Raytheon Reports Solid Fourth Quarter and Full-Year 2012 Results
Raytheon Reports Solid Fourth Quarter and Full-Year 2012 Results
- Strong bookings of $7.9 billion in the quarter and $26.5 billion for the
year; book-to-bill of 1.23 in the quarter and 1.09 for the year
- Fourth quarter net sales of $6.4 billion, up slightly from prior year's
fourth quarter; and full-year net sales of $24.4 billion, down 1.5 percent for
the year
- Fourth quarter 2012 Adjusted EPS(1) of $1.60; EPS from continuing operations
was $1.41
- Full-year 2012 Adjusted EPS(1) of $6.21, up 6.2 percent; EPS from continuing
operations was $5.65, up 8.2 percent
- Strong operating cash flow from continuing operations of $1.0 billion in the
quarter and $2.0 billion for the year
PR Newswire
WALTHAM, Mass., Jan. 24, 2013
WALTHAM, Mass., Jan. 24, 2013 /PRNewswire/ -- Raytheon Company (NYSE: RTN)
announced fourth quarter 2012 Adjusted EPS^1 of $1.60 per diluted share
compared to $1.72 per diluted share in the fourth quarter 2011. The change was
due to the timing of operational improvements in the fourth quarter 2012
compared to the fourth quarter 2011. On a full-year basis, 2012 operational
improvements were relatively consistent with 2011. Fourth quarter 2012 EPS
from continuing operations was $1.41 compared to $1.56 in the fourth quarter
2011. Fourth quarter 2012 included a $0.06 net charge associated with the
impact of early debt retirement. Fourth quarter 2012 also included an
unfavorable FAS/CAS Adjustment of $0.13, compared with an unfavorable FAS/CAS
Adjustment of $0.16 in the fourth quarter 2011.
Full-year 2012 Adjusted EPS^1 was $6.21 per diluted share compared to $5.85
for the full-year 2011, up 6.2 percent. The increase was primarily driven by
capital deployment actions and operational improvements. Full-year 2012 EPS
from continuing operations was $5.65 compared to $5.22 for the full-year 2011.
"Raytheon's solid operating performance in 2012 was a result of our continued
focus on improving productivity and program execution, which delivered value
to both our customers and shareholders," said William H. Swanson, Raytheon's
Chairman and CEO. "Customer demand for advanced technologies and affordable
solutions drove strong orders for both the fourth quarter and the year, and
resulted in a record funded backlog."
___________________________________
^1 Adjusted EPS is EPS from continuing operations attributable to Raytheon
Company common stockholders excluding the impact of the FAS/CAS Adjustment,
and from time to time, certain other items. Q4 2012 and full-year 2012
Adjusted EPS also excludes the impact of the early retirement of debt as
discussed above. Full-year 2011 Adjusted EPS excludes the impact of the UKBA
LOC Adjustment in Q1 2011 and the favorable tax settlement in Q3 2011.
Adjusted EPS is a non-GAAP financial measure. See attachment F for a
reconciliation of this measure and a discussion of why the Company is
presenting this information.
Net sales for the fourth quarter 2012 were $6,439 million, compared to $6,422
million in the fourth quarter 2011. The Company reported strong bookings for
the fourth quarter 2012 of $7,892 million, resulting in a book-to-bill ratio
of 1.23. Bookings in the fourth quarter 2011 were $7,147 million.
Net sales in 2012 were $24.4 billion, compared to $24.8 billion in 2011. The
Company reported strong bookings in both 2012 and 2011, of $26.5 billion and
$26.6 billion, respectively. The book-to-bill ratio for 2012 was 1.09.
Operating cash flow from continuing operations for the fourth quarter 2012 was
$988 million compared to $1,286 million for the fourth quarter 2011. The
change in operating cash from continuing operations in the fourth quarter 2012
was primarily due to the timing of customer advances.
