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 April 3, 2016
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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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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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Apr 3, 2016
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Dec 31, 2015
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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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1,934
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$
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2,328
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Short-term investments
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711
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872
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Contracts in process, net
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5,882
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5,564
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Inventories
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637
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635
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Prepaid expenses and other current assets
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195
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413
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Total current assets
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9,359
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9,812
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Property, plant and equipment, net
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2,018
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2,005
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Goodwill
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14,791
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14,731
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Other assets, net
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2,661
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2,733
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Total assets
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$
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28,829
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$
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29,281
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Liabilities, Redeemable Noncontrolling Interest 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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2,136
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$
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2,193
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Accounts payable
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1,304
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1,402
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Accrued employee compensation
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803
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1,154
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Other current liabilities
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1,506
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1,377
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Total current liabilities
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5,749
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6,126
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Accrued retiree benefits and other long-term liabilities
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7,108
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7,140
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Long-term debt
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5,332
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5,330
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Commitments and contingencies (Note 9)
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Redeemable noncontrolling interest (Note 7)
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330
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355
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Equity
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Raytheon Company stockholders’ equity
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Common stock, par value, $0.01 per share, 1,450 shares authorized, 297 and 299 shares outstanding at April 3, 2016 and December 31, 2015, respectively
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3
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3
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Additional paid-in capital
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30
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398
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Accumulated other comprehensive loss
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(7,050
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)
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(7,176
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)
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Retained earnings
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17,141
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16,903
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Total Raytheon Company stockholders’ equity
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10,124
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10,128
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Noncontrolling interests in subsidiaries
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186
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202
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Total equity
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10,310
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10,330
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Total liabilities, redeemable noncontrolling interest and equity
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$
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28,829
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$
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29,281
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Three Months Ended
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(In millions, except per share amounts)
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Apr 3, 2016
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Mar 29, 2015
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Net sales
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Products
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$
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4,789
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$
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4,387
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Services
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974
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901
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Total net sales
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5,763
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5,288
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Operating expenses
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Cost of sales—products
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3,598
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3,096
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Cost of sales—services
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802
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737
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General and administrative expenses
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751
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615
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Total operating expenses
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5,151
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4,448
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Operating income
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612
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840
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Non-operating (income) expense, net
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Interest expense
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58
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58
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Interest income
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(4
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(4
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Other (income) expense, net
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(2
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(2
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Total non-operating (income) expense, net
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52
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52
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Income from continuing operations before taxes
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560
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788
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Federal and foreign income taxes
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156
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234
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Income from continuing operations
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404
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554
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Income (loss) from discontinued operations, net of tax
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1
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—
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Net income
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405
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554
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Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
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(24
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3
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Net income attributable to Raytheon Company
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$
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429
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$
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551
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Basic earnings per share attributable to Raytheon Company common stockholders:
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Income from continuing operations
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$
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1.43
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$
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1.79
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Income (loss) from discontinued operations, net of tax
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—
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—
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Net income
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1.43
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1.79
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Diluted earnings per share attributable to Raytheon Company common stockholders:
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Income from continuing operations
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$
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1.43
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$
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1.78
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Income (loss) from discontinued operations, net of tax
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—
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—
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Net income
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1.43
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1.79
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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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428
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$
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551
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Income (loss) from discontinued operations, net of tax
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1
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—
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Net income
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$
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429
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$
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551
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Three Months Ended
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(In millions)
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Apr 3, 2016
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Mar 29, 2015
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Net income
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$
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405
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$
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554
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Other comprehensive income (loss), before tax:
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Pension and other postretirement benefit plans, net:
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Amortization of prior service cost included in net periodic cost
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1
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2
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Amortization of net actuarial loss included in net income
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246
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283
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Pension and other postretirement benefit plans, net
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247
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285
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Foreign exchange translation
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(33
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)
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(69
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)
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Cash flow hedges
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4
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(7
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)
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Unrealized gains (losses) on investments and other, net
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2
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(6
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)
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Other comprehensive income (loss), before tax
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220
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203
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Income tax benefit (expense) related to items of other comprehensive income (loss)
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(94
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)
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(98
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)
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Other comprehensive income (loss), net of tax
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126
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105
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Total comprehensive income
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531
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659
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Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries
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(24
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3
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Comprehensive income attributable to Raytheon Company
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$
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555
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$
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656
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Three Months Ended April 3, 2016 and
March 29, 2015 (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
(1)
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Total equity
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||||||||
Balance at December 31, 2015
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$
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3
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$
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398
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$
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(7,176
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)
|
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$
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16,903
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$
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10,128
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$
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202
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$
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10,330
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Net income
|
|
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429
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429
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(17
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)
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412
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|
|||||||||||
Other comprehensive income (loss), net of tax
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|
|
|
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126
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|
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|
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126
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126
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||||||||||||
Adjustment of redeemable noncontrolling interest to carrying value
|
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29
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|
29
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29
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||||||||||||
Distributions and other activity related to noncontrolling interests
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—
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1
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1
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|||||||||||
Dividends declared
|
|
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2
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|
|
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(220
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)
|
|
(218
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)
|
|
|
|
(218
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)
|
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Common stock plans activity
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|
|
|
64
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|
|
|
|
|
|
64
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|
|
|
|
64
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|
||||||||||||
Share repurchases
|
|
|
|
(434
|
)
|
|
|
|
|
|
(434
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)
|
|
|
|
(434
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)
|
||||||||||||
Balance at April 3, 2016
|
|
$
|
3
|
|
|
$
|
30
|
|
|
$
|
(7,050
|
)
|
|
$
|
17,141
|
|
|
$
|
10,124
|
|
|
$
|
186
|
|
|
$
|
10,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||||||||||||
Balance at December 31, 2014
|
|
$
|
3
|
|
|
$
|
1,309
|
|
|
$
|
(7,458
|
)
|
—
|
|
$
|
15,671
|
|
|
$
|
9,525
|
|
|
$
|
196
|
|
|
$
|
9,721
|
|
Net income
|
|
|
|
|
|
|
|
551
|
|
|
551
|
|
|
3
|
|
|
554
|
|
|||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
105
|
|
|
|
|
105
|
|
|
|
|
105
|
|
||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(205
|
)
|
|
(205
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)
|
|
|
|
(205
|
)
|
||||||||||||
Common stock plans activity
|
|
|
|
71
|
|
|
|
|
|
|
71
|
|
|
|
|
71
|
|
||||||||||||
Share repurchases
|
|
|
|
(340
|
)
|
|
|
|
|
|
(340
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)
|
|
|
|
(340
|
)
|
||||||||||||
Balance at March 29, 2015
|
|
$
|
3
|
|
|
$
|
1,040
|
|
|
$
|
(7,353
|
)
|
|
$
|
16,017
|
|
|
$
|
9,707
|
|
|
$
|
199
|
|
|
$
|
9,906
|
|
(1)
|
Excludes redeemable noncontrolling interest which is not considered equity. See "Note 7: Forcepoint Joint Venture" for additional information.
