ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
95-1778500
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Stock, $.01 par value
|
New York Stock Exchange
|
–
|
Integrated Defense Systems;
|
–
|
Intelligence, Information and Services;
|
–
|
Missile Systems; and
|
–
|
Space and Airborne Systems.
|
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Sales to the U.S. Government
(1)
|
$
|
17,019
|
|
|
$
|
17,861
|
|
|
$
|
18,360
|
|
Sales to the U.S. Government as a Percentage of Total Net Sales
(1)
|
72
|
%
|
|
73
|
%
|
|
74
|
%
|
|||
Foreign military sales through the U.S. Government
|
$
|
3,062
|
|
|
$
|
3,196
|
|
|
$
|
2,998
|
|
Foreign military sales through the U.S. Government as a Percentage of Total Net Sales
|
13
|
%
|
|
13
|
%
|
|
12
|
%
|
(1)
|
Excludes foreign military sales through the U.S. Government.
|
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Total international sales
(1)
|
$
|
6,446
|
|
|
$
|
6,232
|
|
|
$
|
6,139
|
|
Total international sales as a Percentage of Total Net Sales
(1)
|
27
|
%
|
|
26
|
%
|
|
25
|
%
|
(1)
|
Includes foreign military sales through the U.S. Government.
|
|
|
|
|
|
% of Total Backlog
|
||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||
Total backlog
|
$
|
33,685
|
|
|
$
|
36,181
|
|
|
100
|
%
|
|
100
|
%
|
Total backlog to the U.S. Government
(1)
|
20,985
|
|
|
23,090
|
|
|
62
|
%
|
|
64
|
%
|
||
Total foreign military sales backlog
|
4,884
|
|
|
5,443
|
|
|
14
|
%
|
|
15
|
%
|
||
Total direct foreign government backlog
|
6,926
|
|
|
6,789
|
|
|
21
|
%
|
|
19
|
%
|
||
Total non-government foreign backlog
|
551
|
|
|
444
|
|
|
2
|
%
|
|
1
|
%
|
||
Total non-U.S. Government domestic backlog
|
339
|
|
|
416
|
|
|
1
|
%
|
|
1
|
%
|
||
Total international backlog
(2)
|
12,361
|
|
|
12,675
|
|
|
37
|
%
|
|
35
|
%
|
(1)
|
Excludes foreign military sales backlog through the U.S. Government.
|
(2)
|
Includes foreign military sales backlog through the U.S. Government.
|
–
|
Identify the needs of, and growth opportunities in, new and emerging markets;
|
–
|
Identify emerging technological and other trends in our current and future markets;
|
–
|
Identify additional uses for our existing technology to address customer needs in our current and future markets;
|
–
|
Develop and maintain competitive products and services for our current and future markets;
|
–
|
Enhance our offerings by adding innovative features that differentiate our offerings from those of our competitors;
|
–
|
Develop and manufacture and bring solutions to market quickly at cost-effective prices; and
|
–
|
Effectively structure our businesses, through the use of joint ventures, collaborative agreements and other forms of alliances, to reflect the competitive environment.
|
–
|
Integrated Defense Systems
—Huntsville, AL; Fullerton, CA; San Diego, CA; Andover, MA; Billerica, MA; Marlboro, MA; Sudbury, MA; Tewksbury, MA; Woburn, MA; Maple Lawn, MD; Portsmouth, RI; Keyport, WA; Waterloo, Canada and Kiel, Germany.
|
–
|
Intelligence, Information and Services
—Chula Vista, CA; Aurora, CO; Orlando, FL; Indianapolis, IN; Burlington, MA; Riverdale, MD; Troy, MI; Omaha, NE; State College, PA; Garland, TX; Dulles, VA; Norfolk, VA and Springfield, VA.
|
–
|
Missile Systems
—Huntsville, AL; East Camden, AR; Tucson, AZ; Rancho Cucamonga, CA; Louisville, KY; Albuquerque, NM; Farmington, NM; Dallas, TX; Richardson, TX; Midland, Canada; Harlow, United Kingdom; Glenrothes, Scotland and Malaga, Spain.
|
–
|
Space and Airborne Systems
—El Segundo, CA; Goleta, CA; Sunnyvale, CA; Largo, FL; Fort Wayne, IN; Cambridge, MA; Forest, MS; Dallas, TX and McKinney TX.
|
–
|
Corporate and Other
—Billerica, MA; Waltham, MA; Garland, TX; Greenville, TX; Plano, TX; Arlington, VA and Dulles, VA.
|
|
Leased
|
|
|
Owned
(1)
|
|
|
Government
Owned
(2)
|
|
|
Total
(3)
|
|
Integrated Defense Systems
|
1,683,528
|
|
|
4,557,262
|
|
|
109,566
|
|
|
6,350,356
|
|
Intelligence, Information and Services
|
4,620,127
|
|
|
1,040,604
|
|
|
207,856
|
|
|
5,868,587
|
|
Missile Systems
|
2,795,839
|
|
|
2,441,537
|
|
|
1,217,607
|
|
|
6,454,983
|
|
Space and Airborne Systems
|
3,365,390
|
|
|
5,438,354
|
|
|
—
|
|
|
8,803,744
|
|
Corporate and Other
(4)
|
526,785
|
|
|
459,454
|
|
|
265
|
|
|
986,504
|
|
Totals
|
12,991,669
|
|
|
13,937,211
|
|
|
1,535,294
|
|
|
28,464,174
|
|
(1)
|
Ownership may include either fee ownership of land and improvements or a long term ground lease with ownership of improvements.
|
(2)
|
“Government Owned” means space owned by the U.S. or a foreign government utilized by us pursuant to an operating agreement with the U.S. or a foreign government (GOCO).
|
(3)
|
Includes approximately
576,000
square feet of vacant space, but excludes approximately
334,000
square feet of space leased or subleased to unrelated third parties. For 2012, we excluded approximately 776,000 square feet of vacant space and included approximately 417,000 square feet of space leased or subleased to unrelated third parties. Applying the methodology utilized in 2013, at December 31, 2012, we owned, leased and/or utilized (through operating agreements) approximately 29.4 million square feet of floor space.
|
(4)
|
Includes business development, discontinued operations and Raytheon International, Inc.
|
(1)
|
This amount includes
2,716,757
shares, which is the aggregate of the actual number of shares issued pursuant to the
2011
Long-Term Performance Plan (LTPP) awards and the maximum number of shares that may be issued upon settlement of outstanding
2012
and
2013
LTPP awards, including estimated dividend equivalent amounts. The shares to be issued pursuant to the
2011
,
2012
and
2013
LTPP awards will be issued under the Raytheon 2010 Stock Plan (2010 Stock Plan). The material terms of the
2011
,
2012
and
2013
LTPP awards are described in more detail in "Note 12: Stock-based Compensation Plans" within Item 8 of this Form 10-K. These awards, which are granted as restricted stock units, may be settled in cash or in stock at the discretion of the Management Development and Compensation Committee.
|
(2)
|
Since restricted stock unit awards do not have an exercise price, the weighted average exercise price does not take into account the
2011
,
2012
and
2013
LTPP awards and restricted stock units generally granted to non-U.S. employees.
|
|
Annual Return Percentage
Years Ending
|
|||||||||||||
Company / Index
|
12/31/2009
|
|
|
12/31/2010
|
|
|
12/31/2011
|
|
|
12/31/2012
|
|
|
12/31/2013
|
|
Raytheon Common Stock
|
3.62
|
|
|
(8.00
|
)
|
|
9.14
|
|
|
23.29
|
|
|
62.33
|
|
S&P 500 Index
|
26.46
|
|
|
15.06
|
|
|
2.11
|
|
|
16.00
|
|
|
32.39
|
|
S&P Aerospace & Defense Index
|
24.64
|
|
|
15.11
|
|
|
5.28
|
|
|
14.56
|
|
|
54.92
|
|
|
Indexed Returns
Years Ending
|
|||||||||||||||
Company / Index
|
Base
Period 12/31/2008 |
|
12/31/2009
|
|
|
12/31/2010
|
|
|
12/31/2011
|
|
|
12/31/2012
|
|
|
12/31/2013
|
|
Raytheon Common Stock
|
100
|
|
103.62
|
|
|
95.33
|
|
|
104.05
|
|
|
128.28
|
|
|
208.23
|
|
S&P 500 Index
|
100
|
|
126.46
|
|
|
145.51
|
|
|
148.59
|
|
|
172.37
|
|
|
228.19
|
|
S&P Aerospace & Defense Index
|
100
|
|
124.64
|
|
|
143.47
|
|
|
151.04
|
|
|
173.04
|
|
|
268.07
|
|
Period
|
Total Number of Shares Purchased
(1)
|
|
|
Average Price Paid per Share
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
|
Approximate Dollar Value (in Billions) of Shares that May Yet Be Purchased Under the Plans
(2)
|
|
||
October (September 30, 2013–October 27, 2013)
|
668
|
|
|
|
$76.08
|
|
|
—
|
|
|
$
|
0.7
|
|
November (October 28, 2013–November 24, 2013)
|
2,617,178
|
|
|
84.25
|
|
|
2,614,800
|
|
|
2.4
|
|
||
December (November 25, 2013–December 31, 2013)
|
2,070,028
|
|
|
87.16
|
|
|
2,062,330
|
|
|
2.3
|
|
||
Total
|
4,687,874
|
|
|
|
$85.53
|
|
|
4,677,130
|
|
|
|
(1)
|
Includes shares purchased related to activity under our stock plans. Such activity during the fourth quarter of 2013 includes the surrender by employees of
10,744
shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
|
(2)
|
In September 2011, our Board of Directors authorized the repurchase of up to
$2.0 billion
of our outstanding common stock.
Additionally, in November 2013, our Board of Directors authorized the repurchase of up to an additional
$2.0 billion
of our outstanding common stock.
Stock repurchases will take place from time to time at management’s discretion depending on market conditions.
|
(In millions, except per share amounts and total employees)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||||
Results of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net sales
|
$
|
23,706
|
|
|
$
|
24,414
|
|
|
$
|
24,791
|
|
|
$
|
25,150
|
|
|
$
|
24,843
|
|
Operating income
|
2,938
|
|
|
2,989
|
|
|
2,830
|
|
|
2,613
|
|
|
3,055
|
|
|||||
Interest expense, net
|
198
|
|
|
192
|
|
|
158
|
|
|
114
|
|
|
115
|
|
|||||
Income from continuing operations
|
1,949
|
|
|
1,901
|
|
|
1,878
|
|
|
1,844
|
|
|
1,981
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
64
|
|
|
(1
|
)
|
|
18
|
|
|
35
|
|
|
(5
|
)
|
|||||
Net income
|
2,013
|
|
|
1,900
|
|
|
1,896
|
|
|
1,879
|
|
|
1,976
|
|
|||||
Net income attributable to Raytheon Company
|
1,996
|
|
|
1,888
|
|
|
1,866
|
|
|
1,840
|
|
|
1,935
|
|
|||||
Diluted earnings per share from continuing operations
attributable to Raytheon Company common stockholders
|
$
|
5.96
|
|
|
$
|
5.65
|
|
|
$
|
5.22
|
|
|
$
|
4.79
|
|
|
$
|
4.91
|
|
Diluted earnings per share attributable to Raytheon Company
common stockholders
|
$
|
6.16
|
|
|
$
|
5.65
|
|
|
$
|
5.28
|
|
|
$
|
4.88
|
|
|
$
|
4.89
|
|
Average diluted shares outstanding
|
324.2
|
|
|
334.2
|
|
|
353.6
|
|
|
377.0
|
|
|
395.7
|
|
|||||
Financial Position at Year-End
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,296
|
|
|
$
|
3,188
|
|
|
$
|
4,000
|
|
|
$
|
3,638
|
|
|
$
|
2,642
|
|
Short-term investments
|
1,001
|
|
|
856
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total current assets
|
9,816
|
|
|
9,246
|
|
|
9,309
|
|
|
8,822
|
|
|
7,868
|
|
|||||
Property, plant and equipment, net
|
1,937
|
|
|
1,986
|
|
|
2,006
|
|
|
2,003
|
|
|
2,001
|
|
|||||
Total assets
|
25,967
|
|
|
26,686
|
|
|
25,854
|
|
|
24,422
|
|
|
23,607
|
|
|||||
Total current liabilities
|
5,810
|
|
|
5,902
|
|
|
6,130
|
|
|
5,960
|
|
|
5,523
|
|
|||||
Long-term liabilities (excluding debt)
|
4,226
|
|
|
7,863
|
|
|
6,779
|
|
|
4,962
|
|
|
5,816
|
|
|||||
Long-term debt
|
4,734
|
|
|
4,731
|
|
|
4,605
|
|
|
3,610
|
|
|
2,329
|
|
|||||
Total equity
|
11,197
|
|
|
8,190
|
|
|
8,340
|
|
|
9,890
|
|
|
9,939
|
|
|||||
Cash Flow and Other Information
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities from
continuing operations
|
$
|
2,382
|
|
|
$
|
1,951
|
|
|
$
|
2,102
|
|
|
$
|
1,892
|
|
|
$
|
2,699
|
|
Net cash provided by (used in) investing activities from
continuing operations
|
(473
|
)
|
|
(1,523
|
)
|
|
(1,083
|
)
|
|
(535
|
)
|
|
(693
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(1,797
|
)
|
|
(1,246
|
)
|
|
(694
|
)
|
|
(411
|
)
|
|
(1,650
|
)
|
|||||
Bookings
|
22,132
|
|
|
26,504
|
|
|
26,555
|
|
|
24,449
|
|
|
25,058
|
|
|||||
Total backlog
|
33,685
|
|
|
36,181
|
|
|
35,312
|
|
|
34,551
|
|
|
36,877
|
|
|||||
Dividends declared per share
|
$
|
2.20
|
|
|
$
|
2.00
|
|
|
$
|
1.72
|
|
|
$
|
1.50
|
|
|
$
|
1.24
|
|
Total employees from continuing operations
|
63,000
|
|
|
67,800
|
|
|
71,000
|
|
|
72,400
|
|
|
75,100
|
|
Topic
|
Page
|
–
|
External threats to our national security, including potential security threats posed by terrorists, emerging nuclear states and other countries;
|
–
|
Support for on-going operations overseas, including Afghanistan, which will require funding above and beyond the DoD base budget for their duration;
|
–
|
Cost-cutting measures implemented by the DoD, such as the “Better Buying Power" initiative, to ensure more efficient use of its resources in order to sufficiently fund its highest priorities;
|
–
|
Priorities of the Administration and the Congress, including but not limited to deficit reduction, which could result in changes in the overall DoD budget and various allocations within the DoD budget; and
|
–
|
The overall health of the U.S. and world economies and the state of governmental finances.
|
–
|
Focus on Technology, Innovation and Mission Assurance for existing and evolving customer mission needs. Sustain and grow our position in our core markets: sensing, effects, C3I, mission support and cyber;
|
–
|
Leverage our domain knowledge in air, land, sea, space and cyber for all markets;
|
–
|
Extend core capabilities to relevant new markets and customers;
|
–
|
Expand global business by building on our relationships and deep market expertise, particularly cyber;
|
–
|
Build upon our Customer Focused mindset, further strengthening our company based on performance, relationships and solutions;
|
–
|
Deliver innovative supply chain solutions to accelerate growth, create competitive advantage and bring value to our global customers; and
|
–
|
Use our technology and competitive strengths to expand our footprint in radar and electronic warfare solutions.
|
(In millions)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
International sales
(1)
|
|
$
|
6,446
|
|
|
$
|
6,232
|
|
|
$
|
6,139
|
|
International bookings
|
|
6,604
|
|
|
5,979
|
|
|
7,692
|
|
(1)
|
Includes foreign military sales through the U.S. Government.
|
–
|
Bookings
—a forward-looking metric that measures the value of firm orders awarded to us during the year;
|
–
|
Net Sales
—a growth metric that measures our revenue for the current year;
|
–
|
Operating Income
—a measure of our profit from continuing operations for the year, before non-operating expenses, net and taxes; and
|
–
|
Operating Margin
—a measure of our operating income as a percentage of total net sales.
|
(In millions, except for percentages)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Bookings
|
|
$
|
22,132
|
|
|
$
|
26,504
|
|
|
$
|
26,555
|
|
Total backlog
|
|
33,685
|
|
|
36,181
|
|
|
35,312
|
|
|||
Total net sales
|
|
23,706
|
|
|
24,414
|
|
|
24,791
|
|
|||
Total operating income
(1)
|
|
2,938
|
|
|
2,989
|
|
|
2,830
|
|
|||
Total operating margin
|
|
12.4
|
%
|
|
12.2
|
%
|
|
11.4
|
%
|
|||
Operating cash flow from continuing operations
|
|
$
|
2,382
|
|
|
$
|
1,951
|
|
|
$
|
2,102
|
|
(1)
|
Includes FAS/CAS Adjustment, described below in Critical Accounting Estimates, of
$249 million
,
$255 million
and
$337 million
of expense in
2013
,
2012
and
2011
, respectively.
