RAYTHEON WALTHAM, Mass., Jan. 26, 2017 /PRNewswire/ -- Raytheon Company (NYSE: RTN) today announced net sales for the fourth quarter 2016 of $6.2 billion compared to $6.3 billion in the fourth quarter 2015(1). Fourth quarter 2016 EPS from continuing operations was $1.84 compared to $1.85 in the fourth quarter 2015. Fourth quarter 2016 EPS from continuing operations included a favorable FAS/CAS Adjustment of $0.26 compared to a favorable FAS/CAS Adjustment of $0.10 in the fourth quarter 2015.
The Company made a pretax discretionary pension plan contribution in both the fourth quarter 2016 and the fourth quarter 2015, discussed further below, which had an unfavorable tax-related EPS impact of $0.04 and $0.02, respectively. The 2016 discretionary pension plan contribution was not included in the Company's prior guidance.
Net sales in 2016 were $24.1 billion, up 3.5 percent compared to $23.2 billion in 2015. Full-year 2016 EPS from continuing operations was $7.44 compared to $6.75 for the full-year 2015.
"I'm pleased with the Company's operating performance in 2016. We delivered solid sales and earnings growth by executing our strategy and investing in advanced capabilities that align with our global customers' evolving requirements," said Thomas A. Kennedy, Raytheon Chairman and CEO. "Strong domestic and international bookings throughout the year drove an increase in our backlog, which positions us well for growth in the future."
The Company generated strong operating cash flow for both the fourth quarter and full-year. Operating cash flow from continuing operations for the fourth quarter 2016 was $1.1 billion compared to $0.8 billion for the fourth quarter 2015. Fourth quarter 2016 operating cash flow from continuing operations included a $500 million pretax discretionary cash contribution to the Company's pension plans compared to $200 million in the fourth quarter 2015. For the full-year 2016 and 2015, the Company generated $2.9 billion and $2.3 billion of operating cash flow from continuing operations, respectively.
(1)Fourth quarter
2016 had 4 fewer
work days than
fourth quarter 2015.
Summary Financial Results
-------------------------
4th Quarter % Twelve Months %
($ in millions, except per share data) 2016 2015 Change 2016 2015 Change
---- ------ ---- ---- ------
Bookings $7,577 $7,861 -3.6% $27,836 $25,227 10.3%
Net Sales $6,238 $6,328 -1.4% $24,069 $23,247 3.5%
Income from Continuing Operations attributable to Raytheon Company $544 $558 -2.5% $2,210 (1) $2,061 (2) 7.2%
EPS from Continuing Operations $1.84 $1.85 -0.5% $7.44 (1) $6.75 (2) 10.2%
Operating Cash Flow from Continuing Operations $1,141 $813 $2,852 $2,346
Workdays in Fiscal Reporting Calendar 57 61 249 249
1 Twelve months 2016 Income from Continuing Operations attributable to Raytheon Company and EPS from Continuing Operations included the tax-free gain of $158 million and $0.53 impact, respectively, for the second quarter 2016 TRS transaction.
2 Twelve months 2015 Income from Continuing Operations attributable to Raytheon Company and EPS from Continuing Operations included the favorable $181 million pretax ($143 million after-tax) and $0.47 impact, respectively, for the first quarter 2015 eBorders settlement.
The Company had bookings of $7.6 billion in the fourth quarter 2016, resulting in a book-to-bill ratio of 1.21. Fourth quarter 2015 bookings were $7.9 billion. Full-year 2016 bookings were a record $27.8 billion, resulting in a book-to-bill ratio of 1.16. Full-year 2015 bookings were $25.2 billion.
Backlog
-------
($ in millions) Period Ending
2016 2015
---- ----
Backlog $36,855 $34,669
Funded Backlog $25,604 $25,060
Backlog at the end of 2016 was $36.9 billion, an increase of approximately $2.2 billion or 6 percent compared to the end of 2015. Funded backlog was $25.6 billion, an increase of approximately $0.5 billion compared to the end of 2015.
In the fourth quarter 2016, the Company repurchased 0.7 million shares of common stock for $100 million. For the full-year 2016, the Company repurchased 6.9 million shares of common stock for $900 million.
Outlook
The Company has provided its financial outlook for 2017. Charts containing additional information on the Company's 2017 outlook are available on the Company's website at www.raytheon.com/ir.
Effective January 1, 2017, the Company adopted the new revenue recognition standard utilizing the full retrospective transition method. Under this method, the standard was applied to each prior reporting period presented and the cumulative effect of applying the standard was recognized at the earliest period shown. The impact of adopting the new standard on the Company's 2015 and 2016 net sales and operating income was not material. The 2016 net sales, effective tax rate and EPS from continuing operations in the financial outlook table below have been recast to reflect this change.