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
405
|
|
|
$
|
554
|
|
(Income) loss from discontinued operations, net of tax
|
|
(1
|
)
|
|
—
|
|
||
Income from continuing operations
|
|
404
|
|
|
554
|
|
||
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
|
|
124
|
|
|
107
|
|
||
Stock-based compensation
|
|
54
|
|
|
51
|
|
||
Deferred income taxes
|
|
(38
|
)
|
|
(94
|
)
|
||
Tax benefit from stock-based awards
|
|
—
|
|
|
(18
|
)
|
||
Changes in assets and liabilities
|
|
|
|
|
||||
Contracts in process, net and advance payments and billings in excess of costs incurred
|
|
(362
|
)
|
|
(586
|
)
|
||
Inventories
|
|
—
|
|
|
(93
|
)
|
||
Prepaid expenses and other current assets
|
|
149
|
|
|
(190
|
)
|
||
Income taxes receivable/payable
|
|
189
|
|
|
326
|
|
||
Accounts payable
|
|
(43
|
)
|
|
(112
|
)
|
||
Accrued employee compensation
|
|
(351
|
)
|
|
(157
|
)
|
||
Other current liabilities
|
|
(37
|
)
|
|
8
|
|
||
Accrued retiree benefits
|
|
221
|
|
|
267
|
|
||
Other, net
|
|
15
|
|
|
(8
|
)
|
||
Net cash provided by (used in) operating activities from continuing operations
|
|
325
|
|
|
55
|
|
||
Net cash provided by (used in) operating activities from discontinued operations
|
|
1
|
|
|
1
|
|
||
Net cash provided by (used in) operating activities
|
|
326
|
|
|
56
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Additions to property, plant and equipment
|
|
(150
|
)
|
|
(55
|
)
|
||
Proceeds from sales of property, plant and equipment
|
|
1
|
|
|
4
|
|
||
Additions to capitalized internal use software
|
|
(12
|
)
|
|
(13
|
)
|
||
Purchases of short-term investments
|
|
—
|
|
|
(148
|
)
|
||
Sales of short-term investments
|
|
—
|
|
|
135
|
|
||
Maturities of short-term investments
|
|
127
|
|
|
250
|
|
||
Payments for purchases of acquired companies, net of cash received
|
|
(57
|
)
|
|
(6
|
)
|
||
Other
|
|
—
|
|
|
(31
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(91
|
)
|
|
136
|
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Dividends paid
|
|
(201
|
)
|
|
(186
|
)
|
||
Repurchases of common stock under share repurchase programs
|
|
(400
|
)
|
|
(300
|
)
|
||
Repurchases of common stock to satisfy tax withholding obligations
|
|
(34
|
)
|
|
(40
|
)
|
||
Contribution from noncontrolling interests
|
|
11
|
|
|
—
|
|
||
Tax benefit from stock-based awards
|
|
—
|
|
|
18
|
|
||
Other
|
|
(5
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
|
(629
|
)
|
|
(508
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(394
|
)
|
|
(316
|
)
|
||
Cash and cash equivalents at beginning of the year
|
|
2,328
|
|
|
3,222
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,934
|
|
|
$
|
2,906
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Operating income
|
$
|
21
|
|
|
$
|
121
|
|
Income from continuing operations attributable to Raytheon Company
|
25
|
|
|
79
|
|
||
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company
|
$
|
0.08
|
|
|
$
|
0.26
|
|
|
|
Three Months Ended
|
||||||
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
||||
Distributed earnings
|
|
$
|
0.73
|
|
|
$
|
0.67
|
|
Undistributed earnings
|
|
0.70
|
|
|
1.12
|
|
||
Total
|
|
$
|
1.43
|
|
|
$
|
1.79
|
|
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
||||
Distributed earnings
|
|
$
|
0.73
|
|
|
$
|
0.67
|
|
Undistributed earnings
|
|
0.70
|
|
|
1.11
|
|
||
Total
|
|
$
|
1.43
|
|
|
$
|
1.78
|
|
|
Three Months Ended
|
||||||
(In millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Income from continuing operations attributable to participating securities
|
$
|
7
|
|
|
$
|
11
|
|
Income (loss) from discontinued operations, net of tax attributable to participating securities
(1)
|
—
|
|
|
—
|
|
||
Net income attributable to participating securities
|
$
|
7
|
|
|
$
|
11
|
|
(1)
|
Income (loss) from discontinued operations, net of tax attributable to participating securities was income of less than $1 million for the
first quarters of 2016 and 2015
.
|
|
Three Months Ended
|
||||
(In millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||
Shares for basic EPS
(1)
|
299.2
|
|
|
308.2
|
|
Dilutive effect of LTPP
|
0.4
|
|
|
0.4
|
|
Shares for diluted EPS
|
299.6
|
|
|
308.6
|
|
(1)
|
Includes
4.8 million
and
5.7 million
participating securities for the
three
months ended
April 3, 2016
and
March 29, 2015
, respectively.
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Materials and purchased parts
|
|
$
|
68
|
|
|
$
|
69
|
|
Work in process
|
|
552
|
|
|
551
|
|
||
Finished goods
|
|
17
|
|
|
15
|
|
||
Total
|
|
$
|
637
|
|
|
$
|
635
|
|
(In millions)
|
|
Integrated
Defense
Systems
(1)
|
|
|
Intelligence, Information and Services
(1)
|
|
|
Missile
Systems |
|
|
Space and
Airborne Systems |
|
|
Forcepoint
(3)
|
|
|
Total
|
|
||||||
Balance at December 31, 2015
|
|
$
|
1,704
|
|
|
$
|
2,958
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
1,809
|
|
|
$
|
14,731
|
|
Acquisitions
(2)
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
60
|
|
||||||
Balance at April 3, 2016
|
|
$
|
1,704
|
|
|
$
|
2,966
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
1,861
|
|
|
$
|
14,791
|
|
(1)
|
In connection with the January 1, 2016 reorganization of IDS and IIS, goodwill of
$90 million
was allocated to the IIS segment on a relative fair value basis and is reflected in the revised balances at December 31, 2015.
|
(2)
|
In addition to the acquisition of the Stonesoft NGFW business during the
first quarter of 2016
, we finalized the purchase price allocation for Raytheon Foreground Security at IIS, which resulted in an adjustment to goodwill of
$8 million
.
|
(3)
|
At
April 3, 2016
, Forcepoint's fair value is estimated to exceed its net book value by approximately
$100 million
. As discussed in "Note 7: Forcepoint Joint Venture", we are required to determine Forcepoint's fair value on a quarterly basis due to the accounting related to the redeemable noncontrolling interest.
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Beginning balance
|
|
$
|
355
|
|
|
$
|
—
|
|
Net income (loss)
|
|
(7
|
)
|
|
—
|
|
||
Other comprehensive income (loss), net of tax
(1)
|
|
—
|
|
|
—
|
|
||
Contribution from noncontrolling interests
|
|
11
|
|
|
—
|
|
||
Adjustment of noncontrolling interest to carrying value
|
|
(29
|
)
|
|
—
|
|
||
Ending balance
|
|
$
|
330
|
|
|
$
|
—
|
|
(1)
|
Other comprehensive income (loss), net of tax, was a loss of less than
$1 million
for the
three months ended April 3, 2016
.
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Carrying value of long-term debt
|
|
$
|
5,332
|
|
|
$
|
5,330
|
|
Fair value of long-term debt
|
|
6,046
|
|
|
5,826
|
|
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Total remediation costs—undiscounted
|
|
$
|
225
|
|
|
$
|
224
|
|
Weighted average discount rate
|
|
5.2
|
%
|
|
5.2
|
%
|
||
Total remediation costs—discounted
|
|
$
|
157
|
|
|
$
|
149
|
|
Recoverable portion
|
|
98
|
|
|
94
|
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Guarantees
|
|
$
|
215
|
|
|
$
|
213
|
|
Letters of credit
|
|
2,591
|
|
|
2,242
|
|
||
Surety bonds
|
|
255
|
|
|
264
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Beginning balance
|
|
$
|
24
|
|
|
$
|
32
|
|
Provisions for warranties
|
|
3
|
|
|
2
|
|
||
Warranty services provided
|
|
(2
|
)
|
|
(1
|
)
|
||
Ending balance
|
|
$
|
25
|
|
|
$
|
33
|
|
|
|
Three Months Ended
|
||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||
Beginning balance
|
|
299.0
|
|
|
307.3
|
|
Stock plans activity
|
|
1.4
|
|
|
1.8
|
|
Share repurchases
|
|
(3.5
|
)
|
|
(3.2
|
)
|
Ending balance
|
|
296.9
|
|
|
305.9
|
|
|
|
Three Months Ended
|
||||||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||||||
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||
Shares repurchased under our share repurchase programs
|
|
$
|
400
|
|
3.2
|
|
|
$
|
300
|
|
2.8
|
|
Shares repurchased to satisfy tax withholding obligations
|
|
34
|
|
0.3
|
|
|
40
|
|
0.4
|
|
||
Total share repurchases
|
|
$
|
434
|
|
3.5
|
|
|
$
|
340
|
|
3.2
|
|
|
Pension and PRB plans, net
(1)
|
|
|
Foreign exchange translation
|
|
|
Cash flow hedges
(2)
|
|
|
Unrealized gains (losses) on investments and other, net
(3)
|
|
|
Total
|
|
|||||
|
|
|
|
|
|||||||||||||||
(In millions)
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2015
|
$
|
(7,088
|
)
|
|
$
|
(60
|
)
|
|
$
|
(16
|
)
|
|
$
|
(12
|
)
|
|
$
|
(7,176
|
)
|
Before tax amount
|
247
|
|
|
(33
|
)
|
|
4
|
|
|
2
|
|
|
220
|
|
|||||
Tax (expense) or benefit
|
(91
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(94
|
)
|
|||||
Net of tax amount
|
156
|
|
|
(33
|
)
|
|
2
|
|
|
1
|
|
|
126
|
|
|||||
Balance at April 3, 2016
|
$
|
(6,932
|
)
|
|
$
|
(93
|
)
|
|
$
|
(14
|
)
|
|
$
|
(11
|
)
|
|
$
|
(7,050
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2014
|
$
|
(7,432
|
)
|
|
$
|
(3
|
)
|
|
$
|
(14
|
)
|
|
$
|
(9
|
)
|
|
$
|
(7,458
|
)
|
Before tax amount
|
285
|
|
|
(69
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|
203
|
|
|||||
Tax (expense) or benefit
|
(100
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(98
|
)
|
|||||
Net of tax amount
|
185
|
|
|
(69
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
105
|
|
|||||
Balance at March 29, 2015
|
$
|
(7,247
|
)
|
|
$
|
(72
|
)
|
|
$
|
(19
|
)
|
|
$
|
(15
|
)
|
|
$
|
(7,353
|
)
|
(1)
|
The pension and PRB plans, net, is shown net of tax benefits of
$3,733 million
and
$3,824 million
at
April 3, 2016
and
December 31, 2015
, respectively.