|
(In millions, except per share amounts)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Operating income
|
$
|
557
|
|
|
$
|
613
|
|
|
$
|
548
|
|
Income from continuing operations attributable to Raytheon Company
|
362
|
|
|
398
|
|
|
348
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
1.12
|
|
|
$
|
1.19
|
|
|
$
|
0.98
|
|
Percentile
|
2013
|
|
2012
|
|
2011
|
|
25
th
|
5.62
|
%
|
6.15
|
%
|
6.67
|
%
|
75
th
|
9.41
|
%
|
9.84
|
%
|
10.65
|
%
|
Asset Category
|
|
|
Global equity (combined U.S. and international equity)
|
|
40% - 60%
|
U.S. equities
|
|
25% - 40%
|
International equities
|
|
15% - 25%
|
Fixed-income securities
|
|
25% - 40%
|
Cash and cash equivalents
|
|
1% - 10%
|
Private equity and private real estate
|
|
3% - 8%
|
Other (including absolute return funds)
|
|
5% - 20%
|
(In millions)
|
|
||
Impact of change in discount rate on net periodic benefit cost
|
$
|
60
|
|
Impact of change in discount rate on benefit obligations
|
645
|
|
(In millions)
|
|
|
||
FAS expense
|
|
$
|
(40
|
)
|
CAS expense
|
|
34
|
|
|
FAS/CAS Pension Adjustment
|
|
$
|
(6
|
)
|
(In millions)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Beginning balance
|
|
$
|
(12,051
|
)
|
|
$
|
(10,776
|
)
|
|
$
|
(7,931
|
)
|
Amortization of net losses included in net income
|
|
1,161
|
|
|
950
|
|
|
800
|
|
|||
Gain (loss) arising during the period
|
|
2,967
|
|
|
(2,225
|
)
|
|
(3,645
|
)
|
|||
Ending balance
|
|
$
|
(7,923
|
)
|
|
$
|
(12,051
|
)
|
|
$
|
(10,776
|
)
|
External Net Sales by Products and Services
(% of segment total external net sales)
|
||||
|
IDS
|
IIS
|
MS
|
SAS
|
Products
|
95%
|
50%
|
95%
|
90%
|
Services
|
5%
|
50%
|
5%
|
10%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Products
|
$
|
19,855
|
|
|
$
|
20,380
|
|
|
$
|
20,725
|
|
|
83.8
|
%
|
|
83.5
|
%
|
|
83.6
|
%
|
Services
|
3,851
|
|
|
4,034
|
|
|
4,066
|
|
|
16.2
|
%
|
|
16.5
|
%
|
|
16.4
|
%
|
|||
Total net sales
|
$
|
23,706
|
|
|
$
|
24,414
|
|
|
$
|
24,791
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Sales to the U.S. Government
(1)
|
$
|
17,019
|
|
|
$
|
17,861
|
|
|
$
|
18,360
|
|
|
72
|
%
|
|
73
|
%
|
|
74
|
%
|
Sales to the U.S. Department of Defense
(1)
|
16,015
|
|
|
16,818
|
|
|
17,308
|
|
|
68
|
%
|
|
69
|
%
|
|
70
|
%
|
|||
Total international sales
(2)
|
6,446
|
|
|
6,232
|
|
|
6,139
|
|
|
27
|
%
|
|
26
|
%
|
|
25
|
%
|
|||
Foreign direct commercial sales
(1)
|
3,384
|
|
|
3,036
|
|
|
3,141
|
|
|
14
|
%
|
|
12
|
%
|
|
13
|
%
|
|||
Foreign military sales through the U.S. Government
|
3,062
|
|
|
3,196
|
|
|
2,998
|
|
|
13
|
%
|
|
13
|
%
|
|
12
|
%
|
(1)
|
Excludes foreign military sales through the U.S. Government.
|
(2)
|
Includes foreign military sales through the U.S. Government.
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Products
|
$
|
15,292
|
|
|
$
|
15,712
|
|
|
$
|
16,245
|
|
|
64.5
|
%
|
|
64.4
|
%
|
|
65.5
|
%
|
Services
|
3,240
|
|
|
3,380
|
|
|
3,419
|
|
|
13.7
|
%
|
|
13.8
|
%
|
|
13.8
|
%
|
|||
Total cost of sales
|
$
|
18,532
|
|
|
$
|
19,092
|
|
|
$
|
19,664
|
|
|
78.2
|
%
|
|
78.2
|
%
|
|
79.3
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Administrative and selling expenses
|
$
|
1,771
|
|
|
$
|
1,882
|
|
|
$
|
1,847
|
|
|
7.5
|
%
|
|
7.7
|
%
|
|
7.5
|
%
|
Research and development expenses
|
465
|
|
|
451
|
|
|
450
|
|
|
2.0
|
%
|
|
1.8
|
%
|
|
1.8
|
%
|
|||
Total general and administrative expenses
|
$
|
2,236
|
|
|
$
|
2,333
|
|
|
$
|
2,297
|
|
|
9.4
|
%
|
|
9.6
|
%
|
|
9.3
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Total operating expenses
|
$
|
20,768
|
|
|
$
|
21,425
|
|
|
$
|
21,961
|
|
|
87.6
|
%
|
|
87.8
|
%
|
|
88.6
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Total operating income
|
$
|
2,938
|
|
|
$
|
2,989
|
|
|
$
|
2,830
|
|
|
12.4
|
%
|
|
12.2
|
%
|
|
11.4
|
%
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Non-operating (income) expense, net
|
|
|
|
|
|
||||||
Interest expense
|
$
|
210
|
|
|
$
|
201
|
|
|
$
|
172
|
|
Interest income
|
(12
|
)
|
|
(9
|
)
|
|
(14
|
)
|
|||
Other expense (income), net
|
(17
|
)
|
|
18
|
|
|
12
|
|
|||
Total non-operating (income) expense, net
|
$
|
181
|
|
|
$
|
210
|
|
|
$
|
170
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Federal and foreign income taxes
|
$
|
808
|
|
|
$
|
878
|
|
|
$
|
782
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Income from continuing operations
|
$
|
1,949
|
|
|
$
|
1,901
|
|
|
$
|
1,878
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Income (loss) from discontinued operations, net of tax
|
$
|
64
|
|
|
$
|
(1
|
)
|
|
$
|
18
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net income
|
$
|
2,013
|
|
|
$
|
1,900
|
|
|
$
|
1,896
|
|
(In millions, except per share amounts)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Income from continuing operations attributable to Raytheon Company
|
$
|
1,932
|
|
|
$
|
1,889
|
|
|
$
|
1,848
|
|
Diluted weighted-average shares outstanding
|
324.2
|
|
|
334.2
|
|
|
353.6
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
5.96
|
|
|
$
|
5.65
|
|
|
$
|
5.22
|
|
(In millions, except per share amounts)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net income attributable to Raytheon Company
|
$
|
1,996
|
|
|
$
|
1,888
|
|
|
$
|
1,866
|
|
Diluted weighted-average shares outstanding
|
324.2
|
|
|
334.2
|
|
|
353.6
|
|
|||
Diluted EPS attributable to Raytheon Company
|
$
|
6.16
|
|
|
$
|
5.65
|
|
|
$
|
5.28
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company common
stockholders
|
|
$5.96
|
|
|
|
$5.65
|
|
|
|
$5.22
|
|
EPS impact of the FAS/CAS Adjustment
|
0.50
|
|
|
0.50
|
|
|
0.62
|
|
|||
Per share impact of 2012 R&D tax credit
|
(0.08
|
)
|
|
0.07
|
|
|
—
|
|
|||
EPS impact of the early retirement of debt charges
|
—
|
|
|
0.06
|
|
|
—
|
|
|||
EPS impact of UKBA LOC Adjustment
|
—
|
|
|
—
|
|
|
0.17
|
|
|||
EPS impact of the 2011 Tax Settlement
|
—
|
|
|
—
|
|
|
(0.17
|
)
|
|||
Adjusted EPS
|
|
$6.38
|
|
|
|
$6.28
|
|
|
|
$5.85
|
|
Bookings
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
5,869
|
|
|
$
|
6,633
|
|
|
$
|
7,605
|
|
Intelligence, Information and Services
|
5,046
|
|
|
5,470
|
|
|
6,158
|
|
|||
Missile Systems
|
5,221
|
|
|
7,794
|
|
|
6,747
|
|
|||
Space and Airborne Systems
|
5,996
|
|
|
6,607
|
|
|
6,045
|
|
|||
Total
|
$
|
22,132
|
|
|
$
|
26,504
|
|
|
$
|
26,555
|
|
|
Funded Backlog
|
|
Total Backlog
|
||||||||||||||||||||
Backlog at December 31
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
Integrated Defense Systems
|
$
|
9,397
|
|
|
$
|
9,188
|
|
|
$
|
8,512
|
|
|
$
|
10,916
|
|
|
$
|
11,656
|
|
|
$
|
11,547
|
|
Intelligence, Information and Services
|
2,592
|
|
|
2,848
|
|
|
2,821
|
|
|
5,856
|
|
|
6,409
|
|
|
7,027
|
|
||||||
Missile Systems
|
6,859
|
|
|
7,535
|
|
|
6,957
|
|
|
9,162
|
|
|
10,676
|
|
|
9,446
|
|
||||||
Space and Airborne Systems
|
4,166
|
|
|
4,476
|
|
|
4,172
|
|
|
7,751
|
|
|
7,440
|
|
|
7,292
|
|
||||||
Total
|
$
|
23,014
|
|
|
$
|
24,047
|
|
|
$
|
22,462
|
|
|
$
|
33,685
|
|
|
$
|
36,181
|
|
|
$
|
35,312
|
|
Total Net Sales
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
6,489
|
|
|
$
|
6,492
|
|
|
$
|
6,441
|
|
Intelligence, Information and Services
|
6,045
|
|
|
6,335
|
|
|
6,470
|
|
|||
Missile Systems
|
6,599
|
|
|
6,639
|
|
|
6,801
|
|
|||
Space and Airborne Systems
|
6,371
|
|
|
6,823
|
|
|
6,818
|
|
|||
Corporate and Eliminations
|
(1,798
|
)
|
|
(1,875
|
)
|
|
(1,739
|
)
|
|||
Total
|
$
|
23,706
|
|
|
$
|
24,414
|
|
|
$
|
24,791
|
|
EAC Adjustments
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Gross favorable
|
$
|
1,129
|
|
|
$
|
1,026
|
|
|
$
|
1,041
|
|
Gross unfavorable
|
(572
|
)
|
|
(413
|
)
|
|
(493
|
)
|
|||
Total net EAC adjustments
|
$
|
557
|
|
|
$
|
613
|
|
|
$
|
548
|
|
Operating Income
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
1,115
|
|
|
$
|
1,047
|
|
|
$
|
998
|
|
Intelligence, Information and Services
|
510
|
|
|
536
|
|
|
480
|
|
|||
Missile Systems
|
830
|
|
|
861
|
|
|
939
|
|
|||
Space and Airborne Systems
|
920
|
|
|
988
|
|
|
951
|
|
|||
FAS/CAS Adjustment
|
(249
|
)
|
|
(255
|
)
|
|
(337
|
)
|
|||
Corporate and Eliminations
|
(188
|
)
|
|
(188
|
)
|
|
(201
|
)
|
|||
Total
|
$
|
2,938
|
|
|
$
|
2,989
|
|
|
$
|
2,830
|
|
Integrated Defense Systems
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012
|
|
|
2012 compared
to 2011
|
|
|||
Total Net Sales
|
$
|
6,489
|
|
|
$
|
6,492
|
|
|
$
|
6,441
|
|
|
—
|
%
|
|
0.8
|
%
|
Total Operating Expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,272
|
|
|
2,292
|
|
|
2,302
|
|
|
(0.9
|
)%
|
|
(0.4
|
)%
|
|||
Cost of sales—materials and subcontractors
|
2,149
|
|
|
2,229
|
|
|
2,192
|
|
|
(3.6
|
)%
|
|
1.7
|
%
|
|||
Other cost of sales and other operating expenses
|
953
|
|
|
924
|
|
|
949
|
|
|
3.1
|
%
|
|
(2.6
|
)%
|
|||
Total Operating Expenses
|
5,374
|
|
|
5,445
|
|
|
5,443
|
|
|
(1.3
|
)%
|
|
—
|
%
|
|||
Operating Income
|
$
|
1,115
|
|
|
$
|
1,047
|
|
|
$
|
998
|
|
|
6.5
|
%
|
|
4.9
|
%
|
Operating Margin
|
17.2
|
%
|
|
16.1
|
%
|
|
15.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012 |
|
|
2012 compared
to 2011 |
|
|||
Total Net Sales
|
$
|
6,045
|
|
|
$
|
6,335
|
|
|
$
|
6,470
|
|
|
(4.6
|
)%
|
|
(2.1
|
)%
|
Total Operating Expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,345
|
|
|
2,417
|
|
|
2,400
|
|
|
(3.0
|
)%
|
|
0.7
|
%
|
|||
Cost of sales—materials and subcontractors
|
2,521
|
|
|
2,669
|
|
|
2,807
|
|
|
(5.5
|
)%
|
|
(4.9
|
)%
|
|||
Other cost of sales and other operating expenses
|
669
|
|
|
713
|
|
|
783
|
|
|
(6.2
|
)%
|
|
(8.9
|
)%
|
|||
Total Operating Expenses
|
5,535
|
|
|
5,799
|
|
|
5,990
|
|
|
(4.6
|
)%
|
|
(3.2
|
)%
|
|||
Operating Income
|
$
|
510
|
|
|
$
|
536
|
|
|
$
|
480
|
|
|
(4.9
|
)%
|
|
11.7
|
%
|
Operating Margin
|
8.4
|
%
|
|
8.5
|
%
|
|
7.4
|
%
|
|
|
|
|
Change in Operating Income (in millions)
|
|
|
Year Ended 2013 Versus Year Ended 2012
|
|
Year Ended 2012 Versus Year Ended 2011
|
|
|
|
|||||||||
Volume
|
|
|
$
|
(24
|
)
|
|
$
|
(4
|
)
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
(17
|
)
|
|
42
|
|
|
|
|
|||||||
Mix and other performance
|
|
|
15
|
|
|
18
|
|
|
|
|
|||||||
Total Change in Operating Income
|
|
|
$
|
(26
|
)
|
|
$
|
56
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012
|
|
|
2012 compared
to 2011
|
|
|||
Bookings
|
$
|
5,046
|
|
|
$
|
5,470
|
|
|
$
|
6,158
|
|
|
(7.8
|
)%
|
|
(11.2
|
)%
|