2017 Financial Outlook
----------------------
2016 Actual 2017
As Reported New Rev Rec(1) Outlook(1)
----------- ------------- ---------
Net Sales ($B) 24.1 24.1 24.8 - 25.3
Deferred Revenue Adjustment ($M)(2) (77) (77) (33)
Amortization of Acquired Intangibles ($M)(2) (121) (121) (127)
FAS/CAS Adjustment ($M) 435 435 428
Interest Expense, net ($M) (216) (216) (216) - (221)
Diluted Shares (M) 297 297 291 - 293
Effective Tax Rate 28.3% 28.3% ~31.5%
EPS from Continuing Operations(3) $7.44 $7.55 $7.20 - $7.35
Operating Cash Flow from Continuing Operations ($B) 2.9 2.9 2.8 - 3.1
1 Effective January 1, 2017, the Company adopted the new revenue recognition standard, Accounting Standards Update 2014-09. The 2016 Actuals - New Rev Rec and the 2017 Outlook above reflect this change.
2 Deferred Revenue Adjustment and Amortization of Intangibles represent the unfavorable impact of the acquisition accounting adjustments to record acquired deferred revenue at fair value and the
amortization of acquired intangible assets, respectively, for all of the business segments.
3 2016 EPS from Continuing Operations included the $0.53 tax-free gain for the second quarter TRS transaction.
Segment Results
The Company's reportable segments are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint.
The pro-forma attachments at the end of this release present prior period consolidated and segment data recast to reflect the adoption of the new revenue recognition standard discussed above. The business results discussed below do not reflect these changes, because they became effective January 1, 2017.
Integrated Defense Systems
4th Quarter Twelve Months
($ in millions) 2016 2015 % Change 2016 2015 % Change
Net Sales $1,406 $1,558 -10% $5,476 $5,847 -6%
Operating Income(1) $219 $281 -22% $950 $864 NM
Operating Margin(1) 15.6% 18.0% 17.3% 14.8%
(1) Twelve months 2016 operating income and operating margin include the $158 million tax-free gain from the second quarter TRS transaction.
NM = Not Meaningful
Integrated Defense Systems (IDS) had fourth quarter 2016 net sales of $1,406 million compared to $1,558 million in the fourth quarter 2015. IDS had full-year 2016 net sales of $5,476 million compared to $5,847 million in 2015. The change in net sales for both the quarter and the full-year was primarily driven by lower net sales on an international communications program and on the Air Warfare Destroyer (AWD) program. In addition, the full-year was also driven by lower net sales on various missile defense radar production programs.
IDS recorded $219 million of operating income in the fourth quarter 2016 compared to $281 million in the fourth quarter 2015. The change in operating income for the quarter was primarily driven by a favorable contract modification on the AWD program in the fourth quarter 2015 and lower volume in the fourth quarter 2016. IDS recorded $950 million of operating income in 2016 compared to $864 million in 2015. Operating income for the full-year 2016 included the $158 million tax-free gain from the second quarter TRS transaction.
During the quarter, IDS booked approximately $1.0 billion to provide advanced Patriot air and missile defense capabilities for multiple international customers. IDS booked $189 million to provide Consolidated Contractor Logistics Support (CCLS) and $144 million on the AN/TPY-2 radar sustainment program for the Missile Defense Agency (MDA). IDS also booked $110 million on the Air and Missile Defense Radar (AMDR) program for the U.S. Navy.
Intelligence, Information and Services
4th Quarter Twelve Months
($ in millions) 2016 2015 % Change 2016 2015 % Change
Net Sales $1,518 $1,537 -1% $6,194 $6,111 1%
Operating Income(1) $121 $111 9% $467 $646 NM
Operating Margin(1) 8.0% 7.2% 7.5% 10.6%
(1) Twelve months 2015 operating income and operating margin include the favorable $181 million impact for the first quarter eBorders settlement.
NM = Not Meaningful
Intelligence, Information and Services (IIS) had fourth quarter 2016 net sales of $1,518 million compared to $1,537 million in the fourth quarter 2015. IIS had full-year 2016 net sales of $6,194 million compared to $6,111 million in 2015. The change in net sales for the full-year was primarily driven by higher net sales on cybersecurity and special mission programs.
IIS recorded $121 million of operating income in the fourth quarter 2016 compared to $111 million in the fourth quarter 2015. The change in operating income for the quarter was primarily driven by higher net program efficiencies in the fourth quarter 2016. IIS recorded $467 million of operating income in 2016 compared to $646 million in 2015. Operating income for the full-year 2015 included the favorable $181 million impact for the first quarter eBorders settlement.
During the quarter, IIS booked $90 million on domestic and foreign training programs in support of Warfighter FOCUS activities. IIS also booked $448 million on a number of classified contracts.