|
(2)
|
The cash flow hedges are shown net of tax benefits of
$8 million
and
$10 million
at
April 3, 2016
and
December 31, 2015
, respectively.
|
(3)
|
The unrealized gains (losses) on investments and other are shown net of tax benefits of
$3 million
and
$4 million
at
April 3, 2016
and
December 31, 2015
, respectively.
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Marketable securities held in trust
|
|
$
|
511
|
|
|
$
|
525
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Service cost
|
|
$
|
123
|
|
|
$
|
130
|
|
Interest cost
|
|
272
|
|
|
261
|
|
||
Expected return on plan assets
|
|
(379
|
)
|
|
(384
|
)
|
||
Amounts reflected in net funded status
|
|
16
|
|
|
7
|
|
||
Amortization of prior service cost included in net periodic pension expense
|
|
1
|
|
|
2
|
|
||
Recognized net actuarial loss
|
|
245
|
|
|
282
|
|
||
Loss due to curtailments/settlements
|
|
3
|
|
|
—
|
|
||
Amounts reclassified during the period
|
|
249
|
|
|
284
|
|
||
Net periodic pension expense (income)
|
|
$
|
265
|
|
|
$
|
291
|
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Long-term pension liabilities
|
|
$
|
6,452
|
|
|
$
|
6,474
|
|
Long-term PRB liabilities
|
|
351
|
|
|
352
|
|
||
Total long-term pension and PRB liabilities
|
|
$
|
6,803
|
|
|
$
|
6,826
|
|
|
Three Months Ended
|
||||||
(In millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Required pension contributions
|
$
|
43
|
|
|
$
|
22
|
|
PRB contributions
|
5
|
|
|
5
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Total Net Sales
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
1,558
|
|
|
$
|
1,417
|
|
|
$
|
1,565
|
|
|
$
|
1,307
|
|
|
$
|
5,847
|
|
|
$
|
5,600
|
|
Intelligence, Information and Services
|
1,537
|
|
|
1,519
|
|
|
1,594
|
|
|
1,461
|
|
|
6,111
|
|
|
6,222
|
|
||||||
Missile Systems
|
1,879
|
|
|
1,645
|
|
|
1,559
|
|
|
1,473
|
|
|
6,556
|
|
|
6,309
|
|
||||||
Space and Airborne Systems
|
1,576
|
|
|
1,446
|
|
|
1,416
|
|
|
1,358
|
|
|
5,796
|
|
|
6,075
|
|
||||||
Forcepoint
|
133
|
|
|
114
|
|
|
57
|
|
|
24
|
|
|
328
|
|
|
104
|
|
||||||
Eliminations
|
(331
|
)
|
|
(331
|
)
|
|
(333
|
)
|
|
(335
|
)
|
|
(1,330
|
)
|
|
(1,481
|
)
|
||||||
Total business segment sales
|
6,352
|
|
|
5,810
|
|
|
5,858
|
|
|
5,288
|
|
|
23,308
|
|
|
22,829
|
|
||||||
Acquisition Accounting Adjustments
(1)
|
(24
|
)
|
|
(27
|
)
|
|
(10
|
)
|
|
—
|
|
|
(61
|
)
|
|
(3
|
)
|
||||||
Total
|
$
|
6,328
|
|
|
$
|
5,783
|
|
|
$
|
5,848
|
|
|
$
|
5,288
|
|
|
$
|
23,247
|
|
|
$
|
22,826
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Intersegment Sales
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
64
|
|
|
$
|
96
|
|
Intelligence, Information and Services
|
153
|
|
|
162
|
|
|
159
|
|
|
150
|
|
|
624
|
|
|
686
|
|
||||||
Missile Systems
|
40
|
|
|
37
|
|
|
33
|
|
|
33
|
|
|
143
|
|
|
140
|
|
||||||
Space and Airborne Systems
|
119
|
|
|
115
|
|
|
119
|
|
|
131
|
|
|
484
|
|
|
548
|
|
||||||
Forcepoint
|
5
|
|
|
3
|
|
|
4
|
|
|
3
|
|
|
15
|
|
|
11
|
|
||||||
Total
|
$
|
331
|
|
|
$
|
331
|
|
|
$
|
333
|
|
|
$
|
335
|
|
|
$
|
1,330
|
|
|
$
|
1,481
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Operating Income
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
281
|
|
|
$
|
198
|
|
|
$
|
202
|
|
|
$
|
183
|
|
|
$
|
864
|
|
|
$
|
928
|
|
Intelligence, Information and Services
|
111
|
|
|
118
|
|
|
122
|
|
|
295
|
|
|
646
|
|
|
532
|
|
||||||
Missile Systems
|
258
|
|
|
219
|
|
|
184
|
|
|
207
|
|
|
868
|
|
|
801
|
|
||||||
Space and Airborne Systems
|
239
|
|
|
213
|
|
|
195
|
|
|
182
|
|
|
829
|
|
|
886
|
|
||||||
Forcepoint
|
11
|
|
|
20
|
|
|
(1
|
)
|
|
—
|
|
|
30
|
|
|
11
|
|
||||||
Eliminations
|
(29
|
)
|
|
(42
|
)
|
|
(36
|
)
|
|
(33
|
)
|
|
(140
|
)
|
|
(149
|
)
|
||||||
Total business segment operating income
|
871
|
|
|
726
|
|
|
666
|
|
|
834
|
|
|
3,097
|
|
|
3,009
|
|
||||||
Acquisition Accounting Adjustments
|
(59
|
)
|
|
(63
|
)
|
|
(32
|
)
|
|
(14
|
)
|
|
(168
|
)
|
|
(55
|
)
|
||||||
FAS/CAS Adjustment
|
44
|
|
|
43
|
|
|
49
|
|
|
49
|
|
|
185
|
|
|
286
|
|
||||||
Corporate
|
(28
|
)
|
|
(9
|
)
|
|
(35
|
)
|
|
(29
|
)
|
|
(101
|
)
|
|
(61
|
)
|
||||||
Total
|
$
|
828
|
|
|
$
|
697
|
|
|
$
|
648
|
|
|
$
|
840
|
|
|
$
|
3,013
|
|
|
$
|
3,179
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Intersegment Operating Income
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
7
|
|
Intelligence, Information and Services
|
13
|
|
|
26
|
|
|
15
|
|
|
14
|
|
|
68
|
|
|
67
|
|
||||||
Missile Systems
|
5
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
15
|
|
|
14
|
|
||||||
Space and Airborne Systems
|
11
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
47
|
|
|
52
|
|
||||||
Forcepoint
|
2
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
8
|
|
|
9
|
|
||||||
Total
|
$
|
29
|
|
|
$
|
42
|
|
|
$
|
36
|
|
|
$
|
33
|
|
|
$
|
140
|
|
|
$
|
149
|
|
|
Three Months Ended
|
||||||
Total Net Sales
(in millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
$
|
1,337
|
|
|
$
|
1,307
|
|
Intelligence, Information and Services
|
1,493
|
|
|
1,461
|
|
||
Missile Systems
|
1,720
|
|
|
1,473
|
|
||
Space and Airborne Systems
|
1,450
|
|
|
1,358
|
|
||
Forcepoint
|
136
|
|
|
24
|
|
||
Eliminations
|
(347
|
)
|
|
(335
|
)
|
||
Total business segment sales
|
5,789
|
|
|
5,288
|
|
||
Acquisition Accounting Adjustments
(1)
|
(26
|
)
|
|
—
|
|
||
Total
|
$
|
5,763
|
|
|
$
|
5,288
|
|
|
|
Three Months Ended
|
||||||
Intersegment Sales
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
17
|
|
|
$
|
18
|
|
Intelligence, Information and Services
|
|
167
|
|
|
150
|
|
||
Missile Systems
|
|
35
|
|
|
33
|
|
||
Space and Airborne Systems
|
|
125
|
|
|
