FORM 10-Q
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 29, 2015
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
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Delaware
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95-1778500
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
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PART I
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Item 1.
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C
onsolidated Balance Sheets at
March 29, 2015 (Unaudited) and December 31, 2014
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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(In millions, except per share amounts)
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(Unaudited)
Mar 29, 2015 |
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Dec 31, 2014
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Assets
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Current assets
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Cash and cash equivalents
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$
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2,906
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$
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3,222
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Short-term investments
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1,234
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1,497
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Contracts in process, net
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5,223
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4,985
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Inventories
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506
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414
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Prepaid expenses and other current assets
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372
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174
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Total current assets
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10,241
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10,292
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Property, plant and equipment, net
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1,906
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1,935
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Goodwill
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13,060
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13,061
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Other assets, net
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2,591
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2,612
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Total assets
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$
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27,798
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$
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27,900
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Liabilities and Equity
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Current liabilities
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Advance payments and billings in excess of costs incurred
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$
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1,944
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$
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2,284
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Accounts payable
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1,141
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1,250
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Accrued employee compensation
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905
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1,059
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Accrued income taxes
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346
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31
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Other accrued expenses
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1,299
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1,306
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Total current liabilities
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5,635
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5,930
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Accrued retiree benefits and other long-term liabilities
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6,926
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6,919
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Long-term debt
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5,331
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5,330
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Commitments and contingencies (Note 8)
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Equity
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Raytheon Company stockholders’ equity
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Common stock, par value, $0.01 per share, 1,450 shares authorized, 306 and 307
shares outstanding at March 29, 2015 and December 31, 2014, respectively.
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3
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3
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Additional paid-in capital
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1,040
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1,309
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Accumulated other comprehensive loss
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(7,353
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(7,458
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)
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Retained earnings
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16,017
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15,671
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Total Raytheon Company stockholders’ equity
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9,707
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9,525
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Noncontrolling interests in subsidiaries
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199
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196
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Total equity
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9,906
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9,721
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Total liabilities and equity
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$
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27,798
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$
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27,900
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Three Months Ended
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(In millions, except per share amounts)
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Mar 29, 2015
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Mar 30, 2014
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Net sales
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Products
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$
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4,387
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$
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4,565
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Services
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901
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943
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Total net sales
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5,288
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5,508
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Operating expenses
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Cost of sales—products
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3,096
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3,391
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Cost of sales—services
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737
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770
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General and administrative expenses
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615
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559
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Total operating expenses
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4,448
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4,720
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Operating income
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840
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788
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Non-operating (income) expense, net
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Interest expense
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58
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51
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Interest income
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(4
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(3
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Other (income) expense, net
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(2
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—
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Total non-operating (income) expense, net
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52
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48
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Income from continuing operations before taxes
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788
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740
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Federal and foreign income taxes
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234
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147
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Income from continuing operations
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554
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593
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Income (loss) from discontinued operations, net of tax
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—
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7
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Net income
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554
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600
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Less: Net income attributable to noncontrolling interests in subsidiaries
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3
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4
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Net income attributable to Raytheon Company
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$
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551
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$
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596
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Basic earnings (loss) per share attributable to Raytheon Company common stockholders:
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Income from continuing operations
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$
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1.79
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$
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1.87
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Income (loss) from discontinued operations, net of tax
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—
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0.02
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Net income
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1.79
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1.89
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Diluted earnings (loss) per share attributable to Raytheon Company common stockholders:
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Income from continuing operations
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$
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1.78
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$
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1.87
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Income (loss) from discontinued operations, net of tax
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—
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0.02
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Net income
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1.79
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1.89
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Amounts attributable to Raytheon Company common stockholders:
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Income from continuing operations
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$
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551
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$