Missile Systems
4th Quarter Twelve Months
($ in millions) 2016 2015 % Change 2016 2015 % Change
---- -------- ---- --------
Net Sales $1,895 $1,879 1% $7,071 $6,556 8%
Operating Income $260 $258 1% $916 $868 6%
Operating Margin 13.7% 13.7% 13.0% 13.2%
Missile Systems (MS) had fourth quarter 2016 net sales of $1,895 million compared to $1,879 million in the fourth quarter 2015. MS had full-year 2016 net sales of $7,071 million compared to $6,556 million in 2015. The increase in net sales for the full-year was primarily driven by higher net sales on the Paveway(TM) program.
MS recorded $260 million of operating income in the fourth quarter 2016 compared to $258 million in the fourth quarter 2015. MS recorded $916 million of operating income in 2016 compared to $868 million in 2015. The increase in operating income for the full-year was primarily due to higher volume in 2016.
During the quarter, MS booked $362 million for Paveway(TM), $309 million for Tomahawk, $259 million for the Rolling Airframe Missile (RAM(TM)) program, $208 million for the Stinger(®) weapon system, $193 million for Evolved Seasparrow Missiles (ESSM(®)), $141 million for Standard Missile-3 (SM-3(®)), $114 million for Phalanx(®) close-in weapon systems, $76 million for Miniature Air Launched Decoy (MALD(®)), and $76 million for the David's Sling weapon system's Stunner Missile. MS also booked $175 million for the Hypersonic Air-breathing Weapon Concept (HAWC) program for the Defense Advanced Research Projects Agency (DARPA) and the U.S. Air Force.
Space and Airborne Systems
4th Quarter Twelve Months
($ in millions) 2016 2015 % Change 2016 2015 % Change
---- -------- ---- --------
Net Sales $1,612 $1,576 2% $6,199 $5,796 7%
Operating Income $231 $239 -3% $817 $829 -1%
Operating Margin 14.3% 15.2% 13.2% 14.3%
Space and Airborne Systems (SAS) had fourth quarter 2016 net sales of $1,612 million compared to $1,576 million in the fourth quarter 2015. The increase in net sales for the quarter was primarily driven by higher net sales on an electronic warfare systems program and an international classified program. SAS had full-year 2016 net sales of $6,199 million compared to $5,796 million in 2015. The increase in net sales for the full-year was primarily due to higher net sales on classified programs.
SAS recorded $231 million of operating income in the fourth quarter 2016 compared to $239 million in the fourth quarter 2015. SAS recorded $817 million of operating income in 2016 compared to $829 million in 2015. The change in operating income for the quarter and the full-year was primarily driven by a change in program mix.
During the quarter, SAS booked $610 million for the production of Active Electronically Scanned Array (AESA) radars, $81 million to provide radar components and $75 million on a cryptographic modernization program, all for both U.S. and international customers. SAS also booked $467 million on a number of classified contracts.
Forcepoint
4th Quarter Twelve Months
($ in millions) 2016 2015 % Change 2016 2015 % Change
---- -------- ---- --------
Net Sales $143 $133 8% $566 $328 NM
Operating Income $11 $11 - $51 $30 NM
Operating Margin 7.7% 8.3% 9.0% 9.1%
NM = Not Meaningful
Forcepoint had fourth quarter 2016 net sales of $143 million, up 8 percent compared to $133 million in the fourth quarter 2015. The increase in net sales for the quarter was primarily driven by the acquisition of Stonesoft in the first quarter of 2016. Forcepoint recorded $11 million of operating income in both the fourth quarter 2016 and in the fourth quarter 2015.
Forcepoint had full-year 2016 net sales of $566 million compared to $328 million in 2015. Forcepoint recorded $51 million of operating income in 2016 compared to $30 million in 2015. The increase in both net sales and operating income for the full-year was primarily due to the acquisition of Websense in the second quarter of 2015 and Stonesoft in the first quarter of 2016.
About Raytheon
Raytheon Company, with 2016 sales of $24 billion and 63,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 95 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5I(TM) 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 Fourth Quarter and Full-Year 2016 Financial Results
Raytheon's financial results conference call will be held on Thursday, January 26, 2017 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 (800) 510-9691 in the U.S. or (617) 614-3453 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, a government shutdown, or otherwise, uncertain funding of programs and potential termination of contracts; 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 and obtain approvals, 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; 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 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; 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.