131
|
|
||
Forcepoint
|
|
3
|
|
|
3
|
|
||
Total
|
|
$
|
347
|
|
|
$
|
335
|
|
|
|
Three Months Ended
|
||||||
Operating Income
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
147
|
|
|
$
|
183
|
|
Intelligence, Information and Services
|
|
100
|
|
|
295
|
|
||
Missile Systems
|
|
192
|
|
|
207
|
|
||
Space and Airborne Systems
|
|
173
|
|
|
182
|
|
||
Forcepoint
|
|
14
|
|
|
—
|
|
||
Eliminations
|
|
(33
|
)
|
|
(33
|
)
|
||
Total business segment operating income
|
|
593
|
|
|
834
|
|
||
Acquisition Accounting Adjustments
|
|
(58
|
)
|
|
(14
|
)
|
||
FAS/CAS Adjustment
|
|
105
|
|
|
49
|
|
||
Corporate
|
|
(28
|
)
|
|
(29
|
)
|
||
Total
|
|
$
|
612
|
|
|
$
|
840
|
|
|
|
Three Months Ended
|
||||||
Intersegment Operating Income
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
—
|
|
|
$
|
1
|
|
Intelligence, Information and Services
|
|
16
|
|
|
14
|
|
||
Missile Systems
|
|
3
|
|
|
4
|
|
||
Space and Airborne Systems
|
|
12
|
|
|
12
|
|
||
Forcepoint
|
|
2
|
|
|
2
|
|
||
Total
|
|
$
|
33
|
|
|
$
|
33
|
|
|
|
Three Months Ended
|
||||||
FAS/CAS Adjustment Income (Expense)
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
FAS/CAS Pension Adjustment
|
|
$
|
105
|
|
|
$
|
48
|
|
FAS/CAS PRB Adjustment
|
|
—
|
|
|
1
|
|
||
FAS/CAS Adjustment
|
|
$
|
105
|
|
|
$
|
49
|
|
Total Assets
(in millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Integrated Defense Systems
(1)
|
|
$
|
4,158
|
|
|
$
|
4,132
|
|
Intelligence, Information and Services
(1)
|
|
4,378
|
|
|
4,380
|
|
||
Missile Systems
(1)
|
|
6,776
|
|
|
6,561
|
|
||
Space and Airborne Systems
(1)
|
|
6,496
|
|
|
6,416
|
|
||
Forcepoint
(1)
|
|
2,501
|
|
|
2,486
|
|
||
Corporate
|
|
4,520
|
|
|
5,306
|
|
||
Total
|
|
$
|
28,829
|
|
|
$
|
29,281
|
|
(1)
|
Total assets includes intangible assets.
Related amortization expense is included in Acquisition Accounting Adjustments.
|
External Net Sales by Products and Services
(% of segment total external net sales)
|
|
|||||||||
|
IDS
|
|
IIS
|
|
MS
|
|
SAS
|
|
Forcepoint
|
|
Products
|
90
|
%
|
45
|
%
|
100
|
%
|
95
|
%
|
95
|
%
|
Services
|
10
|
%
|
55
|
%
|
—
|
%
|
5
|
%
|
5
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||||
Net sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
4,789
|
|
|
$
|
4,387
|
|
|
83.1
|
%
|
|
83.0
|
%
|
Services
|
974
|
|
|
901
|
|
|
16.9
|
%
|
|
17.0
|
%
|
||
Total net sales
|
$
|
5,763
|
|
|
$
|
5,288
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||||
Sales to the U.S. government
(1)
|
$
|
3,908
|
|
|
$
|
3,750
|
|
|
68
|
%
|
|
71
|
%
|
Sales to the U.S. Department of Defense
(1)
|
3,724
|
|
|
3,516
|
|
|
65
|
%
|
|
66
|
%
|
||
Total international sales
(2)
|
1,739
|
|
|
1,485
|
|
|
30
|
%
|
|
28
|
%
|
||
Foreign direct commercial sales
(1)
|
1,042
|
|
|
804
|
|
|
18
|
%
|
|
15
|
%
|
||
Foreign military sales through the U.S. government
|
697
|
|
|
681
|
|
|
12
|
%
|
|
13
|
%
|
(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)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||||
Cost of sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
3,598
|
|
|
$
|
3,096
|
|
|
62.4
|
%
|
|
58.5
|
%
|
Services
|
802
|
|
|
737
|
|
|
13.9
|
%
|
|
13.9
|
%
|
||
Total cost of sales
|
$
|
4,400
|
|
|
$
|
3,833
|
|
|
76.3
|
%
|
|
72.5
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||||
Administrative and selling expenses
|
$
|
552
|
|
|
$
|
473
|
|
|
9.6
|
%
|
|
8.9
|
%
|
Research and development expenses
|
199
|
|
|
142
|
|
|
3.5
|
%
|
|
2.7
|
%
|
||
Total general and administrative expenses
|
$
|
751
|
|
|
$
|
615
|
|
|
13.1
|
%
|
|
11.6
|
%
|
|
Three Months Ended
|
||||||
(In millions, except percentages)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Total operating expenses
|
$
|
5,151
|
|
|
$
|
4,448
|
|
% of Total Net Sales
|
89.4
|
%
|
|
84.1
|
%
|
|
Three Months Ended
|
||||||
(In millions, except percentages)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Operating income
|
$
|
612
|
|
|
$
|
840
|
|
% of Total Net Sales
|
10.6
|
%
|
|
15.9
|
%
|
|
Three Months Ended
|
||||||
(In millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Non-operating (income) expense, net
|
|
|
|
||||
Interest expense
|
$
|
58
|
|
|
$
|
58
|
|
Interest income
|
(4
|
)
|
|
(4
|
)
|
||
Other (income) expense, net
|
(2
|
)
|
|
(2
|
)
|
||
Total non-operating (income) expense, net
|
$
|
52
|
|
|
$
|
52
|
|
|
Three Months Ended
|
||||||
(In millions, except percentages)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Federal and foreign income taxes
|
$
|
156
|
|
|
$
|
234
|
|
Effective tax rate
|
27.9
|
%
|
|
29.7
|
%
|
|
Three Months Ended
|
||||||
(In millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Income from continuing operations
|
$
|
404
|
|
|
$
|
554
|
|
|
Three Months Ended
|
||||||
(In millions)
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Net income
|
$
|
405
|
|
|
$
|
554
|
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Income from continuing operations attributable to Raytheon Company
|
|
$
|
428
|
|
|
$
|
551
|
|
Diluted weighted-average shares outstanding
|
|
299.6
|
|
|
308.6
|
|
||
Diluted EPS from continuing operations attributable to Raytheon Company
|
|
$
|
1.43
|
|
|
$
|
1.78
|
|
|
|
Three Months Ended
|
||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||
Beginning balance
|
|
299.0
|
|
|
307.3
|
|
Stock plans activity
|
|
1.4
|
|
|
1.8
|
|
Share repurchases
|
|
(3.5
|
)
|
|
(3.2
|
)
|
Ending balance
|
|
296.9
|
|
|
305.9
|
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Net income attributable to Raytheon Company
|
|
$
|
429
|
|
|
$
|
551
|
|
Diluted weighted-average shares outstanding
|
|
299.6
|
|
|
308.6
|
|
||