The Company generated strong operating cash flow from continuing operations
for both 2012 and 2011, of $2.0 billion and $2.1 billion, respectively.
In the fourth quarter 2012, the Company repurchased 1.8 million shares of
common stock for $100 million as part of its previously announced share
repurchase program. For the full-year 2012, the Company repurchased 15.9
million shares of common stock for $825 million.
Also as previously announced, in the fourth quarter 2012, the Company acquired
the Government Solutions business of SafeNet Inc., which has become part of
Raytheon's Network Centric Systems (NCS) business, and Teligy, Inc., which has
become part of Raytheon's Intelligence and Information Systems (IIS) business.
In the fourth quarter 2012, the Company issued $1.1 billion in long-term debt,
which was used primarily for the early retirement of 2014 and 2015 maturities.
The Company ended 2012 with $687 million of net debt. Net debt is defined as
total debt less cash and cash equivalents and short-term investments.
Summary
Financial
Results
4th Quarter % Full-Year %
($ in
millions, 2012 2011 Change 2012 2011 Change
except per
share data)
Net Sales $ 6,439 $ 6,422 0.3% $ 24,414 $ 24,791 -1.5%
Income from
Continuing
Operations
attributable $ 466 $ 539 -13.5% $ 1,889 $ 1,848 2.2%
to
Raytheon
Company
Adjusted $ 529 $ 593 -10.8% $ 2,074 $ 2,067 0.3%
Income*
EPS from
Continuing $ 1.41 $ 1.56 -9.6% $ 5.65 $ 5.22 8.2%
Operations
Adjusted EPS* $ 1.60 $ 1.72 -7.0% $ 6.21 $ 5.85 6.2%
Operating Cash
Flow from $ 988 $ 1,286 $ 1,951 $ 2,102
Continuing
Operations
Workdays in
Fiscal 58 57 249 248
Reporting
Calendar
* Adjusted Income is income from continuing operations attributable to
Raytheon Company common stockholders and Adjusted EPS is 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: Q4 and
full-year 2012 Adjusted Income and Adjusted EPS exclude the impact of early
debt retirement. Full-year 2011 Adjusted Income and Adjusted EPS exclude the
impact of the UKBA LOC Adjustment in Q1 2011 and the favorable tax settlement
in Q3 2011. 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) 4th Quarter Full-Year
2012 2011 2012 2011
Bookings $ 7,892 $ 7,147 $ 26,504 $ 26,555
Backlog
($ in millions) Period Ending
2012 2011
Backlog $ 36,181 $ 35,312
Funded Backlog $ 24,047 $ 22,462
The Company had bookings of $7.9 billion in the fourth quarter 2012 and ended
2012 with a backlog of $36.2 billion, an increase of $869 million over
year-end 2011. The Company ended 2012 with a record funded backlog of $24.0
billion.
Outlook
The Company has provided its financial outlook for 2013. Charts containing
additional information on the Company's 2013 outlook are available on the
Company's website at www.raytheon.com/ir.
2013 Financial Outlook
2012 Actual 2013 Outlook
Net Sales ($B) 24.4 23.6 - 24.1
FAS/CAS Adjustment ($M) (255) (286)
Interest Expense, net ($M) (192) (200) - (210)
Diluted Shares (M) 334 324 - 327
Effective Tax Rate 31.6% ~30%
EPS from Continuing Operations $5.65 $5.16 - $5.31
Adjusted EPS* $6.21 $5.65 - $5.80
Operating Cash Flow from 2.0 2.0 - 2.2
Continuing Operations ($B)
* Adjusted EPS is 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: full-year 2012 also
excludes the impact of early debt retirement. 2013 Adjusted EPS guidance also
excludes the impact of an expected research and
development (R&D) tax credit that relates to 2012. See attachment F for a
reconciliation of this measure and a discussion of why the
Company is presenting this information.