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589
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Income (loss) from discontinued operations, net of tax
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—
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7
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Net income
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$
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551
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$
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596
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Three Months Ended
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(In millions)
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Mar 29, 2015
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Mar 30, 2014
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Net income
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$
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554
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$
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600
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Other comprehensive income (loss), before tax:
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Foreign exchange translation
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(69
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)
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6
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Cash flow hedges and interest rate locks
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(7
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)
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(1
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Unrealized gains (losses) on investments and other, net
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(6
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)
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—
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Pension and other employee benefit plans, net:
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Amortization of prior service cost (credit) included in net periodic cost
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2
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2
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Amortization of net actuarial loss included in net income
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283
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222
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Pension and other employee benefit plans, net
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285
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224
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Other comprehensive income (loss), before tax
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203
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229
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Income tax benefit (expense) related to items of other comprehensive income (loss)
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(98
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)
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(78
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)
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Other comprehensive income (loss), net of tax
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105
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151
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Total comprehensive income (loss)
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659
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751
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Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries
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3
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4
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Comprehensive income (loss) attributable to Raytheon Company
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$
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656
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$
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747
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Three Months Ended March 29, 2015 and March 30, 2014 (in millions)
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Common
stock
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Additional
paid-in
capital
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Accumulated
other
comprehensive
income (loss)
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Retained
earnings
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Total
Raytheon
Company
stockholders’
equity
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Noncontrolling
interests in
subsidiaries
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Total
equity
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||||||||
Balance at December 31, 2014
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$
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3
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$
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1,309
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$
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(7,458
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)
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|
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$
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15,671
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$
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9,525
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$
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196
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$
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9,721
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Net income
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|
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551
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551
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3
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554
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|||||||||||
Other comprehensive
income (loss), net of tax
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105
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105
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105
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||||||||||||
Dividends declared
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|
|
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(205
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)
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(205
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)
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(205
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)
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Common stock plans activity
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71
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|
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71
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|
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71
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|
||||||||||||
Share repurchases
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(340
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)
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(340
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)
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|
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(340
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)
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||||||||||||
Balance at March 29, 2015
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|
$
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3
|
|
|
$
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1,040
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|
|
$
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(7,353
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)
|
|
|
$
|
16,017
|
|
|
$
|
9,707
|
|
|
$
|
199
|
|
|
$
|
9,906
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||||||||||||
Balance at December 31, 2013
|
|
$
|
3
|
|
|
$
|
1,972
|
|
|
$
|
(5,113
|
)
|
—
|
|
|
$
|
14,173
|
|
|
$
|
11,035
|
|
|
$
|
162
|
|
|
$
|
11,197
|
|
Net income
|
|
|
|
|
|
|
|
|
596
|
|
|
596
|
|
|
4
|
|
|
600
|
|
|||||||||||
Other comprehensive income
(loss), net of tax |
|
|
|
|
|
151
|
|
|
|
|
|
151
|
|
|
|
|
151
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|
||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
|
(187
|
)
|
|
(187
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)
|
|
|
|
(187
|
)
|
||||||||||||
Distributions and other activity related to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
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—
|
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|
(1
|
)
|
|
(1
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)
|
|||||||||||
Common stock plans activity
|
|
|
|
53
|
|
|
|
|
|
|
|
53
|
|
|
|
|
53
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|
||||||||||||
Share repurchases
|
|
|
|
(230
|
)
|
|
|
|
|
|
|
(230
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)
|
|
|
|
(230
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)
|
||||||||||||
Balance at March 30, 2014
|
|
$
|
3
|
|
|
$
|
1,795
|
|
|
$
|
(4,962
|
)
|
|
|
$
|
14,582
|
|
|
$
|
11,418
|
|
|
$
|
165
|
|
|
$
|
11,583
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
554
|
|
|
$
|
600
|
|
(Income) loss from discontinued operations, net of tax
|
|
—
|
|
|
(7
|
)
|
||
Income from continuing operations
|
|
554
|
|
|
593
|
|
||
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
|
|
107
|
|
|
107
|
|
||
Stock-based compensation
|
|
51
|
|
|
38
|
|
||
Deferred income taxes
|
|
(94
|
)
|
|
(31
|
)
|
||
Tax benefit from stock-based awards
|
|
(18
|
)
|
|
(11
|
)
|
||
Changes in assets and liabilities
|
|
|
|
|
||||
Contracts in process, net and advance payments and billings in excess of costs
incurred
|
|
(586
|
)
|
|
(77
|
)
|
||
Inventories
|
|
(93
|
)
|
|
—
|
|
||
Prepaid expenses and other current assets
|
|
(190
|
)
|
|
(51
|
)
|
||
Accounts payable
|
|
(112
|
)
|
|
(100
|
)
|
||
Income taxes receivable/payable
|
|
326
|
|
|
224
|
|
||
Accrued employee compensation
|
|
(157
|
)
|
|
(201
|
)
|
||
Other accrued expenses
|
|
8
|
|
|
5
|
|
||
Other long-term liabilities
|
|
(5
|
)
|
|
(12
|
)
|
||
Accrued retiree benefits
|
|
267
|
|
|
180
|
|
||
Other, net
|
|
(3
|
)
|
|
(5
|
)
|
||
Net cash provided by (used in) operating activities from continuing operations
|
|
55
|
|
|
659
|
|
||
Net cash provided by (used in) operating activities from discontinued operations
|
|
1
|
|
|
12
|
|
||
Net cash provided by (used in) operating activities
|
|
56
|
|
|
671
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Additions to property, plant and equipment
|
|
(55
|
)
|
|
(39
|
)
|
||
Proceeds from sales of property, plant and equipment
|
|
4
|
|
|
—
|
|
||
Additions to capitalized internal use software
|
|
(13
|
)
|
|
(12
|
)
|
||
Purchases of short-term investments
|
|
(148
|
)
|
|
(1,345
|
)
|
||
Sales of short-term investments
|
|
135
|
|
|
457
|
|
||
Maturities of short-term investments
|
|
250
|
|
|
400
|
|
||
Payments for purchases of acquired companies, net of cash received
|
|
(6
|
)
|
|
—
|
|
||
Other
|
|
(31
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
|
136
|
|
|
(539
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Dividends paid
|
|
(186
|
)
|
|
(174
|
)
|
||
Repurchases of common stock under share repurchase programs
|
|
(300
|
)
|
|
(200
|
)
|
||
Repurchases of common stock to satisfy tax withholding obligations
|
|
(40
|
)
|
|
(30
|
)
|
||
Proceeds from exercise of stock options
|
|
—
|
|
|
1
|
|
||
Tax benefit from stock-based awards
|
|
18
|
|
|
11
|
|
||
Net cash provided by (used in) financing activities
|
|
(508
|
)
|
|
(392
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(316
|
)
|
|
(260
|
)
|
||
Cash and cash equivalents at beginning of the year
|
|
3,222
|
|
|
3,296
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
2,906
|
|
|
$
|
3,036
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Operating income
|
$
|
121
|
|
|
$
|
122
|
|
Income from continuing operations attributable to Raytheon Company
|
79
|
|
|
79
|
|
||
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company
|
$
|
0.26
|
|
|
$
|
0.25
|
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Materials and purchased parts
|
|
$
|
61
|
|
|
$
|
70
|
|
Work in process
|
|
429
|
|
|
326
|
|
||
Finished goods
|
|
16
|
|
|
18
|
|
||
Total
|
|
$
|
506
|
|
|
$
|
414
|
|
(In millions)
|
|
Integrated
Defense
Systems
|
|
|
Intelligence,
Information and Services
|
|
|
Missile
Systems |
|
|
Space and
Airborne Systems |
|
|
Total
|
|
|||||
Balance at December 31, 2014
|
|
$
|
1,797
|
|
|
$
|
3,008
|
|
|
$
|
4,150
|
|
|
$
|
4,106
|
|
|
$
|
13,061
|
|
Increase for acquisitions
(1)
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Effect of foreign exchange rates and other
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Balance at March 29, 2015
|
|
$
|
1,793
|
|
|
$
|
3,007
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
13,060
|
|
(1)
|
During the
first quarter of 2015
, we acquired Sensintel, Incorporated.