Total Backlog
|
5,856
|
|
|
6,409
|
|
|
7,027
|
|
|
(8.6
|
)%
|
|
(8.8
|
)%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012
|
|
|
2012 compared
to 2011
|
|
|||
Total Net Sales
|
$
|
6,599
|
|
|
$
|
6,639
|
|
|
$
|
6,801
|
|
|
(0.6
|
)%
|
|
(2.4
|
)%
|
Total Operating Expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,008
|
|
|
1,977
|
|
|
1,912
|
|
|
1.6
|
%
|
|
3.4
|
%
|
|||
Cost of sales—materials and subcontractors
|
2,732
|
|
|
2,766
|
|
|
2,812
|
|
|
(1.2
|
)%
|
|
(1.6
|
)%
|
|||
Other cost of sales and other operating expenses
|
1,029
|
|
|
1,035
|
|
|
1,138
|
|
|
(0.6
|
)%
|
|
(9.1
|
)%
|
|||
Total Operating Expenses
|
5,769
|
|
|
5,778
|
|
|
5,862
|
|
|
(0.2
|
)%
|
|
(1.4
|
)%
|
|||
Operating Income
|
$
|
830
|
|
|
$
|
861
|
|
|
$
|
939
|
|
|
(3.6
|
)%
|
|
(8.3
|
)%
|
Operating Margin
|
12.6
|
%
|
|
13.0
|
%
|
|
13.8
|
%
|
|
|
|
|
Change in Operating Income (in millions)
|
|
|
Year Ended 2013 Versus Year Ended 2012
|
|
Year Ended 2012 Versus Year Ended 2011
|
|
|
|
|||||||||
Volume
|
|
|
$
|
(1
|
)
|
|
$
|
(10
|
)
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
14
|
|
|
(42
|
)
|
|
|
|
|||||||
Mix and other performance
|
|
|
(44
|
)
|
|
(26
|
)
|
|
|
|
|||||||
Total Change in Operating Income
|
|
|
$
|
(31
|
)
|
|
$
|
(78
|
)
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012
|
|
|
2012 compared
to 2011
|
|
|||
Bookings
|
$
|
5,221
|
|
|
$
|
7,794
|
|
|
$
|
6,747
|
|
|
(33.0
|
)%
|
|
15.5
|
%
|
Total Backlog
|
9,162
|
|
|
10,676
|
|
|
9,446
|
|
|
(14.2
|
)%
|
|
13.0
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012
|
|
|
2012 compared
to 2011
|
|
|||
Total Net Sales
|
$
|
6,371
|
|
|
$
|
6,823
|
|
|
$
|
6,818
|
|
|
(6.6
|
)%
|
|
0.1
|
%
|
Total Operating Expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,446
|
|
|
2,452
|
|
|
2,507
|
|
|
(0.2
|
)%
|
|
(2.2
|
)%
|
|||
Cost of sales—materials and subcontractors
|
2,166
|
|
|
2,567
|
|
|
2,597
|
|
|
(15.6
|
)%
|
|
(1.2
|
)%
|
|||
Other cost of sales and other operating expenses
|
839
|
|
|
816
|
|
|
763
|
|
|
2.8
|
%
|
|
6.9
|
%
|
|||
Total Operating Expenses
|
5,451
|
|
|
5,835
|
|
|
5,867
|
|
|
(6.6
|
)%
|
|
(0.5
|
)%
|
|||
Operating Income
|
$
|
920
|
|
|
$
|
988
|
|
|
$
|
951
|
|
|
(6.9
|
)%
|
|
3.9
|
%
|
Operating Margin
|
14.4
|
%
|
|
14.5
|
%
|
|
13.9
|
%
|
|
|
|
|
Change in Operating Income (in millions)
|
|
|
Year Ended 2013 Versus Year Ended 2012
|
|
Year Ended 2012 Versus Year Ended 2011
|
|
|
|
|||||||||
Volume
|
|
|
$
|
(56
|
)
|
|
$
|
(2
|
)
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
(46
|
)
|
|
79
|
|
|
|
|
|||||||
Mix and other performance
|
|
|
34
|
|
|
(40
|
)
|
|
|
|
|||||||
Total Change in Operating Income
|
|
|
$
|
(68
|
)
|
|
$
|
37
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013 compared
to 2012
|
|
|
2012 compared
to 2011
|
|
|||
Bookings
|
$
|
5,996
|
|
|
$
|
6,607
|
|
|
$
|
6,045
|
|
|
(9.2
|
)%
|
|
9.3
|
%
|
Total Backlog
|
7,751
|
|
|
7,440
|
|
|
7,292
|
|
|
4.2
|
%
|
|
2.0
|
%
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
FAS/CAS Pension Adjustment
|
$
|
(253
|
)
|
|
$
|
(255
|
)
|
|
$
|
(340
|
)
|
FAS/CAS PRB Adjustment
|
4
|
|
|
—
|
|
|
3
|
|
|||
FAS/CAS Adjustment
|
$
|
(249
|
)
|
|
$
|
(255
|
)
|
|
$
|
(337
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
FAS expense
|
$
|
(1,240
|
)
|
|
$
|
(1,093
|
)
|
|
$
|
(1,073
|
)
|
CAS expense
|
987
|
|
|
838
|
|
|
733
|
|
|||
FAS/CAS Pension Adjustment
|
$
|
(253
|
)
|
|
$
|
(255
|
)
|
|
$
|
(340
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
FAS (expense) income
|
$
|
(10
|
)
|
|
$
|
(16
|
)
|
|
$
|
(13
|
)
|
CAS expense
|
14
|
|
|
16
|
|
|
16
|
|
|||
FAS/CAS PRB Adjustment
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Total Net Sales (in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Intersegment sales eliminations
|
$
|
(1,798
|
)
|
|
$
|
(1,875
|
)
|
|
$
|
(1,739
|
)
|
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
(1,798
|
)
|
|
$
|
(1,875
|
)
|
|
$
|
(1,739
|
)
|
Total Operating Income (in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Intersegment profit eliminations
|
$
|
(160
|
)
|
|
$
|
(177
|
)
|
|
$
|
(161
|
)
|
Corporate
|
(28
|
)
|
|
(11
|
)
|
|
(40
|
)
|
|||
Total
|
$
|
(188
|
)
|
|
$
|
(188
|
)
|
|
$
|
(201
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Cash and cash equivalents
|
$
|
3,296
|
|
|
$
|
3,188
|
|
Short-term investments
|
1,001
|
|
|
856
|
|
||
Working capital
|
4,006
|
|
|
3,344
|
|
||
Amount available under our credit facilities
|
1,398
|
|
|
1,398
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net cash provided by (used in) operating activities from continuing operations
|
$
|
2,382
|
|
|
$
|
1,951
|
|
|
$
|
2,102
|
|
Net cash provided by (used in) operating activities
|
2,378
|
|
|
1,957
|
|
|
2,107
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Required pension contributions
|
$
|
778
|
|
|
$
|
721
|
|
|
$
|
1,078
|
|
Discretionary pension contributions
|
300
|
|
|
500
|
|
|
750
|
|
|||
Total
|
$
|
1,078
|
|
|
$
|
1,221
|
|
|
$
|
1,828
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Federal
|
$
|
628
|
|
|
$
|
826
|
|
|
$
|
332
|
|
Foreign
|
22
|
|
|
13
|
|
|
94
|
|
|||
State
|
39
|
|
|
78
|
|
|
12
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net cash provided by (used in) investing activities from continuing operations
|
$
|
(473
|
)
|
|
$
|
(1,523
|
)
|
|
$
|
(1,083
|
)
|
Net cash provided by (used in) investing activities
|
(473
|
)
|
|
(1,523
|
)
|
|
(1,051
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Additions to property, plant and equipment
|
$
|
280
|
|
|
$
|
339
|
|
|
$
|
340
|
|
Additions to capitalized internal use software
|
49
|
|
|
76
|
|
|
97
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Purchases of short-term investments
|
$
|
(1,241
|
)
|
|
$
|
(1,505
|
)
|
|
$
|
—
|
|
Sales of short-term investments
|
325
|
|
|
150
|
|
|
—
|
|
|||
Maturities of short-term investments
|
779
|
|
|
505
|
|
|
—
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Payments for purchases of acquired companies, net of cash acquired
|
$
|
9
|
|
|
$
|
301
|
|
|
$
|
645
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net cash provided by (used in) financing activities
|
$
|
(1,797
|
)
|
|
$
|
(1,246
|
)
|
|
$
|
(694
|
)
|
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
$
|
Shares
|
|
|
$
|
Shares
|
|
$
|
Shares
|
||||||||
Stock repurchased under our stock repurchase programs
|
$
|
1,075
|
|
15.2
|
|
|
$
|
825
|
|
15.9
|
|
|
$
|
1,250
|
|
27.1
|
|
Stock repurchased to satisfy tax withholding obligations
|
48
|
|
0.8
|
|
|
37
|
|
0.7
|
|
|
36
|
|
0.7
|
|
|||
Total stock repurchases
|
$
|
1,123
|
|
16.0
|
|
|
$
|
862
|
|
16.6
|
|
|
$
|
1,286
|
|
27.8
|
|
(In millions, except per share amounts)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash dividends per share
|
|
$2.20
|
|
|
|
$2.00
|
|
|
|
$1.72
|
|
Total dividends paid
|
694
|
|
|
643
|
|
|
588
|
|
|
Short-Term
|
|
Long-Term Senior
|
|
|
|
|
Rating Agency
|
Debt Rating
|
|
Debt Rating
|
|
Outlook
|
|
Date of Last Action
|
Fitch
|
F2
|
|
A-
|
|
Stable
|
|
September 2008
|
Moody’s
|
P-2
|
|
A3
|
|
Stable
|
|
October 2011
|
S&P
|
A-2
|
|
A-
|
|
Stable
|
|
September 2008
|
|
Payment due by period
|
||||||||||||||||||
(In millions)
|
Total
|
|
|
Less than
1 year
(2014)
|
|
|
1–3 years
(2015–2016)
|
|
|
3–5 years
(2017–2018)
|
|
|
After 5 years
(2019 and
thereafter)
|
|
|||||
Debt
(1)
|
$
|
4,783
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
4,192
|
|
Interest payments
|
2,723
|
|
|
209
|
|
|
418
|
|
|
410
|
|
|
1,686
|
|
|||||
Operating leases
|
986
|
|
|
205
|
|
|
303
|
|
|
185
|
|
|
293
|
|
|||||
Purchase obligations
|
6,526
|
|
|
5,194
|
|
|
1,144
|
|
|
119
|
|
|
69
|
|
|||||
Total
|
$
|
15,018
|
|
|
$
|
5,608
|
|
|
$
|
1,865
|
|
|
$
|
1,305
|
|
|
$
|
6,240
|
|
(1)
|
Debt includes scheduled principal payments only.
|
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
||
Total remediation costs—undiscounted
|
$
|
198
|
|
|
$
|
202
|
|
Weighted-average risk-free rate
|
5.6
|
%
|
|
5.6
|
%
|
||
Total remediation costs—discounted
|
$
|
133
|
|
|
$
|
131
|
|
Recoverable portion
|
90
|
|
|
86
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Guarantees
|
$
|
378
|
|
|
$
|
255
|
|
Letters of Credit
|
1,424
|
|
|
1,474
|
|
||
Surety Bonds
|
238
|
|
|
239
|
|
Long—Term Debt
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
4,192
|
|
|
$
|
4,783
|
|
|
$
|
5,036
|
|
Average interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.549
|
%
|
|
4.065
|
%
|
|
4.372
|
%
|
|
|
Long—Term Debt
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,783
|
|
|
$
|
4,783
|
|
|
$
|
5,483
|
|
Average interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.372
|
%
|
|
4.372
|
%
|
|
|
/s/ William H. Swanson
|
|
/s/ David C. Wajsgras
|
William H. Swanson
|
|
David C. Wajsgras
|
Chairman and Chief Executive Officer
|
|
Senior Vice President and Chief Financial Officer
|
(In millions, except per share amount) December 31:
|
2013
|
|
|
2012
|
|
||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,296
|
|
|
$
|
3,188
|
|
Short-term investments
|
1,001
|
|
|
856
|
|
||
Contracts in process, net
|
4,870
|
|
|
4,543
|
|
||
Inventories
|
363
|
|
|
381
|
|
||
Deferred taxes
|
24
|
|
|
96
|
|
||
Prepaid expenses and other current assets
|
262
|
|
|
182
|
|
||
Total current assets
|
9,816
|
|
|
9,246
|
|
||
Property, plant and equipment, net
|
1,937
|
|
|
1,986
|
|
||
Deferred taxes
|
66
|
|
|
1,367
|
|
||
Goodwill
|
12,764
|
|
|
12,756
|
|
||
Other assets, net
|
1,384
|
|
|
1,331
|
|
||
Total assets
|
$
|
25,967
|
|
|
$
|
26,686
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Advance payments and billings in excess of costs incurred
|
$
|
2,350
|
|
|
$
|
2,398
|
|
Accounts payable
|
1,178
|
|
|
1,348
|
|
||
Accrued employee compensation
|
1,068
|
|
|
1,014
|
|
||
Other accrued expenses
|
1,214
|
|
|
1,142
|
|
||
Total current liabilities
|
5,810
|
|
|
5,902
|
|
||
Accrued retiree benefits and other long-term liabilities
|
3,903
|
|
|
7,854
|
|
||
Deferred taxes
|
323
|
|
|
9
|
|
||
Long-term debt
|
4,734
|
|
|
4,731
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|||
|
|
|
|
||||
Equity
|
|
|
|
||||
Raytheon Company stockholders’ equity
|
|
|
|
||||
Common stock, par value, $0.01 per share, 1,450 shares authorized, 315 and 328 shares outstanding at 2013 and 2012, respectively.