The financial outlook for 2013 does not reflect any of the potential effects
of sequestration under the Budget Control Act (BCA). Although it remains
uncertain if sequestration will be implemented, it could have a significant
impact on the U.S. Military, the Aerospace and Defense Industry and Federal
spending. Several industry associations estimate that sequestration, if
implemented, could have a severe impact on U.S. Aerospace and Defense Industry
employment nationwide. We believe that Raytheon's large international market
presence, portfolio of programs, technology and focus on high priority areas
should help to mitigate some of the potential overall impact.
Segment Results
The Company's reportable segments are: Integrated Defense Systems,
Intelligence and Information Systems, Missile Systems, Network Centric
Systems, Space and Airborne Systems, and Technical Services.
Integrated Defense Systems
4th Quarter Full-Year
($ in millions) 2012 2011 % Change 2012 2011 % Change
Net Sales $ 1,321 $ 1,291 2% $ 5,037 $ 4,958 2%
Operating Income $ 226 $ 236 -4% $ 918 $ 836 10%
Operating Margin 17.1% 18.3% 18.2% 16.9%
Integrated Defense Systems (IDS) had fourth quarter 2012 net sales of $1,321
million compared to $1,291 million in the fourth quarter 2011. The increase in
net sales was primarily due to higher sales on a missile defense radar program
for an international customer. IDS had full-year 2012 net sales of $5,037
million compared to $4,958 million in 2011. The increase in net sales was
primarily due to international programs.
IDS recorded $226 million of operating income compared to $236 million in the
fourth quarter 2011. IDS recorded $918 million of operating income in 2012
compared to $836 million in 2011. The increase in operating income for
full-year 2012 was primarily driven by international programs.
During the quarter, IDS booked $332 million for the production and sustainment
of AN/TPY-2 radars for the Missile Defense Agency (MDA). IDS also booked $293
million to provide technical and logistics support for a Hawk and Patriot air
and missile defense program for an international customer, $293 million on an
Early Warning Surveillance Radar System (EWSRS) support program for an
international customer, $251 million on the Zumwalt-class destroyer program
for the U.S. Navy, $159 million for the production of Airborne Low Frequency
Sonar (ALFS) systems for the U.S. Navy, $128 million to provide Consolidated
Contractor Logistics Support (CCLS) for the MDA and $76 million on the Aegis
Performance Based Logistics (PBL) contract for the U.S. Navy.
Intelligence and Information Systems
4th Quarter Full-Year
($ in 2012 2011 % 2012 2011* %
millions) Change Change
Net Sales $ 755 $ 753 - $ 3,012 $ 3,015 -
Operating $ 64 $ 74 -14% $ 247 $ 159 NM
Income
Operating 8.5% 9.8% 8.2% 5.3%
Margin
* First quarter 2011 included an $80 million reduction to operating income due
to the UKBA LOC Adjustment as described in attachment F.
NM - Not
Meaningful
Intelligence and Information Systems (IIS) had fourth quarter 2012 net sales
of $755 million compared to $753 million in the fourth quarter 2011. IIS had
full-year 2012 net sales of $3,012 million compared to $3,015 million in 2011.
IIS recorded $64 million of operating income compared to $74 million in the
fourth quarter 2011. IIS recorded $247 million of operating income in 2012
compared to $159 million in 2011. The change in operating income in 2012 was
primarily due to the $80 million UKBA LOC Adjustment in the first quarter
2011.
During the quarter, IIS booked $79 million on the Joint Polar Satellite System
(JPSS) program for NASA. IIS also booked $511 million on a number of
classified contracts.
Missile Systems
4th Quarter Full-Year
($ in millions) 2012 2011 % Change 2012 2011 % Change
Net Sales $ 1,544 $ 1,482 4% $ 5,693 $ 5,590 2%
Operating Income $ 181 $ 209 -13% $ 719 $ 693 4%
Operating Margin 11.7% 14.1% 12.6% 12.4%
Missile Systems (MS) had fourth quarter 2012 net sales of $1,544 million, up 4
percent compared to $1,482 million in the fourth quarter 2011. The increase in
net sales was primarily driven by higher sales on the Standard Missile-3
(SM-3) and Rolling Airframe Missile (RAM) programs. MS had full-year 2012 net
sales of $5,693 million compared to $5,590 million in 2011. The increase in
net sales was primarily driven by higher sales on the SM-3 program.
