Raytheon Reports Solid Fourth Quarter and Full-Year 2011 Results
WALTHAM, Mass., Jan. 26, 2012 /PRNewswire/ --
-- Fourth quarter 2011 Adjusted EPS of $1.74, up 12 percent; EPS from
continuing operations was $1.58(1)
-- Full-year 2011 Adjusted EPS of $5.90, up 7 percent; full-year 2011 EPS
from continuing operations was $5.28(1)
-- Strong operating cash flow of $1.3 billion in the quarter and $2.2
billion for the year after a $750 million discretionary pension plan
contribution
-- Strong bookings of $7.1 billion in the quarter and $26.6 billion for the
year; book-to-bill of 1.11 in the quarter and 1.07 for the year
Raytheon Company (NYSE: RTN) announced fourth quarter 2011 Adjusted EPS of $1.74 per diluted share compared to $1.55 per diluted share in the fourth quarter 2010(1). The increase was driven by operational improvements and capital deployment actions. Fourth quarter 2011 EPS from continuing operations was $1.58 compared to $1.37 in the fourth quarter 2010. Fourth quarter 2011 included an unfavorable FAS/CAS Adjustment(1) of $0.16, compared with an unfavorable FAS/CAS Adjustment of $0.09 in the fourth quarter 2010. Fourth quarter 2010 EPS from continuing operations also included a $0.10 net charge associated with the impact of early debt retirement.
"In a year of economic uncertainty, the Raytheon team focused on what we do best - ensuring customer success through program performance and product innovation," said William H. Swanson, Raytheon's Chairman and CEO. "Improved efficiencies and lower costs drove operating margin and earnings performance, while global demand for our affordable solutions resulted in strong orders."
Q4 2010 vs. Q4 2011 EPS Variance
--------------------------------
EPS Adjusted EPS*
--- -------------
Q4 2010 $1.37 $1.55
Operational Improvements 0.19 0.19
Reduced Share Count 0.10 0.10
Other Items, net (primarily tax-related) (0.11) (0.11)
FAS/CAS Adjustment** (0.07) -
Q4 2010 Early Debt Retirement Impact, net 0.10 -
Q4 2011 $1.58 $1.74
===== =====
* Adjusted EPS is 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.
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. Amounts may not add due to rounding.
** Represents the difference between the 2011 and 2010 FAS/CAS
Adjustments of $(0.16) and $(0.09), respectively.
Net sales for the fourth quarter 2011 were $6,441 million, compared to $6,885 million in the fourth quarter 2010, with 5 fewer workdays in the fourth quarter 2011. The Company reported strong bookings for the fourth quarter 2011 of $7,147 million compared to $5,984 million in the fourth quarter 2010, resulting in a book-to-bill ratio of 1.11.
The Company generated strong operating cash flow in the quarter. Operating cash flow from continuing operations for the fourth quarter 2011 was $1,319 million compared to $861 million for the fourth quarter 2010. Both fourth quarter 2011 and fourth quarter 2010 included $750 million in discretionary cash contributions to the Company's pension plans. The increase in operating cash flow from continuing operations in the fourth quarter 2011 was primarily due to the timing of collections.
In the fourth quarter 2011, the Company repurchased 7.0 million shares of common stock for $313 million as part of its previously announced share repurchase program. For the full-year 2011, the Company repurchased 27.1 million shares of common stock for $1,250 million.
Full-Year Financial Results
Full-year 2011 Adjusted EPS was $5.90 per diluted share compared to $5.51 for the full-year 2010(2), up 7 percent. The increase was primarily driven by operational improvements and capital deployment actions. Full-year 2011 EPS from continuing operations was $5.28 compared to $4.79 for the full-year 2010.
2010 vs. 2011 EPS Variance
--------------------------
EPS Adjusted EPS(2)
--- ---------------
Full-Year 2010 $4.79 $5.51
Operational Improvements 0.18 0.18
Reduced Share Count 0.37 0.37
Other Items, net (primarily tax-related &
interest) (0.16) (0.16)
FAS/CAS Adjustment* (0.30) -
UKBA Adjustments** 0.58 -
Tax Settlements*** (0.28) -
Q4 2010 Early Debt Retirement Impact, net 0.10 -
Full-Year 2011 $5.28 $5.90
===== =====
* Represents the difference between the 2011 and 2010 FAS/CAS
Adjustments of $(0.62) and $(0.32), respectively.
** Represents the difference between the 2011 UKBA LOC Adjustment
and the 2010 UKBA Program Adjustment of $(0.17) and $(0.75),
respectively.
*** Represents the difference between the Q3 2011 and Q3 2010
favorable tax settlement of $0.17 and $0.45, respectively.
Net sales in 2011 were $24.9 billion, compared to $25.2 billion in 2010. The Company reported strong bookings in 2011 of $26.6 billion compared to $24.4 billion in 2010, resulting in a book-to-bill ratio of 1.07.
The Company generated strong operating cash flow for the year. Operating cash flow from continuing operations was $2.2 billion in 2011, compared to $1.9 billion in 2010. Both 2011 and 2010 included $750 million in discretionary cash contributions to the Company's pension plans. The Company made $1.8 billion in total cash contributions to its pension plans in 2011 compared to $1.9 billion in 2010.
In the fourth quarter 2011, the Company issued $1.0 billion in long-term debt. The Company ended the year with $605 million of net debt. Net debt is defined as total debt less cash and cash equivalents.