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Carrying value of long-term debt
|
|
$
|
5,331
|
|
|
$
|
5,330
|
|
Fair value of long-term debt
|
|
6,040
|
|
|
5,936
|
|
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Total remediation costs—undiscounted
|
|
$
|
204
|
|
|
$
|
202
|
|
Weighted average discount rate
|
|
5.5
|
%
|
|
5.5
|
%
|
||
Total remediation costs—discounted
|
|
$
|
139
|
|
|
$
|
131
|
|
Recoverable portion
|
|
85
|
|
|
80
|
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Guarantees
|
|
$
|
303
|
|
|
$
|
266
|
|
Letters of credit
|
|
1,823
|
|
|
1,938
|
|
||
Surety bonds
|
|
298
|
|
|
298
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Beginning balance
|
|
$
|
32
|
|
|
$
|
30
|
|
Provisions for warranties
|
|
2
|
|
|
—
|
|
||
Warranty services provided
|
|
(1
|
)
|
|
(1
|
)
|
||
Ending balance
|
|
$
|
33
|
|
|
$
|
29
|
|
|
|
Three Months Ended
|
||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||
Beginning balance
|
|
307.3
|
|
|
314.5
|
|
Stock plans activity
|
|
1.8
|
|
|
0.6
|
|
Share repurchases
|
|
(3.2
|
)
|
|
(2.3
|
)
|
Ending balance
|
|
305.9
|
|
|
312.8
|
|
|
|
Three Months Ended
|
||||||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||||||
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||
Shares repurchased under our share repurchase programs
|
|
$
|
300
|
|
2.8
|
|
|
$
|
200
|
|
2.1
|
|
Shares repurchased to satisfy tax withholding obligations
|
|
40
|
|
0.4
|
|
|
30
|
|
0.2
|
|
||
Total share repurchases
|
|
$
|
340
|
|
3.2
|
|
|
$
|
230
|
|
2.3
|
|
|
|
Three Months Ended
|
||||||
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
||||
Distributed earnings
|
|
$
|
0.67
|
|
|
$
|
0.59
|
|
Undistributed earnings
|
|
1.12
|
|
|
1.28
|
|
||
Total
|
|
$
|
1.79
|
|
|
$
|
1.87
|
|
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
||||
Distributed earnings
|
|
$
|
0.67
|
|
|
$
|
0.59
|
|
Undistributed earnings
|
|
1.11
|
|
|
1.28
|
|
||
Total
|
|
$
|
1.78
|
|
|
$
|
1.87
|
|
|
Three Months Ended
|
||||||
(In millions)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Income from continuing operations attributable to participating securities
|
$
|
11
|
|
|
$
|
11
|
|
Income (loss) from discontinued operations, net of tax attributable to participating securities
(1)
|
—
|
|
|
—
|
|
||
Net income attributable to participating securities
|
$
|
11
|
|
|
$
|
11
|
|
(1)
|
Income (loss) from discontinued operations, net of tax attributable to participating securities was earnings of less than $1 million for the
first quarter of 2015
and the
first quarter of 2014
.
|
|
Three Months Ended
|
||||
(In millions)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||
Shares for basic EPS (including 5.7 and 6.0 participating securities for the three months ended March 29, 2015 and March 30, 2014, respectively.)
|
308.2
|
|
|
315.0
|
|
Dilutive effect of stock options and LTPP
|
0.4
|
|
|
0.8
|
|
Shares for diluted EPS
|
308.6
|
|
|
315.8
|
|
(In millions)
|
Number of Shares
|
|
Outstanding unvested at December 31, 2014
|
4.5
|
|
Granted
|
1.2
|
|
Forfeited
|
(0.1
|
)
|
Outstanding unvested at March 29, 2015
|
5.6
|
|
|
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, 2014
|
$
|
(3
|
)
|
|
$
|
(14
|
)
|
|
$
|
(9
|
)
|
|
$
|
(7,432
|
)
|
|
$
|
(7,458
|
)
|
Before tax amount
|
(69
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|
285
|
|
|
203
|
|
|||||
Tax (expense) or benefit
|
—
|
|
|
2
|
|
|
—
|
|
|
(100
|
)
|
|
(98
|
)
|
|||||
Net of tax amount
|
(69
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
185
|
|
|
105
|
|
|||||
Balance at March 29, 2015
|
$
|
(72
|
)
|
|
$
|
(19
|
)
|
|
$
|
(15
|
)
|
|
$
|
(7,247
|
)
|
|
$
|
(7,353
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2013
|
$
|
47
|
|
|
$
|
(8
|
)
|
|
$
|
(9
|
)
|
|
$
|
(5,143
|
)
|
|
$
|
(5,113
|
)
|
Before tax amount
|
6
|
|
|
(1
|
)
|
|
—
|
|
|
224
|
|
|
229
|
|
|||||
Tax (expense) or benefit
|
—
|
|
|
1
|
|
|
—
|
|
|
(79
|
)
|
|
(78
|
)
|
|||||
Net of tax amount
|
6
|
|
|
—
|
|
|
—
|
|
|
145
|
|
|
151
|
|
|||||
Balance at March 30, 2014
|
$
|
53
|
|
|
$
|
(8
|
)
|
|
$
|
(9
|
)
|
|
$
|
(4,998
|
)
|
|
$
|
(4,962
|
)
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Marketable securities held in trust
|
|
$
|
527
|
|
|
$
|
519
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Service cost
|
|
$
|
130
|
|
|
$
|
117
|
|
Interest cost
|
|
261
|
|
|
281
|
|
||
Expected return on plan assets
|
|
(384
|
)
|
|
(401
|
)
|
||
Amounts reflected in net funded status
|
|
7
|
|
|
(3
|
)
|
||
Amortization of prior service cost included in net periodic pension expense
|
|
2
|
|
|
2
|
|
||
Amortization of net actuarial loss included in net income