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
1,972
|
|
|
2,928
|
|
||
Accumulated other comprehensive loss
|
(5,113
|
)
|
|
(7,788
|
)
|
||
Retained earnings
|
14,173
|
|
|
12,883
|
|
||
Total Raytheon Company stockholders’ equity
|
11,035
|
|
|
8,026
|
|
||
Noncontrolling interests in subsidiaries
|
162
|
|
|
164
|
|
||
Total equity
|
11,197
|
|
|
8,190
|
|
||
Total liabilities and equity
|
$
|
25,967
|
|
|
$
|
26,686
|
|
(In millions, except per share amounts) Years Ended December 31:
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net sales
|
|
|
|
|
|
||||||
Products
|
$
|
19,855
|
|
|
$
|
20,380
|
|
|
$
|
20,725
|
|
Services
|
3,851
|
|
|
4,034
|
|
|
4,066
|
|
|||
Total net sales
|
23,706
|
|
|
24,414
|
|
|
24,791
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of sales—products
|
15,292
|
|
|
15,712
|
|
|
16,245
|
|
|||
Cost of sales—services
|
3,240
|
|
|
3,380
|
|
|
3,419
|
|
|||
General and administrative expenses
|
2,236
|
|
|
2,333
|
|
|
2,297
|
|
|||
Total operating expenses
|
20,768
|
|
|
21,425
|
|
|
21,961
|
|
|||
Operating income
|
2,938
|
|
|
2,989
|
|
|
2,830
|
|
|||
Non-operating (income) expense, net
|
|
|
|
|
|
||||||
Interest expense
|
210
|
|
|
201
|
|
|
172
|
|
|||
Interest income
|
(12
|
)
|
|
(9
|
)
|
|
(14
|
)
|
|||
Other (income) expense, net
|
(17
|
)
|
|
18
|
|
|
12
|
|
|||
Total non-operating (income) expense, net
|
181
|
|
|
210
|
|
|
170
|
|
|||
Income from continuing operations before taxes
|
2,757
|
|
|
2,779
|
|
|
2,660
|
|
|||
Federal and foreign income taxes
|
808
|
|
|
878
|
|
|
782
|
|
|||
Income from continuing operations
|
1,949
|
|
|
1,901
|
|
|
1,878
|
|
|||
Income (loss) from discontinued operations, net of tax
|
64
|
|
|
(1
|
)
|
|
18
|
|
|||
Net income
|
2,013
|
|
|
1,900
|
|
|
1,896
|
|
|||
Less: Net income attributable to noncontrolling interests in subsidiaries
|
17
|
|
|
12
|
|
|
30
|
|
|||
Net income attributable to Raytheon Company
|
$
|
1,996
|
|
|
$
|
1,888
|
|
|
$
|
1,866
|
|
|
|
|
|
|
|
||||||
Basic earnings per share attributable to Raytheon Company common
stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
5.97
|
|
|
$
|
5.67
|
|
|
$
|
5.25
|
|
Income (loss) from discontinued operations, net of tax
|
0.20
|
|
|
—
|
|
|
0.05
|
|
|||
Net income
|
6.17
|
|
|
5.67
|
|
|
5.30
|
|
|||
Diluted earnings per share attributable to Raytheon Company common
stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
5.96
|
|
|
$
|
5.65
|
|
|
$
|
5.22
|
|
Income (loss) from discontinued operations, net of tax
|
0.20
|
|
|
—
|
|
|
0.05
|
|
|||
Net income
|
6.16
|
|
|
5.65
|
|
|
5.28
|
|
|||
Amounts attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
1,932
|
|
|
$
|
1,889
|
|
|
$
|
1,848
|
|
Income (loss) from discontinued operations, net of tax
|
64
|
|
|
(1
|
)
|
|
18
|
|
|||
Net income
|
$
|
1,996
|
|
|
$
|
1,888
|
|
|
$
|
1,866
|
|
(In millions) Years Ended December 31:
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net income
|
$
|
2,013
|
|
|
$
|
1,900
|
|
|
$
|
1,896
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Foreign exchange translation
|
(13
|
)
|
|
35
|
|
|
(3
|
)
|
|||
Cash flow hedges and interest rate locks
|
(4
|
)
|
|
13
|
|
|
(9
|
)
|
|||
Unrealized gains (losses) on investments and other, net
|
1
|
|
|
(6
|
)
|
|
3
|
|
|||
Pension and other employee benefit plans, net:
|
|
|
|
|
|
||||||
Net change in initial net obligation
|
—
|
|
|
1
|
|
|
4
|
|
|||
Prior service (cost) credit arising during period
|
—
|
|
|
(2
|
)
|
|
45
|
|
|||
Net gain (loss) arising during period
|
2,965
|
|
|
(2,217
|
)
|
|
(3,688
|
)
|
|||
Amortization of prior service cost (credit) included in net periodic cost
|
7
|
|
|
7
|
|
|
1
|
|
|||
Amortization of net actuarial loss included in net income
|
1,154
|
|
|
942
|
|
|
795
|
|
|||
Effect of exchange rates
|
2
|
|
|
(6
|
)
|
|
(2
|
)
|
|||
Pension and other employee benefit plans, net
|
4,128
|
|
|
(1,275
|
)
|
|
(2,845
|
)
|
|||
Other comprehensive income (loss), before tax
|
4,112
|
|
|
(1,233
|
)
|
|
(2,854
|
)
|
|||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
(1,437
|
)
|
|
446
|
|
|
999
|
|
|||
Other comprehensive income (loss), net of tax
|
2,675
|
|
|
(787
|
)
|
|
(1,855
|
)
|
|||
Total comprehensive income
|
4,688
|
|
|
1,113
|
|
|
41
|
|
|||
Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries
|
17
|
|
|
12
|
|
|
30
|
|
|||
Comprehensive income attributable to Raytheon Company
|
$
|
4,671
|
|
|
$
|
1,101
|
|
|
$
|
11
|
|
Years Ended December 31, 2013, 2012 and 2011 (in millions)
|
Common
stock
|
|
|
Additional
paid-in
capital
|
|
|
Accumulated
other
comprehensive
loss
|
|
|
Retained
earnings
|
|
|
Total
Raytheon
Company
stockholders’
equity
|
|
|
Noncontrolling
interests in
subsidiaries
|
|
|
Total
equity
|
|
|||||||
Balance at December 31, 2010
|
$
|
4
|
|
|
$
|
4,506
|
|
|
$
|
(5,146
|
)
|
|
$
|
10,390
|
|
|
$
|
9,754
|
|
|
$
|
136
|
|
|
$
|
9,890
|
|
Net income
|
|
|
|
|
|
|
1,866
|
|
|
1,866
|
|
|
30
|
|
|
1,896
|
|
||||||||||
Other comprehensive income
(loss), net of tax
|
|
|
|
|
(1,855
|
)
|
|
|
|
(1,855
|
)
|
|
|
|
(1,855
|
)
|
|||||||||||
Dividends declared
|
|
|
|
|
|
|
(600
|
)
|
|
(600
|
)
|
|
|
|
(600
|
)
|
|||||||||||
Distributions and other activity
related to noncontrolling
interests
|
|
|
|
|
|
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||||||||
Common stock plans activity
|
|
|
180
|
|
|
|
|
|
|
180
|
|
|
|
|
180
|
|
|||||||||||
Warrants exercised
|
|
|
123
|
|
|
|
|
|
|
123
|
|
|
|
|
123
|
|
|||||||||||
Share repurchases
|
(1
|
)
|
|
(1,286
|
)
|
|
|
|
|
|
(1,287
|
)
|
|
|
|
(1,287
|
)
|
||||||||||
Balance at December 31, 2011
|
3
|
|
|
3,523
|
|
|
(7,001
|
)
|
|
11,656
|
|
|
8,181
|
|
|
159
|
|
|
8,340
|
|
|||||||
Net income
|
|
|
|
|
|
|
1,888
|
|
|
1,888
|
|
|
12
|
|
|
1,900
|
|
||||||||||
Other comprehensive income
(loss), net of tax |
|
|
|
|
(787
|
)
|
|
|
|
(787
|
)
|
|
|
|
(787
|
)
|
|||||||||||
Dividends declared
|
|
|
|
|
|
|
(661
|
)
|
|
(661
|
)
|
|
|
|
(661
|
)
|
|||||||||||
Distributions and other activity
related to noncontrolling
interests
|
|
|
|
|
|
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||||||||
Common stock plans activity
|
|
|
267
|
|
|
|
|
|
|
267
|
|
|
|
|
267
|
|
|||||||||||
Share repurchases
|
|
|
(862
|
)
|
|
|
|
|
|
(862
|
)
|
|
|
|
(862
|
)
|
|||||||||||
Balance at December 31, 2012
|
3
|
|
|
2,928
|
|
|
(7,788
|
)
|
|
12,883
|
|
|
8,026
|
|
|
164
|
|
|
8,190
|
|
|||||||
Net income
|
|
|
|
|
|
|
1,996
|
|
|
1,996
|
|
|
17
|
|
|
2,013
|
|
||||||||||
Other comprehensive income
(loss), net of tax |
|
|
|
|
2,675
|
|
|
|
|
2,675
|
|
|
|
|
2,675
|
|
|||||||||||
Dividends declared
|
|
|
|
|
|
|
(706
|
)
|
|
(706
|
)
|
|
|
|
(706
|
)
|
|||||||||||
Distributions and other
activity related to
noncontrolling interests
|
|
|
|
|
|
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|||||||||||
Common stock plans activity
|
|
|
167
|
|
|
|
|
|
|
167
|
|
|
|
|
167
|
|
|||||||||||
Share repurchases
|
|
|
(1,123
|
)
|
|
|
|
|
|
(1,123
|
)
|
|
|
|
(1,123
|
)
|
|||||||||||
Balance at December 31, 2013
|
$
|
3
|
|
|
$
|
1,972
|
|
|
$
|
(5,113
|
)
|
|
$
|
14,173
|
|
|
$
|
11,035
|
|
|
$
|
162
|
|
|
$
|
11,197
|
|
(In millions) Years Ended December 31:
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,013
|
|
|
$
|
1,900
|
|
|
$
|
1,896
|
|
(Income) loss from discontinued operations, net of tax
|
(64
|
)
|
|
1
|
|
|
(18
|
)
|
|||
Income from continuing operations
|
1,949
|
|
|
1,901
|
|
|
1,878
|
|
|||
Adjustments to reconcile to net cash provided by (used in) operating activities
from continuing operations, net of the effect of acquisitions and divestitures
|
|
|
|
|
|
||||||
Depreciation and amortization
|
445
|
|
|
455
|
|
|
444
|
|
|||
Stock-based compensation
|
129
|
|
|
122
|
|
|
102
|
|
|||
Deferred income taxes
|
68
|
|
|
94
|
|
|
376
|
|
|||
Tax benefit from stock-based awards
|
(16
|
)
|
|
(13
|
)
|
|
(14
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
||||||
Contracts in process, net and advance payments and billings in excess
of costs incurred
|
(391
|
)
|
|
(145
|
)
|
|
289
|
|
|||
Inventories
|
18
|
|
|
(37
|
)
|
|
29
|
|
|||
Prepaid expenses and other current assets
|
(27
|
)
|
|
44
|
|
|
(81
|
)
|
|||
Accounts payable
|
(171
|
)
|
|
(159
|
)
|
|
(41
|
)
|
|||
Income taxes receivable/payable
|
197
|
|
|
(219
|
)
|
|
(49
|
)
|
|||
Accrued employee compensation
|
53
|
|
|
75
|
|
|
18
|
|
|||
Other accrued expenses
|
48
|
|
|
3
|
|
|
(150
|
)
|
|||
Other long-term liabilities
|
(30
|
)
|
|
(74
|
)
|
|
(25
|
)
|
|||
Pension and other postretirement benefit plans
|
150
|
|
|
(131
|
)
|
|
(760
|
)
|
|||
Other, net
|
(40
|
)
|
|
35
|
|
|
86
|
|
|||
Net cash provided by (used in) operating activities from continuing operations
|
2,382
|
|
|
1,951
|
|
|
2,102
|
|
|||
Net cash provided by (used in) operating activities from discontinued operations
|
(4
|
)
|
|
6
|
|
|
5
|
|
|||
Net cash provided by (used in) operating activities
|
2,378
|
|
|
1,957
|
|
|
2,107
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(280
|
)
|
|
(339
|
)
|
|
(340
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
2
|
|
|
46
|
|
|
—
|
|
|||
Additions to capitalized internal use software
|
(49
|
)
|
|
(76
|
)
|
|
(97
|
)
|
|||
Purchases of short-term investments
|
(1,241
|
)
|
|
(1,505
|
)
|
|
—
|
|
|||
Sales of short-term investments
|
325
|
|
|
150
|
|
|
—
|
|
|||
Maturities of short-term investments
|
779
|
|
|
505
|
|
|
—
|
|
|||
Payments for purchases of acquired companies, net of cash received
|
(9
|
)
|
|
(301
|
)
|
|
(645
|
)
|
|||
Other
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|||
Net cash provided by (used in) investing activities from continuing operations
|
(473
|
)
|
|
(1,523
|
)
|
|
(1,083
|
)
|
|||
Net cash provided by (used in) investing activities from discontinued operations
|
—
|
|
|
—
|
|
|
32
|
|
|||
Net cash provided by (used in) investing activities
|
(473
|
)
|
|
(1,523
|
)
|
|
(1,051
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Dividends paid
|
(694
|
)
|
|
(643
|
)
|
|
(588
|
)
|
|||
Issuance of long-term debt, net of offering costs
|
—
|
|
|
1,092
|
|
|
992
|
|
|||
Repayments of long-term debt
|
—
|
|
|
(970
|
)
|
|
—
|
|
|||
Repurchases of common stock
|
(1,075
|
)
|
|
(825
|
)
|
|
(1,250
|
)
|
|||
Proceeds from warrants exercised
|
—
|
|
|
—
|
|
|
123
|
|
|||
Activity under common stock plans
|
(24
|
)
|
|
94
|
|
|
22
|
|
|||
Tax benefit from stock-based awards
|
16
|
|
|
13
|
|
|
14
|
|
|||
Other
|
(20
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||
Net cash provided by (used in) financing activities
|
(1,797
|
)
|
|
(1,246
|
)
|
|
(694
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
108
|
|
|
(812
|
)
|
|
362
|
|
|||
Cash and cash equivalents at beginning of year
|
3,188
|
|
|
4,000
|
|
|
3,638
|
|
|||
Cash and cash equivalents at end of year
|
$
|
3,296
|
|
|
$
|
3,188
|
|
|
$
|
4,000
|
|
(In millions, except per share amounts)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Operating income
|
$
|
557
|
|
|
$
|
613
|
|
|
$
|
548
|
|
Income from continuing operations attributable to Raytheon Company
|
362
|
|
|
398
|
|
|
348
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
1.12
|
|
|
$
|
1.19
|
|
|
$
|
0.98
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Short-term investments
|
$
|
1,001
|
|
|
$
|
856
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Materials and purchased parts
|
$
|
73
|
|
|
$
|
74
|
|
Work in process
|
279
|
|
|
291
|
|
||
Finished goods
|
11
|
|
|
16
|
|
||
Total
|
$
|
363
|
|
|
$
|
381
|
|
|
Years
|
Machinery and equipment
|
3–10
|
Buildings
|
20–45
|
|
Foreign exchange translation
|
|
|
Cash flow hedges and interest rate locks
|
|
|
Unrealized gains (losses) on investments and other, net
|
|
|
Pension and other employee benefit plans, net
|
|
|
Total
|
|
|||||
|
|
|
|
|
|||||||||||||||
(In millions)
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2010
|
$
|
28
|
|
|
$
|
(7
|
)
|
|
$
|
(11
|
)
|
|
$
|
(5,156
|
)
|
|
$
|
(5,146
|
)
|
Before tax amount
|
(3
|
)
|
|
(9
|
)
|
|
3
|
|
|
(2,845
|
)
|
|
(2,854
|
)
|
|||||
Tax (expense) benefit
|
—
|
|
|
3
|
|
|
3
|
|
|
993
|
|
|
999
|
|
|||||
Net of tax amount
|
(3
|
)
|
|
(6
|
)
|
|
6
|
|
|
(1,852
|
)
|
|
(1,855
|
)
|
|||||
Balance at December 31, 2011
|
25
|
|
|
(13
|
)
|
|
(5
|
)
|
|
(7,008
|
)
|
|
(7,001
|
)
|
|||||
Before tax amount
|
35
|
|
|
13
|
|
|
(6
|
)
|
|
(1,275
|
)
|
|
(1,233
|
)
|
|||||
Tax (expense) benefit
|
—
|
|
|
(5
|
)
|
|
1
|
|
|
450
|
|
|
446
|
|
|||||
Net of tax amount
|
35
|
|
|
8
|
|
|
(5
|
)
|
|
(825
|
)
|
|
(787
|
)
|
|||||
Balance at December 31, 2012
|
60
|
|
|
(5
|
)
|
|
(10
|
)
|
|
(7,833
|
)
|
|
(7,788
|
)
|
|||||
Before tax amount
|
(13
|
)
|
|
(4
|
)
|
|
1
|
|
|
4,128
|
|
|
4,112
|
|
|||||
Tax (expense) benefit
|
—
|
|
|
1
|
|
|
—
|
|
|
(1,438
|
)
|
|
(1,437
|
)
|
|||||
Net of tax amount
|
(13
|
)
|
|
(3
|
)
|
|
1
|
|
|
2,690
|
|
|
2,675
|
|
|||||
Balance at December 31, 2013
|
$
|
47
|
|
|
$
|
(8
|
)
|
|
$
|
(9
|
)
|
|
$
|
(5,143
|
)
|
|
$
|
(5,113
|
)
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2:
|
Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or that we corroborate with observable market data for substantially the full term of the related assets or liabilities.
|
Level 3:
|
Unobservable inputs supported by little or no market activity that are significant to the fair value of the assets or liabilities.
|
(In millions)
|
Integrated
Defense
Systems
(1)
|
|
Intelligence, Information and Services
(1)
|
|
Missile
Systems
(1)
|
|
Space
and
Airborne
Systems
(1)
|
|
Total
|
||||||||||
Balance at December 31, 2011
|
$
|
1,797
|
|
|
$
|
2,686
|
|
|
$
|
4,150
|
|
|
$
|
3,911
|
|
|
$
|
12,544
|
|
Increase for acquisitions
|
2
|
|
|
13
|
|
|
—
|
|
|
197
|
|
|
212
|
|
|||||
Effect of foreign exchange
rates and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2012
|
1,799
|
|
|
2,699
|
|
|
4,150
|
|
|
4,108
|
|
|
12,756
|
|
|||||
Increase for acquisitions
|
—
|
|
|
12
|
|
|
—
|
|
|
(2
|
)
|
|
10
|
|
|||||
Effect of foreign exchange
rates and other
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Balance at December 31, 2013
|
$
|
1,800
|
|
|
$
|
2,708
|
|
|
$
|
4,150
|
|
|
$
|
4,106
|
|
|
$
|
12,764
|
|
(1)
|
As part of our business consolidation in 2013, we reallocated goodwill to our reporting units on a relative fair value basis.