Attachment A
Raytheon Company
Preliminary Statement of Operations Information
Fourth Quarter 2016
(In millions, except per share amounts) Three Months Ended Twelve Months Ended
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- ---------
Net sales $6,238 $6,328 $24,069 $23,247
------ ------ ------- -------
Operating expenses
Cost of sales 4,655 4,808 17,947 17,574
General and administrative expenses 721 692 2,882 2,660
Total operating expenses 5,376 5,500 20,829 20,234
----- ----- ------ ------
Operating income 862 828 3,240 3,013
--- --- ----- -----
Non-operating (income) expense, net
Interest expense 58 58 232 233
Interest income (4) (2) (16) (11)
Other (income) expense, net 1 (2) (6) 4
--- --- --- ---
Total non-operating (income) expense, net 55 54 210 226
--- --- --- ---
Income from continuing operations before taxes 807 774 3,030 2,787
Federal and foreign income taxes 266 220 857 733
--- --- --- ---
Income from continuing operations 541 554 2,173 2,054
Income (loss) from discontinued operations, net of tax - 13 1 13
--- --- --- ---
Net income 541 567 2,174 2,067
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries (3) (4) (37) (7)
--- --- --- ---
Net income attributable to Raytheon Company $544 $571 $2,211 $2,074
==== ==== ====== ======
Basic earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations $1.84 $1.85 $7.45 $6.76
Income (loss) from discontinued operations, net of tax - 0.04 - 0.04
Net income 1.84 1.89 7.45 6.81
Diluted earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations $1.84 $1.85 $7.44 $6.75
Income (loss) from discontinued operations, net of tax - 0.04 - 0.04
Net income 1.84 1.89 7.44 6.80
Amounts attributable to Raytheon Company common stockholders:
Income from continuing operations $544 $558 $2,210 $2,061
Income (loss) from discontinued operations, net of tax - 13 1 13
---
Net income $544 $571 $2,211 $2,074
==== ==== ====== ======
Average shares outstanding
Basic 294.2 301.6 296.5 304.8
Diluted 294.5 302.1 296.8 305.2
Attachment A - Pro Forma
Raytheon Company
Preliminary Statement of Operations Information
Full Year 2015, and Quarters within and Full Year 2016
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our statement of operations information set forth below reflect these changes.
(In millions, except per share amounts) Three Months Ended Twelve Months Ended
31-Dec-16 2-Oct-16 3-Jul-16 3-Apr-16 31-Dec-16 31-Dec-15
--------- -------- -------- -------- --------- ---------
Net sales $6,279 $6,014 $6,029 $5,802 $24,124 $23,321
------ ------ ------ ------ ------- -------
Operating expenses
Cost of sales 4,688 4,474 4,362 4,441 17,965 17,608
General and administrative expenses 711 710 695 748 2,864 2,646
--- --- --- --- ----- -----
Total operating expenses 5,399 5,184 5,057 5,189 20,829 20,254
----- ----- ----- ----- ------ ------
Operating income 880 830 972 613 3,295 3,067
--- --- --- --- ----- -----
Non-operating (income) expense, net
Interest expense 58 58 58 58 232 233
Interest income (4) (4) (4) (4) (16) (11)
Other (income) expense, net 1 (4) (1) (2) (6) 4
--- --- --- --- --- ---
Total non-operating (income) expense, net 55 50 53 52 210 226
--- --- --- --- --- ---
Income from continuing operations before taxes 825 780 919 561 3,085 2,841
Federal and foreign income taxes 272 239 205 157 873 747
--- --- --- --- --- ---
Income from continuing operations 553 541 714 404 2,212 2,094
Income (loss) from discontinued operations, net of tax - 1 (1) 1 1 13
--- --- --- --- --- ---
Net income 553 542 713 405 2,213 2,107
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries (2) (2) (4) (23) (31) (3)
--- --- --- --- --- ---
Net income attributable to Raytheon Company $555 $544 $717 $428 $2,244 $2,110
==== ==== ==== ==== ====== ======
Basic earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations $1.88 $1.84 $2.41 $1.43 $7.55 $6.88
Income (loss) from discontinued operations, net of tax - - - - - 0.04
Net income 1.88 1.84 2.41 1.43 7.56 6.92
Diluted earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations $1.87 $1.84 $2.41 $1.43 $7.55 $6.87
Income (loss) from discontinued operations, net of tax - - - - - 0.04
Net income 1.88 1.84 2.41 1.43 7.55 6.91
Amounts attributable to Raytheon Company common stockholders:
Income from continuing operations $555 $543 $718 $427 $2,243 $2,097