MS recorded $181 million of operating income compared to $209 million in the
fourth quarter 2011. The change in operating income was primarily due to a
change in contract mix and a favorable contractual resolution in 2011. MS
recorded $719 million of operating income in 2012 compared to $693 million in
2011. The increase in operating income in 2012 was primarily due to favorable
program performance.
During the quarter, MS booked $500 million for the production of Paveway™ for
the U.S. Air Force and international customers, $303 million for the
production and development of Tomahawk for the U.S. Navy and an international
customer, $242 million on the RAM for the U.S. Navy and international
customers, $175 million for Evolved Sea Sparrow Missile (ESSM) for the U.S.
Navy and international customers, and $116 million for the Exoatmospheric Kill
Vehicle (EKV) for the MDA.
Network Centric Systems
4th Quarter Full-Year
($ in millions) 2012 2011 % Change 2012 2011 % Change
Net Sales $ 1,133 $ 1,137 - $ 4,058 $ 4,497 -10%
Operating Income $ 125 $ 175 -29% $ 495 $ 667 -26%
Operating Margin 11.0% 15.4% 12.2% 14.8%
Network Centric Systems (NCS) had fourth quarter 2012 net sales of $1,133
million compared to $1,137 million in the fourth quarter 2011. NCS had
full-year 2012 net sales of $4,058 million compared to $4,497 million in 2011.
The change in net sales, as expected, was primarily due to lower sales on U.S.
Army production programs.
NCS recorded $125 million of operating income compared to $175 million in the
fourth quarter 2011. The change in operating income was primarily due to a
change in contract mix and costs associated with ending a supplier agreement
in the fourth quarter 2012. NCS recorded $495 million of operating income in
2012 compared to $667 million in 2011. The change in operating income in 2012
was primarily due to a change in contract mix and lower volume.
During the quarter, NCS booked $650 million on an international Command,
Control, Communications, Computers and Intelligence (C4I) program. NCS also
booked $82 million on the Navy Multiband Terminal (NMT) program.
Space and Airborne Systems
4th Quarter Full-Year
($ in millions) 2012 2011 % Change 2012 2011 % Change
Net Sales $ 1,377 $ 1,341 3% $ 5,333 $ 5,255 1%
Operating Income $ 217 $ 214 1% $ 784 $ 717 9%
Operating Margin 15.8% 16.0% 14.7% 13.6%
Space and Airborne Systems (SAS) had fourth quarter 2012 net sales of $1,377
million compared to $1,341 million in the fourth quarter 2011. The increase in
net sales was primarily due to higher net sales on an international tactical
airborne radar program. SAS had full-year 2012 net sales of $5,333 million
compared to $5,255 million in 2011.
SAS recorded $217 million of operating income compared to $214 million in the
fourth quarter 2011. SAS recorded $784 million of operating income in 2012
compared to $717 million in 2011. The increase in operating income in 2012 was
primarily due to improved program performance and a change in contract mix.
During the quarter, SAS booked $289 million for an international sensor
program and $76 million for the production of the Multi-Platform Radar
Technology Insertion Program (MP-RTIP) surveillance system for NATO.
Technical Services
4th Quarter Full-Year
($ in millions) 2012 2011 % Change 2012 2011 % Change
Net Sales $ 831 $ 886 -6% $ 3,239 $ 3,353 -3%
Operating Income $ 72 $ 84 -14% $ 282 $ 312 -10%
Operating Margin 8.7% 9.5% 8.7% 9.3%
Technical Services (TS) had fourth quarter 2012 net sales of $831 million
compared to $886 million in the fourth quarter 2011. The change in net sales
was due to lower net sales on a National Science Foundation (NSF) Polar
contract, which was completed in the first quarter 2012. TS had 2012 net sales
of $3,239 million compared to $3,353 million in 2011. The change in net sales
was due to lower net sales on a NSF Polar contract.