|
|
282
|
|
|
222
|
|
||
Amounts reclassified during the year
|
|
$
|
284
|
|
|
$
|
224
|
|
Net periodic pension expense (income)
|
|
$
|
291
|
|
|
$
|
221
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Service cost
|
|
$
|
2
|
|
|
$
|
1
|
|
Interest cost
|
|
7
|
|
|
9
|
|
||
Expected return on plan assets
|
|
(7
|
)
|
|
(8
|
)
|
||
Amounts reflected in net funded status
|
|
2
|
|
|
2
|
|
||
Amortization of net actuarial loss included in net income
|
|
1
|
|
|
—
|
|
||
Amounts reclassified during the year
|
|
$
|
1
|
|
|
$
|
—
|
|
Net periodic postretirement expense (income)
|
|
$
|
3
|
|
|
$
|
2
|
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Long-term pension liabilities
|
|
$
|
6,341
|
|
|
$
|
6,359
|
|
Long-term other postretirement benefit plan liabilities
|
|
350
|
|
|
352
|
|
||
Total long-term pension and other postretirement benefit plan liabilities
|
|
$
|
6,691
|
|
|
$
|
6,711
|
|
|
Three Months Ended
|
||||||
(In millions)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Required pension contributions
|
$
|
22
|
|
|
$
|
39
|
|
Other postretirement benefit contributions
|
5
|
|
|
4
|
|
|
|
Three Months Ended
|
||||||
Total Net Sales
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
1,433
|
|
|
$
|
1,481
|
|
Intelligence, Information and Services
|
|
1,393
|
|
|
1,450
|
|
||
Missile Systems
|
|
1,473
|
|
|
1,574
|
|
||
Space and Airborne Systems
|
|
1,358
|
|
|
1,398
|
|
||
Corporate and Eliminations
|
|
(369
|
)
|
|
(395
|
)
|
||
Total
|
|
$
|
5,288
|
|
|
$
|
5,508
|
|
|
|
Three Months Ended
|
||||||
Intersegment Sales
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
20
|
|
|
$
|
30
|
|
Intelligence, Information and Services
|
|
185
|
|
|
200
|
|
||
Missile Systems
|
|
33
|
|
|
31
|
|
||
Space and Airborne Systems
|
|
131
|
|
|
134
|
|
||
Total
|
|
$
|
369
|
|
|
$
|
395
|
|
|
|
Three Months Ended
|
||||||
Operating Income
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
195
|
|
|
$
|
226
|
|
Intelligence, Information and Services
|
|
285
|
|
|
125
|
|
||
Missile Systems
|
|
207
|
|
|
208
|
|
||
Space and Airborne Systems
|
|
173
|
|
|
190
|
|
||
FAS/CAS Adjustment
|
|
49
|
|
|
87
|
|
||
Corporate and Eliminations
|
|
(69
|
)
|
|
(48
|
)
|
||
Total
|
|
$
|
840
|
|
|
$
|
788
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
FAS/CAS Pension Adjustment
|
|
$
|
48
|
|
|
$
|
86
|
|
FAS/CAS PRB Adjustment
|
|
1
|
|
|
1
|
|
||
FAS/CAS Adjustment
|
|
$
|
49
|
|
|
$
|
87
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Intersegment profit eliminations
|
|
$
|
(35
|
)
|
|
$
|
(39
|
)
|
Corporate
|
|
(34
|
)
|
|
(9
|
)
|
||
Total
|
|
$
|
(69
|
)
|
|
$
|
(48
|
)
|
|
|
Three Months Ended
|
||||||
Intersegment Operating Income
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
1
|
|
|
$
|
2
|
|
Intelligence, Information and Services
|
|
18
|
|
|
20
|
|
||
Missile Systems
|
|
4
|
|
|
3
|
|
||
Space and Airborne Systems
|
|
12
|
|
|
14
|
|
||
Total
|
|
$
|
35
|
|
|
$
|
39
|
|
Total Assets
(in millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Integrated Defense Systems
|
|
$
|
4,140
|
|
|
$
|
4,128
|
|
Intelligence, Information and Services
|
|
4,474
|
|
|
4,243
|
|
||
Missile Systems
|
|
6,375
|
|
|
6,223
|
|
||
Space and Airborne Systems
|
|
6,468
|
|
|
6,414
|
|
||
Corporate
|
|
6,341
|
|
|
6,892
|
|
||
Total
|
|
$
|
27,798
|
|
|
$
|
27,900
|
|
External Net Sales by Products and Services
(% of segment total external net sales)
|
||||||||
|
IDS
|
|
IIS
|
|
MS
|
|
SAS
|
|
Products
|
90
|
%
|
50
|
%
|
95
|
%
|
90
|
%
|
Services
|
10
|
%
|
50
|
%
|
5
|
%
|
10
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||||
Net sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
4,387
|
|
|
$
|
4,565
|
|
|
83.0
|
%
|
|
82.9
|
%
|
Services
|
901
|
|
|
943
|
|
|
17.0
|
%
|
|
17.1
|
%
|
||
Total net sales
|
$
|
5,288
|
|
|
$
|
5,508
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||||
Sales to the U.S. Government
(1)
|
$
|
3,750
|
|
|
$
|
3,989
|
|
|
71
|
%
|
|
72
|
%
|
Sales to the U.S. Department of Defense
(1)
|
3,516
|
|
|
3,763
|
|
|
66
|
%
|
|
68
|
%
|
||
Total international sales
(2)
|
1,485
|
|
|
1,469
|
|
|
28
|
%
|
|
27
|
%
|
||
Foreign direct commercial sales
(1)
|
804
|
|
|
805
|
|
|
15
|
%
|
|
15
|
%
|
||
Foreign military sales through the U.S. Government
|
681
|
|
|
664
|
|
|
13
|
%
|
|
12
|
%
|
(1)
|
Excludes foreign military sales through the U.S. Government.
|
(2)
|
Includes foreign military sales through the U.S. Government. Due to rounding, the total international sales percentage may not equal the sum of the percentages for foreign direct commercial sales and foreign military sales through the U.S. Government.