Income (loss) from discontinued operations, net of tax - 1 (1) 1 1 13
Net income $555 $544 $717 $428 $2,244 $2,110
==== ==== ==== ==== ====== ======
Average shares outstanding
Basic 294.2 295.2 297.3 299.2 296.5 304.8
Diluted 294.5 295.5 297.6 299.6 296.8 305.2
Attachment B
Raytheon Company
Preliminary Segment Information
Fourth Quarter 2016
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
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- --------- --------- ---------
Integrated Defense Systems $1,406 $1,558 $219 $281 15.6% 18.0%
Intelligence, Information and Services 1,518 1,537 121 111 8.0% 7.2%
Missile Systems 1,895 1,879 260 258 13.7% 13.7%
Space and Airborne Systems 1,612 1,576 231 239 14.3% 15.2%
Forcepoint 143 133 11 11 7.7% 8.3%
Eliminations (323) (331) (32) (29)
---- ---- --- ---
Total business segment 6,251 6,352 810 871 13.0% 13.7%
Acquisition Accounting Adjustments (13) (24) (43) (59)
FAS/CAS Adjustment - - 117 44
Corporate - - (22) (28)
--- --- --- ---
Total $6,238 $6,328 $862 $828 13.8% 13.1%
====== ====== ==== ====
Operating Income
Net Sales Operating Income As a Percent of Net Sales
--------- ---------------- -------------------------
(In millions, except percentages) Twelve Months Ended Twelve Months Ended Twelve Months Ended
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- --------- --------- ---------
Integrated Defense Systems $5,476 $5,847 $950 $864 17.3% 14.8%
Intelligence, Information and Services 6,194 6,111 467 646 7.5% 10.6%
Missile Systems 7,071 6,556 916 868 13.0% 13.2%
Space and Airborne Systems 6,199 5,796 817 829 13.2% 14.3%
Forcepoint 566 328 51 30 9.0% 9.1%
Eliminations (1,360) (1,330) (141) (140)
------ ------ ---- ----
Total business segment 24,146 23,308 3,060 3,097 12.7% 13.3%
Acquisition Accounting Adjustments (77) (61) (198) (168)
FAS/CAS Adjustment - - 435 185
Corporate - - (57) (101)
--- --- --- ----
Total $24,069 $23,247 $3,240 $3,013 13.5% 13.0%
======= ======= ====== ======
Attachment B - Pro Forma
Raytheon Company
Preliminary Segment Information
Full Year 2015, and Quarters within and Full Year 2016
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our segment information set forth below reflect these changes.
Net Sales Net Sales
--------- ---------
(In millions) Three Months Ended Twelve Months Ended
------------------
31-Dec-16 2-Oct-16 3-Jul-16 3-Apr-16 31-Dec-16 31-Dec-15
--------- -------- -------- -------- --------- ---------
Integrated Defense Systems $1,460 $1,334 $1,399 $1,336 $5,529 $5,848
Intelligence, Information and Services 1,516 1,534 1,587 1,532 6,169 6,137
Missile Systems 1,897 1,770 1,706 1,723 7,096 6,569
Space and Airborne Systems 1,600 1,590 1,547 1,445 6,182 5,814
Forcepoint 143 167 137 139 586 344
Eliminations (324) (364) (326) (347) (1,361) (1,330)
---- ---- ---- ---- ------ ------
Total business segment 6,292 6,031 6,050 5,828 24,201 23,382
Acquisition Accounting Adjustments (13) (17) (21) (26) (77) (61)
--- --- --- --- --- ---
Total $6,279 $6,014 $6,029 $5,802 $24,124 $23,321
====== ====== ====== ====== ======= =======
Operating Income Operating Income
---------------- ----------------
(In millions) Three Months Ended Twelve Months Ended
31-Dec-16 2-Oct-16 3-Jul-16 3-Apr-16 31-Dec-16 31-Dec-15
--------- -------- -------- -------- --------- ---------
Integrated Defense Systems $238 $211 $376 $146 $971 $859
Intelligence, Information and Services 120 123 120 104 467 648
Missile Systems 261 235 233 192 921 877
Space and Airborne Systems 221 215 205 167 808 851
Forcepoint 21 41 10 18 90 56
Eliminations (33) (42) (34) (33) (142) (140)
--- --- --- --- ---- ----
Total business segment 828 783 910 594 3,115 3,151
Acquisition Accounting Adjustments (43) (46) (51) (58) (198) (168)
FAS/CAS Adjustment 117 104 109 105 435 185
Corporate (22) (11) 4 (28) (57) (101)
--- --- --- --- --- ----
Total $880 $830 $972 $613 $3,295 $3,067
==== ==== ==== ==== ====== ======
Operating Income Operating Income
As a Percentage of Net Sales As a Percentage of Net Sales
---------------------------- ----------------------------
Three Months Ended Twelve Months Ended
31-Dec-16 2-Oct-16 3-Jul-16 3-Apr-16 31-Dec-16 31-Dec-15
--------- -------- -------- -------- --------- ---------
Integrated Defense Systems 16.3% 15.8% 26.9% 10.9% 17.6% 14.7%