Summary Financial Results
-------------------------
4th Quarter Full-Year
% %
($ in
millions,
except
per share
data) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net sales $6,441 $6,885 -6% $24,857 $25,183 -1%
Income
from
continuing
operations
attributable
to
Raytheon
Company $546 $499 9% $1,867 $1,804 3%
Adjusted
Income* $600 $568 6% $2,086 $2,077 -
EPS from
continuing
operations $1.58 $1.37 15% $5.28 $4.79 10%
Adjusted
EPS* $1.74 $1.55 12% $5.90 $5.51 7%
Operating
cash flow
from
cont.
ops. $1,319 $861 $2,156 $1,931
Workdays
in fiscal
reporting
calendar 57 62 248 249
* Adjusted Income is income from continuing operations attributable
to Raytheon Company common stockholders and Adjusted EPS is EPS from
continuing operations attributable to Raytheon Company common
stockholders, in each case, excluding the after-tax impact of the
FAS/CAS Adjustment and, from time to time, certain other items. In
addition to the FAS/CAS Adjustment: Q4 2010 Adjusted Income and
Adjusted EPS exclude the impact of early debt retirement; full-year
2010 Adjusted Income and Adjusted EPS exclude the impact of the UKBA
Program Adjustment in Q2 2010, a favorable tax settlement in Q3 2010
and early debt retirement in Q4 2010; full-year 2011 Adjusted
Income and Adjusted EPS exclude the impact of the UKBA LOC
Adjustment in Q1 2011 and the favorable tax settlement in Q3 2011.
Adjusted Income and Adjusted EPS are non-GAAP financial measures.
See attachment F for a reconciliation of these measures and a
discussion of why the Company is presenting this information.
Bookings and Backlog
Bookings
--------
($ in millions) 4th Quarter Full-Year
2011 2010 2011 2010
---- ---- ---- ----
Bookings $7,147 $5,984 $26,555 $24,449
Backlog
-------
($ in millions) Period Ending
31-Dec-11 31-Dec-10
--------- ---------
Backlog $35,312 $34,551
Funded Backlog $22,462 $22,632
The Company ended 2011 with a backlog of $35.3 billion, compared to $34.6 billion at the end of 2010.
Outlook
The Company has provided its financial outlook for 2012. Charts containing additional information on the Company's 2012 outlook are available on the Company's website at www.raytheon.com/ir. In the first quarter of 2012, the Company sold the remaining operating assets at a slight gain and ceased operations of Raytheon Airline Aviation Services (RAAS), the Company's residual turbo-prop commuter aircraft portfolio. Accordingly, the favorable 2011 financial results of RAAS will be reclassified to discontinued operations beginning in the first quarter of 2012.
2012 Financial Outlook
----------------------
2011 as 2011 Adjusted 2012
------- ------------- ----
Reported for RAAS* Outlook
-------- --------- -------
Net Sales ($B) 24.9 24.8 24.5 - 25.0
FAS/CAS Adjustment ($M) (337) (337) (284)
Interest Expense, Net ($M) (155) (157) (190) -(200)
Diluted Shares (M) 354 354 334 - 340
Effective Tax Rate 29.5% 29.5% ~32%**
EPS from Continuing Operations $5.28 $5.22 $4.90 - $5.05**
Adjusted EPS*** $5.90 $5.84 $5.45 - $5.60**
Operating Cash Flow from Cont.
Ops. ($B) 2.2 2.1 1.6 - 1.8
* Adjusted to exclude the financial impact of RAAS, the Company's
residual turbo-prop commuter aircraft portfolio. See attachment H
for a reconciliation of the 2011 Adjusted for RAAS financial
information as well as other preliminary 2009 and 2010 financial
information excluding the financial results of RAAS.
** Impacted by 100 basis points, or $0.07 per diluted share, due to
the expiration of the R&D tax credit in 2011.
*** Adjusted EPS is EPS from continuing operations attributable to
Raytheon Company common stockholders excluding the EPS impact of the
FAS/CAS Adjustment and, from time to time, certain other items. In
addition to the FAS/CAS Adjustment, 2011 Adjusted EPS exclude the
impact of the UKBA LOC Adjustment in Q1 2011 and the favorable tax
settlement in Q3 2011. Adjusted EPS is a non-GAAP financial
measures. See attachment F for a reconciliation of Adjusted EPS to
EPS from continuing operations and a discussion of why the Company is
presenting this information.
Segment Results(3)
The Company's reportable segments, organized based on capabilities and technologies are: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services.
Integrated Defense Systems
--------------------------
4th Quarter Full-Year
% %
($ in millions) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net Sales $1,291 $1,463 -12% $4,958 $5,470 -9%
Operating Income $236 $238 -1% $836 $870 -4%
Operating Margin 18.3% 16.3% 16.9% 15.9%
Fourth Quarter
Integrated Defense Systems (IDS) had fourth quarter 2011 net sales of $1,291 million compared to $1,463 million in the fourth quarter 2010. As expected, the change in net sales was primarily due to lower sales on a U.S. Navy program and on an international Patriot program. IDS recorded $236 million of operating income compared to $238 million in the fourth quarter 2010. The change in operating income was primarily due to the change in volume partially offset by improved program performance and favorable contract mix.
During the quarter, IDS booked $2,771 million including $1,027 million for AN/TPY-2 radar contract awards for the United Arab Emirates (UAE), Missile Defense Agency (MDA) and U.S. Army. IDS also booked $560 million to provide advanced Patriot air and missile defense capability for Taiwan, $243 million on the Zumwalt-class destroyer program for the U.S. Navy, $177 million to provide Consolidated Contractor Logistics Support (CCLS) for the MDA, and $81 million for the production of Airborne Low Frequency Sonar (ALFS) systems for the Australian Navy.
Full-year
IDS had full-year 2011 net sales of $4,958 million compared to $5,470 million in 2010. As expected, the change in net sales was primarily due to lower sales on a U.S. Navy program and an international Patriot program. IDS recorded $836 million of operating income in 2011 compared to $870 million in 2010. The change in operating income was primarily due to the change in volume partially offset by improved program performance.