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||||
Cost of sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
3,096
|
|
|
$
|
3,391
|
|
|
58.5
|
%
|
|
61.6
|
%
|
Services
|
737
|
|
|
770
|
|
|
13.9
|
%
|
|
14.0
|
%
|
||
Total cost of sales
|
$
|
3,833
|
|
|
$
|
4,161
|
|
|
72.5
|
%
|
|
75.5
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||||
Administrative and selling expenses
|
$
|
473
|
|
|
$
|
448
|
|
|
8.9
|
%
|
|
8.1
|
%
|
Research and development expenses
|
142
|
|
|
111
|
|
|
2.7
|
%
|
|
2.0
|
%
|
||
Total general and administrative expenses
|
$
|
615
|
|
|
$
|
559
|
|
|
11.6
|
%
|
|
10.1
|
%
|
|
|
Three Months Ended
|
||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Total operating expenses
|
|
$
|
4,448
|
|
|
$
|
4,720
|
|
% of Total Net Sales
|
|
84.1
|
%
|
|
85.7
|
%
|
|
Three Months Ended
|
||||||
(In millions, except percentages)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Operating income
|
$
|
840
|
|
|
$
|
788
|
|
% of Total Net Sales
|
15.9
|
%
|
|
14.3
|
%
|
|
Three Months Ended
|
||||||
(In millions)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Non-operating (income) expense, net
|
|
|
|
||||
Interest expense
|
$
|
58
|
|
|
$
|
51
|
|
Interest income
|
(4
|
)
|
|
(3
|
)
|
||
Other (income) expense, net
|
(2
|
)
|
|
—
|
|
||
Total non-operating (income) expense, net
|
$
|
52
|
|
|
$
|
48
|
|
|
Three Months Ended
|
||||||
(In millions, except percentages)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Federal and foreign income taxes
|
$
|
234
|
|
|
$
|
147
|
|
Effective tax rate
|
29.7
|
%
|
|
19.9
|
%
|
|
Three Months Ended
|
||||||
(In millions)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Income from continuing operations
|
$
|
554
|
|
|
$
|
593
|
|
|
Three Months Ended
|
||||||
(In millions)
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Net income
|
$
|
554
|
|
|
$
|
600
|
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Income from continuing operations attributable to Raytheon Company
|
|
$
|
551
|
|
|
$
|
589
|
|
Diluted weighted-average shares outstanding
|
|
308.6
|
|
|
315.8
|
|
||
Diluted EPS from continuing operations attributable to Raytheon Company
|
|
$
|
1.78
|
|
|
$
|
1.87
|
|
|
|
Three Months Ended
|
||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||
Beginning balance
|
|
307.3
|
|
|
314.5
|
|
Stock plans activity
|
|
1.8
|
|
|
0.6
|
|
Share repurchases
|
|
(3.2
|
)
|
|
(2.3
|
)
|
Ending balance
|
|
305.9
|
|
|
312.8
|
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Net income attributable to Raytheon Company
|
|
$
|
551
|
|
|
$
|
596
|
|
Diluted weighted-average shares outstanding
|
|
308.6
|
|
|
315.8
|
|
||
Diluted EPS attributable to Raytheon Company
|
|
$
|
1.79
|
|
|
$
|
1.89
|
|
|
|
Three Months Ended
|
||||||
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Diluted EPS from continuing operations attributable to Raytheon Company common stockholders
|
|
$
|
1.78
|
|
|
$
|
1.87
|
|
Per share impact of FAS/CAS Adjustment
|
|
(0.10
|
)
|
|
(0.18
|
)
|
||
Per share impact of eBorders settlement
|
|
(0.42
|
)
|
|
—
|
|
||
Per share impact of the tax benefit of foreign dividend
|
|
—
|
|
|
(0.25
|
)
|
||
Adjusted EPS
|
|
$
|
1.26
|
|
|
$
|
1.43
|
|
|
|
Three Months Ended
|
||||||
Bookings
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
1,483
|
|
|
$
|
1,180
|
|
Intelligence, Information and Services
|
|
952
|
|
|
1,011
|
|
||
Missile Systems
|
|
1,405
|
|
|
1,083
|
|
||
Space and Airborne Systems
|
|
631
|
|
|
1,019
|
|
||
Total
|
|
$
|
4,471
|
|
|
$
|
4,293
|
|
|
|
Funded Backlog
|
|
Total Backlog
|
||||||||||||
Backlog
(in millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||||||
Integrated Defense Systems
|
|
$
|
9,174
|
|
|
$
|
8,939
|
|
|
$
|
11,462
|
|
|
$
|
11,495
|
|
Intelligence, Information and Services
|
|
2,849
|
|
|
2,902
|
|
|
5,510
|
|
|
5,877
|
|
||||
Missile Systems
|
|
7,302
|
|
|
6,992
|
|
|
9,191
|
|
|
9,269
|
|
||||
Space and Airborne Systems
|
|
4,398
|
|
|
4,259
|
|
|
6,322
|
|
|
6,930
|
|
||||
Total
|
|
$
|
23,723
|
|
|
$
|
23,092
|
|
|
$
|
32,485
|
|
|
$
|
33,571
|
|
|
|
Three Months Ended
|
||||||
Total Net Sales
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
1,433
|
|
|
$
|
1,481
|
|
Intelligence, Information and Services
|
|
1,393
|
|
|
1,450
|
|
||
Missile Systems
|
|
1,473
|
|
|
1,574
|
|
||
Space and Airborne Systems
|
|
1,358
|
|
|
1,398
|
|
||
Corporate and Eliminations
|
|
(369
|
)
|
|
(395
|
)
|
||
Total
|
|
$
|
5,288
|
|
|
$
|
5,508
|
|
|
Three Months Ended
|
||||||
EAC Adjustments
(in millions)
|
Mar 29, 2015
|
|
|
Mar 30, 2014
|
|
||
Gross favorable
|
$
|
181
|
|
|
$
|
251
|
|
Gross unfavorable
|
(60
|
)
|
|
(129
|
)
|
||
Total net EAC adjustments
|
$
|
121
|
|
|
$
|
122
|
|
|
|
Three Months Ended
|
||||||
Operating Income
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Integrated Defense Systems
|
|
$
|
195
|
|
|
$
|
226
|
|
Intelligence, Information and Services
|
|
285
|
|
|
125
|
|
||
Missile Systems
|
|
207
|
|
|
208
|
|
||
Space and Airborne Systems
|
|
173
|
|
|
190
|
|
||
FAS/CAS Adjustment
|
|
49
|
|
|
87
|
|
||
Corporate and Eliminations
|
|
(69
|
)
|
|
(48
|
)
|
||
Total
|
|
$
|
840
|
|
|
$
|
788
|
|
Integrated Defense Systems
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Total Net Sales
|
|
$
|
1,433
|
|
|
$
|
1,481
|
|
|
(3.2
|
)%
|
Total Operating Expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
492
|
|
|
548
|
|
|
(10.2
|
)%
|