Intelligence, Information and Services 7.9% 8.0% 7.6% 6.8% 7.6% 10.6%
Missile Systems 13.8% 13.3% 13.7% 11.1% 13.0% 13.4%
Space and Airborne Systems 13.8% 13.5% 13.3% 11.6% 13.1% 14.6%
Forcepoint 14.7% 24.6% 7.3% 12.9% 15.4% 16.3%
Eliminations
Total business segment 13.2% 13.0% 15.0% 10.2% 12.9% 13.5%
Acquisition Accounting Adjustments
FAS/CAS Adjustment
Corporate
Total 14.0% 13.8% 16.1% 10.6% 13.7% 13.2%
Attachment C
Raytheon Company
Other Preliminary Information
Fourth Quarter 2016
(In millions) Funded Backlog Total Backlog
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- ---------
Integrated Defense Systems $8,438 $8,961 $10,224 $10,629
Intelligence, Information and Services 2,340 2,933 5,663 6,367
Missile Systems 9,008 7,998 11,617 10,885
Space and Airborne Systems 5,286 4,692 8,819 6,309
Forcepoint 532 476 532 479
--- --- --- ---
Total $25,604 $25,060 $36,855 $34,669
======= ======= ======= =======
Three Months Ended Twelve Months Ended
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- ---------
Total Bookings $7,577 $7,861 $27,836 $25,227
====== ====== ======= =======
Three Months Ended Twelve Months Ended
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- ---------
Administrative and selling expenses $525 $497 $2,127 $1,954
Research and development expenses 196 195 755 706
Total general and administrative expenses $721 $692 $2,882 $2,660
==== ==== ====== ======
Attachment C - Pro Forma
Raytheon Company
Other Preliminary Information
Full Year 2015, and Quarters within and Full Year 2016
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our other information set forth below reflect these changes.
(In millions) Remaining
Performance
Obligations
(Total Backlog)
31-Dec-16
---------
Integrated Defense Systems $10,159
Intelligence, Information and Services 5,662
Missile Systems 11,568
Space and Airborne Systems 8,834
Forcepoint 486
---
Total $36,709
=======
Bookings Bookings
-------- --------
(In millions) Three Months Ended Twelve Months Ended
31-Dec-16 2-Oct-16 3-Jul-16 3-Apr-16 31-Dec-16 31-Dec-15
--------- -------- -------- -------- --------- ---------
Integrated Defense Systems $2,062 $1,025 $1,273 $1,017 $5,377 $6,389
Intelligence, Information and Services 980 1,731 1,599 1,253 5,563 5,319
Missile Systems 2,439 1,932 1,891 1,632 7,894 8,149
Space and Airborne Systems 1,935 2,060 2,217 2,202 8,414 4,936
Forcepoint 166 175 123 97 561 352
--- --- --- --- --- ---
Total $7,582 $6,923 $7,103 $6,201 $27,809 $25,145
====== ====== ====== ====== ======= =======
Attachment D
Raytheon Company
Preliminary Balance
Sheet Information
Fourth Quarter 2016
(In millions)
31-Dec-16 31-Dec-15
--------- ---------
Assets
Current assets
Cash and cash
equivalents $3,303 $2,328
Short-term investments 100 872
Contracts in process,
net 6,202 5,564
Inventories 659 635
Prepaid expenses and
other current assets 414 413
--- ---
Total current assets 10,678 9,812
Property, plant and
equipment, net 2,166 2,005
Goodwill 14,788 14,731
Other assets, net 2,420 2,733
Total assets $30,052 $29,281
======= =======
Liabilities, Redeemable
Noncontrolling Interest
and Equity
Current liabilities
Advance payments and
billings in excess of
costs incurred $2,239 $2,193
Accounts payable 1,520 1,402
Accrued employee
compensation 1,234 1,154
Other current
liabilities 1,434 1,377
----- -----
Total current
liabilities 6,427 6,126
Accrued retiree benefits
and other long-term
liabilities 7,775 7,140
Long-term debt 5,335 5,330
Redeemable
noncontrolling interest 449 355
Equity
Raytheon Company
stockholders' equity
Common stock 3 3
Additional paid-in
capital - 398
Accumulated other
comprehensive loss (7,411) (7,176)
Retained earnings 17,474 16,903
------ ------
Total Raytheon Company
stockholders' equity 10,066 10,128
Noncontrolling interests
in subsidiaries - 202
--- ---
Total equity 10,066 10,330
------ ------
Total liabilities,
redeemable
noncontrolling interest
and equity $30,052 $29,281
======= =======
Attachment D - Pro Forma
Raytheon Company
Preliminary Balance Sheet Information
December 31, 2016
Effective January 1, 2017, we adopted Accounting Standards Update (ASU)
2014-09, Revenue from Contracts with Customers (Topic 606). The
amounts and presentation of our balance sheet information set forth
below reflect these changes.