|
|
Cost-Type
|
|
Fixed-Price
|
|
Total
|
||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||||
U.S. Government contracts (including foreign
military sales):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Billed
|
$
|
490
|
|
|
$
|
363
|
|
|
$
|
374
|
|
|
$
|
212
|
|
|
$
|
864
|
|
|
$
|
575
|
|
Unbilled
|
787
|
|
|
956
|
|
|
8,139
|
|
|
8,890
|
|
|
8,926
|
|
|
9,846
|
|
||||||
Progress payments
|
—
|
|
|
—
|
|
|
(6,003
|
)
|
|
(6,870
|
)
|
|
(6,003
|
)
|
|
(6,870
|
)
|
||||||
|
1,277
|
|
|
1,319
|
|
|
2,510
|
|
|
2,232
|
|
|
3,787
|
|
|
3,551
|
|
||||||
Other customers:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Billed
|
16
|
|
|
11
|
|
|
343
|
|
|
545
|
|
|
359
|
|
|
556
|
|
||||||
Unbilled
|
22
|
|
|
27
|
|
|
1,411
|
|
|
1,072
|
|
|
1,433
|
|
|
1,099
|
|
||||||
Progress payments
|
—
|
|
|
—
|
|
|
(705
|
)
|
|
(659
|
)
|
|
(705
|
)
|
|
(659
|
)
|
||||||
|
38
|
|
|
38
|
|
|
1,049
|
|
|
958
|
|
|
1,087
|
|
|
996
|
|
||||||
Allowance for doubtful accounts
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Total contracts in process, net
|
$
|
1,315
|
|
|
$
|
1,357
|
|
|
$
|
3,555
|
|
|
$
|
3,186
|
|
|
$
|
4,870
|
|
|
$
|
4,543
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Land
|
$
|
104
|
|
|
$
|
104
|
|
Buildings and improvements
|
2,547
|
|
|
2,503
|
|
||
Machinery and equipment
|
3,605
|
|
|
3,533
|
|
||
Property, plant and equipment, gross
|
6,256
|
|
|
6,140
|
|
||
Accumulated depreciation and amortization
|
(4,319
|
)
|
|
(4,154
|
)
|
||
Total
|
$
|
1,937
|
|
|
$
|
1,986
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Marketable securities held in trust
|
$
|
479
|
|
|
$
|
407
|
|
Computer software, net of accumulated amortization of $918 and $840 at
December 31, 2013 and 2012, respectively
|
340
|
|
|
371
|
|
||
Other intangible assets, net of accumulated amortization of $242 and $192 at
December 31, 2013 and 2012, respectively
|
235
|
|
|
293
|
|
||
Other noncurrent assets, net
|
330
|
|
|
260
|
|
||
Total
|
$
|
1,384
|
|
|
$
|
1,331
|
|
(In millions, except percentages)
|
Ownership %
|
|
2013
|
|
|
2012
|
|
||
Equity method investments
|
|
|
|
|
|
||||
Thales-Raytheon Systems Co. Ltd. (TRS)
|
50
|
|
$
|
71
|
|
|
$
|
69
|
|
Other investments
|
Various
|
|
9
|
|
|
6
|
|
||
Total
|
|
|
$
|
80
|
|
|
$
|
75
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Derivatives designated as hedging instruments
|
$
|
20
|
|
|
$
|
13
|
|
|
$
|
23
|
|
|
$
|
12
|
|
Derivatives not designated as hedging instruments
|
3
|
|
|
4
|
|
|
3
|
|
|
2
|
|
||||
Total
|
$
|
23
|
|
|
$
|
17
|
|
|
$
|
26
|
|
|
$
|
14
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Effective Portion
|
|
|
|
||||
Gain (loss) recognized in AOCL
|
$
|
(1
|
)
|
|
$
|
8
|
|
Gain (loss) reclassified from AOCL to operating income
|
3
|
|
|
1
|
|
||
Amount excluded from effectiveness assessment and ineffective portion
|
|
|
|
||||
Gain (loss) recognized in operating income
|
—
|
|
|
—
|
|
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
||
$251 notes due 2018, 6.75%
|
$
|
251
|
|
|
$
|
251
|
|
$340 notes due 2018, 6.40%
|
339
|
|
|
338
|
|
||
$500 notes due 2020, 4.40%
|
497
|
|
|
497
|
|
||
$1,000 notes due 2020, 3.125%
|
992
|
|
|
991
|
|
||
$1,100 notes due 2022, 2.50%
|
1,092
|
|
|
1,092
|
|
||
$382 notes due 2027, 7.20%
|
369
|
|
|
368
|
|
||
$185 notes due 2028, 7.00%
|
184
|
|
|
184
|
|
||
$600 notes due 2040, 4.875%
|
591
|
|
|
591
|
|
||
$425 notes due 2041, 4.70%
|
419
|
|
|
419
|
|
||
Total debt issued and outstanding
|
$
|
4,734
|
|
|
$
|
4,731
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Fair value of long-term debt
|
$
|
5,036
|
|
|
$
|
5,483
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Principal
|
$
|
4,783
|
|
|
$
|
4,783
|
|
Unamortized issue discounts
|
(38
|
)
|
|
(40
|
)
|
||
Unamortized interest rate lock costs
|
(11
|
)
|
|
(12
|
)
|
||
Total
|
$
|
4,734
|
|
|
$
|
4,731
|
|
(In millions)
|
|
||
2014
|
$
|
—
|
|
2015
|
—
|
|
|
2016
|
—
|
|
|
2017
|
—
|
|
|
2018
|
591
|
|
(In millions)
|
|
||
2014
|
$
|
205
|
|
2015
|
173
|
|
|
2016
|
130
|
|
|
2017
|
102
|
|
|
2018
|
83
|
|
|
Thereafter
|
293
|
|
(In millions, except percentages)
|
2013
|
|
|
2012
|
|
||
Total remediation costs—undiscounted
|
$
|
198
|
|
|
$
|
202
|
|
Weighted average risk-free rate
|
5.6
|
%
|
|
5.6
|
%
|
||
Total remediation costs—discounted
|
$
|
133
|
|
|
$
|
131
|
|
Recoverable portion
|
90
|
|
|
86
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Guarantees
|
$
|
378
|
|
|
$
|
255
|
|
Letters of Credit
|
1,424
|
|
|
1,474
|
|
||
Surety Bonds
|
238
|
|
|
239
|
|
(In millions)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Beginning balance
|
|
$
|
33
|
|
|
$
|
38
|
|
|
$
|
43
|
|
Provisions for warranties
|
|
3
|
|
|
5
|
|
|
4
|
|
|||
Warranty services provided
|
|
(6
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|||
Ending balance
|
|
$
|
30
|
|
|
$
|
33
|
|
|
$
|
38
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
Beginning balance
|
328.1
|
|
|
338.9
|
|
|
359.4
|
|
Warrants exercised
|
—
|
|
|
—
|
|
|
3.3
|
|
Stock plans activity
|
2.4
|
|
|
5.8
|
|
|
4.0
|
|
Stock repurchases
|
(16.0
|
)
|
|
(16.6
|
)
|
|
(27.8
|
)
|
Ending balance
|
314.5
|
|
|
328.1
|
|
|
338.9
|
|
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
$
|
Shares
|
|
$
|
Shares
|
|
$
|
Shares
|
|||||||||
Stock repurchased under our stock repurchase programs
|
$
|
1,075
|
|
15.2
|
|
|
$
|
825
|
|
15.9
|
|
|
$
|
1,250
|
|
27.1
|
|
Stock repurchased to satisfy tax withholding obligations
|
48
|
|
0.8
|
|
|
37
|
|
0.7
|
|
|
36
|
|
0.7
|
|
|||
Total stock repurchases
|
$
|
1,123
|
|
16.0
|
|
|
$
|
862
|
|
16.6
|
|
|
$
|
1,286
|
|
27.8
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Distributed earnings
|
$
|
2.19
|
|
|
$
|
1.98
|
|
|
$
|
1.71
|
|
Undistributed earnings
|
3.78
|
|
|
3.69
|
|
|
3.54
|
|
|||
Total
|
$
|
5.97
|
|
|
$
|
5.67
|
|
|
$
|
5.25
|
|
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Distributed earnings
|
$
|
2.18
|
|
|
$
|
1.98
|
|
|
$
|
1.70
|
|
Undistributed earnings
|
3.78
|
|
|
3.67
|
|
|
3.52
|
|
|||
Total
|
$
|
5.96
|
|
|
$
|
5.65
|
|
|
$
|
5.22
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Income from continuing operations attributable to participating securities
|
$
|
38
|
|
|
$
|
36
|
|
|
$
|
31
|
|
Income (loss) from discontinued operations, net of tax attributable to participating securities
(1)
|
1
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to participating securities
|
$
|
39
|
|
|
$
|
36
|
|
|
$
|
31
|
|
(1)
|
Income (loss) from discontinued operations, net of tax attributable to participating securities was a loss of less than
$1 million
for
2012
and income of less than
$1 million
for
2011
.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
Shares for basic EPS (including 6.4 participating securities for 2013, 6.3 for 2012, and 5.8 for 2011)
|
323.4
|
|
|
333.2
|
|
|
351.7
|
|
Dilutive effect of stock options and LTPP
|
0.8
|
|
|
1.0
|
|
|
1.4
|
|
Dilutive effect of warrants
|
—
|
|
|
—
|
|
|
0.5
|
|
Shares for diluted EPS
|
324.2
|
|
|
334.2
|
|
|
353.6
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
Stock options included in the calculation of EPS (dilutive)
|
0.1
|
|
|
0.9
|
|
|
4.4
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Stock-based compensation expense
|
$
|
129
|
|
|
$
|
122
|
|
|
$
|
102
|
|
Stock-based tax benefit
|
39
|
|
|
37
|
|
|
34
|
|
|
Shares
(in thousands)
|
|
Weighted-Average
Grant Date
Fair Value
|
|
||
Outstanding at December 31, 2010
|
5,443
|
|
|
$
|
51.30
|
|
Granted
|
2,089
|
|
|
49.63
|
|
|
Vested
|
(1,701
|
)
|
|
52.25
|
|
|
Forfeited
|
(292
|
)
|
|
51.25
|
|
|
Outstanding at December 31, 2011
|
5,539
|
|
|
50.38
|
|
|
Granted
|
2,370
|
|
|
50.38
|
|
|
Vested
|
(1,733
|
)
|
|
51.78
|
|
|
Forfeited
|
(338
|
)
|
|
50.07
|
|
|
Outstanding at December 31, 2012
|
5,838
|
|
|
49.98
|
|
|
Granted
|
1,855
|
|
|
67.46
|
|
|
Vested
|
(1,708
|
)
|
|
48.93
|
|
|
Forfeited
|
(648
|
)
|
|
52.39
|
|
|
Outstanding at December 31, 2013
|
5,337
|
|
|
$
|
56.10
|
|
|
Units
(in thousands)
|
|
Weighted-Average
Grant Date
Fair Value
|
|
||
Outstanding at December 31, 2010
|
1,072
|
|
|
$
|
50.34
|
|
Granted
|
458
|
|
|
52.33
|
|
|
Decrease
|
(66
|
)
|
|
57.83
|
|
|
Vested
|
(473
|
)
|
|
74.79
|
|
|
Outstanding at December 31, 2011
|
991
|
|
|
50.07
|
|
|
Granted
|
484
|
|
|
50.83
|
|
|
Increase
|
407
|
|
|
53.32
|
|
|
Vested
|
(462
|
)
|
|
46.04
|
|
|
Outstanding at December 31, 2012
|
1,420
|
|
|
52.57
|
|
|
Granted
|
402
|
|
|
61.38
|
|
|
Increase
|
398
|
|
|
53.86
|
|
|
Vested
|
(383
|
)
|
|
55.74
|
|
|
Forfeited
|
(10
|
)
|
|
51.22
|
|
|
Outstanding at December 31, 2013
|
1,827
|
|
|
$
|
54.13
|
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Option Price
|
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|
|||
Outstanding at December 31, 2010
|
6,450
|
|
|
$
|
37.23
|
|
|
1.5
|
|
|
$
|
59
|
|
Exercised
|
(1,867
|
)
|
|
33.73
|
|
|
|
|
|
||||
Forfeited or expired
|
(185
|
)
|
|
30.85
|
|
|
|
|
|
||||
Outstanding at December 31, 2011
|
4,398
|
|
|
38.98
|
|
|
0.8
|
|
|
41
|
|
||
Exercised
|
(3,238
|
)
|
|
40.61
|
|
|
|
|
|
||||
Forfeited or expired
|
(271
|
)
|
|
44.00
|
|
|
|
|
|
||||
Outstanding at December 31, 2012
|
889
|
|
|
31.56
|
|
|
0.5
|
|
|
23
|
|
||
Exercised
|
(755
|
)
|
|
31.45
|
|
|
|
|
|
||||
Forfeited or expired
|
(82
|
)
|
|
31.23
|
|
|
|
|
|
||||
Outstanding at December 31, 2013
|
52
|
|
|
$
|
33.55
|
|
|
0.5
|
|
|
$
|
3
|
|
Exercisable at December 31, 2013
|
52
|
|
|
$
|
33.55
|
|
|
0.5
|
|
|
$
|
3
|
|
Exercise Price Range
|
Shares
(in thousands)
|
|
Weighted- Average
Remaining Contractual
Life (in years)
|
|
|
Weighted-
Average
Exercise
Price
|
|
||
29.65 to 32.84
|
33
|
|
|
0.3
|
|
|
$
|
31.60
|
|
32.85 to 37.00
|
14
|
|
|
0.7
|
|
|
$
|
35.78
|
|
37.01 to 39.21
|
5
|
|
|
0.9
|
|
|
$
|
39.21
|
|
Total
|
52
|
|
|
0.5
|
|
|
$
|
33.55
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Domestic Pension Benefit plan
|
$
|
18,822
|
|
|
$
|
16,733
|
|
Foreign Pension Benefit plan
|
806
|
|
|
717
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Marketable securities held in trust
|
$
|
479
|
|
|
$
|
407
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Required pension contributions
|
$
|
778
|
|
|
$
|
721
|
|
|
$
|
1,078
|
|
Discretionary pension contributions
|
300
|
|
|
500
|
|
|
750
|
|
|||
Other postretirement benefit contributions
|
22
|
|
|
19
|
|
|
18
|
|
|||
Total
|
$
|
1,100
|
|
|
$
|
1,240
|
|
|
$
|
1,846
|
|
(In millions)
|
Pension
Benefits
|
|
|
Other
Benefits
|
|
||
2014
|
$
|
1,568
|
|
|
$
|
57
|
|
2015
|
1,606
|
|
|
57
|
|
||
2016
|
1,600
|
|
|
57
|
|
||
2017
|
1,590
|
|
|
57
|
|
||
2018
|
1,523
|
|
|
57
|
|
||
Thereafter (next 5 years)
|
7,980
|
|
|
277
|
|
Components of Net Periodic Pension Expense (Income)
|
Pension Benefits
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Service cost
|
$
|
579
|
|
|
$
|
516
|
|
|
$
|
471
|
|
Interest cost
|
996
|
|
|
1,047
|
|
|
1,069
|
|
|||
Expected return on plan assets
|
(1,495
|
)
|
|
(1,422
|
)
|
|
(1,272
|
)
|
|||
Amounts reflected in net funded status
|
80
|
|
|
141
|
|
|
268
|
|
|||
Amortization of prior service cost included in net periodic pension expense
|
9
|
|
|
10
|
|
|
11
|
|
|||
Recognized net actuarial loss
|
1,150
|
|
|
939
|
|
|
792
|
|
|||
Loss due to curtailments/settlements
|
1
|
|
|
3
|
|
|
2
|
|
|||
Amounts reclassified during the year
|
1,160
|
|
|
952
|
|
|
805
|
|
|||
Net periodic pension expense (income)
|
$
|
1,240
|
|
|
$
|
1,093
|
|
|
$
|
1,073
|
|
Components of Net Periodic Postretirement Expense (Income)
|
Other Benefits
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Service cost
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
9
|
|
Interest cost
|
32
|
|
|
38
|
|
|
41
|
|
|||
Expected return on plan assets
|
(32
|
)
|
|
(31
|
)
|
|
(34
|
)
|
|||
Amounts reflected in net funded status
|
8
|
|
|
15
|
|
|
16
|
|
|||
Amortization of transition obligation
|
—
|
|
|
1
|
|
|
4
|
|
|||
Amortization of prior service cost included in net periodic postretirement expense
|
(2
|
)
|
|
(3
|
)
|
|
(10
|
)
|
|||
Recognized net actuarial loss
|
4
|
|
|
3
|
|
|
3
|
|
|||
Amounts reclassified during the year
|
2
|
|
|
1
|
|
|
(3
|
)
|
|||
Net periodic postretirement expense (income)
|
$
|
10
|
|
|
$
|
16
|
|
|
$
|
13
|
|
Funded Status – Amounts Recognized on our Balance Sheets
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions) December 31:
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Noncurrent assets
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(74
|
)
|
|
(69
|
)
|
|
(13
|
)
|
|
(13
|
)
|
||||
Noncurrent liabilities
|
(3,387
|
)
|
|
(7,138
|
)
|
|
(288
|
)
|
|
(397
|
)
|
||||
Net amount recognized on our balance sheets
|
$
|
(3,342
|
)
|
|
$
|
(7,207
|
)
|
|
$
|
(301
|
)
|
|
$
|
(410
|
)
|
Reconciliation of Amounts Recognized on our Balance Sheets
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions) December 31:
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Prior service (cost) credit
|
$
|
(13
|
)
|
|
$
|
(22
|
)
|
|
$
|
5
|
|
|
$
|
7
|
|
Net loss
|
(7,892
|
)
|
|
(11,913
|
)
|
|
(23
|
)
|
|
(123
|
)
|
||||
Accumulated other comprehensive loss
|
(7,905
|
)
|
|
(11,935
|
)
|
|
(18
|
)
|
|
(116
|
)
|
||||
Accumulated contributions in excess (below) net periodic benefit or
cost
|
4,563
|
|
|
4,728
|
|
|
(283
|
)
|
|
(294
|
)
|
||||
Net amount recognized on our balance sheets
|
$
|
(3,342
|
)
|
|
$
|
(7,207
|
)
|
|
$
|
(301
|
)
|
|
$
|
(410
|
)
|
Sources of Change in Accumulated Other Comprehensive Loss
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Amortization of initial net obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Net change initial net obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Prior service (cost) credit arising during period