||
Cost of sales—materials and subcontractors
|
|
536
|
|
|
466
|
|
|
15.0
|
%
|
||
Other cost of sales and other operating expenses
|
|
210
|
|
|
241
|
|
|
(12.9
|
)%
|
||
Total Operating Expenses
|
|
1,238
|
|
|
1,255
|
|
|
(1.4
|
)%
|
||
Operating Income
|
|
$
|
195
|
|
|
$
|
226
|
|
|
(13.7
|
)%
|
Operating Margin
|
|
13.6
|
%
|
|
15.3
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Mar 29, 2015 Versus Three Months Ended Mar 30, 2014
|
|||||||||
Volume
|
|
|
|
$
|
(3
|
)
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
14
|
|
|
|
||||
Mix and other performance
|
|
|
|
(42
|
)
|
|
|
||||
Total Change in Operating Income
|
|
|
|
$
|
(31
|
)
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Bookings
|
|
$
|
1,483
|
|
|
$
|
1,180
|
|
|
25.7
|
%
|
Intelligence, Information and Services
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Total Net Sales
|
|
$
|
1,393
|
|
|
$
|
1,450
|
|
|
(3.9
|
)%
|
Total Operating Expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
572
|
|
|
557
|
|
|
2.7
|
%
|
||
Cost of sales—materials and subcontractors
|
|
538
|
|
|
584
|
|
|
(7.9
|
)%
|
||
Other cost of sales and other operating expenses
|
|
(2
|
)
|
|
184
|
|
|
(101.1
|
)%
|
||
Total Operating Expenses
|
|
1,108
|
|
|
1,325
|
|
|
(16.4
|
)%
|
||
Operating Income
|
|
$
|
285
|
|
|
$
|
125
|
|
|
128.0
|
%
|
Operating Margin
|
|
20.5
|
%
|
|
8.6
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Mar 29, 2015 Versus Three Months Ended Mar 30, 2014
|
|||||||||
Volume
|
|
|
|
$
|
(1
|
)
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
(1
|
)
|
|
|
||||
Mix and other performance
|
|
|
|
162
|
|
|
|
||||
Total Change in Operating Income
|
|
|
|
$
|
160
|
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Bookings
|
|
$
|
952
|
|
|
$
|
1,011
|
|
|
(5.8
|
)%
|
Missile Systems
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Total Net Sales
|
|
$
|
1,473
|
|
|
$
|
1,574
|
|
|
(6.4
|
)%
|
Total Operating Expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
480
|
|
|
497
|
|
|
(3.4
|
)%
|
||
Cost of sales—materials and subcontractors
|
|
627
|
|
|
656
|
|
|
(4.4
|
)%
|
||
Other cost of sales and other operating expenses
|
|
159
|
|
|
213
|
|
|
(25.4
|
)%
|
||
Total Operating Expenses
|
|
1,266
|
|
|
1,366
|
|
|
(7.3
|
)%
|
||
Operating Income
|
|
$
|
207
|
|
|
$
|
208
|
|
|
(0.5
|
)%
|
Operating Margin
|
|
14.1
|
%
|
|
13.2
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Mar 29, 2015 Versus Three Months Ended Mar 30, 2014
|
|||||||||
Volume
|
|
|
|
$
|
(13
|
)
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
4
|
|
|
|
||||
Mix and other performance
|
|
|
|
8
|
|
|
|
||||
Total Change in Operating Income
|
|
|
|
$
|
(1
|
)
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Bookings
|
|
$
|
1,405
|
|
|
$
|
1,083
|
|
|
29.7
|
%
|
Space and Airborne Systems
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Total Net Sales
|
|
$
|
1,358
|
|
|
$
|
1,398
|
|
|
(2.9
|
)%
|
Total Operating Expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
545
|
|
|
548
|
|
|
(0.5
|
)%
|
||
Cost of sales—materials and subcontractors
|
|
427
|
|
|
463
|
|
|
(7.8
|
)%
|
||
Other cost of sales and other operating expenses
|
|
213
|
|
|
197
|
|
|
8.1
|
%
|
||
Total Operating Expenses
|
|
1,185
|
|
|
1,208
|
|
|
(1.9
|
)%
|
||
Operating Income
|
|
$
|
173
|
|
|
$
|
190
|
|
|
(8.9
|
)%
|
Operating Margin
|
|
12.7
|
%
|
|
13.6
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Mar 29, 2015 Versus Three Months Ended Mar 30, 2014
|
|||||||||
Volume
|
|
|
|
$
|
(4
|
)
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
(18
|
)
|
|
|
||||
Mix and other performance
|
|
|
|
5
|
|
|
|
||||
Total Change in Operating Income
|
|
|
|
$
|
(17
|
)
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
% Change
|
|||||
Bookings
|
|
$
|
631
|
|
|
$
|
1,019
|
|
|
(38.1
|
)%
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
FAS/CAS Pension Adjustment
|
|
$
|
48
|
|
|
$
|
86
|
|
FAS/CAS PRB Adjustment
|
|
1
|
|
|
1
|
|
||
FAS/CAS Adjustment
|
|
$
|
49
|
|
|
$
|
87
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
FAS (expense)
|
|
$
|
(291
|
)
|
|
$
|
(221
|
)
|
CAS expense
|
|
339
|
|
|
307
|
|
||
FAS/CAS Pension Adjustment
|
|
$
|
48
|
|
|
$
|
86
|
|
|
|
Three Months Ended
|
||||||
Total Net Sales
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Intersegment sales eliminations
|
|
$
|
369
|
|
|
$
|
395
|
|
Corporate
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
369
|
|
|
$
|
395
|
|
|
|
Three Months Ended
|
||||||
Operating Income
(in millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Intersegment profit eliminations
|
|
$
|
(35
|
)
|
|
$
|
(39
|
)
|
Corporate
|
|
(34
|
)
|
|
(9
|
)
|
||
Total
|
|
$
|
(69
|
)
|
|
$
|
(48
|
)
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Cash and cash equivalents
|
|
$
|
2,906
|
|
|
$
|
3,222
|
|
Short-term investments
|
|
1,234
|
|
|
1,497
|
|
||
Working capital
|
|
4,606
|
|
|
4,362
|
|
||
Amount available under credit facilities
|
|
1,398
|
|
|
1,398
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Net cash provided by (used in) operating activities from continuing operations
|
|
$
|
55
|
|
|
$
|
659
|
|
Net cash provided by (used in) operating activities
|
|
56
|
|
|
671
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Required pension contributions
|
|
$
|
22
|
|
|
$
|
39
|
|
Other postretirement benefit contributions
|
|
5
|
|
|
4
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