(In millions)
31-Dec-16
---------
Assets
Current assets
Cash and cash equivalents $3,303
Short-term investments 100
Receivables, net 1,163
Contract assets 5,041
Inventories 608
Prepaid expenses and other
current assets 670
---
Total current assets 10,885
Property, plant and equipment,
net 2,166
Goodwill 14,788
Other assets, net 2,399
Total assets $30,238
=======
Liabilities, Redeemable Noncontrolling Interest
and Equity
Current liabilities
Contract liabilities $2,646
Accounts payable 1,520
Accrued employee compensation 1,234
Other current liabilities 1,139
-----
Total current liabilities 6,539
Accrued retiree benefits and
other long-term liabilities 7,758
Long-term debt 5,335
Redeemable noncontrolling
interest 449
Equity
Raytheon Company stockholders' equity
Common stock 3
Additional paid-in capital -
Accumulated other
comprehensive loss (7,411)
Retained earnings 17,565
------
Total Raytheon Company
stockholders' equity 10,157
Noncontrolling interests in
subsidiaries -
---
Total equity 10,157
------
Total liabilities, redeemable
noncontrolling interest and
equity $30,238
=======
Attachment E
Raytheon Company
Preliminary Cash Flow Information
Fourth Quarter 2016
Twelve Months Ended
(In millions) 31-Dec-16 31-Dec-15
--------- ---------
Cash flows from operating activities
Net income $2,174 $2,067
(Income) loss from discontinued operations, net of tax (1) (13)
--- ---
Income from continuing operations 2,173 2,054
Adjustments to reconcile to net cash provided by (used in)
operating activities from continuing operations, net of
acquisitions and divestitures
Depreciation and amortization 515 489
Stock-based compensation 151 140
Gain on sale of equity method investment (158) -
Deferred income taxes 109 (56)
Tax benefit from stock-based awards - (47)
Changes in assets and liabilities
Contracts in process, net and advance payments and billings
in excess of costs incurred (593) (637)
Inventories (23) (223)
Prepaid expenses and other current assets 181 (28)
Income taxes receivable/payable (185) (181)
Accounts payable 152 107
Accrued employee compensation 77 72
Other current liabilities (6) 58
Accrued retiree benefits 419 637
Other, net 40 (39)
--- ---
Net cash provided by (used in) operating activities from
continuing operations 2,852 2,346
Net cash provided by (used in) operating activities from
discontinued operations - 13
Net cash provided by (used in) operating activities 2,852 2,359
----- -----
Cash flows from investing activities
Additions to property, plant and equipment (561) (406)
Proceeds from sales of property, plant and equipment 34 59
Additions to capitalized internal use software (64) (51)
Purchases of short-term investments (472) (1,392)
Sales of short-term investments - 209
Maturities of short-term investments 1,184 1,793
Payments for purchases of acquired companies, net of cash
received (57) (1,954)
Other (11) (2)
--- ---
Net cash provided by (used in) investing activities 53 (1,744)
--- ------
Cash flows from financing activities
Dividends paid (850) (797)
Repurchases of common stock under share repurchase programs (900) (1,000)
Repurchases of common stock to satisfy tax withholding
obligations (96) (99)
Acquisition of noncontrolling interest in RCCS LLC (90) -
Contribution from noncontrolling interests in Forcepoint 11 -
Tax benefit from stock-based awards - 47
Sale of noncontrolling interest in Forcepoint - 343
Other (5) (3)
---
Net cash provided by (used in) financing activities (1,930) (1,509)
------ ------
Net increase (decrease) in cash and cash equivalents 975 (894)
Cash and cash equivalents at beginning of the year 2,328 3,222
Cash and cash equivalents at end of period $3,303 $2,328
====== ======
Attachment E - Pro Forma
Raytheon Company
Preliminary Cash Flow Information
Full Year 2015, and Quarters within and Full Year 2016
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our cash flow information set forth below reflect these changes.