TS recorded operating income of $72 million compared to $84 million in the
fourth quarter 2011. TS recorded operating income of $282 million in 2012
compared to $312 million in 2011.
About Raytheon
Raytheon Company, with 2012 sales of $24 billion and 68,000 employees
worldwide, is a technology and innovation leader specializing in defense,
homeland security and other government 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 Fourth Quarter and Full-Year 2012 Financial Results
Raytheon's financial results conference call will be held on Thursday,
January 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 (800) 706-7749 in the U.S.
or (617) 614-3474 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, 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.
Raytheon Company
Global Headquarters
Waltham, Mass.
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Jon Kasle
781.522.5110
Attachment A
Raytheon Company
Preliminary Statement of
Operations Information
Fourth Quarter 2012
(In millions, except per share Three Months Ended Twelve Months Ended
amounts)
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Net sales $ 6,439 $ 6,422 $ 24,414 $ 24,791
Operating expenses
Cost of sales 5,092 5,018 19,092 19,664
Administrative and selling 431 384 1,629 1,672
expenses
Research and development 161 171 704 625
expenses
Total operating expenses 5,684 5,573 21,425 21,961
Operating income 755 849 2,989 2,830
Non-operating (income) expense,
net
Interest expense 52 45 201 172
Interest income (3) (2) (9) (14)
Other expense (income) 28 (3) 18 12
Total non-operating (income) 77 40 210 170
expense, net
Income from continuing operations 678 809 2,779 2,660
before taxes
Federal and foreign income taxes 210 261 878 782
Income from continuing operations 468 548 1,901 1,878
Income (loss) from discontinued 3 4 (1) 18
operations, net of tax
Net income 471 552 1,900 1,896
Less: Net income (loss)
attributable to noncontrolling
interests in subsidiaries 2 9 12 30
Net income attributable to $ 469 $ 543 $ 1,888 $ 1,866
Raytheon Company
Basic earnings (loss) per share
attributable to Raytheon
Company common stockholders:
Income from continuing $ 1.41 $ 1.56 $ 5.67 $ 5.25
operations
Income (loss) from
discontinued operations, net of 0.01 0.02 — 0.05
tax
Net income 1.42 1.58 5.67 5.30
Diluted earnings (loss) per share
attributable to Raytheon
Company common stockholders:
Income from continuing $ 1.41 $ 1.56 $ 5.65 $ 5.22
operations
Income (loss) from
discontinued operations, net of 0.01 0.02 — 0.05
tax
Net income 1.42 1.57 5.65 5.28
Amounts attributable to Raytheon
Company common
stockholders:
Income from continuing $ 466 $ 539 $ 1,889 $ 1,848
operations
Income (loss) from
discontinued operations, net of 3 4 (1) 18
tax
Net income $ 469 $ 543 $ 1,888 $ 1,866
Average shares outstanding
Basic 329.8 344.1 333.2 351.7
Diluted 330.8 345.1 334.2 353.6
Attachment B
Raytheon
Company
Preliminary
Segment
Information
Fourth
Quarter 2012
Operating Income
Net Sales Operating Income As a Percent of
Net Sales
(In millions, Three Months
except Three Months Ended Three Months Ended Ended
percentages)
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Integrated
Defense $ 1,321 $ 1,291 $ 226 $ 236 17.1 % 18.3 %
Systems
Intelligence
and 755 753 64 74 8.5 % 9.8 %
Information
Systems
Missile 1,544 1,482 181 209 11.7 % 14.1 %
Systems
Network
Centric 1,133 1,137 125 175 11.0 % 15.4 %
Systems
Space and
Airborne 1,377 1,341 217 214 15.8 % 16.0 %
Systems
Technical 831 886 72 84 8.7 % 9.5 %
Services
FAS/CAS — — (67) (83)
Adjustment
Corporate and (522) (468) (63) (60)
Eliminations