IDS had full-year 2011 bookings of $6,392 million. During the year, IDS booked $3,147 million for the Patriot Air and Missile Defense System, including $1,698 million for the Kingdom of Saudi Arabia, $560 million for Taiwan, $340 million for other international customers, and $257 million to provide engineering services support for U.S. and international customers. IDS booked $1,027 million for AN/TPY-2 radar contract awards for the UAE, MDA and U.S. Army. IDS also booked $345 million on the Zumwalt-class destroyer program for the U.S. Navy, $268 million for the production of ALFS systems and spares for the U.S. Navy and the Australian Navy, $193 million to provide CCLS for the MDA, and $107 million for development on the competitively awarded Space Fence program for the U.S. Air Force.
Intelligence & Information Systems
----------------------------------
4th Quarter Full-Year*
% %
($ in millions) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net Sales $753 $820 -8% $3,015 $2,757 9%
Operating Income
(Loss) $74 $67 10% $159 $(157) NM
Operating Margin 9.8% 8.2% 5.3% -5.7%
*Full-year 2011 includes a $80 million reduction to operating income
due to the UKBA LOC Adjustment in the first quarter 2011. Full-year
2010 includes a $316 million reduction to net sales and a $395 million
reduction to operating income due to the UKBA Program Adjustment in
the second quarter 2010.
NM = Not Meaningful
Fourth Quarter
Intelligence and Information Systems (IIS) had fourth quarter 2011 net sales of $753 million compared to $820 million in the fourth quarter 2010. The change in net sales was primarily due to lower sales on domestic programs. IIS recorded $74 million of operating income compared to $67 million in the fourth quarter 2010. Fourth quarter 2011 operating income included the recovery of an insurance claim.
During the quarter, IIS booked $433 million on a number of classified contracts.
In addition, as previously announced during the quarter, the Company acquired Pikewerks Corporation and Henggeler Computer Consultants, Inc., further extending the Company's capabilities to serve the cybersecurity, enterprise architecture and systems engineering needs of customers in the intelligence community as well as in the Department of Defense.
Full-year
IIS had full-year 2011 net sales of $3,015 million compared to $2,757 million in 2010. The change in net sales was primarily due to the 2010 UKBA program adjustment and higher sales on the Global Positioning System Operational Control Segment (GPS-OCX) program. IIS recorded $159 million of operating income in 2011 compared to a loss of $157 million in 2010. The change in operating income was primarily due to adjustments related to the UKBA program and favorable contract mix.
During the year, IIS booked $520 million on the Joint Polar Satellite System (JPSS) program for NASA and $183 million on a contract to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force. IIS also booked $1,554 million on a number of classified contracts.
Missile Systems
---------------
4th Quarter Full-Year
% %
($ in millions) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net Sales $1,482 $1,565 -5% $5,590 $5,732 -2%
Operating Income $209 $170 23% $693 $650 7%
Operating Margin 14.1% 10.9% 12.4% 11.3%
Fourth Quarter
Missile Systems (MS) had fourth quarter 2011 net sales of $1,482 million compared to $1,565 million in the fourth quarter 2010. The change in net sales was primarily due to lower sales on the Rolling Airframe Missile (RAM) and Standard Missile-2 (SM-2) programs. MS recorded $209 million of operating income compared to $170 million in the fourth quarter 2010. The increase in operating income was primarily due to improved program performance and a favorable contractual resolution.
During the quarter, MS booked $383 million for the development of Standard Missile-3 (SM-3) for the Missile Defense Agency (MDA), $131 million for Paveway(TM) and $86 million for Advanced Medium-Range Air-to-Air Missiles (AMRAAM) for international customers; and $128 million for Evolved Seasparrow Missiles (ESSM) to the U.S. Navy and international customers; and $90 million for the Joint Stand-off Weapon (JSOW) for the U.S. Navy. MS also booked $85 million for the development and production of Excalibur for the U.S. Marine Corps and U.S. Army.
Full-year
MS had full-year 2011 net sales of $5,590 million compared to $5,732 million in 2010. The change in net sales was primarily due to lower sales on the SM-2, ESSM, and SM-3 programs, partially offset by higher sales on the Small Diameter Bomb II (SDB II) and Paveway(TM) programs. MS recorded $693 million of operating income in 2011 compared to $650 million in 2010. The increase in operating income in 2011 was primarily due to favorable contract mix and improved program performance.
During the year, MS booked $1,402 million for SM-3, $696 million for AMRAAM, $393 million for ESSM, $374 million for Phalanx Weapon Systems, $311 million for Excalibur, $270 million for Paveway(TM), $237 million for SM-2, $225 million on a classified program, $210 million for Standard Missile-6 (SM-6), $191 million for JSOW, $152 million for Tube Launched, Optically Tracked, Wireless (TOW) missiles, and $113 million for Miniature Air Launched Decoys (MALD).
Network Centric Systems
-----------------------
4th Quarter Full-Year
% %
($ in millions) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net Sales $1,137 $1,310 -13% $4,497 $4,918 -9%
Operating Income $175 $196 -11% $667 $692 -4%
Operating Margin 15.4% 15.0% 14.8% 14.1%
Fourth Quarter
Network Centric Systems (NCS) had fourth quarter 2011 net sales of $1,137 million compared to $1,310 million in the fourth quarter 2010. The change in net sales was primarily due to lower sales on U.S. Army programs. NCS recorded $175 million of operating income compared to $196 million in the fourth quarter 2010. The change in operating income was primarily due to lower volume partially offset by improved program performance.
Full-year
NCS had full-year 2011 net sales of $4,497 million compared to $4,918 million in 2010. The change in net sales was primarily due to lower sales on U.S. Army programs. NCS recorded $667 million of operating income compared to $692 million in 2010. The change in operating income was primarily due to lower volume partially offset by improved program performance and favorable contract mix.
During the year, NCS booked $211 million for the production of Sentinel radars, spares, and services for the U.S. Army and international customers, $146 million for Long Range Advanced Scout Surveillance Systems (LRAS3) for the U.S. Army, $71 million for the Thermal Weapon Sight (TWS) program for the U.S. Army and $64 million for Enhanced Position Location Reporting System (EPLRS) and MicroLight® radios for the Australian Defence Materiel Organisation (DMO).