|
|||
Net cash provided by (used in) investing activities
|
|
$
|
136
|
|
|
$
|
(539
|
)
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Additions to property, plant and equipment
|
|
$
|
55
|
|
|
$
|
39
|
|
Additions to capitalized internal use software
|
|
13
|
|
|
12
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Purchases of short-term investments
|
|
$
|
(148
|
)
|
|
$
|
(1,345
|
)
|
Sales of short-term investments
|
|
135
|
|
|
457
|
|
||
Maturities of short-term investments
|
|
250
|
|
|
400
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Net cash provided by (used in) financing activities
|
|
$
|
(508
|
)
|
|
$
|
(392
|
)
|
|
|
Three Months Ended
|
||||||||||
(In millions)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||||||
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||
Shares repurchased under our share repurchase programs
|
|
$
|
300
|
|
2.8
|
|
|
$
|
200
|
|
2.1
|
|
Shares repurchased to satisfy tax withholding obligations
|
|
40
|
|
0.4
|
|
|
30
|
|
0.2
|
|
||
Total share repurchases
|
|
$
|
340
|
|
3.2
|
|
|
$
|
230
|
|
2.3
|
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Mar 29, 2015
|
|
Mar 30, 2014
|
||||
Cash dividends declared per share
|
|
$
|
0.670
|
|
|
$
|
0.605
|
|
Total dividends paid
|
|
186
|
|
|
174
|
|
|
|
Short-Term
|
|
Long-Term Senior Debt
|
|
|
||
Rating Agency
|
|
Debt Rating
|
|
Rating
|
|
Outlook
|
|
Date of Last Action
|
Fitch
|
|
F2
|
|
A -
|
|
Stable
|
|
September 2008
|
Moody’s
|
|
P-2
|
|
A3
|
|
Stable
|
|
October 2011
|
S&P
|
|
A-1
|
|
A
|
|
Stable
|
|
May 2014
|
(In millions, except percentages)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Total remediation costs—undiscounted
|
|
$
|
204
|
|
|
$
|
202
|
|
Weighted average discount rate
|
|
5.5
|
%
|
|
5.5
|
%
|
||
Total remediation costs—discounted
|
|
$
|
139
|
|
|
$
|
131
|
|
Recoverable portion
|
|
85
|
|
|
80
|
|
(In millions)
|
|
Mar 29, 2015
|
|
Dec 31, 2014
|
||||
Guarantees
|
|
$
|
303
|
|
|
$
|
266
|
|
Letters of credit
|
|
1,823
|
|
|
1,938
|
|
||
Surety bonds
|
|
298
|
|
|
298
|
|
As of March 29, 2015
Principal Payments and Interest Rate Detail by Contractual Maturity Dates
(In millions, except percentages)
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-Term Debt
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
Thereafter
|
|
|
Total
|
|
Fair Value
|
||||||||||
Fixed-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
—
|
|
|
$
|
4,792
|
|
|
$
|
5,383
|
|
|
$
|
6,040
|
|
Average interest rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.549
|
%
|
|
—
|
|
|
4.017
|
%
|
|
4.295
|
%
|
|
|
As of December 31, 2014
Principal Payments and Interest Rate Detail by Contractual Maturity Dates
(In millions, except percentages)
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-Term Debt
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
Thereafter
|
|
|
Total
|
|
Fair Value
|
||||||||||
Fixed-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
—
|
|
|
$
|
4,792
|
|
|
$
|
5,383
|
|
|
$
|
5,936
|
|
Average interest rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.549
|
%
|
|
—
|
|
|
4.017
|
%
|
|
4.295
|
%
|
|
|
Period
|
Total Number of
Shares
Purchased
(1)
|
|
|
Average
Price Paid
per Share
|
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
|
|
|
Approximate Dollar
Value (in billions)
of Shares that
May Yet Be Purchased
Under the Plan
(2)
|
|
||
January (January 1, 2015 - January 25, 2015)
|
655
|
|
|
$
|
107.40
|
|
|
—
|
|
|
$
|
1.5
|
|
February (January 26, 2015 - February 22, 2015)
|
162
|
|
|
106.50
|
|
|
—
|
|
|
1.5
|
|
||
March (February 23, 2015 - March 29, 2015)
|
2,779,604
|
|
|
108.00
|
|
|
2,777,949
|
|
|
1.2
|
|
||
Total
|
2,780,421
|
|
|
$
|
108.00
|
|
|
2,777,949
|
|
|
|
(1)
|
Includes shares purchased related to activity under our stock plans. Such activity during the
first quarter of 2015
includes the surrender by employees of
2,472
shares to satisfy income tax withholding obligations in connection with the vesting of restricted stock issued to employees.
|
(2)
|
In November 2013, our Board of Directors authorized the repurchase of up to
$2.0 billion
of our outstanding common stock. Share repurchases will take place from time to time at management’s discretion depending on market conditions.
|
10.1
|
|
Agreement dated January 15, 2015 by and between Raytheon Company and Jay B. Stephens*
|
|
|
|
15
|
|
PricewaterhouseCoopers LLP Awareness Letter.*
|
|
|
|
31.1
|
|
Certification of Thomas A. Kennedy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
31.2
|
|
Certification of Anthony F. O'Brien pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
32.1
|
|
Certification of Thomas A. Kennedy pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
|
|
|
32.2
|
|
Certification of Anthony F. O'Brien pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
|
|
|
101
|
|
The following materials from Raytheon Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.*
|
*
|
filed electronically herewith
|
**
|
furnished and not filed herewith
|
RAYTHEON COMPANY
|
||
|
|
|
By:
|
/s/ Michael J. Wood
|
|
|
Michael J. Wood
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
Principal Accounting Officer
|
Raytheon
|
|
|
Thomas A. Kennedy
|
|
Raytheon Company
|
|
|
Chairman and CEO
|
|
870 Winter Street
|
|
|
|
|
781.522.6400 business
|
|
Waltham, Massachusetts
|
|
|
|
781.522.6401 fax
|
|
02451 USA
|
|
|
|
tkennedy1@raytheon.com
|
|
|
2.