Three Months Ended Twelve Months Ended
(In millions) 31-Dec-16 2-Oct-16 3-Jul-16 3-Apr-16 31-Dec-16 31-Dec-15
--------- -------- -------- -------- --------- ---------
Cash flows from operating activities
Net income $553 $542 $713 $405 $2,213 $2,107
(Income) loss from discontinued operations, net of tax - (1) 1 (1) (1) (13)
--- --- --- --- --- ---
Income from continuing operations 553 541 714 404 2,212 2,094
Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations,
net of acquisitions and divestitures
Depreciation and amortization 138 130 123 124 515 489
Stock-based compensation 31 31 35 54 151 140
Gain on sale of equity method investment - - (158) - (158) -
Deferred income taxes 217 (31) (23) (30) 133 (42)
Tax benefit from stock-based awards - - - - - (47)
Changes in assets and liabilities
Receivables, net 82 186 (156) (94) 18 12
Contracts assets and contract liabilities 280 (433) (197) (295) (645) (656)
Inventories 27 (23) (55) 41 (10) (187)
Prepaid expenses and other current assets (47) 122 (13) 143 205 (61)
Income taxes receivable/payable (107) (142) (125) 189 (185) (181)
Accounts payable 100 3 92 (43) 152 107
Accrued employee compensation 102 18 308 (351) 77 72
Other current liabilities 18 17 (33) (43) (41) 17
Accrued retiree benefits (274) 248 224 221 419 637
Other, net 21 (27) 10 5 9 (48)
--- --- --- --- --- ---
Net cash provided by (used in) operating activities from continuing operations 1,141 640 746 325 2,852 2,346
Net cash provided by (used in) operating activities from discontinued operations - - (1) 1 - 13
--- --- --- --- --- ---
Net cash provided by (used in) operating activities 1,141 640 745 326 2,852 2,359
----- --- --- --- ----- -----
Cash flows from investing activities
Additions to property, plant and equipment (217) (107) (87) (150) (561) (406)
Proceeds from sales of property, plant and equipment 9 24 - 1 34 59
Additions to capitalized internal use software (17) (21) (14) (12) (64) (51)
Purchases of short-term investments - - (472) - (472) (1,392)
Sales of short-term investments - - - - - 209
Maturities of short-term investments 362 223 472 127 1,184 1,793
Payments for purchases of acquired companies, net of cash received - - - (57) (57) (1,954)
Other (2) (15) 6 - (11) (2)
--- --- --- --- --- ---
Net cash provided by (used in) investing activities 135 104 (95) (91) 53 (1,744)
--- --- --- --- --- ------
Cash flows from financing activities
Dividends paid (215) (216) (218) (201) (850) (797)
Repurchases of common stock under share repurchase programs (99) (199) (202) (400) (900) -
Repurchases of common stock to satisfy tax withholding obligations (1) (3) (58) (34) (96) (1,000)
Acquisition of noncontrolling interest in RCCS LLC - - (90) - (90) (99)
Contribution from noncontrolling interests in Forcepoint - - - 11 11 -
Tax benefit from stock-based awards - - - - - 47
Sale of noncontrolling interest in Forcepoint - - - - - 343
Other - - - (5) (5) (3)
--- --- --- --- --- ---
Net cash provided by (used in) financing activities (315) (418) (568) (629) (1,930) (1,509)
---- ---- ---- ---- ------ ------
Net increase (decrease) in cash and cash equivalents 961 326 82 (394) 975 (894)
Cash and cash equivalents at beginning of the year 2,342 2,016 1,934 2,328 2,328 3,222
Cash and cash equivalents at end of period $3,303 $2,342 $2,016 $1,934 $3,303 $2,328
====== ====== ====== ====== ====== ======
Attachment F
Raytheon Company
Supplemental EPS Information
Fourth Quarter 2016
(In millions, except per share amounts) Three Months Ended Twelve Months Ended
31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15
--------- --------- --------- ---------
Per share impact of the FAS/CAS Adjustment (A) $0.26 $0.10 $0.95 $0.39
Per share impact of the TRS transaction (B) - - 0.53 -
Per share impact of the eBorders settlement (C) - 0.02 - 0.47
Per share impact of discretionary pension contributions (D) 0.04 0.02 0.04 0.02
---- ---- ---- ----
(A) FAS/CAS Adjustment $117 $44 $435 $185
Tax effect (at 35%
statutory rate) (41) (15) (152) (65)
--- --- ---- ---
After-tax impact 76 29 283 120
Diluted shares 294.5 302.1 296.8 305.2
-----
Per share impact $0.26 $0.10 $0.95 $0.39
===
(B) TRS transaction $ - $ - $158 $ -
Diluted shares - - 296.8 -
Per share impact $ - $ - $0.53 $ -
=== === ===
(C) eBorders settlement $ - $ - $ - $181
Tax effect (at 21% blended
global tax rate) - 5 - (38)
After-tax impact - 5 - 143
Diluted shares - 302.1 - 305.2
Per share impact $ - $0.02 $ - $0.47
=== ===
(D) Tax impact of discretionary pension
contribution $13 $5 $13 $5
Diluted shares 294.5 302.1 296.8 305.2
Per share impact $0.04 $0.02 $0.04 $0.02
Raytheon Company
Global Headquarters
Waltham, Mass.
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Corinne Kovalsky
781.522.5899
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/raytheon-reports-strong-fourth-quarter-and-full-year-2016-results-300397095.html
SOURCE Raytheon Company