Space & Airborne Systems
------------------------
4th Quarter Full-Year
% %
($ in millions) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net Sales $1,341 $1,300 3% $5,255 $4,830 9%
Operating Income $214 $163 31% $717 $676 6%
Operating Margin 16.0% 12.5% 13.6% 14.0%
Fourth Quarter
Space and Airborne Systems (SAS) had fourth quarter 2011 net sales of $1,341 million compared to $1,300 million in the fourth quarter 2010. The increase in net sales was primarily due to higher net sales related to Raytheon Applied Signal Technology, which was acquired in the first quarter of 2011. SAS recorded $214 million of operating income compared to $163 million in the fourth quarter 2010. The increase in operating income was primarily due to improved program performance.
During the quarter, SAS booked $212 million for the production of Active Electronically Scanned Array (AESA) radars for the U.S. Navy. SAS also booked $177 million on a number of classified contracts.
Full-year
SAS had full-year 2011 net sales of $5,255 million, up 9 percent compared to $4,830 million in 2010. The increase in net sales was primarily due to higher net sales related to Raytheon Applied Signal Technology, and growth on intelligence, surveillance and reconnaissance (ISR) systems programs and an international airborne tactical radar program. SAS recorded $717 million of operating income in 2011 compared to $676 million in 2010. The increase in operating income was primarily due to higher sales and improved program performance partially offset by acquisition-related costs related to Raytheon Applied Signal Technology.
During the year, SAS booked $782 million on an international AESA program for F-15's to the Kingdom of Saudi Arabia, $291 million for the production of AESA radars for the U.S. Air Force, U.S. Navy and the Air National Guard, and $78 million on radar contracts for an international customer. SAS also booked $954 million on a number of classified contracts.
Technical Services
------------------
4th Quarter Full-Year
% %
($ in millions) --- ---
2011 2010 Change 2011 2010 Change
---- ---- ------ ---- ---- ------
Net Sales $886 $964 -8% $3,353 $3,472 -3%
Operating Income $84 $82 2% $312 $297 5%
Operating Margin 9.5% 8.5% 9.3% 8.6%
Fourth Quarter
Technical Services (TS) had fourth quarter 2011 net sales of $886 million compared to $964 million in the fourth quarter 2010. The change in net sales was primarily due to lower sales on programs nearing completion, including a Defense Threat Reduction Agency (DTRA) program and a Transportation Security Administration (TSA) program. TS recorded operating income of $84 million compared to $82 million in the fourth quarter 2010. The change in operating income was primarily due to improved program performance.
During the quarter, TS booked $39 million on domestic training programs and $98 million on foreign training programs in support of Warfighter FOCUS activities.
Full-year
TS had full-year 2011 net sales of $3,353 million compared to $3,472 million in 2010. The change in net sales was primarily due to lower sales on a DTRA program, which is nearing completion and on Warfighter FOCUS, partially offset by higher sales on various depot services operations programs. TS recorded operating income of $312 million in 2011 compared to $297 million in 2010. The increase in operating income was primarily due to contract mix and operational improvements.
During the year, TS booked $994 million on domestic training programs and $347 million on foreign training programs in support of the Warfighter FOCUS activities. TS also booked $150 million to provide operational and logistics support to the National Science Foundation (NSF) Office of Polar Programs, $120 million to design, develop and deliver technical training for a commercial customer and $100 million for base operations, maintenance and support services at the Harold E. Holt Naval Communications station for Australia.
About Raytheon
Raytheon Company, with 2011 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 90 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 71,000 people worldwide. For more about Raytheon, visit us at www.raytheon.com and follow us on Twitter at @raytheon.
Conference Call on the Fourth Quarter and Full-Year 2011 Financial Results
Raytheon's financial results conference call will be held on Thursday, January 26, 2012 at 9 a.m. ET. Participants will include William H. Swanson, Chairman and CEO; David C. Wajsgras, senior vice president and CFO; and other Company executives.
The dial-in number for the conference call will be (866) 510-0712 in the U.S. or (617) 597-5380 outside of the U.S. The conference call will also be audiocast on the Internet at www.raytheon.com/ir. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for printing prior to the call.
Interested parties are encouraged to check the website ahead of time to ensure their computers are configured for the audio stream. Instructions for obtaining the free required downloadable software are posted on the site.
Disclosure Regarding Forward-looking Statements
This release and the attachments contain forward-looking statements, including information regarding the Company's financial outlook, future plans, objectives, business prospects and anticipated financial performance. These forward-looking statements are not statements of historical facts and represent only the Company's current expectations regarding such matters. These statements inherently involve a wide range of known and unknown risks and uncertainties. The Company's actual actions and results could differ materially from what is expressed or implied by these statements. Specific factors that could cause such a difference include, but are not limited to: the Company's dependence on the U.S. Government for a significant portion of its business and the risks associated with U.S. Government sales, including changes or shifts in defense spending, 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.
Investor Relations Contact
Todd Ernst
781.522.5141
Media Contact
Jon Kasle
781.522.5110
(1) Adjusted EPS is 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: Q4 2010 Adjusted EPS excludes the impact of early debt retirement; full-year 2010 Adjusted EPS excludes the impact of the UKBA Program Adjustment in Q2 2010, a favorable tax settlement in Q3 2010 and early debt retirement in Q4 2010; 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.
(2) Adjusted EPS is 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. 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.