Total $ 6,439 $ 6,422 $ 755 $ 849 11.7 % 13.2 %
Operating Income
Net Sales Operating Income As a Percent of
Net Sales
(In millions, Twelve Months
except Twelve Months Ended Twelve Months Ended Ended
percentages)
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Integrated
Defense $ 5,037 $ 4,958 $ 918 $ 836 18.2 % 16.9 %
Systems
Intelligence
and 3,012 3,015 247 159 8.2 % 5.3 %
Information
Systems
Missile 5,693 5,590 719 693 12.6 % 12.4 %
Systems
Network
Centric 4,058 4,497 495 667 12.2 % 14.8 %
Systems
Space and
Airborne 5,333 5,255 784 717 14.7 % 13.6 %
Systems
Technical 3,239 3,353 282 312 8.7 % 9.3 %
Services
FAS/CAS — — (255) (337)
Adjustment
Corporate and (1,958) (1,877) (201) (217)
Eliminations
Total $ 24,414 $ 24,791 $ 2,989 $ 2,830 12.2 % 11.4 %
Attachment C
Raytheon Company
Other Preliminary Information
Fourth Quarter 2012
(In millions) Funded Backlog Total Backlog
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Integrated Defense Systems $ 7,313 $ 7,100 $ 9,431 $ 9,766
Intelligence and Information 1,067 829 3,989 4,366
Systems
Missile Systems 6,939 6,205 10,030 8,570
Network Centric Systems 3,583 3,267 4,364 4,160
Space and Airborne Systems 3,409 3,104 6,031 5,864
Technical Services 1,736 1,957 2,336 2,586
Total $ 24,047 $ 22,462 $ 36,181 $ 35,312
Bookings Bookings
Three Months Ended Twelve Months Ended
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Total Bookings $ 7,892 $ 7,147 $ 26,504 $ 26,555
Attachment D
Raytheon Company
Preliminary Balance Sheet Information
Fourth Quarter 2012
(In millions)
31-Dec-12 31-Dec-11
Assets
Cash and cash equivalents $ 3,188 $ 4,000
Short-term investments 856 —
Contracts in process, net 4,543 4,526
Inventories 381 336
Deferred taxes 96 221
Prepaid expenses and other current assets 182 226
Total current assets 9,246 9,309
Property, plant and equipment, net 1,986 2,006
Deferred taxes 1,367 657
Goodwill 12,756 12,544
Other assets, net 1,331 1,338
Total assets $ 26,686 $ 25,854
Liabilities and Equity
Current liabilities
Advance payments and billings in excess of costs $ 2,398 $ 2,542
incurred
Accounts payable 1,348 1,507
Accrued employee compensation 1,014 941
Other accrued expenses 1,142 1,140
Total current liabilities 5,902 6,130
Accrued retiree benefits and other long-term liabilities 7,854 6,774
Deferred taxes 9 5
Long-term debt 4,731 4,605
Equity
Raytheon Company stockholders' equity
Common stock 3 3
Additional paid-in capital 2,928 3,523
Accumulated other comprehensive loss (7,788) (7,001)
Retained earnings 12,883 11,656
Total Raytheon Company stockholders' equity 8,026 8,181
Noncontrolling interests in subsidiaries 164 159
Total equity 8,190 8,340
Total liabilities and equity $ 26,686 $ 25,854
Attachment E
Raytheon Company
Preliminary Cash Flow
Information
Fourth Quarter 2012
Three Months Ended Twelve Months Ended
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Net income $ 471 $ 552 $ 1,900 $ 1,896
Loss (income) from
discontinued (3) (4) 1 (18)
operations, net of tax
Income from continuing 468 548 1,901 1,878
operations
Depreciation 80 81 318 311
Amortization 34 35 137 133
Working capital
(excluding pension and 668 1,060 (243) 187
income taxes)**
Other long-term (36) 30 (74) (25)
liabilities
Pension and other
postretirement (251) (500) (131) (760)
benefits
Other 25 32 43 378
Net operating cash
flow from continuing 988 1,286 1,951 2,102
operations
Supplemental Cash Flow
Information
Capital spending (135) (143) (339) (340)
Internal use software (16) (23) (76) (97)
spending
Acquisitions (294) (94) (301) (645)
Dividends (165) (148) (643) (588)
Repurchases of common (100) (313) (825) (1,250)
