2010 | 2009 | of range | of range | |||||||
Operating margin | 5.8 % | 12.5 % | 8.8 % | 12.3 % | 9.4 % | 9.6 % | ||||||
Less: Impact of the FAS/CAS Pension Adjustment | (0.9) % | 0.2 % | (0.9) % | 0.2 % | (0.9) % | (0.9) % | ||||||
Less: Impact of UK Border Agency program termination | (5.9) % | 0.0 % | (2.9) % | 0.0 % | (1.5) % | (1.5) % | ||||||
Adjusted operating margin (1) | 12.6 % | 12.3 % | 12.6 % | 12.1 % | 11.8 % | 12.0 % | ||||||
(1) These amounts are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). They should be Adjusted EPS is defined as diluted EPS from continuing operations attributable to Raytheon Company common stockholders excluding the EPS (2) Amounts may not recalculate directly due to rounding. | ||||||||||||
Attachment G | |
Raytheon Company | |
Preliminary Return on Invested Capital Non-GAAP Financial Measure | |
Second Quarter 2010 | |
The Company defines Return on Invested Capital (ROIC) as income from continuing operations excluding the after-tax effect of | |
Return on Invested Capital | ||||||
(In millions, except percentages) | 2010 Current Guidance | |||||
Low end | High end | |||||
2009 | of range | of range | ||||
Income from continuing operations | $ 1,977 | |||||
FAS/CAS Pension Adjustment, after-tax * | (18) | |||||
UK Border Agency program termination, after-tax ** | - | |||||
Net interest expense, after-tax * | 71 | Combined | Combined | |||
Lease expense, after-tax * | 66 | |||||
Return | $2,096 | $ 2,155 | $ 2,220 | |||
Net debt *** | $ (132) | |||||
Equity less investment in discontinued operations | 9,560 | |||||
Lease expense x 8, plus financial guarantees | 2,815 | Combined | Combined | |||
Minimum pension liability | 5,007 | |||||
Invested capital from continuing operations **** | $ 17,250 | $ 17,700 | $ 17,500 | |||
ROIC | 12.2% | 12.2% | 12.6% | |||
* Federal statutory tax rate of 35% | ||||||
** U.K. statutory tax rate of 28% | ||||||
*** Net debt is defined as total debt less cash and cash equivalents and is calculated using a 2 point average | ||||||
**** Calculated using a 2 point average | ||||||
SOURCE Raytheon Company
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