(3) Q4 2011 results reflect 5 fewer workdays compared with Q4 2010
Attachment A
Raytheon Company
Preliminary Statement of Operations
Information
Fourth Quarter 2011
(In millions, except per share Twelve Months
amounts) Three Months Ended Ended
------------------ --------------
31- 31- 31- 31-
Dec- Dec- Dec- Dec-
11 10 11 10
---- ---- ---- ----
Net sales $6,441 $6,885 $24,857 $25,183
------ ------ ------- -------
Operating expenses
Cost of sales 5,025 5,506 19,697 20,303
Administrative and selling expenses 385 432 1,678 1,648
Research and development expenses 171 143 625 625
--- --- --- ---
Total operating expenses 5,581 6,081 22,000 22,576
----- ----- ------ ------
Operating income 860 804 2,857 2,607
--- --- ----- -----
Interest expense 45 28 172 126
Interest income (3) (6) (17) (16)
Other (income) expense (3) 67 12 65
--- --- --- ---
Non-operating (income) expense, net 39 89 167 175
--- --- --- ---
Income from continuing operations
before taxes 821 715 2,690 2,432
Federal and foreign income taxes 266 201 793 589
--- --- --- ---
Income from continuing operations 555 514 1,897 1,843
Income (loss) from discontinued
operations, net of tax (3) (40) (1) 36
--- --- --- ---
Net income 552 474 1,896 1,879
Less: Net income (loss)
attributable to noncontrolling
interests in subsidiaries 9 15 30 39
--- --- --- ---
Net income attributable to Raytheon
Company $543 $459 $1,866 $1,840
==== ==== ====== ======
Basic earnings (loss) per share
attributable to Raytheon Company
common stockholders:
Income from continuing operations $1.58 $1.38 $5.31 $4.84
Income (loss) from discontinued
operations, net of tax (0.01) (0.11) - 0.10
Net income 1.58 1.26 5.30 4.94
Diluted earnings (loss) per share
attributable to Raytheon Company
common stockholders:
Income from continuing operations $1.58 $1.37 $5.28 $4.79
Income (loss) from discontinued
operations, net of tax (0.01) (0.11) - 0.10
Net income 1.57 1.25 5.28 4.88
Amounts attributable to Raytheon
Company common stockholders:
Income from continuing operations $546 $499 $1,867 $1,804
Income (loss) from discontinued
operations, net of tax (3) (40) (1) 36
--- --- --- ---
Net income $543 $459 $1,866 $1,840
==== ==== ====== ======
Average shares outstanding
Basic 344.1 363.2 351.7 372.7
Diluted 345.1 366.0 353.6 377.0
Attachment B
Raytheon Company
Preliminary Segment Information
Fourth Quarter 2011
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-11 31-Dec-10 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10
--------- --------- --------- --------- --------- ---------
Integrated
Defense
Systems $1,291 $1,463 $236 $238 18.3% 16.3%
Intelligence
and
Information
Systems 753 820 74 67 9.8% 8.2%
Missile
Systems 1,482 1,565 209 170 14.1% 10.9%
Network
Centric
Systems 1,137 1,310 175 196 15.4% 15.0%
Space
and
Airborne
Systems 1,341 1,300 214 163 16.0% 12.5%
Technical
Services 886 964 84 82 9.5% 8.5%
FAS/CAS
Adjustment - - (83) (49)
Corporate
and
Eliminations (449) (537) (49) (63)
---- ---
Total $6,441 $6,885 $860 $804 13.4% 11.7%
====== ====== ==== ====
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-11 31-Dec-10 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10
--------- --------- --------- --------- --------- ---------
Integrated
Defense
Systems $4,958 $5,470 $836 $870 16.9% 15.9%
Intelligence
and
Information
Systems 3,015 2,757 159 (157) 5.3% -5.7%
Missile
Systems 5,590 5,732 693 650 12.4% 11.3%
Network
Centric
Systems 4,497 4,918 667 692 14.8% 14.1%
Space
and
Airborne
Systems 5,255 4,830 717 676 13.6% 14.0%
Technical
Services 3,353 3,472 312 297 9.3% 8.6%
FAS/CAS
Adjustment - - (337) (187)
Corporate
and
Eliminations (1,811) (1,996) (190) (234)
------ ----
Total $24,857 $25,183 $2,857 $2,607 11.5% 10.4%
======= ======= ====== ======
Attachment C
Raytheon Company
Other Preliminary Information
Fourth Quarter 2011
(In millions) Funded Backlog Total Backlog
-------------- -------------
31- 31- 31- 31-
Dec- Dec- Dec- Dec-
11 10 11 10
---- ---- ---- ----
Integrated Defense
Systems $7,100 $6,433 $9,766 $8,473
Intelligence and
Information Systems 829 725 4,366 4,319
Missile Systems 6,205 6,385 8,570 8,212
Network Centric Systems 3,267 3,740 4,160 4,912
Space and Airborne
Systems 3,104 3,266 5,864 5,981
Technical Services 1,957 2,083 2,586 2,654
----- ----- ----- -----
Total $22,462 $22,632 $35,312 $34,551
======= ======= ======= =======
Bookings Bookings
Three Months Twelve Months
Ended Ended
------------- --------------
31- 31- 31- 31-
Dec- Dec- Dec- Dec-
11 10 11 10
---- ---- ---- ----
Total Bookings $7,147 $5,984 $26,555 $24,449
====== ====== ======= =======
Attachment D
Raytheon Company
Preliminary Balance Sheet Information
Fourth Quarter 2011
(In millions)
31-Dec-11 31-Dec-10
--------- ---------
Assets
Cash and cash equivalents $4,000 $3,638
Contracts in process, net 4,526 4,414
Inventories 336 363
Deferred taxes 221 266
Prepaid expenses and other current
assets 226 141
--- ---
Total current assets 9,309 8,822
Property, plant and equipment, net 2,006 2,003
Deferred taxes 657 106
Goodwill 12,544 12,045
Other assets, net 1,338 1,446
----- -----
Total assets $25,854 $24,422
======= =======
Liabilities and Equity
Current liabilities
Advance payments and billings in
excess of costs incurred $2,542 $2,201
Accounts payable 1,507 1,538
Accrued employee compensation 941 901
Other accrued expenses 1,140 1,320
----- -----
Total current liabilities 6,130 5,960
Accrued retiree benefits and other