stock
Debt issuance 1,092 992 1,092 992
Debt repayment (970) — (970) —
** 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 Statements of Cash Flows.
Attachment F
(Page 1 of 2)
Raytheon Company
Non-GAAP Financial Measures - Adjusted EPS,
Adjusted Income and Adjusted Operating Margin
Fourth Quarter
2012
Adjusted EPS
Non-GAAP
Reconciliation
(In millions,
except per share 2013 Guidance^(5)
amounts)
Three Months Twelve Months Ended Low end High end
Ended
2012 2011 2012 2011 of range of range
Diluted earnings
per share from
continuing
operations
attributable to
Raytheon Company
common $ 1.41 $ 1.56 $ 5.65 $ 5.22 $ 5.16 $ 5.31
stockholders
Per share impact
of the FAS/CAS 0.13 0.16 0.50 0.62 0.57 0.57
Adjustment (A)
Per share impact
of the early debt
retirement 0.06 — 0.06 — — —
make-whole
provision (B)
Per share impact
of the UK Border — — — 0.17 — —
Agency (UKBA) LOC
Adjustment (C)
Per share impact
of the favorable — — — (0.17) — —
tax settlement
(D)
Per share impact
of the expected
2012 research and — — — — (0.08) (0.08)
development (R&D)
tax credit (E)
Adjusted EPS (3), $ 1.60 $ 1.72 $ 6.21 $ 5.85 $ 5.65 $ 5.80
(4)
(A) FAS/CAS $ 67 $ 83 $ 255 $ 337 $ 286 $ 286
Adjustment
Tax (23) (29) (89) (118) (100) (100)
effect (1)
After-tax 44 54 166 219 186 186
impact
Diluted 330.8 345.1 334.2 353.6 327.0 324.0
shares
Per share $ 0.13 $ 0.16 $ 0.50 $ 0.62 $ 0.57 $ 0.57
impact
Early debt
(B) retirement $ 29 $ — $ 29 $ — $ — $ —
make-whole
provision
Tax (10) — (10) — — —
effect (1)
After-tax 19 — 19 — — —
impact
Diluted 330.8 — 334.2 — — —
shares
Per share $ 0.06 $ — $ 0.06 $ — $ — $ —
impact
(C) UKBA LOC $ — $ — $ — $ 80 $ — $ —
Adjustment
Tax — — — (20) — —
effect (2)
After-tax — — — 60 — —
impact
Diluted — — — 353.6 — —
shares
Per share $ — $ — $ — $ 0.17 $ — $ —
impact
Favorable
(D) tax $ — $ — $ — $ (60) $ — $ —
settlement
Diluted — — — 353.6 — —
shares
Per share $ — $ — $ — $ (0.17) $ — $ —
impact
Expected
(E) 2012 R&D tax $ — $ — $ — $ — $ (25) $ (25)
credit
Diluted — — — — 327.0 324.0
shares
Per share $ — $ — $ — $ — $ (0.08) $ (0.08)
impact
(1) Tax effected at 35% federal statutory tax rate.
(2) Tax effected at approximately 25% blended global tax rate.
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
(3) 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 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.