Diluted EPS attributable to Raytheon Company
|
|
$
|
1.43
|
|
|
$
|
1.79
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Total Net Sales
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
1,558
|
|
|
$
|
1,417
|
|
|
$
|
1,565
|
|
|
$
|
1,307
|
|
|
$
|
5,847
|
|
|
$
|
5,600
|
|
Intelligence, Information and Services
|
1,537
|
|
|
1,519
|
|
|
1,594
|
|
|
1,461
|
|
|
6,111
|
|
|
6,222
|
|
||||||
Missile Systems
|
1,879
|
|
|
1,645
|
|
|
1,559
|
|
|
1,473
|
|
|
6,556
|
|
|
6,309
|
|
||||||
Space and Airborne Systems
|
1,576
|
|
|
1,446
|
|
|
1,416
|
|
|
1,358
|
|
|
5,796
|
|
|
6,075
|
|
||||||
Forcepoint
|
133
|
|
|
114
|
|
|
57
|
|
|
24
|
|
|
328
|
|
|
104
|
|
||||||
Eliminations
|
(331
|
)
|
|
(331
|
)
|
|
(333
|
)
|
|
(335
|
)
|
|
(1,330
|
)
|
|
(1,481
|
)
|
||||||
Total business segment sales
|
6,352
|
|
|
5,810
|
|
|
5,858
|
|
|
5,288
|
|
|
23,308
|
|
|
22,829
|
|
||||||
Acquisition Accounting Adjustments
(1)
|
(24
|
)
|
|
(27
|
)
|
|
(10
|
)
|
|
—
|
|
|
(61
|
)
|
|
(3
|
)
|
||||||
Total
|
$
|
6,328
|
|
|
$
|
5,783
|
|
|
$
|
5,848
|
|
|
$
|
5,288
|
|
|
$
|
23,247
|
|
|
$
|
22,826
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Operating Income
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
281
|
|
|
$
|
198
|
|
|
$
|
202
|
|
|
$
|
183
|
|
|
$
|
864
|
|
|
$
|
928
|
|
Intelligence, Information and Services
|
111
|
|
|
118
|
|
|
122
|
|
|
295
|
|
|
646
|
|
|
532
|
|
||||||
Missile Systems
|
258
|
|
|
219
|
|
|
184
|
|
|
207
|
|
|
868
|
|
|
801
|
|
||||||
Space and Airborne Systems
|
239
|
|
|
213
|
|
|
195
|
|
|
182
|
|
|
829
|
|
|
886
|
|
||||||
Forcepoint
|
11
|
|
|
20
|
|
|
(1
|
)
|
|
—
|
|
|
30
|
|
|
11
|
|
||||||
Eliminations
|
(29
|
)
|
|
(42
|
)
|
|
(36
|
)
|
|
(33
|
)
|
|
(140
|
)
|
|
(149
|
)
|
||||||
Total business segment operating income
|
871
|
|
|
726
|
|
|
666
|
|
|
834
|
|
|
3,097
|
|
|
3,009
|
|
||||||
Acquisition Accounting Adjustments
|
(59
|
)
|
|
(63
|
)
|
|
(32
|
)
|
|
(14
|
)
|
|
(168
|
)
|
|
(55
|
)
|
||||||
FAS/CAS Adjustment
|
44
|
|
|
43
|
|
|
49
|
|
|
49
|
|
|
185
|
|
|
286
|
|
||||||
Corporate
|
(28
|
)
|
|
(9
|
)
|
|
(35
|
)
|
|
(29
|
)
|
|
(101
|
)
|
|
(61
|
)
|
||||||
Total
|
$
|
828
|
|
|
$
|
697
|
|
|
$
|
648
|
|
|
$
|
840
|
|
|
$
|
3,013
|
|
|
$
|
3,179
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
Revised Bookings
(in millions)
|
Dec 31, 2015
|
|
Sep 27, 2015
|
|
Jun 28, 2015
|
|
Mar 29, 2015
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||||
Integrated Defense Systems
|
$
|
1,754
|
|
|
$
|
657
|
|
|
$
|
2,650
|
|
|
$
|
1,328
|
|
|
$
|
6,389
|
|
|
$
|
6,174
|
|
Intelligence, Information and Services
|
1,371
|
|
|
1,532
|
|
|
1,425
|
|
|
1,088
|
|
|
5,416
|
|
|
5,984
|
|
||||||
Missile Systems
|
2,733
|
|
|
1,780
|
|
|
2,216
|
|
|
1,405
|
|
|
8,134
|
|
|
6,383
|
|
||||||
Space and Airborne Systems
|
1,848
|
|
|
1,217
|
|
|
1,240
|
|
|
631
|
|
|
4,936
|
|
|
5,410
|
|
||||||
Forcepoint
|
155
|
|
|
129
|
|
|
49
|
|
|
19
|
|
|
352
|
|
|
101
|
|
||||||
Total
|
$
|
7,861
|
|
|
$
|
5,315
|
|
|
$
|
7,580
|
|
|
$
|
4,471
|
|
|
$
|
25,227
|
|
|
$
|
24,052
|
|
Revised Funded Backlog
(in millions)
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||
Integrated Defense Systems
|
|
$
|
8,961
|
|
|
$
|
8,257
|
|
Intelligence, Information and Services
|
|
2,933
|
|
|
3,536
|
|
||
Missile Systems
|
|
7,998
|
|
|
6,992
|
|
||
Space and Airborne Systems
|
|
4,692
|
|
|
4,259
|
|
||
Forcepoint
(1)
|
|
476
|
|
|
48
|
|
||
Total
|
|
$
|
25,060
|
|
|
$
|
23,092
|
|
(1)
|
Forcepoint funded backlog excludes the unfavorable impact of $86 million and less than $1 million at December 31, 2015 and December 31, 2014, respectively, related to the acquisition accounting adjustments to record acquired deferred revenue at fair value.
|
Revised Total Backlog
(in millions)
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||
Integrated Defense Systems
|
|
$
|
10,629
|
|
|
$
|
10,362
|
|
Intelligence, Information and Services
|
|
6,367
|
|
|
6,958
|
|
||
Missile Systems
|
|
10,885
|
|
|
9,269
|
|
||
Space and Airborne Systems
|
|
6,309
|
|
|
6,930
|
|
||
Forcepoint
(1)
|
|
479
|
|
|
52
|
|
||
Total
|
|
$
|
34,669
|
|
|
$
|
33,571
|
|
(1)
|
Forcepoint total backlog excludes the unfavorable impact of $86 million and less than $1 million at December 31, 2015 and December 31, 2014, respectively, related to the acquisition accounting adjustments to record acquired deferred revenue at fair value.
|
|
|
Three Months Ended
|
||||||
Bookings
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
1,017
|
|
|
$
|
1,328
|
|
Intelligence, Information and Services
|
|
1,253
|
|
|
1,088
|
|
||
Missile Systems
|
|
1,632
|
|
|
1,405
|
|
||
Space and Airborne Systems
|
|
2,202
|
|
|
631
|
|
||
Forcepoint
|
|
97
|
|
|
19
|
|
||
Total
|
|
$
|
6,201
|
|
|
$
|
4,471
|
|
|
|
Funded Backlog
|
|
Total Backlog
|
||||||||||||
Backlog
(in millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||||||
Integrated Defense Systems
|
|
$
|
8,776
|
|
|
$
|
8,961
|
|
|
$
|
10,242
|
|
|
$
|
10,629
|
|
Intelligence, Information and Services
|
|
2,962
|
|
|
2,933
|
|
|
6,075
|
|
|
6,367
|
|
||||
Missile Systems
|
|
8,332
|
|
|
7,998
|
|
|
10,822
|
|
|
10,885
|
|
||||
Space and Airborne Systems
|
|
5,618
|
|
|
4,692
|
|
|
7,147
|
|
|
6,309
|
|
||||
Forcepoint
(1)
|
|
480
|
|
|
476
|
|
|
482
|
|
|
479
|
|
||||
Total
|
|
$
|
26,168
|
|
|
$
|
25,060
|
|
|
$
|
34,768
|
|
|
$
|
34,669
|
|
(1)
|
Forcepoint funded and total backlog excludes the unfavorable impact of
$97 million
and
$86 million
at
April 3, 2016
and
December 31, 2015
, respectively, related to the acquisition accounting adjustments to record acquired deferred revenue at fair value.