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit) included in net income
|
9
|
|
|
10
|
|
|
(2
|
)
|
|
(3
|
)
|
||||
Net change in prior service (cost) credit not recognized in net
income during that period
|
9
|
|
|
8
|
|
|
(2
|
)
|
|
(3
|
)
|
||||
Actuarial gain (loss) arising during period
|
2,869
|
|
|
(2,219
|
)
|
|
96
|
|
|
2
|
|
||||
Amortization of net actuarial (gain) loss included in net income
|
1,150
|
|
|
939
|
|
|
4
|
|
|
3
|
|
||||
Net change in actuarial gain (loss) not included in net income
during the period
|
4,019
|
|
|
(1,280
|
)
|
|
100
|
|
|
5
|
|
||||
Effect of exchange rates
|
2
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Total change in accumulated other comprehensive loss during period
|
$
|
4,030
|
|
|
$
|
(1,278
|
)
|
|
$
|
98
|
|
|
$
|
3
|
|
Adjustments to Accumulated Other Comprehensive Loss
(in millions)
|
Pension Benefits
|
|
Other Benefits
|
||||
Amortization of net loss
|
$
|
(889
|
)
|
|
$
|
(1
|
)
|
Amortization of prior service (cost) credit
|
(7
|
)
|
|
1
|
|
||
Total
|
$
|
(896
|
)
|
|
$
|
—
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
PBO for domestic qualified pension plans
|
$
|
21,396
|
|
|
$
|
23,082
|
|
ABO for domestic qualified pension plans
|
19,595
|
|
|
20,828
|
|
||
Asset values for domestic qualified pension plans
|
18,822
|
|
|
16,733
|
|
Change in Projected Benefit Obligation
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Projected benefit obligation at beginning of year
|
$
|
24,657
|
|
|
$
|
21,613
|
|
|
$
|
818
|
|
|
$
|
812
|
|
Service cost
|
579
|
|
|
516
|
|
|
8
|
|
|
8
|
|
||||
Interest cost
|
996
|
|
|
1,047
|
|
|
32
|
|
|
38
|
|
||||
Plan participants’ contributions
|
15
|
|
|
18
|
|
|
43
|
|
|
44
|
|
||||
Amendments
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Plan curtailments/settlements
|
(6
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
(1,798
|
)
|
|
2,670
|
|
|
(70
|
)
|
|
13
|
|
||||
Foreign exchange loss (gain)
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(1,473
|
)
|
|
(1,233
|
)
|
|
(99
|
)
|
|
(97
|
)
|
||||
Projected benefit obligation at end of year
|
$
|
22,970
|
|
|
$
|
24,657
|
|
|
$
|
732
|
|
|
$
|
818
|
|
Change in Plan Assets
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
17,450
|
|
|
$
|
15,552
|
|
|
$
|
408
|
|
|
$
|
396
|
|
Actual return (loss) on plan assets
|
2,563
|
|
|
1,868
|
|
|
57
|
|
|
46
|
|
||||
Company contributions
|
1,078
|
|
|
1,221
|
|
|
22
|
|
|
19
|
|
||||
Plan participants’ contributions
|
15
|
|
|
18
|
|
|
43
|
|
|
44
|
|
||||
Plan settlements
|
(6
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign exchange gain (loss)
|
1
|
|
|
27
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(1,473
|
)
|
|
(1,233
|
)
|
|
(99
|
)
|
|
(97
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
19,628
|
|
|
$
|
17,450
|
|
|
$
|
431
|
|
|
$
|
408
|
|
Weighted-Average Net Periodic Benefit Cost Assumptions
|
Pension Benefits
|
|||||||
|
2013
|
|
|
2012
|
|
|
2011
|
|
Discount rate
|
4.15
|
%
|
|
5.00
|
%
|
|
5.73
|
%
|
Expected long-term rate of return on plan assets
|
8.67
|
%
|
|
8.68
|
%
|
|
8.68
|
%
|
Rate of compensation increase
|
|
|
|
|
|
|||
Range
|
2% -7%
|
|
|
2% -7%
|
|
|
2% -7%
|
|
Average
|
4.40
|
%
|
|
4.40
|
%
|
|
4.50
|
%
|
Weighted-Average Net Periodic Benefit Cost Assumptions
|
Other Benefits
|
|||||||
|
2013
|
|
|
2012
|
|
|
2011
|
|
Discount rate
|
4.00
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
Expected long-term rate of return on plan assets
|
8.24
|
%
|
|
8.25
|
%
|
|
8.25
|
%
|
Rate of compensation increase
|
|
|
|
|
|
|||
Range
|
2% -7%
|
|
|
2% -7%
|
|
|
2% -7%
|
|
Average
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Health care trend rate in the next year
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Gradually declining to an ultimate trend rate
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Year that the rate reaches ultimate trend rate
|
*
|
|
|
*
|
|
|
2027
|
|
Weighted-Average Year-End Benefit Obligation Assumptions
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Discount rate
|
5.06
|
%
|
|
4.15
|
%
|
|
5.01
|
%
|
|
4.00
|
%
|
Rate of compensation increase
|
|
|
|
|
|
|
|
||||
Range
|
2% -7%
|
|
|
2% -7%
|
|
|
2% -7%
|
|
|
2% -7%
|
|
Average
|
4.39
|
%
|
|
4.40
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Health care trend rate in the next year
|
|
|
|
|
4.00
|
%
|
|
4.00
|
%
|
||
Gradually declining to an ultimate trend rate of
|
|
|
|
|
4.00
|
%
|
|
4.00
|
%
|
||
Year that the rate reaches the ultimate trend rate
|
|
|
|
|
*
|
|
|
*
|
|
Percentile
|
2013
|
|
2012
|
|
2011
|
|
25
th
|
5.62
|
%
|
6.15
|
%
|
6.67
|
%
|
75
th
|
9.41
|
%
|
9.84
|
%
|
10.65
|
%
|
Fair Value Measurements at December 31, 2012
|
|
|
|||||||||||||
(In millions)
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
U.S. equities
|
|
|
|
|
|
|
|
||||||||
All capitalization
(1)
|
$
|
4,626
|
|
|
$
|
1,817
|
|
|
$
|
2,809
|
|
|
$
|
—
|
|
International equities
|
|
|
|
|
|
|
|
||||||||
Developed markets
(1)
|
2,350
|
|
|
1,834
|
|
|
516
|
|
|
—
|
|
||||
Emerging markets
(1)
|
658
|
|
|
553
|
|
|
105
|
|
|
—
|
|
||||
Fixed-income securities
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency securities
|
69
|
|
|
69
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities/instruments
|
|
|
|
|
|
|
|
||||||||
Investment grade bonds
(2)
|
1,989
|
|
|
—
|
|
|
1,989
|
|
|
—
|
|
||||
Non-investment grade bonds
(2)
|
336
|
|
|
—
|
|
|
336
|
|
|
—
|
|
||||
Emerging market debt
|
181
|
|
|
181
|
|
|
—
|
|
|
—
|
|
||||
Core fixed-income
(3)
|
1,519
|
|
|
1,281
|
|
|
238
|
|
|
—
|
|
||||
Global multi-sector fixed-income
(4)
|
202
|
|
|
—
|
|
|
202
|
|
|
—
|
|
||||
Fixed-income hedge funds
(5)
|
297
|
|
|
—
|
|
|
230
|
|
|
67
|
|
||||
Securitized
(6)
|
480
|
|
|
—
|
|
|
480
|
|
|
—
|
|
||||
Cash and cash equivalents
(8)
|
874
|
|
|
339
|
|
|
535
|
|
|
—
|
|
||||
Other funds
|
|
|
|
|
|
|
|
||||||||
Absolute return funds
(9)
|
|
|
|
|
|
|
|
||||||||
Relative value
(10)
|
358
|
|
|
—
|
|
|
358
|
|
|
—
|
|
||||
Event driven
(11)
|
203
|
|
|
—
|
|
|
131
|
|
|
72
|
|
||||
Equity hedge
(12)
|
118
|
|
|
—
|
|
|
113
|
|
|
5
|
|
||||
Macro
(13)
|
994
|
|
|
—
|
|
|
962
|
|
|
32
|
|
||||
Multi-strategy
(14)
|
581
|
|
|
501
|
|
|
—
|
|
|
80
|
|
||||
Private equity funds
(15)
|
397
|
|
|
—
|
|
|
—
|
|
|
397
|
|
||||
Private real estate funds
|
299
|
|
|
—
|
|
|
50
|
|
|
249
|
|
||||
Insurance contracts
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Payable for securities lending collateral
(16)
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
||||
Other
(17)
|
192
|
|
|
—
|
|
|
—
|
|
|
192
|
|
||||
Total
|
$
|
16,733
|
|
|
$
|
6,575
|
|
|
$
|
9,039
|
|
|
$
|
1,119
|
|
(1)
|
U.S. and International equities primarily include investments across the spectrum of large, medium and small market capitalization stocks.
|
(2)
|
Investment grade bonds are fixed-income securities with a rating equivalent to a Standard & Poors rating of BBB- or better. Non-investment grade bonds have a rating equivalent to a Standard & Poors rating of BB+ or less.
|
(3)
|
Core fixed-income securities are funds that invest primarily in intermediate-term high quality domestic bonds issued by various governmental or private sector entities.
|
(4)
|
Global multi-sector fixed-income investments are funds that invest globally among several sectors including governments, investment grade corporate bonds, high yield corporate bonds and emerging market bonds.
|
(5)
|
Fixed-income hedge funds can employ numerous strategies and seek to hedge some of the risk inherent in their investments by using a variety of methods, including short selling and derivative instruments.
|
(6)
|
Securitized fixed-income securities pool together various cash flow producing financial assets that are structured in a way that can achieve desired targeted credit, maturity or other characteristics and are typically collateralized by residential mortgages, commercial mortgages and other assets.
|
(7)
|
Convertible fixed-income securities are funds that invest in bonds that can be converted into a predetermined amount of the issuer's equity at certain times during the life of the bond, usually at the discretion of the bondholder.
|
(8)
|
Cash and cash equivalents are invested in highly liquid money market funds. Included in cash and cash equivalents is excess cash in investment manager accounts. This cash is available for immediate use and is used to fund daily operations and execute the investment policy. This amount is not considered to be part of the cash target allocation set forth in the investment policy.
|
(9)
|
Absolute return funds seek returns that are less volatile than long only funds under all market conditions.
|
(10)
|
Relative value fund strategies seek to capture arbitrage opportunities created by price discrepancies between related equity, debt and derivative financial instruments while minimizing or neutralizing market risk.
|
(11)
|
Event driven fund strategies seek to capture return opportunities created by special situations and corporate events tied to corporate merger and acquisition activity, restructuring, bankruptcy or financial distress.
|
(12)
|
Equity hedge fund strategies invest in global public equity securities, equity related options and derivatives and employ short selling with the objective of generating higher risk-adjusted returns than traditional investments in equity.
|
(13)
|
Macro fund strategies invest in futures, broad market indices and other financial instruments and seek to either generate positive returns regardless of market conditions or take advantage of global capital flows.
|
(14)
|
Multi-strategy funds allocate investments tactically across all asset classes globally based upon relative valuations to achieve maximum returns.
|
(15)
|
Private equity funds are predominantly invested in the U.S. and Western Europe.
|
(16)
|
The Plan participated in a securities lending program with the Trustee as of
December 31, 2012
and exited the program by
December 31, 2013
. The program allowed the Trustee to loan securities, which are assets of the Plan, to approved brokers (Borrowers). The Trustee requires Borrowers, pursuant to a security loan agreement, to deliver collateral to secure each loan. The Plan bears the risk of loss with respect to the unfavorable change in fair value of the invested cash collateral. The market value of securities on loan is reflected in the various asset categories above. Loaned securities were predominantly U.S. equities, International equities, corporate bonds and U.S. Government bonds or treasuries. Cash collateral obligations of
$15 million
were received for securities on loan as of
December 31, 2012
. Cash collateral was invested in a separately maintained and managed cash collateral investment account.
|
(17)
|
As of
December 31, 2013
and
December 31, 2012
, this category included
$106 million
and
$192 million
of net receivables and payables which consisted primarily of pending trades, interest, dividends and other payable expenses.
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Beginning
Balance at
Dec 31,
2012
|
|
Actual return
on plan
assets
(1)
|
|
Purchases,
issuances,
settlements
|
|
Transfers in and/or out of
Level 3
|
|
Ending
Balance at
Dec 31,
2013
|
||||||||||
Fixed-income securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-income hedge funds
|
$
|
67
|
|
|
$
|
39
|
|
|
$
|
(99
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
Other funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Absolute return funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Relative value
|
—
|
|
|
11
|
|
|
135
|
|
|
—
|
|
|
146
|
|
|||||
Event driven
|
72
|
|
|
30
|
|
|
53
|
|
|
—
|
|
|
155
|
|
|||||
Equity hedge
|
5
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Macro
|
32
|
|
|
1
|
|
|
(23
|
)
|
|
—
|
|
|
10
|
|
|||||
Multi-strategy
|
80
|
|
|
13
|
|
|
32
|
|
|
—
|
|
|
125
|
|
|||||
Private equity funds
|
397
|
|
|
85
|
|
|
116
|
|
|
—
|
|
|
598
|
|
|||||
Private real estate funds
|
249
|
|
|
49
|
|
|
31
|
|
|
—
|
|
|
329
|
|
|||||
Insurance contracts
|
25
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
26
|
|
|||||
Other
|
192
|
|
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
106
|
|
|||||
Total
|
$
|
1,119
|
|
|
$
|
229
|
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
1,508
|
|
(In millions)
|
Beginning
Balance at Dec 31, 2011 |
|
Actual return
on plan
assets
(1)
|
|
Purchases,
issuances,
settlements
|
|
Transfers in and/or out of
Level 3
|
|
Ending
Balance at Dec 31, 2012 |
||||||||||
Fixed-income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed-income hedge funds
|
$
|
53
|
|
|
$
|
28
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
67
|
|
Other funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Absolute return funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Relative value
|
23
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|||||
Event driven
|
57
|
|
|
9
|
|
|
6
|
|
|
—
|
|
|
72
|
|
|||||
Equity hedge
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Macro
|
22
|
|
|
1
|
|
|
9
|
|
|
—
|
|
|
32
|
|
|||||
Multi-strategy
|
—
|
|
|
2
|
|
|
78
|
|
|
—
|
|
|
80
|
|
|||||
Private equity funds
|
301
|
|
|
45
|
|
|
51
|
|
|
—
|
|
|
397
|
|
|||||
Private real estate funds
|
182
|
|
|
18
|
|
|
49
|
|
|
—
|
|
|
249
|
|
|||||
Insurance contracts
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Other
|
89
|
|
|
—
|
|
|
103
|
|
|
—
|
|
|
192
|
|
|||||
Total
|
$
|
752
|
|
|
$
|
103
|
|
|
$
|
264
|
|
|
$
|
—
|
|
|
$
|
1,119
|
|
(1)
|
The actual return on plan assets for assets still held at
December 31, 2013
and
December 31, 2012
was
$95 million
and
$(32) million
, respectively.