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. In addition to the
FAS/CAS Adjustment, three and twelve months ended 2012 Adjusted EPS also
excludes the impact of the charges associated with the make-whole provision
on the early retirement of debt. In addition to the FAS/CAS Adjustment,
twelve months ended 2011 Adjusted EPS also excludes the impact of the UKBA
LOC Adjustment, as previously disclosed. This adjustment was based on the
UKBA's decision to draw down on the previously disclosed letters of credit
provided by Raytheon Systems Limited (RSL). The determination of the
(4) validity of the draw down is now a subject of the ongoing arbitration
proceedings related to the UKBA program. Twelve months ended 2011 Adjusted
EPS also excludes the earnings per share impact of a favorable tax
settlement in the third quarter of 2011 as a result of our receipt of final
approval from the IRS and the U.S. Congressional Joint Committee on Taxation
of a tax refund for the 2006-2008 tax years. 2013 Adjusted EPS guidance also
excludes the earnings per share impact of an expected R&D tax credit that
relates to 2012. 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 expect to record the 2012 benefit in 2013.
(5) 2013 Guidance does not reflect any of the potential effects of sequestration
under the Budget Control Act (BCA), if implemented.
Attachment F
(Page 2 of 2)
Raytheon Company
Non-GAAP Financial Measures - Adjusted EPS,
Adjusted Income and Adjusted Operating Margin
Fourth Quarter
2012
Adjusted Income
Non-GAAP
Reconciliation
(In millions)
Three Months Twelve Months Ended
Ended
2012 2011 2012 2011
Income from
continuing
operations
attributable to $ 466 $ 539 $ 1,889 $ 1,848
Raytheon Company
common
stockholders
FAS/CAS 44 54 166 219
Adjustment (1)
Early debt
retirement 19 — 19 —
make-whole
provision (1)
UKBA LOC — — — 60
Adjustment (2)
Favorable tax — — — (60)
settlement
Adjusted Income $ 529 $ 593 $ 2,074 $ 2,067
(3), (4)
Adjusted
Operating Margin
Non-GAAP
Reconciliation
2013 Guidance^(6)
Three Months Twelve Months Ended Low end High end
Ended
2012 2011 2012 2011 of range of range
Operating Margin 11.7 % 13.2 % 12.2 % 11.4 % 11.1 % 11.3 %
Impact of the
FAS/CAS 1.0 % 1.3 % 1.0 % 1.4 % 1.2 % 1.2 %
Adjustment
Impact of the
UKBA LOC — % — % — % 0.3 % — % — %
Adjustment
Adjusted
Operating Margin 12.8 % 14.5 % 13.3 % 13.1 % 12.3 % 12.5 %
(3), (5)
(1) Tax effected at 35% federal statutory tax rate.
(2) Tax effected at approximately 25% blended global tax rate.
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
(3) 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 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.
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. In addition
to the FAS/CAS Adjustment, three and twelve months ended 2012 Adjusted
Income also excludes the impact of the charges associated with the
(4) make-whole provision on the early retirement of debt. In addition to the
FAS/CAS Adjustment, twelve months ended 2011 Adjusted Income also excludes
the after-tax impact of the UKBA LOC Adjustment, as described on page 1 of 2
of this attachment. Twelve months ended 2011 Adjusted Income also excludes
the impact of the favorable tax settlement in the third quarter of 2011, as
described on page 1 of 2 of this attachment.
Adjusted Operating Margin is defined as total operating margin excluding the
margin impact of the FAS/CAS Adjustment and, from time to time, certain
(5) other items. In addition to the FAS/CAS Adjustment, twelve months ended 2011
Adjusted Operating Margin also excludes the impact of the UKBA LOC
Adjustment, as described on page 1 of 2 of this attachment.
(6) 2013 Guidance does not reflect any of the potential effects of sequestration
under the BCA, if implemented.
SOURCE Raytheon Company
Website: http://www.raytheon.com
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