|
|
|
Three Months Ended
|
||||||
Total Net Sales
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
1,337
|
|
|
$
|
1,307
|
|
Intelligence, Information and Services
|
|
1,493
|
|
|
1,461
|
|
||
Missile Systems
|
|
1,720
|
|
|
1,473
|
|
||
Space and Airborne Systems
|
|
1,450
|
|
|
1,358
|
|
||
Forcepoint
|
|
136
|
|
|
24
|
|
||
Eliminations
|
|
(347
|
)
|
|
(335
|
)
|
||
Total business segment sales
|
|
5,789
|
|
|
5,288
|
|
||
Acquisition Accounting Adjustments
(1)
|
|
(26
|
)
|
|
—
|
|
||
Total
|
|
$
|
5,763
|
|
|
$
|
5,288
|
|
|
Three Months Ended
|
||||||
EAC Adjustments
(in millions)
|
Apr 3, 2016
|
|
|
Mar 29, 2015
|
|
||
Gross favorable
|
$
|
179
|
|
|
$
|
181
|
|
Gross unfavorable
|
(158
|
)
|
|
(60
|
)
|
||
Total net EAC adjustments
|
$
|
21
|
|
|
$
|
121
|
|
|
|
Three Months Ended
|
||||||
Operating Income
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
147
|
|
|
$
|
183
|
|
Intelligence, Information and Services
|
|
100
|
|
|
295
|
|
||
Missile Systems
|
|
192
|
|
|
207
|
|
||
Space and Airborne Systems
|
|
173
|
|
|
182
|
|
||
Forcepoint
|
|
14
|
|
|
—
|
|
||
Eliminations
|
|
(33
|
)
|
|
(33
|
)
|
||
Total business segment operating income
|
|
593
|
|
|
834
|
|
||
Acquisition Accounting Adjustments
|
|
(58
|
)
|
|
(14
|
)
|
||
FAS/CAS Adjustment
|
|
105
|
|
|
49
|
|
||
Corporate
|
|
(28
|
)
|
|
(29
|
)
|
||
Total
|
|
$
|
612
|
|
|
$
|
840
|
|
Integrated Defense Systems
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Total net sales
|
|
$
|
1,337
|
|
|
$
|
1,307
|
|
|
2.3
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
509
|
|
|
454
|
|
|
12.1
|
%
|
||
Cost of sales—materials and subcontractors
|
|
453
|
|
|
478
|
|
|
(5.2
|
)%
|
||
Other cost of sales and other operating expenses
|
|
228
|
|
|
192
|
|
|
18.8
|
%
|
||
Total operating expenses
|
|
1,190
|
|
|
1,124
|
|
|
5.9
|
%
|
||
Operating income
|
|
$
|
147
|
|
|
$
|
183
|
|
|
(19.7
|
)%
|
Operating margin
|
|
11.0
|
%
|
|
14.0
|
%
|
|
|
Intelligence, Information and Services
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Total net sales
|
|
$
|
1,493
|
|
|
$
|
1,461
|
|
|
2.2
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
635
|
|
|
588
|
|
|
8.0
|
%
|
||
Cost of sales—materials and subcontractors
|
|
573
|
|
|
580
|
|
|
(1.2
|
)%
|
||
Other cost of sales and other operating expenses
|
|
185
|
|
|
(2
|
)
|
|
NM
|
|
||
Total operating expenses
|
|
1,393
|
|
|
1,166
|
|
|
19.5
|
%
|
||
Operating income
|
|
$
|
100
|
|
|
$
|
295
|
|
|
(66.1
|
)%
|
Operating margin
|
|
6.7
|
%
|
|
20.2
|
%
|
|
|
|||
NM = Not meaningful
|
|
|
|
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Apr 3, 2016 Versus Three Months Ended Mar 29, 2015
|
|||||||||
Volume
|
|
|
|
$
|
4
|
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
(2
|
)
|
|
|
||||
Mix and other performance
|
|
|
|
(197
|
)
|
|
|
||||
Total change in operating income
|
|
|
|
$
|
(195
|
)
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Bookings
|
|
$
|
1,253
|
|
|
$
|
1,088
|
|
|
15.2
|
%
|
Missile Systems
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Total net sales
|
|
$
|
1,720
|
|
|
$
|
1,473
|
|
|
16.8
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
526
|
|
|
480
|
|
|
9.6
|
%
|
||
Cost of sales—materials and subcontractors
|
|
646
|
|
|
627
|
|
|
3.0
|
%
|
||
Other cost of sales and other operating expenses
|
|
356
|
|
|
159
|
|
|
123.9
|
%
|
||
Total operating expenses
|
|
1,528
|
|
|
1,266
|
|
|
20.7
|
%
|
||
Operating income
|
|
$
|
192
|
|
|
$
|
207
|
|
|
(7.2
|
)%
|
Operating margin
|
|
11.2
|
%
|
|
14.1
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Apr 3, 2016 Versus Three Months Ended Mar 29, 2015
|
|||||||||
Volume
|
|
|
|
$
|
33
|
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
(69
|
)
|
|
|
||||
Mix and other performance
|
|
|
|
21
|
|
|
|
||||
Total change in operating income
|
|
|
|
$
|
(15
|
)
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Bookings
|
|
$
|
1,632
|
|
|
$
|
1,405
|
|
|
16.2
|
%
|
Space and Airborne Systems
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Total net sales
|
|
$
|
1,450
|
|
|
$
|
1,358
|
|
|
6.8
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|||||
Cost of sales—labor
|
|
600
|
|
|
607
|
|
|
(1.2
|
)%
|
||
Cost of sales—materials and subcontractors
|
|
392
|
|
|
333
|
|
|
17.7
|
%
|
||
Other cost of sales and other operating expenses
|
|
285
|
|
|
236
|
|
|
20.8
|
%
|
||
Total operating expenses
|
|
1,277
|
|
|
1,176
|
|
|
8.6
|
%
|
||
Operating income
|
|
$
|
173
|
|
|
$
|
182
|
|
|
(4.9
|
)%
|
Operating margin
|
|
11.9
|
%
|
|
13.4
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Apr 3, 2016 Versus Three Months Ended Mar 29, 2015
|
|||||||||
Volume
|
|
|
|
$
|
15
|
|
|
|
|||
Net change in EAC adjustments
|
|
|
|
11
|
|
|
|
||||
Mix and other performance
|
|
|
|
(35
|
)
|
|
|
||||
Total change in operating income
|
|
|
|
$
|
(9
|
)
|
|
|
|||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended
|
|||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
|||||
Bookings
|
|
$
|
2,202
|
|
|
$
|
631
|
|
|
249.0
|
%
|
Forcepoint
|
|
|
|
|
||||||
|
|
Three Months Ended
|
||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
||||
Total net sales
|
|
$
|
136
|
|
|
$
|
24
|
|
|
NM
|
Total operating expenses
|
|
|
|
|
|
|
||||
Cost of sales
|
|
24
|
|
|
6
|
|
|
NM
|
||
Selling and marketing
|
|
48
|
|
|
5
|
|
|
NM
|
||
Research and development
|
|
32
|
|
|
10
|
|
|
NM
|
||
General and administrative
|
|
18
|
|
|
3
|
|
|
NM
|
||
Total operating expenses
|
|
122
|
|
|
24
|
|
|
NM
|
||
Operating income (loss)
|
|
$
|
14
|
|
|
$
|
—
|
|
|
NM
|
Operating margin
|
|
10.3
|
%
|
|
—
|
%
|
|
|
||
NM = Not meaningful
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||
(In millions, except percentages)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
% Change
|
||||
Bookings
|
|
$
|
97
|
|
|
$
|
19
|
|
|
NM
|
NM = Not meaningful
|
|
|
|
|
|
|
•
|
Cost of sales
—
labor and overhead
costs associated with analytic and technical support services; infrastructure costs associated with maintaining our databases; and labor, materials and overhead costs associated with providing our product offerings.
|
•
|
Selling and marketing
—
labor costs related to personnel engaged in selling and marketing and customer support functions; costs related to public relations, advertising, promotions and travel; and related overhead costs.
|
•
|
Research and development
—
labor costs for the development and management of new and existing products, and related overhead costs.
|
•
|
General and administrative expenses
—
labor costs for our executive, finance and administrative personnel; third party professional service fees; and related overhead costs.
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Deferred revenue adjustment
(1)
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
Amortization of acquired intangibles
|
|
(32
|
)
|
|
(14
|
)
|
||
Total Acquisition Accounting Adjustments
|
|
$
|
(58
|
)
|
|
$
|
(14
|
)
|
(1)
|
The deferred revenue adjustment to operating income was less than $1 million for the
first quarter of 2015
.