|
VEBA Trust Asset Information
|
Percent of Plan Assets at Dec 31:
|
||||
Asset category
|
2013
|
|
|
2012
|
|
Fixed-income securities
|
34
|
%
|
|
35
|
%
|
U.S. equities
|
41
|
%
|
|
41
|
%
|
International equities
|
21
|
%
|
|
20
|
%
|
Cash and cash equivalents
|
4
|
%
|
|
4
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Current income tax expense
|
|
|
|
|
|
||||||
Federal
|
$
|
723
|
|
|
$
|
753
|
|
|
$
|
360
|
|
Foreign
|
17
|
|
|
32
|
|
|
46
|
|
|||
Deferred income tax expense (benefit)
|
|
|
|
|
|
||||||
Federal
|
36
|
|
|
74
|
|
|
387
|
|
|||
Foreign
|
32
|
|
|
19
|
|
|
(11
|
)
|
|||
Total
|
$
|
808
|
|
|
$
|
878
|
|
|
$
|
782
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Statutory tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Research and development (R&D) tax credit
|
(1.8
|
)
|
|
—
|
|
|
(1.0
|
)
|
Tax settlements and refund claims
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(2.6
|
)
|
Domestic manufacturing deduction benefit
|
(2.1
|
)
|
|
(1.9
|
)
|
|
(1.8
|
)
|
Other, net
|
(1.0
|
)
|
|
(0.7
|
)
|
|
(0.2
|
)
|
Effective tax rate
|
29.3
|
%
|
|
31.6
|
%
|
|
29.4
|
%
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Domestic income from continuing operations before taxes
|
$
|
2,612
|
|
|
$
|
2,630
|
|
|
$
|
2,574
|
|
Foreign income from continuing operations before taxes
|
145
|
|
|
149
|
|
|
86
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Federal
|
$
|
628
|
|
|
$
|
826
|
|
|
$
|
332
|
|
Foreign
|
22
|
|
|
13
|
|
|
94
|
|
|||
State
|
39
|
|
|
78
|
|
|
12
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Unrecognized tax benefits, beginning of year
|
$
|
129
|
|
|
$
|
167
|
|
|
$
|
188
|
|
Additions based on current year tax positions
|
104
|
|
|
1
|
|
|
22
|
|
|||
Additions based on prior year tax positions
|
—
|
|
|
—
|
|
|
12
|
|
|||
Reductions based on prior year tax positions
|
(64
|
)
|
|
(39
|
)
|
|
(55
|
)
|
|||
Settlements based on prior year tax positions
|
(51
|
)
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefits, end of year
|
$
|
118
|
|
|
$
|
129
|
|
|
$
|
167
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Current deferred tax assets (liabilities)
|
|
|
|
||||
Accrued employee compensation and benefits
|
$
|
240
|
|
|
$
|
226
|
|
Other accrued expenses and reserves
|
191
|
|
|
181
|
|
||
Contracts in process and inventories
|
(513
|
)
|
|
(311
|
)
|
||
Deferred income taxes-current
|
$
|
(82
|
)
|
|
$
|
96
|
|
Noncurrent deferred tax assets (liabilities)
|
|
|
|
||||
Pension benefits
|
$
|
934
|
|
|
$
|
2,490
|
|
Other retiree benefits
|
113
|
|
|
118
|
|
||
Net operating loss and tax credit carryforwards
|
116
|
|
|
148
|
|
||
Depreciation and amortization
|
(1,346
|
)
|
|
(1,312
|
)
|
||
Other
|
(74
|
)
|
|
(86
|
)
|
||
Deferred income taxes-noncurrent
|
$
|
(257
|
)
|
|
$
|
1,358
|
|
Total Net Sales
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
6,489
|
|
|
$
|
6,492
|
|
|
$
|
6,441
|
|
Intelligence, Information and Services
|
6,045
|
|
|
6,335
|
|
|
6,470
|
|
|||
Missile Systems
|
6,599
|
|
|
6,639
|
|
|
6,801
|
|
|||
Space and Airborne Systems
|
6,371
|
|
|
6,823
|
|
|
6,818
|
|
|||
Corporate and Eliminations
|
(1,798
|
)
|
|
(1,875
|
)
|
|
(1,739
|
)
|
|||
Total
|
$
|
23,706
|
|
|
$
|
24,414
|
|
|
$
|
24,791
|
|
Intersegment Sales
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
107
|
|
|
$
|
91
|
|
|
$
|
83
|
|
Intelligence, Information and Services
|
817
|
|
|
784
|
|
|
741
|
|
|||
Missile Systems
|
163
|
|
|
161
|
|
|
182
|
|
|||
Space and Airborne Systems
|
711
|
|
|
839
|
|
|
733
|
|
|||
Total
|
$
|
1,798
|
|
|
$
|
1,875
|
|
|
$
|
1,739
|
|
Operating Income
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
1,115
|
|
|
$
|
1,047
|
|
|
$
|
998
|
|
Intelligence, Information and Services
|
510
|
|
|
536
|
|
|
480
|
|
|||
Missile Systems
|
830
|
|
|
861
|
|
|
939
|
|
|||
Space and Airborne Systems
|
920
|
|
|
988
|
|
|
951
|
|
|||
FAS/CAS Adjustment
|
(249
|
)
|
|
(255
|
)
|
|
(337
|
)
|
|||
Corporate and Eliminations
|
(188
|
)
|
|
(188
|
)
|
|
(201
|
)
|
|||
Total
|
$
|
2,938
|
|
|
$
|
2,989
|
|
|
$
|
2,830
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Intersegment profit eliminations
|
$
|
(160
|
)
|
|
$
|
(177
|
)
|
|
$
|
(161
|
)
|
Corporate
|
(28
|
)
|
|
(11
|
)
|
|
(40
|
)
|
|||
Total
|
$
|
(188
|
)
|
|
$
|
(188
|
)
|
|
$
|
(201
|
)
|
Intersegment Operating Income
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
7
|
|
Intelligence, Information and Services
|
72
|
|
|
72
|
|
|
68
|
|
|||
Missile Systems
|
17
|
|
|
24
|
|
|
20
|
|
|||
Space and Airborne Systems
|
62
|
|
|
73
|
|
|
66
|
|
|||
Total
|
$
|
160
|
|
|
$
|
177
|
|
|
$
|
161
|
|
Capital Expenditures
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
69
|
|
|
$
|
67
|
|
|
$
|
91
|
|
Intelligence, Information and Services
|
28
|
|
|
34
|
|
|
51
|
|
|||
Missile Systems
|
55
|
|
|
66
|
|
|
81
|
|
|||
Space and Airborne Systems
|
117
|
|
|
132
|
|
|
98
|
|
|||
Corporate
|
11
|
|
|
40
|
|
|
19
|
|
|||
Total
|
$
|
280
|
|
|
$
|
339
|
|
|
$
|
340
|
|
Depreciation and Amortization
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Integrated Defense Systems
|
$
|
96
|
|
|
$
|
101
|
|
|
$
|
98
|
|
Intelligence, Information and Services
|
62
|
|
|
65
|
|
|
63
|
|
|||
Missile Systems
|
76
|
|
|
68
|
|
|
66
|
|
|||
Space and Airborne Systems
|
158
|
|
|
161
|
|
|
162
|
|
|||
Corporate
|
53
|
|
|
60
|
|
|
55
|
|
|||
Total
|
$
|
445
|
|
|
$
|
455
|
|
|
$
|
444
|
|
Total Assets
(in millions)
|
2013
|
|
|
2012
|
|
||
Integrated Defense Systems
|
$
|
3,897
|
|
|
$
|
3,710
|
|
Intelligence, Information and Services
|
3,772
|
|
|
3,827
|
|
||
Missile Systems
|
6,316
|
|
|
6,319
|
|
||
Space and Airborne Systems
|
6,399
|
|
|
6,470
|
|
||
Corporate
|
5,583
|
|
|
6,360
|
|
||
Total
|
$
|
25,967
|
|
|
$
|
26,686
|
|
Total Net Sales by Geographic Areas
(in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
United States
|
$
|
17,260
|
|
|
$
|
18,182
|
|
|
$
|
18,652
|
|
Asia/Pacific
|
2,590
|
|
|
2,510
|
|
|
2,556
|
|
|||
Middle East and North Africa
|
2,396
|
|
|
2,470
|
|
|
2,216
|
|
|||
All Other (Principally Europe)
|
1,460
|
|
|
1,252
|
|
|
1,367
|
|
|||
Total
|
$
|
23,706
|
|
|
$
|
24,414
|
|
|
$
|
24,791
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Sales to the U.S. Government
(1)
|
$
|
17,019
|
|
|
$
|
17,861
|
|
|
$
|
18,360
|
|
Sales to the U.S. Department of Defense
(1)
|
16,015
|
|
|
16,818
|
|
|
17,308
|
|
|||
Total international sales
(2)
|
6,446
|
|
|
6,232
|
|
|
6,139
|
|
|||
Foreign military sales through the U.S. Government
|
3,062
|
|
|
3,196
|
|
|
2,998
|
|
(1)
|
Excludes foreign military sales through the U.S. Government.
|
(2)
|
Includes foreign military sales through the U.S. Government.
|
Property, Plant and Equipment, net by Geographic Area
(in millions)
|
2013
|
|
|
2012
|
|
||
United States
|
$
|
1,841
|
|
|
$
|
1,878
|
|
All Other (Principally Europe)
|
96
|
|
|
108
|
|
||
Total
|
$
|
1,937
|
|
|
$
|
1,986
|
|
(In millions, except per share amounts, stock prices and workdays)
|
|
|
|
|
|
|
|
||||||||
2013
|
First
(3)
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Total net sales
|
$
|
5,879
|
|
|
$
|
6,115
|
|
|
$
|
5,842
|
|
|
$
|
5,870
|
|
Gross margin
|
1,274
|
|
|
1,362
|
|
|
1,308
|
|
|
1,230
|
|
||||
Income from continuing operations
|
496
|
|
|
493
|
|
|
491
|
|
|
469
|
|
||||
Net income attributable to Raytheon Company
|
488
|
|
|
488
|
|
|
489
|
|
|
531
|
|
||||
EPS from continuing operations attributable to Raytheon Company
common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.50
|
|
|
$
|
1.50
|
|
|
$
|
1.51
|
|
|
$
|
1.46
|
|
Diluted
|
1.49
|
|
|
1.50
|
|
|
1.51
|
|
|
1.46
|
|
||||
EPS attributable to Raytheon Company common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
1.49
|
|
|
1.50
|
|
|
1.52
|
|
|
1.66
|
|
||||
Diluted
|
1.49
|
|
|
1.50
|
|
|
1.51
|
|
|
1.66
|
|
||||
Cash dividends per share
|
|
|
|
|
|
|
|
||||||||
Declared
|
0.55
|
|
|
0.55
|
|
|
0.55
|
|
|
0.55
|
|
||||
Paid
|
0.50
|
|
|
0.55
|
|
|
0.55
|
|
|
0.55
|
|
||||
Common stock prices
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
59.01
|
|
|
$
|
68.07
|
|
|
$
|
80.69
|
|
|
$
|
91.04
|
|
Low
|
52.67
|
|
|
56.22
|
|
|
64.82
|
|
|
73.97
|
|
||||
Workdays
(2)
|
63
|
|
|
64
|
|
|
63
|
|
|
59
|
|
2012
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
(4)
|
|
||||
Total net sales
|
$
|
5,938
|
|
|
$
|
5,992
|
|
|
$
|
6,045
|
|
|
$
|
6,439
|
|
Gross margin
|
1,279
|
|
|
1,340
|
|
|
1,356
|
|
|
1,347
|
|
||||
Income from continuing operations
|
454
|
|
|
471
|
|
|
508
|
|
|
468
|
|
||||
Net income attributable to Raytheon Company
|
448
|
|
|
471
|
|
|
500
|
|
|
469
|
|
||||
EPS from continuing operations attributable to Raytheon Company
common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.33
|
|
|
$
|
1.41
|
|
|
$
|
1.51
|
|
|
$
|
1.41
|
|
Diluted
|
1.33
|
|
|
1.41
|
|
|
1.51
|
|
|
1.41
|
|
||||
EPS attributable to Raytheon Company common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
1.33
|
|
|
1.41
|
|
|
1.51
|
|
|
1.42
|
|
||||
Diluted
|
1.32
|
|
|
1.41
|
|
|
1.50
|
|
|
1.42
|
|
||||
Cash dividends per share
|
|
|
|
|
|
|
|
||||||||
Declared
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
||||
Paid
|
0.43
|
|
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
||||
Common stock prices
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
52.96
|
|
|
$
|
56.59
|
|
|
$
|
58.40
|
|
|
$
|
59.28
|
|
Low
|
47.99
|
|
|
49.30
|
|
|
54.28
|
|
|
54.00
|
|
||||
Workdays
(2)
|
64
|
|
|
64
|
|
|
63
|
|
|
58
|
|
(1)
|
EPS is computed independently for each of the quarters presented; therefore, the sum of the quarterly earnings per share may not equal the total computed for each year.
|
(2)
|
Number of workdays per our fiscal calendar, which excludes holidays and weekends.
|
(3)
|
During the first quarter of 2013, we recorded a
$25 million
benefit for the 2012 research and development (R&D) tax credit. In January 2013, Congress approved legislation that included the extension of the R&D tax credit. The legislation retroactively reinstated the R&D tax credit for 2012 and extended it through December 31, 2013. As a result, we recorded the 2012 benefit in the first quarter of 2013.
|
(4)
|
During the fourth quarter of 2012, we received proceeds of
$1,092 million
for the issuance of
$1.1 billion
fixed rate long-term debt and exercised our call rights to repurchase, at prices based on fixed spreads to the U.S. Treasuries,
$970 million
of our long-term debt due 2014 and 2015 at a loss of
$29 million
pretax,
$19 million
after-tax, which is included in other expense (income), net.
|
(a)
|
Financial Statements and Schedules
|
(1)
|
The following financial statements of Raytheon Company, supplemental information and report of independent registered public accounting firm are included in this Form 10-K:
|
(b)
|
Exhibits:
|
3.1
|
Raytheon Company Restated Certificate of Incorporation, restated as of April 2, 2002, filed as an exhibit to the Company’s Registration Statement on Form S-3, File No. 333-85648, is hereby incorporated by reference.
|
|
|
3.2
|
Certificate of Amendment of Restated Certificate of Incorporation of Raytheon Company, amended as of May 5, 2005, filed as an exhibit to the Company’s Current Report on Form 8-K filed May 9, 2005, is hereby incorporated by reference.
|
|
|
3.3
|
Certificate of Amendment of Restated Certificate of Incorporation of Raytheon Company, as amended as of June 2, 2010, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 27, 2010, is hereby incorporated by reference.
|
|
|
3.4
|
Raytheon Company Amended and Restated By-Laws, as amended as of September 23, 2010, filed as an exhibit to the Company’s Current Report on Form 8-K filed September 27, 2010, is hereby incorporated by reference.
|
|
|
3.5
|
Indenture relating to Senior Debt Securities dated as of July 3, 1995, between Raytheon Company and The Bank of New York, Trustee, filed as an exhibit to the former Company’s Registration Statement on Form S-3, File No. 33-59241, is hereby incorporated by reference.
|
|
|
3.6
|
Indenture relating to Subordinated Debt Securities dated as of July 3, 1995, between Raytheon Company and The Bank of New York, Trustee, filed as an exhibit to the former Company’s Registration Statement on Form S-3, File No. 33-59241, is hereby incorporated by reference.
|
|
|
4.1
|
Supplemental Indenture dated as of December 17, 1997, between Raytheon Company and The Bank of New York, Trustee, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, is hereby incorporated by reference.
|
|
|
4.2
|
Second Supplemental Indenture, dated as of May 9, 2001, between Raytheon Company and The Bank of New York, Trustee, filed as an exhibit to the Company’s Current Report on Form 8-K filed May 10, 2001, is hereby incorporated by reference.
|
|
|
4.3
|
Form of Senior Debt Securities, filed as an exhibit to the Company’s Registration Statement on Form S-3, File No. 333-58474, is hereby incorporated by reference.
|
|
|
4.4
|
Form of Subordinated Debt Securities, filed as an exhibit to the Company’s Registration Statement on Form S-3, File No. 333-58474, is hereby incorporated by reference.
|
|
|
4.5
|
Certificate of Trust of RC Trust I, filed as an exhibit to the Company’s Registration Statement on Form S-3, File No. 333-58474, is hereby incorporated by reference.
|
|
|
4.6
|
Amended and Restated Declaration of Trust of RC Trust I, dated as of May 9, 2001, among Raytheon Company, The Bank of New York as initial Property Trustee, The Bank of New York (Delaware) as initial Delaware Trustee, and the Regular Trustee including the Form of Preferred Security Attached as Exhibit A, filed as an exhibit to the Company’s Current Report on Form 8-K filed May 10, 2001, is hereby incorporated by reference.
|
|
|
4.7
|
Agreement of Resignation, Appointment and Acceptance, dated April 1, 2005, between Raytheon Company and The Bank of New York appointing Successor Trustee, Paying Agent and Registrar in connection with certain securities originally authorized and issued under the Indenture dated as of July 3, 1995, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 27, 2005, is hereby incorporated by reference.
|
|
|
4.8
|
Agreement of Resignation, Appointment and Acceptance, dated April 1, 2005, between Raytheon Company and The Bank of New York appointing Successor Trustee, Paying Agent and Registrar in connection with the 8.25% Equity Security Units originally authorized and issued under the Indenture dated as of July 3, 1995 and the Second Supplemental Indenture dated as of May 9, 2001, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 27, 2005, is hereby incorporated by reference.
|
|
|
4.9
|
Warrant Agreement dated May 10, 2006 between Raytheon Company and American Stock Transfer & Trust Company, as warrant agent, filed as an exhibit to the Company’s Current Report on Form 8-K filed June 9, 2006, is hereby incorporated by reference.
|
|
|
4.10
|
Form of 4.40% Notes due 2020, filed as an exhibit to the Company’s Current Report on Form 8-K filed on November 19, 2009, is hereby incorporated by reference.
|
|
|
4.11
|
Form of 1.625% Notes due 2015, filed as an exhibit to the Company’s Current Report on Form 8-K filed October 20, 2010, is hereby incorporated by reference.
|
|
|
4.12
|
Form of 3.125% Notes due 2020, filed as an exhibit to the Company’s Current Report on Form 8-K filed October 20, 2010, is hereby incorporated by reference.
|
|
|
4.13
|
Form of 4.875% Notes due 2040, filed as an exhibit to the Company’s Current Report on Form 8-K filed October 20, 2010, is hereby incorporated by reference.