long-term liabilities 6,774 4,815
Deferred taxes 5 147
Long-term debt 4,605 3,610
Equity
Raytheon Company stockholders' equity
Common stock 3 4
Additional paid-in capital 11,676 11,406
Accumulated other comprehensive loss (7,001) (5,146)
Treasury stock, at cost (8,153) (6,900)
Retained earnings 11,656 10,390
------ ------
Total Raytheon Company stockholders'
equity 8,181 9,754
Noncontrolling interests in
subsidiaries 159 136
--- ---
Total equity 8,340 9,890
----- -----
Total liabilities and equity $25,854 $24,422
======= =======
Attachment E
Raytheon Company
Preliminary Cash Flow Information
Fourth Quarter 2011
(In Twelve Months
millions) Three Months Ended Ended
------------------ --------------
31- 31- 31- 31-
Dec- Dec- Dec- Dec-
11 10 11 10
---- ---- ---- ----
Net income
(loss) $552 $474 $1,896 $1,879
(Income)
loss from
discontinued
operations,
net of tax 3 40 1 (36)
--- --- ---
Income
(loss) from
continuing
operations 555 514 1,897 1,843
Depreciation 81 79 314 304
Amortization 35 30 133 116
Working
capital
(excluding
pension and
taxes) (1) 1,079 495 196 358
Other long-
term
liabilities 30 11 (25) (344)
Pension and
other
postretirement
benefits (500) (559) (760) (1,048)
Other 39 291 401 702
--- --- --- ---
Net
operating
cash flow 1,319 861 2,156 1,931
Discontinued
operations (1) 4 (49) 11
Capital
spending (143) (135) (340) (319)
Internal use
software
spending (23) (22) (97) (67)
Acquisitions (94) (140) (645) (152)
Dividends (148) (135) (588) (536)
Repurchases
of common
stock (313) (250) (1,250) (1,450)
Debt
issuance 992 1,975 992 1,975
Debt
repayments - (678) - (678)
Warrants
exercised - - 123 250
Other 6 9 60 31
--- --- --- ---
Total cash
flow $1,595 $1,489 $362 $996
====== ====== ==== ====
(1) Working capital (excluding pension and taxes)
is a summation of changes in: contracts in process
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 2011
Adjusted EPS Non-GAAP Reconciliation
------------------------------------
(In millions, except per share amounts) 2012 Guidance
-------------
High
Three Months Ended Twelve Months Ended Low end end
------------------ -------------------
31-
Dec- of of
11 31-Dec-10 31-Dec-11 31-Dec-10 range range
---- --------- --------- --------- ------ ------
Diluted earnings per share from continuing
operations
attributable to Raytheon Company common
stockholders $1.58 $1.37 $5.28 $4.79 $4.90 $5.05
Per share impact of the FAS/CAS Adjustment (A) 0.16 0.09 0.62 0.32 0.54 0.55
Per share impact of the UK Border Agency (UKBA)
Program Adjustment (B) - - - 0.75 - -
Per share impact of the UKBA LOC Adjustment (C) - - 0.17 - - -
Per share impact of the favorable tax settlements
(D) - - (0.17) (0.45) - -
Per share impact of the early debt retirement
make-whole provision (E) - 0.13 - 0.13 - -
Per share impact of the acceleration of deferred
gains related
to terminated interest rate swaps on
retired debt (F) - (0.03) - (0.03) - -
Adjusted EPS (4), (5) $1.74 $1.55 $5.90 $5.51 $5.45 $5.60
===== ===== ===== ===== ===== =====
(A) FAS/CAS Adjustment $83 $49 $337 $187 $284 $284
Tax effect (1) (29) (17) (118) (65) (99) (99)
--- --- ---- --- --- ---
After-tax impact 54 32 219 122 185 185
Diluted shares 345.1 366.0 353.6 377.0 340.0 334.0
Per share impact $0.16 $0.09 $0.62 $0.32 $0.54 $0.55
(B) UKBA Program Adjustment $- $- $- $395 $- $-
Tax effect (2) - - - (111) - -
--- --- --- ---- --- ---
After-tax impact - - - 284 - -
Diluted shares - - - 377.0 - -
Per share impact $- $- $- $0.75 $- $-
(C) UKBA LOC Adjustment $- $- $80 $- $- $-
Tax effect (3) - - (20) - - -
--- --- --- --- --- ---
After-tax impact - - 60 - - -
Diluted shares - - 353.6 - - -
Per share impact $- $- $0.17 $- $- $-
(D) Favorable tax settlements $- $- $(60) $(170) $- $-
Diluted shares - - 353.6 377.0 - -
Per share impact $- $- $(0.17) $(0.45) $- $-
Early debt retirement make-whole
(E) provision $- $73 $- $73 $- $-
Tax effect (1) - (26) - (26) - -
--- --- --- --- --- ---
After-tax impact - 47 - 47 - -
Diluted shares - 366.0 - 377.0 - -
Per share impact $- $0.13 $- $0.13 $- $-
Acceleration of deferred gains related to
(F) terminated interest rate
swaps on retired debt $- $(15) $- $(15) $- $-
Tax effect (1) - 5 - 5 - -
--- --- --- --- --- ---
After-tax impact - (10) - (10) - -
Diluted Shares - 366.0 - 377.0 - -
Per share impact $- $(0.03) $- $(0.03) $- $-
(1) Tax effected at 35% federal statutory tax rate.
(2) Tax effected at approximately 30.5% blended global tax rate.
(3) Tax effected at approximately 25% blended global tax rate.
(4) These amounts are not measures of financial performance under U.S. generally accepted accounting principles
(GAAP). They should be considered supplemental to and not a substitute for financial performance in accordance
with GAAP and may not be defined and calculated by other companies in the same manner. These amounts exclude
the FAS/CAS Adjustment and, from time to time, certain other items. We are providing these measures because
management uses them for the purposes of evaluating and forecasting the Company's financial performance and
believes that they provide additional insights into the Company's underlying business performance. We also
believe that they allow investors to benefit from being able to assess our operating performance in the context
of how our principal customer, the U.S. Government, allows us to recover pension and 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.