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Integrated Defense Systems
|
|
$
|
—
|
|
|
$
|
—
|
|
Intelligence, Information and Services
|
|
5
|
|
|
3
|
|
||
Missile Systems
|
|
—
|
|
|
—
|
|
||
Space and Airborne Systems
|
|
5
|
|
|
9
|
|
||
Forcepoint
|
|
22
|
|
|
2
|
|
||
Total
|
|
$
|
32
|
|
|
$
|
14
|
|
|
|
Three Months Ended
|
||||||
FAS/CAS Adjustment Income (Expense)
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
FAS/CAS Pension Adjustment
|
|
$
|
105
|
|
|
$
|
48
|
|
FAS/CAS PRB Adjustment
|
|
—
|
|
|
1
|
|
||
FAS/CAS Adjustment
|
|
$
|
105
|
|
|
$
|
49
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
FAS (expense)
|
|
$
|
(265
|
)
|
|
$
|
(291
|
)
|
CAS expense
|
|
370
|
|
|
339
|
|
||
FAS/CAS Pension Adjustment
|
|
$
|
105
|
|
|
$
|
48
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Corporate
|
|
$
|
(28
|
)
|
|
$
|
(29
|
)
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Cash and cash equivalents
|
|
$
|
1,934
|
|
|
$
|
2,328
|
|
Short-term investments
|
|
711
|
|
|
872
|
|
||
Working capital
|
|
3,610
|
|
|
3,686
|
|
||
Amount available under credit facilities
|
|
1,250
|
|
|
1,250
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Net cash provided by (used in) operating activities from continuing operations
|
|
$
|
325
|
|
|
$
|
55
|
|
Net cash provided by (used in) operating activities
|
|
326
|
|
|
56
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Required pension contributions
|
|
$
|
43
|
|
|
$
|
22
|
|
PRB contributions
|
|
5
|
|
|
5
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
|
|||
Net cash provided by (used in) investing activities
|
|
$
|
(91
|
)
|
|
$
|
136
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Additions to property, plant and equipment
|
|
$
|
150
|
|
|
$
|
55
|
|
Additions to capitalized internal use software
|
|
12
|
|
|
13
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Purchases of short-term investments
|
|
$
|
—
|
|
|
$
|
(148
|
)
|
Sales of short-term investments
|
|
—
|
|
|
135
|
|
||
Maturities of short-term investments
|
|
127
|
|
|
250
|
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Payments for purchases of acquired companies, net of cash acquired
|
|
$
|
(57
|
)
|
|
$
|
(6
|
)
|
|
|
Three Months Ended
|
||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Net cash provided by (used in) financing activities
|
|
$
|
(629
|
)
|
|
$
|
(508
|
)
|
|
|
Three Months Ended
|
||||||||||
(In millions)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||||||
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||
Shares repurchased under our share repurchase programs
|
|
$
|
400
|
|
3.2
|
|
|
$
|
300
|
|
2.8
|
|
Shares repurchased to satisfy tax withholding obligations
|
|
34
|
|
0.3
|
|
|
40
|
|
0.4
|
|
||
Total share repurchases
|
|
$
|
434
|
|
3.5
|
|
|
$
|
340
|
|
3.2
|
|
|
|
Three Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Apr 3, 2016
|
|
Mar 29, 2015
|
||||
Cash dividends declared per share
|
|
$
|
0.7325
|
|
|
$
|
0.67
|
|
Total dividends paid
|
|
201
|
|
|
186
|
|
|
|
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)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Total remediation costs—undiscounted
|
|
$
|
225
|
|
|
$
|
224
|
|
Weighted average discount rate
|
|
5.2
|
%
|
|
5.2
|
%
|
||
Total remediation costs—discounted
|
|
$
|
157
|
|
|
$
|
149
|
|
Recoverable portion
|
|
98
|
|
|
94
|
|
(In millions)
|
|
Apr 3, 2016
|
|
Dec 31, 2015
|
||||
Guarantees
|
|
$
|
215
|
|
|
$
|
213
|
|
Letters of credit
|
|
2,591
|
|
|
2,242
|
|
||
Surety bonds
|
|
255
|
|
|
264
|
|
(In millions, except percentages)
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
3,292
|
|
|
$
|
5,383
|
|
|
$
|
6,046
|
|
Average interest rate
|
|
—
|
|
|
—
|
|
|
6.549
|
%
|
|
—
|
|
|
3.550
|
%
|
|
4.229
|
%
|
|
4.295
|
%
|
|
|
(In millions, except percentages)
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
3,292
|
|
|
$
|
5,383
|
|
|
$
|
5,826
|
|
Average interest rate
|
|
—
|
|
|
—
|
|
|
6.549
|
%
|
|
—
|
|
|
3.550
|
%
|
|
4.229
|
%
|
|
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, 2016 - January 31, 2016)
|
4,044
|
|
|
$
|
118.40
|
|
|
—
|
|
|
$
|
2.5
|
|
February (February 1, 2016 - February 28, 2016)
|
1,448,810
|
|
|
123.80
|
|
|
1,448,810
|
|
|
2.3
|
|
||
March (February 29, 2016 - April 3, 2016)
|
1,786,136
|
|
|
123.66
|
|
|
1,784,251
|
|
|
2.1
|
|
||
Total
|
3,238,990
|
|
|
$
|
123.72
|
|
|
3,233,061
|
|
|
|
(1)
|
Includes shares purchased related to activity under our stock plans. Such activity during the
first quarter of 2016
includes the surrender by employees of
5,929
shares to satisfy 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. Additionally, in November 2015, our Board of Directors authorized the repurchase of up to
$2.0 billion
of our outstanding common stock.
|
10.1
|
|
Letter Agreement dated January 21, 2015 by and between the Company and Anthony F. O'Brien.*
|
|
|
|
10.2
|
|
Letter Agreement dated December 16, 2014 by and between the Company and Frank R. Jimenez.*
|
|
|
|
10.3
|
|
Amendment to Letter Agreement dated January 23, 2015 by and between the Company and Frank R. Jimenez.*
|
|
|
|
10.4
|
|
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 one times base salary and bonus).*
|
|
|
|
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 April 3, 2016, 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 electronically herewith, and not filed
|
RAYTHEON COMPANY
|
||
|
|
|
By:
|
/s/ Michael J. Wood
|
|
|
Michael J. Wood
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
Principal Accounting Officer
|
|
|
Thomas A. Kennedy
|
|
Raytheon Company
|
|
Chairman & Chief Executive Officer
|
|
870 Winter Street
|
|
|
781.522.6400 business
|
|
Waltham, Massachusetts
|
|
|
781.522.6401 fax
|
|
02451 USA
|
|
|
|
tkennedy1@raytheon.com
|
|
|
•
|
Your base salary will be $496,112 annually, paid at a bi-weekly rate of $19,081.23. Your next eligibility for a base salary increase will be March, 2016.
|
•
|
Your Results Based Incentive (RBI) Program target for 2015 will be 100% of your annualized base salary, subject to individual and company performance. Your 2014 award amount is $400,000.
|
•
|
You will continue to be eligible to participate in the Company’s Long Term Participant Plan (LTPP). Your award value for the 2015 program is $1,000,000. Based on performance achieved at the end of a three-year cycle (2015-2017), your payout, if earned, may be higher or lower than the initial award value. Participation in this plan is subject to annual review.
|
•
|
You will continue to be eligible to participate in the annual restricted share award program subject to the terms of the award and the provisions of the Raytheon Stock Plan. Your 2015 award as an Elected Vice President of Raytheon is valued at $800,000.
|
•
|
You will be required by the end of your fifth (5
th
) year in an elected officer capacity to own a minimum of two (2x) times base salary in the form of Raytheon equity. In addition, there is a requirement that each elected officer holds shares of Company "stock owned outright" with a value of at least 1x base salary. Company stock owned outright includes the following Company securities: outright share purchases, shares from restricted stock/unit vestings or acquired upon option exercises; and vested shares or share equivalents in any Company retirement plan (e.g., 401(k), Deferred Compensation Plan).
|
•
|
If you are involuntarily separated from employment with the Company without cause, as defined in the Raytheon Severance Pay Plan, you will be entitled to a separation payment of one (1) times your annual base salary and target bonus, as well as one (1) years benefits as of the date of separation in exchange for a General Release.
|
•
|
You will be entitled to a Change in Control Severance Agreement which would provide you with severance benefits equal to one (1) times your annual base salary and target bonus as of the date of the change in control in the event of a change in control of the company. Please note that the Change in Control Severance Agreement is structured to require both a change in corporate ownership and a loss of employment as those terms are defined in the draft agreement.
|
•
|
You will be eligible to participate in the Raytheon Supplemental Executive Retirement Plan. This non-qualified plan provides a pension of 35% of final average compensation after ten (10) years of Raytheon service and attainment of age 55, increasing by 3% of final average compensation for every additional year of service up to a maximum of 50% of final average compensation after fifteen (15) years of service and attainment of age 60. Amounts payable under this plan will be offset by amounts payable under any other pension plan of the Company or any prior employer and by Social Security.