|
|
|
4.14
|
Form of 1.40% Notes due 2014, filed as an exhibit to the Company’s Current Report on Form 8-K filed December 6, 2011, is hereby incorporated by reference.
|
|
|
4.15
|
Form of 4.70% Notes due 2041, filed as an exhibit to the Company’s Current Report on Form 8-K filed December 6, 2011, is hereby incorporated by reference.
|
|
|
4.16
|
Form of 2.50% Notes due 2022, filed as an exhibit to the Company’s Current Report on Form 8-K filed December 4, 2012, is hereby incorporated by reference.
|
10.1
|
Raytheon Company 1991 Stock Plan, as amended on September 21, 2005, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2005, is hereby incorporated by reference.
|
|
|
10.2
|
Raytheon Company 1995 Stock Option Plan, as amended on September 21, 2005, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2005, is hereby incorporated by reference.
|
|
|
10.3
|
Raytheon Company 2001 Stock Plan, as amended on September 21, 2005, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2005, is hereby incorporated by reference.
|
|
|
10.4
|
Raytheon 2010 Stock Plan, filed as Appendix B to the Company’s definitive proxy statement filed on April 26, 2010, is hereby incorporated by reference.
|
|
|
10.5
|
Amendment No. 1 to Raytheon 2010 Stock Plan, filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 26, 2010, is hereby incorporated by reference.
|
|
|
10.6
|
Plan for Granting Stock Options in Substitution for Stock Options Granted by Texas Instruments Incorporated, filed as an exhibit to the Company’s Registration Statement on Form S-8, File No. 333-45629, is hereby incorporated by reference.
|
|
|
10.7
|
Plan for Granting Stock Options in Substitution for Stock Options Granted by Hughes Electronics Corporation, filed as an exhibit to the Company’s Registration Statement on Form S-8, File No. 333-45629, is hereby incorporated by reference.
|
|
|
10.24
|
Form of Change in Control Severance Agreement between the Company and certain executive officers (providing for benefits in the event of a qualified termination upon a change in control of two times base salary and bonus), filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, is hereby incorporated by reference.
|
|
|
10.25
|
Form of Amendment to Change in Control Severance Agreement between the Company and its executive officers, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, is hereby incorporated by reference.
|
|
|
10.26
|
Summary of Executive Severance and Change in Control Guidelines*
|
|
|
10.27
|
Letter Agreement between Raytheon Company and William H. Swanson, filed as an exhibit to the Company’s Current Report on Form 8-K filed April 24, 2003, is hereby incorporated by reference.
|
|
|
10.28
|
Employment Agreement between Raytheon Company and Jay B. Stephens, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, is hereby incorporated by reference.
|
|
|
10.29
|
Amendment dated November 18, 2002 to Employment Agreement between Raytheon Company and Jay B. Stephens, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, is hereby incorporated by reference.
|
|
|
10.30
|
Amendment to Employment Agreement between Raytheon Company and Jay B. Stephens, filed as an exhibit to Raytheon’s Quarterly Report on Form 10-Q for the quarter ended September 28, 2003, is hereby incorporated by reference.
|
|
|
10.31
|
Summary of Executive Perquisites Policy*
|
|
|
10.32
|
Summary of Key Employee Permanent Domestic Relocation Policy, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, is hereby incorporated by reference.
|
|
|
10.33
|
Guarantee Agreement, dated as of May 9, 2001, between Raytheon Company and The Bank of New York as initial Guarantee Trustee, filed as an exhibit to the Company’s Current Report on Form 8-K filed May 10, 2001, is hereby incorporated by reference.
|
|
|
10.34
|
Settlement Agreement between Raytheon Company, Raytheon Engineers and Constructors International, Inc. and Washington Group International, Inc. dated January 23, 2002, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, is hereby incorporated by reference.
|
|
|
10.35
|
Fifth Amended and Restated Purchase and Sale Agreement between General Aviation Receivables Corporation, Raytheon Aircraft Receivables Corporation, Raytheon Aircraft Credit Corporation, Receivables Capital Corporation and Bank of America, N.A., dated September 1, 2003, filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, is hereby incorporated by reference.
|
|
|
10.36
|
Letter Agreement dated February 21, 2006 between Raytheon Company and David C. Wajsgras, filed as an exhibit to the Company’s Current Report on Form 8-K filed February 28, 2006, is hereby incorporated by reference.
|
|
|
10.37
|
Letter Agreement dated March 2, 2006 between Raytheon Company and Taylor W. Lawrence, filed as an exhibit to the Company’s Current Report on Form 8-K filed March 6, 2006, is hereby incorporated by reference.
|
|
|
10.38
|
Summary of the Raytheon Company Results-Based Incentive Program, filed as an exhibit to the Company’s Current Report on Form 8-K filed December 14, 2006, is hereby incorporated by reference.
|
|
|
10.39
|
Summary of the Raytheon Company Long-Term Performance Plan*
|
|
|
10.40
|
Stock Purchase Agreement by and among, Hawker Beechcraft Corporation, Greenbulb Limited, Raytheon Company, Raytheon Aircraft Holdings, Inc. and Raytheon Aircraft Services Limited dated as of December 20, 2006, filed as an exhibit to the Company’s Current Report on Form 8-K filed December 22, 2006, is hereby incorporated by reference.
|
|
|
R
AYTHEON
C
OMPANY
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Wood
|
|
|
|
|
Michael J. Wood
Vice President, Controller and Chief
Accounting Officer
|
|
|
|
|
SIGNATURES
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ William H. Swanson
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
|
February 11, 2014
|
William H. Swanson
|
|
|
|
|
|
|
|
|
|
/s/ David C. Wajsgras
|
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 11, 2014
|
David C. Wajsgras
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Wood
|
|
Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)
|
|
February 11, 2014
|
Michael J. Wood
|
|
|
|
|
|
|
|
|
|
/s/ James E. Cartwright
|
|
Director
|
|
February 11, 2014
|
James E. Cartwright
|
|
|
|
|
|
|
|
|
|
/s/ Vernon E. Clark
|
|
Director
|
|
February 11, 2014
|
Vernon E. Clark
|
|
|
|
|
|
|
|
|
|
/s/ Stephen J. Hadley
|
|
Director
|
|
February 11, 2014
|
Stephen J. Hadley
|
|
|
|
|
|
|
|
|
|
/s/ Thomas A. Kennedy
|
|
Director
|
|
February 11, 2014
|
Thomas A. Kennedy
|
|
|
|
|
|
|
|
|
|
/s/ George R. Oliver
|
|
Director
|
|
February 11, 2014
|
George R. Oliver
|
|
|
|
|
|
|
|
|
|
/s/ Michael C. Ruettgers
|
|
Director
|
|
February 11, 2014
|
Michael C. Ruettgers
|
|
|
|
|
|
|
|
|
|
/s/ Ronald L. Skates
|
|
Director
|
|
February 11, 2014
|
Ronald L. Skates
|
|
|
|
|
|
|
|
|
|
/s/ William R. Spivey
|
|
Director
|
|
February 11, 2014
|
William R. Spivey
|
|
|
|
|
|
|
|
|
|
/s/ Linda G. Stuntz
|
|
Director
|
|
February 11, 2014
|
Linda G. Stuntz
|
|
|
|
|
2.
|
Section 4.4 is amended by adding the following section after Section 4.4(b):
|
A
|
B
|
Retirement Plan
|
Form of benefit to survivor
|
Raytheon Non-Bargaining Retirement Plan (other than former General Dynamics salaried employees)
|
Form specified in Exhibit A for the Participant
|
Raytheon Bargaining Retirement Plan
|
Form specified in Exhibit A for the Participant
|
Marine Systems Plan
|
50% joint and survivor annuity (non-increasing)
|
All other situations not covered elsewhere in this column A, other than Exhibit E (Raytheon TI Systems Employees Pension Plan) to the Raytheon Company Pension Plan for Salaried Employees for which there is no survivor benefit under this Plan
|
50% joint and survivor annuity
|
A
|
B
|
C
|
Raytheon Bargaining Retirement Plan
|
|
|
Contributory
|
Later of age 55 and Separation from Service
|
Five-year period certain installments:
with COLA for a person at least age 55 at termination; otherwise, without COLA
|
Non-Contributory
|
Later of age 55 and Separation from Service
|
Ten-year period certain installments
|
Any situation not covered above
|
Later of age 60 and Separation from Service
|
Single life annuity
|
A
|
B
|
C
|
Applicable Retirement Plan determined as though the Participant had terminated employment on December 31, 2008
|
Time of payment (first day of month following later of times below)
|
Form of payment
|
|
|
|
Raytheon Salaried Pension Plan (Exhibit A of Raytheon Company Pension Plan for Salaried Employees (RCPPSE))
|
Later of age 55 and Separation from Service
|
Single life annuity
|
E-Systems Plans (Exhibits B, C, and D of RCPPSE, except Waco participants in Exhibit D, the Richardson/Waco Plan)
|
Later of age 55 and Separation from Service
|
Single life annuity
|
Richardson/Waco Plan (Waco
participants only)
|
Later of age 55 and Separation from Service
|
Single life annuity
|
RTIS Plan (Exhibit E of RCPPSE)
|
Later of age 55 and Separation from Service
|
Lump sum
|
Raytheon Non-Bargaining Retirement Plan (other than former General Dynamics salaried employees)
|
|
|
Contributory
|
Later of age 55 and Separation from Service
|
Five-year period certain installments with COLA
|
Non-Contributory
|
Later of age 55 and Separation from Service
|
Ten-year period certain installments
|
Raytheon Non-Bargaining Retirement Plan (former General Dynamics salaried employees only)
|
Later of age 55 and Separation from Service
|
Single life annuity
|
Raytheon Marine Systems Retirement Plan
|
Later of age 55 and Separation from Service
|
Lump sum
|
RE&C and Aircraft Credit Plan (for Aircraft Credit employees only)
|
Later of age 55 and Separation from Service
|
Single life annuity
|
Raytheon Hourly Pension Plan
|
Later of age 55 and Separation from Service
|
Single life annuity
|
Raytheon Bargaining Retirement Plan
|
|
|
Contributory
|
Later of age 55 and Separation from Service
|
Five-year period certain installments with COLA
|
Non-Contributory
|
Later of age 55 and Separation from Service
|
Ten-year period certain installments
|
Any situation not covered above
|
Later of age 55 and Separation from Service
|
Single life annuity
|
Designated Executive
|
Termination Date
|
SPECIAL SERVICE RULES
(if applicable)
|
Daniel P. Burnham
|
1/31/04
|
|
Franklyn A. Caine
|
3/8/05*
|
|
Philip W. Cheney
|
12/31/01
|
|
Thomas M. Culligan
|
|
|
Robert W. Drewes
|
3/11/02
|
|
Bryan J. Even
|
|
|
Richard J. Foley
|
12/31/03
|
|
Louise L. Francesconi
|
|
|
Charles E. Franklin
|
|
|
John D. Harris II
|
|
|
Robert L. Horowitz
|
6/1/05*
|
|
Michael D. Keebaugh
|
|
|
Jack R. Kelble
|
|
|
Philip T. LePore
|
8/4/03*
|
|
Francis S. Marchilena
|
9/30/05*
|
|
Neal E. Minahan
|
3/31/05*
|
|
Keith J. Peden
|
|
|
Phyllis J. Piano
|
2/28/05
|
|
Edward S. Pliner
|
|
|
Rebecca R. Rhoads
|
|
|
Donald M. Ronchi
|
|
|
Colin Schottlaender
|
|
|
James E. Schuster
|
|
|
Gregory S. Shelton
|
1/1/06
|
|
Daniel L. Smith
|
|
|
Jay B. Stephens
|
|
Upon completion of 5 years of service with Raytheon,
will receive an additional 5 years of pension credit.
|
William H. Swanson
|
|
|
Pamela Wickham
|
|
|
Jon E. Wohler
|
2/28/03
|
|
|
•
|
|
Level 1 Executive
: (a) salary continuance of two (2) times the executive’s base salary and annual incentive bonus target and (b) the continuation of two (2) years of existing benefits (no perquisites).
|
|
•
|
|
Level 2 Executive
: (a) salary continuance of one (1) times the executive’s base salary and annual incentive bonus target and (b) the continuation of one (1) year of existing benefits (no perquisites).
|
|
•
|
|
Level 3 Executive
: (a) salary continuance of one (1) times the executive’s base salary and annual incentive bonus target and (b) the continuation of one (1) year of existing benefits (no perquisites).
|
|
|
|
|
•
|
The Long-Term Performance Plan (the “LTPP”) is an incentive compensation plan for Raytheon Company (the “Company”) senior executives, including executive officers, designed to promote leadership teamwork toward achieving common performance goals and to foster an effective link between long-term rewards and performance against internal and external goals.
|
•
|
Each participating senior executive will receive a restricted stock unit award under the LTPP which will entitle the executive to the right to earn shares of the Company’s common stock or cash upon the attainment of the pre-established performance goals over a three-year plan period. The fully independent Management Development and Compensation Committee (the “Committee”) of the Company’s Board of Directors establishes the specific pre-established levels of Company performance for each three year LTPP cycle.
|
•
|
The Committee approved three metrics for purposes of determining performance goals weighted as follows: return on invested capital (50%); cumulative free cash flow (25%); and total shareholder return (25%). The goals are independent and additive, which means that if the threshold performance as to one measure is missed, no credit would apply to that element, but could be made up for by above-target performance in another area.
|
|
|
•
|
Each executive will receive an award with a threshold, target and maximum payout. The awards will settle based upon our performance over the cumulative three-year plan period with respect to the stated goals. If the Company’s performance with respect to all three metrics fails to meet the threshold, then the awards will not vest and no payout under the awards will be made. If the Company’s performance with respect to any or all of the three metrics meets or exceeds the threshold, then a varying amount of shares or cash, up to the maximum, may be earned.
|
•
|
The awards may be settled in shares of the Company’s common stock or cash at the discretion of the Committee. The LTPP operates under, and awards are made pursuant to, the Company’s 2010 Stock Plan. All shares to be issued in settlement of awards shall be issued pursuant to the 2010 Stock Plan.
|
|
|
•
|
Dividend equivalents will accrue on the restricted stock units and be paid in shares of common stock upon settlement of the awards based upon the number of shares of common stock actually earned pursuant to the award.
|
•
|
The Committee will review the Company’s performance relative to the applicable metrics and authorize payment in settlement of the awards, if any, after performance results for the three-year performance period are known.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(In millions, except ratio)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
2010
|
|
2009
|
||||||||
Pretax income from continuing
operations attributable to Raytheon
Company common stockholders*
|
|
$
|
2,740
|
|
|
$
|
2,788
|
|
|
$
|
2,613
|
|
|
$
|
2,390
|
|
|
$
|
2,896
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
296
|
|
|
291
|
|
|
265
|
|
|
233
|
|
|
223
|
|
|||||
Amortization of capitalized interest
|
|
4
|
|
|
4
|
|
|
5
|
|
|
4
|
|
|
4
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
|
3
|
|
|
4
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|||||
Income as adjusted
|
|
$
|
3,037
|
|
|
$
|
3,079
|
|
|
$
|
2,880
|
|
|
$
|
2,624
|
|
|
$
|
3,120
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Portion of rents representative of
interest factor
|
|
$
|
83
|
|
|
$
|
86
|
|
|
$
|
90
|
|
|
$
|
104
|
|
|
$
|
97
|
|
Interest on indebtedness
|
|
210
|
|
|
201
|
|
|
172
|
|
|
126
|
|
|
123
|
|
|||||
Capitalized interest
|
|
3
|
|
|
4
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|||||
Fixed charges
|
|
$
|
296
|
|
|
$
|
291
|
|
|
$
|
265
|
|
|
$
|
233
|
|
|
$
|
223
|
|
Ratio of earnings to fixed charges
|
|
10.3
|
|
|
10.6
|
|
|
10.9
|
|
|
11.3
|
|
|
14.0
|
|
Name of Subsidiary
|
|
Jurisdiction
|
|
Ownership
Percentage
|
—
|
|
—
|
|
—
|
|
|
/s/ PricewaterhouseCoopers LLP
|
PricewaterhouseCoopers LLP
|
Boston, Massachusetts
|
February 11, 2014
|
1.
|
I have reviewed this annual report on Form 10-K of Raytheon Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ William H. Swanson
|
William H. Swanson
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Raytheon Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ David C. Wajsgras
|
David C. Wajsgras
Senior Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ William H. Swanson
|
William H. Swanson
Chairman and Chief Executive Officer
|
February 11, 2014
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David C. Wajsgras
|
David C. Wajsgras
Senior Vice President and Chief Financial Officer
|
February 11, 2014
|