(5) 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 2010 Adjusted EPS exclude the earnings per share
impact of the charges associated with the make-whole provision on the early retirement of debt and the impact
of the acceleration of deferred gains related to terminated interest rate swaps on retired debt in 2010. In
addition to the FAS/CAS Adjustment, twelve months ended 2011 Adjusted EPS also excludes the per share impact
of the UKBA LOC Adjustment, as previously disclosed, while twelve months ended 2010 Adjusted EPS also excludes
the per share impact of the UKBA Program Adjustment, as previously disclosed. The UKBA Program Adjustment was
based on our adjustment after the UKBA's termination of the UKBA program, to our estimated amount of revenue
and costs under the program in the second quarter of 2010. The UKBA LOC 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 validity of the drawdown is now a subject of the ongoing arbitration proceedings
related to the UKBA program. Twelve months ended 2011 and 2010 Adjusted EPS also excludes the earnings per
share impact of favorable tax settlements in the third quarters of 2011 and 2010 as a result of our receipt of
final approval from the IRS and the U.S. Congressional Joint Committee on Taxation of the IRS' examination of
our tax returns for the 2006-2008 tax years and 1998-2005 tax years, respectively.
Attachment F (Page 2 of 2)
Raytheon Company
Non-GAAP Financial Measures - Adjusted EPS, Adjusted Income and Adjusted Operating Margin
Fourth Quarter 2011
Adjusted Income Non-GAAP Reconciliation
---------------------------------------
(In millions)
Three Months Ended Twelve Months Ended
------------------ -------------------
31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10
--------- --------- --------- ---------
Income from continuing operations attributable to Raytheon Company
common stockholders $546 $499 $1,867 $1,804
FAS/CAS Adjustment 54 32 219 122
UKBA Program Adjustment - - - 284
UKBA LOC Adjustment - - 60 -
Favorable tax settlements - - (60) (170)
Early debt retirement make-whole provision - 47 - 47
Acceleration of deferred gains related to terminated interest rate swaps
on retired debt - (10) - (10)
---
Adjusted Income (1), (2) $600 $568 $2,086 $2,077
==== ==== ====== ======
Adjusted Operating Margin Non-GAAP Reconciliation
-------------------------------------------------
2012 Guidance
-------------
Three Months Ended Twelve Months Ended Low end High end
------------------ -------------------
31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10 of range of range
--------- --------- --------- --------- -------- --------
Operating Margin 13.4 % 11.7 % 11.5 % 10.4 % 10.9 % 11.1 %
Impact of the FAS/CAS Adjustment 1.3 % 0.7 % 1.4 % 0.7 % 1.2 % 1.2 %
Impact of UKBA Program Adjustment - % - % - % 1.4 % - % - %
Impact of the UKBA LOC Adjustment - % - % 0.3 % - % - % - %
Adjusted Operating Margin (1), (3) 14.6 % 12.4 % 13.2 % 12.5 % 12.1% 12.3 %
===== ===== ===== ===== ==== =====
(1) These amounts are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). They should be considered
supplemental to and not a substitute for financial performance in accordance with GAAP and may not be defined and calculated by other companies in the same
manner. These amounts exclude the FAS/CAS Adjustment and, from time to time, certain other items. We are providing these measures because management uses
them for the purposes of evaluating and forecasting the Company's financial performance and believes that they provide additional insights into the
Company's underlying business performance. We also believe that they allow investors to benefit from being able to assess our operating performance in the
context of how our principal customer, the U.S. Government, allows us to recover pension and 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.
(2) 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 2010 Adjusted Income
exclude the earnings per share impact of the charges associated with the make-whole provision on the early retirement of debt and the impact of the
acceleration of deferred gains related to terminated interest rate swaps on retired debt in the twelve months ended 2010. 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 above, while twelve months
ended 2010 Adjusted Income also excludes the after-tax impact of the UKBA Program Adjustment, as described above. Three months and twelve months ended
2011 and 2010 Adjusted Income also excludes the impact of the favorable tax settlements in the third quarters of 2011 and 2010, as described above.
(3) Adjusted Operating Margin is defined as total operating margin excluding the margin impact of the FAS/CAS Adjustment and, from time to time, certain
other items. 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 above, while twelve months ended 2010 Adjusted Operating Margin also excludes the impact of the UKBA Program Adjustment, as
described above.
Attachment G
Raytheon Company
Preliminary Return on Invested Capital Non-GAAP
Financial Measure
Fourth Quarter 2011
We define ROIC as income from continuing operations
excluding the after-tax effect of the FAS/CAS
Adjustment and, from time to time, certain other items,
plus after-tax net interest expense plus one-third of
operating lease expense after-tax (estimate of interest
portion of operating lease expense) divided by average
invested capital after capitalizing operating leases
(operating lease expense times a multiplier of 8),
adding financial guarantees less net investment in
Discontinued Operations, and adding back the liability
for defined benefit pension plans and postretirement
benefit plans, net of tax. ROIC is not a measure of
financial performance under generally accepted
accounting principles (GAAP) and may not be defined and
calculated by other companies in the same manner. ROIC
should be considered supplemental to and not a
substitute for financial information prepared in
accordance with GAAP. The Company uses ROIC as a measure
of the efficiency and effectiveness of its use of
capital and as an element of management compensation.