|
•
|
You will continue to be eligible to participate in Raytheon’s Deferred Compensation Plan, subject to the terms and conditions of the program.
|
•
|
Your annual automobile allowance will be $14,000.00, paid at a bi-weekly rate of $538.46.
|
•
|
You will be eligible to receive Company paid senior executive life insurance which equals four (4) times your annual base salary to a maximum of $3 million. You are also eligible to receive enhanced life insurance equal to one (1) times your annual base salary. If you choose not to elect this benefit, your enhanced life insurance will be capped at $50,000.00.
|
•
|
Your financial planning assistance will be $12,000.00 for your first year as Vice President of Raytheon, Chief Financial Officer, and $10,000.00 annually thereafter.
|
•
|
Excess liability coverage will be increased to $5 million.
|
•
|
You will continue to be eligible for the Executive Health Program, which includes an annual comprehensive medical assessment. This benefit has an annual allowance of $2,000.00 for your participation in the program. You will be enrolled in the Executive Registry. It is a health care program designed for traveling executives and their families. The Registry operates as a domestic and international network of leading academic medical centers and affiliations.
|
•
|
You will be eligible for first class airfare for all business travel.
|
|
|
Thomas A. Kennedy
|
|
Raytheon Company
|
|
Chairman & Chief Executive Officer
|
|
870 Winter Street
|
|
|
781.522.6400 tel
|
|
Waltham, Massachusetts
|
|
|
781.522.6401 fax
|
|
02451 USA
|
|
|
|
tkennedy1@raytheon.com
|
|
|
•
|
Your base salary will be $680,000 annually, paid at a bi-weekly rate of $26,153.85 effective upon your date of hire. Your next eligibility for a base salary increase will be March, 2016.
|
•
|
Your Results Based Incentive (RBI) Program target for 2015 will be 100% of your annualized base salary. A projected award amount is $680,000, subject to individual and company performance and will be approved by the Management Development and Compensation Committee of the Raytheon Board of Directors on January 20, 2015.
|
•
|
You will be eligible to participate in the Company’s Long Term Participant Plan (LTPP). As a first-time participant in this program in 2015, your award value is $1,000,000. Based on performance achieved at the end of a three-year cycle (2015-2017), your payout may be higher or lower than the initial award value based on company performance against the plan metrics. Participation in this plan is subject to annual review.
|
•
|
You will be eligible to participate in the annual restricted share award program subject to the terms of the award and the provisions of the Raytheon Stock Plan. Your 2015 award as an Elected Vice President of Raytheon is valued at $800,000 and subject to approval by the Management Development and Compensation Committee of the Raytheon Board of Directors on January 20, 2015.
|
•
|
Subject to acceptance of this offer, upon hire you will receive a cash award of $450,000 to replace the value of your forgone bonus from your prior employer. In addition, you will be granted $1,544,000 in value of Restricted Stock that will vest over a period of three years on the anniversary of your hire. This award is also from forgone value from your previous employer. If you are involuntarily separated from the company without cause prior to this award being vested, any unvested portion of this stock award will vest upon separation.
|
•
|
You will be required by the end of your fifth (5
th
) year in an elected officer capacity to hold beneficial ownership of a minimum of three (3x) times base salary in the form of Raytheon equity. In addition, there is a requirement that each elected officer holds shares of Company "stock owned outright" with a value of at least 1x base salary.
|
•
|
If you are involuntarily separated from employment with the Company without cause, as defined in the Raytheon Severance Pay Plan, you will be entitled to a separation payment of one (1) times your annual base salary and target bonus, as well as one (1) years benefits as of the date of separation in exchange for a General Release.
|
•
|
You will be entitled to a Change in Control Severance Agreement which would provide you with severance benefits equal to two (2) times your annual base salary and target bonus as of the date of the change in control in the event of a change in control of the company. Please note that the Change in Control Severance Agreement is structured to require both a change in corporate ownership and a loss of employment as those terms are defined in the draft agreement.
|
•
|
You will be eligible to participate in the Raytheon Supplemental Executive Retirement Plan. This non-qualified plan provides a pension of 35% of final average compensation after ten (10) years of Raytheon service and attainment of age 55, increasing by 3% of final average compensation for every additional year of service up to a maximum of 50% of final average compensation after fifteen (15) years of service and attainment of age 60. Amounts payable under this plan will be offset by amounts payable under any other pension plan of the Company or any prior employer and by Social Security.
|
•
|
You will be eligible to participate in Raytheon’s Deferred Compensation Plan, subject to the terms and conditions of the program.
|
•
|
You will be eligible for twenty (20) days per year of Paid Time Off (PTO).
|
•
|
You will be eligible for an annual automobile allowance of $14,000.00, paid at a bi-weekly rate of $538.46.
|
•
|
You will be eligible to receive Company paid senior executive life insurance which equals four (4) times your annual base salary to a maximum of $3 million. You are also eligible to receive enhanced life insurance equal to one (1) times your annual base salary. If you choose not to elect this benefit, your enhanced life insurance will be capped at $50,000.00.
|
•
|
You will be eligible for financial planning assistance of $12,000.00 for your first year, and $10,000.00 annually thereafter, as Vice President, General Counsel and Secretary of the Board of Directors
|
•
|
You will be eligible for excess liability coverage of $5 million.
|
•
|
You will be eligible for the Executive Health Program, which includes an annual comprehensive medical assessment. This benefit has an annual allowance of $2,000.00 for your participation in the program. You will be enrolled in the Executive Registry. It is a health care program designed for traveling executives and their families. The Registry operates as a domestic and international network of leading academic medical centers and affiliations.
|
•
|
You will be eligible for first class airfare for all business travel.
|
•
|
You will be eligible for key relocation coverage under the Raytheon relocation policy.
|
|
|
Thomas A. Kennedy
|
|
Raytheon Company
|
|
Chairman & Chief Executive Officer
|
|
870 Winter Street
|
|
|
781.522.6400 tel
|
|
Waltham, Massachusetts
|
|
|
781.522.6401 fax
|
|
02451 USA
|
|
|
|
tkennedy1@raytheon.com
|
|
|
•
|
You will be required by the end of your fifth (5
th
) year in an elected officer capacity to own a minimum of two (2x) times base salary in the form of Raytheon equity. In addition, there is a requirement that each elected officer holds shares of Company "stock owned outright" with a value of at least 1x base salary. Company stock owned outright includes the following Company securities: outright share purchases, shares from restricted stock/unit vestings or acquired upon option exercises; and vested shares or share equivalents in any Company retirement plan (e.g., 401(k), Deferred Compensation Plan).
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•
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You will be entitled to a Change in Control Severance Agreement which would provide you with severance benefits equal to one (1) times your annual base salary and target bonus as of the date of the change in control in the event of a change in control of the company as set forth in the attached draft agreement. Please note that the Change in Control Severance Agreement is structured to require both a change in corporate ownership and a loss of employment as those terms are defined in the draft agreement.
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1.6
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“
Code
” means the Internal Revenue Code of 1986, as amended.
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1.9
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“
Severance Benefits
” means:
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2
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QUALIFYING TERMINATION
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(i)
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the Severance Benefits described in Sections 1.9(ii) and (v) shall be paid within 30 days of a Qualifying Termination;
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(ii)
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the Severance Benefits described in Sections 1.9(i), (iii), and (iv) shall be paid six months after the date on which Executive has a separation from service, as defined in Section 409A of the Code, Department of Treasury regulations issued under it, and policies adopted by the Company for compliance with Section 409A, provided that a reasonably anticipated permanent reduction in the level of bona fide services to less than 50% of the average level of bona fide services provided in the immediately preceding 12 months shall give rise to the rebuttable presumption of separation from
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(iii)
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the Severance Benefits described in Section 1.9(vi) shall be paid in the form and at the time provided for payment of benefits in the supplemental retirement plan, as amended to comply with Section 409A of the Code.
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By:
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Executive
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1.
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I have reviewed this quarterly report on Form 10-Q of Raytheon Company;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Thomas A. Kennedy
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Thomas A. Kennedy
Chairman and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Raytheon Company;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Anthony F. O'Brien
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Anthony F. O'Brien
Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Thomas A. Kennedy
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Thomas A. Kennedy
Chairman and Chief Executive Officer
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April 28, 2016
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Anthony F. O'Brien
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Anthony F. O'Brien
Vice President and Chief Financial Officer
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April 28, 2016
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