|
Results Based Incentive ("RBI") Bonuses
: You will receive an RBI payment for 2014 of
|
3.
|
Restricted Stock Awards
: You will be granted Restricted Stock Units with a value of
|
7.
|
Paid Time Off
: You will be paid any accrued but unused PTO as of your separation date.
|
9.
|
General Release
: You agree to execute the General Release attached hereto
.
|
1.
|
Award of Units
|
Total Number of Restricted Units (the "Award"):
16,527
|
Vesting Date/ # Units
|
|||
Vesting Schedule:
(Each period from the Award Date until the Vesting Date is a "Restriction Period".)
|
l
|
June 30, 2016
|
8,264
|
|
l
|
June 30, 2017
|
8,263
|
2.
|
Acceptance of Award
|
3.
|
Vesting of Units on Continued Service
|
4.
|
Effect of Termination of Employment
|
5.
|
Effect of Death, Medical Leave of Absence, Disability or Change in Control.
|
a)
|
immediately upon your death;
|
b)
|
in accordance with the Vesting Schedule in the event of (i) a Medical Leave of Absence of at least one year or (ii) Disability; or
|
c)
|
immediately upon a Change in Control.
|
6.
|
Payment; Dividend Equivalents
|
7.
|
Post-Employment Conduct
|
8.
|
Other Provisions
|
A.
|
No Guaranty of Future Awards.
This Award does not guarantee you the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.
|
B.
|
No Rights as Shareholder
. You shall not be considered a shareholder of the Company with respect to the Units until Shares are issued to you in payment of the Units. Therefore, you have no right to vote the Units or to receive dividends with respect to such Units except as provided in Section 6 above.
|
C.
|
No Rights to Continued Employment; Recipient Obligations
. This Award shall not be deemed to create a contract or other promise of continued employment with the Company or an Affiliate and shall not in any way prohibit or restrict the ability of the Company or an Affiliate to terminate your employment at any time for any reason. This Award Agreement provides for certain obligations on your part following the cessation of your employment with the Company or an Affiliate and shall not, by implication or otherwise, affect in any way your obligations to the Company or an Affiliate during the term of your employment by the Company or an Affiliate, whether pursuant to written agreements between the Company and you, the provisions of applicable Company policies that may be adopted from time to time or applicable law or regulation.
|
D.
|
Restrictions on Transfer of Units
. Until the vesting of, and lapse of the restrictions applicable to, any Units and the delivery of Shares in payment therefor, Units may not be sold, transferred, pledged, exchanged, hypothecated or disposed of by you and shall not be subject to execution, attachment or similar process.
|
E.
|
Taxes
. Taxes may be assessed and/or withheld as required by law at applicable United States federal, state and/or other tax rates (under the laws of the jurisdictions in which you reside or that may otherwise be applicable to you) with respect to Units, issuance of Shares and cash in lieu of dividends. The Company will accelerate the vesting and payment of Units to pay your Federal Insurance Contributions Act (FICA) tax on Units, the income tax withholding that results from payment of your FICA tax, and your additional FICA
|
F.
|
Clawback
. If you are an elected officer, in addition to any other remedies available to the Company (but subject to applicable law), if the Board determines that it is appropriate, the Company may recover (in whole or in part) any payment made pursuant to this Award where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a restatement of Company financial statements filed with the Securities and Exchange Commission; (2) the Board determines that you engaged in knowing or intentional fraudulent or illegal conduct that caused or substantially caused the need for the restatement; and (3) a lower payment would have been made to you pursuant to the Award based upon the restated financial results. In any such instance, the Company will, to the extent practicable, seek to recover from you the amount by which the payment pursuant to the Award for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Company's right of recovery applies to both the vested and unvested portion of the Award.
|
G.
|
Compliance with Section 409A of the Code
. Notwithstanding anything in this Agreement to the contrary, to the extent that this Agreement constitutes a nonqualified deferred compensation plan to which Code Section 409A applies, the administration of this Award (including time and manner of payments under it) shall comply with Section 409A.
|
H.
|
Plan
. All terms and conditions of the Plan are incorporated herein by reference and constitute an integral part hereof. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.
|
I.
|
Notices
. Notices required or permitted hereunder shall be in writing and shall be delivered personally or by mail, postage prepaid, addressed to Raytheon Company, 870 Winter Street, Waltham, Massachusetts 02451, Attention: Senior Vice President, Human Resources, and to you at your address as shown on the Company's payroll records.
|
J.
|
Entire Agreement; Successors and Assigns
. The Plan and this Award Agreement constitute the entire agreement governing the terms of the Award to you. The Award Agreement shall inure to the benefit of the Company's successors and assigns and may be assigned by the Company without your consent.
|
K.
|
Governing Law
. This Award Agreement shall be governed by the law of the Commonwealth of Massachusetts, without regard to its provisions governing conflicts of law.
|
|
|
Thomas A. Kennedy
|
|
Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Date
|
|
|
|
|
|
Print Name
|
|
Employee ID
|
|
2.
|
Restrictions
.
|
4.
|
Result of Breach of Section 2 or Section 3
. In the event that you breach any of the covenants or agreements in Section 2 or Section 3 hereof, to the extent your Units have not fully vested, all of your remaining rights, title or interest in the Award and any dividend equivalents with respect thereto, shall cease.
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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/ Thomas A. Kennedy
|
Thomas A. Kennedy
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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/ Anthony F. O'Brien
|
Anthony F. O'Brien
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/ Thomas A. Kennedy
|
Thomas A. Kennedy
Chairman and Chief Executive Officer
|
April 23, 2015
|
(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/ Anthony F. O'Brien
|
Anthony F. O'Brien
Vice President and Chief Financial Officer
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April 23, 2015
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