Return on Invested
Capital
(In millions, except
percentages)
2010 2011 Adjusted
---- ---- 2011 (6)
-------
Income from
continuing
operations $1,843 $1,897 $1,878
FAS/CAS Adjustment
(1) 122 219 219
Q2 2010 UK Border
Agency (UKBA)
program adjustment
(2) 284 - -
Favorable tax
settlements (170) (60) (60)
Q4 2010 early debt
retirement make-
whole provision (1) 47 - -
Q1 2011 UKBA LOC
Adjustment (3) - 60 60
Net interest expense
(1) 72 101 102
Lease expense (1) 67 59 59
Return $2,265 $2,276 $2,258
------ ------ ------
Net debt (4) $(171) $289 $289
Equity less
investment in
discontinued
operations 9,944 9,163 9,132
Lease expense x 8,
plus financial
guarantees 2,890 2,766 2,762
Pension and PRB
liability, net of
related tax benefit 3,323 3,774 3,774
Invested capital
from continuing
operations (5) $15,986 $15,992 $15,957
------- ------- -------
ROIC 14.2% 14.2% 14.2%
---- ---- ----
(1) Net of tax, calculated utilizing the federal
statutory tax rate of 35%
(2) Net of tax, calculated utilizing the UK statutory
tax rate in effect in Q2 2010 of 28%
(3) Net of tax, calculated utilizing the UK statutory
tax rate in effect in Q4 2011 of 25%
(4) Net debt is defined as total debt less cash and cash
equivalents and is calculated using a 2-point average
(5) Calculated using a 2-point average
(6) Excludes the financial impact of Raytheon Airline
Aviation Services (RAAS), the Company's residual turbo-
prop commuter aircraft portfolio. In the first quarter
of 2012, the Company sold the remaining operating assets
at a slight gain and ceased operations of RAAS.
Accordingly, the favorable 2011 financial results of
RAAS will be reclassified to discontinued operations
beginning in the first quarter of 2012.
Attachment H
Raytheon Company
Preliminary Non-GAAP Reconciliation of Financial Information Excluding RAAS*
Fourth Quarter 2011
(In millions except per
share amounts)
Total Net Sales
---------------
Three Months Ended Twelve Months Ended
------------------ -------------------
03- 03- 02- 31- 31- 31-
Apr- Jul- Oct- Dec- Dec- Dec-
11 11 11 11 31-Dec-11 10 09
---- ---- ---- ---- --------- ---- ----
Net sales as reported under
GAAP $6,062 $6,222 $6,132 $6,441 $24,857 $25,183 $24,881
Adjustment for RAAS (10) (21) (16) (19) (66) (33) (38)
Net sales excluding RAAS $6,052 $6,201 $6,116 $6,422 $24,791 $25,150 $24,843
====== ====== ====== ====== ======= ======= =======
Operating Income
----------------
Three Months Ended Twelve Months Ended
------------------ -------------------
03- 03- 02- 31- 31- 31-
Apr- Jul- Oct- Dec- Dec- Dec-
11 11 11 11 31-Dec-11 10 09
---- ---- ---- ---- --------- ---- ----
Operating income as reported
under GAAP $591 $681 $725 $860 $2,857 $2,607 $3,042
Adjustment for RAAS (2) (11) (3) (11) (27) 6 13
Operating income excluding
RAAS $589 $670 $722 $849 $2,830 $2,613 $3,055
==== ==== ==== ==== ====== ====== ======
Operating Margin
----------------
Three Months Ended Twelve Months Ended
------------------ -------------------
03- 03- 02- 31- 31- 31-
Apr- Jul- Oct- Dec- Dec- Dec-
11 11 11 11 31-Dec-11 10 09
---- ---- ---- ---- --------- ---- ----
Operating margin as reported
under GAAP 9.7% 10.9% 11.8% 13.4% 11.5% 10.4% 12.2%
Operating margin excluding
RAAS 9.7% 10.8% 11.8% 13.2% 11.4% 10.4% 12.3%
Income from Continuing
Operations Attributable to
Raytheon Company Common
Stockholders
---------------------------
Three Months Ended Twelve Months Ended
------------------ -------------------
03- 03- 02- 31- 31- 31-
Apr- Jul- Oct- Dec- Dec- Dec-
11 11 11 11 31-Dec-11 10 09
---- ---- ---- ---- --------- ---- ----
Income from continuing
operations as reported
under GAAP $383 $438 $500 $546 $1,867 $1,804 $1,936
Adjustment for RAAS (2) (8) (2) (7) (19) 1 4
Income from continuing
operations excluding RAAS $381 $430 $498 $539 $1,848 $1,805 $1,940
==== ==== ==== ==== ====== ====== ======
EPS from Continuing
Operations Attributable to
Raytheon Company Common
Stockholders
---------------------------
Three Months Ended Twelve Months Ended
------------------ -------------------
03- 03- 02- 31- 31- 31-
Apr- Jul- Oct- Dec- Dec- Dec-
11 11 11 11 31-Dec-11 10 09
---- ---- ---- ---- --------- ---- ----
Diluted EPS from continuing
operations as reported
under GAAP $1.06 $1.23 $1.43 $1.58 $5.28 $4.79 $4.89
(Loss)/income per share for
RAAS (0.01) (0.02) (0.01) (0.02) (0.05) -- 0.01
----- ----- ----- ----- ----- --- ----
Diluted EPS from continuing
operations excluding RAAS $1.06 $1.20 $1.42 $1.56 $5.22 $4.79 $4.91
===== ===== ===== ===== ===== ===== =====
Operating Cash Flow
-------------------
Twelve Months
Ended
31-Dec-11
---------
Operating Cash Flow as
reported under GAAP $2,156
Adjustment for RAAS (54)
Operating Cash Flow
excluding RAAS $2,102
======
* These amounts are not measures of financial performance under generally accepted accounting
principles (GAAP). They should be considered supplemental to and not a substitute for financial
performance in accordance with GAAP. In the first quarter of 2012, the Company sold the remaining
operating assets at a slight gain and ceased operations of RAAS. We are providing these non-GAAP
measures to provide insight on how we expect continuing operations to appear when RAAS is reported as
a discontinued operation. Amounts may not foot due to rounding.
SOURCE Raytheon Company